Latin America’s left at the crossroads

Leftist governments in Latin America are facing resistance not only from the right, but from their own bases, as well.

Income inequality rose under Brazilian president Luiz Inácio Lula da Silva [GALLO/GETTY] 

The triumph of left-leaning former army officer Ollanta Humala in Peru’s presidential elections this past June has observers wondering if Peru could be the latest “Pink Tide” country in Latin America. The so-called Pink Tide refers to the ambiguous turn to the left in recent years in several Latin American countries. The neo-liberal model that has changed the face of the continent’s political economy and devastated the poor and working classes over the past two decades has come under challenge by these nominally left governments, whose populist and redistributional policies, however, may now be reaching a crossroads.

At his victory rally after winning the presidency, Humala has promised to tax mining profits and generate social programmes for the poor. “We’ve been waiting a long time for a government that really cares about the poor,” he said. International investors have previously pledged more than $40bn over the next decade to develop gold, silver, copper and other mining operations in rich Andean and Amazonian lodes. No longer will the government cater to a Lima elite that sells transnationals these mineral riches that comprise 65 per cent of Peru’s export earnings, said Humala. “This has got to change, and it’s for this change that I am here. That is why I got into politics.”

Humala faces pressure from below to carry through on these commitments. For several weeks during the Peruvian electoral campaign thousands of indigenous people blocked an international border between Peru and Bolivia in protest over a planned mining project on the shores of Lake Titicaca, which straddles both countries. The outgoing Peruvian government granted a Canadian mining company rights to build a silver mine near the lake that local communities say will poison the lake, their principal source of water. The indigenous have promised to sustain and expand their mobilisation.

Pink Tide governments

Pink Tide governments have faced increasing popular protests as well as challenges from a resurgent right. The most serious of these challenges took place in Ecuador last year, in an abortive coup d’état against President Rafael Correa. In Venezuela, just days before the putsch in Ecuador, the anti-Chavez right made major gains in mid-term elections. And in Bolivia, workers and indigenous communities have launched several mass strikes over the past year in protest over the policies of President Evo Morales. These events underscore the conundrums of the projects of popular social change proposed by the Pink Tide governments and the social movements that brought them to power. These governments are now coming up against the limits of redistributive reform within the logic of global capitalism, especially in the wake of the global crisis that exploded in 2008.

The Ecuadoran Right and the US would certainly like to see Correa removed from power. He has closed the US military’s Mantra air base in Ecuador – declaring that “We can negotiate with the US about a base in Mantra if they let us put a military base in Miami” – successfully defaulted on $3.2bn of foreign debt that had been found to be illegitimately contracted, joined the Venezuelan-led Bolivarian Alliance for Our America (ALBA), and declared his allegiance to “21st-century socialism”.

However, Correa has also moved steadily away from the mass social base of indigenous, trade union, and popular organisations that brought him to power. The powerful Confederation of Indigenous Nationalities of Ecuador (CONAIE) publicly stated its opposition to the coup and to the right-wing and imperialist forces behind it. But it also declared that “a process of change, as weak as it may be, runs the risk of being overturned or overtaken by the right, old or new, if it [the government] does not establish and progressively deepen alliances with organised social and popular sectors”. The statement charged the government with attacking popular sectors such as the indigenous and workers’ unions who have mobilised against transnational mining, oil, and agro-industrial companies, while “not weakening in the least the structures of power of the right, or those within the state apparatus”. Correa’s policies in favour of “the most reactionary sectors and emerging business interests” emboldened the right to attempt a coup.

Foreign influences increase

In Venezuela, the right-wing opposition to President Hugo Chavez made major inroads in last year’s mid-term elections. The opposition participated in the election through a Coalition for Democratic Unity, which took nearly 50 per cent of the total national popular vote. The governing United Socialist Party of Venezuela retained a majority in the National Assembly but fell short of a two-thirds majority.

The inroads by the right reflect in part the success of a relentless US-led destabilisation campaign against Venezuela that has included US economic and political support for the right-wing opposition (US brokers and sinecures they dished out finally brought the opposition into a unity coalition after ten years of divisions and fractious competition for leadership), military threats, economic sabotage and a unrelenting propaganda campaign waged by the right-wing and international media. However, they also reflect disaffection among the revolution’s social base in the face of economic difficulties, including falling oil revenues, widespread corruption and opportunism among state and party officials, and the slow pace of radical transformation demanded by the grassroots.

