Latin America

Error message

Deprecated function: The each() function is deprecated. This message will be suppressed on further calls in _menu_load_objects() (line 579 of /var/www/drupal-7.x/includes/menu.inc).

The Economic Consequences of COVID-19 in Latin America

Published by Anonymous (not verified) on Tue, 05/05/2020 - 10:35am in


The video of my talk can be seen here.

Cuban Communist Party to launch post-Congress debate

Published by Anonymous (not verified) on Fri, 10/06/2016 - 9:02am in

In the wake of Obama’s historic visit, the Cuban Communist Party (PCC) held its 7th Congress on April 16-19 in the Havana Convention Centre. Beneath a backdrop featuring a huge likeness of Fidel Castro, PCC secretary Raul Castro delivered the main report on behalf of the Central Committee.

Fidel being Fidel, many Cubans would have been reassured by his surprise appearance at the closing session on the eve of his 90th birthday. Traditionally, PCC congresses are the culmination of a months-long process of consultation with the Party’s activist base and the wider Cuban society.

By contrast, an air of secrecy and anticlimax hung over the 7th Congress. Fidel’s brief valedictory address, which moved some in the audience to tears and was received with a thunderous and prolonged ovation, served to stamp the Congress with a legitimacy that only Fidel can confer.

While Fidel’s appearance at the Congress and the content of Raul’s report may have unruffled some feathers, the PCC’s central leadership must now strive to reconnect with the Party’s grassroots so that a disconnect doesn’t harden into a dangerous rift. Having received a sharp rebuke from the party base, it seems the leadership has got the message.

Fidel (left) and Raul (centre) at the 7th Congress

Controversy

The disconnect between the Central Committee and the PCC base is evident in the preparatory process for the 7th Congress. The 6th Congress, held in April 2011, was preceded by a three month process of PCC-wide and public consultations on the draft Economic and Social Policy Guidelines.

While critics have noted the democratic deficiencies of that consultation—such as the fragmentary nature of the local debates, which hindered the emergence of possible alternative platforms for the election of delegates—the Guidelines adopted by the Congress bore the imprint of public opinion.

Initially, the PCC leadership gave every indication that there would be a comparable consultation prior to the 7th Congress. Soon after the 6th Congress, the Central Committee began work—behind closed doors—on two strategic and programmatic documents to be presented to the 7th Congress.

These two documents, the 2016-30 Plan and the ‘Conceptualisation of the Cuban socio-economic socialist development model’, would complement the Guidelines. As a set of concrete objectives based on certain principles, the Guidelines are neither a programmatic vision nor a socialist plan.

As the 7th Congress approached, it became apparent that the drafting process was well behind schedule. Either the anticipated public consultation would have to be abandoned, or the Congress would have to be postponed. As late as February 23, the Central Committee’s Tenth Plenum reiterated its commitment to a public consultation on the draft documents prior to the Congress.

On February 14, Esteban Morales, a prestigious and outspoken Cuban intellectual whose party loyalty is beyond reproach, circulated an acerbic commentary on the Congress process. In 2010, Morales’ PCC membership was suspended—one step short of expulsion—for warning that high-level corruption (and not US-sponsored ‘dissident’ grouplets) was “the real counterrevolution” in Cuba. He was eventually reinstated after receiving numerous public gestures of solidarity.

Morales complained that “for months” he’d been asking for the Congress documents, to no avail. This would be a congress of party functionaries rather than the grassroots “which I consider to be the real party”, he added. He suggested the PCC was regressing in terms of party democracy, and described the mood among the party base as justifiably “indignant”. That perception was anchored in his “broad and continuous contact with Cuban society” as an intellectual and an ordinary citizen.

In a similar vein, on March 27, PCC activist Francisco ‘Paquito’ Rodriguez published an Open Letter to Raul Castro on his personal blog. Rodriguez is an academic, a journalist for the Cuban trade union confederation’s Trabajadores newspaper and a prominent gay rights activist. As a gay rights activist he is said to be close to Mariela Castro, Raul Castro’s daughter.

Rodriguez objected to “the lack of discussion of the key Congress documents—which are still shrouded in secrecy—in both the grassroots Party committees and among the rest of the citizenry”.

He proposed that the Congress be postponed till late July to allow for a PCC base and public consultation during April and May. He noted that Raul Castro himself had often insisted that the reform process underway in Cuba must proceed ‘without haste’, and “I see no reason to rush so decisive a political process … if its preparation has not yet reached maturity”.

Granma responds

Also on March 27, the PCC daily, Granma, acknowledged the controversy in an editorial: “The Granma editorial board has received, through various means, concerns of Party activists (and non-members) who question the reasons why, on this occasion, no public discussion process has been planned, such as that carried out five years ago on the Economic and Social Policy Guidelines.”

Granma made no mention of the Central Committee’s earlier commitment to a public consultation. Its core justification for not holding such a consultation was that only 21% of the 2011 Congress Guidelines had been fully implemented, so the 7th Congress would be effectively a continuation of the 6th. The implication is that this is for the Central Committee, not the party as a whole, to decide.

The Granma editorial, which expressed the opinion of the Central Committee, did not discuss the possibility that that same statistic (21%) might call into question the viability of the course set at the 6th Congress, or the party leadership’s approach to its implementation. It suggested the leadership can assume an indefinite popular mandate until it decides a new course is desirable:

[R]ather than launch a new society-wide debate process in the throes of implementation, we need to finish what we have begun, continuing to carry out the popular will expressed five years ago and advancing along the course set by the Sixth Congress.

The 1000 Congress delegates elected by the Party base, the 612 National Assembly deputies and some 3500 other selected consultants had contributed to the elaboration of the two key documents, Granma stressed. Put another way, less than 0.05% of Cuban citizens had access to them prior to the Congress. No timeframe has been announced for their wider availability.

As usual, readers submitted comments to the online version of the Granma editorial. Most touched on the controversy. A reader identifying themselves as ‘Leandro’ argued that a dangerous precedent is being set: a new generation of PCC leaders that lack the legitimacy of the historical leadership “would feel they have the right to hold Congresses without popular participation”.

Cuban philosopher Jose Ramon Fabelo opined that the Conceptualisation of the Cuban socialist model aspired to “is not a task for experts and social scientists alone”. The most important congress “is that which takes place in the streets and workplaces of revolutionary Cuba. Let’s not pass up the opportunity to give another lesson in democracy—genuine democracy, Cuban style—to Obama and all those who want to throw their discredited models in our faces”.

Ernesto Estevez stressed the question of representation. How, he asked, can Congress delegates be said to represent the PCC membership when the vast majority of party members are unaware of the content of the draft documents? Delegates’ opinions and votes should “reflect the consensus of those that elected them from the grassroots”. For that, the membership must have the documents.

Estevez urged his party to “learn from the errors of the former Soviet Union”. All party members “should zealously uphold the democratic side of centralism, so that democracy operates in the right way and doesn’t end up being held hostage to centralism, albeit with the best of intentions”. The lack of consultation is a regression, and “there should be no attempt to compensate after the fact”.

Congress shift

Clearly in response to the rumblings of discontent from the party base, Raul proposed in his Congress report that the documents be adopted by the Congress only “in principle” rather than definitively. They would then be the basis for a “profound and democratic process of analysis by the membership of the Party and the Communist Youth, as well as by broad sectors of our society.”

This wider consultation would be aimed at “improving and enriching” the documents. Raul further proposed that the incoming Central Committee be empowered to approve the final versions, which would be subsequently submitted to the National Assembly. Both proposals were adopted.

