What's Left in Latin America?

Regime Change in New Times

James Petras, Henry Veltmeyer

• Publisher: Routledge
• Year: 2016
• Print ISBN: 9780754677970
• eBook ISBN: 9781134761692
• Edition: 1
• Topic: Politique et relations internationales
• Subtopic: Politique

This book concerns recent and current political developments in Latin America related to the emergence of left-leaning regimes riding the waves of anti-neoliberalism and a primary commodities boom. Based on five years of field research and a critical engagement with social movements in the region, the book documents the short-term advances and strategic weaknesses of these left-leaning regimes, highlighting their failure to take advantage of favourable economic and political conditions. The authors profile four cases of recent and current political developments, and the prospects for socialism, in Argentina, Bolivia, Cuba and Venezuela.

1 Paradoxes of Latin American Development

DOI: 10.4324/9781315547404-1

Latin American political development presents us with an array of paradoxes that befuddle the predictions, prescriptions and commentaries of writers and academics on both the right and the left. Abrupt changes and shifts in the political correlation of forces are matched by striking structural continuities. Political advances alternate with sharp reversals as popular movements compete for power with resurgent mass mobilizations managed by elements of the ruling or dominant class.

Breakdowns in the financial and productive systems, the flight of capital and the demise of ruling class regimes are followed by strong capitalist-led economic recovery, the resurgence of business-led movements and the restoration of capitalist hegemony over the petit bourgeoisie. Horizontal class anchored movements and trade unions, which overcome ethnic, regional and local divisions to challenge the capitalist state are displaced by vertical divisions in which mass-based regional and sectoral capitalist organizations compete over profits.

Hegemonic leadership over vast sectors of the lower middle class, urban and rural poor oscillates between the downwardly mobile proletariat, organized public employees, peasantry, and in some cases, the urban unemployed, and organized agro-export elites, financial and mineral-based multinationals led by big business backed radical right-wing middle class demagogues. Economic recovery and sustained and substantial growth rates strengthen the political and social power of the ruling class which contributes to extending and deepening inequalities which exceed those preceding the economic crisis. The political pendulum shifts from radical left influence ‘in the streets’, to centre-left institutional power, to a resurgence of right-wing street and institutional power.

Mass social movements, which occupy and organize failing factories and unproductive landed estates, are replaced by the restoration of the previous factory bosses and the forcible displacement of peasants and the vast expansion of agricultural export commodities.

As US hegemony in Latin America loses ground, Latin America’s particular brand of neoliberalism expands and goes global. The onset of the US recession and financial crisis has little or no effect in slowing Latin America’s export boom, demonstrating the growing decoupling of the economies in the region from the US economy, rendering obsolete the long-standing cliché ‘When the US sneezes, Latin America catches a cold (or worse, develops pneumonia)’.

The Primarization of Export-led Economic Growth

Against a backdrop of two decades and a half of neoliberal reform, instability and exceedingly sluggish growth – growth that barely averaged 0.5 percent a year from 1981 to 2002 – the regional economy, according to CEPAL (2007), has been putting in its best performance in 40 years. Indeed, some countries, such as Argentina, Peru and Venezuela, have been growing at rates around 8–9 percent since 2003 (Table 1.1). By all accounts, the economic recovery and recent five-year growth spurt can be attributed almost entirely to a fundamental change in the world economy associated with the ascension of China.

Table 1.1 Growth rates of GDP (%), selected countries in Latin America, 1995–2007

	1995	2000	2003	2004	2005	2006	2007
Argentina	−2.1	4.8	8.8	9.0	9.2	8.5	8.6
Bolivia	4.9	2.5	2.7	4.2	4.0	4.6	3.8
Brazil	4.2	4.3	1.1	5.7	2.9	3.7	5.3
Chile	10.6	4.5	3.9	6.0	5.7	4.0	5.3
Colombia	5.2	2.9	4.6	4.7	5.7	6.8	7.0
Cuba	−	3.8	5.4	11.8	12.5	7.0	−
Ecuador	1.8	2.8	3.6	8.0	6.0	3.9	2.7
Mexico	−6.2	6.6	1.4	4.2	2.8	4.8	3.3
Peru	8.6	3.0	4.0	5.1	6.7	7.6	8.2
Venezuela	4.0	3.7	−7.8	18.3	10.3	10.3	8.5
LA	0.6	3.9	2.1	6.2	4.7	5.5	5.6

Source: CEPAL (2007: 85).

There is a strong evidence that the margin of difference for South America’s commodities exports is a function of increased demand from China and India, and, to a much lesser degree, of other rapidly growing nations in Asia (Blázquez-Lidoy, Rodríquez and Santiso, 2006; Gottschalk and Prates, 2006; Lederman, Olarreaga and Perry, 2007). Blázguez-Lidoy and his associates, for example, emphasize the fact that the average annual rate of growth of China’s imports in the 1990s was 16 percent per year. For some soft commodities, such as soybeans that were thought to have peaked in price around 2004, prices in 2007 once again soared, profiting directly the major sojeros of Argentina, Bolivia, Brazil and Paraguay.

The recent and growing interest in biofuels has led to rising prices for sugar cane and corn, generating huge gains for corporate producers while pushing the world’s poor ever closer to hunger and starvation. Meanwhile, following broad worldwide trends wheat futures rose from $2.48 per bu. in late 1999 to $7.67 per bu. in late August 2007, directly benefiting the conglomerates that dominate grain production in countries such as Argentina as well as world trade. In mid 2007 the Commodity Research Bureau’s indices for raw materials and metals indicated that price increases for these commodities were very strong, consistent with the late 2002–2006 trend, if not greater (Commodity Research Bureau 2007). And commodity markets in the new global context have been booming, with prices reaching record levels in 2008, particularly for the commodities of oil, nickel, tin, corn and wheat.

The economic and political outcomes of these developments in the global economy were momentous. The aggregate economic outcome of these developments for primary goods exporting countries in South America is reflected in the growth rate statistics given in Table 1.1. The connection between this historically abnormal pattern of sustained growth and the ‘primarization’ of exports is evidenced by the positively strong correlation between the rate of economic growth and the composition of exports: the greater the weight of primary commodities in exports the higher the rate of growth. Thus Argentina and Peru with around 70 to 85 percent of their exports in primary commodity form have posted growth rates of 8–9 percent sustained for five years to date, while Mexico, with an entirely different export structure dominated by manufactured goods, has not participated in the pattern of high economic growth. Most of the countries in South America, where the new pattern of sustained economic growth is concentrated, have a primary good export structure (over 50 percent of exports in primary commodity form); the most diversified export structure is found in Brazil, where primary commodities in recent years account for 47–49 percent of exports (as opposed to 68–94 percent for the other countries in the region). No country in the sub-region has an export structure similar to Mexico’s with a predominance of manufactured goods. As for Bolivia and Ecuador, which, despite a primary commodities export structure, have not sustained particularly...

Table of contents

• Cover Page
• Half Title Page
• Title Page
• Copyright Page
• Contents
• Tables
• Acknowledgements
• Introduction
• 1 Paradoxes of Latin American Development
• 2 Latin America at the Crossroads: In the Vortex of Change
• 3 Argentina: From Crisis and Rebellion to Growth and Pragmatic Neoliberalism
• 4 Bolivia: Class Dynamics and Regime Politics
• 5 Cuba: Continuing Revolution and New Contradictions
• 6 Venezuela: Democracy, Socialism and Imperialism
• 7 Back to the Future or Fastforward to the Past?
• Bibliography
• Index