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AN EXAMINATION OF THE CAUS AL MECHANISMS BEHIND LATIN AMERICAS POPULIST RE VIVAL AND CORRESPONDING MOVE TO THE LEFT BY ANDREA LYNCH A Thesis Submitted to the Division of Social Sciences New College of Florida in partial fulfillment of the requirements for the degree Bachelor of Arts Under the sponsorship of Dr. Barbara Hicks Sarasota, Florida May, 2009
Lynch ii Special thanks to Dr. Hicks, whose night-owl ways made finishing this thesis possible. Thanks also to Drs. Mink and Dungy.
Lynch iii AN EXAMINATION OF THE CAUS AL MECHANISMS BEHIND LATIN AMERICAS POPULIST RE VIVAL AND CORRESPONDING MOVE TO THE LEFT Andrea Lynch New College of Florida, 2009 ABSTRACT In the years since the turn of the 21st century Latin America has been experiencing an unprecedented rise of leftist, populist leaders. A 2006 article by Jorge Castaneda popularized the dichotomy between the Bolivarian left and the moderate, reformist left, and subsequent studies have often atte mpted to explain the emergence of leftist populism in each of its two different incarnations. This study seeks to examine four popular causal factors for the rise of the new populist left and demonstrate how these causal factors are linked. The four factors chosen for the study are: 1) the history of U.S. intervention and human rights abuses in Latin America, 2) the effects of attempted neoliberal reforms in the 1980s and 1990s, 3) the success of indigenous attempts at mobilization, and 4) the degree of point resource dependency. Anti-Americanism, economic inequality and fragmented party systems have resulted fr om the interactions among these factors and have enabled populist leaders to rise to pow er. Differing patterns suggest that none of these factors provides a full explanation for the new wave of populists, but the factors work in conjunction with one another to cont ribute to the election of left-leaning populist leaders. Dr. Barbara Hicks
Lynch iv Division of Social Sciences Contents I. Chapter I. Populism in Latin America p. 1 The Rise of Populism and Latin Americas Move to the Left 1 Explanatory Factors 4 The Roots of Empire 8 The US and Latin America in the Cold War 12 A New Era of Hemispheric Relations 13 Current Attitudes 15 II. Chapter II. Explaining the M ove to the Left: Anti-Americanism, Human Rights Abuses and U.S. Intervention p. 17 Human Rights and Anti-Americanism 17 Chile: A Special Case of Intervention 21 U.S.-Latin American Military Relations 23 Provision of Economic Aid and Hu man Rights Violations 27 Progress in Human Rights Practice 29 III. Chapter III. A New Econo mic Ideology? p. 34 Economic Well-being and Human Rights 34 The Bretton Woods Institutions and Stru ctural Adjustment Policies during the Period of Neoliberalism 36 Case Studies of Neoliberal Reforms 40 Venezuela 40 Bolivia 41 Ecuador 42 Argentina 44 Brazil 46 Chile 47 Peru 49
Lynch v Resistance and Alternative Initiatives 50 IV. Chapter IV: Populism and Indigenous Mobilization p. 53 The Formation of Indigenous Organizations 53 Neoliberal Reforms and Globalization 56 Case Studies of Indigenous Politics 59 Peru 59 Bolivia 60 Ecuador 62 Venezuela 64 Indigenous Voters and Party Fragmentation 66 V. Chapter V: The Causal Effect of the Resource Curse p. 72 Populism and Oil 72 The Resource Curse in Latin America 74 Point Resources and Economic Development 75 Point Resources and the Democratic Deficit 79 Delegative Democracy in Latin America 83 Case Studies of Resource-Ri ch Countries 85 Venezuela 85 Bolivia 87 Peru 88 Chile 90 Brazil 91 VI. Chapter VI: Analysis an d Conclusions p. 93 Explaining the Rise of Leftist Populism 95 The Resource Curse and Indigenous Mobilization 97 Economic Difficulties 98 The Echoes of Anti-Americanism 100 Leftist Populism and Democracy 102
Lynch 1 Chapter I. Populism in Latin America The Rise of Populism and Latin Americas Move to the Left Over the past few years, Latin America has been experiencing an unprecedented region-wide sweep to the left. As leftist leaders are elected one after another, some observers have began wringing their hands in panic. This is to be expected, as the most vociferous representative of Latin American leftism, Hugo Chavez, has not presented the international community with a favorable view of socialist tendencies as they have emerged in Latin America. Chavez embodies all of the classic traits of traditional Latin American populistshe has welcomed the patern alistic role of unimpeded authority over his country; he displays all of the markings of an irresponsible de magogue; and he rejects many democratic principles. Yet, he is still loved among his people. And, Venezuela is not the only country to once again elect a populist leader. Populists have also come to power in Brazil, Chile, Argen tina, Bolivia, Ecuador and Peru,1 although none of them has proven to be quite so classi cally populist as Chavez. So, the two questions that have recently surfaced again and again in political circles are: in wh at ways is this left turn representative of a unified ideological m ovement, and why has this sudden wave of populism emerged? 1 Castaneda, Jorge G. La tin Americas Left Turn. Foreign Affairs May/June 2006.
Lynch 2 To group all of Latin Am ericas recen tly-elected populist leaders into one category would be a misrepresentation of thei r ideologies and politic al inheritances. The polarizing effects of neoliberal policies have driven politics in mo st of Latin America leftward but to varying degrees While all left-wing parties in Latin America aspire to the same ideals of a more egalitarian capitalism and a more inclusive political system, the political landscape is impressively diverse. While a descriptive analysis of the intricate discrepancies among Latin American leftist par ties could provide further insight into the role various factors have played in each country, a two-part typology allows for an analysis approximates the reality of the situ ation without presenting an unwieldy amount of information. Former Mexican Secretary of Foreign Affairs Jorge Castaneda introduced this typology in his influential 2006 article, Latin Americas Left Turn. In the years since, this typology has been widely accepte d among regional scholar s with few critics. Jorge Castaneda categorizes one type of left as having first sprung from communism and the Bolshevik Revolution. This left later came to be associated with Fidel Castros Cuban Revolution, establishing a firm Latin American base for Leninist ideology.2 In recent years this left has unexp ectedly turned toward moderation and pragmatism, and modern left-wing parties adhering to this tradition are likely to implement well-planned reforms and accept democratic institutions. Meanwhile, the other type of left garners support by appeali ng to the poor through inflammatory rhetoric and redistributionist programs financed by fiscal expansion.3 The leaders of this left draw freely on nationalist and populist sym bols in order to win elections.4 The first type of 2 Castaneda, Latin Americas Left Turn. 3 Castaneda, Latin Americas Left Turn. 4 Schamis, Hector E. Populism, Socialism, and Democratic Institutions. Journal of Democracy 17.4:18. October 2006. p.21
Lynch 3 moderate, refor mist leftists consists of lead ers such as Michelle Bachelet of Chile, Luis Inacio Lula da Silva of Brazil, and Alan Garcia of Peru. Bolivarian populism falls under the latte r category of lefts. The Bolivarian movement calls upon historic ideals of unity and freedom from foreign oppression, utilizing the nationalist figure of Simon Bolivar, the historic liberator of much of Latin America. Because this left attempts to impl ement radical social change through the state, government spending is used freely as a tool for social change. Periods of financial largesse are often followed by periods of ruin as relative prices worsen and new macroeconomic restraints are imposed.5 Under these conditions, democracy suffers as the political process is reduced to a mere byproduct of spending-induced economic cycles. While the government is being restricted by economic frustrations on the one hand, it is also being eroded by anti-democra tic processes as democratic in stitutions are consistently ignored and silenced on the other hand. Venezuelas Hugo Chavez is perhaps the most conspicuous champion of Bolivarian populism. Evo Morale s, who presents himself as the indigenous Che, is another prime example. This school of populis m is also represented by Lopez Obrador in Mexico, Correa in Ecuador, and Kirchner in Argentina. Ollanta Humala, who ran for the Peruvian presidency in 2006 and lost by an exceedingly narrow ma rgin, also embodies the Bolivarian ideals and populist-style politics For all of these le aders, democratic values, economic performance, program matic achievements and cooperating with Washington are not necessary. These leaders prefer to maintain popularity with their people through rousing nationalistic speech es and a systematic denunciation of Washington-based neoliberal ideals and Am erican foreign policy. They are able to 5 Schamis. Populism, Socialism, and Democratic Institutions. p.21
Lynch 4 exercise financial control over their people th rough control and m anipul ation of oil, gas, mineral, and other natural resource wealth. In the past, this sort of governance has led to inflation, greater poverty and inequality, conf rontation with Washington and the gradual dismantling of democratic rule and respect for human rights. Explanatory Factors While populism has long characterized many democratic regimes in Latin America, the region has never before experi enced the scope of ideologically similar populist leaders that now constitute the major ity of elected heads of state in South America. In order to ascertai n why these leaders have been able to come to power, one must first establish the basic parameters of such a study. In the interest of providing a sufficient amount of depth w ithout sacrificing reasonable scope, this study will focus only on democratic regimes in South America ra ther than Latin America as a whole. The terms Latin America, referring to the cultu ral region, and South America, referring to the geographic continent, can he nceforth be read interchange ably. While cases of Central American leftist populism have arisenand many of the explanatory factors to be examined often do apply to Central Ameri can and Caribbean cases as wellthe cases and factors that follow are to focus on South America exclusively in order to avoid imposing overly broad generalizations. Likewi se, many possible causal mechanisms have created the preconditions for the new wave of leftist populism, but the explanations that are to be investigated here were chosen b ecause they, for the most part, represent region-
Lynch 5 wide experiences that have been widely researched independently of one another. This study seeks to reveal the synerg istic effects of four m ain cau sal factors that have enabled both the new reformist populists and the Bolivarian populists to come to power. Any attempt to explain the causality of a broad-sweeping, region-wide phenomenon that is itself not homogenous across countries must be, by definition, superficial. Therefore, the case studies and events chosen for examination cannot be comprehensive. The events and facts that will fo rm the basis of this analysis were chosen because they represent critical historical junc tures, significant sources of public opinion, or are in other ways recurrent themes in sc holarly and popular rationa lizations of why this new wave of populism is taking hold. The ev ents shaping the reemergence of populism have occurred simultaneously on domestic, inte rnational, and transnational levels over several decades. Previous studies have allude d to the interplay of factors within these frames, but the complexity of interactions among actors at different levels merits a systematic analysis. Such an analysis may logically begin in the international realm and find its way to the domestic politics and cons traints that shape decision-making. In Latin Americas democratic countries, public opinion is perhaps the most salient factor shaping voting patterns. Public opinion is shaped by both international factors and domestic actors, who in turn are influenced by one another and interna tional organizations. Therefore, an adequate unders tanding of the regions recent turn must not fail to include explanations at all levels. The four explanatory factors chosen for this examination represent the findings of scholar s, politicians, the media, a nd international organizations. The analysis begins at the international level, providing insights into the formation of public opinion and voting pattern s. The analysis then focuses on the direct interactions
Lynch 6 between in ternational an d domestic actors and the resulti ng popular rhetoric that emerges in response to practical concerns. Domestic in terest groups are then addressed. Finally, an important non-political factor shaping regime formation is introduced. The first explanation for Latin Americas recent turn to the left is concerned with the legacy of anti-Americanism resulting from U.S. support of repr essive regimes during the Cold War. The lingering distrust of U.S. intervention spurred by U.S. support of right-wing dictators who blat antly violated human rights during the Cold War has produced a fertile breeding ground for inflammatory rhetoric. Populist leaders are able to draw upon this distrust to ignite public opini on against the U.S., po ssibly leading voters to overlook more moderate candidates. While not necessarily a direct cause of the rise of the new left and Bolivarians, the ramificati ons of U.S. intervention in Latin America during the Cold War constitute an important factor shaping attitudes, voting patterns, and mobilization in the region. Another factor shaping voti ng patterns concerns the longterm effects of U.S.-led neoliberal reforms enacted in Latin America under guidance by the IMF and World Bank. U.S.-led continent-wide neoliberal reforms have deepened the socioeconomic divide and exacerbated ethnic cleavages. Neoliberal reform s were intended to strengthen democracy and free market capitalism in Latin America while allowing nations to repay their debt, but these reforms have been met with resist ance from many sectors of society. Many of the leaders belonging to the recent wave of popul ists have relied heavily on inflammatory rhetoric explicitly targeting neoliberal re forms and globalization in their campaigns. Yet the more moderate reformist populists have inco rporated free market ideologies into their
Lynch 7 econom ic policies and have not entirely alie nated the U.S. Therefore the Neoliberal reforms represent an important and highly-visible factor shaping the rise of leftist leaders. Indigenous mobilization has proven to be an instrumental factor in the rise of populist leaders, especially the Bolivarian popu lists. Indigenous communities, who were affected most adversely by Neoliberal refo rms, have responded by mobilizing through organizations and even political parties. Trad itionally the most politically disenfranchised sector of society, indigenous peoples now constitute a large and potent source of electoral power. Additionally, because indigenous popula tions are also often the poorest members of society, ethnic issues tend to beco me intertwined with class issues. The last explanatory variable to be examin ed here is related to the mechanism that allows populists to stay in powerstate contro l over oil and mineral wealth. The resource curse hypothesis suggests that countries whos e primary export wealth stems from point resources like oil and extractive minera ls experience poor economic growth and incomplete democratization, mainly because reliance on point resources stunts democratic institution-building especially when those industries are nationalized. Coincidentally, Venezuela, Chile, Peru, and Bolivia all rank among th e top twenty oil and natural mineral-dependent countries in the world,6 and all of these countries have a history of nationalized point resource indus tries. Ecuador also has a sizeable pointresource sector that has recently been nationalized. State-owned mineral extraction wealth is also related to the Neoliberal reforms and indigenous land-use issues. Therefore, it seems likely that there is a cau sal link between natura l resource dependency and the rise of the new leftis t populism in Latin America. 6 Ross, Michael L. The Natural Resource Curse: How Wealth Can Make You Poor. Natural Resources and Violent Conflicts: Options and Actions. Ian Bannon, Paul Collier, Editors. The World Bank. 2003. p. 21.
Lynch 8 W hile this set of factors is in no way comprehensive, these are some of the common explanations advanced for the recent tide of leftist populists, and they can serve as a sort of theoretical roadmap, marki ng important junctures and clearly demarking causal pathways. By establishing the empirical evidence for each of the causal factors and then demonstrating how these factors ar e related, a rough outline of understanding emerges. The time-frame chosen for this examination focuses on the Cold War period through current times, but Latin America ha s a long history of populism and has only in recent years departed from its historical place under U.S. regional hegemony. Therefore, a brief historical summary is necessary to establish the setting for more recent events. The Roots of Empire A study attempting to explain the rise of the current wave of populists would be remiss in failing to address the long history of U.S. influence in the region. U.S. hegemonic power in Latin America was an acce pted fact until recent years. Therefore, the history of U.S. intervention is an impor tant issue to keep in mind when examining other explanatory factors. Peter Smith has di vided the history of U.S. intervention in Latin America into a useful conceptualizati on of three distinct periods: the period of Imperialism, the Cold War, and the current period of uncertainty.7 The Imperial period began in the early nineteenth century, when most of Latin America was still under Spanish possession. The newly independent United States saw a 7 Smith, Brian H. Human Rights and Basic Needs in the Americas p. 219.
Lynch 9 system of competition and entangling alliances forming in its neighboring colonies to the south and decided that it w ould be in the best interests of the U.S. to take advantage of European competition in order to reduce Eu ropean influence in the entire region. This was accomplished through pressuring the French and British to stay out of Latin America, thus allowing Spain, which was weakening at the time, to retain its American colonies. In the 1810s and 1820s, the U.S. th en pushed for the colonies independence from Spain despite concerns that the ne wly independent, weak states would be susceptible to intervention from Britain or France.8 As Thomas Jefferson wrote in 1808, We consider their interests and ours as the same, and that the object of both must be to exclude all European influence from this hemisphere.9 Clearly, Jefferson envisioned U.S. hegemony over Latin America even befo re most Latin American colonies has achieved independence from Europe. The establishment of U.S. hegemony be gan with the proclamation of the Monroe Doctrine in 1823; this proclamation declared the United States to be the guardian of democracy and independence throughout the western hemisphere. The U.S. was not interested in colonizing Latin America; ra ther, it aimed to extend hegemony through an informal network of economic and political relations.10 These relations were initially institutionalized through th e creation of a Commercial Bureau of the American Republics, which would later become the Organization of American States (OAS).11 In order to secure economic interests, Pres ident Roosevelt issued a declaration in 1904 that would come to be known as the Roosevelt Corollary to the Monroe Doctrine that 8 Shoultz, Lars. Human Rights and United States Policy Princeton University Press: Princeton, New Jersey. 1981. 9 Shoultz, Human Rights and United States Policy, p. 114 10 Smith, p. 27. 11 Smith, p. 32.
Lynch 10 stated that the United States would act on a unilateral b asis to maintain order in the hemisphere.12 Another central tenet of U.S. invol vement in Latin America during this period entailed interventions for democracy, wh ich were carried out in seven countries from 1898 to 1934.13 The establishment of Washington-fr iendly political leaders, while they were not always democratic, facilitated trade relations and favorable terms of trade for the United States. These puppet regimes were often strict dictatorsh ips that ruled only in the interest of domestic and Washington e lites, doing little to encourage the image of the United States in the eyes of Latin Amer ican citizens then and in the years since.14 U.S. hegemony in the region was furthe r cemented in the period immediately following World War II. During this time, the fear of communism and the Soviet menace drove the U.S. to push for the establishment of regional security organizations and treaties, such as the Rio Pact of 1947. The Cold War marked a new development for U.S.-Latin American relations in that secu rity issues now took precedence over economic issues, yet both goals could be pursued simultaneously. Latin Americas policy alternatives were also severely limited duri ng this time. Latin American leaders were therefore left with essentiall y three choices. They could defy the United States and pursue socialist policies of political change, seek support from the United States on the basis of anticommunist solidarity, or attempt to forge an intermediate strategy which would entail avoiding alignment with both East a nd West in favor of independence. Socialism struck a powerful chord in Latin America, wher e a long history of colonial oppression had formed highly stratif ied societies. Marxist parties in Latin 12 Smith, Peter H. Talons of the Eagle: Dynamics of U.S.-Latin American Relations Oxford University Press. 1996. p. 38. 13 Smith, p. 52. 14 Shoultz, pp. 251-272.
Lynch 11 Am erica that had formed shortly after th e Russian Revolution, however, began to fragment or drastically alte red their ideologies as Cold War tensions became more pronounced. The governments of Brazil, Chile, Mexico, and other countries declared communist parties illegal in 1947 and 1948, a nd fervent party members that escaped prosecution were forced to go underground.15 As a result, the period from 1950 to 1980 saw nearly thirty separate guerilla movements, virtually all of them proclaiming Marxist ideologies. Only two of thes e revolutionary movements, the Fidelistas in Cuba and Sandinistas in Nicaragua, were successful in seizing power. The second option, alignment with the United States agai nst communism, was largely forced upon some Latin American countries as a result of the successful revolutions in Nicaragua and Cuba. The success of Castro in Cuba, which had practically been a U.S. protectorate since 1933, particularly made the threat of communist governments in Latin America real. Presiden t Kennedy asserted th at, while the United States wished to uphold the doctrine of noni ntervention, the Unite d States would not hesitate to take action against a st ate that threatened U.S. security.16 However, for some dictators rising to power the al lure of a close relationship with the United States was a strong incentive to conform to anticommunist ideals, even without the threat of intervention. With the exception of President Carter, no American president in this period sought to promote democracy and human right s over security inte rests in the region, although the intervention of international human rights advocacy networks eventually forced the issue into consideration.17 15 Smith, p. 190. 16 Chasteen and Tulchin, Problems in Modern Latin American History: A Reader. SR Books. 1997. p. 323. 17 Shoultz, p. 333.