Like the Granma editorial, Raul’s report did not acknowledge the leadership’s earlier commitment to a broad consultative process. It merely stated that there was no such process “given that what is involved is the confirmation and continuity of the line adopted five years ago”. Incongruously, it also said that given the theoretical intricacy of the draft Conceptualisation of the socialist model “and its importance for the future”, it should not be adopted by the Congress.

What’s missing from Raul’s report is a logically consistent and persuasive explanation for the leadership’s abandonment of the foreshadowed pre-Congress PCC base and public consultation process. That explanation can be inferred from Raul’s account of the drafting process.

Raul reported that the Conceptualisation document had been drafted no less than eight times. Work on the 2016-2030 Plan began four years ago. It was initially hoped a complete draft would be ready for the Congress, but due to its “great technical complexity” only its bases have been elaborated. A complete, final version is not expected till 2017.

In December and January, the Central Committee redrafted the Congress documents on the basis of some 900 opinions and suggestions submitted by Central Committee members, Raul reported. If, as the Granma editorial claims, “the basis of these [two] documents is the content of the Guidelines”, why has it taken the Central Committee five years to draft them?

Divergent visions

In reality, the Guidelines and their implementation open the door to not one, but several distinctly different socialist models and corresponding medium-term plans. They leave unresolved the vital question posed in 2011 by Havana University planning specialist Oscar Fernandez:

From the traditional state socialism that characterises Cuba today, is it moving towards a more decentralised state socialism? An Asian-style market socialism? A self-managed socialism of the Yugoslav variety? To the so-called participatory socialism of the 21st century? There is an urgent need for a debate aimed at a consensus on the key features of the vision of the future society.

Cuba’s Marxist intelligentsia perceives competing poles of socialist thought in Cuba today. Each polarity corresponds to divergent conceptions of the socialist transitional society in general and in Cuba’s conditions. Each is seen as influencing the evolution of Cuba’s emerging socialist model, and each polarity is reflected to some degree in the content of the Guidelines.

Veteran Cuban sociologist Juan Valdes and Cuban cooperatives proponent Camila Piñero both perceive essentially three such polarities: state socialism, market socialism and ‘socialisation’.

The first pole tends to view the socialist transition through the prism of state power; the second, through the lens of economic development, i.e. GDP growth; the third views progress towards socialism in terms of the socialisation (i.e. democratisation) of party-state power and property.

The Central Committee’s glacial progress in drafting the two key documents suggests that it has tried to reconcile, behind closed doors, divergent conceptions of the new Cuban socialist model that is aspired to. They had to be reconciled if the leadership were to present a more or less coherent programmatic vision to the party as a whole—rather than strive to involve the party as a whole in developing that vision from the outset over the five years since the 6th Congress.

Leaving the realm of speculation, opting for secrecy over transparency relegated the vast majority of the PCC’s 680,000 members to the role of spectators rather than participants in the 7th Party Congress. Having won the right to be consulted on the socialist model that is aspired to, the party base has—consciously or instinctively—shifted the balance of forces a little towards the socialisation pole.

***
This commentary was written for Australia’s Green Left Weekly. It draws together the threads of my previous blog posts on the Cuban Communist Party’s 7th Congress and also appeared on Cuba’s Socialist Renewal.

The post Cuban Communist Party to launch post-Congress debate appeared first on Progress in Political Economy (PPE).

Robert Austin, Rise and Demise: Latin American and Hispanic Studies

Published by Anonymous (not verified) on Fri, 06/05/2016 - 7:20am in

Robert Austin (University of Sydney), 'Rise and Demise: Latin American and Hispanic Studies in Australasia From Boom to Postmodernity'

This is the sixth seminar in the Semester 1 series of 2016 organised by the Department of Political Economy at the University of Sydney.

Date and Location:

19 May 2016, Darlington Centre Boardroom, 4:00pm – 5.30pm

All welcome!

2016 - Austin Web

The post Robert Austin, Rise and Demise: Latin American and Hispanic Studies appeared first on Progress in Political Economy (PPE).

Magical Development or Magical Illusions? Oil, Dependency and Venezuela

Published by Anonymous (not verified) on Mon, 02/05/2016 - 4:52pm in

With oil prices nearing historic lows, a new round of introspection about the pitfalls of oil-based development has kicked off in the media and development policy circles. The arguments, as to be expected, rehash some version of the ‘resource curse’ thesis, which holds that resource richness, in particular in oil, represents not a blessing but a curse, with a host of negative effects, from corruption engendered by unproductive rent revenues, to the Dutch Disease. Venezuela features prominently in this discourse, given its reliance on oil revenues to power the ‘Bolivarian Revolution’ under Hugo Chávez and Nicolás Maduro over the past 17 years. With the country facing shortages of basic goods, widespread corruption and political polarisation, resource curse advocates seem to have no shortage of evidence to illustrate their thesis.

energyHowever, as I argue in a recent book chapter entitled “A Different Kind of Magic? Oil, Development and the Bolivarian Revolution in Venezuela”, the situation is much more complex. The resource curse thesis offers a one-sided account of the failures of oil-based development, which essentially boils down to the absence of capitalist modernity in oil-producing nations. Yet these failures cannot be understood as resulting from endogenous factors alone. Any analysis must also examine the larger question of the dependent insertion of oil-producing nations into the global economy, and the role played by foreign oil capital in perpetuating this dependence. Likewise, any attempt to use oil to achieve sustainable development must address this dependence if it hopes to succeed.

In this context, Venezuela’s past and present offer a perfect case study of oil-based development and its pitfalls. Its post-war development model was closely aligned with the West, seeking to ‘sow the oil’ by capturing a ‘fair’ share of revenues from foreign oil companies, to invest them in creating a modern, capitalist, industrial economy. This model represented oil as a means to Western modernity, without the need for revolutionary change in a country riven with racial and class cleavages. As the late Fernando Coronil argued, this was ‘magical’ thinking, with Venezuelan leaders acting like ‘magicians,’ claiming that oil wealth enabled them to pull a modern Venezuela out of the proverbial hat, without radical change and social upheaval.

However, despite periodic achievements, by the 1980s this model was failing, precisely because it failed to confront Venezuela’s dependent insertion into the global economy, and its social structure build on centuries of exclusion and exploitation. Internally, the oil economy skewed class relations, promoting the middle and skilled working classes, while marginalising the vast masses confined to the informal sector. On the other side, easy money doled out to local capital fuelled corruption, and meant that national industry never became competitive.  Externally, Venezuela remained reliant on foreign corporations, which defined the terms of production to suit their own needs, refusing to increase refining capacity or diversify export markets. Even nationalisation in 1976 failed to change much, with the management of the new national company Petróleos de Venezuela, SA (PDVSA) retaining an international focus, and the oil price collapse of the 1980s crippling hopes of a revenue boost.

As a result, Venezuela entered a long and painful period of economic crisis and stagnation, with 81% of the population living below the poverty line by 1998. Far from delivering modernity, oil had produced a flawed development model which reproduced internal domination and intensified external dependence.

It was in this context that Hugo Chávez came to power in 1998, attacking the post-war model precisely for its failure to confront Venezuela’s internal class cleavages and external dependence. In its place, Chávez offered a different kind of a magical project, one which also celebrated the oil wealth of the nation, but which sought to use that wealth to explicitly challenge dependence.