Bolivian President Evo Morales won election as a leftist, but the country’s economic structure has remained much the same under his presidency [Reuters]

In Bolivia, the Morales government has confronted a spate of strikes and mobilisations by labour unions, indigenous, and popular organisations over wages, austerity measures, and a lack of local input into government policies or consultation with local communities over natural resource exploitation, among other things. “What has changed in the last few years?,” asked Roberto Laserna, a well known neo-liberal Bolivian intellectual. “A lot, if one observes the process in terms of its discourse and symbols and maintains a short-term perspective. But very little if one is attentive to structural conditions and observes the economic and social tendencies with a longer-term view.”

Backdrop to Pink Tide: Capitalist globalisation

The year 2010 marked the 200th anniversary of independence for many Latin American nations. While the region may have achieved its political independence it still remains, 200 years later, deeply tied – and subordinated – to the larger world capitalist system that has shaped its economic and political development from the conquest in 1492 right up to the present period of globalisation.

The new global capitalism swept Latin America by storm in the 1980s and 1990s. Neo-liberal programmes were imposed by international financial institutions, western governments, and local elites. The region experienced a sweeping transformation of its political economy and social structure. By the early 21st century the “commanding heights” of accumulation were no longer the old traditional agro-exports or national industry. New industries and business practices took their place: maquiladoras, transnational agribusiness complexes, global banking, tourism, the “retail revolution”, Walmart and other super-stores (which now control some 70 per cent of the region’s commerce, up from just 10-20 per cent in 1990), and trans-national labour markets, which have made Latin America a major exporter of workers to the global economy.

Transnational capital poured into the region in the form of productive investment in these dynamic new circuits of accumulation. Portfolio managers and speculative financial ventures took advantage of the bonanza opened up by privatisation, deregulation, and issues of government bonds, which attracted investors from the money markets that dominate the global financial system.

A new breed of transnationally-oriented elites and capitalists forged a neo-liberal bloc and led the region into the global age of hothouse accumulation, financial speculation, credit ratings, the internet, malls, fast-food chains, and gated communities. Neo-liberalism forged a social base among emerging middle classes and professional strata for which globalisation opened up new opportunities for upward mobility and participation in the global bazaar. But neo-liberalism also brought about unprecedented social inequalities, mass unemployment, and the immiseration and displacement of tens if not hundreds of millions from the popular classes, which triggered a wave of transnational migration and new rounds of mass mobilisation among those who stayed behind.

The world recession of 2000-01 hit Latin America hard, undermining growth and reversing gains of previous years. By the early 21st century neo-liberalism appeared to be reaching its ideological and political limits. The turning point came with the collapse of the Argentine economy – previously the poster child of neo-liberalism – and the subsequent mass uprising in 2001. A wave of popular rebellion brought to power governments through elections that opposed neo-liberalism, at least initially, among them: Chavez in Venezuela (1998); Lula in Brazil (2002); Nestor Kirchner in Argentina (2003); Morales in Bolivia (2005); the Broad Front in Uruguay (2004; 2010); Correa in Ecuador (2006); and the Sandinistas in Nicaragua (2006).

These governments challenged and even reversed major components of the neo-liberal programme. Many of them halted privatisations, nationalised natural resources and other economic sectors, restored public health and education, expanded social spending, introduced social welfare programmes, renegotiated foreign debts on discounted terms, broke with the IMF, and staked out foreign policies independent of Washington’s dictates. All of this has been highly popular with poor majorities and helps explain why most Pink Tide governments enjoy broad support. Chavez still retains a 60 per cent approval rating and Correa a 65 per cent approval rating. In Uruguay, Tabare Vasquez left office in 2010 with a 61 per cent approval rating, and Lula proved to be the most popular president in Brazilian history, leaving office in January of this year with an 80 per cent approval rating. But it is not clear now that these gains can be sustained in the face of the global crisis and the right-wing backlash, or that they are enough to satisfy the demands and expectations of the popular classes.