Lynch 12 The third option, economic and political independence, was based on Argentine economist Raul Prebischs thesis that the global economy cons isted of countries in the center that manufactured goods imported from the periphery at a profit. He therefore advocated import substitution a nd industrialization as a means to economic development, a necessity for political independence. While these policies were successful initially, they led to problems that would later be apparent in the years leading up to the end of the Cold War. Additionally, countries that adopted th ese policies ran the risk of antagonizing both the United States and the Soviet Union, as happened to Arbenz in Guatemala, Bosch in the Dominican Republic, Allende in Chile, and others as well.18 The US and Latin America in the Cold War The fall of the Soviet Union marked a new era of U.S.-Latin American relations as communism no longer posed a security threat to U.S. interests. This period, however, has been and continues to be marked by un certainty regarding U.S. influence in the region. The United States and Latin America em erged from the Cold War triumphant and optimistic about pursuing mutual economic interests. However, oil price fluctuations in the 1970s and the resulting debt crisis of 1982 had severely weakened Latin Americas bargaining position. Socially, Latin America was in a crisis as well; unemployment skyrocketed and real wages plummeted as debt restructuring funneled out nearly one half of export earnings into interest payments. Wh ile Latin America had been unable to avoid the debt crisis due to the gl obal price of oil and irrespons ible international lending, the 18 Smith, p. 214.
Lynch 13 United States also pointed to Latin A m erican policies of import-substitution industrialization, which placed emphasis on state controls and domestic markets, as the cause of the crisis. As a result, the United St ates was able to impose neoliberal reforms on Latin America through a set of policy prescrip tions that has come to be known as the Washington Consensus.19 Theoretically, these reforms were intended to enable countries to pay back their debt while c onforming to the Western economic ideology. The ultimate goal was integration into the Fr ee Trade Area of the Americas (FTAA).20 The United States did not explicitly coerce Latin American countries into accepting neoliberal reforms, though. Reforms came about through a complex interrelationship between compliant nationa l governments, transnat ional corporations, and intellectuals, especi ally economists, who were aggressi ve in promoting the neoliberal ideology.21 These various actors constituted an epistemic community constructed to manufacture public consent to reforms, and th e United States was able to further expand its hegemony by superseding national development strategies. A New Era of Hemi spheric Relations There is much speculation as to whether the neoliberal reforms pushed by the Washington Consensus are compatible with democracy. In the 1980s, governments in fragmented, unconsolidated democracies f eared that the immediate high costs of neoliberal reforms would trigger social turm oil and political conflict, thus endangering 19 Smith, p. 242. 20 Kellogg, Paul.Regional Integration in Latin Amer ica: Dawn of an Alternative to Neoliberalism? New Political Science vol. 29, issue 2. June 2007. p.188. 21 Kellogg, p.188
Lynch 14 the surv ival of democracy.22 Under dictatorships, however, the process of reform could be expedited despite the heavy social cost s, which explains why Chile under Pinochet was able to implement radical reforms quick ly. Other Latin American countries followed suit with mixed results. The later neoliber al reforms pushed by the World Bank and IMF severely limited Latin American nations economic and political autonomy and exposed those countries to increase d international pressure.23 Generally speaking, increased international involvement in Latin Amer ica has strengthened democracy through increased monitoring and unila teral pressure by the United States to conform to the neoliberal, democratic ideology. For instance, the autogolpe enacted by Fujimori in 1992 was intended to establish a formal authoritar ian government in Peru, but pressure applied from Washington convinced Fujimori to restore a procedural democracy.24 While neoliberal reforms have directly contributed to rising inequality across Latin America, they have also helped many countries consolidate democracy. Grugel et al. point out th at the phrase Washington consensus. came to embody more than just economic policy in the eyes of Latin American citizens; the term seems to imply policy imposition by a powerful constellati on of forces rooted in Washington with ulterior political motives.25 Washington pushed its agenda of liberalization without paying heed to whether Latin American c ountries had the capacity to implement the reforms. Unable either to expand extern al borrowing further or to ramp up export earnings easily, many Latin American countries faced no obvious sustainable alternatives 22 Weyland, Kurt. Neoliberalism and Democr acy in Latin America: A Mixed Record. Latin American Politics and Society 2004. p. 136. 23 Weyland, p. 139. 24 Weyland, p. 139. 25 Grugel et al., New Regionalism and Modes of GovernanceComparing US and EU Strategies in Latin America. European Journal of International Relations 2004. p. 501.
Lynch 15 to reducing overall domestic dem and via grea ter fiscal discipline, while in parallel adopting policies to redu ce protectionism and increas e their economies' export orientation.26 Therefore, the adoption of ne oliberal policies caused economic development to stagnate. As a response to poor economic development and a growing divide between the upper and lo wer classes, many Latin Amer ican constituencies have sought an alternative to failed neoliberal policies. Leftis t populist leaders have been elected in nearly every Latin American country in the most recent elections. Current Attitudes The growing turn to the left has not gone unnoticed by Washington, which has attempted on several occasions since the 2002 coup in Venezuela to engineer a regime change in Venezuela.27 Its primary diplomatic strategy is to undermine support for Chavez both internally within Venezuela a nd externally in relation to other Latin American states.28 The United States has therefore de signated several red lines, which if crossed would entail some sort of partic ipatory response on the part of the United States and other Latin American leaders. T hose lines included any attempt to amend the Venezuelan constitution to extend Chavezs term of office, Venezuelan support for 26 Hakim, Peter. Is Washington Losing Latin America? Foreign Affairs January/February 2006. 27 Foster, JB. The Latin American Revolt: An Introduction. Monthly Review, New York. 2007. p. 3. 28 Foster, p. 3.
Lynch 16 extending d estabilizing forces into other countrie s, or a military relationship with Iran or any other enemy of the U.S.29 All of those red lines have already b een crossed, but the United States has been unable to intervene diplomatically because of a lack of support within the region. The United States is unable to exercise influe nce in Latin America for various reasons. Distrust of U.S. hegemony and the failed neol iberal reform programs is one constraint. Another reason is that the United States effectively lost interest in Latin America in the years immediately following the terrorist attacks of 9/11. Wh ereas at the turn of the millennium U.S. influence was still strong in the region, with a few exceptions, the election of leftist leaders acr oss Latin America and the rise of Bolivarianism have significantly limited U.S. capacity to push its economic and political agenda. 29 Foster, p.4.
Lynch 17 Chapter II: Explaining the Move to the Left: AntiAmericanism, Human Rights Abuses and U.S. Intervention Human Rights and Anti-Americanism The recent tide of anti-Americanism is in part a reaction to the long history of human rights abuses in Latin America suppor ted or ignored by the United States. AntiAmericanism is not a new concept, however; it is a subject that has been debated in Latin America for decades. To explain the phenom enon of anti-Americanism, prominent authors on the subject point to U.S. policies of exceptionalism that send mixed signals regarding U.S. commitment to human rights and the provision of basic needs. The rise of leftist populist leaders represents the interplay of bottom-up attempts at improving welfare and top-down manipulati on of public sentiment. Anti-Americanism is a real, if difficult to define phenomenon that shap es public opinion through both channels. Economic indoctrination of American ideolo gies is commonly conj ured as a rallying point of Anti-Americanism in populist rhetoric but the true source of the sentiment is
Lynch 18 more deeply rooted in history. The B olivarian revolution in particular represents not only a desire for economic freedom, but a desi re for political freedom and regional empowerment. An activism-themed magazine commented, One Venezuelan academic reports that the [Bolivarian] revolution is about exacting revenge, not about improving the welfare of the poor.30 While to some, particularly scholars of the neoliberal reform period, the U.S. role in human rights abuses and repressive regi mes in Latin America may seem a relic of times past, popular rhetoric demonstrates that U.S. intervention nonetheless constitutes an important factor shaping public opinion a nd voting patterns. The end of World War II and the subsequent rise in tensions between the United States and Soviet Union saw U.S. influence in the region rise in an attempt to contain communism. Investment by American firms in Latin America quintupled in the twenty years after World War II, and U.S. political influence expanded accordingly.31 Yet, U.S. intervention is also contingent upon the whims of U.S. political elites and pub lic opinion alike. During the 1980s, for example, a tide of revolutions in Central Am erica and rising debt in the rest of Latin America placed the region squarely in the public eye. In 1983 and 1989 the United States launched military invasions of both Grenada and Panama. Within months, both were largely forgotten. While U.S. public attention to Latin America reflects the pattern of U.S. policy-making toward Latin America, which lurches from the extremes of military 30 Colburn, Forrest D. Latin Am erica: Captive to Commodities. Dissent Winter 2009. p. 30. 31 Lowenthal, Abraham F. Partners in Conflict: The United States and Latin America in the 1990s The Johns Hopkins University Press: Baltimore and London. 1990, p. 41
Lynch 19 intervention to outright neglect,32 public opinion in Latin America remains radically altered by such events. The United States may exert political influence on Latin America through bilateral diplomatic, military, or economic relations. It may also exert influence through international financial and po litical organizations. The Orga nization of American States (OAS) is just one example of a political ch annel through which U.S. decision-makers can facilitate regional leadership by the U.S. in Latin America. The U.S. has also designed a host of other mechanisms including traini ng programs, defense councils, and joint exercises for exerting political pressure. Milita ry and C.I.A. involvement in past regime changessome of which has been exposed in recent yearshas fostered growing anger about continuing U.S. imperialism. The Un ited States is also able to manipulate decision-making through its prov ision of foreign aid, particularly through the Agency for International Development (USAID). The gran ting or withholding of aid has played a significant role in building pub lic opinion in Latin America. During the postwar decades the U.S. was the largest supp lier of military and economic assistance to Latin America.33 U.S. influence over human rights policies in Latin America has played a crucial role in constructing policies and attitudes. Personal, political, and economic rights have suffered an erratic history in Latin American law and practice, and the United States has heavily incorporated the idea of human rights into its foreign policy since the Carter administration. 34As the dominant moral vocabulary of foreign a ffairs and the single 32 Cottham, Martha L. Images and Intervention: U.S. Policies in Latin America. University of Pittsburgh Press, Pittsburgh. 1994, p. 3 33 Cottham, Images and Intervention: U.S. Policies in Latin America. p. 3 34 Michalopoulos, Constantine. Basic Needs Strate gy: Some Policy Implementation Issues of the U.S. Bilateral Assistance Program. Found in Human Rights and Basic Needs in the Americas Margaret E. Crahan, editor. Georgetown University Press: Washington, D.C., 1982, p. 243.
Lynch 20 most m agnetic political idea of the contemporary time,35 human rights norms construct the moral lens through which foreign polic y must be judged. Adherence to the international norms of human rights may be the most important fountainhead of legitimacy for domestic and international pol icy. U.S. administrations since President Carter have made a practice of scrutinizing human rights policies in Latin America, a region that has historically constituted a larg e part of the U.S. sphere of influence. However, in an international system wher e Westphalian sovereignty has long been held as the cornerstone of statehood and policies of nonintervention have been valued above humanitarian intervention, unilateral acti on to directly manipulate Latin American politics has been a controvers ial and seldom-realized practic e. There are exceptions to this ruleChile under Allende is an exam pleand those exceptions have provoked farreaching consequences. In order to flush out the linkages among U.S. foreign policy, human rights abuses, and anti-Americanism, several empirical arguments must be presented. First, as the most widely publicized and controversial case of U.S. military involvement in South America, the case of U.S. military intervention to dispose of Chilean president Salvador Allende and replace him with military l eader Augusto Pinochet presen ts a striking case of past U.S. interventionism shaping current public opinion. Second, U.S. military assistance throughout the region, especially during repr essive Latin American military regimes provides evidence of linkages. Because the Un ited States both assisted the development of Latin American militaries and provided aid to those militaries during times of repression, the history of U.S.-Latin American military relations has led to identification 35 Sikkink, Kathryn. Mixed Signals: U.S. Human Rights Policy and Latin America Cornell University Press 2004, p. 3
Lynch 21 of the United States with hum an rights a buses and has become an important factor shaping political struggles. Finally, the histor y of the dispensation of U.S. developmental assistance in relation to huma n rights violations provides a window into changing policy preferences. Chile: A Special Case of Intervention U.S. intervention in Chile during the ear ly 1970s was shaped by U.S. perceptions of Chiles position relative to the dependent nations of Latin America and the emerging Soviet enemy. The U.S. had a particular inte rest in Chile for seve ral reasons. Like many nations in the region, Chiles point resource-based economy was heavily reliant upon the U.S. market. Chiles most important source of income was its coppe r industry, which was dominated by U.S.-based multi-national corporations. Chiles large middle class, tradition of democratic rule, and history of compliance with U.S. interests led most Americans to view Chile in a positive yet patronizing light.36 The U.S first interfered in Chiles 1964 pr esidential election to bring the Christian Democratic candidate, Eduardo Frei, into power. When Salvador Allende, a Marxist determined to follow the va Chilena (the Chilean path) to socialism, emerged as a major candidate in the 1970 elections, the Nixon admi nistration took several initiatives to prevent Allende from winning the electi on. An anti-Allende spoiling campaign was undertaken by the CIA in Chile, but Allende won by a congressional ruling despite U.S. efforts. Once Allende was in office the Ni xon administration significantly cut aid to Chile, drastically exacerbating Chiles financial problems. Allendes regime ended in a 36 Cottham, Images and Intervention: U.S. Policies in Latin America. p. 55.
Lynch 22 1973 coup resulting in his death and the rise of right-wing general Augusto Pinochet to power.37 Pinochet served as a dictator from 1973 to 1990. After the coup, the U.S. provided financia l and material support to the military regime of Pinochet while disavowing any involvement. A document released in 2000 by the CIA entitled "CIA Activities in Chile" revealed that the CIA actively supported the military junta before and after the overthrow of Allende, and many of Pinochet's officers were actually paid contacts of the CIA or U.S. military. Furt hermore, the document demonstrates that the CIA was aware of the human rights abuses th at took place during the severe campaign against lef tists under Pinochets regime.38 While Pinochet was in power, thousands were disappeared, tortur ed, or exiled. The majority of cases of extreme violence occurred during the ear ly years of Pinochets regime. The U.S. policy toward human rights viola tions in Chile shifted with the election of the Carter administration. After Carter s inauguration in 197 6, Chile received no significant military aid or sales, and economic aid declined considerably.39 Carter frequently mentioned Chile in his speeches and the Democratic Party specifically criticized Republican support for the dictatorship. Yet, with the 2000 release of the document detailing the CIAs involvement in Chile, popular anger against U.S. involvement in Chilean affairs was renewe d. The CIAs involvement with human rights abuses has contributed to the region-wide anti -Americanism that has r eappeared in recent years.40 37 Cottham, Images and Intervention: U.S. Policies in Latin America. pp. 55-60. 38 C.I.A. Activities in Chile. 39 Sikkink, Mixed Signals: U.S. Human Rights Policy and Latin America p. 125. 40 McPherson, Alan L. Yankee, No !: Anti-Americanism in U.S.-Latin American Relations. Harvard University Press: Cambridge. 2003, p. 169.
Lynch 23 U.S.-Latin American Military Relations While U.S. interference in Chile represen ts a very direct manipulation of Latin American politics on behalf of the United Stat es, direct interference is not the only means through which the United States has influen ced military regimes. The history of U.S. military relations with its southern neighbors can be traced back to the period before World War II. The main means through which the U.S. has exerted its military influence is through the provision of military ec onomic assistance, training, and arms. During the 50 years prior to World War II, Germany and France represented the major international influences on military thinking and training. In the early part of the twentieth century, German military missions were invited to Chile, Argentina, and Bolivia to train the various bran ches of the armed forces. The French were invited to Peru and Brazil to fulfill the same purpose. The German and French military training programs instilled a particular ideology, traces of wh ich can be seen in later Latin American militaries. That ideology instates the idea that defense requires the development of economic, political, and social resources whic h are necessary to acquire and preserve territory for the growing nati on. These needs were emphasized as central, and civil and political rights were expressly ignored as unnecessary to the basic goals of continental geopolitics.41 The German and French military tr aining inculcated a strong sense of nationalism in the Latin American military a nd instilled the militaries with a sense of responsibility for ma intaining order. The United States became the chief military advisory source for Latin America in the years immediately before World War II. Bilateral military defense agreements were 41 Smith, Brain H., p. 262.
Lynch 24 reached including the p rovision of arms for seven Latin American countries, the inauguration of training missions for milita ry personnel, and U.S. support for the construction of naval bases in 16 countries th at were to be used by the United States during the war.42 During the war, more than half of Latin American exports went to the United States. Immediately after the war, the U.S. transferred many of its surplus weapons to Latin America in an effort to standardize armaments throughout the Americas. By the late 1940s, the Second World Wa r had left Europe in economic distress and the rising power of the Soviet Union impos ed the most severe ideological threat to the U.S. security alliance. The United States was eager to forge further military alliances with Latin America in order to further its go als of political and economic leadership in the hemisphere. Latin America was reluctant to accept U.S. aid, but the U.S. perspective prevailed. With the outbreak of the Kor ean War in 1950, the United States sought bilateral agreements for military assistance wi th several states in order to ensure the protection of strategic natural resources and democratic regimes in transition. Military regimes in Argentina, Venezuela, and Colombia had all transferred power to civilians in the late 1950s and the U.S. considered promulgation of democratic idea ls to be central to its security objectives. The Mutual Securi ty Act of 1951 issued $38 million to establish military assistance programs (MAPs) for Latin America.43 However, with the ebb of Cold War hostilities in the la te 1950s, opposition to U.S. m ilitary intervention began t be discussed in the Senate, with some senato rs claiming that assistance only helped promote dictatorial forms of government and repress civilian opposition to such o to 42 Smith, Brian H., p. 263. 43 Smith, Brian H. p. 265.
Lynch 25 regim es.44 Congress attempted a reso lution that would limit mili tary assistance to those Latin American countries having representati onal governments, but the resolution did not pass. Funding through the MAPs proved essential in the establishment of numerous war colleges across Latin America. The ideologies that emerged from these colleges incorporated U.S. attitudes of anticommunism, but the more prevalent ideologies represented the German and French military ro ots of Latin American militaries and their corresponding geopolitical goals, nationalist tendencies, and military involvement in social matters. The election of President Ke nnedy in 1961 led to the expansion of MAPs as part of the Alliance for Progress plan he in itiated to help ensure internal security and suppress guerilla warfare in Latin America. The era of the Alliance for Progress marks a shift in military strategy from protection from external threats to the maintenance of internal stability. The largest training programs and sales of weaponry were issued to the large South American countries like Brazil, Argentina, Chile, Colombia, Peru, and Venezuela. While there is no direct evidence that the expanded military aid network created as part of the Alliance for Progress include d methods of torture or other inhumane techniques to control the civilian populat ion, the U.S. provision of military aid was central to establishing military institutions that perpetuated violence against civilians in this period. Smith points out that three factor s imprinted in the Latin American collective consciousness imply U.S. involveme nt with repressive military regimes. First, the course content of MAPs training programs invol ved a high degree of anticommunist indoctrination. Second, the organi zational skills and the managerial capabilities of Latin 44 Smith, Brian H. p. 265.
