Masci,David_TroubleinSouthAmerica[1]

Masci,David_TroubleinSouthAmerica[1] - .Afuneral procession...

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Unformatted text preview: .Afuneral procession for 17 peasants reportedly killed by the Revolutionary Armed Forces of Colombia (PARC) wends through San Carlos on Jan. 19, 2003. The Bush administration is seeking $537 million from Congress for Colombia this year, partly to help protect an oil pipeline from attacks by the guerrillas. Political turmoil in much of South America has some experts worried about the survival of democratic gains made in the 19805 and ’90s. V tom 77:: C Q Researcher, March 14, 2003. AFP Photo/Fernando Vergara Trouble in South America David Masci at P21 means “peace” in Spanish, but Bolivia’s capital was any- thing but peaceful on Feb. 12., when thousands of angry citi— zens marched to the center of the city. At one point during the ensuing melee, striking police officers and army troops sent to keep order fired at each other. By the next day, 29 people were dead, seven government min- istries had been ransacked, scores of businesses looted and large downtown sections of the city set ablaze. Protesters even rushed the presidential palace, forcing President_,Gonzalo Sanchez de Lozada to make his escape by hiding in an ambulance. The pmesrs were sparked by Sanchez’s decision, later rescinded, to raise taxes and cut W International Monetary und (IMF) loans. Aid is desperately needed in the p can nation, where nearly three-quarters of the 8 million people live at or below the poverty line. Economicandqmfificirurmoil has wracked much of South America in recent years, sending protesters into the streets in Argan violent results. “There’s a sour mood throughout much of the continent right now,” says Michael Shifter, a professor of Latin American studies at Georgetown University and vice president of Inter—American Dialogue, a Washington think tank. “There’s a sense that the eco- nomic and political models they’d been relying on for years are not working.” Venezuela is perhaps the best example of such failure. President Hugo Chavez—Whose 1999 election reflected voter dissatisfaction with the existing government—has responded to massive strikes with dictatorial tactics, such as arresting opponents. (See sidebar, p. 218.) 207 il :l il l 208 DEMOCRATIZATION emocratic Nations,‘Ele'c.ted-r Leaders ‘ outthmerica’s remaining dictatorships evolved into democracies in the last two decades, including thQs ' aZil;-’Argentina, Paraguay and Chile. Today, ‘everyleader on the continent has either been elected by'dir , pillar vote or by a parliament or other elected body. Brazil, the continent’s largest and most populous ' ation‘, recently elected the popular Luiz inacio Lula da Silva —— widely known as Lula. Georgetown Paramaribo _ ench Guiana e _ \ In A1 troubles political watchers nent. All the milii new pop cratic gal Muc} CCOI’IOID) TROUBLE 1N SOUTH AMERICA 209 Gross omestic Product (GDP)* 3;: s billion 1 N p in coal currency. ' oUrce‘s: CIA War/d Book, 2002; news reports (for inflation) Per capita per capital GDP numbers are calculated in purchasing power parity, or the amount of goods and services '. Inflation Main industr es In Argentina, Bolivia and other countries, economic troubles have discredited political elites and traditional political parties to the point that some South America- watchers fear for the survival of democracy on the conti- nent. Although few believe South America will return to the military dictatorships of the 19708, some feel that new populist leaders like Chavez may subvert the demo— cratic gains of the 19805 and ’905 just to stay in power.1 Much of the Wlimfiublid‘ world economy, which has been in a slump since t e urn of M '\__. the millennium. The region’s gross domestic product (GDM similar drop is expected this year, according to Shifter and others. But some analysts also blame the big multilateral lending institutions, in particular the IMF, for many of the continent’s woes. The IMF and the World Bank lend tens of billions each year to South American by more than 1 percent last year, and a nations, giving the banks tremendous influence over economic policy. 210 DEMOCRATIZATION _ l is life story sounds like a r'ags-to—riches Holly— Hv’mod movie: Born into abject poverty, Brazil’s , ' Luiz Inacio Lula da Silva—knownsirnply as ' Lula—has risen from shining shoes to the nation’s highest office. ' ' ' , A 7 f I The miracle of Lula’s incredible success is not Idst on his ' fellow citizens, who love a passion usually reserved p -' for religiousleader's or rock‘stars. Even before he was offi-‘ -‘ cially declared thewinner of the country’s presidential elec- tion on Oct. 27,-the streets of Brazil’s. largest city, 359. 'A'Paulo, were crowdedivwith pro—Lula revelers. i 7 ' 1 Lula did not disappoint his supporters, winning more . than 60 percent of the voteagain'st‘ his government; ' j'rsupported opponent. Indeed, the landslide markedanother ._‘ v;>,chapter'in his'remarkable liferThe triumph came after’four , 5 previeus unSuccessfirl runs for the presidency. V ' :4, is ahistoric victory because, finally, it representsr‘ I I. of‘thelp‘eople,” said Gabriel Brasileiro, a $50 Paulo O’cial worker. “Peoplewant wealth distributed more fairly, i 3; sure Lula will adopt a more Socialist-and: right. theisfmfli _ , . , . V V * But restoring the country‘s sagging economyfwhile :eli'rn—‘ n the son ofsimpoverished farm workers, dropped. E j _ uT/ie’zvew‘yozk Timer; Oct. 27, 2002,19. A6. ‘ fits—all” economic regimen—including tight monetary policies, privatization and trade liberalization—~that does much more harm than good in countries with fragile economies. They point to Argentina, where they say IMF policies helped cause and exacerbate a fiscal crisis of immense proportions. But IMF officials say the fund tailors its advice to fit each country’s situation. “One—size—fits—all is a big myth,” says Tom Dawson, chief spokesman for the IMF. “We’re always accused of not caring what RagsétO-Riches 1' . activist. He was elected president of a 'metalworkers’ union attention after leading several successful strikes. The “fol; , lowing » year, he formed the Workers Party, bringing I together several leftist groiips under one banner. ‘ j ’ (In 1985, Brazil’s nfilitaryvdiCtatorjshipended,’ and: {11 next three, but'Oncaeh try-his share of‘the vote r ‘ V ' few believed he Wouldlever‘ get more 35 'Or ‘40 pe ‘ “espoused large increases social spending while cri I V big business, free trader-he International Monet ' e _ ' (IMF) and the United States; He even’dressedl he :‘workingman that,1h_e',was;lin- casual clothes instead o he For the 2002 eleCtiorr'campaig'n though, than},ng 'his' stripes—literally, additipntodonning pinstrip ‘u ' candidate Lula moderated his vp65irions,' sounding I'll-cs i he . - lthe‘fiery populist ofyore ' nd‘.more like‘t’he'kin ; inatin'cits: crushing" poverty willi'be no, easytask for the ' v “nut f‘school after 'thefifth‘grade to help'support'his :famr ‘tiated by‘ decad¢,.'Lula factory 'work, 'ofren'asa ' . . , . . . . , p » lead Brazil It lecono i’ ‘Qu‘ot'ed Tony‘S'mith,'“Music and Victory in the Streets ofBraiail‘,” ~-;'“{1€Ss' leaders werelless convinc drléatdingm a ‘ _ . .' in-the value ofthe-country’sCurrency; th /J/er 3’" Critics of the big lenders say they lmpOSSMfiLZLJOthCI‘ countries] think, but we look closely at every At 22, Lula joined a union and quickly became a. labor when he was 30, and by 1980 he had come to national ran for“ president. He lost the first election,vasi well ‘of the vote because 'of ideology; , Indeed, in'hisfirstifdur-campaigns, Lula unaba business suits most political leaders wear. light find in .Europ' thestriet Still;_bankers' ” " real ands-d;on individual country and try to help them fashion policies to suit their needs.” Other experts blame the region’s problems on government corruption and inefficiency. The United States, meanwhile, is hoping to jump— start the region’s economies with the proposed Free Trade Area of the Americas (FTAA) treaty—which would encompass all of North and South America plus most of the Caribbean. The U.S. proposal for the FTAA, unveiled in February by U.S. Trade Representative ' Brazil’s stock market as it 1 Lulawo'uldwin.‘ » _ I .But .Lula surprised the doubters‘so far. He has i ' Stayed within budgetary con- straints imposed the IMF * deal and journeyedto Wash- ington even before he was inaugurated to discuss free trade with'i‘President Bush. 1 . He also picked an economic " team known for its 'conunip ment to fiscal. responsibility._ COnsequently,‘ the stock mar— ' ‘ ket hasflfully recovered and . the, real has regained about half its lost ground. _ . At the ,i/s‘amenme, the new president has not forgot- . ten his leftist supporters, ’ announcing a new campaign; _ . Zinc Hunger, to help Brazil’s ' I‘ '- poorest. The food—assistance :3 iprdposal would spénd nearly Y.$ billion” over-- the next ' 'four' years to help .46 million . ' _ - ofthe. countryis.‘ 176, million citizens... - . ', ~ _ “Heisgreally trying to itakerthe middle road of economic, Rand fiscal stability Onone side and poverty reductionson the _ -‘ othera’; says, Michael'Shifter,‘ vice presidentjfor' policyrat : Inter-AmericanflDialogue. a‘Washington think tank. I i V, V So the act. seems-to be working, andotliérs say. 'Certainlyreveryvvhiere the new president- ' goes",u'crowds 'cheer him. 