The Return of the Repressed?

South America in the Age of US Supremacy

by Jorge Rogachevsky

Resist newsletter, July / August 2002

A t this time, South America finds itself steeped in the quagmire of its own historical failures, a situation fraught with both promise and danger. Economic chaos could give way to social chaos and ultra-right political shifts. On the other hand, new alternatives for progressive social change could emerge, at a time when few such options appear to be taking root anywhere else in the world. The United States will certainly play a key role in any future developments, just as it holds significant responsibility for the failures of the past.

Three South American societies-Argentina, Colombia, and Venezuela-show the overall limitations of US policy towards Latin America. Each in its own way threatens to dismantle the post-Cold War policy framework developed by the United States.

US Historical Role as Co-Conspirator

To understand the present and what the future might bring, it's important to recapitulate the role of the United States as a co-conspirator in the history of atrocities that precedes the current moment.

In the 1970s, an unprecedented challenge to US hegemony in Latin America appeared. In South America, 1970 saw the election of Salvador Allende, a Socialist heading a left-wing coalition. Three years later, Argentina's military rulers had to give

way and allow the installation as president of strong-man Juan Domingo Peron, after almost 20 years in exile. Little links Peron and Allende directly, except that historically both represent, from opposite poles, a populist and nationalist resistance to US control of Latin America's economic and social resources.

The United States could have taken numerous paths to confront these challenges. In Chile, for example, the United States could have accepted the democratic will expressed by its people, and looked for ways to engage constructively the government of Salvador Allende, a highly cultured, principled, and democratically-minded political leader.

This was not the path chosen. Starting with the overthrow of Allende and his replacement with the brutal Pinochet dictatorship in 1973, the United States decided to fight the revolutionary fire spreading through Latin America by throwing dynamite on the flames. The result was an unprecedented wave of repression m a continent with a long and sad experience of dictatorial rule. More than 3,000 people were disappeared and killed in Chile according to official accounts.

As military rule spread from Guatemala to Tierra del Fuego, progressive social movements were dismantled, and revolutionary movements were stymied.

In the 1980s, though, new dangers manifested themselves, as the remedy used to fight the "disease" of social transformation began to have unintended side-effects. Military corporatism was unstable. It could tilt towards left-leaning populism, as was the case with Omar Torrijos in Panama. It could also embrace right-wing nationalism, as the pampered Argentine military demonstrated. To stem a wave of increasing domestic unrest, the Argentine military decided to cash in its chips after having perfected the dirty war in the Southern Cone and then moving on to train and advise the Guatemalan army and the Nicaraguan contras, by invading the Malvinas in 1982. It took a full-scale war mobilization on the part of the British-and major US intelligence support-to put the Argentine military in its place.

That place, however, could no longer be as guarantors of the Pax Americana. Moreover, as the Cold War reached its whimpering climax, it would hardly do for the United States to promote "democratization" in Eastern Europe while tying itself to some of the most murderous governments on earth; neither was it sound policy to continue investing US resources in militarizing Latin America and stifling not only dangerous social change but also profitable economic activity. The US slowly distanced itself from its former military allies and promoted a process of pacification and democratization.

For the US government, the 1990s became the era of self-congratulatory posturing. The sudden and profound collapse of the former Soviet Union left the United States as the sole military and economic superpower. With progressive social change effectively suppressed in Latin America, the United States supported democratic rule, which favored the return to power of the traditional managerial political class or the traditional economic elites, both of which sectors would ally themselves with neo-liberal economic policies.

The elements of the neo-liberal formula were tightly interrelated:

1) Fight inflation by reducing government spending and maintaining tight monetary controls;

2) Reduce spending by decreasing public services and reducing government employment; 3) Increase competition by divesting the state of the public sector and reducing or eliminating tariffs and duties;

4) Reduce the leverage of the labor movement by reducing the size of the public workforce and creating greater competition for jobs; 5) Promote investment confidence by reducing the cost of labor, maintaining tight monetary controls, and granting major tax concessions;

6) Fill in any threatening cracks in the neoliberal economic dike through a major program of state borrowing facilitated by the implementation of measures 1-5.

