Argentina unilaterally cancels debt. Cuba becomes a member of Mercosur. Brazil opposes U.S. subsidies to its domestic agriculture. Venezuela invests in large scale private and semi private Latin American petrochemical projects. Cuba opens its commercial ports, airspace and to semi-capitalist nation while opposing ultra left guerilla movements in Colombia.

The Capitalist Communist binary is over in Latin America. Pan Latin American market socialism is taking its place. A supra-nationalist minded policies supported by a domestic elite, labor and reformed socialists has replaced it.

We will offer our take on the shape of things but first we offer this essay by disgruntled leftist Dr. James Petras.


Latin America - Four Competing Blocs of Power

In reality there are four competing blocs of nations in Latin America, contrary to the highly simplistic dualism portrayed by the White House and most of the Left.

. 04.17.2007

Introduction

Each of these four blocs represents different degrees of accommodation or opposition to US policies and interests. Moreover much depends on how the US defines or re-defines its interests under the new realities.

The radical left includes the FARC guerrillas in Colombia, sectors of the trade unions and peasant and barrio movements in Venezuela; the labor confederation CONLUTAS and sectors of the Rural Landless Movement in Brazil; sectors of the Bolivian Labor Confederation (COB), the Andean peasant movements and barrio organizations in El Alto; sectors of the peasant-indigenous movement CONAIE in Ecuador; sectors of the teachers and peasant-indigenous movements in Oaxaca, Guerrero and Chiapas in Mexico; sectors of the nationalist-peasant-left in Peru; sectors of the trade union and unemployed workers in Argentina. In addition, there are numerous other social movements in Central and South America and a plethora of small Marxist groups in Argentina, Bolivia, Chile and elsewhere. Together these organizations form a heterodox, dispersed political bloc, which is staunchly anti-imperialist, rejects any concessions to neo-liberal socio-economic policies, opposes debt payments and generally supports a socialist or radical nationalist program.

The pragmatic left includes President Chavez in Venezuela, Morales in Bolivia and Castro in Cuba as well as a multiplicity of large electoral parties and major peasant and trade unions in Central and South America. Included here are the left electoral parties, the PRD in Mexico, the FMLN in El Salvador, the left electoral bloc and the labor confederation (CUT) in Colombia, the Chilean Communist Party, the majority in Peruvian nationalist Humala’s parliamentary party, leadership sectors of the MST, in Brazil, the MAS, the governing party in Bolivia, the CTA, the second largest labor confederation in Argentina, and a minority of the Broad Front and the labor confederation (PIT-CNT) in Uruguay. The great majority of left Latin American intellectuals are found among this political bloc.

It is worthwhile to examine why this bloc is referred to as the ‘pragmatic’ left. First of all Venezuela, Bolivia and the entire spectrum of above-mentioned social movements, trade union confederations, parties and fractions of parties do not call for or practice the expropriation of capitalism, the repudiation of the debt, the complete expropriation of US or EEC banks or multinational corporation, or any rupture in relations with the US.

For example, in Venezuela, private national and foreign banks earned over 30% rate of return in 2005-2007. Foreign-owned oil companies reaped record profits between 2004-2007. Less than 1% of the biggest landed estates were fully expropriated and titles turned over to landless peasants. Capital-labor relations still operate in a framework heavily weighted on behalf of business and labor contractors who rely on subcontractors who continue to dominate hiring and firing in more than one half of the large enterprises. The Venezuelan military and police continue to arrest suspected Colombian guerrillas and activists and turn them over to the Colombian police. Venezuela and US-client President Uribe of Colombia have signed several high-level security and economic co-operation agreements. While promoting Latin American integration (excluding the US) Chavez has looked toward greater ‘integration’ with neo-liberal Brazil and Argentina, whose oil production and distribution is controlled by European MNCs and US investors. While Chavez attacks US attempts to subvert the democratic process in Venezuela, it still provides 12% of total US petroleum imports, owns 12,000 CITGO gasoline stations in the US and several refineries.

