GLOBAL ECONOMIC VIEWPOINT
IN LATIN AMERICA, DEMOCRACY IS LOSING LEGITIMACY --ALL OVER AGAIN
By Alvaro Vargas Llosa
Alvaro Vargas Llosa, a Peruvian journalist and co-author of ''Manual of the Perfect Latin American Idiot,'' is currently working on a book about Latin America.
LIMA, Peru -- The Bush administration seems to have a much clearer picture about what is wrong than about what is right in Latin America. The continuing pressures on Cuba and expansion of help to dissidents and broadcasts to the island is at least an indication of policy against the dictatorship. And the recent increase in military aid to Colombia, whether right or wrong, is an indication of policy against terrorists and drug traffickers.
But as far as encouraging the right kinds of people and policies within Latin America, the administration is not so hot. The lukewarm effort to have the Andean Trade Preference Act approved is not only due to the fact that it is bundled with the president's controversial fast-track authority request on trade agreements. In light of recent protectionist U.S. steel tariffs and farm subsidies, it is clear that the Bush administration does not realize that the huge wave of political and social unrest across the continent means it is time to stop paying lip service to policies that are systematically undermined in real life.
It would help if policy-makers really understood the causes of this unrest.
In the last two years, four Latin American governments have been toppled by popular uprisings, although in Venezuela a ''counter-coup'' with farcical touches restored President Hugo Chavez to power.
In Ecuador, an Indian revolt against the adoption of the dollar as official currency triggered a coup by Vice President Gustavo Noboa against President Jamil Mahuad (the dollar currency survived).
In Peru, popular insurgence threw Alberto Fujimori out of power. Alejandro Toledo won the elections, but the perpetuation of past habits -- political persecution, corruption scandals, lack of reform -- have led to nationwide protests that threaten his regime.
In Argentina, President Fernando de la Ru a inherited a $10 billion dollar fiscal deficit from Carlos Menem, and an over-regulated environment, with 16 percent unemployment, under a currency board monetary system incompatible with such imbalances. The people expelled him from power, and the man who has ended up as president, Eduardo Duhalde, is himself hanging on to power by a thread.
In Venezuela, Hugo Cha vez put an end to four decades of democracy with traditional party rule born out of the Punto Fijo accords of 1958 -- a period rich in corruption, pork and fiscal irresponsibility. But Cha vez tried to assume near-dictatorial powers and to establish a quasi-socialist economy by decree. His government collapsed after people took to the streets, though it quickly regained power.
What are the lessons of this succession of political cataclysms that seems to owe so much to magical-realist literary tradition? There are two, one positive, the other negative.
First, the bad news: Latin America has not reached puberty, despite what investment bankers and some Western governments would have had us believe during the 1990s.
Latin America is still in its mischievous, self-destructive infancy. It mirrors its own stereotype. The economy, which in the 1990s grew slightly more than it did in the 1980s, but only half of what it grew in the 1970s, has not reduced the poverty which affects 50 percent of the population. So democracy -- which held out the promise of economic well-being -- is losing legitimacy all over again.
And now the good news: For the first time in Latin America's history, an embryo of civil society is developing. It lacks clear leadership, and it does yet not carry a cogent message, but it is a force against the status quo, the political and business elites.
This civil society force is not yet armed with a specific government blueprint. It is a republican-like movement against monarch-like presidents and systems of privilege, without a well-formed idea of how to give institutional shape to that libertarian instinct of opportunity and participation. That is why, confusingly, there is also a touch of socialism in some dimensions of that loose movement.
Although directed against specific governments, these uprisings aim at the way power has been exercised for decades in Latin America. It is the political counterpart of the silent revolution undertaken by the informal entrepreneurs of the economy, who now account for 60 percent of the man-hours worked but, because of low productivity resulting from that very system they reject, only around 35 per cent of the GDP.
People are realizing the solutions they once supported are as bad as the preceding problems. Chavez spearheaded a revolt against the traditional political culture of a country that wasted $250 billion in oil revenues in the past 20 years. The traditional Venezuelan political parties, Accio n Democra tica and Copei, and a closely knit business elite, enjoyed those golden years to the last drop with a web of monopolies, tax exemptions and exchange differentials. The Cha vez phenomenon was the response. But he made matters worse. So the people are now questioning the whole system, not just the old faces.
An old era -- begun in 1980 with democratization and continued through the 1990s with insufficient reforms that strengthened power enclaves while reducing inflation and lowering trade barriers -- is coming to a close. Opportunities were opened during those years, not to the poor, but mainly to the privileged few who benefited from monopolies through crony privatizations that contradicted the stated aim of fostering competition, lowering prices and encouraging a new business class (privatization has slowed dramatically since 2000, when there was a 58 percent drop in the sale of state assets.
This cumulative frustration has driven people to set up all sorts of civic organizations -- from groups formed by Buenos Aires neighborhoods to the networks of hundreds of thousands of destitute women whose principal aim is to channel state aid in Lima but which have shown enormous managerial skill without government direction.
The great question is: Which of the two lessons of the recent upheavals will prevail? If it's the negative one, confirming our stereotype of political and economic chaos, this nascent civil society will end up unwittingly bringing the military back.
If it is the positive one, that is to say, if a constructive force brings to the decision levels of these countries a clear vision that puts no limits to the creativity and capacity of those that have been left out thus far, then it may not be too late to start all over again.
(c) 2002, Global Viewpoint. Distributed by Los Angeles Times Syndicate International, a division of Tribune Media Services.
For immediate release (Distributed 5/21/02)