Post-neo-liberal governments or revolutionary transformation?

The Pink Tide governments have been “leftist” insofar as they have introduced limited wealth redistribution, restored a minimal role for the state in regulating accumulation, and administered government expansion in more inclusionary ways. When we cut through the rhetoric, however, a number of these governments – such as the Socialists in Chile, Kirchner in Argentina, and Lula in Brazil – were able to push forward capitalist globalisation with greater credibility than their orthodox neo-liberal predecessors, and, in doing so, to deradicalise dissent and demobilise social movements. What emerged was an elected progressive bloc in the region committed to mild redistributive programmes respectful of prevailing property relations and unwilling or simply unable to challenge the global capitalist order – a new, post-neo-liberal form of the national state tied to the larger institutional networks of global capitalism.

“In many Pink Tide countries there has been no significant change in the unequal distribution of income”

In many Pink Tide countries there has been no significant change in the unequal distribution of income or wealth, and indeed, inequality may actually be increasing.  Nor has there been any shift in basic property and class relations despite changes in political blocs, despite discourse favouring the popular classes, and despite mildly reformist or social welfare measures. In Argentina, for instance, the percentage of national income going to labour (through wages) and to the unemployed and pensioners (through social welfare subsidies and pensions) dropped from 32.5 per cent in 2001, before the crisis exploded, to 26.7 per cent in 2005. In Kirchner’s own words, the aim of his policies was to reconstruct capitalism in the country, “a capitalism in which the state plays an intelligent role, regulating, controlling, and mitigating where necessary problems that the market does not solve”. Despite its social programmes, the Kirchner administration worked to demobilise and divide Argentina’s social movements.

In Brazil, the wealthy grew in number by 11.3 per cent in 2005 alone as inequality deepened. “Far from doing any harm to the propertied, this [Lula] was a government that greatly benefitted them,” historian Perry Anderson observed in a recent essay in the London Review of Books. “Never has capital so prospered as under Lula … Brazilian financiers and industrialists have been warm supporters of Lula’s government.” The Brazilian stock market outperformed every other bourse in the world. However, Anderson noted that outlays to the Bolsa Familia, a popular social welfare program, totalled a mere 0.5 per cent of GDP, while rentier incomes from the public debt comprised 6 to 7 per cent of GDP and taxes remained staggeringly regressive.

Lula also gave powerful support to agribusiness instead of to small farms and the landless. In the countryside, land ownership was more concentrated at the end of Lula’s term than it was 50 years ago. Because there have been no structural transformations that have addressed the causes of poverty and inequality in Brazil, the improvement in living standards is based on government social programmes that could be reversed or eliminated should a right-wing government come to power or should an economic downturn force austerity.

On the other hand, Venezuela has attempted to organise a radical anti-neo-liberal bloc, seeking what Chavez has termed “21st-century socialism” that, at least in discourse, included Bolivia under Morales and Ecuador under Correa. Redistributive reforms have been much deeper in Venezuela than in other Pink Tide countries, and have attemped to transform state structure and property relations, and empower the popular classes.

In all three countries, constitutional assemblies have convened by popular referendum to redraft the constitution in favour of the popular classes, the most egregious neo-liberal policies have been reversed, and natural resources have been renationalised. There are ongoing land redistributions in Venezuela and promises of such programmes in Bolivia and Ecuador.

The Venezuelan government has nationalised a significant number of large companies in the power, telecommunications, steel, food, cement and banking sectors, encouraged the formation of hundreds of thousands of small business cooperatives, and distributed several million hectares of land to farmers.

However, it must be remembered that these more radical governments were brought to power through electoral processes that placed them at the reins of corrupt, clientalist, bureaucratic, and oligarchic states of the ancient regimes. In Venezuela, Bolivia, and Ecuador, prevailing state institutions have tried to constrain, dilute, and coopt mass struggles from below. In Venezuela, the biggest threat to the revolution is not the right-wing opposition, but what has been called the “endogenous” or “Chavista” right, whose penchant for state sinecures, local power fiefdoms, and acquiring business contracts through state or party privilege make them more interested in preventing a break with global capitalism than in socialist transformation from below.

