I played around with a couple maps in Photoshop a few months back, documenting the leftward transformation of Latin America as the most positive legacy, if wholly unintended, of the Bush administration on geopolitics. Pico asked for a bit of exposition on the dynamics on the ground, country by country, which I didn't have time to do back then.
My friend Michael Tallon, an expat living in Guatemala, also saw the item and we hashed around some ideas as to how to present the story to a different audience, that of La Cuadra, a small magazine he contributes to in Antigua. The following story is sort of a "beginner's guide," as presented to that magazine, and so is not hardcore in-depth-metric socio-political analysis. Nor, again, does it really parse well-meant progressives' issues with Chavez, which requires far deeper and incisive analysis and about which I continue to argue, love him or hate him, he is not, nor does he need to be, our enemy, much less a hemispheric bogeyman. Either way, I'm hoping it addresses, at least in broadstroke, of some of the well-grounded queries, like Pico's, as to who and what have fanned the Bluing of Latin America.
PINK TIDE TURNS LATIN AMERICA 'BLUE'
When Venezuelans amassed in the streets of Caracas and loyal military units faced down rogue superiors in April of 2002, they may have symbolically ended more than just the coup d’etat against their republic’s constitutional government. Though conflated by Western media as an internal conflict spurred by the precipitous, firebrand ways of president Hugo Chávez, few in Latin America failed to see the fingerprints of the Bush administration on the coup. Such norteamericano machinations have littered the history of the region for more than a century, almost always at the behest of American financial elites, their corporations and their wealthy in-country peers, and always to the detriment of those countries’ broader populations.
But at the dawn of a new century, the old seeds failed to yield the desired fruit, instead stirring the ire of the Latin American community. Whether they loved, abided or even hated Chávez, 19 nations of the Rio Group, then meeting in San Jose, Costa Rica, issued a joint statement condemning the coup, as did the Organization of American States. Bush played a Cold War-worn game and lost. Six years later, the region has undergone a tectonic political shift to where the U.S. and its once unquestioned primacy as the unmoved mover in the region "risks finding itself pushed aside as an outdated and rather useless relic," as Larry Birns, director of Council on Hemispheric Affairs, a liberal U.S. think-tank, put it in June 2006.
When Bush relinquishes the US presidency in less than half a year, he will leave his nation mired in a disastrous and legally untenable war, economically ravaged by predatory capitalism run amuck, riddled with criminal scandal, and its prestige in the world in tatters. Historians, then or decades hence, will have little good to say of the administration’s tenure at the helm of the superpower, which it so single-mindedly dedicated to enforcing a global hegemony. And yet, for those "south of the border" where U.S. hegemony was once omnipresent, the Bush reign has effected just the opposite: an epoch-making, Latin America-wide shift leftward, away from, if not out of, Washington’s orbit.
In April, the people of Paraguay elected Fernando Lugo, a center-left populist and former Catholic priest, as their new president, ending of 60 years of reactionary one-party rule in Paraguay. Lugo’s win is just the latest in the onslaught of progressive electoral victories that have, in less than a decade, ended a century-long lockdown on Latin American power by U.S.-backed right-wing oligarchs. He joins the likes of Luiz Ignacio Lula da Silva of Brazil, Cristina Fernández de Kirchner of Argentina, Rafael Correa of Ecuador, Michelle Bachelet of Chile, Tabare Vazquez of Uruguay, Chávez of Venezuela, Evo Morales of Bolivia and Daniel Ortega of Nicaragua in what has been called the "Pink Tide." Each represents different degrees of progress, from moderate reformers to left nationalists. Yet, in relative terms, all are utter Reds compared to the erstwhile U.S.-friendly regimes that preceded them and, should they aggregate as a bloc, pose the broadest regional breach of the U.S.’s hegemony and "neoliberal" economic orthodoxy in the world today.