Finally the Venezuela’s political system is wide open to influence by the private mass media, which are overwhelmingly hostile to the democratically elected President and Congress. US-funded NGO’s continue to act on behalf of US policymakers, as do a dozen pro-US political parties and a trade union confederation. The majority of pro-Chavez congressional members and officials are of very dubious nationalist credentials, having jumped on his political bandwagon more for personal advancement than from any populist loyalties. Many emigrated from defunct pro-US right wing political parties. In a word, Venezuela’s pragmatism spells out a very lucrative field for US investors, a reliable supplier of energy and alliances with the US’s major client (Colombia) in Latin America. The essence of the matter is that Chavez’s radical rhetoric and discourse on 21st century socialism does not now or in the proximate future correspond to the political realities. If it were not for Washington’s intransigent hostility and continued confrontation and destabilization tactics, even Chavez’s discourse would likely be moderated. That sectors of big business complain about increased royalty payments, profit sharing and taxes is to be expected, but hardly the basis for Washington to engage in arms boycotts, cheap rhetorical shots and undercover subversion.

US-Venezuela relations embody what is wrong and has failed in Latin America. By comparing Chavez’ policy with that of the previous Venezuelan client regimes during the 1990’s, Washington is painting Chavez as a ‘dangerous radical’. Taking into account the changed international environment of the 2000-2007 period and the limited social welfare, and tax and other reforms, and taking Chavez’ foreign policy pronouncements with a grain of salt, the US is in fact dealing with a pragmatic radical who can be accommodated. But that presumes that Washington rejects the 1990’s as a standard for measuring friends and enemies. It presumes that Washington realizes that the favorable international conjuncture of the 1990’s is gone and it must accommodate moderate reforms and foreign policy differences to avoid a social revolution.

The same is true regarding US policy toward Cuba and Bolivia. Cuba has established diplomatic ties with almost all US clients and allies in Latin America. It has explicitly extended a friendly diplomatic hand to US-backed Colombian President Uribe, rejects the revolutionary left (FARC) in Colombia, gives public support to neo-liberals like Lula of Brazil, Kirchner of Argentina and Vazquez in Uruguay and has signed a wide range of purchasing agreements with big US food exporters amounting to over $500 million dollars a year despite onerous terms. Cuba has provided free health services to a large number of US client regimes ranging from Honduras and Haiti to Pakistan. It is training thousands of doctors and educators from the poorest of US client states and has opened the door to foreign investors from four continents in all its major growth sectors.

Paradoxically as Cuba has deepened its integration into the world capitalist market leading to the emergence of a new class of market-oriented elites, Washington has increased its ideological hostility. By issuing military threats and exercising diplomatic pressure and provocations, the White House has strengthened radical tendencies in Cuban society. Washington has adopted a similar extremist posture toward the pragmatic-leftist Morales regime in Bolivia, whose ‘nationalization’ has not and will not expropriate any foreign-owned enterprise. One of Morales main purposes is to stimulate trade agreements between Bolivia’s agro-business elite and the US.

The third and most numerous political bloc in Latin America are the pragmatic neo-liberals which includes Brazil under Lula, Kirchner’s Argentina and the major trade union confederations in Brazil and Argentina, sectors of the big business and financial elites and the principal provincial political bosses handing out subsistence unemployment doles and food baskets. There are numerous imitators of these regimes among left-liberal opposition groups in Ecuador, Nicaragua (the Sandinistas and their split-offs), Paraguay and elsewhere. Both Kirchner and Lula have defended the entire gamut of legal, semi-legal and illegal privatizations, which took place in the 1990’s. Both have prepaid on their official debt obligations (though Argentina imposed a 60% discount on private debt holders).

Both have pursued agro-mineral export growth strategies. Both have vastly increased financial and business profits while restraining wages and salaries. There are also differences between the two. Kirchner’s pro-industry strategy has led to a growth rate over twice that of Lula and he has reduced unemployment by 50% (from a high base figure) compared to Lula’s failed employment policies. In other words, the investment environment for US business-people and bankers in Argentina and Brazil is as favorable to profit making (or even more so for US bankers in Brazil) as it was during the ‘Golden Years’ of the 1990’s.