'V l I ' '2' I I " " Robert Zoellick, would phase out all tariffs for treaty sig— natories between 2005 and 2015. Zoellick and other free—trade advocates contend that eliminating trade barriers will promote long—term growth in South America, as countries gain greater access to the giant U.S. market. But some in the region worry that large American multinational corporations will use free trade to overwhelm smaller South American businesses and despoil the continent’s environment— especially the vast Amazon basin, whose rain forests are being threatened by loggers and agricultural interests. Lin; inépio tuia'da siiva‘, Brazil'spopuiist president in ', pinstripes, moderated his leftist pdsitidns—and his attire—after his victory. » TROUBLE [N SOUTH AMERICA 211 But huge challenges re- ‘ . main. Brazil faces a crippling public debt of more than a half—trillion dollars—about 42 percent of the country’s $1.2 trillion gross domestic product (GDP). At 12 per- cent, inflation is also creep- ing up too high, economists say. In addition, the public pension system is running huge deficits, and the tax sys— tem is not taking in enough revenue. Lula has pledged to re— form pensions and, taxes, but that may be difficult given that his Workers Party has only 18 percent of the seats in parliament. I He also'wants Brazil’s econ— " omy to grow at 5 percent this year, (more than twice ’ last year’s incr'ease)'—a tall ' order considering the sput- . . ,teri'ng global economy. ' ‘ Still, Brazil’s new president has been underestimated his » whole life; .And supporters-and foes alike acknowledge his unique ability to work with different groups, - V“All his political life. he’s-been ago'od negotiator,” says John Welch,’ chief Latin American economist at the New York‘branch ofwestLB; a German ‘fMaybe he can pull ' this one off, too.” ‘ AF? Photo/Evarislu Sa America’s other major regional policy initiative is “ Pl itary assistance to the Colombian government. Colombia is in the grip ofa brutal, decWMi’Wir‘fmied by drug money, involving both left—W rimmilita soldiers. In recent years, US. aid has shifted its {Ocus from just the narcotics trade to coun— tering the guerrillas as well. Human rights activists and others criticize the new aid, slated to be more than $500 million this year, M because the Colombian army is closely linked to the ”— multiyear program to provide mil— m DEMOCRATIZATION 212 paramilitaries, who—like the guerrillas—have been c arge with committing at\rcyc',fies against civilians. “The concern is that the Colombian military has links to paramilitaries who have committed atrocities, and that those involved at the highest level have not been brought to justice,” said Sen. Patrick]. Leahy, D-Vt. “Neither the Colombian military leadership nor the [Colombian] attorney general has shown the will to end the impunity.”2 Suppow that to bring peace to Colombia the army must be strong enough to reiri’ih both sides and restore order. Some experts are cautiously optimistic that Colombia, along with the continent’s other nations, will overcome its problems in the coming decades. Indeed, some opti- mists say that with its rich resources and new democratic traditions, South America will become a stable and pros— perous region over the next 20 years. “There’s no doubt that South America has great untapped potential,” says John Williamson, a senior fel- low at the Institute for International Economics, a think tank in Washington. Even in the here and now, the news is not all bad. Braziligpopular, new president is grappling valiantly with the nation’s crippling public debt and the social problems that have created its large underclass. And in @emflcyényxmmy have flourished since m1 ' ry dictator en. Augusto Pinochet stepped down nearly 15 years ago. As South America—watchers look to the future, here are some of the questions they are asking about the con- tinent today: Are IMF policies partly responsible for South America’s current economic woes? According to a recent World Bank report, South America’s GDP will shrink by 1.1 percent this year—its worst per— formance in 20 years.3 The decline is driven not only by the limping world economy but also by Argentina’s fiscal col- lapse and economic problems in Brazil, Venezuela and other nations on the continent (seep. 224). But some economists say the 1W the responsibility for these problems, much more than other 1mm lenders like the poverty—fighting World Bank and much smaller Inter-American Development Bank. “When you look at South America as a whole, the [fimd] really has mishandled things,” says Sarah Anderson, director of the Global Economy Project at the Institute for Policy Studies, a Washington think tank. “Especially in a place like Argentina, where they forced an austerity program on them as their economy was collapsing, you see that they’ve often been a negative force in many places.” During the 19909r-the-1Mliand other international financial institutions pig‘sh‘ed most of South America to adopt the so—called WasWsuS—a set of , policies aimed at liberalizing ec res by removing trade barriers, privatizing state-owned industries and opening financial markets to foreign capital. Left—leaning critics of the IMF like Anderson say the measures exposed South America’s fragile economies to often—destructive forces that have usual‘l‘;7‘frtl.lt=.n.l&estdofignJ the or and middle class. “Basically, there has been expei’irnmtwrw forced these countries to imple- ment tight fiscal policies and open trade and monetary policies regardless of what was happening on the ground, and it has failed,” says Mark Weisbrot, co-director of the Center for Economic Policy Research, a Washington think tank. ‘ “During the 20 years between 1960 and 1980, South America’s economy grew 75 percent,” he says. “In the next 20 years, between 1980 and 2000, when they were ' supposedly doing the right thing according to the IMF, their economies grew a total of 6 or 7 percent.” Weisbrot says the IMF pushed a one-size—fits—all pol- icy that didn’t take into account individual countries or their economic situations at the time. “So you had coun- tries cutting [government] spending even though they were in a recession,” he says. “That’s usually disastrous, which is why we in the United States don’t do it. But that’s what’s happening right now in Argentina.” Such criticism is “nonsense,” says IMF spokesman Dawson. “The Washington Consensus calls for flexible currency-exchange rates, and yet when Argentina told the fund that they were going to have a fixed rate, we accepted it as the right policy,” he says. “So much for one—size-fits—all. Our policies are based on a nuanced, case—by-case analysis.” And, despite economic turmoil in many South American countries, Washington Consensus policies have generally had positive results, Dawson claims. For instance, he says, the IMF, through loans and advice, has - 1" helped set Chile on a stable course. “And they’ve paid OH:- their IMF loans ahead of schedule.” 1 A different example of an IMF success is its push for South American countries to privatize industries. “Of course, there have been setbacks, but in general, the pri— vatized companies lowered prices and offered better ser- vice to consumers, and that’s good,” says Williamson, whose ideas inspired the Washington Consensus. Defenders of the multilateral lending institutions say South America’s troubles are largely homegrown. “They’re not doing the things good governments should do to make their economies grow,” says Julia E. Sweig, a senior fellow at the Council on Foreign Relations, a New York City think tank. “For instance, they don’t have ade— quate tax systems and often use VAT [value—added taxes] taxes—which are very regressive—to raise revenue.” In addition, South American governments tend to spend beyond their means and waste much of their revenue on inefficiency and corruption, she says. Indeed, IMF Research Director Kenneth Rogoff argues, countries that have been spending beyond their means often criticize the fund when it forces them to confront the obvious: that governmentbudgersmust be more in line with revenues. “Blaming the fund for the reality that every country must confront its budget con, straints is like blaming the fund for gravity.“ But some conservative critics of the international funding institutions blame the continent's problems on the lenders’ unwillingness to use their leverage to force South America’s countries to make needed systemic changes. “The M has turned into a savingundlganfpr these countries by perpetually providing money for them no matter what they do,” says Stephen Johnson, a senior fel— low at the Heritage Foundation. As a result, he says, “the people who run these countries think they can live off the IMF’s largess forever, without ever having to really work out their problems. Until the [IMF] is willing to really hold their feet to the fire and cut them off, you won’t see South America undertaking the real reforms that they need. ” Ian Vasquez, director of the Project for Global Economic Liberty at the libertarian Cato Institute, agrees. The IMF “basically made a bad situation worse by encouraging borrowing and undisciplined spending,” he says, pointing to its recent loan to tottering Argentina. “They stopped lending to Argentina for a year, and I _ thought maybe they’d turned a corner,” he says. “But they blew it when they gave [Argentina] another loan TROUBLE IN SOUTH AMERICA 213 just a year later in spite of the fact that the Argentines hadn’t really done anything to warrant more money.” Is South America in danger of retreating from 1 the democratic gains made since the early 1980s? South America’s successful shift to democratic rule over the past two decades has been widely celebrated. Beginning in the early 1980s, several of the continent’s largest and most important countries—among them Argentina, Brazil and Chile—replaced milita rulers with democratically elected leademegislafifixes. But in the last Wm several Latin democracies has thrown those democratic gains into question. In Mgerents came and went in a tumultuous two—w riod at the end of 2001. The leaders of PWador have been forced from office, and in Venezudgbl’resident Chavez’s heavy— h'i'fided‘fktics have prompted his political opponents to respond in kind. Meanwhile, p 'c su ort a i Sou America is faltering. In Brazil, Colombia, Paraguay and Chile, feWpondents to a 2002 poll favorgidfigrocracy over or er forms of government.5 Some 0 servers say South Arneri democracies have been hurt by their new, largely l®dera who they say used the ballot box to seize pov’ver and then showed little respect for democratic institutions once in office. “There is no doubt South American democracy is in cri- sis,” says Angel Rabasa, a senior policy analyst at the Rand Corporation, a think tank in Palo Alto, Calif. “You have a trend away from real democratic institutions and leftist, authoritarian leaders.” @s widel seen as this roup’s chief offender. Shortly a ter him assembly that replaced mugged—Congress and reshuf- fled the Suprerpfipurt. Indeed, says Constantine Menges, a senior fellow at the conservative Hudson Institute, “Chavez has gone further than that, creating paramilitary groups to intimidate and even shoot his opponents.” Recently, Chavez arrested political oppo— nents who organized