The dawn of rejection toward U.S. neo-liberal policies
President Lt. Colonel Hugo Chavez Frias' criticism of U.S. policies runs deep with an insightful history. The Venezuelan dissident has been criticizing the U.S. Government and its policies since before winning the presidency in 1998. In fact, his most discordant statement occurred six years prior to his free and fair election victory.
In Hugo's failed coup attempt of 1992, he had hoped to overthrow the country's U.S. supported, demoligarchic [1] power structure which had trapped the country in mounting debt by fleecing its petroleum revenues to foreign investors' banks and adhering to Washington's neo-liberal, economic policies. Instead, he found himself incarcerated.
The Venezuelan military leader, however, made good use of his time while in jail. It was behind bars where Chavez honed and polished the principles for his Bolivarian Revolutionary Movement (MBR), which he would finally implement after being awarded a pardon that allowed him to rally the impoverished majority of Venezuelan society. His campaign for the 1998 elections pointed to the corrupt Venezuelan leaders, who for nearly two decades had complacently conformed to hegemonic neo-liberal policies, as the culprit for Venezuela's financial maladies, growing poverty and widening economic gap between the rich and the poor.
Chavez brilliantly relied on rhetoric that associated him with the region's heroic Spanish colonial liberator, Simon Bolivar, who brought independence to the region in the early 19th century. The military leader consistently compared Washington's role in the country, and the region, with that of the Spaniards'. His campaign was effective and his mandate from the people was the key to his success in overturning U.S. influence in Venezuela.
Since coming to power ten years ago, the past decade has seen radical changes in the social and political spheres of Latin America. Almost every nation in the region has a recent history of violence under either totalitarian leaders who terrorized society, or oligarchs who financially sapped the system which they governed. By 2005, people of the region had become intolerant with their corrupt leaders. That year, the Economist indicated that 71 percent of Latin American respondents say their countries are "governed for the benefit of a few powerful interests" instead of "the good of everyone" [2].
Without a doubt, Chavez is the fiercest critic of Washington and its influence in the region. He is known throughout the world for his inflammatory statements addressing not only Bush II, but his government's "imperial ambitions" [Chomsky]. His criticism not only meshes with the foundation of his ideological Bolivarian Revolutionary Movement, but it also represents popular sentiment in Venezuela and the rest of Latin America.
For more than three decades the region has suffered under U.S. economic policies and neo-liberal "free trade" agreements, and this is what Chavez has played his success on. His consistent rhetoric has sent ripples which have likely caused other nations like Bolivia, Brazil, Chile, Ecuador and most recently Nicaragua, to realign their political preference to the left in opposition to these policies.
Notwithstanding, the current trend of Latin America's left turn is not only in response to Chavez's criticism, but also to a regional awareness that U.S. neo-liberal policies spell socio-economic hardships for the majority of people in the region. As such, the people are wising up and playing a more strategic game of political opposition to Washington's policies.
The history, objectives and reality of U.S. neo-liberal policies
The U.S. economic policies which have been incessantly implemented throughout the regions of Latin America, Africa and Asia are known as structural adjustment programs, or SAPs. These programs began to surface more frequently as part of the Washington Consensus in the late 1970's under President Jimmy Carter, but have actually been around since the late 1940's with the incarnation of the Bretton Woods Institutions. While the advertised intention of these SAPs has always been to reduce poverty, the history of these programs reveals only failure in that motive.
Until the late 1990's, Washington was able to convincingly persuaded national leaders to obediently adhere to SAPs, selling/imposing them as financial tools that would eliminate a country's fiscal imbalance. From Argentina, Brazil and Chile, on up through Venezuela to Costa Rica and Mexico, the region has been extremely susceptible to foreign economic intervention from the U.S. and its international financial institution (IFI) affiliates like the World Bank (WB) and the International Monetary Fund (IMF). Today, the region is beginning to stir from its gullible slumber.
Latin America has essentially been an easy target for Washington, its IFI collaborators and multi-national business partners. After roughly thirty years of trust in their well-intentioned advisers to the north, citizens throughout the region are beginning to say "NO!" to the Washington Consensus and subsequently elect leaders who will convey their sentiment. As such, abstention from these dysfunctional SAPs is now contagiously spreading in the region as it leans to the political left.
A more scrutinizing examination of how the Washington Consensus and its SAPs operate will shed some light on the rationale for the region's popular sentiment toward what Chavez refers to as the Empire. SAPs typically consist of six parts that are adhered to by the borrowing country. These include privatization, cuts in government spending, imposition of user fees, promotion of exports, higher interest rates, and trade liberalization [3]. This may or may not look good on paper, but in reality these measures have generally only worsened conditions in any country that has adopted them.