Lynch 26 Am erican militaries with re gard to civilians were signi ficantly upgraded. And third, the type of technology and arms received from th e United States drastically increased the militaries ability to wield potentially re pressive power within their own states.45 During the Alliance for Progress years, military forces in Latin America carried out a series of coups against civilian governments in Pe ru (1962, 1968), Ecuador (1963), Argentina (1962, 1966), Brazil (1964), and Bolivia (1964). The late 1960s and early 1970s saw Presid ent Nixon elected and U.S. attention to Latin America declined. With the exception of covert operations in Chile, U.S.-Latin American military relations began to e bb. Funding for the MAPs fell from $75 million annually in 1966 to $6 million in 1971. At th e same time, however, the sale of nonsophisticated weaponry nearly doubled. In 1971 a Senate investigation found that some of the sale of nonsophist icated U.S. weaponry in Br azil was being utilized for systematic violence and violations of pers onal rights by the Brazilian military against civilians. The investigation also uncovered that U.S. training programs and technology had contributed to the apparatu s being used to carry out repr ession. Rather than withdraw support, though, the Nixon administration contin ued to provide aid allocations for Latin American militaries. The election of Presiden t Carter in 1976 introduced a drastic shift in human rights considerations, and a stricter po licy of surveillance of aid allocations was introduced to minimize support of regimes that violated human rights. In the years since, the United States has taken an active role in helping to establish human rights regimes in Latin America. 45 Smith, Brian, p. 271.
Lynch 27 Provision of Economic Aid a nd Human Rights Violations U.S. econom ic aid to Latin America has fluctuated dramatically since World War II. The aid programs to Latin America reached their peak in the 1960s, as Cold War tensions prompted the United States to atte mpt to build showcases of successful U.S.directed economic development.46 The original purpose of aid programs launched in the early 1960s was to foster economic developmen t and democracy while also providing an outlet for excess agricultural production and extending the sc ope of foreign policy. While the language defining the purpose of such pr ograms has been altered over the years in accordance with changing intern ational norms, the basic function of foreign aid remains the same. As a tool for both development and political influence, economic aid during periods of repression represents an incarnation of the catch22 problem; the United States must simultaneously continue to assist de velopment and the provision of basic needs while not appearing to condone human rights abuses. The main organization charged with the ta sk of distributing foreign aid programs is the U.S. Agency for International Deve lopment (USAID). USAID was established in 1961 by President John F. Kennedy in res ponse to the 1961 Congressional Foreign Assistance ACT, which sought to provide an organizational structure separating U.S. foreign assistance programs of military and non-military aid.47 The new foreign assistance program established by Presiden t Kennedy was justified by three premises: (1) then current foreign aid program s, "America's unprecedented response to world challenges", were largely unsatisfactory and ill suited for the needs of the United States and developing countries, (2) the economic collapse of developing countries "would be disastrous to ou r national security, harmful to our 46 Shoultz, p. 136. 47 USAID, http://www.usaid.gov/about_usaid/usaidhist.html
Lynch 28 comparative prosperity, and offensive to our conscience", and (3) the 1960s presented an historic opportunity fo r industrialized nations to move lessdeveloped nations into self-sustained economic growth.48 Generally speaking, the justif ications for the development of aid programs were principally based around the perceived need to in sulate the hemisphere from the spread of Soviet communism.49 During the 1960s and 1970s, USAID direct ed aid flows to Latin America for several other non-developmental purposes. Fo reign aid has served as a multipurpose political tool that has helped friendly candidates win elections allowed regimes to survive crises that threatened their power, helped to cons olidate government after seizure of power, and influenced decision-making in intergovernmental bodies like the OAS.50 Aid flows can also be limited or removed to alter political decision-ma king in states that are not acting in accordance with U.S. in terests. For instance, in 1963 and 1964 the United States withdrew aid from Brazil when the government of Joao Goulart posed an apparent security threat to the United States.51 In both the governme nts of Brazil under Goulart and Chile under Allende, the U.S. curta iled or halted aid fl ows to regimes that were relatively non-repressive but demons trated some degree of security threat.52 With the end of the Cold War and its asso ciated threat to U.S. security, the United States was confronted with a new set of agendas for the region, and underwent consequent revisi ons of aid policy.53 The Nixon and Carter admi nistrations both adopted rhetoric promising a more firm commitment to human rights.54 A number of studies have 48 USAID, http://www.usaid.gov/about_usaid/usaidhist.html 49 Demirel-Pegg, Tijen and Moskowitz, James, p. 183. 50 Shoultz, p. 139. 51 Shoultz, p. 168. 52 Shoultz, p. 168. 53 Demirel-Pegg, Tijen and Moskowitz, James. US Aid Allocation: The Nexus of Human Rights, Democracy, and Development. Journal of Peace Research, vol. 46, No. 2, 2009, p. 182. 54 Demirel-Pegg and Moskowitz, p. 186.
Lynch 29 dem onstrated that the adoption of human rights commitments affected the decisions governing which countries will receive aid.55 In the post-Cold War period, countries with strong human rights records became much more likely to receive economic aid. This aid is distributed based on a number of need s-based assessments like human development indicators and population. The di stribution is also ideologica lly based, as countries that adopt the liberal, capitalist democratic system are more likely to be cooperative with U.S. interests.56 The United States is increasingly provid ing more substantial aid packages to more fully democratic states while reducing ai d to states viewed as a threat to U.S. security.57 Progress in Human Rights Practice Originally, the movement to adopt polic ies protecting human rights was initiated by states fearful of a hostile global climate. The Inter-American Commission on Human Rights (IACHR) was created by the OAS in 1959, roughly the same time human rights discourse dropped out of U.S. foreign policy as part of the U.S. containment strategy.58 The commission, established by a resolution ra ther than a binding treaty, reflected the lack of support for binding ob ligations of human rights. A formal treaty, the American Convention on Human Rights, was adopted and opened for ratification ten years later. 55 Demirel-Pegg and Moskowitz, p. 186. 56 Demirel-Pegg, Tijen and Moskowitz, James, p. 183. 57 Meernik et al, Testing Models of U.S. Foreign Policy: Foreign Aid During and After the Cold War. p. 64. 58 Meernik et al, Testing Models of U.S. Foreign Policy: Foreign Aid During and After the Cold War. p. 64
Lynch 30 However, this treaty do es not embrace the full definition of human rights as they are represented in the Universal Declaration of Human Rights. The American Convention only applies to political and civil rights; economic, social, and cultural rights were relegated to an additional prot ocol, the Protocol of San Sa lvador, which was drafted and open for ratification in 1988. It finally came in to effect in 1999 and has been ratified by Argentina, Bolivia, Brazil, Colombia, Cost a Rica, Ecuador, El Salvador, Guatemala, Mexico, Panama, Paraguay, Peru, Suriname and Uruguay. Interestingly, the United States has ratified neither treaty. U.S. human rights policy toward Latin America has been constrained by six factors: the intensity of U.S. attention to the region, the dynami cs of international relations, domestic political c onsiderations and the policy pro cess, local developments in the target country, and the defi nition adopted for human rights.59 Despite these limits, U.S. human rights policy toward Latin Ameri ca has had a significant impact. Both human rights victories and defeats have been cont ributed to the United States owing to the dominant position it has long held in the region; some would even go so far as to blame Washington for many of the human rights at rocities committed over the past thirty years.60 Unquestionably, the U.S. role as region al hegemon has allowed its influence a certain amount of weight, and U.S. pressure has a profound effect on the success of other human rights advocates, such as NGOs.61 The U.S. has at its co mmand a wide array of instruments with which to apply pressure on noncompliant governments; these 59 Suominen, Kati. Special Report: U.S. Human Ri ghts Policy toward Latin America. United States Institute of Peace. Special Report 65. 2001, p. 1 60 Cecilia Menjivar and Nestor Rodriuez. When States Kill: Latin America, the U.S., and Technologies of Terror. University of Texas Press. 2005. pp. 3-5. 61 Suominen, Special Report: U.S. Human Rights Policy toward Latin America., p. 1
Lynch 31 instrum ents include but are not limited to fo reign aid and economic sanctions, rhetoric, and quiet diplomacy. The U.S. provision of foreign aid to milita ries that violate human rights has long been a controversial aspect of U.S. fore ign policy in Latin America. The general consensus is that the U.S. has been far too complacent in continuing aid to military dictatorships; some may even argue that the U.S. helped construct the atmosphere for genocide in Latin America. Although the Unite d States did not unilaterally implement a system of terror across the continent, it did pressure weaker states to undertake campaigns of terror when it was in U.S. interest to do so.62 On the other hand, Washington has also played a key role in the demise of several regimes that perpetuated human rights violations, such as those in Uruguay and Argentina. The general trend of U.S. military aid to Latin America seems to be toward a heavier reliance on the recognition of human rights norms, and milita ry aid is increasingly contingent upon stable human rights practices. Rhetorical pressure has provided a more diplomatic tool by which the United States can influence human rights in Latin America. Statements by the administration and visits by top-ranking officials to the o ffending country are common instruments for exerting gentle pressure. Rhetoric is useful because it is not as po litically sensitive as economic sanctions. It is especi ally effective when the target nation is concerned about its international image, lies within the U.S. sphe re of influence, and is already being faced with considerable domestic pressure. The use of rhetoric can interact with efforts made 62 Menjivar and Rodriuez. When States Kill: Latin America, the U.S., and Technologies of Terror. p. 5.
Lynch 32 by hum an rights activists within the target country and the international community of NGOs to reinforce the efforts of both actors.63 Argentina The case of Argentina is demonstrativ e of the changing U.S. human rights ideology. Argentina was one of the first countries to introduce the strategy of disappearances to rid itself of political opponents; it is estimated that roughly 9,000 Argentines disappeared between 1973 and 1983.64 Though Argentina had not yet ratified the International Covenant on Ci vil and Political Rights in this time period, its abuses of human rights were brought to international attention by Amnesty International after the military coup in 1976.65 In response, the international community denounced the rights violations of Argentinas military junta and the Carter administration passed a bill eliminating all military assist ance to Argentina. By 1978 the military had fractured into several different factions with different ideas about Argentinas future. Over time, the most moderate faction emerged supreme a nd decided to restore military and economic aid flows and improve Argentinas interna tional image. The IAHCR was invited into Argentina to perform inspections in exch ange for a U.S. promise to unblock ExportImport Bank funds, and shortly thereafter human rights practices began to improve.66 This case is a perfect example of how the fo rmation of internationa l norms plays a large role in state policies. In the absence of a ny formal, legally binding agreement states and 63 Suominen, Special Report: U.S. Human Rights Policy toward Latin America. p. 4. 64 Lutz, Ellen L. and Sikkink, Kathryn. Internati onal Human Rights Law and Practice in Latin America. Legalization and World Politics Edited by Judith L. Goldstein, M iles Kahler, Robert O. Keohane, and Anne-Marie Slaughter. MIT Press, 2001. p. 264. 65 Lutz and Sikkink, International Human Rights Law and Practice in Latin America. P. 264 66 Lutz and Sikkink, International Human Rights Law and Practice in Latin America. p. 265.
Lynch 33 NGOs were able to exert pre ssure to end hum an rights abuses. The U.S., as the dominant political power of the region, was indispensable as a source of economic pressure; and the synchronization of actors in a transn ational advocacy network was essential to instigate the process.
Lynch 34 Chapter III. A New Economic Ideology? Economic Well-being and Human Rights According to a growing consensus of scholars and politicians alike, the concept of human rights should include a more thorough articulation of rights that extends beyond civil rights. The basic needs approach to human rights, as it has come to be called, is not universally accepted in human rights discourse; but it offers an approach that resonates strongly with the left, especially in Latin America. The expanded definition of human rights has been used as a tool for mob ilization by marginalized groups and populist leaders. Article 25 of the Universal Declarat ion of Human Rights states, Everyone has the right to a standard of liv ing adequate for the health a nd well-being of himself and of his family, including food, clothing, housi ng, medical care and necessary social services.67 Though most Latin American countries are medium-income countries, the extent of inequality rivals that of Africa.68 The impoverished lower classes are denied access to food, basic education, and healthcare; and despite over a decade of moderate 67 Universal Declaration of Human Rights. The United Nations General Assembly
Lynch 35 econom ic growth, inequality has grown in every state in the region except Chile.69 This sort of marginalization represents a case of structural violencethat is, violence that has been inculcated into society over a span of decades through a system of domination and exploitation.70 Structural violence has a di rect link to civil and political rights, as well. Over the last fifteen years or so, thos e who are deeply impoverished and politically marginalized are more likely to fall victim to physical violence. Physician/Soci ologist Paul Farmer argues, Human rights violations are not accid ents; they are not random in distribution or effect. Rights violations are, rather, symptoms of deeper pathologies of power and are linked intimately to the social conditions th at so often determine who will suffer abuse and who will be shielded from harm.71 Structural violence therefore represents a form of repression that will be difficult to exorcise. The only long-term soluti on to structural and direct violence is one that promotes democracy, human rights, and the rule of law. According to Sikkink, This is not nave idealism. It describes a painful process that most of Latin America has passed thr ough in the last three decades.72 All governments are entrusted with two main responsibilities: maintaining the integrity of the state and ensuring the wellbeing of its people. In Latin America, a number of factors have pr evented states from upholdi ng economic practices that simultaneously accomplish both goals. The in tervention of U.S. economic interests instilled changes in Latin Americas capitalis t system over the last two decades of the Twentieth Century that served to deepen the structurally conditioned dependency 69 Castaneda Latin Americas Left Turn. 70 Farmer, Paul. Pathologies of Power: Health, Human Rights, and the War on the Poor Foreward by Amartya Sen. University of Ca lifornia Press. 2005, p. 8. 71Farmer, Pathologies of Power: Health, Human Rights, and the War on the Poor p. xiii. 72 Sikkink, Mixed Signals: U.S. Human Rights Policy and Latin America p. xiv
Lynch 36 consolid ated by the Bretton Woods institutions. The set of economic reforms geared toward expansion of the free market ideology and practices is collectively referred to as neoliberalism. Many critics of the reforms see neoliberalism as a complex process of domination and neo-colonial control that becomes a significant encumbrance to development73. By all accounts, structural inequalities have deepened since the period of neoliberal reforms, and a significant backlash against globalization has emerged in Latin America. The Bretton Woods Institutions and Stru ctural Adjustment Policies during the Period of Neoliberalism Through its influence over the IMF a nd World Bank, the U.S. has a powerful financial tool through which to exert political will in Latin Am erica. From the late 1980s through the 1990s, Washington pres sured Latin American nations to democratize, and at the same time the IMF distributed massive amounts of loans conditional upon the receiving countries ag reements to undergo structural adjustment programs. These neoliberal reforms were intended to enc ourage growth by opening up Latin American economies and simultaneously implementing modera te social reforms. In the years since, IMF structural adjustment policies have fa iled to stimulate economic growth in the region, and in most cases neoliberal reforms have worsened inequality. As the largest financial contributor, the U.S. possesses roughly three times as many votes in the IMF as 73 Richard A. Dello Buono and Jose Bell Lara, p. 1
Lynch 37 the entire co ntinent of South America.74 Therefore, it plays a critical role in deciding the conditions under which loans may be issued when developing states are in need of funding. The process of liberalizing Latin Americ a is not entirely imposed from abroad. There are powerful domestic interests in La tin America that helped give rise to its external debt and in turn benefit from the li beralization process. These domestic interests are composed of transnational factions of th e local business interests that are linked to economic reorientation toward expansion driven by exports. 75 Along with high-level bureaucrats tied to internati onal agencies, financial groups and other international networks, they represent a cons olidated elite who work to engineer the global capitalist system. The Bretton Woods institutions function both as tools for this global elite and as bureaucratic machines of competi ng interests from other sources. The Bretton Woods institutions were de veloped at the end of the Second World War as part of an attempt by Western power s to prevent the recurrence of the trade disputes of the Great Depre ssion and provide loans for reco nstruction. While technically part of the U.N. system, they behave largel y autonomously and voting power is delegated by monetary donations rather than granted evenly to each state, as in the U.N. In theory, the purpose of the IMF is to provide projects for short-term stabili zation, while the World Bank is concerned with longerterm issues like structural adjustment and project funding. In practice the distinction between the two organizations has become increasingly blurred. The immediate purpose of the IMF is to serve as a lender of last resort when a member country experiences balance of pa yment difficulties, which means that it is 74 IMF Members Quotas and Voting Power, and IMF Board of Governors International Monetary Fund.
Lynch 38 unable to borrow enough m oney to finance its trade deficit and manage its debt service payments.76 A country in this positio n may approach the IMF to request a loan, which is then issued if the country in question is will ing to agree to a set of conditions issued by the IMF. During the last two decades of th e last millennium, these conditions normally amounted to neoliberal reforms that abolis hed protective policies and opened up Latin America to world markets. The role of the World Bank is difficult to define because it is constantly evolving. During its fifty years of operation, is has regul arly redefined its stated aims and policies in accordance with prevailing political nor ms, although it does not necessarily alter its policies according to its rhetoric.77 The list of development mandates for the Bank is constantly growing, and it develops economic tools to cope with its growing list of demands. Its original role in Latin America was to provide loans for large development projects like large mining and agribusiness sche mes, but the onset of the debt crisis of the early 1980s saw a shift from project-based lending to structural adjustment.78 The Bank began issuing structural adju stment loans to support economic reform programs. These loans were issued based on the acceptance of conditional performance and reform targets. In contrast to the IMF targets, which tende d to be quantified and precise, the World Banks targets tended to be more qualita tive and negotiable. However, the Banks conditions are much more all-pervasive than the IMFs targets, which are restricted to gauges of macroeconomic performance. 76 Green, Duncan. Silent Revolution: The Rise and Crisis of Market Economics in Latin America 2nd Edition. Monthly Review Press: New York. 2003. p. 43. 77 Green, Silent Revolution: The Rise and Crisis of Market Economics in Latin America p. 53. 78 Green, Silent Revolution: The Rise and Crisis of Market Economics in Latin America ,, p. 54.
Lynch 39 A third, lesser-known financial institu tion, the Inter-American Development Bank (IDB), has also played a leading role in Latin Americas structural readjustment processes. The IDB was founded in 1959 with the mandate of providing finance for specific projects like agriculture and social s ector projects that are too small to seek funding from the World Bank.79 Headquartered in Washington, the IDB is controlled by the United States by a vote share of roughly 30 percent,80 which is enough to allow the United States to veto funds for concessional loans. Opposition to adjustment-oriented sectoral loans in Latin America has limited th e extent of the IDBs actions in the region, but by 2000 it was still issuing $1.9 billion for r eform and modernizatio n of the state as a portion of its $5.3 billion total lending.81 All three of these financial institutio ns have had profound effects on the economic orientation of markets in Latin America. While the ideology of neoliberalism has provided the basic direction of reforms, each country has utilized the institutions to varying degrees and followed its own unique path of reforms. In order to help understand how these reforms have contributed to the recent wave of leftist populism, each country that has now elected either a Bolivarian or reformist populist must be examined. These cases are illustrative of a phenomenon that is ongoing, as some countries continue to seek assistance from the United States-led financ ial institutions listed above. The degree of success of neoliberal reforms partially helps to explain not only the m ove to the left, but also the differentiation between Boliva rian and gradual-reform populists. 79 Green, Silent Revolution: The Rise and Crisis of Market Economics in Latin America p. 57. 80 www.iadb.org. 81 www.worldbank.org/lac.