Chavez himself has called for a radicalisation of the Revolution, and for a campaign against the inefficiency and bureaucracy of state structures inherited from the ancient regime. “We have to finish off demolishing the old structures of the bourgeois state and create the new structures of the proletarian state,” he declared in 2010. To achieve this, the government has encouraged the creation of some 30,000 communal councils that are grouped into some 200 communes across Venezuela. The communal council groups 200-400 families in urban areas and 20-50 in rural areas to solve the problems of local communities. Chavez has referred to the communes as the “building blocks” of a new, revolutionary state.

‘Neither capital nor bureaucrats’

As the global economic crisis intensifies, so too do the challenges that Pink Tide governments will face. The structural power held by transnational capital, and especially of global financial markets, over the attempts of states and social movements to undertake transformations is enormous. This power pushes states to accommodate these markets.

Ecuador has been particularly hard-hit by the world economic crisis that exploded in 2008. In a bid to generate state revenue by attracting transnational capital, Correa approved a mining law in 2009 in violation of agreements with the International Labour Organisation. The law allows for the exploitation of mineral resources by transnational corporations without consulting with the communities that would be affected. He also introduced a Fresh Water Resources Act that allows preferential access to water resources by mining, oil, and agro-industrial interests and favours the privatisation of water distribution. Correa has called in the armed forces and the police to violently repress indigenous communities who have resisted these policies.

In Bolivia, indigenous people have protested the construction of a highway, supported by Morales, that would cross a natural reserve and indigenous land [EPA]

Correa may epitomise part of the Pink Tide equation: nationally-oriented elites who seek better terms in dealing with global capital, and who entered into conjunctural alliances in the first years of the 21st century with popular forces mobilising from below for more radical change. The same movements that brought the Pink Tide governments to power are now seen as threats, to the extent that they stand in the way of resource extraction and the generation of state revenues through granting concessions to transnational capital.

The latest developments suggest a certain unravelling of those alliances, and bring the Pink Tide experiments to a crossroads: either a more substantial radicalisation or a re-subordination to the money mandarins of global capitalism who in Europe, North America, and elsewhere are using the global crisis to impose brutal austerity and attempting to dismantle what is left of welfare systems and social states. How long can low levels of wealth redistribution hold back the tide of rebellion? The mobilisation of new collective subjects and mass social movements in Latin America that are not easily cowed by the transnational elite will likely intensify if the crisis is prolonged.

The grassroots seem poised to undertake a new round of struggle from below. Carrying banners that read, “Neither Capital nor Bureaucrats – More Socialism and More Revolution,” thousands of trade unionists, members of leftist political parties and popular organisations took to the streets in Venezuelan cities in late 2010 and early this year to demand the immediate passage of a new and radical labour law, further nationalisations of key industries, and the empowerment of workers within their unions, especially at worksites that now belong to the network of recently nationalised industries.

And in its press release in the midst of last year’s abortive coup in Ecuador, the Confederation of Indigenous Nationalities of Ecuador stated that it would “deepen our mobilisation against the extractive model and the imposition of large-scale mining, the privatisation and concentration of water, and the expansion of the oil frontier”. It concluded: “The best way to defend democracy is to begin a true revolution that resolves the most urgent and structural questions to the benefit of the majority.”

The US and the right wing in Latin America have launched a counteroffensive to reverse the turn to the left. The Venezuelan revolution has earned the wrath of Latin American and transnational elites, but Bolivia and Ecuador, and more generally, the region’s social movements and leftist political forces are as much targets of this counteroffensive as is Venezuela. In Chile, a right-wing neo-liberal defeated the socialists in last year’s elections; in Honduras, the army deposed the progressive government of Manuel Zelaya in a 2009 coup d’etat with the tacit support of Washington; and the US has expanded its military presence throughout the continent, including the installation of new military bases in Colombia, Panama, and Honduras.

The Pink Tide governments will not be able to stave off this counteroffensive without mass support. And it may be that the only way to assure that support is by advancing a more fundamentally transformative project.

William I. Robinson is professor of sociology, global studies, and Latin American studies at the University of California at Santa Barbara. His latest book is Latin America and Global Capitalism: A Critical Globalization Perspective.

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial policy.