To highlight simply the most intrusive of these policies, privatization is one of the primary remedies mandated by policy makers. Under privatization, the borrowing country agrees to sell its government-owned enterprises to private owners who are usually foreign investors.
Take Venezuela for example, by the mid-90's, Chavez's predecessors had sold most of the country's oil production rights to foreign investors. As such, the revenue from this primary resource was no longer available. What the people witnessed instead was capital flight and a downward spiral in economic stability.
Chavez came to power and immediately repossessed the country's oil production rights and exported the foreign investors. Privatization is the most effective way to manipulate a desperate nation led by corrupt officials. Although the offering price to purchase the industry fell well below market value, the politicians who were brokering the deal came out with their pockets full.
This has happened not only with petroleum in Venezuela, but also with resources like copper in Chile, water in Bolivia and bananas in Nicaragua and Honduras. It can be difficult to identify a country in the region that has not fallen victim to this scheme.
While detailing on just one of the six parts relevant to SAPs, privatization is traditionally known to produce some of the worst impacts on the borrowing country. The end result is that the country becomes more dependent on future borrowing for debt maintenance, and thus ends up integrated in a vicious cycle of remediation which has no end in sight.
Failing U.S. neo-liberal policies and the region's response
After more than three decades of heeding Washington's advice, economic critics now point to the fact that the borrowing country's national sovereignty is jeopardized as a result of SAPs [4]. Because of the binding stipulations that are set on loans, the government of the borrowing country is limited in making decisions on economic and social issues. The country thus relies on bankers and politicians from Washington to decide what is best for the nation. Ostensibly, the outcome has been social and economic disparity.
According to the Pan American Health Organization, "there are currently more poor people (over 200 million) in the area today than the early 1980s" [2]. By the 1980s, the region was just beginning to show its obedience to Washington's plan for assistance. Statistics like these contradict the anticipated outcome for Washington's SAPs, while they simultaneously demonstrate that Washington does no better at financial management than dictators and greedy oligarchs.
Some of the more stellar examples of SAP failures are Argentina and its financial collapse from 1999-2002, Ecuador's financial collapse in January 2000, Bolivia's accumulated debt of billions of dollars after two decades of SAP adherence, Mexico's rapid rise in inflation in 1987, and Haiti which remains the poorest nation in the region. It has been a hard lesson to learn not to do business with Washington, but the region is coming around to its senses and the backlash is being felt in the United States.
The detrimental socio-economic effects of the Washington Consensus and its SAPs have been felt throughout the region with continued economic stagnation and a sharp rise in poverty which has exacerbated the economic gap between the rich and the poor. It is an equation which is highly imbalanced, at best.
This is the reality on which Chavez bases his criticism, and the skepticism experienced by the region's population toward Washington is hereby justifiable. As a result of the Washington Consensus and its SAPs, Latin America has experienced a thirty year delay in development. This though should not come as a shock, as common economic sense deduces that a country which spends all its economic resources on debt payoff to bankers will have nothing remaining to develop itself internally.
This is what has taken place in the region, and this is what the region's recent political shift to the left is all about. Although Chavez has wasted no opportunity in taking a stand against Washington's financial meddling, a majority of the region is following suit and expressing the same discouragement toward U.S. policies, albeit not so uncouth.
Whether they believe in Hugo's criticism, or in their own personal experience, the people are electing leaders who will oppose the policies mandated from the U.S. Popular sentiment has been clearly expressed as Argentina, Brazil, Bolivia, Uruguay, Chile, Ecuador, Guatemala and Nicaragua have recently elected leaders who are committed to the rejection of these policies.
Meanwhile, this trend is forecasted to continue as Chavez and the rest of Latin America continue to abstain from neo-liberal prescriptions, while shifting to the left of the political spectrum.
Bibliography
1. "demoligarchic" is a term which the writer of this piece coined in the year 2000 as part of a thesis on Hugo Chavez' rise to power. Its meaning encapsulates an oligarchic political structure that relies on a quasi-democratic electoral arena which facilitates the maintenance of power among the oligarchy.
2. http://www.pww.org/article/view/6815/1/264/
3. http://www.50years.org/action/s26/factsheet2.html
4. http://www.jubileeusa.org/fileadmin/user_upload/Reso urces/Education_Action_Packet/SAP.pdf