Lynch 40 Case Studies of Neoliberal Reforms Venezuela Venezuelas vast petroleum reserves have long dictated the course of the Venezuelan economy. In the 1970s, Venezuela used the bargaining power of its future oil wealth to negotiate billions of dollars worth of foreign loans. Most of these loans quickly drained away as the result of capital flight, and Venezuela was left with an immense foreign debt. In the early 1980s, Venezuela was able to use its trad e surplus to keep up with debt payments without assistance by the IMF. By 1988, however, its reserves were exhausted and it withdrew loans from th e IMF and World Bank in exchange for neoliberal structural adjustme nt programs. Real wages rapidl y collapsed to less than half of their 1980 level, and prices rose as subsidies were cut.82 Widespread riots broke out against the IMF and many Venezuelans were killed in the violence. Venezuelas government has historically be en hesitant to priv atize its oil sector, which accounts for approximately 90 per cent of export revenues. Instead, it responded to IMF requirements by extending a hand to forei gn firms wishing to participate in joint ventures funded by those firms but cont rolled by the Venezuelan government. The government also introduced partial trade liber alization and signed a number of Regional Trade Agreements. During the period of neoliberal reforms two presidents, Carlos Perez (1989-93) and Rafael Caldera (1994-98) were elected on strictly anti-neoliberal platforms. Subsequently, each of these leaders sought IMF assistan ce when financial crises 82 Alvarez, Cesar J. Venezuelas Oil-Based Economy. Counsel on Foreign Relations, CFR Backgrounder. February 9, 2009. http://www.cfr.org/publication/12089/
Lynch 41 necessitated extern al aid.83 The failings of Perez and Caldera serve as a prime example of Venezuelas dependence on oil exports. When international oil prices are high, the government is able to invest heavily in soci al programs and win the support of important political allies. When oil prices fall, the government must then introduce drastic spending cuts, leading to surges in unpopularity. The ex treme price volatility of oil is directly responsible for radical shifts in political instability. Political fallout from a 1998 adjustment program coupled with another collapse in oil prices led to a la ndslide victory for the Bolivarian candidate, Hugo Chavez. Like his two predecessors, Chavez promised relief from the neoliberal reforms. Chavezs relief came in the form of a new constitution that gua ranteed the right to work, the right of the government to use tariffs to protect small producers, and the expropriation of unused property. His policies also include d raising tariffs on imports, th e diversification of the oil sector, and a partial return to import s ubstitution. His reforms provoked further capital flight from the business sector, resu lting in a failed coup attempt in 2002.84 Bolivia Decades of authoritarian governments and intermittent coups gave way to a democratic government in Bolivia in 1982. The de bt crisis broke just as the new civilian government came to power, precipitating a drastic economic collapse from 1982 to 1985. The new government that took power in 1985 launched the New Economic Policy, a plan backed the World Bank that was designed to implement fierce structural adjustment programs in order to combat hyperinflati on. The plan managed to reduce Bolivias 83 Alvarez, Venezuelas Oil-Based Economy. 84 Green, Silent Revolution: The Rise and Crisis of Market Economics in Latin America p. 260.
Lynch 42 inflation rate from over 8,000 per ce nt in 1985 to 11 per cent in 1987.85 The architect of this plan, Gonzalo Sanchez de Lozada, was consequently elected president in 1993. Sanchez de Lozada introduced further stru ctural adjustment measures, including an innovative privatization program that granted a 50 per cent stake in state companies to private firms in exchange for promises of new investments. Bolivias state oil was fully privatized by 2000, leading to an influx of ne w investment encouraged by new finds of gas deposits.86 Despite an overall growth in GDP during the period of neoliber al reforms, Bolivia experienced a growing economic divide as a result of privatizati on. The market for tin, which had historically been Bolivias princi pal export, experienced a crash in 1985 that shut down many tin mines and devastated industry in Bolivias altiplano, the highlands that are home to Bolivias poorest and mo st indigenous population. The 1980s and 1990s saw a dual economy emerge in Bolivia in whic h most of the growth and innovation takes place in the eastern lowlands while the pove rty-stricken highlands are starved for development.87 Additionally, Bolivias export growth remained sluggish throughout the 1990s when its import of goods from Brazil and Argentina resulted in a high trade deficit. To compensate, Bolivia continually borrowe d from abroad and buried its economy in further deficits. Ecuador In the 1970s, discoveries of sizeable oil deposits in Ecuador prompted the nationalization of Ecuadors pe troleum sector, which by 2000 accounted for nearly half 85 Zissis, Carin. Bolivias Nationalization of Oil and Gas. 86 Ibid. 87 Green, Duncan, p. 230.
Lynch 43 of governm ent revenue.88 Oil came to replace bananas, shrimp, and coffee as the main export of Ecuador. The resulting oil boo m during the 1970s served to mask the underlying exhaustion of the import substitution process and led Ecuador into a steep rise in indebtedness as potential future extractions gave Ecuador a tool to secure large loans for state spending. Ecuadors heavy foreign debt made it particularly sensitive to the debt crisis after 1982; however, Ecuador was reluctant to ac cept full-blown structural readjustment. It also had an inflation rate hovering at around 30 percent, which led to persistent confrontations with the IMF.89 Ecuador feared that privatization an d import liberalizati on would destroy its heavily-protected industrial sector Yet, with the severe impact of the crisis it had little choice but to apply for a loan, which it was awarded by the IMF in 1994. As predicted, the country encountered many difficulties in implementing the required structural adjustments. Self-interested, conservative elites clashed wi th the opposition in Congress, and as a result little progress could be made on the adjustments. Additionally, Ecuadors highly organized indigenous groups fought ag ainst the governments efforts to open up indigenous lands for drilling ope rations by foreign firms. A neoliberal government lead by Sixt o Duran Ballen was elected in 1992 and governed until 1996. The period following Duran Ballens administration represents a particularly tumultuous time for Ecuador, as tw o successive presidents were removed as a result of popular protest and military inte rvention. In 1999, Ecuador became the first country to default on its IMF loans, making it an instant international pariah. As attempts at market reforms were blocked, Ecuadors economy devolved into chaos. Real wages 88 Green, Silent Revolution: The Rise and Crisis of Market Economics in Latin America p. 240. 89 Green, Silent Revolution: The Rise and Crisis of Market Economics in Latin America p. 240.
Lynch 44 were falling and unem ployment was on the rise. In an attempt to salvage the economy, the government proposed dollarization. Ecuadors indigenous movement along with reformist groups in the military overthrew the government, and the new president, Gustavo Noboa, implemented an extensive neol iberal reform package. The IMF granted Noboa a loan conditional on cuts in fuel subsidies, privatization, and opening up to foreign investment. Meanwhile, in equality continued to rise. Argentina The fall of the military junta that ha d ruled the country since 1976 marked the onset of the debt crisis of 1982. The economy had already been devastated by the militarys version of free market reform. The recently elected civilian president, Raul Alfonsin, attempted to avoid resorting to IMF loans by launching the Austral plan, an economic reform that froze prices an d introduced a new currency, the Austral.90 The limited success of the Austral forced Alfonsin to continue negotiations with the IMF and World Bank, and eventually Argentina was issued substantial loans in 1992 and 1993. Alfonsins successor, the Peronist candidate Carlos Menem, won th e presidency in 1989 and undertook a massive neoliberal adjustme nt program involving trade liberalization, privatization, and binding the currency to th e U.S. dollar. Most public utilities and stateowned enterprises were sold off, and mu ch of the banking and manufacturing sectors were sold to foreign firms. Menems program was largely successful in eradicating inflation, and Argentina experienced an economic boom in the early 1990s due to the stimulus provided by the loans. Argentinas involvement in the Mercosur Regional Trade Agreement was 90 Green, Silent Revolution: The Rise and Crisis of Market Economics in Latin America p. 231.
Lynch 45 responsible for export-driven growth, and Argentinas m anufacturing sector grew correspondingly. However, Argentinas economic boom was soon dampened by external forces, namely the debt restructuring pr ogram implemented in 1993. With Argentinas renewed access to foreign loans, the debt began to rise, and Argentina was left vulnerable to fluctuations in the international capital markets as a result of low domestic savings rates, a deteriorating fiscal position, and the rigid currenc y board system. The Mexican crisis of 1994 and Brazils devaluation in 1999 prompted critical recessions in 1995 and 1999. The Peronists lost the 1999 elections to a new center-left Alliance coalition led by Fernando de la Rua. De la Rua attempted to maintain the fixed exchange rate while simultaneously implementing social reforms. Argentinas deteriorating fiscal position coupled with an overvalued dollar led to bac khanded attempts by hi gh-level officials to tinker with the currency boa rd, resulting in a 2001 fina ncial meltdown known as the corralito Widespread street protests prompted de la Ruas resignation, and the following interim government defaulted on Argentinas external debts. The incoming president, Eduardo Duhalde, dismantled the currency board and devalued the currency. A full 21 million Argentines constituting 58 per cent of the population were now living below the official poverty line, and 28% of the population was considered indigent, or earning too little to pay for their fam ilies food requirements. Res ponding to the crisis, the IMF issued another loan in exchange for the D uhalde administrations promises of further spending cuts.91 91 Green, Silent Revolution: The Rise and Crisis of Market Economics in Latin America p. 241.
Lynch 46 Brazil By the end of the last millennium, Braz il had incurred the worlds largest foreign debt, valued at $230 billion in 2001. At the sa me time, Brazil possessed the unfortunate title of the most unequal society in Latin America, while also being the largest, representing one-third of Latin Americas total population and GDP.92 Brazils success under import substitution contributed to its reluctance to embrace the neoliberal movement. Import substitution had built a larg e industrial sector, and Brazil was one of the regions most powerful exporters. It th erefore had more to lose by opening up its markets, and it sought alternative initiatives to find its way out of th e 1980s crises that hit Latin America. Between 1986 and 1991, it attemp ted five different stabilization plans including the introduction of four new currencies without success. Successive governments in the 1990s attempted to implement market reforms in order to repay Brazils exte nsive foreign debt. In 1994, President Fernando Cardoso introduced the Real plan, which aimed to repeat Argentinas trick of running an overvalued currency in order to curb infla tion while simultaneously cutting back on the fiscal deficit. The plan was initially an impressive success, and Cardoso won a second term in 1998. Cardoso proved an ardent adherent to neoliberalism and pushed for further deregulation and privatization. However, Cardosos plan was met with domestic resistance, amplified by the deregulator y constitution intr oduced in 1988 that significantly hindered ex ecutive power. Therefore the market reforms that took place in 92 Crabtree, Steve. Will Brazils New Oil Be a Bl essing or a Curse? The Gallup Organization.
Lynch 47 Brazil during this period were m uch more gradual than in some other Latin American countries.93 Cardosos plan for stabilization brought relief from hyperinfla tion, but it failed to promote growth. Export growth remained sl uggish during the 1990s as a result of high labor costs, bureaucratic inefficiencies, low productivity, low prices, and Brazils infamous inability to educate its working cl ass. Slow progress on reforms coupled with Brazils continued reliance on in ternational capital markets le ft the country vulnerable to instability during the Asian financial crisis and its subsequent economic fallout that affected all emerging markets. The IMF issued a massive $42 billion loan that delayed but did not prevent the pending economic cr isis. In 1999, Brazil was forced into a substantial devaluation of the Real, a nd unemployment soared while wages fell. However, the crisis was short-lived and Brazil quickly returned to low positive growth rates. The 2002 elections introduced a highly viable Workers Party candidate, Lula. As international markets grew nervous over potential protectionist measures, the IMF attempted to persuade Brazil to implement fu rther reforms with its grant of a $30 billion loan. Lula won the election but pledged to keep up debt service payments and stick to strict IMF spending targets. Chile Chile is often touted as a prime exampl e of neoliberalisms triumphs. It entered the 1980s with Latin Americas greatest co llapse. In 1982, per capita GDP fell by over 14 percent and the nation was afflicted with ba nk crashes, which prompted General Pinochet to renationalize a large portion of the financial sector. Thereafter, Chile became a model 93 Green, Silent Revolution: The Rise and Crisis of Market Economics in Latin America, p. 232.
Lynch 48 IMF m ember, successfully completing numerous IMF and World Bank structural readjustment programs in the 1980s. Rather than rely on monetarist st rategies, it sought to develop its exports to ach ieve growth. Through a high level of internal savings and investments, trade liberalization, and its a bundant natural re sources, Chile was able to rapidly increase its exports from 1985. It ha s managed to build a stable export-driven economy by diversifying its export industries; whereas it ha d long been dependent solely on copper exports it now prospered as a resour ce for fishmeal, fresh fruit, and forestry products.94 As one of the last Latin American countri es to return to democracy, Chile was not eager to attempt radical reforms when Pinochet was replaced by a Christian Democrat/Socialist Party coalition in 1990. Th e coalition and successive administrations largely continued the previous economic program but used lingering opposition to Pinochet and impressive growth rates to pers uade the elite to accept a limited increase in taxation. Increased government income allowe d Chile to run a fiscal surplus while increasing spending on education, health, a nd poverty relief throughout the 1990s. As a result, education spending doubled in real terms from 1994 to 2000 and the proportion of the population living in poverty decreased by more than half in the same period.95 However, growth in terms of GDP began to stagnate in the latter half of the 1990s as the prices for exports fell. Chile fared better than most Latin American countries during the economic crises of the late 1990s as it had generated a high level of domestic savings and was therefore somewhat insulate d from international market fluctuations. And, despite the democratic administra tions commitment to eradicating poverty, 94 Green, Silent Revolution: The Rise and Crisis of Market Economics in Latin America, p. 235. 95 Green, Silent Revolution: The Rise and Crisis of Market Economics in Latin America, p. 235.
Lynch 49 inequality re mained relatively high as a re sult of the structural adjustment programs implemented under Pinochet. Peru In 1982, Peru signed a thr ee-year IMF loan in exch ange for the standard neoliberal reform package. The package, which was aimed at jump-starting Perus economy, instead resulted in a disast rous 14.1 percent fall in GDP in 1983.96 Missed targets for reform prompted an IMF susp ension of the loan, and by then over 400,000 Peruvians were left jobless as a result of the recession.97 In the mid-to-late 1980s, President Alan Garcia introduced a stabilization plan known as the Inti plan. He publicly defied the banks and IMF by declaring Perus intent to unilaterally impose a ceiling on its debt repayments equivalent to 10 percent of export income. The international community severely punished Peru for its audacity by virtually boycotting fina ncial arrangements. While the Inti plan produced two years of GDP growth and rising wages, it collapsed in a period of hyperinflation. Garc ia then steered economic policy toward more orthodox arrangements by 1988. The 1990 elections saw the victory of th e most rhetorically anti-neoliberal candidate, Alberto Fujimori. Upon taking office, Fujimori underwent a dramatic ideological transformation and implemented a program that would come to be known as Fujishock.98 This program eliminated all subs idies, cut public spending, increased taxes, and installed a long-ter m plan for further economic lib eralization and privatization. 96 Green, Silent Revolution: The Rise and Crisis of Market Economics in Latin America p. 255 97 Green, Silent Revolution: The Rise and Crisis of Market Economics in Latin America p. 255 98 Robert, Kenneth M. Neoliberalism and the Transformation of Populism in Latin America: The Peruvian Case. P. 93.
Lynch 50 Fujishock ef fectively eliminated all restrictions on foreign investment and capital flows, bestowing upon Peru one of the most liberal economic regimes in Latin America. The IMF rewarded Fujimori and Peru with anothe r three-year IMF loan. This stamp of IMF approval, together with falling inflation a nd privatization, attract ed large inflows of foreign capital, creating an economic growth spurt lasting until 1994. Fujimori is also credited with bring the Shining Path Maoist guerilla movement under control during this time. Fujimoris second term in office (1995-2000) saw the exposure of public discontent as the economic growth spurt dissi pated. High growth rate s slowed as a result of the Asian financial crisis and subsequent fall in capital flows to all emerging markets. Low wages, widespread poverty, and sharply rising inequality spurred public protests. Discontent grew as news sources exposed th e Fujimori Administra tions poor record of human rights abuses and corruption. He attempte d to campaign for a third term in office, but resigned and went into exile in Japan when a Peruvian judge issued an international warrant for his arrest on grounds of his human rights abuses. He was replaced by an indigenous candidate, Aleja ndro Toledo, who promised a reversal of IMF-mandated structural adjustments.99 Toledo failed to deliver on his promises, and within months Peru had signed yet another IMF agreement. Resistance and Alternative Initiatives 99 Green, Silent Revolution: The Rise and Crisis of Market Economics in Latin America, p. 255.
Lynch 51 The poor performance of neoliberal reforms has not deterred the United States from continuing to attempt to impose refo rms on Latin America. In addition to its influence in the Bretton Woods institutions, the United States attempts to disseminate its ideology through international agreements. The United States has made repeated attempts to extend free trade in Latin America; the ke y institution in these attempts has been the Free Trade Area of the Americas (FTAA) In 2001, the Summit of the Americas convened in Canada to negotiate the terms of the agreement. At the end of the meetings, only Venezuela opposed the agreement and th e implementation date was set for 2005. The project did not meet the implementation da te and interest in it has waned. President Bush attempted to revive the FTAA to no av ail, and prospects for a region-wide free trade agreement seem weaker than ever.100 The FTAA was scheduled to include the NAFTA countries, many Central American c ountries, and Argentina, Brazil, Chile, Colombia, Paraguay, and Peru. The presidents of Brazil and Argentina, da Silva and Kirchner, respectively, objected to the agr eement based on its failure to abolish U.S. agricultural subsidies, poor provision of acce ss to foreign markets, and a range of other problems affecting regional in terests. Chavez and Morales ar e among the harshest critics of the FTAA and have proposed some alternative free trade initiatives that they believe would be more beneficial to Latin America. Of the alternative initiatives to the FTAA, Mercosur is perhaps the most publicized. Interestingly, Mercosur has its roots at the core of the neoliberal movement of the early 1990s, but today it is seen as a rejection of U.S. hegemony. In 2006 Chavez joined the four original members of MercosurArgentina, Brazil, Paraguay, and 100 Kellogg, p. 188.
Lynch 52 Uruguayand began arguing that Mercosur break from its neoliberal roots. Chavez envisioned a Mercosur more in line with the Bolivarian ideals, stating, We need a Mercosur that prioritizes soci al concerns, we need a Mercosur that every day moves farther away from the old elitist corporate models of integration. While the United States does not have a long track record of promoting democracy in the region, the recent trend toward neoliberal reforms has adopted democratization that look forfinancial profits, but forget about workers, children, life, and human dignity.101 Another alternative initia tive, the Bolivarian Alternative for the Americas (ALBA), is more explicitly anti-neoliberal While it is ostensib ly a trade union, ALBA was created in 2004 as an agreement between Castro and Chavez that places social concerns on the forefront. The document uses language that is not normally associated with trade agreements, stating that relationships between members countries will be based not only on solidarity principles but also on the exchange of goods and services that are most beneficial for the economic and social needs of participating countries.102 101 Cited in Kellogg, p. 195. 102 Cited in Kellogg, p. 200.
