Commodity boom/crisis

The Brazilian Election and Latin America’s Democratic/Authoritarian Cycles

When Latin America made the transition to electoral democracy in the mid-1980s, the process was hailed as marking the end to the region’s fluctuations between authoritarianism and democracy. Recent, events, especially in Brazil, tell a different story.  Between 2006 and 2011, it seemed possible that the program of a moderate social democratic program could be reconciled with a neoliberal global orientation: Brazil dramatically reduced poverty, public spending was kept in check, while big businesses expanded both exports and investments abroad. Now we see a sharp turn to the political right in Brazil and the inevitability of policies that will contribute to social deterioration. With 99 percent of the votes in, right populist presidential candidate, Jair Bolsonaro, leads with 46 percent of the vote. He is expected to win the second round of voting on October 28. 

What went wrong with Latin America’s Left Regimes?

     Increasingly, right-leaning governments are replacing left regimes in Latin America or, if left governments continue to cling to power, they are adopting policies normally associated with the political right. There has been a shift back to some neoliberal policies that contributed to poverty and inequality in the past. Sympathetic observers placed great hope in the left regimes that came to power between the late 1990s and the mid-2000s—these regimes seemed to be on the right track since they reduced poverty substantially and made inroads into high levels of inequality. What went wrong?

The Political Economy of Latin America’s Political Turmoil

     While some observers, both journalistic and academic, maintain that Latin American politics is either moving to the political right or becoming less polarized, the clearest trend is rising political turmoil with a final destination that is far from clear. Political polarization continues to be an integral part of the Latin American political scene. 

Latin America and the U.S./China Trade Dispute: Caught between Statist and Free Market Capitalism

     During the past two decades, China’s rapid economic growth and pressing need for commodities has resulted in increased trade and investment in Latin America, along with expanded lending operations to fund important infrastructural projects. Meanwhile, the U.S. administration has largely neglected the region and at times shown outright disdain. Amid the current Chinese/American trade spat, President Donald Trump is visiting a South American country (Peru) for the first time this week where he is expected to warn Latin Americans against continued close trade ties with China. The question is: what does U.S. Chinese rivalry mean for Latin America? Under the current circumstances: perhaps some short-term gains for some countries, but in the longer-term, Latin America needs to find its own development path, one that is as independent as possible from both the ideologies and interests of these two powers. 

Ecuador, the Survival of the Left, and the Structural Constraints of Global Capitalism in Latin America

    On Sunday, February 4th Ecuador held a popular consultation (consulta popular) on seven questions; five of which were binding while the remaining two are to guide the government in developing future policies. There are strongly opposed opinions on the meaning of this public consultation and on its consequences for Ecuadorian politics and for the political left. The case provides us with insights into the Latin American political dilemma.

Is Chile Turning to the right? Or Just more of the Same?

     Chile’s run-off presidential election, held on December 17, witnessed the victory of billionaire businessman, Sebastían Piñera over the left-wing candidate Alejandro Guillier. This will be Piñera’s second term in office; he served as president between 2010 and 2014. The victory was a substantial one, with Piñera winning 54.6 percent of the vote while Guiller, supported by outgoing left-centre President Michelle Bachelet, garnered 45.4 percent of the vote. Much of the press coverage of the election claims that the Chilean election is part of a general right-ward swing in Latin American politics. However, such an assessment papers over what is really going on—not just for Chile, but for other countries of the region as well. 

The Latin American Left: Set for a Resurgence?

      Only very recently, observers of Latin American politics were proclaiming the decline of the populist left “pink tide, the various regimes that had come to dominate politics in many countries of the region through much of the 2000s. In 2015 and 2016, centre right leaders obtained a string of notable victories. Mauricio Macri was elected president in Argentina, the opposition in Venezuela obtained a landslide victory in congressional elections, Workers Party President of Brazil, Dilma Rousseff was removed from power through impeachment proceedings, and President Evo Morales of Bolivia lost a referendum to allow him a fourth term as president. However, recent events suggest that the left remains tenaciously resilient.