That formula had led to the so-called "economic miracle" in Chile, and the US promoted it as the cure for a century of economic woes in Latin America. And, for a generation of technocrats uplifted by Mary Poppins' intonation that "a spoonful of sugar makes the medicine go down," the neo-liberal medicine was coated with a veneer of democracy. It became a self-affirming mantra of US officialdom in the l 990s, and into the beginning of this new century, that Latin America was now safely ensconced within the democratic camp (with the salient exception of Cuba, of course).

This highly self-serving and optimistic assessment has been severely tested in the first months of the new century.

Colombia

Colombia is in the throes of the longest-lasting military conflict in the Americas, a civil war that began almost 40 years ago. Of the four major armed sectors in Colombia today, the largest is the security apparatus, consisting of about a quarter million troops distributed among the military branches and the National Police. Confronting this apparatus are two major guerrilla organizations: the FARC (Fuerzas Armadas Revolucionarias de Colombia) numbers 15-20,000 armed combatants, the ELN (Ejercito de Liberacion Nacional) has approximately 5,000 troops.

In addition to these more "traditional" combatants, paramilitary organizations begun to crop up in the 1980s under the payroll of drug traffickers. Despite being declared illegal in 1989 due to their extreme brutality, these forces have continued to grow, and in 1997 merged into a unified command known as the AUC (Autodefensas Unidas de Colombia), with approximately 8,000 combatants. The AUC is the fastest growing armed group in Colombia, and by far the most bloodthirsty. Even though all combatants in the Colombian conflict are accused of carrying out atrocities, the Colombian Commission of Jurists found that the paramilitaries were responsible for 79 percent of the deaths and disappearances of non-combatants in 2000, compared with 16 percent for the guerrillas and almost 5 percent for the military.' (The relatively low level of atrocities directly ascribed to the Colombian military is not a signal of its adherence to human rights principles; even the US State Department has acknowledged that there is often significant cooperation between military officers and the AUC.) In 2000 alone, over 26,000 people died as a result of the violence, or I out of every 1,500 inhabitants; a comparable death rate from terrorist activities for the United States would have produced 187,000 victims in this country. Given the staggering level of violence that the protracted armed conflict in Colombia has generated, and the very real danger that the spiral could generate even greater levels of atrocities, one might hope that the US government would search for a peaceful resolution to the decades-long war. And in fact this is what the State Department itself proposed in a May 17,2001 report:

Support for the Colombian peace process remains a vital element of US policy. Despite the slow progress made to date, the peace process represents Colombia s best chance to escape the forty-year cycle of violence. A military solution is not a viable option, as Colombia s armed forces are not strong enough to defeat these groups of irregular forces with increasing income from drug trafficking.

However, the last thing on the agenda, in Washington and in Bogota, is negotiating with the rebels. The lame-duck government of President Andres Pastrana broke off negotiations with the FARC last February and with the ELN in May. Each side assigned the other with responsibility for the breakdown of the peace process. In May, Alvaro Uribe Velez won the election after campaigning on a hard-line policy of escalating the war against the guerrillas. Uribe, who is to become president on August 7, 2002, is reputed to have received support from the AUC during his campaign. At the same time, the Bush Administration is set to fuel the Colombian fires even further. On July 2, Otto Reich, Undersecretary of State for Latin American Affairs, asserted that Uribe will need "to take the war to the guerrillas," according to the Los Angeles Times. The United States has already contributed almost $2 billion to Colombia's military in the past five years, and Bush has asked Congress for upwards of $500 million more for 2003. Colombia is the third largest recipient of US military aid. In addition, the Bush administration has asked Congress to expand the anti-narcotics focus of funding to include anti-terrorism.

These elements are familiar. In Colombia, the United States is following its Central American policies from the 1980s, fighting fire with dynamite. Given the regional context surrounding Colombia, it becomes clear why the United States has set its sights so closely on that nation.

