These are turbulent times in Latin America. Just witness the dizzying pace of events in March when Ecuador, Venezuela and Nicaragua broke off diplomatic relations with Colombia after the latter’s army attacked a FARC group in Ecuadorean territory. Less than a week later, the four presidents were exchanging embraces in a gesture portraying a curious mixture of emotional excess and rationality.
In another continent, such an incident could and, indeed, has been a prelude to war, but in Latin America it was resolved (although not the underlying differences) in a few short minutes at a summit.
How much of the change taking place in the region is just talk, however grandiloquent, and to what extent does it represent a profound transformation?
To answer this question, we must first discard concepts that confuse rather than clarify the issue. Words like ‘left’, ‘right’, ‘centre’, ‘populism’ and ‘socialism’ have become empty vessels whose meanings, understood in the conceptual framework of the 20th century, can lead to mistaken interpretations. Confusion and uncertainty are perhaps more accurate words to describe current times.
One figure – Hugo Chavez – has wrought an important shift in Latin American politics. He has rescued from the depth of history the emblematic figure of the recently-resigned president of Cuba, Fidel Castro, and resuscitated not a socioeconomic project nor the application of a model – that of socialist Cuba whose results don’t call for much celebration – but the most emotionally-charged ideas of that past: the face of Che with its hard expression, the memory of that small Caribbean country’s relentless battle against the empire, and the concept of dignity – so dear to the spirit of Latin America and, in general, the so-called Third World countries – in the face of the arrogance of the United States.
But what are the strategies for growth and development and the economic model underpinning this political rhetoric?
That is the question Bolivian voters are starting to face with their president; that is the underlying question for those who unhesitatingly supported South America’s first indigenous president. It is also the question being asked by those who see Nicaragua confronting today exactly the same difficulties as two, five, 10 and 40 years ago. It is the question that Ecuadoreans are asking President Correa, who stoked the fires of anti-Colombian patriotism. It is the debate which suggests that Paraguay could take the Bolivarian road mapped by Chavez. It is the question Cristina Fernandez must answer in the context of her quest to recover the regional leadership that Argentina has lost in recent years in the wake of its post-liberal political, economic and social crisis.
The reason for this question is very simple. The voters and leaders of these countries face issues that are very pedestrian but of vital importance – inflation, higher prices and a loss of purchasing power by the mass of the population, despite otherwise spectacular macroeconomic results.
Stubborn reality
Words like ‘revolution’, ‘change’, ‘equity’ and ‘distributive justice’ can be cruel ironies when measured against reality. And stubborn reality is beginning to take its toll. Until now “21st-century socialism” has had economic bonanza on its side. After a deep continental recession (1999-2003) came the voracious demands of China and India and a rate of international growth that, belying those who at the end of the 20th century were talking about the birth of a virtual technological economy, brought renewed hunger for raw materials, pushing their prices to extraordinary levels.
In this golden period, rhetoric was accompanied by growth and record revenues, giving governments the means to implement policies with an immediate impact (a wave of benefits flowed through the continent in the form of, for example, guarantees for keeping children in school, healthcare for those who vaccinated their children and universal pensions for old people).
But this bonanza also permitted an abusive and false use of the word nationalization. The old idea that this meant the State expropriating the assets of a local or overseas company disappeared. Evo Morales ordered the Bolivian army into a gas plant owned by Brazil’s Petrobras. Three days later, the soldiers had left but the “nationalization” decree angered Brazilians. The dramatic impact of this was the freezing of all foreign investment in Bolivia, the impossibility of developing a consistent productive project, and default on international obligations scarcely a year after the vaunted measure.
In other words, the leaders of “21st-century socialism” have not developed an economic policy of social investment that goes beyond handouts; they have given no sign of using their countries’ surpluses to diversify the economy and escape the tyranny of international raw material prices; they have not responded to international insertion with effective policies of integration (on the contrary, this is a time of serious crisis in processes of regional integration) and, although they harshly criticize bilateral Free Trade Agreements (FTAs) – especially with the United States – they do not offer an efficient alternative with equivalent effects.