Externally, Chávez sought to gain control over PDVSA and change its orientation from international to national goals. The first five years of his presidency revolved around the former objective, with the short-lived coup in 2002, the oil industry strike of 2002-2003 and the recall referendum in 2004 all having at their core the question of control over the company. Supported from below, Chávez won these struggles, and set out to transform PDVSA by increasing refining capacity, diversifying export markets, decreasing reliance on the American market, and using oil to promote regional integration through programs such as Petrocaribe. In sum, Chávez sought greater autonomy for Venezuela from the whims of the global economy.

In itself, this was hardly radical. Indeed the government of Carlos Andrés Pérez employed similar policies during the 1970s. However Pérez never sought a radical rupture with the old order. Chávez, on the other hand, sought to use the oil wealth to explicitly challenge Venezuela’s class cleavages by empowering those marginalised under the post-war model. This included, for example, the doubling of social spending from 11.3% of GDP in 1998 to 22.8% in 2011, paid for largely with increased oil revenues, and channelled through a parallel system of ‘missions’ established directly in the barrios where previously the state did not reach, and administered by the communities themselves via newly established Communal Councils. The aim of the government was not simply alleviating socio-economic disadvantage, but also empowering the masses, by using the oil wealth to facilitate self-determination. On a macro scale, the Bolivarian Revolution also sought to utilise the oil wealth to transform the economy, creating a ‘social economy’ enclave, where experiments with cooperatives, co-managed factories and Social Production Enterprises sought to satisfy collective needs rather than considerations of profit. This enclave was surrounded by a larger state-led economy dedicated to increasing Venezuela’s autonomy and diversifying from oil through measures such promoting agricultural production, implementing currency controls and tariffs, and seeking new sources of investment from the Global South.

For a while, this alternative model seemed to make real strides. Poverty more than halved between 1999 and 2012, and Venezuela moved up nine places on the UN Human Development ranking, as the country became the second least unequal country in Latin America. Moreover, the country experienced the largest increase in support for democracy in Latin America, with 87% of the population sporting democracy in the country in 2013. Importantly, this enthusiasm had a class dimension, with 85% of barrio residents believing that there was democracy in Venezuela, compared with only 55% of residents in middle and upper class neighbourhoods. Likewise, efforts to diversify the economy saw the size of the oil sector as a share of GDP decrease from 19.18% in 1999 to 11.55% in 2009, with services and finance making the biggest gains.

However, over the past couple of years, most of these gains have either stalled or reversed, and the country once again tethers on the brink. For the proponents of the resource curse thesis, this is proof that the Revolution was nothing more than oil populism, spawning corruption and failing to implement the ‘good governance’ measures necessary to make the most of oil wealth.

magicalYet, whilst corruption undeniably remains a problem, and governance standards often leave a lot to be desired, there are deeper issues at play here, which are ignored by the resource curse advocates. What the current crisis in Venezuela illustrates is the difficulty of transforming a social order shaped by centuries of marginalisation and exploitation, both internally and externally. Internally, the Bolivarian model has found itself under constant attack from domestic capital, which mobilises its economic, political and social power to effectively go on strike whenever its fundamental interests are threatened. This is especially true since Chávez’s death in 2013, with an investment strike coupled with the political opposition’s regime change strategy paralysing the country and the economy. Likewise, despite efforts at diversification, Venezuela continues to rely on oil for 96% of its export revenues. With international prices plunging, this puts the entire model under threat, especially as PDVSA struggles to find a balance between being a capitalist and a social enterprise, undermining production and refining capabilities. In the face of these problems, the government of Nicolás Maduro seems paralysed and short of ideas on how to confront the economic, political and social crisis now unfolding in Venezuela, especially with a  resurgent opposition using its recent capture of the Congress to try to remove him from power. Thus, while in the 2000s Venezuela represented a powerful example of the possibilities of different paths to oil-based development, it seems that in the end it did not manage to free itself from its internal and external dependencies sufficiently to construct a genuine alternative to the status quo. Despite its undeniable achievements, the Bolivarian Revolution may turn out to be yet another magical illusion.

The post Magical Development or Magical Illusions? Oil, Dependency and Venezuela appeared first on Progress in Political Economy (PPE).

Roundtable on Building Alternatives to Neoliberalism in Latin America

Published by Anonymous (not verified) on Thu, 07/04/2016 - 2:28pm in

Building Alternatives to Neoliberalism in Latin America: Roundtable with Marta Harnecker, Michael Lebowitz and Luis Angosto-Ferrández '

Date and Location:

13 May 2016, University of Sydney, Quadrangle Lecture Theatre [N205], 12:30pm – 2.00pm

All welcome!

PolEcon_SURCLA_final (2)

Rodrigo Acuña, Venezuela Foreign Policy and Latin American Unification

Published by Anonymous (not verified) on Wed, 30/03/2016 - 11:58am in

Rodrigo Acuña (Macquarie University), 'Venezuelan Foreign Policy and Latin American Unification'

This is the third seminar in the Semester 1 series of 2016 organised by the Department of Political Economy at the University of Sydney.

Date and Location:

7 April 2016, Darlington Centre Boardroom, 4:00pm – 5.30pm

All welcome!

2016 - Acuna Web

Overthrowing Dilma Rousseff: It’s Class War, and Their Class is Winning

Published by Anonymous (not verified) on Sat, 26/03/2016 - 4:13am in

The judicial coup against President Dilma Rousseff is the culmination of the deepest political crisis in Brazil for 50 years.

Every so often, the bourgeois political system runs into crisis. The machinery of the state jams; the veils of consent are torn asunder and the tools of power appear disturbingly naked. Brazil is living through one of those moments: it is dreamland for social scientists; a nightmare for everyone else.

Dilma Rousseff was elected President in 2010, with a 56-44 per cent majority against the right-wing neoliberal PSDB (Brazilian Social Democratic Party) opposition candidate. She was re-elected four years later with a diminished yet convincing majority of 52-48 per cent, or a difference of 3.5 million votes.

Dilma’s second victory sparked a heated panic among the neoliberal and US-aligned opposition. The fourth consecutive election of a President affiliated to the centre-left PT (Workers’ Party) was bad news for the opposition, among other reasons because it suggested that PT founder Luís Inácio Lula da Silva could return in 2018. Lula had been President between 2003 and 2010 and, when he left office, his approval ratings hit 90 per cent, making him the most popular leader in Brazilian history. This threat of continuity suggested that the opposition could be out of federal office for a generation. They immediately rejected the outcome of the vote. No credible complaints could be made, but no matter; it was resolved that Dilma Rousseff would be overthrown by any means necessary. To understand what happened next, we must return to 2011.

Dilma inherited from Lula a booming economy. Alongside China and other middle-income countries, Brazil bounced back vigorously after the global crisis. GDP expanded by 7.5 per cent in 2010, the fastest rate in decades, and Lula’s hybrid neoliberal-neodevelopmental economic policies seemed to have hit the perfect balance: sufficiently orthodox to enjoy the confidence of large sections of the internal bourgeoisie and the formal and informal working class, and heterodox enough to deliver the greatest redistribution of income and privilege in Brazil’s recorded history. For example, the real minimum wage rose by 70 per cent and 21 million (mostly low-paid) jobs were created in the 2000s. Social provision increased significantly, including the world-famous Bolsa Família conditional cash transfer programme, and the Government supported a dramatic expansion of higher education, including quotas for blacks and state school pupils. For the first time, the poor could access education as well as income and bank loans. They proceeded to study, earn and borrow, and to occupy spaces, literally, previously the preserve of the upper-middle class: airports, shopping malls, banks, private health facilities and roads, with the latter clogged up by cheap cars purchased on 72 easy payments. The Government enjoyed a comfortable majority in a highly fragmented Congress, and Lula’s legendary political skills managed to keep most of the political elite on side.

