Why Latin America
By
Mark Weisbrot
From
the Guardian
A
few months ago I ran into an economist who was formerly head of the
Bolivian Central Bank in the La Paz airport. He had been reading
Nouriel
Roubini,
the New York University economist whom the media has nicknamed "Dr
Doom",
and was predicting a very gloomy economic future for the hemisphere,
the region and especially his own country.
I
didn’t agree about Bolivia, which has more international reserves
relative to its economy than China. But it was striking to see the
same thing in all the countries that I visited: opposition economists
and political leaders everywhere reminded me of communists in the
1930s, praying for the collapse of the capitalist system — in this
case, somewhat ironically, so that they could rid themselves of the
left governments that the voters had chosen in Bolivia, Venezuela,
Brazil, Argentina, Paraguay, Ecuador and elsewhere.
In
all of these countries the vast majority of the mass media, to
varying degrees, shares the opposition’s agenda and in many cases
appears willing to present an overly pessimistic or even catastrophic
scenario in order to help advance the cause.
But
despite the worsening of the world and regional economy, the left
keeps winning in Latin America. The latest left victory was that of
President Rafael Correa of Ecuador, an economist who was first
elected at the end of 2006 and was reelected last Sunday under a new
constitution. This gives the charismatic 46 year-old four more years,
and he can be re-elected once more for another term.
There
are a number of reasons that most Ecuadorians might stick with their
president, despite what they hear on the TV news. Some 1.3 million of
Ecuador’s poor households (in a country of 14 million) now get a
stipend of $30 a month, which is a significant improvement. Social
spending as a share of the economy has increased by more than 50% in
Correa’s two years in office. Last year the government also invested
heavily in public works, with capital spending more than doubling.
Correa
has delivered on other promises that were important to his
constituents, not least of which was a referendum allowing for a
constituent assembly to draft a new constitution, which voters
approved by a nearly two-thirds majority. It is seen as one of the
most progressive constitutions in the world, with advances in the
rights of indigenous people, civil unions for gay couples and a novel
provision of rights for nature. The latter would apparently allow for
lawsuits on the basis of damage to an ecosystem.
Many
thought Correa was joking when he said during his presidential
campaign that he would be willing to keep the
US military base at Manta
if Washington would allow Ecuadorian troops to be stationed in
Florida. But he wasn’t, and the base is scheduled to close later this
year.
He
also resisted pressure from the U.S. Congress and others in a
multi-billion-dollar lawsuit that Ecuadorian courts will decide, in
which Chevron
is accused of dumping billions of gallons of toxic oil waste
that polluted rivers and streams.
And
in an unprecedented move last November, Correa
stopped payment on $4 billion of foreign debt
when an independent Public Debt Audit Commission, long demanded by
civil society organizations in Ecuador, determined that this debt was
illegally and illegitimately contracted.
In
the United States, these policies have mostly been dismissed as
"populism" or worse. A New York Times editorial in November
2007 entitled "Authoritarians
in the Andes"
summed up the foreign policy establishment view that Correa,
Bolivia’s President Evo Morales and President Hugo Chávez of
Venezuela were "increasingly interested in grabbing power for
themselves." For Correa and Morales, wrote the Times editorial
board, "their confrontational approach is also threatening to
rend Bolivia and Ecuador’s fragile social and political stability."
The
Times (and Washington’s foreign policy establishment) have proven to
be wrong, as Ecuador and Bolivia are now more politically stable than
they have been for decades. (Ecuador has had nine presidents over the
last 15 years). They are also more democratic than they have ever
been.
In
fact, most of Latin America is going through a democratic transition
that is likely to prove every bit as important as the one that
brought an end to the dictatorships that plagued many countries
through the first four decades of the post-second world war era.
Ironically, the region’s economic performance was vastly better in
the era of the dictatorships, because the governments of that era
generally had more effective economic policies than the formally
democratic but neoliberal governments that replaced them.
A
few years ago there were fears, backed by polling data, that people
would become nostalgic for the days of real (not imagined)
authoritarian governments because of the much greater improvements in
living standards during that era. Instead, they chose to vote for
left governments who extended democracy from politics to economic and
social policy.
The
left governments have mostly succeeded where their neoliberal
predecessors failed. Partly they have benefited from an acceleration
in world economic growth during most of the last five years. But they
have also changed their economic policies in ways that increased
economic growth.
Argentina’s
economy grew more than 60% in six years and Venezuela’s by 95%. These
are enormous growth rates even taking into account these countries’
prior recessions, and allowed for large reductions in poverty. Left
governments have also taken greater control over their natural
resources (Ecuador, Bolivia, Venezuela) and delivered on their
promises to share the income from these resources with the poor.
This
is the way democracy is supposed to work: people voted for change and
got quite a bit of what they voted for, with reasonable expectations
of more to come. We should not be surprised if most Latin American
voters stick with the left through hard times. Who else is going to
defend their interests?
Mark
Weisbrot
is co-director of the Center for Economic and Policy Research, in
Washington, D.C.
http://www.guardian.co.uk/commentisfree/cifamerica/2009/apr/30/ecuador-election-economy