a crippling, nationwide strike late last year. But Chavez’ critics have used undemocratic means to push their agenda as well. Last April, business leaders and some military units briefly deposed Chavez in a coup, only to see him returned to power days later by other ele- ments in the armed forces. EOW 214 DEMOCRATIZATION Elsewhere, the situation is little better, according to Menges and Rabasa. They point to Argentina, where a revolving-door presidency has damaged the office to the point that the winner of the May presidential election probably will be severely weakened, possibly creating a power vacuum. In Ecuador, they note, the president is a populist former army officer who was elected after a coup he helped engineer. The governments of Bolivia and Peru also are shaky, with the presidents of both countries in danger of being deposed. Pundits link the instability to recent economic trou— bles. “The failure of market-oriented reforms in places like Ecuador and Argentina has led to the [negative] reac- tion against the governing institutions that are responsi- ble,” Rabasa says. “They turn to populists like Chavez.” But others point outthat most South American coun— tries, even ' se in economic trouble, st' ' ro democraticmhm‘tm‘lhm guns out the military is staying in its barracks and they’re resomeir differences peacefully with elections,” says the Council on Foreign Relations’ Sweig. “With the exception of Chavez in Venezuela, I don’t think they’re backtracking,” agrees Peter Hakim, presi— dent of Inter—American Dialogue. “Although many peo— ple have lost confidence in their institutions and their leaders, democracy is still the rule.” Hakim disagrees with the nOtion that the continent is turning toward leftist, populist, authoritarian leaders like Chavez. In Brazil, he points out, newly elected President Luiz Ina’rcio Lula da Silva, widely known aw sakenW to become a pragmatic 181:. (See :1 3 ar, 1;. 210.) “The real story in Brazil isn’t of a lefrwing firebrand, but of a person who has become much more moderate in power,” Hakim says. “Since he was elected, he hasn’t tried to tear down his predecessor’s more conservative policies,'but has accepted them and even built on them.” For instance, Lula-has adopted the previous adminis- tration’s policy of creating government surpluses each year to pay Wforeign debt, Hakim points out. “This 15 very hard for im because it constrains his ability » to spend money and to enact new programs,” he says. “But he’s done it, and he’s even proposed running higher surpluses in order to pay down more debt.” In Ecuador, another recently elected ist, Lucio Gutierrez, also has moveitmflahc‘pfial and eco— nomic center, winning plaudits from the IMF and the contain the violence with a get—tou Bush administration for his fiscal belt—tightening and other reforms. Moreover, optimists say, most South Americans want to have nothing to do with the kind of populism that has wracked Venezuela. “Chavez scares a lot of people, and they want to avoid becoming anything like what Venezuela has become,” says Johnson of the Heritage Foundation. “For example, what’s happened in Venezuela has had an effect on Peru, where President Alejandro Toledo may not be popular, but he’s muddling through in part because people value stability and don’t want to I sink into chaos.” Should the United States continue aiding Colombia’s fight against leitist guerrillas? Colombia is South America’s most violent country— under siege by leftistguerrillas, r‘ htist paramilita groups and n ickers. In theme, 30,3(3, Colombians—mostly civilians—were killed. Last year alone, 3,00 le were kidna ed.6 "’ Newly elected President Alvaro Wbfie Velez is trying to o icy, targeted espe- cially against the country’s 18,000—member left—Wing guer- rilla group, the Revolutionary Armed Forces of Colombia (FARC).7 Established in 1964 as the military Wing of the Colombian Communist Party, FARC has since largely shed its political agenda to focus more on organized crimi- nal activities like kidnapping and drug—trafficking. Uribe virtually reversed the policies of his predeces- sor, Andres Pastrana, who devoted most of his tenure to unsuccessfully trying to negotiate a peace agreement with FARC, even ceding control to the guerrillas of a “safe haven” the size of Switzerland in southeastern Colombia. Uribe’s about-face won strong support from the Bush administration, which casts the country’s troubles as a part of the broader war on terrorism. “After Sept. 11, the Bush administration changed its whole focus worldwide to fighting terrorism, so it makes sense that they would see the [Colombian] government’s battle against the PARC as a struggle against terrorism,” says Rand’s Rabasa. But the United States was helping Colombia even __ before 9/11. Since 1997, the United States has given . Colombia $2 billion—including $411 million last year-— to beef up its anti-narcotics and law-enforcement capa bilities.8 But the Sept. 11 terrorist attacks on New York and the Pentagon prompted the U.S. to up the ante. When Secretary of State Colin L. Powell visited Bogota on Dec. 4, he announced the administration would seek $537 billion from Congress for Colombia this year, including $98 million for counterinsurgency training. The administration also has sent 60 Special Forces soldiers and intelligence operatives to help train the country’s army.9 The aid is largely to help the Colombian army protect an oil pipeline from the frequent disruptions by guerrilla attacks. Still, the new emphasis on helping Colombia fight guerrillas is a break from the past, when military aid solely targeted anti—drug efforts. Some experts applaud the administration’s help fight— ing PARC and other groups, saying that without U.S. aid, Colombia could implode, becoming a state without a real governing authority. Then they warn, the chaos could spread to less stable neighbors, like Venezuela, throwing the region into further turmoil. “Col bia ' ht ve well collapse unless we strengthen the army enough to fight the leftist guerrillas and the right—wing paramilitaries,” says the Council on Foreign Relations’ Sweig. “Already they don’t control half the country, so something needs to be done to restore government control.” “The problem is getting worse and will continue to get worse if something isn’t done,” agrees Heritage’s Johnson. “Any army’s job in [such] a situation is to guar— antee public safety and the rule of law. The only way they’re going to do that in Colombia is to push the FARC bac .” And repelling the FARC is the only real option, aid sup- porters say. “Pastranas efforts to talk to the PARC ended in failure, because the FARC really weren’t interested in mak— ing peace,” Rabasa says. “The government has exhausted all possibilities and now they have to fight them.” Colombia has only about 40,000 combat soldiers, compared with more than 20,000 leftist, mostly FARC guerrillas and about half that many paramilitaries. The military largely controls the urban areas and some well— populated parts of the countryside. But large swaths are without either a military or civil presence. Rabasa and others say the U.S. should be doing more, given the army’s small size and the task ahead. “Basically We are training and equipping a battalion to guard the oil pipeline,” he says. “While that helps, the army is going to need more resources and training from the Americans if it is going to retake control of the country.” TROUBLE IN SOUTH AMERICA 215 But others say beefing up the Colombian military is counterproductive, because they see the war as unwinnable. “Everyone knows that you’re not going to end this thing militarily,” says Sanho Tree, a fellow at the Institute for Policy Studies. Effective counterinsurgency usually requires 10 times ) as many troops as the rebels, he says. “Colombia is the size of Texas and California combined and has about 40,000 soldiers to deal with almost as many insurgents,” he says. “The New York City police have almost as many people to deal with in an area a fraction of that size.” Opponents of aid also argue that America’s Colombia policy eerily parallels the earlflteermmelment in Viet . “This has quagmire written all over it, ” Tree says. “And just as they were saying about Vietnam in the early 19605, some American hard—liners say we need to help the Colombian military achieve a few big victories to strengthen its position at the bargaining table. That’s how we got deeper into Vietnam, and look what happened. ” More important, say critics of U.S. aid, the Colombian ar as a record of human rights abuses and deepg'es to right-wing paramilitary vigilante groups formed in the early MUS—fa fight FARC and other guerrillas. “The Colombian military created the paramilitaries and has maintained strong ties to them, even after the government declared them illegal in 1989,” says Robin Kirk, a senior researcher with Human Rights Watch and author of the best—selling 2003 book More Terrible Them Dear/J: Massacre; Drugs, amt/America’s War in Colombia. The military “subcontracted out its dirty war against the leftists tow—N [,mmilitarieshaysm Indeed, para— military groups devote most of their energy and resources to killing civilians suspected of sympathizing with the PARC, she says, rather than the guerrillas themselves. “The paramilitaries are believed responsible for 70 percent of the human rights abuses in the country,” Tree adds. “These are not good guys.” But supporters of aid say U.S. assistance will help the army disassociate itself from the paramilitaries and improve human rights in Colombia. “The army has sup— ported and worked with the paramilitaries [because] they haven’t had the resources to combat the guerrillas on their own,” Johnson says. “By strengthening the army, you will make them less dependent on the paramilitaries.” In addition, aid proponents say, the U.S. can use mil— itary aid to assure that the Colombian military cleans up its human rights record. “When we’ve pulled aid—as in ’\J 215 DEMOCRATIZATION Guatemala in the 197OS—things went haywire, and the military committed horrendous abuses,” Sweig says. “But when we’ve used aid to slowly change an army—as we did in El Salvador in the 198OS—things got better.” But Kirk disagrees. .