Reframing Latin American Development

Ronaldo Munck, Raul Delgado Wise, Ronaldo Munck, Raul Delgado Wise

• Publisher: Routledge
• Year: 2018
• eBook ISBN: 9781351690843
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Global Politics
• Index: Politics & International Relations

Since the year 2000 Latin America has been at the forefront of a series of diverse experiments with alternative forms, pathways and models of economic development and at the cutting edge of the international theoretical and political debates that surround these experiments. Reframing Latin American Development brings together leading scholars from Latin America and elsewhere to debate and discuss the current practice and futures of the Latin American experience with alternative forms of development over the last period and particularly since the end of neoliberal dominance.

The models discussed range from the neo developmentalism approach of growth with equity, to the Buen Vivir (How to Live Well) philosophy advanced by the indigenous communities of the Andean highlands and implemented in the national development plans of the governments of Bolivia and Ecuador. Other models of alternative development include the so-called socialism of the twenty-first century and diverse proposals for constructing a social and solidarity economy and other models of local development based on the agency of community-based grassroots organizations and social movements.

Reframing Latin American Development will be of particular interest to researchers, teachers and students in the fields of international development, Latin American studies and the economics, politics and sociology of development.

1 Challenges and prospects for change in Latin America

A foresight approach

Ronaldo Munck

Foreword

In 1980, a seminar was held in Morelia (Mexico) to debate “hegemony and political alternatives in Latin America” within the then emerging Gramscian problematic. The military governments were still riding high and the left was searching for a viable strategy. Its convenor, Julio Labastida Martin del Campo, focused on the limits of voluntarism when it comes to the difficult task of total social, economic and political transformation and argued that the main objective of the seminar was to “reflect on the possibilities of establishing an integrated field of analysis for what in reality and in theory appears disarticulated and even counter-posed” (Martin del Campo 1985: 8–9). This entailed a critical reconsideration of the categories used until then to develop alternative projects for society. In early 2016, I co-organized (with Raul Delgado Wise and Henry Veltmeyer) another seminar in Zacatecas (Mexico) with the objective of rethinking the options for change in Latin America in the context of the left-of-centre governments whose star was already beginning to wane. What was surprising was how many of the concerns of Morelia 1980 were still with us in 2016. Voluntarism still seemed dominant with many calls for this or that class or political group to do something radical now to prevent backsliding or betrayal. The analysis I proposed was aimed at establishing a common terrain or at least a shared understanding of what the main issues were in this period of transition. I tried to keep in mind Ernesto Laclau’s contribution to the Morelia seminar where he said:

To conclude, we need to call for realism, concrete analysis and a move beyond Marxist catechism.… For decades these catechisms have led us to failures and catastrophes. But in general they keep on being used: blame is always placed on the adversary, as though our analysis should not foresee this and our actions take it into account.

(Laclau 1985: 13)

This issue was much present at our own workshop with the “right” or “imperialism” often being blamed for what was happening across Latin America as we met. For myself, I wanted to advance a critical realist assessment of the issues at stake and the options open to those who advocate progressive social change. This foresight exercise has to be cool and dispassionate if it is to serve a radical transformative purpose. With the ebbing of the progressive wave, the stakes could not be higher and a return to the old proclamatory language and the repeating of simplistic catechisms will not, I would argue, provide adequate strategic visions to respond to the new situation opening up.

Challenges

If we examine the main challenges to development and democracy from a Latin American perspective we can propose the following key “matters arising” after the long night of neoliberalism: growth, equity, sustainability and governance. This is now a widely agreed agenda, even by some one-time supporters of neoliberalism, and they are challenges that apply equally to right/pro-market and left/pro-society governments. That underlying division is posed here in relation to the Polanyian “double movement”, with governments predominantly promoting either a market logic against society or supporting social counter-movements to tame naked market forces.¹ We outline these challenges now in a broad schematic way so as to later carry out a balance sheet of the extent to which those forces seeking an alternative to the status quo have risen to the occasion.

Growth

There is little disagreement across the political spectrum (except from some environmentalists) that economic growth is still the main challenge for Latin America, much as it was in previous periods. The post-war period in Latin America was characterized by an inward-looking state-driven development model committed to mass consumption. Around 1980 a sharp turn occurs which leads to a market-driven export-oriented model where mass consumption was not essential. We find that for the region as a whole Gross Domestic Product (GDP) per capita in the 1980s declined, due not least to a massive debt crisis. Then, in the 1990s, GDP per capita rose by 1.5 per cent overall followed by a respectable 2.1 per cent in the 2000s (Bulmer-Thomas 2014: 426). However, these growth rates contrast very poorly indeed with other “developing” regions, not least east Asia, of course. Only one country – Chile – has managed since 1980 to clearly exceed the growth rates for the inward-looking development period of 1950–80. In 2015, in the context of a sluggish global economy, Latin America grew by 2.2 per cent on average which is reasonably positive.

