Latin American Spring and global recession
Evo Morales' presidential election win in Bolivia at the end of 2005,
heralded an unprecedented series of electoral challenges to
US and other foreign influence in Latin America through 2006. The
year's changes have brusquely disrupted domination by local elites
identified with foreign corporations, the agenda of foreign governments
and of the international financial organizations those governments
control. The elections make possible for the first time in decades
concerted combination by Latin American and other countries to
defend their peoples' interests against the imperial powers of US,
Europe and their Pacific allies. As the year ends, elections have now
taken place in Colombia, Peru, Mexico, Brazil, Nicaragua, Ecuador and
Venezuela.
Corrupt, repressive local oligarchies foisted their fascist candidate
of choice on people in both Colombia and Mexico. In Peru, centrist
opportunist Alan Garcia barely scraped a win even with reluctant
support from the country's reactionary oligarchy. In Mexico, the
supreme federal electoral tribunal acknowledged the elections were
vitiated by fraud, but declared for the ruling PAN party's candidate
Felipe Calderon regardless. Fraud tainted Alan Garcia's election win in
Peru as well, although not in a way that permitted losing
candidate Ollanta Humala the kind of mass protest campaign mounted by
Andres Manuel Lopez Obrador in Mexico.
By contrast, in Brazil, Nicaragua, Ecuador and Venezuela the victorious
candidates won by very clear margins in elections almost universally
accepted as legitimate. All the new presidents in those countries are
committed in varying degrees to a strong social agenda, inimical to US
political and economic domination and in favour of regional
integration, prioritizing more or less greater redistribution of
resources in favour of the impoverished majority. However, only in
Venezuela does the re-elected president there enjoy clear majority
support in the legislature. One needs to look beyond the fatuous "pink
tide" pap-reporting of corporate mainstream news media to get some idea
of what Latin America's new political configuration might mean.
Terror, corruption, repression
In Colombia, narco-terror President Alvaro Uribe won re-election by a
substantial margin in a country traumatised by civil war. Like his
patron George W. Bush, Uribe is finding that a second term in office
can incur the consequences of accumulated hubris. Currently, Uribe's
administration is struggling to minimize damage from scandals that have
only confirmed what most people already knew very well concerning its
links to drugs-dealing paramilitary terrorist organizations. Three
members of Colombia's Congress have been arrested accused of illegal
support for the Colombian paramilitary death squads. Over 50 members of
the country's two house Congress may be implicated as well as the
country's Defence Minister and close relatives of the Foreign Minister.
(1)
Revelations by Senator Miguel de Espriella have been followed by
threats of further revelations from paramilitaries participating in the
bogus, revolting "peace talks" between these murderers themselves and
the very authorities who organised them in the early 1990s and with
whom they have been working ever since. The scandal seems to mark a
vicious power struggle between the country's old guard oligarchy and
more recent upstarts exploiting their power base in the paramilitary
bands the oligarchy created and nurtured. Colombia offers a vision at
once frightening and sobering of the kind of desperate civil conflict
that might await Mexico if the illegitimate Calderon regime insists on
pushing through its corrupt, viciously exclusive economic programme.
The recent reprise in Oaxaca of mass indiscriminate imprisonment,
wanton murder, and premeditated wholesale assault and rape perpetrated
earlier in the year in Atenco is likely to be only a taste of what is
to come. Protected by the army, Calderon skulked into office, literally
by the back door, and named notorious human-rights-violating hardmen in
key ministerial posts. Up until now the mass resistance organized by
Andres Manuel Lopez Obrador has not suffered the kind of extremely
violent assaults launched against protestors in Oaxaca. That restraint
is unlikely to last when Calderon and the ruthless oligarchy he fronts
for find their plans for grand larceny on a national scale - such as
privatization of the State oil company PEMEX - frustrated both in the
country's political structures, in the streets and in the campo. (2)
In Peru, chameleon Alan Garcia is haunted by human rights abuses
committed during his previous presidential term in the 1980s. Back then
his government oversaw mass murder by the security forces in Peru's
prisons of hundreds of people accused of links to the Sendero Luminoso
guerrilla movement. He left office amid much speculation about
corruption including rumours of a secret deal permitting Alberto
Fujimori to install his own corrupt, murderous terror regime, run by
Fujimori together with the sinister Vladimiro Montesinos, currently
imprisoned in Peru on narcotics and corruption charges. After
submerging Peru's majority deeper in poverty and hyperinflation in the
1980s, Garcia has now veered to the other extreme and installed
IMF-loyalist and banker Luis Carranza as economy minister. Garcia has
little support in Peru's impoverished rural departments as recent
protests made clear. His APRA party made a miserable showing in recent
municipal elections in which the main political parties generally lost
local representation.