“Aid and training never solved a human rights problem,” she says. “In El Salvador, sol— diers who received full training by the United States went on to commit massacres and atrocities.” BACKGROUND Discovery and Conquest Christopher Columbus discovered what is now Venezuela during his third voyage to the New World in 1498. He was soon followed by fellow Italian, Amerigo Vespucci (after whom the Americas were named) and Pedro Alvares Cabral, a Portuguese sailor who discovered Brazil in 1500. The 5 who followed these first explorers into South America found an array of cultures and societies. The largest and most technically sophisticated of these indigenous groups were the rapacious Inca, who had used their formidable military and organizational skills to forge aivast empire of 12 million people encompassing much of the Andes Mountains and the Pacific coast. By contrast, there were the peaceful Guarani, who raised crops in the jungles of central South America. Other areas supported groups ranging from stone—age hunter—gatherers to large-scale agricultural and fishing communities. The conquest of South America began in earnest in 1530, when Spaniard Francisco Pizarro led a small band of well—armed troops against the Inca. Cunning, skill and vastly superior weaponry helped Pizarro and later con- quistadors bring down the huge empire.lo Old World dis— eases, like smallpox, also played a role, wiping out millions of potential Inca adversaries. The future Peru, Ecuador, Bolivia and Venezuela soon lay in Spanish hands. Meanwhile, the Portuguese were consolidating their hold over Brazil. Incursififi‘ into the colony by French, English and Spanish adventurers prompted the king of Portugal to grant huge tracts of the territory to rich patrons who promised to colonize and protect the area for Portugal in exchange for the right to exploit the land and its people. Spanish was more centralized. A Council of the Indies—located in Spain ised of the king, aris— tocrats and lawyers—made general policy, which was then carried out by an appointed Viceroy, who ruled over the continent from Lima, Peru, through a hierarchy of colonial administrators. ‘ 1 By 1600, the economy of colonial South America flourished on gold and silver mining and large plantations that produced cotton, tobacco and sugar for export. But while Spanish and Portuguese rule made fortunes for many Europeans, it brought misery to the continent’s native peoples. Millions succumbed to diseases that had been common in Europe for centuries but were unknown in the Americas, and hence devastating.12 Millions more were ultimately drafted for forced labor in mines, planta- tions and other ventures. Viewing the Indians as potentialeerrverts, the Catholic Church urged the Spanish crown to prohibit the mistreat- ment of indigenous people. Its missionaries fought for their basic human rights, but European settlers resisted the reform efforts. But the forced—labor system eventually collapsed as more and more Indians died from disease, overwork and the abuses meted out by their Spanish and Portuguese overlords. Many of the Indians who survived became sharecroppers on large European-owned plantations known as haciendas. In turn, millions of African slaves were brought in to do work originally performed by the Indians. During the 18th century, Spanish kings tried several times to reform the administration of their New World colonies. In an effort to decentralize authority, South America was broken into three territories—the Vice— royalties of New Granada (now Venezuela) in the north, Peru along the Pacific coast and Rio de la Plata (Argentina) in the south. Many trade barriers also were lifted, which helped stimulate the continent’s economy. Push for Independence F» In the late 18th century, increased-prosperity expanded South America’s middle and upper classes—the descendants of theman settlers and mixed- race mestizos. But prosperity did not trickle down to the continent’s Indian or black populations, intensifying the region’s soSral stratification. As thilvealglflighgrigw elites grew, so did their wish to run their own affairs. Desire or greater autonomy was rt er stren reVolutions in the 1770s and ’805 in the United States and France and by the revolutionary theories of the Age 1 TROUBLE IN SOUTH AMERICA 217 6th' 1 centuries European can—i: .’ r. iq'ue} South Arizeriai. ’ 3‘ i} 1498 Italian explorer Christopher Columbus, V ' ,y under a Spanish flag, lands in Venezuela, becoming the ‘ p first known European to see South America. I i500 Brazil. i The first slaves arrive: I.” SpaniardVFrancisco Pizarro begins the conquest of i ‘ 'thellncaa " H 1.775 The American ReVolution inspires South Arnericans to consider their ovv'n independence; Portuguese-explorer PedrovAlvares Cabral discovers p r V' 1948 The helps establish the Organization of Arnerican States (OAS). 1964 A} Brazilian coup ousts the elected president. ' ’1973 Gen. Augusto Pinochet overthrows Salvador ' Allende, Chile’s elected president. i ICSCI‘IC Democracy andflee market: . '_ proliferate. :1985 Brazil returns to civilian rule. . 1989 Pinochet loses a referendum and civilian rule in . Chile is restored; . . Carlos Men‘em wins'Argentina’s ' presidency and institutes free—market reforms. iv .1994 Fernando Cardoso becomes Brazil’s president and a p » Century SW”? Amn‘i'mfi state: he??? 3. V, _ Veneiuela' declares independence, but Spain reasserts authorityin 1815. 7 ' ' I ' : ‘SiinénfBolivar‘ helps Venezuelarresist-fspain. .v Argentinadeclaresindependence; - v ’ i 1 9:.1V‘Bollvar liberates Colombia: frees adeptsiihe 5 but ofhemiSPheric affairs; E r 88; abolishes slavery. Dictators:qu eeénomicgrozqr/J are! 7 becomes a separate state a'Portuguesei; V - 3 Otto'bér 2002i‘LfiiZ mic-1:6. ., dentofBra'iilfo-n ,1 institutes free-market reforms. Populist Hugo ChaVez is elected presidentof Venezuela. ' ' ' Eduardo Duhal‘de becomes presidentvof Argentina after the country’s. slide intorecessionf. ; . Businessmen ~ :i‘n'dunta coups against Chavez: on April '12.. He, returns to . ” ower‘intwo days} » iv president ofColombia, ' ’* éfib‘misinawfirack aoyfircxi;»gu¢rrillélsé ' r ' ’ Hula da becomes pres‘ii- ' _, Qfiéifibélfl VEQSinfisesg.wd thegnational oil company » two-month st‘rilie’in Veneiuela‘demanding ' ' ' 'j’ChaVC'z’s resignation. g - > v thhuaw 200.3. Veneiuela’s strike ends; Chavez arrests: «s'ome'strilce' leaders and forces the stategoil Company to resume Operations. ' " ' ’ : i ’ ' February’2003 Protests 'in Paz, Bolivia, over tan hikes and spending cuts almost'br'mg down the government. ' r April 2003 Presidential'elections are scheduled in Argentina to replace Duhalde. 218 DEMOCRATIZATION "Venezuela’s Leader Hail-1'" ' onto Power ' ' enezuela’s feisty President Hugo Chavez prefers to ' stand and fight—even in situations where others might have retreated or resigned, Within the last year and a half, he has weathered a coup ' attempt that forced him from office for two days and Out— lasted a two—month nationwide strike that shut do’wn the entire country. “Chavez actually thrives in situations like this,” says Stephen Levitsky, a professor of government at Harvard University. “He’s at his best when he’s fighting an enemy.” ‘ ' ‘ If that is true, President Chavez has had many opportu— ‘ nities lately to be “at his best.”- Roughly two-thirds of Venezuelans—from almost all sectors of society, including organized labor, business and parts of the military—oppose his leadership. But while his political obituary hasrbeen written mOre than once, Chavez has always managed to confound conventional wisdom and bounce back. The recent strike, for instance, was initially seen as ‘a huge victory for his opponents. Businesses everywhere were shuttered—at an estimated economic cost of $50 million a day;1 Many 'workersatrthe state—owned oil company?- which provides half the government’s revenues, 80 percent ,of the country’s exports and is America’s fourth—largest for— eign supplier'ofloill—went on strike, completely shutting 'Idown the entire industry? _ ' '7 __ _i _ . ’ i ' The strikers, ledby a'coalrition of business and labor ' ‘ leaders, demanded that Chavez step 'dom‘or at least submit I "his:four—year—old rule to a'free‘and fair referendum. The . ~ _ l _ _ lipii‘p’residen't-didn’t budge. Instead, he waited until the‘s-‘trikers : 1 his and p’r'oiniséd #9 put them on triall‘MafiY fear i I I wriigaisb curb‘pressfreedom‘sii ‘ I ' ‘ u .' I‘Venezuela notalways iri'fsuch a chaoti l970s,=}as one of Latin America’s oldest democr Were so financially strapped to reopen their busi-- ; ' ‘ ness’es. As for-the allrirnponant- srateoil company, Petroleos Venezuela, Chavez fired 16,000;sttildngWorkers+aboutt 3:40, percent of its workforce—and 'set the rest to work » ' I ' ' “ if‘rest 'fthecontinent'With'plentifiilsuppl, 'prll,‘ .‘ restarting production. Chavez may havewon his latest politic-albattles; but the, " victories may turn out to be pytrhic. inflation. hasrea'ched ternore than 30 percent, and unemployment,isrexpected'to “reach 'the same-{level by June._The economy Shra'nki'by . V 9 percent last year and is expected to decline 20 percent this lye-at. Latin America has never seen such a dramatic 'eco—' -,no"mic contraction, said Organization ofAmcrican States ' i 1- Ginger Thompson, “Strike’s EFforts Tear at Social Fabric,” 777: New York Times, 16, 2003. 2 Juan Forero, “Venezuela’s Lifeblood Ebbs Even as it Flows,” The New York Times, Feb. 26, 2003, p. C1. ' the developed world. i ' (OAS) Secretary—General Cesar Gavira—“riot even during ,a civil wati"3 . Moreover, Petroleos is unlikely to return to its pre-strike production level of'3.1 million barrels of oil aday, beam the loss of hundreds of experienced workers hobbled the firm, analysts say. “It will not be the company it once Was," . said Mazhar al—Shereidah, an oil economist in Caraca'g Venezuela‘s capita’l.‘ ’ - ' Petroleos isrnot the only company in danger offounder- ing. _More than 5,000 private firms have gone bankrupt since Chavez was elected four years ago, and hundreds of others are about to follow suit. “The feeling Vwe have,” on ‘ business leader told Newsweek, “is that this man wants to do.- away with the private: sector altogether.”5 CV . 7 But Guillermo Garcia Ponce, the Stalinist coordinator of the Political Command of the Revolution—an advisory committee chaired by Chavez—says that rather than want— ‘ing to shut down private business, Chavez .wants to - 3 improve capitalism, so it’s “not subject to globalization or " U.S. interests.”