Latin America Looks Left

How will Washington respond to this new populist wave?

| July / August 2003

LATIN AMERICA is at a crossroads. Driven by a deepening economic crisis that many blame on the harsh policies of Western lending institutions like the International Monetary Fund and the World Bank?which increasingly call for governments to divest from industry and to privatize public services like water, electricity, telecommunications, transportation, and health care?populist movements are gaining ground throughout the region.

Beginning with the election of Venezuelan president Hugo Chavez in 1998 and again in 2000, and followed last fall by the upset victories of Luiz Inacio ?Lula? da Silva in Brazil and Lucio Gutierrez in Ecuador, governments across Latin America have begun to turn left. Lula even joked last December that Brazil, Venezuela, and Cuba constituted a new ?Axis of Good.?

These electoral gains are only one sign of political changes taking place, much of it sparked by the failure of free-market economic policies. Levels of unemployment, poverty, and public debt are soaring throughout the region, even with severe cutbacks on social spending and the IMF-ordered privatizations of state-owned industries, writes economist Mark Weisbrot in Connection to the Americas (May/June 2003), published by the Minneapolis-based Resource Center of the Americas. And though it may be years?if ever?before most Latin American governments abandon the ?Washington consensus? economic policies that swept the region in the 1990s, grassroots revolts are already catching fire in the streets and rural areas.

Here?s a brief look at some of the developments taking place outside the mainstream U.S. media?s gaze:

Argentina: Thirteen years ago, workers began taking over and reopening idle factories. After the country?s spectacular economic collapse in early 2002, an average of three factories per month have come under worker management. Now, more than 120 worker-operated factories across the country employ 12,000 people, producing everything from ceramics to clothes to metallurgical supplies.

Bolivia: In early 2001, the municipal government in Cochabamba sold the management contract for the city?s water system to a subsidiary of U.S. construction giant Bechtel, which raised water bills by as much as 300 percent. Riots broke out, and after four months of civil strife the government canceled the contract. Bolivia?s ?water war? is widely viewed as a watershed moment in the region?s resistance to the IMF?s privatization programs and has emboldened activists to challenge other IMF policies. In February, police officers in La Paz protesting an IMF-ordered income tax hike clashed with the army in a melee that left 13 people dead. This populist momentum nearly translated into a major upset in the March presidential election, in which socialist coca farmer Evo Morales, an Aymara Indian, finished a surprisingly strong second to right-wing incumbent and businessman Gonazalo Sanchez de Lozada. The vote was close enough that Bolivia?s congress has been left with picking the next president.

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