Then everything started to go wrong. Dilma Rousseff was chosen by Lula as his successor. She was a steady pair of hands and a competent manager and enforcer. She was also the most left-wing President of Brazil since João Goulart, who was overthrown by a military coup in 1964. However, she had no political track record and, it will soon become evident, lacked essential qualities for the job.

Once elected, Dilma shifted economic policies further away from neoliberalism. The Government intervened in several sectors seeking to promote investment and output, and put intense pressure on the financial system to reduce interest rates, which lowered credit costs and the Government’s debt service, releasing funds for consumption and investment. A virtuous circle of growth and distribution seemed possible. Unfortunately, the Government miscalculated the lasting impact of the global crisis. The US and European economies stagnated, China’s growth faltered, and the so-called commodity super-cycle vanished. Brazil’s current account was ruined. Even worse, the US, UK, Japan and the Eurozone introduced quantitative easing policies that led to massive capital outflows towards middle-income countries. Brazil faced a tsunami of foreign exchange, that overvalued the currency and bred deindustrialisation. Economic growth rates fell precipitously.

The Government doubled its interventionism through public investment, subsidised loans and tax rebates, which ravaged the public accounts. Their frantic and seemingly random interventionism scared away the internal bourgeoisie: local magnates were content to run Government through the Workers’ Party, but would not be managed by a former political prisoner who overtly despised them. And her antipathy was not only reserved for the capitalists: the President had little inclination to speak to social movements, left organisations, lobbies, allied parties, elected politicians, or her own ministers. The economy stalled and Dilma’s political alliances shrank, in a fast-moving dance of destruction. The neoliberal opposition scented blood.

For years, the opposition to the PT had been rudderless. The PSDB had nothing appealing to offer while, as is traditional in Brazil, most other parties were gangs of bandits extorting the Government for selfish gain. The situation was so desperate that the mainstream media overtly took the mantle of opposition, driving the anti-PT agenda and literally instructing politicians what to do next. In the meantime, the radical left remained small and relatively powerless. It was despised by the hegemonic ambitions of the PT.

The confluence of dissatisfactions became an irresistible force in 2013. The mainstream media is rabidly neoliberal and utterly ruthless: it is as if Fox News and its clones dominated the entire US media, including all TV chains and the main newspapers. The upper-middle class was their obliging target, as they had economic, social and political reasons to be unhappy. Upper-middle class jobs were declining, with 4.3 million posts paying between 5 and 10 minimum wages vanishing in the 2000s. In the meantime, the bourgeoisie was doing well, and the poor advanced fast: even domestic servants got labour rights. The upper-middle class felt squeezed economically, and excluded from their privileged spaces. It was also dislocated from the state. Since Lula’s election, the state bureaucracy had been populated by thousands of cadres appointed by the PT and the left, to the detriment of ‘better-educated’, whiter and, presumably, more deserving upper-middle class competitors. Mass demonstrations erupted for the first time in June 2013, triggered by left-wing opposition against a bus fare increase in São Paulo. Those demonstrations were fanned by the media and captured by the upper middle-class and the right, and they shook the Government – but, clearly, not enough to motivate them to save themselves. The demonstrations returned two years later. And then in 2016.

Now, reader, follow this. After the decimation of the state apparatus by the pre-Lula neoliberal administrations, the PT sought to rebuild selected areas of the bureaucracy. Among them, for reasons that Lula may soon have plenty of time to review and to regret, the Federal Police and the Federal Prosecution Office (FPO). In addition, for overtly ‘democratic’ reasons, but more likely related to corporatism and capacity to make media-friendly noises, the Federal Police and the FPO were granted inordinate autonomy; the former through mismanagement, while the latter has become the fourth power in the Republic, separate from – and checking – the Executive, the Legislature and the Judiciary. The abundance of qualified jobseekers led to the colonisation of these well-paying jobs by upper-middle class cadres. They were now in a constitutionally secure position, and could chew the hand that had fed them, while loudly demanding, through the media, additional resources to maul the rest of the PT’s body.

Corruption was the ideal pretext. Since it lost the first democratic presidential elections, in 1989, the PT moved steadily towards the political centre. In order to lure the upper-middle class and the internal bourgeoisie, the PT neutralised or expelled the party’s left wing, disarmed the trade unions and social movements, signed up to the neoliberal economic policies pursued by the previous administration, and imposed a dour conformity that killed off any alternative leadership. Only Lula’s sun can shine in the party; everything else was incinerated. This strategy was eventually successful and, in 2002, ‘Little Lula Peace and Love’ was elected President. (I kid you not, reader: this was one of his campaign slogans.)

For years the PT had thrived in opposition as the only honest political party in Brazil. This strategy worked, but it contained a lethal contradiction: in order to win expensive elections, manage the Executive and build a workable majority in Congress, the PT would have to get its hands dirty. There is no other way to ‘do’ politics in Brazilian ‘democracy’.

We only need one more element, and our mixture will be ready to combust. Petrobras is Brazil’s largest corporation and one of the world’s largest oil companies. The firm has considerable technical and economic capacity, and it was responsible for the discovery, in 2006, of gigantic ‘pre-salt’ deep sea oilfields hundreds of miles from the Brazilian coast. Dilma Rousseff, as Lula’s Minister of Mines and Energy, was responsible for handling exploration contracts in these areas including large privileges for Petrobras. The enabling legislation was vigorously opposed by PSDB, the media, the oil majors and the US Government.

In 2014, Sergio Moro, a previously unknown judge in Curitiba, a Southern state capital, started investigating a currency dealer involved in tax evasion. This case eventually spiralled into a deadly threat against Dilma Rousseff’s Government. Judge Moro is good-looking, well-educated, white and well-paid. He is also very close to the PSDB. His Lavajato (Carwash) operation unveiled an extraordinary tale of large-scale bribery, plunder of public assets and funding for all major political parties, centred on the relationship between Petrobras and some of its main suppliers – precisely the stalwarts of the PT in the oil, shipbuiding and construction industries. It was the perfect combination, at the right time. Judge Moro’s cause was picked up by the media, and he obligingly steered it to inflict maximum damage on the PT, while shielding the other parties. Politicians connected to the PT and some of Brazil’s wealthiest businessmen were summarily jailed, and would remain locked up until they agreed a plea bargain implicating others. A new phase of Lavajato would ensnare them, and so on. The operation is now in its 26th phase; many have already collaborated, and those who refused to do so have received long prison sentences, to coerce them back into line while their appeals are pending. The media turned Judge Moro into a hero; he can do no wrong, and attempts to contest his sprawling powers are met with derision or worse. He is now the most powerful person in the Republic, above Dilma, Lula, the speakers of the Chamber of Deputies and the Senate (both sinking in corruption and other scandals), and even the Supreme Court Justices, who have either been silenced or are quietly supportive of Moro’s crusade.

Petrobras has been paralysed by the scandal, bringing down the entire oil chain. Private investment has collapsed because of political uncertainty and the politically-driven investment strike against Dilma’s Government. Congress has turned against the Government, and the Judiciary is overwhelmingly hostile. After years of sniping, the media has been delighted to see Lula fall under the Lavajato juggernaut, even if the allegations are often far-fetched: does he actually own a beach-side apartment that his family does not use, is that small farm really his, who paid for the lake and the mobile phone masts nearby, and how about those pedalos? No matter: in a display of bravado and power, Moro even detained Lula for questioning on 4 March. He was taken to São Paulo airport and would have been flown to Curitiba, but the Judge’s plan was halted by fear of the political fallout. Lula was questioned at the airport, then released. He was livid.