é w ‘ ' ' ' I Venezuela’s democracy also has suffered a series of blows since’Chavez came to-offiCe in 1999. Mostnotably, r 2000,,vh‘e pushed through the election of a new Assembly - that dismissed and replaced the existingCorigress and A‘re‘shuifled the Supreme Court. Thepr‘esident also expanded i 1 the powers of- his own office, granting himself the lght t H ' rule by decree in'mattersafi’ecting the economy crime. 7 MOre recently, Chavez 'a’rre'stedsOm'e fifths: strike" lead richeSt-economies, Venezuela Was hailed as -a- class a strong, m'ultipartygdernocracy, :. Aeliev'edgVehezuelawould be thefirst-to join the r ' Bu: plummeting oil prices the _198055aiid 9_Os' ’thepetrol'eum-‘dependent economy into a tailspi _ standards of living eventually ledgto riots and, '1992, two ‘ i. Quotedrin Phil Gunsori> “Out for Revenge?” Newsweek, Feb. 24, 2003 ‘ 4 Forero, op. Fit. 5 Gunson, op. cit. 5 [bid fl coups,one led by then—Col. .Chavez.'. . _ In 1999, .Chavez SWept I into power as a fiery populist promising a revolution on behalf of the lower and work— ing classes and against the country’s wealthy elite. But the new president’s heavy— handed tactics failed to jump V start the economy, and by 2001 the former paratrooper was deeply unpopular, except amongthe very poor. But if Chavez made mis— takes, so did his opponents. ' In April of 2002, members of. the business community joined elements in the mili— .- my to depose the president. ~Within 48 hours, Chavez had rallied much of the army to his side and was back in power: ' ., The (Wes, ’which - tradition; y condemns military takeovers of democratically elected governments, appeared to acquiesce to Chavez’s . . ~\ . _ over ' ‘ ning widespread international criticism. In : fact, Chavez latet allege'd'that the, United States was behind ~ the coup, a chargervehementlydehied by U.S. officials.7 r - Meanwhile,,the‘administtation continues to support the ' ' strikers’ demand for early elections, and, with Chavez returned to power, relations between the two-countries have been strained. . i 1' ‘ :_' The two'sides have never seen eye—to-eye. Chavez’s con— sistently‘antieAmerican' rhetOric4such as calling the U.S. ' assault on Afghanistan as great ,aL-crirn'e as the Sept. 11 ter— rorist attacks in New York and the Pentagon—has irked the United States. Chavez also. raised American ire by pushing for the Organization of Petroleum Exporting Countries to limit production and raise'world .oil prices. Critics of Chavez say that he will-only get more authori— as Venezuela’s economy continues to decline and he , “becomes even more unpopular. They point out that he is a ‘ Close friend and admirer ofcornmunist Cuban dictator Fidel '. Castro ’(who has adviSed'the’Venezuelan president) and allegedly supports leftist guerrillas in neighboring Colombia. ’7 Scott Wilson, “Chavez Raises Idea ofU.S. Role in Coup; Interview Suggests Rocky Road Ahead,” The Wwbingwn Part, MayS, 2002, p. A20. President Hugo Chavez, a former paratrooper, survived a two-day coup and outlasted a recent strike that brought Venezt‘rela to a standstill. TROUBLE IN SOUTH AMERICA “The defeat of the opposi— I 3 tion in theistrike is. allowing . ' him to consolidate a leftisr dictatorship and that will ' continue,” says Angel Rabasa, , a senior policy analyst at the Rand Corporation, a Palo Alto, Califl, think tank. ’ ' But others argue that the opposition is trying, by hook or by crook, to oust a demo— cratically elected president because he is fighting for the poor and not tending to the interests of the country’s elites. “His radical rhetoric favoring the poor over the privileged has alienated the middle class,” wrote Steve Ellner, co—editor of the 2003 book Venezuelan Politics in the Clam/ea Era: Claw, Polari- zation and Conflict.8 The OAS—along with regional heavyweights like the U.S., Mexico and Brazil—is trying tofashion a negotiated settlement tothe country’s crisis, possibly an agreementto. hold a-referendum onthe president’s rule at the midpoint'of his term (August of this year) as is allowed under the country’s c0nstitution. Chavez has largely dismissed the efforts of the OAS-as the “meddling” of outsiders.9 MoreOVet, while he has said he wOuld submit to a vote in Augtist, :many V enezuelans dOn’t believe him. _ ‘ ' “They are convinced that in August, when the constitu— tion contemplates a referendum on the president, thergov— ernment will resort to delaying tactics and dirty tricks,” said Moses Naim, formerVenezueIan minister for trade and ~ AFP Photo/Juan Barram industry and editor rofForezgnPolz'cy magazine.” Levitsky, at Harvard, agrees that Chavez is unlikely to submit himself to a vote for thesimple reason that he would almost certainly loso. “He’s deeply unpopular right now, so I just can’t see him winning a vote that was fair,” he says. “Instead, I think he’s going to keep trying to tough it out.” 5 Steve Ellner, “Venezuela on the Brink,” T17: Nation, Jan, 13, 2003, p. 5. 9 Quoted in David Buchbinder, “Slowly, Chavez Isolates Himself from the World," The Chnlrtian Science Monitor, March 5, 2003, p. 7. ‘° Quoted in Moises Naim, “Hugo Chavez and the Limits of Democracy," T lye New York Times, March 5, 2003, p. A23. 219 220 DEMOCRATIZATION of Enlightenment, which held the sovereignty of the individual as a primary tenet. But the independence movement simmered for decades before being brought to a boil in the early 1800s, during the Napoleonic wars that engulfed Europe. In 1796, Spain joined France in a war against England. The alliance cut the Spanish off from their New World colonies because the English navy was powerful enough to virtually halt Spanish shipping to and from the Americas. In 1806, the British invaded Argentina and captured Buenos Aires. The Argentines soon organized an armed resistance and drove the foreigners from the city. But what had seemed a victory for Spain was short- lived. By taking matters into their own hands, the Argentines gained new confidence that they could run their own affairs. Meanwhile, Spain was slowly being absorbed into Napoleon’s empire. In 1807, the French leader replaced the Spanish king with his brother and invaded Portugal. The move provoked an uprising by the Spanish, leading to five years of brutal war. With Spain in turmoil, Venezuelan elites—led by rev— olutionary leader Francisco de Miranda—took the opportunity to declare independence, creating a consti— tutional republic in 181 1.13 But bickering within the rev- olutionary camp (which included a young army officer named Simon Bolivar) and Spanish attempts to reassert authority after Napoleon’s defeat in 1812, led to the downfall of the new Venezuelan republic by 1815. While many revolutionary leaders (including Miranda) were captured, Bolivar escaped to Jamaica, where he began organizing resistance to Spain. In 1816, he re— turned to a remote part of Venezuela, where revolution— ary support was still strong, and organized an army. In the following years, Bolivar (with British assis- tance) handed the Spaniards a series of stunning defeats, conquering Colombia in 1819, Venezuela and Ecuador in 1821.” Other parts of the continent were cutting their Euro t the same time. In Argentina, those who had resisted the British in 1806 slowly pulled away from Spain, first appointing a Congress to rule in the king’s name in 1810 and finally declaring independence in 1816. An Argentine army under the leadership of Jose’ de San Martin marched north and west, liberating Chile and Uruguay. San Martin also tried to liberate Peru, but it was Bolivar and his lieutenant, José Antonio de Sucre, who ultimately freed the area from Spanish rule in 1823. Brazil was liberated with much less fighting, in p because the revolution was led by the heir to Portugal throne, Dom Pedro, who had originally come to Sou America to escape Napoleon’s invasion of his country. 1822, Dom Pedro resisted calls from Portugal for his realm, and declared Brazil independent and himself king.IS * New Troubles) Political chaos and continuing social imbalances charac. terized the post—independence period. Contrary to the high expectations that followed independence, there was- little change in the ills of colonial South America—such as slavery and poverty among Indians and the working class—after Spanish and Portuguese rule had ended. The powerful landowners and urban elites who ran the newly independent states used their new power to advance their own positions, ignoring the great majority of the citizenry. The cornerstones of 00 ent—such as the rule of law and orderly transfer of political power—were absWWarlords (called caudil. 105) and violent an s were common in many areas; Established landowners~able to acquire more property through government connections—grew richer while the peasants were forced to pay ever-higher taxes. By the mid e of the entury, South American politicaLrlLirilgegwere desperate to reverse the conti— nent’s downward trajectory. Looking to the United States and Great Britain for inspiration, they noticed the relationship between both countries’ political and eco— nomic systems and began to see economic advancement as the way to greater political stability and freedom. I The erlopment in the 18508 . and ’603 came at a propitious time: Foreign investors from - Europe and the United States had begun to enter the»: South American market, attracted by the continent’ abundant natural ' ltural potential. 1 Over the next 60 years, huge tracts of land were-cleared for I grains, sugar and later coffee, and cattle ranching became f a huge industry, especially in Argentina. Foreign investors.- also helped develop the continent’s mineral wealth. p In some chgaders emerged. In' Brazil and Argentina, governments established stabili and order. Roads, bridges and railroads were built-r often by foreigners—further facilitating commerce. The economic boom also attracted immigrants mostl " from Europe. By the end of the century(fi’ undreds of} thousands were arriving each year, many from Italy and, Spain as well as northern Europe. Argentina, for instance, received 1.2 million Italian and 1 million Spanish immi- grants before 1914. After World War I, immigrants began arriving from Asia. More than 200,000 Japanese came to Brazil between 1920 and 1940. New We th and the ew ' ' ught a push to modWiety. Slavery was finally eliminated— Brazil was the last nation to act, freeing its slaves in 1888.