Lynch 53 Chapter IV: Populism and Indigenous Mobilization The Formation of Indigenous Organizations Previous studies of Latin American part y fragmentation have correctly identified the role of class cleavages in electing populist leaders. Recently, ethnic-based social movements have also contributed to the election of populist l eaders in many Latin America countries. In the past, left-wing and populist parties usually focused on class rather than ethnic issues, and the resulting leadership has usually been non-indigenous even in countries where indigenous ethnici ties are the majority or near-majority.103 As essentially political outsiders, indigenous political organizations have long been treated as subordinate to the cultural reality from which they arise.104 Ethnic cleavages became politicized when the pressure fr om the state in the form of neoliberal reforms impinges on indigenous citizens communal autonomy.105 Indigenous societies were then forced to politicize to secure their rights. However, the emergence of indigenous parties has produced effects that perpetua te rather than replace popul ist politics in many states. 103 Yashar, Deborah J. Contesting citizenship: indigenous movements and the postliberal challenge in Latin America Cambridge University Press, New York, 2005. 104 Schaefer, Timo. Engaging Modernity: The Political Making of Indigenous Movements in Bolivia and Ecuador, p. 399. 105 Schaefer, Engaging Modernity: The Political Making of Indigenous Movements in Bolivia and Ecuador, p. 399.
Lynch 54 Paradoxically, indigenous m ovements expand definitions of democracy by emphasizing social justice and economic equality while at the same time eroding the very democratic processes they would need to provide lasting stability. Although indigenous groups have been a pa rt of the political scene since the 1970s, they have never experienced the in fluence they possess today. In the 1970s, indigenous organizations sprang up from Mexico to Argentina. These movements typically have their origins in small organizations constructe d to defend local land rights against imposing commercial interests. As the organizations expanded geographically, they also grew in scope to encompass issues ranging from bilingual education to respect for customary systems of law and self-government. Many of the indigenous organizations that exist today are actua lly breakaways of groups formed by the Catholic Church, evangelicals, or political pa rties established to co-opt the indigenous voters. Some indigenous groups represent branch es of labor unions or poli tical parties that failed to embody indigenous ideals. International actors and donors such as human rights organizations, churches, scholars, and environmentalists helped to form national-level indigenous organizations by the 1980s. These organizations provided a plat form for interaction with domestic and international actors in the areas of economic development and human rights. Bolivia, Argentina, Colombia, Ecuador, and Ven ezuela had all developed national-level indigenous organizations by the mid-1980s; although their funding was poor and they often had only tenuous connections to more cohesive local organizations.106 In Chile, 106 Van Cott, Donna Lee, Latin Americas Indigenous Peoples, Journal of Democracy, Vol. 18, N. 4, October 2007. p. 129.
Lynch 55 Nicaragua, Mexico, Panam a, and Peru regional organizations were growing stronger as well. One of the main hurdles to regional a nd national cooperation is the diversity of ethnicities that comprise th ese countries indigenous popula tions. In Colombia alone, for example, the indigenous population is di vided into 81 groups speaking 64 languages.107 In Ecuador, the largest indigenous language group, the Quichua, contains seventeen distinct subgroupings. The Amazonian re gion contains twelve more indigenous nationalities ranging in size from merely hundred s to tens of thousands of citizens. In addition, the formation of a unitary indigenous identity faces regional cleavages, as Andean groups and Amazonian groups tend to fi nd more cultural simila rities within their respective regions.108 Most substantive gains for indigenous organizations did not occur until the 1990s. During this time advances were made in le gal access, bilingual e ducation, and collective land titling. By the turn of the millennium disparate indigenous groups across Latin America were able to secure at least nominally collective rights from their respective governments, although indigenous groups rarely played a role in policy-making. At the same time, however, neoliberal reforms required by the Intern ational Financial Institutions (IFIs) were threatening indigenous access to re sources, health, and education. The social inequalities exacerbated by globa lization and the neoliberal reforms have become the impetus for indigenous involvement in politics. 107 Van Cott,Latin Americas Indigenous Peoples, p. 131. 108 Van Cott,Latin Americas Indigenous Peoples, p. 131.
Lynch 56 Neoliberal Reforms an d Globalization The neoliberal reforms of the late 1980s and 1990s elevated the risks for indigenous peoples living on lands containing strategic resour ces for market exploitation, especially non-renewable resources such as oi l, gas, minerals, old-growth forests, and biodiversity. Expanding the direct foreign investment of a given economy requires a sizeable input of inexpensive natural re sources, and these natural resources are predominantly found in the rural regions inhabited by the largest in digenous populations. Although indigenous peoples had lo ng been among the most at-risk group of society, they now found their access to resource s being restricted at an al arming rate. Furthermore, the laws their organizations had concocted to protect their land right s were largely being ignored by governments eager to satisfy thei r debt and appease corporate interests. According to Chilean political scientis t Sandra Huenchun Navarro said in 1999, Though indigenous people dont know it, the most powerful determining factor of their destiny is the New York Stock Exchange or transnational companies logic of global investment.109 Throughout the Americas, indigenous populat ions continue to lose economic and social ground despite their appa rent influence over politics in some regions. Their frail control over their native lands, waters, and othe r natural resources cont inues to decline as populist leaders continue the process of selli ng off land to corporat ions both private and state-owned. Only in Venezuela and Bolivia have indigenous interests been weighed 109 Huenchu n Navarro, Sandra. Ter ritorial Impacts of Economic Globalization in Latin American and Caribbean Indigenous Territories. Statement presented in the XXII Latin American Congress of Sociology of the Latin American Sociology As sociation (ALAS). Univer sity of Concepcin Concepcin Chile 1999.
Lynch 57 against corporate interests in decision-m aking. Scholars, in ternational organizations, and indigenous organizations have all reported that market-drive n globalization processes are leading to environmental deterioration and poverty in indigenous communities and inhibiting the viability of sustainabl e indigenous communities and societies.110 Indigenous peoples are responding by mounting new forms of resistance, such as a recent region-wide protest against mining in the Amazonian region of Peru111. The political and economic conjuncture introduced by globalizat ion has forced indigenous peoples to engage in new local battles while continuing to consolidate their autonomy on the national level. Indigenous organizations have responded to the growing wave of globalization by organizing political mobilization. The switch from regional organizations that function outside the political system to fully integrated political actors represen ts an important step for indigenous organizations. Yashar gives four explanations in for the rise in indigenous mobilization in addition to the mounting pre ssure of internationa l globalization and the social and fiscal neoliberal reforms of the 1980s and 1990s. First, she contends that rising infant mortality rates, childhood malnutrition, and poor literacy and schooling rates have forced indigenous communities to reach out to support networks despite ethnic and language differences. A recent study by the Wo rld Bank reported that, compared to nonindigenous people, indigenous populations have fewer years of schooling, have poorer health, and earn significantly less money.112 Second, existing organizations created si nce the 1970s have provided a network 110 Declaration of the Indigenous Caucus of the UN Indigenous Peoples Working Group in Geneva, July 25, 2003. 111 Peru Moves to End Amazon Protests. BBC News. August 19, 2008. 112 Henderson, Paul E. Latin American Populism: The Indigenous Population Effect. Air Command and Staff College, paper AU/ACSC/7807/AY06.
Lynch 58 for indigenous peoples to m obilize. Regional and nationa l-level organizations have reached out to fringe communities in order to establish a better foothold for political influence. Third, those larger umbrella orga nizations are better able to communicate with international organizations to increase aw areness and support for the indigenous cause. Increasingly, international agencies are not just recognizing, bu t are also actively promoting the interests of indige nous peoples across Latin America. The fourth reason Yashar gives for increas ed visibility of indigenous groups is somewhat controversial. She claims democr atic consolidation a nd the promotion of democratic processes have penetrated into tr aditional indigenous regions and made their participation in politics possible.113 While this is true for the formation of indigenous parties, it has not contributed to the formation of stable party systems. In other words, the very democratic processes that made it possi ble for indigenous leaders to rise to power have also introduced leaders who steadfastly silence democratic inst itutions. Indigenous organizations have failed to pr ovide stable party systems mos tly due to the high degree of party fragmentation associated with indige nous interests. A high number of competing parties does not provide voters with steady vot ing platforms for each party, so elections become highly unpredictable. As a result, popu list candidates who are able to draw upon indigenous peoples anger and fr ustration are able to secure the votes of a large number of indigenous citizens. 113 Deborah J. Yashar. Indigenous Protest and Democr acy in Latin America, in Jorge I. Dominguez and Abraham Lowenthal, eds., Constructing Democratic Governance: Latin America and the Caribbean in the 1990s Themes and Issues (Baltimore: The Johns Hopkins University Press, 1996), p. 97
Lynch 59 Case Studies of Indigenous Politics Peru When the Spanish colonized Peru in th e sixteenth century, they constructed a republic in which a deep divide separate d the European colonists from the Incan Indians of the Tawantinsuyu Empire. Lo cal and regional elites of indigenous or mestizo heritage were relegated to a special place in society; they were educated in special schools and intermingled with Spaniards, a nd some even viewed themselves as more European than Incan. Yet, throughout the ei ghteenth century a movement took root to recover traditions and symbol s of the once-great empire. Th e movement culminated in 1780 with the rebellions of Tpac Amar among the Quechua of the Andean highlands and Tpac Katari among the Aymara, which we re defeated and as a result indigenous languages became outlawed.114 The independence movement of 1821 offered the promise of citizenship to indigenous ethnicities, but the old colonial social order prevailed. For more than one hundred years, the te rm Indian was gradually converted into a synonym for poor, landless peasant.115 This trend is not unique to Peru; other countries with a large indigenous population also margin alized the indigenous ethnicities to the point of terminating their citizenship. In Bo livia and Ecuador, indigenous dissatisfaction culminated in the formation of national-leve l indigenous organizati ons to seek political and legal rights for citizens. Yet, no nati onal-level organization has emerged in Peru. 114 Degregori, Carlos Ivan. Ethnic ity and Democratic Governability in Latin America: Reflections from Two Central Andean Countries. Found in Fault Lines of Democracy in Post-Transition Latin America Felipe Aguero and Jeffrey Stark, editors, North-South Center Press: University of Miami, 1998, p. 206. 115 Degrogori, Fault Lines of Democracy in Post-Transition Latin America p. 207.
Lynch 60 Local-level organizations in the highla nds and Amazonian regions have staged limited protests against the intrusion of forei gn firms and have demonstrated the need to establish land rights and cultu ral rights for thes e citizens. In 2 008 and 2009, indigenous communities banded together to destroy or block state and foreign-owned infrastructure in an effort to convey growing frustration with the states inability to secure indigenous rights.116 However, the lack of national-level actio n has sparked researchers to search for the reason larger indigenous movements ha ve not emerged in Peru. The main reason given for the lack of indigenous organizations is the repression of indigenous highland populations by the Maoist Sendero Luminoso guerilla movement in the 1980s and early 1990s and Marxist government pol icies in the 1960s and 1970s.117 Marxist policies encouraged class-based as oppos ed to ethnic-based identifi cation, making it difficult to mobilize along ethnic lines. Th e brutal Sendero Luminoso movement identified with indigenous citizens early on, ma king later mobilization difficult as highland indigenous citizens struggled to distance themselves from the movement in the worlds eyes. Geographical and cultural separation between highland and Amazonian indigenous groups has further discouraged national coordination. However, the recent wave of protests in the Amazonian provinces may be indicative of a reversal of that trend. Bolivia The mobilization of ethnic groups in Boliv ia came about through necessity as the state claimed increasing sovereignty over in digenous territory th roughout the twentieth century. Dominant political theories have sh aped the face of state decision-making over 116 Indians Block River Traffic in Peruvian Amazon. Latin American Herald Tribune. 117 Garcia, Maria Elena. The Politics of Commun ity: Education Indigenous Rights, and Ethnic Mobilization in Peru, p. 73.
Lynch 61 the years; m id-century modernization schemes established corporatism as the solution to development inequities in marginalized territories. Land reforms in 1953 weakened landed elites control of the countryside, redistributed la nd, and provided incentive for indigenous groups to register as peasant communities.118 These government-regulated registrations enabled the countryside to reorganize along official, state-regulated corporatist lines. It became advantageous for more and more indigenous citizens to join these organizations in order to access land, education, health services, and political rights. While the formation of this corporatist citizenship regime provided rural citizens with some degree of political autonomy, it also effect ively re-categorized indigenous groups as peasants, limiting the saliency of the indigenous social cleavage as a political identity. Class-based identification continued to shape the struggle for autonomy until the neoliberal reforms of the 1980s eroded the labo r institutions that gave the movement its strength.119 Democratic consolidation and suppor t from international NGOs and the Catholic Church prompted public demands for indigenous rights. In the early 1990s indigenous demonstrations made significan t strides toward integrating indigenous interests in the political system. A mass mobilization effort in 1992 saw country-wide marches from rural areas into urban centers but the various indi genous groups organizing the marches were unable to coordinate beyond this single event.120 In 1993, Victor Hugo Cardenas, an Aymara leader, became vice-president of Bolivia, marking an important milestone for indigenous politics. Yet, as a member of Bolivias oldest and center118 Yashar, Ethnic Politics and Instability in the Andes, p. 193. 119 Albo, Xavier. Bolivia: Making the Leap from Local Mobilization to National Politics. NACLA Report on the Americas Vol. 29, March/April 1996 120 Albo, Bolivia: Making the Leap from Local Mobilization to National Politics. P. 17.
Lynch 62 oriented party, Cardenas was not the radical figure for indi genous rights the m ovement required. Bolivias indigenous struggles were largely fronted by the Trade Union Confederation of Bolivian Peasant Work ers (CSUTCB), which was founded in 1979.121 The CSUTCB adopted katarismo, a movement that blende d classist and indigenous ideology.122 With the introduction of neoliberal reforms in the 1980s, the leftist classbased struggles were la rgely abandoned and the katarista movement gained the support of farmers, especially coca growers. The U. S.-led War on Drugs sought to eradicate coca growing in the Bolivian lowlands, furthe r strengthening the resolve of indigenous communities to secure their rights. In 2000 a series of demonstrations against water privatization transformed into national-level protests that effectively forced the resignation of President Sanchez de Lozada and enabled the election of the leader of the coca growers movement, Evo Morales.123 Ecuador The evolution of indigenous movements in Ecuador can be traced back to the 1940s. In 1944, The Federacion Ecuatoriana de Indios was formed by indigenous leaders with the support of the Communist Party.124 The federation was poorly organized and lacked salient leadership, but its existence de monstrated the potential for mobilization of underrepresented factions of society. Successive regimes tried to diminish the influence of communism among Ecuadors rural indigenou s citizens by offering agrarian reforms 121 Shaefer, Timo. p. 406. 122 Shaefer, Timo. p. 406. 123 Shaefer, Timo, p. 408. 124 Van Cott, Achievements of excluded Groups in the Andes. P. 159.
Lynch 63 in 1964 and 1973.125 Just as in Bolivia, these reforms were intended to redistribute land use rights back to the citizens that inhabited the land, and the reforms were mildly successful in granting some degree of autonom y to citizens. Encour aged by their limited success, indigenous citizens orga nized in the wake of these reforms to demand or protect communal land rights, access to agricultura l assistance programs, and autonomy over natural resources.126 The Catholic Church assisted these independent indigenous movements in order to help contain the influence of the Communist Party. Because these land reforms severely limited the control of the traditional landowning elites, indigenous citizens found that they could seek repres entation by building local organizations to interact with regional corpor ate interests. In this way, the reforms of the 1960s and 1972 contributed to the establishment of corporat ist citizenship regimes for indigenous groups in Ecuador.127 In 1972 the Catholic Church helped to es tablish a conference of local highland organizations that formed a confederati on of highland organizations for protecting indigenous rights and spreading Ca tholicism into rural areas. It fathered a splinter group, the Ecuadorian Federation of Evangelical I ndians (FEINE), which later became involved in politics to counter the emergence of a more power ful indigenous organization. Simultaneously, Shuar indigenous communities in the Amazon formed organizations to help protect their land use righ ts from companies seeking to extract recently discovered oil. They formed an ethnic-based federation th at merged with the highland confederation and another, coastal organization to form the Confederation of Indigenous Nationalities 125 Yashar, Ethnic Politics and Instability in the Andes, p. 193 126 Van Cott, Achievements of Excluded Groups in the Andes. P. 159. 127 Yashar, Ethnic Politics and Instability in the Andes, p. 193
Lynch 64 of Ecuador (CONAIE) in 1986.128 CONAIE instantly became the largest indigenous organization in Ecuador, repres enting 80 percent of the c ountrys indigenous population by the late 1990s.129 CONAIE led major mobilization mo vements in 1990 and 1994 that secured substantive land-use rights and redraf ting of the proposed agrarian reforms.130 In 1997, CONAIE organized a successful movement to oust President Abdala Bucaram through a nationwide strike and congressional support.131 CONAIEs mobilizations since 2000 have focused on limiting neoliberal reforms, a goal that unites the indigenous poor and middle class sectors of society. However, the movement has become weakened in recent years due to internal ideologi cal cleavages as some factions have begun leaning relatively more political center. In May of 2008 CO NAIE declared its opposition to Bolivarian socialist Rafael Correa due to his sup port for large mining operations and his unwillingness to adopt polic ies of plu rinationality.132 Venezuela Venezuela has a relatively small percen tage of indigenous citizens, and ethnic social movements have only recently affected the outcome of Venezuelan elections. Yet, Venezuelas reform movements have been highly successful as mobilization of marginalized indigenous groups has dramatically transformed political and legal institutions.133 Whereas in the Andean states, i ndigenous organizations have had to 128 Van Cott, Achievements of Excluded Groups in the Andes. P. 160. 129 Van Cott, Achievements of Excluded Groups in the Andes. P. 160. 130 Van Cott, Achievements of Excluded Groups in the Andes. P. 160. 131 Cuzco, Hilda. Prote sts Force Ouster of Pr esident in Ecuador. 132 Denvir, Daniel and Riofrancos, Thea. Ecuador: CONAIE Indigenous Movement Condemns President Correa. 133 Van Cott, Andean Indigenous Movements. P. 50.
Lynch 65 bridge the gap between highland and Am az onian cultures, Venezuelas indigenous citizens are more culturally homogenous. Li ke many countries in Latin America, Venezuela has a long history of marginal ization of indigenous populations. These populations did not begin to or ganize and seek political influence until the geographic regions in which they live became converted from federal districts into independent states as an es.135 as le purpose was to foster dialogue between romises in 2000 by designating three of the 131 cons tituent assembly seats to indigenous in the early 1990s. In 1992, the most heavily indigenous re gion, Amazonas, became recognized independent state. The drafting of its st ate constitution provoked anxiety about the integrity of indigenous territorial rights.134 A movement to protect those rights emerged calling itself the Regional Organization of Indigenous Peoples of Amazonas (ORPIA). ORPIA successfully arranged for multiethnic and pluricultural rights to be inserted into the constitution and demanded indigenous participation in territorial division schem However, internal cleavages form ed as pa rty politics and ethnic divides prevented ORPIA from coordinating with indigenous groups from other states until 1999. Another indigenous organization, the Consejo Nacional Indio de Venezuela (CONIVE), founded in 1989, helped coordinate the operations of ORPIA and smaller groups. CONIVE w not a regional-based group; instead, its so indigenous groups and the government. Hugo Chavezs election in 1999 further united the diverse indigenous communities as his platform promised the convocation of a constituent assembly to construct a more participatory democracy. Chavez fulfilled one of his campaign p 134 Van Cott, Andean Indigenous Movements. P. 52. 135 Van Cott, Andean Indigenous Movements. P. 52.