The world economy is entering a new and complex phase, rife with questions to which there are no immediate answers. The depreciation of the dollar and the rise in the price of oil are dizzying, the threat of a recession in the West – even though it is considered premature to use this term – hovers like a bird of prey, and the hope is that China, although slowing, has enough weight to soften the global landing. Expectations and collective psychology are, it would seem, starting to inflict a dramatic defeat on the economy and rationality.
Old and new
In this context, while “21st-century socialism” begins to come up against harsh reality, the continent’s other nations are trying less spectacular but apparently more sensible responses to the international situation. The old socialists of the last century are now the gentlemanly and responsible managers of economies that are progressing through international integration, a focus on production incentives and export growth, and respect for classic macroeconomic parameters without losing sight of a commitment to social investment.
This is the case with Brazil (which inexplicably ceded political leadership of the continent to Venezuela), Chile, Uruguay, the Dominican Republic and Panama. On the other side, under the dominant figure of President Uribe, Colombia, Peru, almost all Central America and, of course, Mexico (which only narrowly survived the ideological tension and political crisis caused by the Party of the Democratic Revolution during the elections there) believe that the classic liberal concepts of an open economy and the parameters that neoliberalism imposed across the region in the 1990s, remain valid and deliver results. A commitment to bilateral FTAs has replaced the frustrated Free Trade Area of the Americas (FTAA), and these accords continue to show sustained economic progress.
Key issues, however, still await solution and, with a couple of exceptions (Chile and, to a lesser extent, Mexico), the great structural problem is that none of the economic formulas used has resolved the problems of poverty and the inequality of income distribution. Probably one of the reasons for this failure is precisely the erratic road of a region that depends too heavily on political swings and in which the frenzy of the ideology currently in fashion frequently masks a lack of persistence in applying medium- and long-term economic policies.
All this would be just an attractive topic for debate were the situation not so extremely precarious due to the appearance of so-called “social movements” (another vague expression encompassing not only legitimate organizations with widespread appeal and valid demands, but also violent and radical activists, and even parts of groups with terrorist leanings).
Street law
Today, in the name of the old socialist utopia, violent and organized groups can take to the streets, forcing the resignation of presidents, while at the same time calling not for the common good, revolution or power for the people, but for anything from legalizing the sale of second-hand clothing to the expulsion of the foreign company that distributes a city’s water.
Democracy exercised directly from the street is gradually being transformed into the ability to intimidate, threaten, socially isolate opponents and override the popular will as expressed by individual citizens, acting freely according to their conscience, in the ballot booth.
Moreover, in countries with large indigenous populations – like most Andean nations and Guatemala – there is the added factor of ethnic-cultural movements. Here, the long exclusion of the indigenous population has opened the gate for proposals that attempt, with great difficulty, to harmonize the parameters of Western political liberalism with the practices and customs of indigenous peoples (the severe structural crisis this has provoked in Bolivia raises major concerns about the volatility of some Latin American nations).
In this situation, doubt and confusion prevail. A blind and jubilant orthodoxy as to the experience of developed countries has led to polarization. The policy of the United States towards Latin America, which has been aloof when not frankly blind, provides a fertile breeding ground for “anti” rhetoric in response to the misery of poverty and exclusion. The use of emotions as an instrument of mobilization at the expense of rationality, short-sighted answers to short-term economic problems and the emergence of the social groups who are starting to occupy the centre of the political stage call for the use of new categories when attempting to analyse Latin America, and for a revision of our own interpretation of what is understood by right or left and, above all, by populism and neopopulism, because these concepts probably no longer suffice for this analysis.
It is not enough to know what is theoretically best in politics and economics. It is also necessary to understand that its application in today’s turbulent Latin America requires new answers, free of complexes and prejudices but also a firm hand towards experiments that only contribute to further undermining – if that is possible – a continent that has already lost too many of the opportunities that history has offered it.
Carlos Diego Mesa Gisbert is a former president of Bolivia (2003-2005)