“5 New universities sprang up, and more and more children entered primary school. Brazil, Chile, Argentina and other countries cast off dictators and kings to become republics. By the early 20th century, South America had be- come a m exporter of raw materials and agricultural commodififs’Enmierals from Chile and Bolivia, grain and beef from Argentina and coffee from Brazil. About the same time, heavy-industry was developing, particu— larly in the southeWtinent, triggering a population shift to urban areas. Brazil’s Sao Paolo, for instance, grew from a large town of 65,000 in 1890 to a metropolis of 350,000 by 1910. Urbanization brought a newfound sense of entitle- ment on several levels. Workers unionized and began demanding not only better pay but also pensions and other benefits from the government. By the 19303, many countries had created large social—welfare schemes and nationalized major sectors of their economies to protect industrial workers. Relations with U.S. On a broader level, countries began to seek more in— dependence from the United States, whose enormous economower had made it influential throughout the continent. The Monroe Doctrine of 1823 initially had helped establish U.S. supremacy in the Western Hemisphere, discouraging further incursions by European powers. Moreover, American intervention in Mexico, Central America and the Caribbean in the open- ing decades of the 20th century made South Americans even more distrustful of US intentions.l7 —" Relations improved during the 19308, with President Franklin D. Rogexelu-Gandflaghbflolicy, which pledged the US. would noMfere in the continent’s affairs. World War I hel ed cement better ties, as t United States turned to South America to help supply its war effort, bringing new prosperity to the region. In 1948, the United States helped found the Organization TROUBLE IN SOUTH AMERICA 221 of American States ( to to ote development and democracy throughout Latin America and the Caribbean. Despite widespread-progress, somemouner-ies could not rule. Strongman Getulio V_a’rgas led Brazil in the 19308 and ’40s. In 1946, Juan Pe£é_n and his charismatic wife Evita came to power in neighboring Argentina, promising to solve the nation’s social ills by nationalizing industry and spending lavishly on social programs. Vargas Wanda eventually were deposed and both countries returned to Wade systems. But by. the 1960 nd early ’705, Brazil, Argentina, Chile, Uruguay and Peru had succumbed to authoritarian and) often brutal military dictatorships. espite its stated preference for democracy, the United States often sup— ported dictators as bulwarks against the spread of com— munism on the continent. In addition to being repressive, most of the strongmen—with the exception of Chile’s Augusto Pinochet—proved to be poor stewards of the economy. Economic mismanagement and corruption led to run— away inflation, particularly in Brazil and Argentina, and a high level of foreign debt. _ By the earbfiflflflt, many of the military regimes had becorneéigh’l’rm-pnpular. Argentina’s junta—which “disappeared” thousands of leftist opponents—gave up power in 1983. The military had been discreditedgver / its rfli'sl'mdling‘gf’the economy and its humiliating loss in the Falkland Islands war, in which Argentina invaded a British possession off its coast, only to be expelled by the Royal Navy and Marines. Brazil’s military handed back power to civilians in 1985. Chileans, tired of Pinochet’s dictatorial rule, voted the general from power in 1989. During the 1329s, democracy and free markets thrived in South America. In Argentina, popular President Carlos Menem tamed hyperinflation and brought the country almost a decade of sustained economic growth. Fernando Cardoso worked similar economic magic in Brazil, first as finance minister and then as president. In Peru, President Alberto F ujimori destroyed a crippling Maoist rebellion by the Shining Path guerrillas and set the economy on a more stable footing. However, the decade ended on a so . Menem left office accused of Wigna’s econ-\ omy slid into a deepgfifsion. A corruption scandal also drove out the increasingly authoritarian Fujimori. 222 CURRENT SITUATION Free-Trade Proposal Since the Sept. 11 terrorist attacks in the United States and the ongoing confrontation with Iraq, South American diplomats and political leaders have complained about US. neglect of the region. But the United States hasn’t been entirely distracted. In addition to sending U.S. aid to Colombia, the fIIJri‘JgdaStates has been leading the negotiations to create a ee-trade zone linking North and South America and the tarctic to DEMOCRATIZATION an — countries stretching from the Canada. The Free Trade Area of the Americas (FTAA) was first proposed in 1994, but the idea has received little uentionmnrilnegeflly. N a On Feb. 11, the United States presented its opening negotiating stance, offering to W centmports from other FTAA countries as soon as the treaty took effect in 2005. American textile tariffs, long regarded as unfair by South American cometitors, would be phased out over the next five years. By 2015, all treaty signatories would eliminate all tariffs.13 “The U.S. has created a detailed road map for free trade in the Western Hemisphere,” said US. Trade Representative Zoellick. “\We’ve put all our tariffs on the table, and we now hope our trading partners will do the same.”‘9 Many trade analysts applaud Zoellick for moving the process forward, but they caution that negotiations could take a long time. “I think it’s overly optimistic to set a 2005 deadline for completing the treaty,” says the Cato Institute’s Vasquez. “There are a lot of sensitive issues and things that will be hard for each country to give up.” Indeed, many signs do not auger well for the treaty’s early completion. The_U.S. has tarnished its free—trade credentials in the past ymW imposing steel tariffs on many countries, including big steel makers in Brazil, in an effort to protect its own ail— ing industry. For its part, Sout erica has o—poor record on—free-trade, with many countries employing high tariffs to protect uncompetitive industries. The maigr freWncompass— ing Brazil, Argentina, Uruguay and Paraguay—has fallen on hard times. M TlTé‘problems began in l999,,1tben.B;azil decided to allow its currengy to decline in value, making its exports much cheaper. The move devastated trade with the other ‘— We big Mercgsgnaember, Argentina, because its cumin—CA: was pegged to the dollar, keeping it artificially high, and ; hence its exports very expensive. The zone Was also rocked by last year’s economic crisis in Argentina, which shuttered much of the country’s industry and left its con- sumers with little money to spend on imports. On the other hand, the news for free-traders is not all bad. In De bet, the United Statgsgealeéa—freeatm deH-LMLLLhfl probably South America’s most market. oriented economy. South Americans can also look to their Latin cousin to the north, Mexico, where relatively open trade with the US and Canada—spurred by the North American Free Trade Agreement (@)—_has generally been judged a success, leading to increased for- eign investment and sustained economic growth for that country.20 Finally, Brazil’s I.u\la,_f‘ormerly a vocal opponent of the FTAA, has shifted his position since taking office late last year. “In ordmrazil needs to increase the amount of its foreign trade,” he told an audience at the National Press Club in Washington on Dec. 10. “And the FTAA, in our view, can represent a genuine opening up of the US. and Canadian markets.” Lula’s newfound willingness to negotiate a free—trade agreement is a big step forward for supporters of FTAA, given that Brazil is South America’s largest economy. Few dispute that better access to the North American market would oifer South Americans tremendous oppor— tunities; But opponents of the trade zone worry that it also could devastate already fragile South American . economies. - f In ' 5 could rt—and pas l/ ;. sibly bankrupted—by a H 0d ea ' orts frog the more competitive north. Millions of people coul i lose/their jobs, their businesses or their farms, if US. multinationals move in with cheaper, better products. “We cannot compete with them,” said Ermel Chavez, an , activist in Ecuador. “We’ll become nothing more than . > 'i consumers.”21 The Institute for Policy Studies’ Anderson agrees: “Many people down there see free trade as a for the bi American companies to expand their accm : 5 mmarket in order to make greater profits with- 7 out improving the standard of living of local people.” - ' Indi nous roups and environmentalists also oppose the pacmfear it could spur the kind of devel—' opment (such as mining and logging) thaWfi , counterinsurgency efforts? Stephen Johnson Senior Policy Analyst for Latin America, i ' E The Heritage Foundation 'f Written for Tire 6‘0 Researcher, March 10, 2003 ,Just-as Colombia is making progress in its fightagainst vio- ;._ .,,lence, terror and drug trafficking, it would be a mistake to with- drawassistance for its counterterrorism efforts. _ V ’ V_ Despite having one of South America’s longest-running contin- '-.minimal state presence outside urban areas. Civil conflicts triggered ' ‘a ruralcommunlst insurgency in the 1960s. Meanwhile, marijuana, ‘ heroin and cocaine production flourished in the uncontrolled coun- fitr',’y3id'e. By the mid-19903, U.S. counternarcotics aid had helped COIOmbia defeat its major drug cartels. But when allegations sur- , - faced that President Ernesto Samper had received campaign contri- , buttons from one of the kingpins, the United States halted 7.: assistance. Vin-the .ensuing disarray, Colombian rebels joined with .