If we flip the "Red" symbology and instead apply standard U.S. electoral mapping, a telling graphic picture emerges. In the U.S., red is used to indicate states or districts that vote for the more conservative Republican Party, whereas blue is used to indicate where the ostensibly more progressive Democratic Party wins, yielding a common parlance of "red states" versus "blue states." More detailed district-by-district mapping often shows states trending toward "red" or "blue," often graphically rendered in hues of purple. Using a similarly graded system, if not wholly scientifically, the author mapped out changes in the Latin American politicalscape from 2000 (Map 1) up to Lugo’s win (April 2008, Map 2).
Latin America, circa 2000
Latin America, April 2008
The political shift in the region, in this light, is utterly stark. It finds Latin American ruling parties, coalitions and even presidential palaces now populated by the types of people the U.S. once dealt with via military counter-insurgency and death squads, unionistas (Lula), Liberation Theologians (Lugo), self-identified socialists (Chávez, Morales and Bachelet [sort of]), former armed revolutionaries (Ortega) and indigenous peasant movimientistas (Morales).
The Pink Tide has left the reactionary governments of Colombia and El Salvador, and to a lesser extent Mexico and Peru, as vestigial outcrops of the old U.S. client-state model — and even two of those must be footnoted. Mexico’s 2006 election remains clouded by considerable evidence of Bush administration-linked private agencies engaged in ballot-tampering in order to steal the hotly contested election from progressive nationalist Andrés Manuel López Obrador. And in El Salvador, gearing up for an election next March, polls show that for the first time the nation’s former leftist revolutionary front and now political party, the FMLN, will likely take the presidency in the person of the young, dynamic former journalist Mauricio Funes, whom some have called "El Salvador’s Obama."
END OF ‘CONSENSUS’
The current progressive political waves have signaled a cooling shoulder to the U.S., not just as a heavy-leaning "big brother," but also for its conspicuous economic dogma long enforced by monetary loans, and guns, as the "Washington Consensus." The primary problem with the Washington Consensus, however, was that it was no consensus at all, even within the U.S.
The strings attached to loans required debtors to conform to broadstrokes of the "small government" economic doctrine of the U.S.’s Republican Party (though in recent decades adopted by the so-called "New Democrats" of the opposition party), so-called "supply-side" economics, which insists that the less a government taxes and does, the more wealth is retained by the those who earn it, thus the more they will invest in the economy. To impose this doctrine, terms of the loans required that recipient regimes embark on programs of trade liberalization, decentralization (hence "neoliberal") and "fiscal discipline": slashing taxes on the wealthy, lowering tariffs, privatization of state-owned industries, canonization of "property rights," bailing out corporations while gutting of agrarian subsidies, and eliminating social spending.
Adopted as unimpeachable dogma by America’s economic elite, this orthodoxy became an austere, counterintuitive religion to be spread via missionaries from U.S. fiscal subsidiaries such as the International Monetary Fund (IMF), the World Bank and the Inter-American Development Bank, who in many cases took de facto control of debtor economies. These institutions, as a result, became less economic relief and lending institutions, as they have always insisted, but policy-making arms of the U.S. government.
The second and weightier problem with the Washington Consensus was, its underlying theory didn’t work in the real world. In a nutshell, the supply-side theory conflates "economic liberty" with the wishful thinking that increased investments by an unencumbered capital class will create more jobs, thus effecting a mythical "rising tide that lifts all boats." But Latin America found out, as the U.S. persistently has, that simply enabling the capital classes to do whatever they wish — per the old "laissez faire" canard — does more harm than good.
The "globalization" aspect of the loans, effectively lowering economic borders, gave carte blanche to local elites to merely shunt investments out of target countries more easily. U.S. loans in-country often even went to hire U.S. or European corporations, or their subsidiary local front companies, to assume the roles of privatized industries, thus sending a bulk of profits northward anyway. Big corporations’ Latin American business partners also often occupied presidential palaces and assemblies, which nurtured cultures of caprice and corruption, with politicians unaccountable to the welling needs of the majority. As the capital classes’ windfalls came in inverse proportion to governments’ tax coffers, IMF/World Bank loan officers insisted client states divest not only in public industry, but also in domestic social programs, medicine, education, business regulation, not even to mention any "communistic" inclinations toward basic labor protections — the latter once a huge catalyst in the growth of the U.S. middle class.