Just to the north lies Panama, still a major trade and strategic resource for the US. Wounds of the senior Bush Administration's invasion of Panama in 1989 are still very much open inside that nation. To the south lies Ecuador and the promise of major oil reserves. Ecuador has experienced severe economic and social disruptions that have brought about an ongoing political crisis. No president has served out a normal four-year term since 1996. The current president, Gustavo Noboa, came to power after a highly organized indigenous sector helped force the resignation of the elected head-of-state, Jamil Mahauada. And to Colombia's east lies Venezuela, the third largest supplier of oil to the United States, and a country facing significant social upheaval.

Venezuela

Venezuela presents a different challenge to the United States. If Colombia replays the scenario made familiar in Central America, Venezuela, in the figure of the current president, Hugo Chavez, harks back to the tradition of nationalist, charismatic, ex-military leadership. Chavez is treading the path of the aforementioned Trujillo and Peron, looking to forge a policy independent of Washington's dictates and working on a foundation of grassroots support as leverage to internal elite opposition.

Hugo Chavez came to prominence in 1992 when, as an officer in a paratroop regiment, he led an attempted coup against the highly unpopular government of Carlos Andres Perez. Perez's second presidential term had begun inauspiciously in February 1989, when he attempted to implement austerity measures imposed by the International Monetary Fund (IMF). Ensuing riots left 277 civilians dead. Subsequently, the Perez administration was accused of corruption. In 1993, the Attorney General indicted the president for misappropriation of funds. The Supreme Court removed Perez from office so that he could be tried, and he was eventually found guilty.

Hugo Chavez spent two years in jail for his participation in the failed coup attempt.

However, the popularity of the attack against a broadly reviled old-camp politician was demonstrated in 1998. Chavez won the presidency of Venezuela with 56 percent of the vote. He then moved quickly to capitalize on his momentum and charisma to push forward his "Bolivarian Revolution." Chavez called for a Constituent Assembly to draft a new constitution, and his supporters gained 121 out of 128 seats in the assembly. In 2000 Chavez was reelected under the new constitution, this time receiving almost 60 percent of the vote to begin a six-year term.

Like Peron, Chavez seems to be attempting to implement a policy of independence from Washington, looking for allies where he can find them. When released from prison in 1994 he visited and was warmly received by Fidel Castro in Cuba; the two maintain a warm relationship. After winning his second bid for the presidency, Chavez was the first head-of-state since the Gulf War to visit with Saddam Hussein in Iraq. Domestically, Chavez has consolidated his government by implementing the constitutional revisions, maintaining grassroots Bolivarian committees, reshuffling key executive appointments, as well as promoting tepid economic reforms in contrast to a more combative rhetoric. James Petras, well-known Latin American scholar, has summed up Chavez's reforms as follows:

The key point to remember is Chavez s record on domestic policy. He's increased spending for housing, schools, and health. He s increased income by a small margin-3 or 4 percent. He s increased taxes to some limited degree so that the upper classes pay something, rather than nothing.

But for all this, he has also deregulated the financial system. Spanish banks have become very involved in the deregulated system. He privatized Caracas s [sic/ electrical system. US oil companies haven't been hindered- they pay slightly more on the petroleum tax. In other words, there s been no radical or even moderate redistribution of income. There has been no expropriation of any property-except unutilized farmland that s paid for in cash. That s about the most conservative land reform you'll see anywhere in Latin America-market prices for the land, paid in cash.

Despite this moderate program of economic reform, Chavez has generated unyielding opposition from Venezuela's economic elite. Quoting Petras again:

Chavez is a nationalist in foreign policy and a social liberal in domestic policy. From year one, he has been in favor of class collaboration. The opposition isn't interested in any kind of class collaboration-they want it all. The Venezuelan opposition is in a position to reject any kind of collaboration with the Chavez government precisely because the latter's nationalist foreign policy has put him on a collision course with Washington. Despite the lip-service given to the support of democratic leadership in Latin America, and Chavez's unquestioned credentials as a democratically elected leader, the US government has put out very clear signals that his ouster by undemocratic means would find favor.

Such a scenario played itself out on April 11. After months of conspiring, much of it done through meetings at the US embassy in Caracas, an anti-Chavez rally turned violent and culminated with the death of 14 protesters. The Chavez opposition saw an opportunity to act and, with expectations of support from the Venezuelan military and the US government, quickly moved to arrest Chavez and declare an end to his government and the Bolivarian Revolution. Washington, in fact, did play its assigned role, with statements blaming Chavez and indicating support for his ouster.