{rernainingdrug producers and took over-where the cartels left off. restored under a bilateral agenda called Plan Colombia.» But i , ' Pastrana spent most of his term trying to achieve a cease-fireby llowfiingthe largest rebel group, theVRevolutionary Armed orce‘sot Colombia (FARO),to.occupy a hugesafe-haven in-the and began collecting between $50 million and $100 ‘milliona ,rrillas,—_-and.the paramilitary forcesthatlheve risen up to ightithem—c'ause up to 3,500 brutal deaths .a’year and’hun- ds, Of millions of dollars in infrastructure damage, not to ntibnlthe publlc'costs of pursuing themJ . , - -' , Last year, newly'elected President-Alvaro Uribe embarked on an tre’ngthen public institutions and proVide public security. With a ecline in coca cultivation, he is already achieving some’succe’ss. ause America's drug demand fuels much of the prOblem,.the nited States‘should help meet these goals. Counterterrorism‘aid must-be partiof the mix. Failure to leverage Colombiafs homegrown efforts could easilydestabilize thewobbly northernAndean region . andlead to terrdrlst violence in neighboring countries. * j _. ' - ' Bipartisan consensus exists for continuing military aid, but ' ritics point out'that Colombia’s security for‘ces‘still commit uman rights abuses, albeit fewer thanin the past. ‘Yet,»leaving plombia to the mercy of narco—terrorists is no option. The only iternative is to help the government disarmthese criminals and rotth innocent citizens—especially when it is beginning to take progress. ‘ uousfdemocracies, Colombia has had weak goVernments and a’ 3 With‘ the election ofPreSident Andrés’ Pastrana, ald'was , _ die of Colombia. FARC grew from 10,000 to 18,000 troops " ._r'ri_onth from drug trafficking, extortion and kidnappinquOday, . ambitious program toretake the countryside, curb-drug trafficking, . TROUBLE IN SOUTH AMERlCA 223 Subuld the United States continue aiding Colombia’s Jason Hagen Associate for Colombia, Washington Office on N 0 Latin America Written for The (20 Researcher, March 10, 2003 US. taxpayers should ask what their $2 billionhas achieved in Colombia. l.have yet to see many positive results: The drug sup- ply has not been curtailed, the country has become more violent . and‘the ranks of the poorare swelling. , Meanwhile, anti-terrorist rhetoricfrom'both goVernments is drowning out the complexity of the conflict; instead of providing much-needed creativity, the United States is digging its heels into very hostile terrain alongside a new administration in_ Colombia that seems committed to repeating historical errors. ~ ' Most analysts, including me, see negotiations as the only ’ way to resolve the conflict. But those Who believe the country can be pacifiedthroughmilitary-means should at least be hon- , est with the math. Classic counterinsurgency doctrine requires ' 10 soldiers for every insurgent in order to win on the battlefield. Right now, the Colombian military has upto 60,000 soldiers ready to'be deployed, and the government- does not have the " .money to pay foradditional regularsoldiers. There are approxi~ matelyt35,000 illegal, armed guerrillas. tor jungle warfare? . 'Cdiombiansocial spending hasdrie'd .up because the gdvern- .ument isdevoting its slim resources to the‘war. Even in areasthe ‘ ' QQVernment has designated aszsecurityprlorities, promised social, ‘ :aSSistance has not arrIVed.;This- is._a tremendous oversight, con- . ' Sideringthat'morethan Stiperfcent.ofColo‘mbians make less than, , '$2a day, roughly SperCent ofthe population hasjbeen forciblydis- jplaced from their homes and unemployment-is nearly 20 percent. v Having 'sbldierson every corner means, littleto a family that.- . cannot afford. bread. if even atiny fraction-of these desperate__ people'joln the insilrgency forapaycheck or for political rea-V _ sons, the guarrilla threat Will continue to grow. Colombia and the -' *United Stat‘es‘should be investing heavily’in social and econtJmic- ' programs to preventcthis from happening. ~ _ - - . . Elements-of the Colombian military continue to maintain'ties . with an illegal paramilitary force that the United States regards , ' as a terrorist organization. Turning'a blind eye to‘terror in order to *fight terror is neither morally asceptabie nor a'smart strategy _ to bring peaceto Colombia. . - ~ 7 - , Rather than waste years dabbling in an intractable conflict— at the, cost of thousands of livesand billions of dollars—the united States should put its considerable diplomatic weight behind a peace process.‘ ' Will the United States provide the missing 290,000 troops 224 DEMOCRATIZATION the continent’s environment. Concern is especially great over the Amazon basin. “I was just in Ecuador, where there is a strong, indige- nous movement and a strong sense these wild places need to be protected as a resource for these indigenous people who make their living off the land,” Anderson says. “The people I talked to think [the FTAA] will simply be an opening for big foreign companies to exploit the forest, and that average people will not benefit.” Free-trade supporters counter that while these con- cerns are legitimate, they should not stand in the way of open trade. “At the end of the day, when you argue against free trade, you are arguing against moderniza- tion,” Vasquez says. Vasquez admits that dislocations will occur as indus— tries large and small struggle to compete in the new, more open environment. But, he argues, many of those who lose jobs and businesses will find new opportunities as other, more competitive sectors of the economy expand. Most important, Vasquez says, free trade will benefit all South Americans, especially the poor, by driving down the prices of many goods and services, “When you protect industries from competition, prices stay higher than they,shbuld, which is a big deal in South America where so many people are poor.” CShaky Economies Argentina’s economic collapse at the end of 2001 has raised fears of a continentwide meltdown. And indeed, some other countries, including Uruguay, Venezuela and even Brazil, look to be in danger of sliding into a full depression. The continent’s gross domestic product (GDP) shrank by roughly 1 percent last year and is expected to do so again this year as Argentina and Venezuela undergo painful economic contractions, along with other nations. According to the Economic Commission for- Latin America, a United Nations-sponsored think tank in Santiago, Chile, poverty in the region is also high, with 44 percent of Latin Americans now poor, nearly half of them living in extreme poverty.22 And infla/tiog,once the bane of Brazil and many other South American countries, is c ' back up after years in check. Atop the watch list £51:er Venezuela, currently tackling annual inflation rates of nearly 41 per— cent and 31 percent, respectivelyfAt 12.5 percent, con- sumer price increases in Brazil are also considered too high.23 Argentina is still in deep trouble, with its economy contracting 11 percent last year—its fourth annual con- seoiitive decline in GDP. The country is continuing to , struggle through an economic crisis that saw a quarter of its population out of work, private bank accounts frozen and government defaulting on its loan obligations. In January, the IMF rode to the rescue, giving Argentina a $6.8 billion loan that would enable it to ser_ vice its debt to the IMF and other lenders through August. But the agreement (which has yet to be ratified by the country’s Congress) would impose strict fiscal dis. cipline on Argentina. For instance, under the plan, sub- sidies on energy and other staples would be cut, which would hurt the poor and could lead to renewed riots and other forms of social instability. “I don’t think anyone really doubts that in the short term, it’s going to be pretty rocky for Argentina,” says Inter-American Dialogue’s Shifter. "I think it will be at least a few years before they’re able to turn a corner and get back on their feet.” The other big economy of the region, Brazil, is in better shape, but there is the real risk of an Argentine- style collapse. The economy grew only 1.5 percent last year, and the currency, the real, lost 35 percent of its value?“ But there are signs of improvement. At 3.4 percent, fourth—quarter GDP growth was higher than the other three quarters, and agricultural exports have surged due to the weaker currency.25 Like most other South American countries, Brazil has a i h ' debt—running at about 56 percent of GDP. In exchange for an IMF loan last year, Brazil agreed to W11 order to pay some of it off. e problem now facing Lula, the country’s charismatic president, is that many of the cuts must come from social programs, hard for a leader who cam- paigned on a platform of helping the poor.26 In the continent’s Andgzmflgi‘on in the north and west, the situation is not much better, possibly worse. “I think this is the most troubled part of the continent," Shifter says. “It’s sort of an Wal.” Deep political turmoil has wracked the economy of oil—rich Venezuela, which shrank about 9 percent last year.27 And as President Chavez tightens his grip on the country, more stores and factorimre—firpeetedeflfclbse\ as members of the business ‘ggmmunity (which vehe— mently opposes the president) leav<;hg§2§ntry. Economists agree that Colombia, with abundant nat— ural resources and a well-educated populace, has great economic potential. But the civil war has prevented foreign and domestic investment while prompting Colombia’s best and brightest to emigrate. As a result, the economy grew at only 1.6 percent last year.28 EcuadanjBelivia also are facing civil strife, caused in part by slow economic growth. Among the poorest countries in South America, each grew at about 2.5 per— cent laSt year, not fast enough for a developing country to greatly improve the standard of living for most citizens.29 Economic troubles throughout the continent are leading trawl-market policies that South Americans em raced, in some places, as early as the 1980s. “After 10 or 15 years of operating with free— market policies, paradise hasn’t come,” says Julio Carrion, an economist at the University of Delaware. “People are starting to wonder whether the gospel is as good as advertised.” “People are really tired of the current formula because it h ’ aid the dividends they’d hoped for,” George- towfI-Jnrfimmfter says. “At the same time, they don’t want to go back to the discredited socialist policies of the 1970s either.” 