In order to shore up her crumbling administration and protect Lula from prosecution, Dilma Rousseff appointed Lula her Chief of Staff (the President’s Chief of Staff has ministerial status and can be prosecuted only by the Supreme Court). The right-wing conspiracy went into overdrive. Moro (illegally) released the (illegal) recording of a conversation between President Dilma and Lula, pertaining to his investiture. Once suitably misinterpreted, their dialogue was presented as ‘proof’ of a conspiracy to protect Lula from Moro’s determination to jail him. Large right-wing upper-middle class masses poured into the streets, furiously, on 13 March. Five days later, the left responded with not quite as large demonstrations of its own against the unfolding coup. In the meantime, Lula’s appointment was suspended by a judicial measure, then restored, then suspended again. The case is now in the Supreme Court. At the moment, he is not a Minister, and his head is posed above the block. Moro can arrest him at short notice.

Why is this a coup? Because, despite aggressive scrutiny no Presidential crime warranting impeachment proceedings has emerged. Nevertheless, the political right has thrown the kitchen sink at Dilma Rousseff. They rejected the outcome of the 2014 elections and appealed against her alleged campaign finance violations, which would remove from power both Dilma and Vice-President Michel Temer, now the effective leader of the impeachment drive (and strangely enough, this case has been parked). The right simultaneously started impeachment procedures in Congress. The media has attacked the Government viciously, neoliberal economists ‘impartially’ beg for a new administration ‘to restore market confidence’, and the right will resort to street violence as necessary. Finally, the judicial charade against the PT has broken all the rules of legality, yet it is cheered on by the media, the right and even by the Supreme Court Justices.

Yet… the coup de grâce is taking a long time coming. In the olden days, the military would have already moved in. Today, the Brazilian military are defined more by their nationalism (a danger to the neoliberal onslaught) than by their right-wing faith and, anyway, the Soviet Union is no more. Under neoliberalism, coups d’état must follow legal niceties, as was shown in Honduras, in 2009, and in Paraguay, in 2012.

Brazil is likely to join their company, but not just now: large sections of capital want to restore the hegemony of neoliberalism; those who once supported the PT’s national development strategy have fallen into line; the media is howling so loudly it has become impossible to think clearly, and most of the upper-middle class has descended into a fascist odium for the PT, the left, the poor, and blacks. Their disorderly hatred has become so intense that even PSDB politicians are booed in anti-Government demonstrations. And, despite the relentless attack, the left remains reasonably strong, as was demonstrated on 18th March. The right and the elite are powerful and ruthless – but they are also afraid of the consequences of their own daring.

There is no simple resolution to the political, economic and social crises in Brazil. Dilma Rousseff has lost political support and the confidence of capital, and she is likely to be removed from office in the coming days. However, attempts to imprison Lula could have unpredictable implications and, even if Dilma and Lula are struck off the political map, a renewed neoliberal hegemony cannot automatically restore political stability or economic growth, nor secure the social prominence that the upper-middle class craves. Despite strong media support for the impending coup, the PT, other left parties and many radical social movements remain strong. Further escalation is inevitable. Watch this space.

Cuba: Building on Sugar or Sand?

Published by Anonymous (not verified) on Sun, 20/03/2016 - 10:57pm in

Guevara

With the first visit to Cuba in 88 years by a sitting U.S. president unfolding this week, this co-authored piece with Chris Hesketh – stemming from a joint visit to the island in 2013 – is offered as a snapshot reflecting on the changing dynamics facing revolutionary politics in Latin America.  

In Memorias del subdesarrollo [1965, available in English Memories of Underdevelopment], the novelist Edmundo Desnoes captures the idée fixe of uneven development in Cuba by noting that the people of Latin America have often been confronted with ‘nothing but a bad imitation of the powerful, civilised countries, a caricature, a cheap reproduction’. Clearly, the Cuban Revolution in 1959 and its series of cycles since broke with that pattern of imitation. The mass mobilisation and structured participation of the Revolution has meant that Fidel Castro has survived nine U.S. presidents, one U.S.-backed invasion, various assassination attempts and the longest sanctions in history. Talking about revolutionary processes, Che Guevara once declared in his famous statement to the Tricontinental: “Either a socialist revolution or a caricature of revolution”.

More than half a century after their imposition, U.S. economic sanctions against Cuba are estimated to have cost more than $751 billion, undermining a functioning health system on the island and leading to a state of siege, or blockade. As Salim Lamrani details in The Economic War Against Cuba, the United States has pursued the extraterritorial application of economic sanctions that affects the citizens and companies of third countries operating in Cuba. This has resulted in the prevention of the treatment of children suffering from cancer and diverse ophthalmic conditions. Meanwhile the Barack Obama administration has continued to apply the extraterritorial measures of the blockade, imposing a fine of $575 million on the Australia and New Zealand Bank Group, Ltd. for transacting with Cuba in dollars and punishing the Dutch bank ING with a fine of $619 million for the same reason, resulting in the largest penalty since the inception of the economic siege against Cuba in 1960.

IMG_03570037Meanwhile, the social gains of the Revolution have been well documented, including education, employment, land reform, housing, gender equality, and the development of the arts and culture alongside an expansive foreign policy abetting social revolution. For example, in 1961, the Literacy Campaign brought the illiteracy rate in Cuba down in less than one year from 23.6 percent to 3.9 percent. The land reform of 1963 nationalised 10,000 properties and placed some 70 percent of Cuba’s arable land in the state’s hands. Revolutionary mobilisation witnessed the creation of the Comités de Defensa de la Revolución (CDRs: Committees for the Defence of the Revolution), established in 1960, numbering approximately 800,000 to 1.2 million members that rallied against invasion. As such, mobilisation became replaced by institutional structures in the 1970s and the guerrilla ethos of the Revolution dwindled in preference for an apparatus of political representation and formalised institutional participation. The Revolution has since evolved from the “special period” of austerity in the 1990s and the collapse of the Soviet Union to witness a complex mix of cubanía (“Cuban-ness”), a particular manifestation of revolutionary nationalism, in combination with demands for egalitarian social revolution.

From the viewpoint of Cuba specialist, Antoni Kapcia, in his excellent book Cuba in Revolution:

despite appearances of Cuba as an enclosed, militantly defensive community, the Revolution has more often than not (except at moments of national crisis or perceived or real external threat) operated as a system with a surprisingly high degree of leeway and space being given to those who, though not fully committed, are nonetheless passively supportive of the aims and meaning of something which they see as “the Revolution” . . . That is not to say that the political system has not been tolerant; at certain times greater or lesser levels of coercion, peer pressure or harassment have ensured a conformity that can be stultifying and oppressive, leading to excesses of intolerance.

One such historical manifestation would include the rise of the Unidades Militares para Ayuda a la Producción (UMAP: Units to Aid Military Production), or work camps, that targeted sexual, religious, and political dissenters in the 1960s to provide cheap labour for the state. In 2010, Fidel Castro admitted responsibility for such imprisonments committed during the revolutionary period, as detailed in the Mexican daily newspaper La Jornada. For Samuel Farber, in Cuba since the Revolution of 1959, this evidences how Cuba has been organised along a Soviet-type system where the dull compulsion of economic relations has been replaced with more direct coercion and the militarisation of labour. However, Kapcia’s stress on avoiding a petrified Cold War framing of Cuba, as simply the reproduction of a Caribbean version of the Socialist Bloc, is astute. Concurrent with Kapcia, ‘one constant in the understanding of Cuba’s complex system has been the need to eschew the paradigm of the Socialist Bloc and, in fact, to focus on Cuba’s differences’.