Lynch 66 leaders.136 However, internal disputes among the various indigenous organizations divided opinion as to which ethnicities should be represen ted in those three seats. CONIVE helped to resolve the internal conflicts and thus es tablished itself as Venezuelas principal indigenous organiza tion. Venezuelas indi genous movement is perhaps unique from others in South America in the sense that it began along firm ethnic cleavages and then became integrated into class-based and womens rights movements. The general trend among Andean countries shows indigenous move ments arising from established labor movements. Indigenous Voters and Party Fragmentation Indigenous movements are clearly on the rise in Latin America, but the question remains as to whether or not they have c ontributed to the recent wave of populism. Indigenous rights constitute a la rge part of the anti-neoliber al movement, but integration of indigenous interests into the political syst em should not necessarily lead to political candidates who operate outside established democratic institu tions. Several authors have observed that party fragmenta tion may contribute to the tend ency to elect populist leaders with unfavorable results in countries with large indigenous populations. Therefore, in order to understand the type of populism pr oduced by indigenous mobilization, a clear idea of party structures in c ountries with significant indige nous populations is necessary. Mainwaring and Torcal point out that democracies in lessdeveloped countries are likely to produce fragmented parties that are le ss programmatically diffuse, ideologically 136 Van Cott, Andean Indigenous Movements. P. 63.
Lynch 67 unreliable, and candidates of those parties are likely to be highly personalistic.137 In short, less-developed countries are likely to elect populist presidents. The real indicat whether indigenous mobilization produces more fragmented parties, and therefore more populist leaders, would be a cl ear spattering of p oorly-organized parties being supported in majority-indigenous regions. In contrast to the center-left populists representing gradual reform as opposed to radical societ al reconditioning, Bolivarian populists do not have strong ideological roots in past movements and therefor e thrive on more fragmented party systems. In a study on electoral voting pattern s in Latin America conducted by Raul Madrid found that the parties that won less than 15% of the national vote accounted for 45.3% of the vote in areas that are mostly indigenous and only 33.2% of the vote in majority non-indigenous areas du ring the selected elections, or of 138 which all occurred before this 2005 study. Center-left and far-left pa rties accounted for 40.6% of the vote in majority indigenous areas and 28.5% of the vot e in majority non-i ndigenous areas during this period. The smaller partie s that have fared well in indigenous areas have been predominantly leftist or populist. Madrids study includes data from Bolivia and Ecuador, two of the three countries with the highest percentage of indigenous voters. One year after this study, elections occu rred in Peru, the th ird South American country with a substantial indigenous population, and the Bolivarian candidate Ollanta Humala lost by a few percentage points but won in the Andean departments where the largest populations of indigenous citizens ar e located. The candidate that was elected 137 Scott Mainwaring and Mariano Torcal. Party System Institutionalization and Party System Theory After the Third Wave of Democratization. Working Paper # 319, April 2005. p. 22 138 Madrid, Raul L. Indigenous Voters and Party Sy stem Fragmentation in Latin America. Electoral Studies, Vol. 24, Issue 4, December 2005
Lynch 68 instead, Alan Garcia, was put forth by one of Perus oldest political parties, Alianza Popular Revolucionaria Am ericana (APRA). Interestingly, Garcia represents the alternative to Bolivarian populism. That is, Ga rcia is a moderate leftist candidate that represents the type of populism that is rooted in the Castroist tradition that has recently turned toward more moderate reformist pol icies. However, indigenous voices still struggle to be heard in Peru, and protests against mining operations and disputes over land-use issues are common. As could be predicted, up until the recen t elections of populist candidates Morales and Correa the largest parties have fared worst, and small parties, especially leftist and populist parties, have performed best in i ndigenous areas in Bolivia and Ecuador, which are the two countries where the indigenous populat ions have best been able to mobilize in recent years. In these two countries, the indigenous population is relatively politicized and powerful indigenous movements have long denounced the traditional parties.139 The majority parties performed poorly in indi genous areas in Ecuador even before the emergence of Pachakutik, a movement that introduced innovative institutions based on indigenous values into government in 1996, but they have fared even worse since that time. Before 1996, leftist and populist parties usually won the majority of votes in indigenous areas, but no single one of these parties was typically able to win a large share of the vote. In 1992, the largest party in majo rity indigenous countie s was the center-left party, Izquierda Democrtica de Ecuador which won 18.7% of the vote. Eight other parties, mostly populist or left-wing organiza tions, won between 5 and 10% of the vote in 139 Van Cott, Party system development and indigenous populations in Latin America: the Bolivian case, Party Politics Vol. 6, Issue 2, 2000
Lynch 69 largely indigenous counties in 1992, thereby seriously fragm enting the party systems.140 The emergence of Pachakutik in 1996, how ever, reversed this tendency toward fragmentation. Pachakutik won an average of 23.5% of the legislativ e vote in majority indigenous counties in 1996, 36.8% in 1998, and 37.3% in 2002, which significantly reduced the effective number of parties in highly indigenous areas.141 In Bolivia, the two largest parties, traditionally the Movimiento Nacionalista Revolucionario (MNR) and Accin Democrtica Nacionalista (ADN), also fared relatively poorly in indigenous areas. Between 1985 and 2002, these two parties won only 43.8% of the vote in provin ces that were mostly indigenous, as opposed to 64.4% in areas that were mostly non-indigenous. As in Ecuador, the share of the vote given to the two largest parties in indigenous areas in Bolivia has dropped sharply over time, falling from 55.3% in 1985 to 31.0% in 2002. Between 1989 and 1997, a mix of populist and leftist parties, such as the Movimiento Izquierda Revolucionario (MIR), Unin Cvica Solidaridad (UCS), Conciencia de Patria (CONDEPA), and the Movimiento Bolivia Libre (MBL), performed relatively well in i ndigenous areas, but th e large number of parties meant that each of these parties typically won only 5% of the vote in the majority indigenous provinces, which cont ributed to exacerbating party system fragmentation. In the 2002 elections, however, a significant indigenous party, Movimiento al Socialismo (MAS), emerged that won 33.4% of the vote in the majority indigenous provinces, which helped reduce pa rty system fragmentation in these areas. MAS went on to win the 2005 general electi on with its controve rsial candidate, Evo Morales. As the first indigenous president of Bolivia and a member of an indigenous140 Madrid, Raul L. Indigenous Voters and Party Sy stem Fragmentation in Latin America. Electoral Studies, Vol. 24, Issue 4, December 2005 141 Madrid, Indigenous Voters and Party Sy stem Fragmentation in Latin America
Lynch 70 based party that was form ed to protect the interests of coca grower s, Moraless election has proven a monumental step for indigenous political pa rties across Latin America. Despite the fact that Venezuela has a relatively small percentage of indigenous citizens, Hugo Chavez was able to communicate a heavy commitment to indigenous interests during his 1998 campaign. After he was elected, he proceeded to address indigenous issues publicly on his TV program, Alo Presidente He also codified the rights of indigenous peoples to thei r traditional languages and s ought to recognize indigenous land rights as inalienable and non-transferable in Venezuelas new constitution. Part of his plan to redistribute wea lth included the transfer of 317,000 acres of land back to its indigenous inhabitants.142 Chavez arose from a highly fragmented party system, yet in 2007 he introduced a plan to consolidate all of Venezuelas leftist parties under his newly created party, Partido Socialista Unido de Venezuela (PSUV). This initiative has not yet garnered the support of all Venezuelan leftist pa rties, and some have still refused to join. Party fragmentation demonstrates that the political mobilization of indigenous populations does not necessarily bring about more democratic practices. In Venezuela and Bolivia, the quest for political inclusi on has brought about the elections of populist leaders who circumvent democratic processe s and restructure the state to meet their goals. While Chavez and Morales both adhere to the Bolivarian ideal of Latin America for Latin Americans, the lack of transparen cy in their respective regimes discourages democratic monitoring. Monitoring of the stat e by the media is an essential aspect of 142 Canon, Barry. Class/Race Polarisa tion in Venezuela and the Electoral Success of Hugo Chavez: a break with the past or the song remains the same? Third World Quarterly, Volume 29, Issue 4, pp. 731-748.
Lynch 71 dem ocracies; without it, citizen s cannot distinguish the demagogue from the legitimate politician.
Lynch 72 Chapter V: The Causal Effect of the Resource Curse Populism and Oil Historically, populist leaders have been able to silence opposition by capturing natural-resource or monopoly rents, whic h allowed them to spend money on the descamisados, the shirtless, without raisi ng taxes on the middle class. When everything else fails, the thinking went, spend money.143 This thinking may have emerged out of the state-led model of import s ubstitution industr ialization (ISI)144 that became popular due to early development theori es. ISI was intended to help states develop their industrial and manufacturing sectors, which would in tu rn require investment in human capital and reduce poverty. Given that the re source curse is more pronounced in states that attempt to nationalize industry, it seems clear that ISI presented a diverse set of problems for interventionist states. The debt crisis in the 1980s marked the collapse of ISI, though, and many assumed it marked the collapse of populism as well.145 The populism of the Bolivarian movement can be differentiated from the more moderate populism of leaders like Lula a nd Garcia. The latter two demonstrate the 143 Castaneda, Jorge G. Latin Americas Left Turn. Foreign Affairs, May/June 2006. 144 Roberts, Kenneth M. Latin Americas Populist Revival. SAIS Review, 27:1 (Winter/Spring 2007), p. 3 145 Roberts, p. 3
Lynch 73 necessary campaign strategy and leadership styl e that m aterializes in a political landscape virtually devoid of representative institutions.146 In other words, the electorate in these countries will only elect populist leaders beca use the fragmented party systems bred under decades of populist rule and mismanaged wealth do not allow for anything other than personality-based leadership with the occasional circumvention of other democratic institutions. Lula and Garcia could only win their resp ective elections by at least rhetorically championing the pli ght of the people and the severe inequalities from which they deserve relief. Their actual policies, however, demonstrate an awareness of international pressures. Though leftist, both leaders have kept their doors open to foreign investment and implemented modest ra ther than radical welfare programs.147 In contrast, the oil and natural gas polit ics of Hugo Chavez and Evo Morales have justifiably alarmed many within the region and the international community. These two leaders embody a style of populist leadership that represents a real threat to democratic stability.148 Both leaders have managed to mainta in high approval ra tings in their own countries while doing very little for the poor who elected them in th e first place. Their policies are not based on sound economic planning, but are constructe d to oppose all that is American or neoliberal. Oil wealth in Venezuela allows Chavez to pacify calls for structural reform, and the recent nationaliza tion of natural gas w ealth in Bolivia has allowed Morales to drive foreign firms out wh ile increasing the governments capacity to spend. A secessionist movement by the wealthie r segments of Bolivian society who once 146 Roberts, Kenneth M. Latin Americas Populist Revival. SAIS Review, 27:1 (Winter/Spring 2007). P. 12. 147 Roberts (2007), Castaneda (2006). 148 Seligson, Mitchell A. The Rise of Populism and the Left in Latin America. Jo urnal of Democracy 18:3 (July 2007), p. 82.
Lynch 74 m anaged the majority of the countrys natural resource wealth is evidence that democracy is deteriorating. The Resource Curse in Latin America Economists have long been confronted with the intellectual puzzle commonly referred to as the resource curse. While one may expect countries rich in natural resources to harness such wealth for economic development, the opposite effect has been observed in developing countries across the globe. Although historically some countriesthe United States and Norway are a prime exampleshave been successful in converting resource wealth into economic development and subsequent social and political deepening, others have experienced deep societal fissures, retarded economic development, and poor political representati on as a result of th eir abundant natural resources. A wealth of recent literature also has uncovered compelling evidence to suggest that natural resources, especially point resources like oil and extractive minerals, produce a de-democratizing effect th at inhibits the form ation of political institutions and fosters mistrust among the populace. Naturally, academics have scrambled to explain why this effect is more pronounced in some countries than in others and how alternative policy prescriptions may lead to more beneficial outcomes. Then again, another vein of the resource curse li terature addresses the reasons as to why political elites may have a vested interest in maintaining existing channels of profit and influence.
Lynch 75 Two main effects of the resource curse ha ve visibly shaped the form of the new leftist populism in Latin America. First, the economic effects of poorly managed resources have led to a socio-economic environment of extreme inequalities. The resource curse literature addresses several tr ansmission channels that seek to explain why resource wealth tends to be concentrated in the hands of a select few rather than reinvested for societal gains. These can e xplain the leftist descriptor of the new political trend. Second, the res ource curse has had the effect of repressing democratic principles in recently established democracies While the literature addressing this point is scarce, it presents a comp elling argument adding to the narrative of why populism is such an enduring trend in Latin America. Point Resources and Economic Development Resource extraction in and of itself po ses a dilemma that is unique to point resources, which is that they constitute a nonrenewable asset that actually appreciates in value the longer it is left unexploited. Ec onomist Joseph Stiglitz argues that it would almost make sense, then, to abstain from intense extractive activities until the market dictates a higher price for said minerals as they become more and more scarce.149 Yet, point resources are relatively inexpensive to extract, requiring minimal capital and labor. This presents a strong temptation for immediat e exploitation to thos e who directly reap the benefits of mineral extraction, as the economic rewards are much greater than the 149 Stiglitz, Joseph E. Making Natural Resources into a Blessing rather than a Curse. Covering Oil. p. 14
Lynch 76 costs. In a perfect world, the profits genera ted from resource extraction would be totally reinvested in physical, natura l, and hum an capital in order to spur economic development that would benefit society; obviously, this has not been the case in resource-rich countries. Those who acquire exploitation rights of point-based resources have a powerful tool of influence in their hands and a powerful lure toward corruption for personal gain or highly inequ itable profit distribution. Theref ore, the politics dictating who controls the extraction of mineral resources is an issue of utmost importance. Generally, resources are by themselves not a hindrance to economic prosperity; bad policy and management on the part of el ites is responsible for the negative effect natural resources tend to impose on economic de velopment. Ross identifies three reasons why governments may fall into a pattern of bad resource management. His three categories of explanations are: cognitive, which contend that re source booms create a frenzy that cultivates short-sightedness among policymakers; societal, which assert that resource wealth empowers certain classes or interest groups that favor growth-impeding policies; and state-centered, which explain that resource booms tend to weaken state institutions.150 While Rosss explanation explains why resources impede economic growth, he does not fully account for how this happens. In an extensive economic analysis conducted in 2002, Papyrakis and Gelagh investigate five possible transmission channels for the unsuccessful utilization of resource wealth. Those mechanisms include corruption, investment, openness, terms of trade, and schooling.151 They come to the conclusion that i nvestment is the primary cause of the negative impact of reso urce wealth. Upon discovery of a natural resource, they argue, the 150 Ross, Michael L. The Political Economy of the Resource Curse. World Politics 51:2. 1999. p. 298. 151 Elissaios Papyrakis and Reyer Gerlagh. The Resource Curse Hypothesis and its Transmission Channels. Journal of Comparative Economics 32:1. March 2004. pp. 181-193
Lynch 77 resulting econom ic boom leads to a decrease in the imme diate need for sound economic management and institutional quality. The boom may also create a false sense of security and weaken the perceived need for investment and growth-promoting strategies.152 Economies dependent on natural resources benefit less from the technology spillovers that are typical in manuf acturing industries because the expor these industries are harmed by the appreciation of the national currency that occurs through the inflationary pressure resulting fr om increased domestic demand. Finally, as the natural resource sector expands relative to other sectors, the returns to human capita decrease and investments in education, which is not a necessary inpu t for natural r exploitation, decline. ts of l esource nd 153 Therefore, they argue, investment is the variable that has the most profound effects on society and institutions. Damania and Bulte argue that corrupti on is the key variable producing the negative impacts of resource wealth.154 They base their argument on a study conducted by Leite and Weidman155 that demonstrates how the Dutch disease hypothesis, or the idea that resource wealth discourages devel opment of the manufacturing sector, is false when the resource variable in question is disaggregated into its components.156 Instead the main effect of the resource curse is to encourage corruption. The model Damania a Bulte develop is especially useful because they presuppose institutional integrity to be endemic to the variable of corruption. In th eir model, the boom following the discovery 152 Papyrakis andGerlagh. The Resource Curse Hypothesis and its Transmission Channels. 153 Papyrakis andGerlagh. The Resource Curse Hypothesis and its Transmission Channels. 154 Richard Damania and Erwin Bulte Resources for Sale : Corruption, Democracy and the Natural Resource Curse. The University of Adelaide Centre for International Economic Studies. Discussion Paper no. 0320. 2003. p. 4. 155 Leite, C and J. Weidmann, 1999. Does Mother Nature Corrupt? Natural Resources Corruption and Economic Growth, Working Paper of the International Monetary Fund, IMF Working Paper WP/99/85. 156 Damania and Bulte. Resources for Sale: Corruption, Democracy and the Natural Resource Curse. p. 7.
Lynch 78 of natural resources stim ulates a bribe response, in which gr oups of lobbyists compete for influence and bribes are accepted by the incumbent regime in order to maintain power. Garnering bribes and implementing bad polic y is an alternativ e to adopting policies that improve general welfare when those brib es increase the costs of regime change and the state lacks the institutional tr ansparency to prevent corruption.157 Stiglitz astutely observes that bribery, in some sense, is not uncommon in countries even as developed as the United States. Natural resource wealth can be a powerful source of political influence, as Stiglitz affirms, Eve n given the already preferential treatment for oil, gas, and mini ng companies, and even after high oil prices left them flush with cash, President Bush pus hed an energy bill so loaded with subsidies for these companies that Senator John McCa in, a member of the presidents own party, referred to the bill as one that would leave no lobbyist behind.158 Imagine then, the extent to which open corruption may have an influence on developing countries with weak institutions and minimal transparency; bribes become the norm for interactions between business and the state, rather than the exception. Th is sort of bribery has a twofold negative effect: one the one hand, it pr omotes policies that are not optimal for economic development or the alleviation of socioeconomic inequalities; one the other hand, it discourages democratic participati on and leads to an overall mistrust of democratic governance. The latter effect sh all be the subject of the next section. Point Resources and the Democratic Deficit 157 Damania and Bulte. Resources fo r Sale: Corruption, Democracy and the Natural Resource Curse. p. 25. 158 Stiglitz, Joseph E. Making Globalization Work W.W. Norton & Company. 2006. p. 138.
Lynch 79 The resource curse has primarily been observed as an affliction that inhibits economic development, but it also has impli cations for the well being of democracy. Not only do corruption and inequality surroundi ng point resources contribute to antidemocratic sentiment among the populace, but the emerging power structures that govern point resource allocation tend to discourage democratic institutions from developing. Furthermore, leaders may use resource wealth as leverage to keep a regime in power or extend their powers beyond their constitutional authority. Therefore, one may reason that weak institutions are the fundamental fa ult both resulting from and exacerbating democratic resistance in resource-rich econom ies. Terry Lynn Karl supports the claim that sudden resource wealth leads to poor economic management and prevents the proliferation of strong institutions. She suggest s that when states receive large windfalls, they try to do too much too soon, leaving the government administ ratively overextended; they are also targeted by rent seekers, who in essence buy their preferred regulatory environment, regardless of the preferred polic y dictated by democratic institutions. At the moment when the windfall makes careful long-ra nge planning essential, these two effects weaken the state, a claim well-illustrated by her intri guing study of Venezuelan oil politics.159 Luong and Weinthal frame the issue around a fresh perspective; that is, they throw out the long-argued paradox of resource wealth versus underdevelopment and instate a new paradox of concentrated wealth in poor states contra sted with dispersed wealth in richer states. They focus on the ownership structures within states, namely, 159 Karl, Terry Lynn. The Paradox of Plenty: Oil Booms and Petro-States. Berkeley: University of California Press, 1997.