1 South Americans are beginning to look for something that combines the best of both policies, Shifter says. “They are groping right now, looking for a mix of the state and the market to solve their problems.” Shifter believes that Brazil’s new president is making the first attempt to move in a new direction. “Lula repre- sents the best hope for this middle ground,” he says. “He’s moderated his attitude toward free trade and the IMF, but he’s also committed to dealing with Brazil’s poverty.” But others say the problem is not free—market policies but the unwillingness or inability of South American leaders to implement them. “Beginning in the 19805 and picking up steam in the ’903, all of these leaders tried free- market reforms because they’d literally tried everything else, and nothing had worked,” says Cato’s Vasquez. “It worked just like it was supposed to, with inflation down and growth up, but none of these guys, like [Argentina’s] Menem and [Peru’s] Fujimori were really free—marketers. So they abandoned the reforms once the economies picked up and the pressure was off.” Fighting Poverty The search for a new economic path also reflects the con— tinent’s stubbornly high poverty rates. In Brazil, 50 mil- \ _shockingly high. But the World Bank’s Neal points out TROUBLE IN SOUTH AMERICA 225 lion people—almost a third of the population—live at or below the poverty line, and 19 percent of all households still lack running water.30 In Argentina, the economic crisis has driven the number of people in poverty from roughly one-third of the population to nearly one-half in the last 18 months. And in the desperately poor Andes region, countries like Ecuador have poverty rates as high as 80 percent. The World Bank, the world’s largest anti—poverty institution, made $4.4 billion in social-development loans to Latin America in 2002. The loans ranged from $200 million to improve access to higher education in Colombia to $600 million to help poor Argentine fami- lies make ends meet. “We lend money for so many things—to improve health care by building clinics in rural areas or education by building schools or training teachers,” says Christopher Neal, a World Bank spokesman. Other activities include environmental protection, land distribution and improv— ing the way governments deliver services. In exchange, Neal says, “we ask countries to make government reforms by, say, improving transparency,” or public accountability. For instance, he says, the bank might help the government publish information about government procurement on the Internet so citizens can understand and monitor how and where public money is being spent. The Inter-American Development Bank (IDB) also makes poverty-alleviation. and economic—development loans to South American countries. The IDB lent Latin American countries about $8 billion last year—40 per— cent of which went directly for anti—poverty programs like building low—income housing or hospitals in poor areas. Aid organizations are often criticized for being inef— fective, given that South America’s poverty rates are still that the situation in South America has been steadily improving, especially on certain key social—development indicators. “Life e i 90 was 68; 10 years later it was 70,” he says. Infant mortality and illitcfi‘c'ffafEs-have also dropped during the smiod, he says, from 41 deaths per thousand births to 29, and from 16 percent illiteracy to 12 percent. Neal argues that poverty is sometimes driven up by \ outside factors, such as the slumping world economy or the historic and intransigent lack of widespread land own— ership in rural areas throughout the continent. Efforts at 4°“? 1 f N 226 DEMOCRATIZATION land reform in the 19705 and ’805 failed in most Latin countries, and today institutions like the development banks focus on funding programs that buy land from large property holders and sell it to poor farmers. Moreover, lenders like the World Bank and IDB can only be effective in those countries with adequate gov— erning institutions, Neal says. “If a government is not functioning well, it’s hard to have an impact, because you need to work with effective local institutions to be able to make a difference.” OUTLOOK New Leaders Since the late 19th century, South America has been seen as a continent long on potential, both economically and politically, but short on actual results. Argentina actually achieved first-world living standards in the early 19003, only to fall far behind the United States and Europe by the middle of the century. Some experts believe the continent will continue fail- ing to live up to its potential in the coming decades, largely because South Americans do not yet have the political maturity needed to create prosperous societies. “They’re going to muddle along for the time being because they don’t really have a vision for the future aside from each person’s desire to increase their individual wealth,” says Johnson of the Heritage Foundation. “Many people in South America don’t understand that their per— sonal prosperity is tied to that of their neighbors and of society as a whole, so they don’t push hard enough for the kind of change they need, like strong legislatures and judi- ciaries and a government that actually listens to people.” But others say South Americans will begin to make the changes needed to make their societies work. “It is more likely than not that they will do the things they need to do, like continuing to liberalize their markets, reform labor laws and battle corruption? says Williamson of the Institute for International Economics. “South America will end up looking like North America. If you look at countries like Singapore, they went from being poorer than South America is now to developed—country living standards in less than 30 years. So it is possible.” Inter—American Dialogue’s Sifter agrees that the future is bright, in part because the next generation of leaders will be very different from the current crop. “I’ve met with a lot of the people who are in their 30s , and 405 and are going to be running things soon, andI 7: can tell you that these people are very impressive,” h says. “They understand that governments have to be '1 honest and effective and responsive, and that’s what : they’re working for." NOTES 1. For background, see Kenneth Jost, “Democracy in Latin America,” The CQ Researcher, NOV. 3, 2000, pp. 881-904. 2. Quoted in Thomas Ginsberg, “Latin Battle- ground,” The Philadelphia Inquirer, Dec. 12, 2002, p. Al. 3. Figure cited in “Praying for a Happier New Year,” The Economist, Dec. 19, 2002. 4. Kenneth Rogoff, “The IMF Strikes Back,” Foreign Policy, January/February 2003, p. 38. 5. Poll cited in “Democracy Clings On in a Cold Climate,” The Economist, Aug. 15, 2002. 6. Figures cited in “More Order and Less Law,” The Economist, Nov. 7, 2002. 7. Ihid. 8. Juan Forero, “Colombia Will Tie Aid Request to Terror,” The New York Timer, Feb. 10, 2003, p. A6. ” 9. Steven Weisman, “Powell Says U.S. Will Increase Military Aid for Colombia,” The New York Times, Dec. 5, 2002, p. A14. 10. Jared Diamond, Guns, Germs, and Steel' The Fates of H 1 Human Societies (1997), pp. 67-81. i 11. Edwin Williamson, The Penguin History of Latin America (1992), pp. 91—92. 12. Diamond, op. cit, pp. 210—211. 13. Williamson, op. cit, p. 217. 14. 15:21., p. 223. 15. Rex Hudson (ed), Brazil: A Country Study (1998), p. 37. 16. Ihicl, p. 53. 17. Williamson, op. cit, pp. 322—327. 18. Neil Irwin, “U.S. Seeks to End Many Tariffs,” The 7 Washington Post, Feb. 12, 2003, p. El. ' ' 998), ° The 19. Quoted in ihioi 20. For background, see Mary H. Cooper, “Rethinking NAFTA,” The CQ Researcher, June 7, 1996, pp. 481—504, and David Masci, “Mexico’s Future,” Sept. 19, 1997, pp. 817—840. 21. Quoted in Edmund Andrews, “Outside the Halls of Power, Many Fear Free Trade,” The New York Times, Nov. 3, 2002, p. C4. 22. Figures cited at www.cclac.cl. 23. CIA lVorla' Book, 2002. 24. Tony Smith, “Brazil: Growth Despite Turmoil,” The New York Times, Feb. 28, 2003, p. W1. 25. Ihiri. 26. “Gruel Before Jam,” The Economist, Feb. 13, 2003. 27. Figure cited in Marc Lifsher, “The Andean Arc of Instability,” The Wall Street journal, Feb. 24, 2003, p. A13. 28. Figure cited in ihia’. 29. Figure cited in ihid. 30. “Three Square Meals a Day,” The Economist, Feb. 20, 2003. ‘ BIBLIOGRAPHY Books Easterly, William, The Elusive Quest for Growth: Economists’Adventures and Misadventures in the Tropics, MIT Press, 2002. I A former World Bank economist concludes that aid pro— grams for the developing world fail because people and institutions respond to incentives, not penalties. Kirk, Robin, More Terrible Than Death: Massacres, Drugs, and America’s War in Colombia, Public AHairs, 2003. A Human Rights Watch researcher chronicles the human toll of Colombia’s drug war. Skidmore, Thomas E., and Peter H. Smith, Modern Latin America, Oxford University Press, 2000. The authors, who teach history at Brown University and political science at the University of California at San Diego, respectively, explore social and political trends in South America. TROUBLE IN SOUTH AMERICA 227 Williamson, Edwin, The Penguin History of Latin America, Penguin U.S.A., 1993. A professor of Hispanic studies at the University of Edinburgh focuses on 19th-century independence movements. Articles Andrews, Edmund L., “Outside the Halls of Power, Many Fear Free Trade,” The New York Times, Nov. 3, 2002, p. C4. Andrews examines the debate over the proposed Free Trade Area of the Americas, focusing on the critics’ concerns. Bluestein, Paul, “IMF’s ‘Consensus’ Policies Fray— ing,” The Washington Post, Sept. 26, 2002, p. E1. The article details the small but growing number of economists who oppose the “Washington Consensus” due to South America’s anemic growth rates. Bussey, Jane, “U.S. Trade Chief Offers Zero Tariffs,” The Miami Herald, Feb. 12, 2003, p. 1. US Trade Representative Robert Zoellick’s offer to eliminate tariHs in the Western Hemisphere by 2015 is detailed. Forero, Juan, “How Venezuelan Outlasted His Foes,” The New York Times, Feb. 6, 2003, p. A6. The article explores the character traits that help President Hugo Chavez survive political turmoil. Jost, Kenneth, “Democracy in Latin America,” The CQ Researcher, Nov. 3, 2000, pp. 881—904. Jost details the strengths and weakness of the democracies that have arisen in South America in the last two decades. Kristof, Nicholas D., “The Next Africa,” The New York Times, Dec. 10, 2002, p. A35. Kristof concludes from South America’s many troubles that it is “quietly falling apart.” Lifsher, Mate, “The Andean Arc of Instability,” The Wall Street journal, Feb. 24, 2003, p. A13. Lifsher explores the extreme poverty and political tur- moil in the Andean region. “Lula’s Burden of Hope,” The Economist, Jan. 2, 2003. Brazil’s new president is committed to helping the poor but constrained by IMF spending requirements. ...
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