The way Latin America responded to the global economic crisis of 2008–9 provides some indication of the progress made since the high-water mark of the neoliberal era, when the fortunes of the region were almost totally tied to economic fluctuation in the affluent North. Whereas in the past a financial crisis in the North led to catastrophic collapse in the South, this time we saw Brazil’s GPD growing by 7.5 per cent in 2010 and Argentina’s by 9.2 per cent (following the virtual collapse in 2001 of an extreme neoliberal model). It appeared at first that the “decoupling” of the Latin American economies from the global economy – once advocated by the dependency theorists in the 1970s – had come to pass. The reality was more prosaic but just as significant. As M Cohen et al. argue, in a close analysis of this period, the disparity in performance during and after the crisis between Latin America and the North is striking and it “resulted in comparatively shallower and shorter recessions, smaller rises in unemployment and poverty and much faster recovery of previous growth rates” (Cohen, M et al. 2012: 13). The challenge of economic growth is ultimately about political choices. As Karl Polanyi was fond of saying, “There was nothing natural about laissez-faire; free markets could never come into being merely by allowing things to take their course” (Polanyi 2001:145). Likewise, the reversing of neoliberalism’s denigration of the state and subordination of society to the market is an eminently political process.

Equity

The Economic Commission for Latin America and the Caribbean (ECLAC) has in recent years placed great emphasis on equality in its economic policy recommendations. For ECLAC: “The value of equality, together with that of freedom, is the most humane way of taking on the tasks of modernity” (ECLAC 2010: 39). Political equality in Latin America today is clearly being undermined by massive levels of socio-economic inequality. Social equality and justice is thus, correctly, seen as the biggest challenge in the region for democratic development. ECLAC poses this task in somewhat technocratic terms – social spending to address inequality should be seen as social investment in human capabilities – but it is important that for once this issue is being addressed centrally by policy makers even if it is in the context of “growth with equity” and not in its own right. This priority is now central in a post-crisis scenario where a greater degree of social regulation of the market (as Polanyi argued for) is widely accepted.

In recent years a new orthodoxy has emerged in global policy-making circles which assumes inequality in Latin America was greatly reduced in the 1990s (thus proving the suitability of the Washington Consensus). Thus World Bank data is cited to suggest that moderate poverty has fallen from 26 per cent in 1990 to 22 per cent in 2004 (World Bank 2006). ECLAC data goes further, stating that extreme poverty declined from 23 per cent to 15 per cent between 1990 and 2005 (ECLAC 2010). At one level this is not surprising as with high levels of growth it would take worsening income inequality for poverty not to reduce. Also these findings are based on the dubious proposition that Mexico’s poverty rates were cut by more than half in the 1990s. While the likes of conditional cash transfers (particularly in Brazil) have had an impact, the levels of inequality in Latin America are extremely high. At the start of the century the richest 10 per cent of households took home about one-third of the national income while the poorest 40 per cent of the population barely took home 10 per cent (ECLAC 2000: 6). Only Costa Rica and Uruguay stood out from this bleakly unequal scenario.

Of all the forms of inequality the aspect where there is the greatest challenge, and where the greatest impact could be made in terms of poverty reduction, is in relation to gender inequality. While gender equity levels in education have more or less been established, it is clear that, as ECLAC argues, “inequality remains a structural hallmark of the labour market and the female labour force” (ECLAC 2015: 30). While women with higher levels of education have shown higher levels of economic participation, overall time-use differences between men and women show that “the costs of labour force participation have been borne clearly and exclusively by women” (ECLAC 2010: 30). When we take into account the wider world of work – paid but also unpaid labour – we can see how unequal the gender division of labour is. Given men’s negligible participation in domestic and care work, one can hardly expect women to be able to participate in the labour market under equal conditions. To date we have not seen a concerted drive by the left-of-centre governments to address what is effectively the dominant divide in society alongside social class. Such a drive would have a massive impact on household income inequality levels.