The major changes in relations between the pragmatic neo-liberals and Washington are in the negotiations over a free trade agreement. The vast increase in global trade opportunities and the stronger market position of elite export producers and manufacturers within Latin America gives them a stronger negotiating position. Both Lula and Kirchner will have nothing to do with extremist-militarist US efforts to overthrow or boycott Chavez because they have growing and lucrative market investments and joint oil/gas projects in the works. They recognize the basically capitalist nature of the Chavez regime even as they reject most of his radical anti-imperialist discourse. Likewise both Presidents are diversifying trading partners and pursuing markets with US competitors in China and Asia because it is lucrative, revenue generating and part of their neo-liberal practice.

There is a clear difference between the market-oriented and free trade-driven policy of Argentina and Brazil and the militarist, ideologically driven US policy toward Venezuela, Cuba, the Middle East and elsewhere.

While Washington is not hostile to Argentina and has a friendly working relation with Brazil, it has failed to fully exploit the possibilities of extending influence because of its refusal to recognize the emergence of a kind of ‘nationalist’ free trade regime. Measuring Argentina against the 1990’s ‘Golden Age of Pillage’ under President Carlos Menem, Kirchner’s pursuit of negotiated agreements, regulated investments, tax collection and debt re-negotiations is seen as ‘nationalist’, ‘leftist’ and barely tolerable. Likewise Washington, accustomed to Cardoso’s role as a Washington client, is disturbed by the fact that Lula’s free market policies include a demand that the US end agricultural subsidies and quotas as well as Brazil. Once again Washington’s extremism sacrifices large-scale, long-term US entry into Brazil’s industrial and service sector in order to defend uncompetitive US farm enterprises. Washington’s attitude is more akin to a 19th century colonial (or mercantile) power than a 21st century market-based empire-builder, especially faced with pragmatic rulers looking to build their own regional power bases.

The fourth political bloc is the doctrinaire neo-liberal regimes, parties and elite associations, which closely follow Washington’s dictates. This includes the Calderon regime in Mexico, preparing to privatize the lucrative public petroleum and electrical firms, the Bachelet regime in Chile - the perennial agro-mineral-exporter, Central America – the tropical fruit and assembly plant exporters (El Salvador, Nicaragua, Honduras, Costa Rica and Guatemala). The latter were brought into the US orbit subsequent to the killing of over 300,000 people between the late 1970’s and early 1990’s.

Colombia, another member of the hard-line neo-liberal bloc, is recipient of $5 billion dollars in US military aid since the late 1990’s. Peru, which over the past 20 years has privatized almost all of its mineral wealth is governed by US client President Alan Garcia who continues the same policies. Paraguay has become the biggest military base for Washington. In Uruguay, a regime of ex-leftists has signed onto a new free trade agreement with the US and agreed to a military training base. In the Caribbean, the US occupies Haiti via the UN after overthrowing and abducting the elected President Bertram Aristide and has a loyal ally in the Dominican Republic (President Leonel Fernandez). In other words, Washington dominates a ‘Pacific Arc’ of loyal clients extending from Mexico, through Central America down the Southern Pacific coast, including Colombia, Peru and Chile. While the political labels, rhetoric and degree of stability vary, these regimes all embrace US-backed doctrines of free market, mostly follow the US lead in regional and international forums and in one degree or another openly or surreptitiously oppose Venezuela and Cuba. Powerful pragmatic leftist movements challenge these client regimes, especially in Mexico, El Salvador, Peru and Colombia (including the radical left in the latter). Nevertheless for the immediate future, Washington has a loyal bloc of follower regimes, even as, over the middle course this could change abruptly.

