Is boom, then slump, behind fiery Latin American protests?

Economic concerns have seen thousands take to the streets of Chile, Bolivia, Haiti and Ecuador in the past month.

Chile protests
Discontent with gaping inequality has erupted into violent protests in Chile and elsewhere in the region [Edgard Garrido/Reuters]

Chile is one of the richest countries in the region. Haiti is the poorest. Ecuador has a centrist government. Bolivia‘s is socialist.

Yet, from Port-au-Prince to Santiago, furious demonstrators have been marching to demand fundamental change, part of a wave of often-violent protests that has set tires, government offices, trains and metro stations ablaze across Latin America and the Caribbean.

What is driving these protests that are thousands of miles apart, across countries with profoundly different politics, economies, cultures and histories?

One important factor: Despite their differences, the countries hit by fiery protests this month saw often-dizzying commodity-driven growth in the first decade of this century, followed by a slump or stall as prices dropped for key exports.

Even Haiti, its own economy largely stagnant, saw billions in aid from oil-rich Venezuela flood in, then disappear.

That pattern of boom then slackening is a dangerous one for less-than-agile leaders. It expands the middle class, making citizens feel entitled to receive more from their governments, and empowered to demand it. It also sharpens the sense of unfairness for those left out of the boom, who see neighbours prospering while they stand still or slide backward.

Chaos in the oasis

Chile, the world’s largest copper producer, boomed from 2000 to 2014 before growth dropped off. The average Chilean still earns roughly $560 to $700 a month, income that makes it hard for many to pay their bills.

Then, last week in Chile, an independent panel implemented a four-cent subway fare increase that the federal government initially said was needed to cope with rising oil prices and a weaker local currency. For thousands of Chileans, it was a final indignity after years of struggling as the country prospered.

Clashes wracked Chile for a sixth day Wednesday, with the death toll at 18 in an upheaval that has almost paralysed a country long seen as an oasis of stability.

Chile protests
Deadly protests in Chile have seen the military on the streets for the first time since its return to democracy [Ivan Alvarado/Reuters]

“People went out to protest because they feel the government cares more about the wealthy, and that social programmes help the very poor but the rest of the population is left to care for themselves,” said Patricio Navia, an adjunct assistant professor at the Center for Latin American and Caribbean Studies at New York University.

“They are not poor enough to get government subsidies, nor rich enough to get government tax credits. They revolted to make their voice heard.”

Marta Lagos, the Santiago, Chile-based director of the polling firm Latinobarometro, said Chile’s growth rates hid the over-concentration of wealth in the hands of the elite.

Austerity woes

Like Chile, oil-rich Ecuador saw a steep rise in its gross domestic product (GDP) as oil topped $100 a barrel and President Rafael Correa built airports, universities and multi-lane highways. Then oil slumped, leaving Ecuador with billions in debt and a steep annual budget shortfall.

Correa’s successor, Lenin Moreno, took out a three-year $4.2bn credit line from the International Monetary Fund (IMF) and this month announced a $1.3bn austerity package that included the elimination of fuel subsidies and a resulting sharp rise in gasoline and diesel prices.

That sent Ecuadorians to the streets, led by the country’s well-organised, mostly rural indigenous peoples, many of whom are subsistence farmers who saw little to no benefit from the boom years.

Ecuador protests
The removal of fuel subsidies sparked days of violent protests in Ecuador’s capital, Quito [File: Henry Romero/Reuters]

As a law professor, Mariana Yumbay is better off than most residents of Ecuador’s mountainous Bolivar province, where people raise corn and potato or herds of cattle, pigs and sheep.

Even as Ecuador prospered under Correa, indigenous farmers in Bolivar depended on rainfall because they have no irrigation networks, she said. More than 40 percent of children are malnourished and many people live on about $30 a month.

“Unfortunately the state hasn’t had a policy of steering economic resources to pull indigenous people and farmers out of poverty,” Yumbay, 46, said this month as she protested outside Ecuador’s National Assembly.

Moreno ended the protests by agreeing to restore the subsidies, a solution that analysts said left him weakened and facing the same economic troubles that loomed before nearly two weeks of often-violent protests.

The region’s poorest revolt

Haiti was worse off than any other country in the region at the start of the new century but saw an infusion of billions of dollars in highly subsidised oil from Venezuela starting in 2009. Another factor at play in Haiti: the flood of international aid after the country’s devastating 2010 earthquake.

When oil slumped and Venezuela’s economy collapsed, the subsidised fuel ended, and the already-impoverished island suffered regular gasoline shortages. Investigations by Haiti’s senate and a federal auditor alleged that government officials had embezzled and misappropriated billions in proceeds from the Venezuelan programme known as Petrocaribe.

Fuelled partly by a group of internet-savvy young Haitians known as the Petrocaribe Challengers, street protests erupted that organisers say will not stop until President Jovenel Moise leaves office.

Haiti protests
Haitians have been protesting for months, demanding their president’s resignation [Andres Martinez Casares/Reuters]

In Bolivia, President Evo Morales has had 14 years of low inflation and strong GDP growth of four percent a year on average, thanks largely to earnings during the commodities-boom years. In recent years, the country’s income from natural gas sales has been dropping due to falling prices, drops in reserves and less demand from Brazil and Argentina.

Experts say the Bolivian economy is looking increasingly fragile. Against that backdrop, the popularity that Morales won for his economic management and infrastructure investment has been weakened by corruption scandals in his administration and his insistence on seeking re-election despite losing a referendum on the issue.

After allegations of fraud in the Sunday election, protests multiplied across Bolivia outside vote-counting centres this week. Rioting was reported in at least six of Bolivia’s nine regions, and in the national capital of La Paz, police used tear gas in attempts to quell fighting between supporters of Morales and opponent Carlos Mesa outside a vote-counting centre. Protesters threw firecrackers and stones.

Morales’s opponents burned election offices and ballots in several cities and called for a strike. On Wednesday, Morales said his opponents are trying to stage a coup.

Bolivia protests
Protesters are questioning the legitimacy of Sunday’s presidential election in Bolivia [David Mercado/Reuters]
Source: AP