As a result, the Washington Consensus did little but deepen the already gross chasm between rich and poor in Latin America. Nearly every U.S. presidential administration since the end of World War II rationalized their myriad alliances with dictators as defense of "economic liberty," tacitly allowing that to be at the expense of political and social liberty. Most infamously, the ostensible father of supply-side economics, the U.S. economist and right-wing icon Milton Friedman, allied with one of the U.S.’s previous coup beneficiaries, Chilean fascist strongman Augusto Pinochet, to use Chile as an economic Petri dish, with stereotypical results. Even amid Pinochet’s disappearing of some 30,000 citizens, Friedman’s Chilean "economic miracle" yielded a growth in the country’s poverty rate from 17% in 1970, when his coup-dispatched predecessor Salvador Allende was elected president, to 35% in 1990, with the poorest 50% of the population’s share of national income declining from 20.4% to 16.8% and the share of wealthiest 10% skyrocketing from 36.6% to 46.8%.
When the Reagan administration turned up the heat on the Cold War in Latin America — killing upwards of 300,000 people in a series of illegal wars-by-proxy in Central America alone — things got even worse. From 1980-2000, per capita GDP grew an anemic 9% throughout Latin America, unable to offset a growth in those living in poverty, according to the U.N. Special Economic Commission for Latin America and the Caribbean, from 136 million in 1980 to 205 million last year.
Reagan’s wars and heavy bankrolling of right-wing regimes suppressed popular movements against this inequitable status quo, but they became cause to inevitable effect. That is, by simply beating down dissent and making change impossible, the U.S. only worsened the conditions and assured further discontent, enabling a system of government that, shed of any civic responsibility to its people, did little actual work — other than marshal armies.
The Washington Consensus "was relatively blind to the importance of governance and the role of the state," Mark L. Schneider, senior vp at the Brussels-based NGO the International Crisis Group, told Latin American Studies Annual Conference in Montreal last September. "Without effective, inclusive and accountable governance . . . inevitably some of the measures produced losers as well as winners, and the poor and the most vulnerable always tended to be the losers . . . [T]he consequences exacerbated a sense of exclusion and alienation of growing segments of the population."
John Kennedy famously said, "Those who make peaceful revolution impossible make violent revolution inevitable." A contemporary corollary now in play in Latin America would suggest that those who suppressed revolution violently might not fare so well once their prior actions go measured by an honest vote.
THE RISING
The maverick Chávez’s election in 1998 may have made Venezuela a left-leaning outlier in the region, but his open antipathy for the Washington Consensus and its bulwarks like the IMF became a sounding board for years of pent-up frustrations across the region.
Beneath Chávez’s rhetoric, he played the global-trade game amenably, making the country’s loan payments on time and remaining a top supplier of oil to the U.S. But he eventually moved to reform the nation’s lucrative petroleum trade, for decades a no-strings-attached free-for-all for multinational oil companies. In 2001, he passed a law requiring Big Oil firms to enter into joint ventures with the state company Petroleos de Venezuela SA, intending to reinvest the boost in public revenues in the country’s domestic infrastructure via education, medicine and poverty-reduction. Similar circumstances during the U.S.’s reactionary Cold War period had drawn martial sanction from Washington — most infamously via its interventions on behalf of United Fruit in its 1954 Guatemala coup and ITT in Chile in 1973 — and the Bush administration, riddled as it was with linear, Cold War-era perceptions of the world, did not disappoint its conservative-elite Venezuelan allies.
When in late 2001 the administration openly colluded with Venezuela’s oligarchs and their military allies, funded anti-Chávez propaganda and ferried coup plotters to Washington and back, few failed to see the writing on the wall. Their collaborative, hamfisted coup the next spring included the installation of a U.S.-friendly dictator-for-a-day, businessman Pedro Carmona, who, true to previous U.S. coup beneficiaries, moved immediately to dissolve Venezuela’s National Assembly and Supreme Court. Having seen that show too many times before, the community of Latin American nations reacted with the same revulsion as the Venezuelan people.