The coup quickly unraveled, though. Externally, Latin American leaders, then meeting in Costa Rica, sharply rebuked the undemocratic ouster of Chavez. In a rare sign of independence, Latin American politicians, including Bush's strong ally, Vicente Fox of Mexico, broke with Washington in a very public manner. This swift, strong action ensured that Washington's statements of support of the new government in Caracas never turned into direct recognition.

Internally, the new government, headed by Pedro Carmona, head of the business confederation Fedecamaras, overplayed its hand, dismissing the National Assembly and the Supreme Court and declaring void the 1999 constitution. Carmona's heavy-handedness apparently alienated his military backers. They began to move away, allowing Chavez supporters within the armed forces to regroup and mobilize. At the same time, Chavez's grassroots supporters within the lower classes came out in mass to counter the middle-class opponents who had staged the April 11 march. All of these fast-moving developments led to Chavez's reinstatement on April 13.

Since then, the situation has continued to be highly charged. After Chavez reassumed office, Bush Administration officials sent out public warnings that it was best for him to mend his ways. Former US president Jimmy Carter traveled to Caracas in early July, 2002, to mediate between the factions. But despite Chavez's offer to allow the Organization of American States and the United Nations to participate in further mediating efforts, the opposition failed to turn out to discussions sponsored by Carter. As part of the failed Carter-led discussions, Chavez had offered to the opposition that he would allow his presidency, which is not set to expire until 2006, to be placed before a referendum in 2003.

Opposition to Chavez continues to press on. A July 11 rally to commemorate theApril 11 events brought out as many as 200,000 people; this time no violence erupted. The Venezuelan Supreme Court has also used a loophole in the law to open the way for Chavez's possible indictment for alleged campaign financing irregularities. And, the main labor confederation, the CTV (Confederacion de Trabajadores Venezolanos) is reaching out to the Church, the political opposition, and business and academic groups to promote a call for a national strike to press for Chavez's resignation. Meantime, Chavez is calling on his supporters to come to his defense.

It is unclear how much longer Chavez will be able to traverse the political minefield placed at his feet. If he can weather the current crisis, fend off the internal opposition, consolidate his support within the armed forces, keep Washington at bay, and reinvigorate his popular backing, he will have emerged stronger for having been tested in this fashion. It will then be seen whether he can take the next step and move beyond his nationalist and populist rhetoric to promote a program of radical social reform.

Argentina

Meanwhile, at the far end of the continent, in Argentina, unprecedented crisis and potential have emerged, as the second-largest country in South America and in the 1990s the darling of the neo-liberal prophets-has run aground economically.

In the 1990s, Argentina moved to stem one of the worst cases of hyperinflation in history by pegging the peso to the dollar. At the same time, it followed the IMF prescription of privatizing its state sector and significantly reducing public spending. But, after an initial influx of capital from privatization, the Argentine economy begun to stall as it experienced the reverberations of economic shocks in Mexico, Asia, Russia, and Brazil. As investment capital began to dry up, and Argentine exports suffered due to an overpriced peso, the Argentine government of the Peronist Carlos Menem parlayed its good relationship with Washington and the IMF into government loans intended to prop up its sagging economy-generating a foreign debt of $132 billion, the largest in the world.

Borrowing from Peter in order to pay Pablo was a sure formula for Argentina to secure short-term solvency by delaying an inevitable financial collapse. The collapse hit in December 2001. Even though IMF-imposed austerity measures had generated an official unemployment rate of around 20 percent, IMF pressures continued. Despite Argentine government pleas to ease up and provide short-term relief in the form of capital it could use to service an impending debt payment, the IMF continued to apply a political and economic tourniquet. Neo-liberal pundits in the United States went on the attack, declaring that the Argentine crisis was due to a profligate population that was unwilling to tighten its belt and meet its debt obligations.