IMG_03560036One of these differences is Cuba’s emergence in the context of global capitalism or what George Lambie details in The Cuban Revolution in the 21st Century as ‘market socialism’ in which the state retains firm control over key sectors of the economy while allowing private enterprise and foreign capital to enter the country alongside participatory democracy. This is the most fascinating aspect of Samuel Farber’s book Cuba since the Revolution of 1959 in detailing how, since the Sixth Congress of the Cuban Communist Party (CCP), the ‘statification’ of the Cuban Revolution is leading to a form of capitalist restoration. The renovation of Old Havana, through the ubiquitous tourist-oriented Habaguanex, directed by Eusebio Leal, is one expression of this form of economic development. Cuba, an island the size of England, and with a current population of some eleven million people is attracting over 2 million tourists annually. Indeed, walking around Old Havana it is impossible not to notice both the gentrification of the city and the rise of private markets, sometimes initiated by a hiss and whisper of ‘Cigar? Cigar my friend? Cohiba?’ (Cohiba being the premier brand of Cuban cigar once smoked by Fidel Castro himself). It is with a certain irony that a Revolution inspired by the excesses of US-based interests and the regime of Fulgencio Batista, now seeks to precisely utilise such symbolic capital as a form of branding alongside the old classic cars of Havana excitedly touted as ‘American taxis’. 

IMG_03220005Today, along with the liberalisation of rules governing small businesses and foreign investment we are witnessing the emergence of civilian and military joint ventures with foreign capital and economic enterprises, administered for example through the Grupo de Administración Empresarial S.A. (GAESA). As a result, Farber’s book is highly useful in delineating the emergence of what he refers to as a ‘reconstituted ruling class’ in Cuba, through enterprise improvement.

The official organ of the Central Committee of the CCP, Granma, indicated as recently as 22nd November in an article entitled ‘Continúa el fortalecimiento de la empresa estatal socialista’ that the strengthening of state socialist enterprises would continue into 2014. Under the application of the new concept of ‘Encargo Estatal’ [State Order], specific enterprises and products notably linked to the ministries of industry, construction, energy and mining sectors would be gradually included in the policy of commercial strengthening of state socialism. ‘The implementation of this project’, as stated in Granma, ‘will allow enterprises to increase their sales and profits, which is a source for recapitalisation and increased incomes for workers’. Here, the concept of ‘the state as the centre of accumulation’ begins to enter the picture, as detailed by David Ruccio in Development and Globalization.

RuccioIn Cuba as elsewhere across Latin America, there is a return to a conception of the role of the state in planning and controlling economic surplus, through the ‘new extractivism’, so that the state becomes the centre of accumulation by centralising the so-called surplus and thereby planning the use of that surplus in accumulation. The state can therefore ‘siphon off’ surplus realised in nonstate enterprises that could then be used for the reactivation and restructuring of the economy on the basis of state investment. However, these attempts then position the state in a wide range of political and economic class struggles and tensions: the elimination of subsidies and social benefits (food, education), attempts to lower real wages (to increase the amount of surplus extracted), or increase taxes on joint-venture capitalist enterprises in order to direct the surplus into fiscal revenues could all generate conflicts threatening the central role of the state in accumulation.

In 1960, as relayed in Eduardo Galeano’s classic book Venas abiertas de América Latina [1971, available in English, Open Veins of Latin America], Jean-Paul Sartre apparently asked about Cuba, ‘Is building on sugar better than building on sand?’ With sugar production falling from 7.2 million to 4.5 million tons in the 1950s and then rising to a high of 7 to 8 million tons in the 1980s to fall to 1 and 1.5 million tons more recently, it seems that Cuba is building less on sugar and more on sand in the form of tourism with the state as the centre of accumulation. Struggles from below, meaning the democratic self-management of the Cuban economy and the fight for the self-emancipation of the working classes against capitalist priorities might be one outcome, as argued by Farber. Resolving popular demands through new forms of co-option within state institutions and retaining the state as a centre of accumulation within a form of capitalist restoration might of course be another outcome. It is too early to say whether Cuba is now nothing but a caricature of socialism. Nevertheless, rather than talking about a revolution, it does indeed sound more like a whisper of ‘Cigar? Cigar my friend? Cohiba?’.

Democracy in the Crucible: Impeachment or Coup d’État in Brazil?

Published by Anonymous (not verified) on Tue, 02/02/2016 - 9:00am in

As first posted on E-International Relations, Brazil is the world’s sixth largest economy, a prominent member of the G-20 and the BRICS group of large emerging countries, and the host of the 2014 Football World Cup and the 2016 Summer Olympics. The country has also attracted attention since the Presidential election of PT (Workers’ Party) candidates Luís Inácio Lula da Silva, in 2002 and 2006, and Dilma Rousseff, in 2010 and 2014. Their administrations have played a leading role in the Latin American ‘Pink Tide’; Brazil has also achieved considerable gains in employment and distribution, and was one of the few nations where social spending rose in the current ‘Age of Neoliberalism’.

Yet, Brazil finds itself enmeshed in the worst economic contraction in a generation, coupled with a political deadlock fuelled by a parade of corruption scandals. A particularly grotesque one has engulfed the Speaker of the Chamber of Deputies, who is struggling for his political life while, simultaneously, leading impeachment procedures against President Rousseff. Even if her administration survives, Rousseff is unlikely to regain the ability to pass legislation through a bitterly hostile Congress, further impairing the country’s economic prospects.

This is calamitous for Brazil, and potentially lethal for the PT. At the end of his second administration, Lula enjoyed approval rates bordering on 90 per cent, and Dilma Rousseff’s approvals hovered around 70 per cent until 2013. The collapse has been relentless: her popularity is now stuck in single digits. There is profound cross-class discontent, a mass-based political right has emerged for the first time since the 1960s, and the mainstream media has been promoting a vicious campaign against the PT and anything approaching even social democracy. If they succeed, there may be a long-term shift to the right in the largest country in Latin America. 

Lula’s search for political hegemony

The forces driving today’s economic and political crises can be traced back to the incompatibility between two transitions taking place in last 30 years: the political transition from military rule to democracy, that was sealed by the progressive Constitution of 1988, and the economic transition from import-substitution industrialisation to neoliberalism, that was consolidated by the macroeconomic policy ‘tripod’ imposed in 1999, including inflation targeting and Central Bank independence, liberalisation of capital flows, and permanently contractionary fiscal and monetary policies.

The Constitution is socially inclusive; it has democratised and decentralised power and mandated the creation of a Swedish-style welfare state, including extensive social rights and income guarantees. In contrast, neoliberalism promotes the interests of internationalised capital in general and finance in particular, concentrates economic and political power and imposes an exclusionary democracy cloaked as ‘macroeconomic stability’. The friction between incompatible principles of social organisation – democracy or neoliberalism – helps to explain both the election of Lula, and the destruction of his successor.

Correspondingly, for 25 years Brazilian political life has been structured by the conflict between the social-democratic PT and the hardline neoliberal Social Democratic Party, PSDB. In Poulantzian fashion, these parties are closely aligned with two fractions of capital. Domestic capital is based primarily on construction, shipbuilding, the capital goods industry, agribusiness and national banks. They have supported the PT in exchange for subsidised state finance and institutional protection supporting their complex relationship of competition and co-operation with global capital. Internationalised capital includes foreign firms and their associates across finance, insurance, globally-integrated manufacturing and the mainstream media which, although overwhelmingly owned by domestic capital, is committed to neoliberalism and rejects the notion of a ‘national’ development strategy. This group is represented by the PSDB.