Corruption and Brazil’s Political Crisis

      On May 24th, tens of thousands of protesters marched on the Brazilian Congress demanding the resignation of President Michel Temer and an end to his austerity measures. He has recently taken power, having engineered the removal of Workers Party (PT) president Dilma Rousseff (2011-2016). The increasingly violent unrest was also fueled by revelations of corrupt practices on the part of Temer, videotaped paying off a witness in one of the country’s worst corruption scandals. There are now calls for Temer’s impeachment. The accusations against the president, however, are only the most recent manifestation of ongoing political upheaval over widespread corruption, involving most of the country’s political class and powerful business leaders. 

Venezuela’s Turmoil: Not a Story of Good versus Evil

     When I teach Latin American politics, I usually begin by counselling my Canadian undergraduates that it is important to resist the natural human inclination to pass judgement. It is tempting to do so because Latin American politics is rife with authoritarian strong men, corruption, and procedural irregularities. However, in the words of Uruguayan journalist, Eduardo Galeano, “History never really says goodbye. History says, 'See you later.'” This is particularly true when trying to make sense of the current turmoil in Venezuela. The Venezuelan crisis is the culmination of a complex and long historical process. Contrary to much of the mainstream media, it is not a good versus evil struggle between the forces of repression and the forces of democracy.

The Venezuelan Crisis and the Failure of Petro Populism

    With the election of Hugo Chavez to the presidency of Venezuela in 1998, the country became the darling of the intellectual left. Chavez pledged to confront the country’s reactionary oligarchy and redistribute the bounty from the country’s petroleum wealth to eradicate poverty,  and deprivation. Until recently, supported by buoyant international petroleum prices, the “socialist” experiment seemed to work fairly well, although with intermittent and growing political tensions and increasing political polarization. Between 1999 and 2011, poverty and infant mortality rates declined. Today, however, the country faces a severe economic and humanitarian crisis involving inflation of over 700 percent, rising poverty, severe shortages in food and medical supplies, and burgeoning crime rates. Venezuela is now one of the world’s most violent countries.

Brazil’s Turn to the Right

     After twenty hours of debate, the Brazilian Senate voted this week to initiate impeachment proceedings against President Dilma Rousseff. Rousseff stepped down from the presidency on Thursday and was replaced by her vice-president, Michel Temer. Given the strong sentiment in favor of initiating the impeachment process (55 votes in favour out of 81) Rousseff is not likely to return to power. 

     There are at least three important questions arising from these events. 

Using Extractive Resource Investment for Inclusive Development: Taming the Power of Multinational Corporations (MNCs)

     There is now a growing chorus of opinion calling for Global South countries with substantial production in extractive industries (mining, petroleum, gas) to utilize the tax revenue from this production to bring about widespread improvements in living standard. An array of institutions, from the International Monetary Fund, to the World Bank, to a variety of United Nations entities, including the United Nations Development Program have all weighed in on this issue. The substantial rise in commodity prices, between the early 2000s and 2013, generated wealth that (theoretically) could have been used for development programs, especially for social programs (conditional cash transfer programs being one of favorites) and for infrastructural development. There is a consensus that while the commodity boom brought about some improvements in many African countries, for example, the results in terms of improved inclusion could have been considerably better than they were. 

Challenges to Inclusive Development in Latin America

Summary

With the decline in commodity prices, Latin America faces the possibility of a downward political and economic cycle. During the last fifteen years, as the region has enjoyed economic prosperity with the rise of commodity prices on the international market, left/centre governments spent liberally on the expansion of social policy initiatives. These measures spread the wealth among all socio-economic groups in ways that have not occurred in the past. Poverty declined and there has even been a reduction in the region’s high level of inequality. However, these countries now faces a new critical juncture as left/centre governments face corruption scandals, loss of political power, widespread protests, and the rise of the political right. The commodity boom papered over both institutional inadequacies and hard redistributive decisions. Governments spread the wealth but did not substantially redistribute it, ensuring that middle and upper classes retained an inordinate share of state largesse. Faced with economic downturns and declining state revenues, governments will now have to make hard decisions about the allocation of diminishing state resources. This reality is already giving rise to an increased level of political polarization and contestation, a development that, in combination with the economic downturn itself, may worsen prospects for continued progress toward social inclusion.

Inclusive Development, the Crisis of Global Capitalism, and the 2016 Sustainable Development Goals

In this entry, Teichman discusses the Sustainable Development Goals (SDGs), drawing on some of ideas elaborated on in The Politics of Inclusive Development. Policy, State Capacity and Coalition Building, 2016. (Link to publisher).