Lynch 80 private vers us public ownership and the resulting power structures in each. They find that strong fiscal and regulatory in stitutions are more likely to emerge under private domestic ownership of point resources because such ow nership creates a set of actors who have a mutual interest in formalizing guidelines to increase fiscal predictability and reduce transaction and monitoring costs.160 In contrast, these structures are unlikely to emerge in states that have nationalized their point resour ces. This has unfortunately been the case in many Latin American countries as nationalizatio n has surfaced as the dominant policy for resource management. Given that extract ion and development are highly capitalintensive, foreign direct investment or in ternational loans are often the only sufficient means of procuring funding and doing so re quires the security of state ownership.161 Furthermore, nationalization has long been vi ewed as beneficial because it was thought that it would foster the provision of public goods and allow poor, yet mineral-rich states to escape the dependency cycle. The World Ba nk has widely advocated nationalization of the mineral sector as a way both to reduce price volatility162 and to help developing countries escape poverty. Therefore, accord ing to Luong and Weinthal, inward and outward pressures led to largescale nationalization of minera l industries that would come to weaken institutional capacity163 and allow the curse to manife st itself. They argue that privatizing ownership and dele gating rights to domestic corp orations would be a more effective strategy for strengthening institutions, but this approach has for the most part only succeeded in industrialized countries because in poorly-developed countries 160 Pauline Jones Luong and Erika Weinthal. Rethinking the Resource Curse: Ownership Structure, Institutional Capacity, and Domestic Constraints. Annual Review of Political Science 2006. p. 242. 161 Jones Luong and Weinthal. Rethinking the Resource Curse: Ownership Structure, Institutional Capacity, and Domestic Constraints. p. 243. 162 Ross, Michael L. The Political Economy of the Resource Curse. World Politics 51:2. 1999. pp. 297322. 163 Pauline Jones Luong and Erika Weinthal. Rethinking the Resource Curse: Ownership Structure, Institutional Capacity, and Domestic Constraints. Annual Review of Political Science 2006. p. 245.
Lynch 81 dom estic companies usually cannot afford th e high initial investme nt required, and state actors are easily tempted by more immediate forms of profit-making. Luong and Weinthals argument roughly captures Rosss th ree categories explaining why states may c hoose to pursue bad or undemo cratic policy. Cognitively, policy-makers may fail to take long-term pla nning into account when the possibility of well concealed corruption presents immediate gra tification. There is al so the chance that they simply fail to plan effectively because they are attempting to maximize the current boom or they have been offered faulty ec onomic advice. Empirical evidence, however, suggests that this is not of ten the case. In Latin America, Ross points out, societal approaches that suggest resource booms enhan ce the political leverage of non-state actors who favor policies that are not conducive to growth best explain why the resource-rich Latin American countries fell behind res ource-poor East Asia in the 1970s and 1980s.164 Given the intensely unequal distribution of wealth in Latin America, powerful non-state actors nearly always hail from the middle a nd upper class; and thes e interest groups are able to exert influence over the state oil a nd mineral companies, further reinforcing the patrimonial system of domination and authoritarian-style rule. Philip concurs that State oil [and mineral] companies are a powerful means by which elites and middle-class professionals can exert control over a Latin American economy.165 The establishment of this system, in which extensive clientelistic networks seek management of the point resource in order to distribute its proceeds among political elites and non-state insiders,166 suppresses democratic participation in a clearl y illustrated way; par ties and other political 164 Ross, Michael L. The Political Economy of the Resource Curse. World Politics 51:2. 1999. p. 311. 165 Philip, George. Oil and Politics in Latin America: Nationalist Movements and States Companies. Cambridge University Press. 2007. p. 316. 166 Schamis, Hector E. Populism, Socialism, and Democratic Institutions. Journal of Democracy 17:4. October 2006. p. 29.
Lynch 82 institutions becom e meaningless and confidence in democracy is vitiated. Luong and Weinthals argument approximately captures Rosss state-centered explanation of the resource curse in that they each seek to expl ain why a state may have ulterior motives for harnessing resource wealth. Ross hypothesizes three effects to explai n why oil wealth makes states less democratic. These arguments were developed in response to effects observed in the Middle East, but Ross demonstrates that they can be applied elsewhere, such as Latin America. First, the rentier effect allows governments to use their oil revenues to relieve social pressures that might otherwise lead to demands for greater accountability.167 When governments acquire most of their revenues from external sources, such as resource rents or foreign assistance, they are freed from the need to impose heavy domestic taxes and become less accountable to the societies they govern. Accordingly, the lack of government accountability implies the breakdown of representation, neglect of democratic principles and de terioration of democratic institutions. In such an environment, social stratification becomes in creasingly politicized and an us vs. them mentality emerges in popular rhetoric that r ecognizes two polarized fa ctions, the people and the elite. Rather than s purring revolution, though, this syst em frequently exists in a delicate balance in which elites marginally satisfy the demands of the people while obscuring the true sources of structural inequality with a charismatic figurehead who touts his or her commitment to the needs of the people. Also, in addition to providing relief from heavy taxation, the elites may use oil and mineral profits to implement social programs that reduce pressure from the people to modify the status quo in favor of a more equitable distribution of wealth. While thes e social programs often provide temporary 167 Ross, Michael L. Does Oil Hinder Democracy? World Politics 53 (April 2001), p. 332.
Lynch 83 relief, they do not address underlying structur al inequalities; and de spite their ephem eral effects, they promulgate the belief that pr esidential authority s hould not necessarily be constrained by institutions. The second effect, which Ross d ubs the repression effect, leads to greater military presence due to and funded by oil wealth. Third, the modernization effect predicts that democratiz ation will not occur or will not be fully consolidated if resource-led growth does not lead to higher educa tion levels and greater occupational specialization, which has not occurred in the Middle East and other countries whose revenues are based on oil wealth.168 Delegative Democracy in Latin America Rosss conception of a rentier state, Luong and Weinthals argument about the democratic pitfalls associated with state ownership, and Karls description of stateweakening policies resulting from resource wealth all draw a number of parallels with a subtype of existing democracies presented by Guillermo ODonnell in his work on delegative democracies. ODonnell constructs the category of del egative democracies in order to explain a subtype of democracy common to Latin America that is not fully consolidated, but is also somewhat stable and not threatened by th e imminent danger of slipping back into authoritarianism. These types of democracies often emerge during a second wave of democratization, a prol onged period under which most transitional governments move from a democratic governme nt to a democratic regime. Institutionbuilding is the most important element missi ng from delegative democracies that would allow them to become fully consolidated democracies.169 168 Ross, Michael L. Does Oil Hinder Democracy?p. 337. 169 ODonnell, Guillermo. Delegative Democracy? Journal of Democracy 5 (January 1994)
Lynch 84 A state characterized by a lack of institu tions must necessarily look to a central leadership figure in order to maintain itself. Th e type of leader that arises in a delegative democracy takes on the responsibility of serving as representative of the entire state. This leader has minimal accountability; his or her power is delegated rather than representative, as there are no institutions to enforce democratic principles. But, the basic democratic ideal of elections is still uphe ld, which results in a string of patrimonial leaders that may espouse whatever ideals th ey like during their po litical campaign but have no true accountability once they are elect ed to office beyond, of course, the desire for reelection, if that is a possibility.170 Populist leaders have been elected in many of the most resource-dependent countries in Latin AmericaVenezuela, Bo livia, Peru, and Chileand Brazil, which, while not devoted to point resource extraction, still ranks as one of the top exporters of minerals in the world and is positioned to begin extensive oil extraction. Venezuela is widely known for its reliance on petroleum production, but it also mines for iron ore, steel, and aluminum. Bolivias primary exports include a variety of mined minerals and, possibly more importantly, petroleum. Peru, occupying much of the same geological territory as Bolivia, also speci alizes in mining; it ranks s econd in the world in production of silver and tin, fourth in zi nc and lead, seventh in copper, and eighth in gold. It also extracts and refines petroleum and natura l gas, but on a much smaller scale than Venezuela or even Bolivia. Chiles primary export is copper, followed by other minerals and processed iron and steel.171 Brazil has a widely divers ified manufacturing economy, 170 ODonnell, Guillermo. Delegative Democracy? Journal of Democracy 5 (January 1994) 171 The CIA World Factbook. Field Listing Indust ries.
Lynch 85 but it still exports a sizeable am ount of mi nerals and petroleum, and it is poised to drastically increase petroleum pr oduction if it chooses to do so. Case Studies of Resource-Rich Countries Venezuela Venezuelas dependence on oil revenue is illustrative of a particular phenomenon described by Karl, in which dependence on petroleum revenues produces a distinctive type of institutional setting, the petro-state, which encourages the political distribution of rents.172 The Venezuelan state has long been characterized by fiscal reliance on petrodollars, which expand state jurisdicti on and weaken authority as other extractive capabilities deteriorate. As a result, when f aced with competing pressures, state officials have repeatedly relied on the progressive s ubstitution of public spending for statecraft, thereby further weakening state capacity.173 Unfortunately, this public spending has yet to demonstrate any concrete improvements in social welfare. Oil has dictated the course of Venezuel an politics since the second half of the twentieth century. Oil was th e cornerstone of the Punt o Fijo pact of 1958, which established a power-sharing regime between the center-left and center-right parties. Throughout the 1960s and 1970s, oil wealth allowed democracy to continue in Venezuela despite an outbreak of authoritarian regime s elsewhere in Latin America, but when oil prices fell in the early 1980s, unprecedented fiscal constraints revealed the true nature of 172 Karl, Terry Lynn. The Paradox of Plenty: Oil Booms and Petro-States. Berkeley: University of California Press, 1997. p. 16 173Karl, The Paradox of Plenty: Oil Booms and Petro-States P. 16
Lynch 86 this power-sharing arrangem ent to be nothing more than a system of collusion among party elites from both wings who doled out the oil windfall to their cohorts while generally ignoring the pl ight of the urban poor.174 This power-sharing system collapsed when riots broke out against then-president Carlos Andres Perez and his implementation of structural-adjustment programs, and current president Hugo Chavez was quick to take advantage of the dissolution of both parties by ascending to power via ardent speechmaking and popular appeals175. Since then, Chavez has commandeered the government through the uninhibited use of o il revenue and attempted to assuage discontent through oil-funded welfare programs, which have been controversial in their effect on inequality. The economy under Chavezs regime has remained squarely centered on oil production. In 2006, Chavez announced the nationa lization of all oil fields managed by foreign firms, instantly raising government revenue from these projects from 40 percent to 60 percent.176 According to some official accounts, this dramatic increase in revenue has been diverted to social spending that has helped alleviate pove rty and unemployment. Yet, a lack of government transparency leav es many critics skeptical about whether or not such measures can be trusted. Venezuela continues to have a hi gh inflation rate and has experienced shortages of basi c foods such as grain and milk.177 Increased oil wealth has also enabled Chavez to increase spe nding outside of Venezuela. An August 2007 Associated Press release estimated that Chavez had promised $8.8 billion in aid energy funding, and financing to countries in Latin Am erica and the Cari bbean, a figure that 174 Schamis, Hector E. Populism, Socialism, and Democratic Institutions. Journal of Democracy 17:4. October 2006. p. 30. 175 Schamis, Populism, Socialism, and Democratic Institutions. p. 30 176 Alvarez, Cesar J. Venezuelas Oil-Based Economy. 177 Alvarez, Cesar J. Venezuelas Oil-Based Economy.
Lynch 87 am ounts to several times the $1.6 billion of U.S. assistance to the same region.178 Chavez has purportedly also utilized oil revenue to aid candidates in Ec uador, Argentina, and Peru. Bolivia Bolivia generates oil and mineral revenues as a relative share of its economy that is second in the region only to Venezuela. Yet, Bolivia has long remained the poorest country in Latin America.179 Like most Latin American nations, Bolivia underwent extensive privatization schemes in the 1990s that led to growing inequalities and allegations of corruption. In an atmosphere of growing discontent and protests conducted by the marginalized poor, Bolivia n Indian activist Evo Morale s of the Movement Toward Socialism (MAS) won 54% of the vote in D ec. 2005 presidential el ections, becoming the country's first indigenous president. Morale s carried out an inte nse nationalization of Bolivias energy resources in 2006. The plan call ed for all foreign and domestic firms to hand majority control over to Bolivi as state-owned natural gas company, Yacimientos Petrolferos Fiscales Bolivianos The plan more than doubled Bolivias revenue from natural gas extraction and provi ded Morales with a useful so urce of funding for his leftist agenda.180 Venezuela and Bolivia signed agreements in January and May 2006 for Venezuela to supply diesel at a reduced pri ce and invest $1.5 billi on in the Bolivian oil and gas sector in exchange for Bolivian goods and services.181 178 Alvarez, Cesar J. Venezuelas Oil-Based Economy. 179 Zissis, Carin. Bolivias Nationalization of Oil and Gas. CFR Backgrounder.
Lynch 88 Bolivia is also the home of nearly ha lf the worlds supply of lithium, a vital component of battery production that is being considered as an alternative to oil in hybrid and electric cars.182 The nationalization of Bolivias mi neral industries has kept foreign firms from accessing Bolivias vast lithium deposits, and these deposits remain largely untapped. The indigenous citizens that inhabit the salt flats ha ve demanded a share in the eventual revenue from lithium extraction, and constitutional territorial rights proposed by Morales demonstrate the potential for indigenous gr oups to realize this goal.183 Peru Mining operations in Peru were la rgely nationalized under the Velasco government, which came into power in 1968 and started a determined campaign to restrict foreign investment. Although the govern ment subsequently moderated its hostility to foreign firms, continuing disputes and th en the deterioration of the economy led many companies to withdraw and suppressed forei gn investment in mineral wealth throughout the 1980s.184 Then-president Alan Garcia struggled with negative growth rates, and the state-controlled mining industries suffered fr om poor bureaucratic management and weak infrastructural capacity. Garcias unsuccessful economic policies suffered their final blow when his program to nationalize all private banks led to a complete currency collapse in the late 1980s. Garcias successor, Alberto Fujimori, instated a radically different economic program of neoliberal reform in 1992 char acterized by extensive privatization and a 182 Romero, Simon. P. 1 183 Romero, Simon. P. 1 184 Gavin Wright and Jesse Czelusta. The Myth of the Resource Curse. Challenge March/April 2004. p. 27.
Lynch 89 return to welcom ing conditions for foreign investment; these reforms provided a much more favorable legal context for developmen t of Perus natural resource industries. Several foreign oil and mineral compan ies responded immediately, although the disorganized state of the economy and the context of polit ical violence discouraged any general inflow of ne w foreign investment.185 Since then, Perus privatization schemes have continued, albeit at a slower pace, and the granting of large mining project concessions coupled with liberal policies including slashed subsidies and tariffs, a simplified tax code, and free exchange rates ha ve generated foreign investment that has funded economic and social development.186 Beginning in 2003, the international price boom in minerals increased Perus mining revenue markedly but had little impact on poverty. By 2007, Peru became the worlds second biggest producer of silver; the third of zinc, co pper, and tin; the fourth of lead and molybdenum; and the fifth of gold.187 Tellingly, local-level conflicts around mining operations have increased drama tically in the last few years. Chile Chile has a long history of copper pr oduction, although growth in the copper industry did not really take off until th e government undertook a massive training program and technological overhaul in the 1970s, which is the same period in which Chile consolidated and nationalized copper production under its state-owned company, 185 Wright and Czelusta. The Myth of the Resource Curse. p. 27. 186 Gurmendi, Alfredo C. The Mineral Industry of Peru.
Lynch 90 Codelco.188 Although private rights were eventu ally strengthen ed, the Chilean government still legally retains more than half of the countrys copper production. Yet laws passed during the dictatorship of the late General Augusto Pinochet granted large concessions to private firms, which still account for the vast majority of copper revenue. Since then foreign firms have enjoyed ope rating under relatively low taxes, and many sources have attributed Chiles successful economic growth to development of its copper industry, which has prospered under democr atic governance because of sound fiscal management and regulatory mechanisms negotiated between the state and private companies. Unlike some other mineral-rich nations, Chile has been successful in using its mineral wealth to reduce inequality.189 During the period of neoliberal reforms, Chile strategically expanded its mining sector while allowing foreign firms to enter the market. By following a stable development strategy, Chil e has been able to ensure that resource wealth does not become entirely concentrat ed in the hands of a few elite. Relatively stable democratic institutions and repres entative decision-making have mitigated the effects of inequality stemming from point-resource driven wealth. Brazil Brazil is the leading industrial nation in Latin America, but despite its vast mineral deposits and the recent discovery of several new ultra-deep oil fields,190 its share of the mining sector is low relative to other Latin American countries. Though early 188 Wright and Czelusta. The Myth of the Resource Curse. p. 25. 189 Ross, Mineral Wealth, Conflict, and Equitable Development, p. 193. 190 Crabtree, Steve. Will Brazils New Oil Be a Bl essing or a Curse? The Gallup Organization.
Lynch 91 explorations in the 1930s had predicted huge m ineral deposits in Brazil, these claims were largely disregarded and Brazil instead pur sued a path of inte nse industrialization and diversification up until about 1981, when the economy hit a period of stagnated growth. Mineral production grew at a rate of more than 10% per year following concentrated government investment in pr ospecting, exploration, and basic geologic research.191 A brief imposition of restrictions on foreign participation in mining halted the growth of those industries between 1988 and 1994, but after that, mineral explorations expanded significantly. Brazil now produces upwards of sixty mineral commodities and is the worlds leading exporter of iron ore.192 Brazil operates petroleu extraction and refining through its state-controlled oil company, Petroleo Brasileiro SA (Petrobras), which has been praised by several NGOs for its transparency. Although diversification in the manufact uring sector, as well as the sheer size of Brazils econom have allowed Brazil to avoid mineral-expor t dependency in the pa st, the opportunities that Petrobras has been c onfronted with since 2006 w ill certainly make increased investment in the petroleum sect or a savory p m y, rospect for Lula. Heavy point resource dependence in each of these countries can help to explain the election of populist leaders in each of these countries The resource curse and the variety of undemocratic leadership it enable s are particularly relevant to Bolivarian populism. It is no coincidence that the tw o economies most heavily dependent on point mineral exports, Venezuela and Bolivia, are al so the two most radi cal cases of leftist populism. The Bolivarian cause advocates th e reclaiming of natu ral resources by the people. Yet, the populist regimes that have ar isen lack the transp arency necessary to 191 Wright and Czelusta. The Myth of the Resource Curse. p. 27. 192Ibid.
Lynch 92 prevent corruption. On the other hand, resource -dependent countries like Peru and Chile have become relatively more dem ocratic sin ce the neoliberal period of privatization of extractive mineral industries. Their relati ve success through the reform period of the 1980s and 1990s has prevented the large-sc ale upheaval and mobilization against privatization seen in Venezuela and Bolivia Brazil, which is also more politically moderate, has only recently discovered its vast deposits of oil, so the future of its extractive mineral industry is uncertain.