The PT administrations promoted the interests of domestic capital and the workers with considerable success during the period of prosperity afforded by the commodity boom pulled by the USA and, subsequently, by China. For example, these administrations supported the expansion of the oil chain through the state-owned Petrobras, the country’s largest firm; the shipbuilding industry recovered from the disaster imposed in the 1990s by the PSDB administration of F.H. Cardoso that reduced it to 5,000 workers. Under Lula, profits ballooned and employment in the shipyards rose to 105,000. The PT administrations reduced real interest rates from a peak of 22 per cent, under Cardoso, to 3 per cent, under Dilma, and dramatically expanded subsidised finance through the Brazilian Development Bank (BNDES), that became the largest development bank in the world.

These governments also benefitted the organised workers and the poor, both indirectly through the expansion of the economy, and directly through the government’s wage, employment and transfer policies. The minimum wage rose by 72 per cent in real terms between 2005 and 2012, and social provision increased through pensions, benefits and the flagship Bolsa Família cash transfer programme. Economic prosperity and a supportive administration also facilitated social struggles. There were around 300 strikes in 2003, and less than 20 per cent of collective actions led to real wage gains; in 2013 there were 2,000 strikes, and 95 per cent of agreements increased real wages.

Yet social and economic achievements did not create a stable political hegemony. For example, the PT and its close allies never controlled more than one-third of seats in Congress. Instead, they always depended on broad alliances with unreliable parties and opportunistic groups in order to pass legislation. In the meantime, the mainstream media remained ravenously hostile to Lula and Dilma, often orchestrating the parliamentary opposition. The Judiciary is also firmly aligned with the political right. Finally, corruption remains an essential link between politics and business life. Thievery and underhand transfers supplement the machinery of the state, democratic processes and the institutional modalities of representation of the elite. It is only natural that, in the 1990s, the PT decided that in order to win elections instead of being honourably defeated, it needed to begin distributing favours to its business supporters, and reward unprincipled politicians in exchange for their support. There is no other way to govern the country. These crooked circumstances were incompatible with political coherence, and the PT was always tripping on the verge of calamity.

The favourable winds of the global commodity boom supported Lula’s programme of income distribution, but his economic ambitions were constrained by the neoliberal policy tripod. Fiscal and monetary austerity, large capital movements and incoherent industrial policies overvalued the currency and promoted economic precarisation. Brazil created millions of jobs in the 2000s, but they were mostly precarious and poorly paid posts in urban services. Infrastructure funding was always lagging, creating a yawning gap between rising consumption levels within the household and the provision of public goods and services, especially transport, water, sanitation, security, schooling and health. Mass frustration crept in. In the meantime, the upper middle classes felt increasingly alienated from the government, because of their exclusion from power and the feeling that ‘their’ taxes were funding feckless hordes and arrogant arrivistes, who insisted on their right of admission to shopping centres, airports and private clinics.

Brazil recovered rapidly from the global crisis through bold monetary and fiscal policies. However, the scope for success was limited because growth was driven by commodity exports, for which demand was bound to decline, backed up by fickle capital inflows. Since the economy is permanently hampered by the neoliberal policy tripod, if the external engine splutters domestic growth will falter, regardless of fiscal tweaks or bombastic attacks on corruption. If, in addition, the government is isolated politically, demoralised, and beset by an investment strike, the economy must fall off a cliff. Let us see how it happened.

The cracks are showing: Dilma’s fall, and the emboldening of the Right                             

Dilma Rousseff was never a politician, nor was she a member of the PT until recently. She was a manager and a fixer, and was offered the Ministry of Energy in 2003. There, she oversaw the massive expansion of the country’s oil industry. She subsequently became President Lula’s Chief of Staff. Dilma succeeded in both posts and Lula, at the height of his powers, anointed her PT candidate to his succession.

Once elected, Dilma tilted economic policy further away from neoliberalism. She introduced more expansionary fiscal policies, lowered interest rates, imposed marginal capital controls, funded additional state investment, expanded transfers and intervened in multiple sectors. The outcome was ruinous. The government expected the global crisis to peter out but, instead, it deepened. Quantitative easing in the advanced economies wreaked havoc with the Brazilian real; the media intensified its attacks, and domestic capital refused to invest since it could neither control the government nor claim easy profits. The current account deficit ballooned, and the economy tanked. The government lost the ability to conciliate conflicting interests. The urban poor rebelled in 2013, but their protests were hijacked by the right-wing media and a bitterly hostile upper middle class.

Dilma campaigned for re-election with a left-wing message, warning against the neoliberal adjustment planned by her PSDB rival. However, once victorious, Dilma appointed as Finance Minister a banker connected to the PSDB, and gave him free rein to restore the government’s ‘credibility’ through a sharp fiscal and monetary contraction. The left cried foul, and Rousseff’s working class supporters felt betrayed. The retraction of demand during a protracted global crisis triggered the collapse of investment. Output nose-dived and unemployment mounted. The economy contracted 3.5 per cent in 2015, and 2016 can be just as bad. The gains from the 2000s are being wiped out as we speak. International capital is waiting for Dilma’s fall; domestic capital is cowering, and the formal sector workers are dumbfounded by their losses. The informal workers suffer heavily, through the evaporation of opportunities for income, employment, education and social advancement.

The media, the (PSDB-controlled) Federal Police and the Judiciary tightened the screws in 2014, and successive corruption scandals have come to light. The Federal Police’s ongoing Lava Jato operation has unveiled a large corruption network centred on Petrobras and including cartels, fraud and illegal funding for several parties. Blanket media coverage focusing on the PT alone badly dented the government’s credibility. Several politicians and party cadres were jailed, followed by some of the country’s most prominent businessmen, but only those supporting the government. A two-pronged campaign was launched to restore the right to power regardless of the elections. On the one hand, the media suggested that the PT was uniquely corrupt and corrupting, and that the businesses aligned with it had violated the law and perverted democracy. On the other hand, the police and the judicial system have sought to throttle the party. The message was clear: anyone funding the PT illegally will be imprisoned; their companies will be destroyed and the shareholders will pay dearly. Having survived for years through the favours of the rich at the expense of the militancy of the poor, the PT was in a bind. It had no explanation to offer, no programme to advance, and no strategy to climb out of the hole.

The attack against Rousseff and the PT forged a right-wing mass opposition demanding the ‘end of corruption’ and ‘Dilma’s impeachment’, even though there is no legal justification for it. Examination of the opposition’s grievances leads to a laundry list of unfocused and conflicting dissatisfactions articulated by expletives rather than logic: the demand for the President’s impeachment has no legal substance. The process is an attempted political coup d’état: the PSDB and the media refuse to accept the outcome of the 2014 elections and they have decided to depose the President and restore the hegemony of globalised neoliberalism regardless of Constitutional niceties.

At this point in time, it is impossible to predict whether or not Dilma will be impeached or forced to resign. Underpinning this uncertainty is the impasse between social forces defending an inclusive Constitution and those imposing an excluding neoliberal system of accumulation. These disputes emerge through a dysfunctional political system, a distorted economy and a regressive social structure: a democracy without legitimate sources of party funds, a hollowed out manufacturing base supported by large-scale agribusiness, an economy without prospects of generating quality jobs for its workers or capacity to distribute income in a fiscally sustainable manner, and élites clinging to their privileges and resenting any attempt to build an inclusive citizenship. A political hegemony resolving these impasses will not be built easily or rapidly. The agony is not over. The end is not even close.