It is difficult to fully assess Chávez’s tense stand-off with the U.S. for its influence across the region. But later that year, the populist Worker’s Party candidate Lula won the presidency in Brazil, and in 2003, Argentina elected Cristina Fernández’s predecessor and husband, Néstor Kirchner, president — both on strength of tough talk toward their nations’ creditors. In the wake of crippling economic crisis that saw Argentina default on $95 billion in loans in 2001, Kirchner simply refused to honor the nation’s debt, insisting IMF economic policies had "devastated" the country. He renegotiated the debt in 2005 to pay it back at 35 cents on the dollar. For his stand, Chávez showed solidarity, offering to buy some $2.5 billion worth of Argentine bonds, helping Kirchner buy completely out of his nation’s IMF debt at the beginning of the next year.
The move spurred a rebound in Argentina, whose economy grew 50% over the next two years, 11 million people, 28% of the population, climbing above the poverty line as unemployment shrank to 8.5% (from 21.5%) and real wages grew 40%. Even before his country’s actual metric resurgence, Kirchner told an audience prophetically, if much to Washington’s chagrin, "There is life after the IMF, and it's a good life." Lula, as promised, executed a similar buyout in 2006.
"Argentina standing up to the IMF was like an underdog knocking down the schoolyard bully," Mark Engler, an analyst with Foreign Policy in Focus, wrote in an article on TomPaine.com in March 2006. "The aura of invincibility surrounding the Fund was dispelled, and the institution will likely never again inspire the same begrudging awe."
In April 2007, new Ecuadorean president Rafael Correa booted the World Bank representative out of Ecuador, accusing the body of "extortion," and paid off his country’s own IMF debt. Chávez similarly offered Ecuador a $500 million loan to underwrite that effort, along with another $1.5 billion to new Bolivian president Morales. Venezuela itself paid off all its debts to the IMF and World Bank that same month, then the next month withdrew country completely from membership in the organizations. Finance minister Rodrigo Cabezas announced the move on state TV with a telling sentiment:
"My dear sirs at the World Bank, sirs at the International Monetary Fund, goodbye to you. Venezuela is free . . . and sovereign."
By that point, whereas in 2005 Latin America accounted for 80% of the IMF’s global portfolio, it had shrunk to just 1%, a mere $50 million.
BLOC-ED
Even as these monetary chains were being cut, perhaps the most devastating single public blow to U.S. primacy in the region occurred in 2005, at the Summit of the Americas in Mar del Plata, Argentina. Bush arrived to thousand of protesters, led by football superstar Maradona, decrying the U.S. president’s war in Iraq, his administration’s sanctioning the torture of prisoners, and, closer to home, his plan for the Free Trade Agreement of the Americas. Neoliberals envisioned the FTAA as a hemispheric expansion of NAFTA, the North American Free Trade Agreement, which had devastated both the industrial economy of the U.S. and the agrarian economy of Mexico, to which many U.S. corporations moved manufacturing facilities for cheap, unregulated labor. While 29 other nations had signed onto the pact, five refused — five who together accounted for over half the economic activity and population of the continent, Brazil, Argentina, Venezuela, Uruguay and Paraguay. In addition to Bush’s public relations black eye with all Latin America watching, and Chávez adding actual insults to injury at the event, the FTAA went down in flames, smelling too much, by the dissenters’ estimates, of an attempt to revert back to the bad old days under another guise.
"We've almost all of us been down that road, and it didn't work," an anonymous diplomat for one of holdout nations told The New York Times at the time. "The United States continues to see things one way, but most of the rest of the hemisphere has moved on and is heading in another direction."