Sustainability

Compared to both the inward oriented growth period (1950–80) and the neoliberal period (1980–2000) there is now a much greater emphasis across the policy world on the importance of sustainability. The term sustainable development is usually taken to refer to environmental sustainability but it can also refer to sustainable democracy. In its first sense it has been defined as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (Brundtland 1987: 143). It is very clear that Latin America has entered a period of heightened vulnerability due to the effects of climate change and by 2030 it is considered that most countries will be in the “at risk” category (DARA 2012). The Andean countries have been severely affected by El Niño (Southern Oscillation) as is well known but the complexity of the processes involved are still not fully understood. The challenge now is to reverse ecological destruction and to create a sustainable development path while still addressing the livelihood needs of a growing population.

One of the major issues impacting on sustainable development in Latin America is its resource export dependency. If we examine export specialization in Latin America in 2000 we can see to what extent the main export (and the top three) represents a very considerable proportion of the total.

Table 1.1 Export specialization in Latin America (2000)

Country	Major export	%	Next two	%	Top 3%
Venezuela	Crude petroleum	58.9	Petroleum products, Aluminium	28.6	87.5
Ecuador	Crude petroleum	43.5	Bananas, Shell fish	22.5	66.0
Nicaragua	Coffee	27.1	Shell fish, Meat	27.1	54.2
Paraguay	Soya beans	32.8	Raw cotton, Vegetables	17.8	50.6

Source: adapted from Murray and Silva 2004 p. 121.

While aggregate figures for Latin America show that the export of primary goods has reduced from 90 per cent of the total in 1970 to 42 per cent in 2000, for the above countries over half of their exports are still primary goods, both renewable and, in the case of crude petroleum, non-renewable. As with earlier emphasis on the negative impact of the “enclave economy” (in the country but not part of it) this type of development is not sustainable either because the products are not renewable (petroleum and mining) or socially because it is capital intensive and does not create much employment or forward linkages into the broader economy.

The environmental impact of primary product exploitation in Latin America is also, of course, a huge issue. The deforestation of Brazil and the depletion of the fishery stock in Chile are but two salient examples. Large-scale mining and the petroleum industry have had a wide-ranging ecological impact with pollution of the air and river systems having negative effects on the ecosystem and human health. Sustainable development polices, however, need to take into account social sustainability and the overarching context of inequality. As Murray and Silva note, “Extreme necessity forces people to abuse natural resources, especially renewable ones. Dense populations of poor people are forced to continually clear forest for fuel and land in slash and burn cycles” (Murray and Silva 2004: 129). Northern environmental models do not necessarily translate well into this context while, in theory anyway, the “growth with equity” strategy does. Economic growth, poverty and inequality and environmental degradation are all interlinked and a politically viable and progressive sustainable development strategy needs to address all three together.

We must note also that in Latin America some steps forward have been taken in relation to the environment. As the Paris global climate change conference was occurring in 2015, Uruguay was announcing that renewables were now providing 95 per cent of the country’s electricity. In less than ten years Uruguay had reduced its carbon footprint dramatically and brought energy prices down in the process. This compares with a situation beforehand where nearly 30 per cent of the country’s imports were accounted for by oil.

Governance

The fourth critical development challenge after growth, equity and sustainability, I would argue, is that of governance. Government in the era of globalization is more complex than it once was: from the “outside” powerful economic forces constrain decision-making and from the “inside” the state finds itself “hollowed out” by the neoliberal reforms of the 1990s. We thus increasingly refer to governance to imply a process of “steering” (rather than dictating to) society and the economy. The first point to note is that Latin America since re-democratization in the mid-to-late 1980s has been characterized by quite stable democratic governance with very few threats of military intervention and none in the bigger countries, where military rule had lasted for decades. Most of Latin America’s republics can be characterized as “polyarchies” (participation is high and power is dispersed among competing organized groups) that is to say, they are regimes based on competing political elites that recognize the need to place some limits on their power. They are characterized, on the whole, by free and competitive elections, as well as the freedom of expression and of association that makes them possible.

Following the collapse of armed struggles in most countries – often traumatically – the left began to prioritize democracy, which began to lose the epithet “bourgeois” as liberal democracy was revalorized (see Portantiero 1980; Moulian 1983; Weffort 1984). Today the rule of law (estado de derecho) is universally deemed a prerequisite for democracy and good governance. It means, above all, that basic civil rights should apply equally to the whole of the population. But the long night of the dictatorships created a culture of impunity among the rich and powerful. To be economically secure and socially powerful means to be literally “above the l...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright page
• Table of Contents
• List of illustrations
• Notes on contributors
• List of acronyms
• Introduction: framing the debate
• 1 Challenges and prospects for change in Latin America: a foresight approach
• PART I The progressive wave: results and prospects
• PART II Beyond neoliberalism: case studies
• CONCLUSION Looking to the future
• Index