Backed into a corner, and facing severe capital shortage and a run on the banks that had generated over $1 billion in withdrawals at the end of November, in December the Radical Party government of Fernando de la Rua imposed a limit on bank withdrawals of 250 pesos a week. The government also announced that privatized pension funds would be replaced by government bonds in order to free up capital to continue servicing the debt. These measures provoked the middle class to join the working class, whose leadership had called for a general strike in mid-December.

Massive unrest broke out in Argentina's major cities on December 19, leading to de la Rua's resignation on December 20 when the army refused to come out in support of his government. After ten tempestuous days that saw the exit of three provisional presidents, Congress selected Peronist Senator Eduardo Duhalde, de la Rua's main opponent in the 1999 elections, to complete de la Rua's term. Duhalde, however, has been equally unable to stem the economic collapse and the popular unrest. He did win concessions from provincial governors to reduce transfers from the national budget, but the IMF has continued to maintain pressure, announcing in early July that a team of advisors would travel to Argentina at the end of the month to suggest ways of reforming the banking sector, but refusing to extend hope that a new influx of capital would be forthcoming.

The Bush administration appears intent on maintaining a hard-line policy, intoning the neo-liberal mantra that Argentina's problems are its own fault. Not so, according to Columbia University professor Joseph Stiglitz, former vice-president and chief economist at the World Bank, and winner of the 2001 Noble prize in economics:

The disaster comes not from not listening to the IMF, but rather from listening.... Given the exchange rate, given the economic depression which the IMF policies had already brought about, given the huge debt, given that the IMF did not provide any convincing economic strategy to get out of the mess, given that there were open capital markets so that anyone who wanted to could move their investments to safer havens elsewhere in the world, it was highly unlikely that anyone-especially when the government signed an agreement to reduce its deficit further, predictably causing more unemployment and lower output-would start investing more.

Given the absence of new capital resources, Argentine bank deposits have remained frozen. Many in the middle class have lost most of their life-savings, and the devalued peso has lost more than 70 percent of its value since the beginning of 2002. With greater austerity measures signaled, the working class, and in particular the unemployed, have also been severely hit. The one bright light in the cavernous pit into which Argentine society has fallen is that the mobilization which brought down the de la Rua government in December has remained unabated. Currently, the government is experiencing a wave of recurrent actions as a result of the death of two unemployed youth in a confrontation with police during a protest action on June 26. On July 9, Argentina's Independence Day, 35,000 people marched on the Plaza de Mayo, where the president's palace is located. This was the second mass demonstration in as many weeks, with a third one called for the third week in July. These demonstrations have brought together sectors of the labor movement, the unemployed, human rights groups, left-wing political parties, students, and neighborhood committees which emerged from the December mobilizations.

There are also ongoing expressions of a developing alliance between "piqueteros y cacerolas" (strikers and potters-the latter referring to the practice of middle-class housewives of banging pots as a sign of protest which originated in Chile against the Pinochet regime), calls for "una segunda independencia" (a second independence movement), and the removal of president Duahlde and the IMF. Given this ongoing pressure, Duahlde, with the clear backing of the Bush Administration, has called for early elections in March 2003 to release some pressure from the cooker.

What Lies Ahead?

It is unclear where Argentina's deepening political and economic crisis, combined with mounting popular mobilization, will lead. So far, the military has remained at the margin, but, as is clear in Colombia and Venezuela, the Bush Administration's commitment to peace and democracy in Latin America is an easily discarded rhetorical posture. Will the growing unrest in Argentina lead to the development of a broadbased grassroots political movement that will challenge the political and economic status quo? What response would be generated from the Argentine oligarchy, political class, military, and the US government? And what will be the impact from other regional developments, in particular the October elections in Brazil, where Worker's Party candidate, Luiz Inacio Lula de Silva (Lula) is the front-runner? The unpredictability of current circumstances suggests that there is much to watch for in Argentine developments.

Colombia, Venezuela, and Argentina- each in itself, and all three together- clearly point to the imminent potential for deepening conflict in South America. They also raise the possibility that a new century may indeed bring about a new beginning for people in Latin America.

Jorge Rogachevsky is a member of RESIST's Board of Directors and teaches Spanish and Latin American Studies at St. Mary s College of Maryland.

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