Just as almost everywhere else, corruption is prevalent throughout
Latin America but the degree to which its benefits are guaranteed by
murderous organized violence against the dispossessed in Mexico and
Colombia sets those countries very much apart. Mexico and Colombia
receive practically unqualified support from the US authorities and
their European and Pacific colleagues despite the blatant electoral
fraud in Mexico and the naked narco-terror of Alvaro Uribe's regime.
Peru's Alan Garcia, recently reconciled with Venezuela's Hugo Chavez
after differences during Peru's hard-fought election campaign,
will most probably try to bolster his precarious popular support by
trying to meet campaign commitments he made to economically vulnerable
groups. He may well stick only loosely to the neo-liberal Pacific Rim
corporate consensus promoted by the United States from Mexico City down
to Santiago in Chile. If he tries to push through a hard neo-liberal
corporate agenda he will certainly provoke the mobilisation of the kind
of popular coalition that almost denied him the presidency this year
and which helped Rafael Correa win the presidency in neighbouring
Ecuador in November.
Prague Spring in Latin America?
Trade and investment are the economic key to Latin American countries'
efforts to defeat the imperialist designs of the US and its European
and Pacific allies. A recent vote in the US Congress on the Andean
Trade Preference and Drug Eradication Act seems to have extended that
measure's preferential terms for 6 months to all four participating
countries, Bolivia, Colombia, Ecuador and Peru. The ATPDEA was first
agreed in the early 1990s ostensibly to promote measures against drug
production, mainly cocaine, and to promote US-Andean trade. In
practice, it served both as a pretext to legitimise a US military and
intelligence presence in the area aimed principally against the
Colombian FARC guerrillas and as a way of getting the Andean countries
hooked on favourable trade terms so as to soften them up for full-blown
"free trade" treaties with the US.
Against vigorous popular opposition, the Peruvian and Colombian
governments have already signed up for these trade-in-your-sovereignty
treaties with the US - although Congress has yet to ratify them and may
even refuse to do so if the Democrats decide it suits them to hang
tough against George Bush's failed-state regime. But Ecuador and
Bolivia both reject the prospect of such treaties on the grossly
prejudicial terms offered by US trade negotiators. The renewal of the
ATPDEA (3) has sent feathers flying in the corporate one-party State
cockpit in Washington. Some wanted to condition renewal on
commitments from Bolivia and Ecuador to future "free trade" agreements.
Others argued that renewal is vital to counteract the influence of
trade initiatives from Venezuela and Cuba like ALBA (the Bolivarian
Alternative for the Americas) as well as already mooted bilateral
cooperation agreements between Venezuela, Bolivia and Ecuador. The
precarious future of broad US military presence in the region is also a
factor, since Ecuador's president-elect Rafael Correa has already
declared that his government will not renew the lease on the strategic
US coastal and air base at Manta when that expires in 2009.
When Bolivia's president Evo Morales stated that other South American
countries had committed to absorbing Bolivian manufactures, jewellery,
furniture and textiles should these be blocked from entry to the US
(4), he signalled regional governments' determination to insist on
reaching terms of trade in the interests of their peoples. A
major factor facilitating moves towards greater economic autonomy is
increased investment from China. China's leader Hu Jintao visited
various Latin American countries at the end of 2004 and negotiated
investment deals initially worth at least US$50bn and perhaps as much
as US$100bn in years to come. While this is still less than half
current US direct investment in the region it dramatically increases
Latin American countries' economic options and invites a fundamental
rethink in US and European economic strategies in the region.
Foreign investment - a mixed bag
The growing non-traditional investment presence in Latin America of
countries like China and, on a smaller scale, other countries like
Russia, India and Iran is most obvious in Venezuela. Computer assembly,
vehicle production and arms manufacture accompany cooperation in oil
and gas extraction technology and cooperation on satellite ventures.
Brazil's Embraer, now a major world aerospace manufacturer, runs a
joint aircraft production plant in China. The Chinese oil company
Sinopec is helping Cuba explore for oil. An Indian multinational
recently signed a deal with the Bolivian government to exploit the
country's vast Mutun iron ore reserves. That Mutun deal was much
criticised by analysts who argued that Bolivia would have done better
to build up its own iron ore processing capacity rather than contract
out that processing wholesale to a foreign multinational. (It may be
worth noting here that Indian and Brazilian multinational companies are
currently competing against each other in a takeover battle for the
British Corus steel company).