The set image is by thierry ehrmann [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons.

Argentine elections 2015: a shift to the right and the need for a popular response

Published by Anonymous (not verified) on Sun, 24/01/2016 - 9:00am in

The electoral victory of Mauricio Macri in the Presidential elections in Argentina last year (22 November 2015) signifies a dramatic change in Argentine and Latin American politics. Despite Mauricio Macri’s campaign promise to ‘keep the good policies’ of the former center-left government, the reality of the first month in office is strikingly different. In this post, originally published on Trade Unions and Global RestructuringBruno Dobrusin analyses these changes as well as the reasons for, and broader implications of, the turn to the right in Argentina.

Reversing centre-left policies

There have been drastic policy changes during the first month. To name a few: devaluation of the currency by 40%; reduction in export taxes for large agribusiness; new cabinet full withformer CEOs of multinational companies; reformulation of Central Bank mandate to further its autonomy; elimination of import controls; liberalization of foreign exchange controls; reversal of the media law; revision of all contracts in the public sector signed since 2012; realignment with US foreign policy objectives, including the promotion of free trade agreements. This brief list highlights the main decisions taken in only a month in office and shows that Macri’s government has two main objectives: (1) liberalizing economic policy after years of intense state intervention in Argentina, and (2) becoming a reference point for the right-wing in the region, in view of defeating the wave of progressive governments of the previous decade.

Argentina1

The arrival of this right-wing project into government was a product of a combination of factors. In 2011, Cristina Fernandez de Kirchner run for re-election and won by an outstanding 54% of the vote in the first round, with the closest rival at a distant 16%. This large popularity was a combination of distributive measures and high economic growth during the previous years, supplemented by Cristina Kirchner’s charismatic leadership. The electoral results—and the defeat of the center-left project—of 2015 was a product of different factors, several to do with Kirchnerism’s own limitations; while others were related to what we can call an ‘investment lockout’ on behalf of the business sector and the lack of access to foreign currency.

Reasons for the decline of Kirchnerism

During the second mandate of Cristina Kirchner, inflation remained high at an average inflation of 30% per year, while economic growth began to stagnate, with near zero growth in the 2012-2015 period. This coincided with a decline in the export of primary commodities as well as their prices in the world market. The redistributive measures implemented in the previous years (2003-2011), which focused on adjusting social assistance and pensions according to inflation mixed with collective bargaining agreements that generally matched inflation, were continued in this period, but with less impact on the overall economy than in the past. Employment generation in the private sector stalled, informal work stopped its decline at around 33% of the workforce. Unions increased conflicts in the last three years, and while the political relationship with the government of a majority of trade unions continued, a growing number of confederations and unions took a confrontational stance by carrying out five general strikes between 2012 and 2015. Moreover, so-called ‘second generation’ demands became more acute, especially in the field of public service provision. The train accident of 2012 in one of Buenos Aires’ main stations, Once, left at plain sight the mishandling and lack of investment in an essential service and the complicity between the State and the company in charge of the railways. Although the government reacted by nationalizing most of the urban services, this reaction was late and has only recently resulted in improvements of the service.

Argentina2A second element that influenced the economic condition of Argentina during the last Kirchner administration was the dispute with vulture funds that held Argentine bonds. During the 2001 economic crisis, Argentina defaulted on its debt with foreign bond holders. The default lasted until 2005, when the government of Nestor Kirchner (2003-2007)  renegotiated with 75% of the creditors a major cut in the debt—close to 75%—and the exit from default. In 2010, the government launched a new campaign to negotiate with the remaining 25% of the bond-holders, with the same deal as before. After both negotiations, 93% of the total debt was renegotiated with significant reduction of overall debt. The remaining 7% of bond-holders, many of these now in the hands of vulture funds, went to court in the hope of getting the full value of those bonds. This move by the vulture funds got a friendly judge in 2012, who ruled in favor of these hedge funds and blocked Argentina’s access to international markets. This added to an already-existing difficulty in accessing cheap credit, since the government had rejected any form of IMF intervention in economic policy. The lack of access to credit led to, among other policies, a firm exchange control that in turn affected economic investment—and expected returns by corporations. Argentina entered yet another period of foreign currency restriction, showing the limitations of the Kirchners’ project to overcome the dependence on the export of primary commodities, an issue that has affected all other progressive governments in the region.

A third factor to understand the defeat was the electoral campaign itself. The candidate chosen by the then-governing party, Daniel Scioli, had a tense relationship with Cristina Kirchner and this tension was expressed throughout the campaign, when there seemed to exist two parallel agendas for the same political project. Only in the second round did Cristina Kirchner firmly come out in support of Scioli. The right-wing ran a campaign based on ‘happiness and change’, not responding to attacks from Kirchnerism and avoiding mentioning any concrete economic agenda, as well as hiding their economic advisors—most of them with previous experience in the neoliberal administrations of the 1990s.

Argentina 3These three factors can partially explain the changes taking place in Argentina’s political direction. The economic measures implemented by the new government will affect mostly working people and redistribute wealth upward, towards concentrated capital and large agribusinesses. The new administration has decided to reduce the presence of the State, returning to the dogmatism that dominated the neoliberal decade of the 1990s. A central element in this new position is foreign policy, where the clashes with Venezuela have already begun. At the last Mercosur Summit in Paraguay, participating for the first time Macri engaged in a verbal confrontation with Venezuela’s foreign affairs minister. Moreover, the government has signaled its intention of joining the ‘Pacific Alliance’ (a free trade agreement between Mexico, Costa Rica, Colombia, Peru and Chile) that intends to be incorporated into the Transpacific Partnership Agreement.

Continuing contestation and resistance

Despite these policies already implemented, the economic agenda of the government will not be easily taken. The trade union movement is beginning to mobilize more intensely, and when collective bargaining rounds start in early March, the level of conflict will certainly rise. In parliament, the Peronist party (which includes Kirchnerism) still remains a first minority in the lower-house and a majority in the upper-house. The firepower is large, making it possible to reverse some of the policies of the government and force it to negotiate with the opposition. Lastly, after the 2001 socioeconomic crisis, Argentine society has remained highly mobilized. Informal workers through picket lines on major roads, formal workers through trade unions, and the middle class have consistently gained improvements through mobilization. The public space remains an area of debate and dispute that governments cannot ignore. The capacity to challenge the new agenda will depend on the dynamic of these elements; especially on the impact that social mobilization can have on the government’s liberal agenda.

Argentina4Overall, what took place in Argentina, and a week later in Venezuela’s parliamentary elections, is an indication of changing times in Latin America. It is not definite, as the reversals of neoliberal policies from the 1990s show, but it has certainly produced a revival for the right-wing on the continent and a defeat for progressive movements. The capacity to create new alternatives will depend not only on the political forces’ actions in opposition, but also on the autonomous capacity of popular movements to mobilize and promote alternatives. This was key during previous struggles against neoliberalism and was generally lost in the region during the progressive administrations, especially after the defeat of the Free Trade Area of the Americas (FTAA) in 2005. The reorganization, generally under the banner of the State, has created few spaces of autonomous contestation. Returning to those practices by organizing the base is a mandatory step for those movements, including labour, that were essential in reversing neoliberal policies two decades ago.

Pages