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.
NAFTA renegotiations are in full swing. The second round is currently underway in Mexico City with the main issue emerging as differential labor standards among the three countries. The main concern on the part of Canadian and U.S. negotiators and their respective trade union movements is the much lower wages and poorer working conditions in Mexico as compared to the other two countries. The argument of course is that lower pay and poor working conditions in Mexico are at the root of the flow of jobs southward, putting downward pressure on labor standards in the U.S. and Canada and swelling corporate profits. The argument that NAFTA has been a bad agreement for working people in all three countries is a compelling one. That being said, can a renegotiated NAFTA agreement do anything much to address workers’ plight in Mexico? Some observers are optimistic, even seeing Trump’s push for better wages and working conditions as potentially positive for Mexican workers. However, I have my doubts.
On May 28, the EZLN (Zapatista National Liberation Army) and the Indigenous Council of Government (CIG), selected María de Jesús Patricio Martínez, an indigenous women from the Nahua community of the state of Jalisco, to run as their presidential candidate in the 2018 election. As she readily admits, she has no chance of winning. In fact, just obtaining the opportunity to run for the presidency will be a struggle since electoral law requires that an independent candidate obtain some 850,000 signatures across 17 of the country’s 32 states.
The mainstream media has characterized Emmanuel Macron’s victory in yesterday’s French election as a resounding defeat of right wing authoritarian populism. Macron, heading up a new political party called En Marche! (Forward!), won 65 percent of the popular vote against right wing populist Marine Le Pen’s 34 percent. Despite the rise of populist authoritarian movements in an increasing number of countries, global elites continue to laud the unquestionable benefits of free trade and other features of the neoliberal policy prescription.
Lack of employment opportunities has been a longstanding feature of most Latin American countries, including Mexico, and one of the key reasons for historically high levels of poverty, deprivation, corruption, crime, and political violence. Lack of sufficient decent employment is now a widely recognized problem in the United States—one of the crucial issues in the election of Donald Trump was the loss of jobs, particularly in the manufacturing sector.
U.S. president-elect Donald Trump has targeted Mexico as one of the main sources of job losses in the U.S., leaving many people with the mistaken impression that countries such as Mexico have been the winners in the global competitive game. However, today’s liberal trade and investment order, as I suggested in an earlier blog post, has not, on balance, benefitted Mexico. From 1996 to 2015, the Mexican economy has grown at the average annual growth rate of only 1.2 percent. With such lacklustre growth, the country’s poverty rate increased by 2.9 percent between 2008 and 2014. Inequality has also risen. While the top 10 percent saw their incomes rise, the bottom 50% of the population either failed to see their situation improve, or saw it deteriorate. In 2012, the total household income of the bottom 10 percent of the population was substantially lower than it was in 2008, despite some slight improvement in 2010.
On Monday of last week, President-elect Donald Trump, outlining plans for his first 100 days in office, declared that he would withdraw the U.S. from the Trans-Pacific Partnership (TPP) trade deal and replace it with “fair” bilateral agreements. As the Japanese Prime Minister, Shinzo Abe, one of the 12 signatories to the deal, declared, the TPP “without the U.S, is meaningless.” The agreement aimed to lower barriers on trade and investment among twelve countries (bordering the Pacific Ocean: US, Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile and Peru), accounting for approximately 60 percent of the world economy and 40 percent of the world’s population.
More people in Latin America die as a result of criminal violence than in anywhere else in the world. While 8 percent of the world’s population lives in Latin America and the Caribbean, the region accounts for roughly one-third of the world’s homicide cases. Latin America's per capita homicide rate is 23.4 per 100,000 people, nearly double the rate in Africa, a region sometimes mistakenly believed to be the most violent continent.
As is widely known, organized crime, particularly crime involving drug trafficking, is one of the most important sources of the violence in the region, with serious implications for physical security and general human well-being, particularly for those living in poor communities. Some recent research has noted the worrying sign of close links between political elites and organized crime—a situation that does not bode well for either the quality of democracy or for substantial improvement over the long-term—despite some recent improvements in specific cases.
Latinos in the U.S. enthusiastically support Democratic presidential candidate, Hillary Clinton. Unlike her opponent Donald Trump, she does not speak ill of immigrants or of the national character of those south of the U.S. border. Latin Americans also would prefer to see Clinton elected over Trump. Clinton has not promised to build a wall along the Mexican/American border; nor does she evince the same sort of strong opposition to international trade deals as Trump does. All of this suggests that Latin Americans would be much better off with a Clinton win. However, there are reasons to be skeptical about just how good a Clinton presidency would be for Latin America. Two events last week alert us to what the nature of U. S. foreign policy could be like should Clinton become President: U.S. support for regimes that are harmful to democracy and inclusive development.
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.
The recent scandals in a number of Latin American countries raise the issue of institutional capacity and the vexing issue of what is at the root of state incapacity in Latin American countries, particularly in those cases that have made recent significant progress in reducing poverty. This blog entry argues that there are long-standing historical and structural conditions that make corrupt practices extremely resilient. The reform of formal institutions will not be effective unless it is accompanied by efforts to grapple with those underlying conditions.
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.
This week and last, a number of my students asked me about me how and why I became interested in development issues, in general, and Latin America, in particular. These enquires forced me to think back to those heady days of the 1960s when we all thought that the world could be changed for the better. It also got me to thinking about the ways in which both popular conceptions and academic thinking about social injustice and the operation of the world economy has changed over the last forty years—despite the fact that the reality may not have changed all that much.
In this entry, Teichman discusses the Brazilian crisis, drawing on some of the ideas developed in The Politics of Inclusive Development. Policy, State Capacity and Coalition Building, 2016. (Link to publisher).
Brazil appears generously endowed with attributes that should contribute to the achievement of equitable and inclusive development: its ample agricultural land and mineral wealth affords a wide array of commodity exports while the country’s a large domestic market can support the development of industry and manufacturing. Nevertheless, Brazil’s historical development trajectory has been far from inclusionary, involving high levels of inequality, persisting poverty (reduced substantially only fairly recently), and exclusion. In the early 2000s, the World Bank identified the social exclusion of blacks, children, youth and indigenous people as one of the country’s most pressing development challenges (1). Brazil has had historically high levels of socioeconomic inequality, a feature sometimes linked to a dependence on commodity exports—one of the implications of the so-called resource curse. However, inequality and exclusion also arise from a history of highly unequal political power relations and the operation of exclusionary institutions.