In parallel with that growing commercial power and confidence, Latin
America's technological prowess is also clear. Apart from the
well-established skills base in agriculture, in steel and manufacturing
and in oil and gas technologies, both Brazil and Argentina have
successful nuclear industries. Argentina, for example, is likely to
operate a contract shortly to overhaul a nuclear reactor in Libya.(5)
Complementing all the foreign investment are local integration
processes advocated most strongly by Venezuela and Brazil and supported
by Argentina, Bolivia and now very probably Ecuador as well. A typical
example of this rapidly advancing trend was the recent inauguration of
a gas liquefaction plant in Bolivia as a joint venture between Bolivia
and Venezuela, part of a planned US$1.2bn investment program run by
Bolivia's state YFPB copmany and Venezuela's State PDVSA.(6)
Despite such promising signs of growing autonomy, Latin American
economies remain overwhelmingly dependent on raw materials exports.
Latin America (mainly Chile and Peru) exports 40% of the global supply
of copper and 47% of the global supply of soya, (mainly from Argentina,
Brazil and Paraguay). China's current voracious demand for raw
materials is buoying up prices for the moment and gives Latin American
countries much-needed leverage in negotiations with the United States
and Europe. Chile negotiated a mutually beneficial trade agreement with
China that came into effect in October this year. Even so, the OECD
reports (7) that from 2001 to 2005, the main investors in Latin America
were from the US, Holland, Spain, France and Canada.
Principal targets for companies from these countries have been
industries like tourism, banking and telecommunications, manufacturing
and natural resources, mainly oil, gas and minerals. Mexico and Brazil
have been the main beneficiaries. Overall direct foreign investment in
Latin America has declined by about 4% from 12% in the 1980s to 8% now
as a proportion of global investment overall. Such figures are
misleading in that much of the so-called investment through the 1990s
and in recent years was largely attributable to merger and acquisition
activity, a lot of it fuelled by the privatization of State resources
under the edicts of the IMF and the World Bank.
Coupled with that, deregulation of capital controls meant that most of
the profits from all that artificial investment activity fled Latin
America for major global financial centres and the plethora of
international offshore tax havens. The kind of foreign investment that
countries chase after matters at least as much as the nominal amounts
on offer. The reason gargantuan infrastructure programs like Plan
Puebla Panama and IIRSA (South American Regional Infrastructure
Initiative) depend almost entirely on Inter-American Development Bank
loans is that private corporations and multinational companies refuse
to invest in them. So local populations get saddled with massive debt
to cover risks private capital refuses to touch. The massive dishonest
corporate propaganda machine trumpeting the wonders of "free market"
capitalism falls silent when shareholders fear losing their shirts.
Then it is suddenly time for international financial institutions to
approve corporate welfare "regional development plans" and other
interventions not-so-abhorrent-to-all-true-believers, so long as they
are funded by reluctant, impoverished tax-payer philanthropists.
In any case, China's efforts to increase its presence in South America
should boost levels of real investment in technology and infrastructure
and combine with the investment potential of current integration
initiatives to reshape traditional investment patterns in Latin
America. The huge challenge facing progressive governments in Latin
America is to guarantee a dramatic improvement in the redistribution of
the wealth resulting from such changes. If one asks the question "why
are the United States and its European and Pacific allies politically
hostile to Venezuela and Bolivia (and now Ecuador) but friendly with
Mexico and Colombia?" almost all of the answer is based in that
economic reality. The old rules of the game are changing because Latin
American governments can now work together and play three giant
customers against each other. It is much harder for Europe and the US
to run their traditional debt-aid-and-trade extortion racket to divvy
up Latin American resources between themselves now a third major player
has dealt themselves in.
Dollar decline, same old sham diplomacy
How long the current buoyancy of raw materials and energy prices
sustaining healthy Latin American economic prospects will last is
anyone's guess. So much depends on the US economic love-hate
relationship with China. The decline of the dollar has been the theme
of endless speculation for years. Right now it looks as though the
global central banks cartel is managing markets convincingly enough to
be able to deliver a managed dollar devaluation allowing foreign buyers
to soak up worth-less-and-less US Treasury paper liquidity with
relatively limited recessionary effects. Some analysts expect the
dollar to make a stately decline through 2007, others optimistically
argue that the current drop in value is a speculative blip, for example
an arbitrage by speculators on statistical values of the Yen against
the Euro.(8) A less sanguine view was recently offered by Gabriel
Kolko(9) suggesting that financial markets, especially financial
derivatives markets, are so out of control that a market induced crash
could plunge the world's economies into recession at any moment.