It must be noted that the dissenting bloc at the Summit of the Americas does not necessarily represent a constant, united ideological front. Fernandez, Uruguay’s Vazquez and even the ostensible socialist Bachelet in Chile (as well as some of the surprising center-left victors in Central America) have shown themselves amenable to continued neoliberal trade policies — Lula in particular has continued along a course of privatization and alienated his labor base. The continuum, however, nevertheless remains extant in their willingness to stand up to U.S.-written, supply-side-myopic trade pacts, as well as their pursuit of "mixed economies" whose domestic social reinvestments fly in the face of conservative "small government" dogma.
While Washington abides such administrations and has publicly drawn a line between them and those it deems heretical rogue regimes, Chávez, Morales, Correa and Nicaragua’s Ortega, that line is largely a fiction confined to U.S. borders. Certainly differences have arisen between the more market-minded and the socialistas, such as the 2006 rift between Bolivia and Brazil over Morales’s nationalization of his country’s energy assets, in which Brazil’s state energy company, Petrobras, retains considerable investments. But a summit between Chávez, Lula, Morales and Kirchner settled the matter amicably, if grudgingly, with a frame for renegotiating Petrobras’s contracts, instead of a CIA-engineered coup.
The hard leftists and center-leftists might disagree on degrees of state activism, but, as Greg Grandin, professor of Latin American history at New York University, wrote in The Nation in April 2006, "they are also highly dependent on one another, especially in their dealings with the United States. For Chávez, besieged during the first three years of his administration, the election of sympathetic regional allies . . . came just in time to help him shore up his position and push back his domestic and foreign opponents. In return, the confrontational Chávez provides cover to his more circumspect counterparts, drawing Washington's anger. If it were not for its quarrel with Venezuela, the United States would certainly be less tolerant of . . . Brazil's opposition to the [FTAA] and Chile's refusal to support the invasion of Iraq."
Indeed, the Pink Tide’s common cause became even more evident late last year, when Venezuela, Argentina, Brazil, Bolivia, Ecuador, Paraguay and Uruguay signed the founding charter of the Banco del Sur. Surprising everyone, Colombia had even requested membership. If the center-left nations are as wary of Chávez as the Bush administration says they should be, they showed no signs of it, agreeing to headquarter the bank in Caracas. The new lending institution will pool the member countries’ capital reserves to be loaned out amongst themselves and neighbors, essentially in competition with the IMF and World Bank. But more importantly, it will lend on considerably less doctrinaire conditions and with an eye towards sustainable development — from basic roadbuilding to a trans-continental oil pipeline — versus the neoliberal emphasis on growth capitalism.
Figuring in not just Chávez’s established oil wealth but welling potential reserves in Bolivia and, just recently discovered, Brazil, the bank could portend at least the first steps toward an intrasufficient economic bloc, which, for the conservative status quo in Washington and on Wall Street, is the worst possible scenario. Proponents of neoliberalism, as a component of U.S.-defined "globalization," have couched it as a beneficent system of economic development, even if in reality it has maintained developing countries as neo-colonial provinces of cheap labor and resources for the corporations of wealthier nations. The fear in the big business-embedded Bush administration in its remaining months — as it has always been towards Chavez in particular — is not necessarily of the ideological turn in Latin America, for there is no Soviet Union remaining with which to conflate smaller nations’ politics with greater global "threats." It is that an entire community of nations might successfully buck off interdependence from the Great Power whose corporations have found such fertile climes in el Sur.
Recall that the Nixon administration’s problem with Allende in Chile wasn’t that he posed a Ruskie-puppet socialist threat to the region or the U.S., any more than Chávez does now. It was that his government might become a case study in socialist-inclined, or simply activist, government amenably co-existing with democratic institutions, thus disproving the great Cold War myth, that only a certain dogma, of unfettered, elite-driven meta-capitalism, fits neatly hand-in-glove with democracy. The Pink Tide, in all its hues of "blue," has at long last disproven that. That Pandora’s Box has been opened in Latin America.
"Developing nations must create their own mechanisms of finance, instead of suffering under those of the IMF and the World Bank, which are institutions of rich nations," Lula said in inaugurating the Banco del Sur in December. "It is time to wake up."