Lynch 93 Chapter VI: Analysis and Conclusions Each of the four factors ex amined in this study has contributed to the new wave of leftist populism in its full spectrum. Yet none of the factors offers a full explanation for the emergence of populist leaders who ci rcumvent democratic controls and accountability. U.S. interventionism in La tin America and U.S.-supported human rights abuses have fueled the anti-Americanism that enabled the populist left to take root and spread across Latin America. The history of human rights abuses and the new lefts use of the expanded definition of human rights to apply to ec onomic and social rights have allowed populist leaders like Chavez to ga in power through rhetorically positioning themselves radically opposite the United States The failure of the neoliberal reforms of the 1980s and 1990s to promote development fu rther frustrated Latin Americas poor and gave impetus for indigenous movements to mobilize politically. These indigenous citizens were particularly outraged at forei gn firms control and abuse of native land and resources and demanded land usage rights and th e legal adoption of pl uriethnicity, among other things. Populists who promised to remove foreign firms from the extractive mineral industries and divert profits from these indus tries to social spending were able to win elections because of anger a bout resource management and U.S. imperialism. This web
Lynch 94 of interactions am ong local a nd international-level actors enabled leftist populism to spread across most of Latin America in recent years. This causal chain best describes Boli varian populism, but more moderate populists have also come to power. Poor economic performance dur ing the Neoliberal reform period, successful indigenous mob ilization, and a high dependence on point resources are the conditions that allow Bo livarian leaders to take power. Bolivarian leaders utilize latent anti-Americanism to fu rther drive public sentiment more radically left. When one of these three factors is mi ssing or poorly defined, a different variety of populism results. The more moderate populists are more democratic in the sense that they follow a constitutional government run with a higher degree of transparency and established political parties. Bolivarian populism calls for a style of government that is essentially non-democratic. Reformist populists such as Garcia and Lula may represent stepping stones to deeper democratic conso lidation. The Bolivarian s, on the other hand, reject democratic practices. Explaining the Rise of Leftist Populism Each of the four factors examined is li nked to the rise of populism, but differing patterns suggest that none of these factors alone offers a full explanation. The literature on the resource curse suggests that natural resour ces have indeed played a role in shaping institutions in many Latin American countries and thus have created an environment in which populist leadership is likely to emerge. Resource industries, when nationalized,
Lynch 95 have enabled populist leaders to exercise alm ost unlimited sovereignty over policy formation, within the constraints of esta blished power relations. Latin American governments, especially Venezuela and Boliv ia, have displayed the symptoms of the rentier state identified by Ross and have also demonstrated other characteristics of states trapped in the natural resour ce curse. Furthermore, the populist-style governments that are popping up in the region strong ly adhere to the description of delegative democracies ODonnell constructs, thus explaining why the trend is so stubborn. While the nationalization of point re sources in Venezuela and Bolivia is characteristic of traditio nal populist use of such res ources to fund undemocratic governments, privatization of those industrie s in Peru and Chile demonstrates a step toward a possible escape from the resource curse. Luong and Weinthals argument that nationalization of point resources creates a political environment in which institutions are either weakened or prevented from emerging seems to hold true, given that privatization in Chile and more recently in Peru has led to economic growth and stronger democratic institutions. Of these two count ries, Chile represents the more clear-cut case of escaping the resource curse because democratic institu tions have led to a more representative government, an element that is still missing fr om Peruvian politics. However, Chile has had the advantage of a pacted transition from authoritarian rule that locked in certain policy prescriptions that have protected Chilean democratic institutions, and Chile has thus been able to establish a stronger part y system and political accountability. Perus party system remains fragmented, but with economic development it is possible that diversification of the manufactur ing sector may take place an d spur investment in human development. None of this will happen, though, if factors affecting voter confidence and
Lynch 96 satisfaction, such as corruption, are not brought under control. The outlook for Perus future at this point is positive, at least because Garcias moderate approach to leftist politics has meant that Perus extractive mineral industry will for the most part be left private. This is a factor that should encourage bargaining between the state and firms and help to solidify institutions. In Brazil, the resource curse has been avoided because the economy was already diversified at the time that resource extraction became prominent. Because of its large and diversified economy, the absence of str ong democratic institutions in Brazil has not proven to be a powerful enough force to preclude responsible fiscal management on the part of populist leaders. However, Brazi ls petroleum company, Petrobras, remains mostly nationalized, which increases the risk of falling into the resource curse should Lula choose to greatly increas e production, a possib ility that is not unlikely given the rising cost of oil, the fact that relations with Morales (who supplies Brazil with much of its oil) are worsening, and th e recent discovery of two ult ra-deep oil fields and one mega-deep field. Venezuela and Bolivia, on the other ha nd, both represent instances where the resource curse has taken hold. Populist leaders in both countries have utilized resource wealth to circumvent democratic principles and overcome institutions and parties. They are a clear embodiment of the Bolivarian populist left descri bed by Castaneda, in which those in power love power more than democracy and will fight to keep it at great cost.193 Unfortunately, the bearers of that cost tend to be the poor as natural resource wealth does not produce a trickle-down effect. Also, they are the constituency that most 193 Castaneda, JG. Latin Americas Left Turn. Foreign Affairs May/June 2006.
Lynch 97 desperately rallied for so cial change follo wing the period of exacerbated inequalities and corporate favoritism produced by the neoliberal reforms of the 1990s, yet the men of the people they elected as their instruments for ch ange will probably not force any structural change that would affect their ability to govern the spending of resource wealth. The Resource Curse and Indigenous Mobilization An abundance of natural resources, es pecially point reso urces like oil and extractive minerals, has been demonstrated to predispose states to unhealthy spending practices. With the rise of indigenous movements and their consequent calls for radical change, resource wealth ha s aided the election of popu list leaders promising to redistribute wealth to indigenous citizens. Populist leaders are able to artificially inflate state spending in order to generate their desired response among the people. Yet, state revenue inevitably fluctuates and the absence of stable democratic institutions becomes apparent. In Venezuela, for example, Chav ez rose to power on a platform promising social reforms for indigenous and working cl ass citizens funded by Venezuelas vast oil wealth. In Bolivia, Morales has promised to establish a pluricultural state in which the profits of oil and mineral wealth are ma naged by those indigenous communities that inhabit mineral-producing territories. Ecuador and Peru each have sizeable indigenous populations and point-resource based economies; they each have elected leaders who have promised to increase social spending and enhance the legal status of indigenous citizens. In these countries, populist leaders have been elected because they represent ideological shifts in the system. The populis t nature of these regimes poses a potential
Lynch 98 threa t to democratic institutions and traditions However, history has yet to show how this recent tide of leftist populism will affect democratic stability in the long run. Extractive minerals are a particularly important political issue for indigenous groups for another reason. In Latin Ameri ca, mineral deposits are often found on rural land that is traditionally indigenous. Hist orically, class-based mobilization and the exclusion of indigenous ident ities in politics did not allo w for indigenous concerns to become a salient issue in decision-making about extractive operat ions. As indigenous groups began to mobilize in the 1970s and 1980s, they established public forums where their concerns could be voiced. With the neoliberal reforms of the 1980s and 1990s, outrage at foreign and stat e-led operations on indigenous territory could be voiced. Dissatisfaction with the management of natu ral resources and environmental degradation called for indigenous leadership. As the backla sh against neoliberalism began in the late 1990s and early 21st century, the control of natural resources became a rallying point for indigenous organizations and political parties. Economic Difficulties Backlash against neoliber al policies was not limited to indigenous populations. By 2002, most countries in Latin America had experienced negative economic growth as the result of economic reforms. Graham and Sukhtankar argue that the year 2002 can be considered as a crisis for Latin Americ a because the effects were largely regionwide.194 However, not all countries exited the neoliberal reforms decades of the 1980s and 1990s in a full-blown crisis. Brazil, Ch ile, Ecuador, and Peru all experienced 194 Graham, Carol and Sukhtankar, Sandip, p. 345
Lynch 99 growing inequality, but they did not dem onstrate the negative econom ic growth that would constitute a crisis. All of the recently-elected leftist populis ts represent a backlash to neoliberal reforms to some degree. The Bolivarian lead ers like Chavez and Mo rales are the most vocal opponents of neoliberalism, and they have accordingly implemented the most radical reforms. Yet the degree of success or fail ure of the neoliberal reform era is not the single determinant of the variety of leftis t populism that has emerged. For instance, Ecuador fared relatively well during its neoliberal reforms, but it has elected a Bolivarian leader, Rafael Correa. Ecuador is relian t on natural resource wealth and has a high population of indigenous citizens, but its indi genous organizations do not support Correa because he has refused to allow indigenous control of those resources. Correas refusal to comply with his Bolivarian campaign promises is indicative of one of the problems with populist leadership in general. Because he is not opposed to operating outside of established democratic institutions, he is not necessarily compelled to acquiesce to the requests of his electors. With the exception of Ecuador, the countries that fared the best under the guidance of the IMF and World Bank have not adopted Bolivarian populism, although Peru came close. With growing inequality and economic failure, citizens seek more dramatic solutions to societal problems. The Bolivarian movement enables leaders to take advantage of that outrage in order to garner widespread support for radical and sometimes undemocratic policies. These regimes represent a move away from Washington and U.S. hegemony, but the ideol ogical differences between the Bolivarian regimes and other populist regimes do not c onstitute a clear political movement.
Lynch 100 The Echoes of Anti-Americanism Anti-Am ericanism is a long-standing problem that has manifested recently in the rhetoric of Bolivarian and other populists. Hist orical contradictions in U.S. human rights and foreign policies have fostered distrust, even when reforms to those policies have helped implement stronger human rights prac tices. The effectiveness of human rights agreements is entirely contingent upon whethe r the rhetorical commitment to those norms actually leads to improvements in domestic enforcement of human rights. However, the conditions under which human rights policies become effective are complex and unclear. In Latin America, U.S. forei gn policy has certainly been a pr edominant factor shaping the face of human rights. While the U.S. is not party to multilateral human rights treaties, consecutive governments over the past three decades have continuously pledged U.S. commitment to human rights as part of U.S. foreign policy. Washingtons historical hypocrisy and contradicti ons have plagued on U.S. foreign policy and its credibility and effectiv eness. A policy tool can only yield modest results when its efforts are consistently unde rmined by other policies. U.S. foreign policy during the Cold War attempted to mix Containment policies with hum an rights policies, and the result went something like this: In Chile, the U.S. executive branchs hearty rhetorical support for human rights was contradicted by direct assurances to Pinochet that his militarys success in combating communi sm was Washingtons primary concern. The mixed signals the U.S. has been sending Latin America over the years has naturally fostered resentment by many groups within the region.
Lynch 101 U.S. foreign policy to advocate human ri ghts is only effective when backed by a domestic and international consensus that those policies are justified. Adherence to current cultural norms is a crucial aspect of successful foreign policy initiatives, and convergence at both domestic and international levels is necessary to prevent the appearance of hypocrisy. Unfortunately, the U.S. is learning this the hard way and may pay for it in a lack of allies among our neighbor s to the south. Also, the U.S. forgets that its foreign policy in one region necessarily has an impact on another regions perceptions of its legitimacy as a unilat eral actor in human rights enforcement. One method of injecting legitimacy into its foreign polic y entails paying greater attention to the information that is transmitted through networks of NGOs and international organizations. Transnational advocacy networks rely on NGOs and political institutions to diffuse information and apply pressure on decision-makers. Advocacy networks have made significant strides in transforming the notion of sovere ignty by blurring the boundaries between a states relations with its own nationals and the recourse both citizens and states have to the international system.195In Latin American countries with weak institutions and populist leaders, th ese networks may be ineffectual because populist leaders tend to ignore ot her political institutions. 195 Keck, Margaret E. and Sikkink, Kathryn. Activists Beyond Borders. Foundations of International Law and Politics Oona A. Hathaway and Harold Hongju Ko h, editors. Foundation Press. 2005. p. 217
Lynch 102 Leftis t Populism and Democracy The rise of populism across Latin America has sparked arguments about political stability and the consolidation of democrac y. The discussion about political stability inevitably turns toward a discussion of in stitutions. Economists have increasingly begun to focus on "good governance" as the key to good economic performance, pointing in particular to secure property rights and stable rule of law as essential ingredients to encourage investment and sustain growth.196 In particular, good governance has come to mean a government in which democratic pr inciples are fully exercised; "illiberal democracies" or "partial democracies" repres ent dangerous halfway houses that promise much but deliver little. 197 Yet, it remains unclear precisely which institutions are most important for political stability and how much those institutions matter when compared to such factors as a country's income, position in global trade, region, culture, or demographic makeup.198 The emergence of populist-style leadership in countries across Latin America is indicative of so me degree of democratic failure. In Latin America, the rise of populist leaders seems to be eroding democratic institutions in several countries. In partic ular, Venezuela under Chavez is increasingly distancing itself from democra tic principles. Venezuela is a good example of a political system characterized by disjointed party politic s. In a disjointed party system, incentives for parliamentary negotiation te nd to be weak. Taking political disputes to the streets is routine, and the execu tive enjoys ample room for autonomous action.199 Although the 196 Goldstone and Ulfelder, p. 12. 197 Goldstone and Ulfelder, p. 12 198 Goldstone and Ulfelder, p. 13. 199 Schamis, p. 26.
Lynch 103 voting populace in Venezuela is stro ngly polariz ed into Chavistas and opposition, there is no united party representing the opposition. Chav ezs bid to end presidential term limits and his escalating attacks on opposition member s does not bode well fo r the institution of democracy in Venezuela.200The opposition is widely repr esented in the Venezuelan media, though, and Chavez is constantly at wa r with the media via his weekly television program, Alo Presidente It is somewhat difficult to ascertain the true degree of democratic decay in Venezuela because the media both within Venezuela and internationally present vari ed accounts of democratic conditions in Venezuela. Argentina, Bolivia, and Peru also represent very clear cases of disjointed party politics. Since its tr ansition to democracy beginning in 1983, Argentina has seen the rise of a system in which democratic procedures are twisted, circumvent ed, and violated in pursuit of the executives goals.201 Bolivia has seen the rise of a strong, radically leftist indigenous president who allows little room for political negotiation. In fact, the most united elements of the opposition to him have attempted a separatist movement, demonstrating their lack of representation in the Boliv ian government. Years of corruption, scandals, and internal disputes have severely fractured the Peruvian Congress. The victory of Alan Garcia over his Chavez -back opponent, Ollanta Hu mala, represents a move in the right direction for democracy, but Garcia is not know n for his history of effective democratic governance, and his mode rately democratic agenda will be difficult to carry out in the dysfunctiona l institutional setting within whic h he will have to work. Political stability is also crucial for an economy to grow. Many would argue that, specifically, democratic institutions are necessary for even growth. In a political economy 200 Chavez Shifts Ground on Presidential Re-Election. Latin American Herald Tribune January 8, 2009. 201 Schamis, p. 27.
Lynch 104 where dem ocratic institutions are lacking, economic growth tends to create intense regional and sectoral cleavages. In count ries based on oil-production and extractive minerals democracy is predisposed to fare particularly poorly and economic growth is likely to be slow and intensely uneven.202 Schamis points out that oil-export revenues spur an appreciation of the exchange rate that hurts the competitiveness of the manufacturing sector and crowds out investment. Social cl eavages are then exacerbated and the economy suffers through sharp cycles associated with pri ce and exchange rate fluctuations, which foster instability, both economically and politic ally. A weak economy and poor democratic base leave a country mo re vulnerable to insurgency and violent protest. Internally, violent conflict is more likely to take place because concentrated inequalities and poor economic performance pr ovides an environment for political unrest. ODonnells description of leadership in a delegative democracy cl early articulates the definition of populist leadership. He argues th at in delegative democracies, the elected leader serves as the embodiment of the nation and custodian of nationa l interests; he or she is therefore assigned the right to govern as he or she deems fit as long as the current power structures allow it, regardless of what was promised during the electoral campaign. It is worth quoting his description of pa trimonial leadership in greater detail: Since this paternal figure has to take care of the whole nation, it is almost obvious that his support cannot come from a party; his political basis has to be a movement, the supposedly vibran t overcoming of the factionalism and conflicts that parties br ing about. How can it be otherwise for somebody who claims to embody the whole of the nation? In this view other institutionssuch as Congress and the Judiciaryare nuisances that come attached to the domestic and inte rnational advantages of being a democratically-elected Pres ident. Accountability to t hose institutions, or to other private or semi-private organizations, appears as an unnecessary 202 Schamis, p. 29.
Lynch 105 impediment to the full au thority that the President has been delegated to exercise.203 In this process of insulating the President from institutional constraints, an important factor shaping the political role of resource wealth emerges. The ideal patrimonial figure of a delegative democracy is given almost complete opacity because he is able to dictate what is right for the country in the l ong-term, whether society resists or not. He is not pressured to reveal the r easons why he does what he does, because it is obvious that only the head knows [what is right].204 Therefore, his actions are unmonitored and he is able to utilize resour ce wealth to his advantage. Chavez has most certainly been guilty of this. While he has funded some welfare programs in Venezuela, these amount to no more than table scraps compared to the money he spends abroad, yet the poor do not complain. Chavez has given away oil to Cuba and other Caribbean states, bought Argentinas debt, and allegedly financed political campaigns in Peru, Bolivia, and possibly Mexico.205 All of this superfluous spending would not be possible were it not for Venezuelas nationalization of its rich oil resources The U.S. has a long history of hegemony in Latin America, but the rise of the new wave of leftist, populist leader s seems to be signaling an e nd to that era. The question then arises as to what the United States shoul d do, if anything, to strengthen its influence in the region. Past foreign po licy in Latin America has not produced the desired results. The imperial age led to widespread huma n rights abuses advocated by Washington, and the era of the Cold War saw the United States turn a blind eye to human rights violations at various stages in the past. The period of neoliberal reforms impos ed policies that have led to increased inequalities and social in justices. Logically, the Latin American populace 203 ODonnell, Guillermo. Delegative Democracy? Journal of Democracy 5 (January 1994): 55-69. 204 ODonnell, Guillermo. Delegative Democracy? 205 Castaneda, Jorge G. Latin Americas Left Turn. Foreign Affairs, May/June 2006.
Lynch 106 has shown a desire for change through its pr esidential choices, but the Un ited States and Bretton Woods organizations continue to pr essure Latin America to adopt neoliberal policies. The resource curse has created a politic al environment that facilitated populiststyle leadership to take hold once again, this time in a unified move ment reacting against neoliberal reforms that have aggravated deep -seated inequalities. This movement is not the homogeneous movement many have assumed it to be. Populist leaders in the region now represent different factions of the left and the resource curse has influenced their respective formation in various ways. Indigenous organizations seeking to reclaim control over their own na tural resource wealth have turn ed to populist leaders in an attempt to have their voices heard. Natural resource wealth leads to populis t-style leadership because it makes it possible for democratically-elected leader s to run an economy based on rent-seeking rather than true development, based on incr easing productivity and human capital. The persistent emergence of populist leaders in Latin America is a result of weak democratic institutions and splintered party systems, wh ich eliminate horizontal accountability and necessitate campaigns based on demagoguery an d empty promises. Elected officials may purposefully resist the establishment of ins titutions because they would represent a check to power and an obstacle to the established pa ttern of natural resour ce windfalls within the government. Yet, several countries seem to be capable of escaping the curse of natural resource wealth. If th ese are not isolated cases, escaping the resource curse may enable other so-called delegative de mocracies in the region to exchange uninstitutionalized populist leadership for party politics and leaders accountable to
Lynch 107 dem ocratic institutions. Those delegative democracies would then be transformed into representational democracies, which would be a favorable turn of events for Latin Americas poor.
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