A more cynical spin might be that the US government is using global
dependency on the dollar to intimidate competitors into doing what it
wants - a kind of US economic water-torture, drip by drip. The managers
of the US corporate one party State also know domestic hard times are
very likely on the way and, by smart not-so-coincidence, already have
in place the repressive legislation necessary to manage any burgeoning
domestic dissent or revolt, having scrapped the Constitution in favour
of Patriot Acts 1 and 2. While China's investment in Latin America may
be welcome, countries like Mexico and the Central American republics
see China as much as a competitor as a potential benefactor. All are
heavily dependent on domestic US consumer demand. The threat of global
recession is a powerful one that despìte its "free market"
gobbledy-gook the US government is well able and willing to manipulate
in its favour. In some ways China's investment in Latin America might
best be viewed as a race against time to diversify available markets
for its goods away from North America, as much as an accompaniment to
vacuuming up the continent's natural resources.
Along with the unfavourable global economic realities that seem to have
overtaken United States government policy has appeared a superficial
softening in US diplomacy. Thomas Shannon, Assistant Secretary of State
for Western Hemispheric Affairs, has recently declared US government
readiness to work with Daniel Ortega and with Hugo Chavez following
their presidential election victories in Nicaragua and Venezuela
respectively. But that apparent change of heart in the Bush regime line
towards democratically elected ideological opponents is barely even
press-release-deep. When one returns to consider US and European Union
policy in Latin America the stark reality remains unchanged. Mass
murderer Augusto Pinochet and his sister-in-arms Jean
Kirkpàtrick may be dead now but their nefarious criminal
ideological legacy abides.
Blatant electoral fraud and mass human rights abuses in Mexico go
practically unchallenged by the imperial powers. Colombia more clearly
than ever is ruled by narcotics, death-squad gangsters but still
receives billion-dollar funding from the US and the mildest of
admonishments from Europe. The US still refuses to meet its
international obligations and return self-confessed mass murderer Luis
Posada Carriles to Venezuela to stand trial for the bombing of a
civilian airliner. Terrorist camps in Florida continue to train
assassins for terror attacks in Cuba and Venezuela, with the complicity
of the US authorities. The European Union stays mum - so much for the
"war on terror". One can only hope Latin America's Spring endures
longer than the one in then Czechoslovakia and is not frozen stiff by
the United States and its European and Pacific allies manipulating
global "free markets" so as to manage economic downturn as a variation
on Clausewitz's "politics by other means". This may be to overstate the
empire's capacity to turn wishes into reality. But its agents never
stop scheming. With their power and control in decline, they will seek
to preserve every advantage they can.
Notes
1. "Colombian scandal weakens push for economic reform", Hugh
Bronstein (Alertnet Reuters)November 27th 2006
"Actitud paramilitares complica aún más situación
gobierno colombiano" Prensa Latina, December 7th 2006
"¿No existen las responsabilidades políticas?", Jorge
Enrique Robledo, Argenpress.info 04/12/2006
"Conexiones "ocultas"", José María Carbonell, Anncol,
29/11/2006
"Narco Parlamento Colombiano", Miguel Suarez, Anncol 29/11/2006
"El país de los escándalos", Reinaldo Spitaletta,
Argenpress.info 30/11/2006
"Uribe Vélez no es aliado de los paramilitares...", Por la
boca muere el pez/Juan Leonel Londoño/Luís Pedro
Lizcano,Anncol, 2/12/2006
2."Repression on the Menu in Mexico" John Ross, Counterpunch, December
4th 2006
"The Dirty War of Oaxaca", Barucha Calamity Peller, Counterpunch,
December 2nd/3rd 2006
"The Coup d'Etat in Mexico", Al Giordano, Narco News, November 29th 2006
3. "Preferential US-Andean Deals Face Uncertain Future", Emad Mekay,
Inter Press Service 20th November 2006
"Renovación de las preferencias arancelarias Para Bolivia y
Ecuador es otro precio" Asociacion de Prensa Mercosur, 6/12/2006
"EE.UU. amplía plazo preferencial a Bolivia y países
andinos", Prensa Latina, 09-12-2006
4."Afirma Morales que encontró mercado en países
sudamericanos", Prensa Latina, 09-12-2006
5."Argentina modernizará un reactor nuclear en Libia", XINHUA,
Argenpress, 04/12/2006)
6. "Chávez y Morales inaugurarán en Bolivia planta de
gas", Prensa Latina 3/12/2006
7. "China, a helping hand?" Javier Santiso, Policy Insight No.23, OECD
Development Centre
8. "Dollar decline? What dollar decline? It's arbitrage." David Andrew
Taylor, Seeking Alpha, 4/12/2006
(http://usmarket.seekingalpha.com/article/21656)
9. "Factors in our colossal mess", Gabriel Kolko, Counterpunch,
25th/26th November 2006 (http://www.counterpunch.org/kolko11252006.html)