Conclusion

Claims by Washington and right-wing ideologues that ‘radical populism’ is sweeping the region are self-serving and gross simplifications of a complex reality. Instead there is a ‘quadrangle of competing and conflicting forces’ within Latin America. There are also new and changing international scenarios, which complicate any attempt to ‘pigeonhole’ policies with ‘either/or’ choices. Washington has emphasized the subversive influence of Venezuela and Cuba in weakening US dominance in Latin America. A far more important factor is the across the board rise in commodity prices of goods which are major export earners for Latin America. This means that the Latin American countries have less need to rely on IMF ‘conditions’ for securing loans, thus severely limiting US political leverage. Secondly the greater liquidity means that commercial loans can be secured without resorting to the World Bank, another instrument of US influence in Latin American political and economic policy making. Thirdly the rapidly expanding markets in Asia and particularly the growth of Asian investment in Latin America’s extractive industries has further eroded US ‘market leverage’ in Latin America over and above what Washington possessed in the 1990’s. Fourthly with the slowdown of the US economy in 2007, the US is expected to lessen its investments and trade with Latin America. In other words, Washington has less market leverage over pragmatic leftists and neo-liberals than it possessed during the 1990’s. To continue to act in the late-2000s as if Washington’s relative loss of influence reflects the ebb and flow of political forces (radical populism) within the region is to pursue failed policies. Mislabeling regimes and exaggerating the degree and kind of opposition leads to the exacerbation of conflicts. Furthermore for Washington to persist in believing that it can secure continent-wide free trade agreements based on non-reciprocal concessions (particularly in agriculture) is to lose out on opportunities for trade deals.

Washington’s over-politicization and ideological labeling of changes in US-Latin American relations is a result of the ultra-conservative configuration of policymakers and their principal advisers in Washington.

If Washington has grossly misrepresented Latin American political reality and misreads the current regional and international context, the Left is hardly more prescient. Leftist intellectuals exaggerate the radicalism or revolutionary reality of Cuba and Venezuela. They overlook the contradictory realities and their pragmatic accommodations with neo-liberal regimes. The Left, with little historical perspicacity, continues to categorize pragmatic neo-liberals like Lula, Kirchner and Vazquez as ‘progressives’, lumping them together with pragmatic leftists like Chavez, Castro and Morales. In many cases they characterize parties and regimes based on their past leftist political identities rather than their current free market, pro-agro-mineral elite policies. The Left confuses the pragmatic neo-liberal regimes’ efforts to negotiate symmetrical free market trade agreements with the US as some sort of ‘anti-globalization’ policy or as a ‘counter-weight’ to US power.

The Left has to face up to the fact that while US power has declined relative to the ‘Golden Age of Pillage’ during the 1990’s, it has recovered and advanced since the mass rebellions and overthrow of client regimes of 2000-2002. The hopes that the Left had that the presidential victories of former center-left electoral parties in Brazil, Uruguay and Argentina, would augur a reversion of the neo-liberal policies of their predecessors have been demonstrably dashed. The attempt to redefine the conversion of the ex-leftist-turned-pragmatic neo-liberals into something progressive or as a ‘counter-weight’ to US power is ingenuous at best and at worst compounds the initial error. The Left’s lack of political clarity regarding political changes has led it into a blind alley as damaging to its future growth as Washington’s failed efforts to recognize the new realities.

While US power over Latin America has declined since the 1990’s it has not been a linear process, a sharp fall has been followed by a partial recovery. The decline of the US has not been matched by a sustained rise in the power of the radical left. The real ‘gainers’ have been the pragmatic leftists and neo-liberals who rode to power with the demise of the doctrinaire neo-liberals and the favorable expansive conjuncture in world market conditions. There are neither inherent long-term ‘laws of imperial decline’ as some Leftist historians claim, nor ‘an end of the revolutionary left’ as their neo-liberal counterparts claim. Rather a realistic analysis demonstrates that political interventions, class conflict and international markets play a major role in shaping US-Latin American relations and more particularly the ascent and decline of US imperial power, social revolutionary forces and the other political variants in between.

March 2007