September 25, 2007

This report examines three critical moments in today’s Latin America: the tense face-off in Venezuela between supporters and opponents of President Hugo Chávez; the coming of an apparent flashpoint in the long Colombian armed conflict; and the helplessness of the Argentine government to do anything to stem the country’s economic chaos. Discussions of these national crises are grouped together here because of the strong possibility—and palpable concern among the region’s political leadership—that these separate moments portend a larger hemispheric crisis. The operative word is "contagion"—the epidemic spreading of financial and political instability to other vulnerable countries. Given recent Latin American history and the region’s role in the global economy, there is widespread vulnerability on two fronts: to the contagion of the recent conspiratorial/military politics of Venezuela and the politics of violence in Colombia; and to the economic meltdown in Argentina.

Underlying this vulnerability is a region-wide withdrawal of legitimacy from established political parties—an anti-party cynicism that has given us Venezuela’s military populist Hugo Chávez, Colombia’s hard-line rightist Alvaro Uribe and the principal slogan of Argentina’s popular assemblies: "Throw them all out." The traditional parties have lost their coherence and appeal, and politics is taking an anti-party form: a populist, anti-elite, "Chavista" form on the one hand, and an anti-populist, law-and-order "Uribista" form on the other.

Underlying the anti-party cynicism is the growing inability of the old political class to effectively govern—an inability that has been exacerbated by the growing disparities in income distribution and a growing desperation among those displaced and impoverished by free-market, neoliberal "progress." The region’s democratic governments have neither been able to stem this tide of impoverishment nor stem the tide of protest against it. This is at the root of the political crisis.

A decade ago, as the region’s great neoliberal convulsion was reaching Caracas, a number of influential Venezuelan economists, inspired by the free-market model of Chile, argued that economic liberalization not only had to come to Venezuela, but had to be imposed on the country all at once, as a kind of "shock" or, in the words of a former finance minister, a "big bang." And, they contended, while the shock might stand a better chance of success if it were coherently explained to the populace, it had to be imposed regardless of the "populist"-inspired wishes of the people. The Chilean model, of course, was imposed by a brutal dictatorship, as were the somewhat less sweeping neoliberal models of Argentina and Uruguay.

Essentially, the shock theorists argued, Venezuela, in a democratic setting, had to replicate the Chilean experience by diluting the ability of working class and popular sectors to protect their short-term interests. In the long run, they argued, everyone would be better off. Only by reining in social spending and creating a casual, "flexible" labor force, could the country compete for the highly mobile investment capital that now ruled global financial markets. Not surprisingly, the model—in Venezuela, Argentina and everywhere else it has been implemented—has provoked resistance. The resistance has prompted neoliberal hardliners to search for ways to cleanly break with populist governance. This was certainly one factor behind the attempted coup in Venezuela; it is lurking in the draconian IMF proposals for Argentina; and it has always been a factor on the Colombian right.

There seem to be two progressive organizing agendas: On the one hand, there is a growing "globalization from below," a cross-border coming together of groups that challenge global capital on a local or regional basis; on the other hand, there is an ongoing nationalist reassertion of the perogatives of the sovereign state. The nationalist response is that of Hugo Chávez; the local organizing is the response of Argentina’s popular assemblies. In any case, this neoliberal crisis of governability—the Achilles heel of "neoliberal democracy"—will occupy the progressive agenda for many years to come.


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