Profoundly marked by five centuries of colonial rule, massacre, and pillage of natural wealth and resources, a new leadership has emerged acutely conscious of the continents widening inequalities and continuing poverty in the context of aggressive globalisation. Whilst macroeconomic indicators in the region have improved over the past twenty years, the benefits of economic growth have failed to reach the producers of that wealth. Social inequalities and skewed income distribution remain a problem. Poverty and exploitation persist throughout the continent.
From agriculture to health, to education, to public finance, to energy security, Latin Americans are finding innovative solutions.
Spawned by popular resistance to neoliberalism and US domination since the early twentieth century, the success of the Cuban revolution, the struggle against military dictatorships in the sixties and more recently the anti-IMF riots in 1989 in Caracas, Venezuela, and the rise of the Zapatistas in Mexico in the early 1990s, Governments and leaders with an independent and progressive political orientation have been brought into power in most of the region.
This trend has grown and has been confirmed in recent years with the re-election of President Lula in Brazil and President Chavez in Venezuela; the choice of President Michele Bachelet (daughter of General Bachelet assassinated by Pinochet) in Chile; the brilliant election in the first round of Cristina Kirchner as President of Argentina; the election of President Alvaro Colom in Guatemala; the victory of President Rafael Correa’s Party in Ecuador’s parliamentary elections in the aftermath of his own election as President; the election of the Sandinista Daniel Ortega, a close friend of Chavez and Fidel Castro, as President of Nicaragua; the victory of Fernando Lugo, the so-called red Bishop, as President of Paraguay.
A recent phenomenon is the arrival at the top levels of power of indigenous leaders or those identified with their struggle and that of poor communities. The victory of indigenous leader Evo Morales in Bolivia in the December 2005 elections was hailed by the President of the powerful Confederation of Indigenous Nationalities of Ecuador (CONAIE), Luis Macas, as "a historical landmark unlike anything seen since the time of Spanish colonialism." Hugo Chavez` ancestry is indigenous Indian, Spanish and Afro-Venezuelan. Rafael Correa is a mixed-blood mestizo who speaks Quechua, the Indian language, was nearly chosen as the candidate of the indigenous party Pachakutik and received the support of the indigenous population in Ecuador. Lugo Fernando spent more than ten years as Bishop of San Pedro, one of the poorest regions of Paraguay peopled by Guaran/Indian peasant farmers and landless labourers.
In the bold recall referendum of 10 August 2.008. Bolivias Evo Morales won more than 67 percent of votes ratifying his mandate amidst opposition to his new constitution and socialist reforms by 8 opposition governors from the capitalistic East seeking autonomy. Morales received more votes than he had won in 2005, when he gained 53.7% in a historic landslide.
Toward financial sovereignty - independence from IMF/World Bank
The restoration of control over its natural wealth and resources, the accumulation of foreign exchange reserves, the arrival of popular left or centre-left Governments, and regional solidarity, have profoundly modified Latin America’s relations with its creditors from the North and with the United States in particular, which until recently considered the region as its backyard.
Although approaches to resolving the external debt problem vary and the margin of manoeuvre is limited by preoccupations with electoral politics, there is a shared recognition of the decisive role played by the IMF and World Bank in the process of their indebtedness and the negative economic and social consequences of conditionalities imposed upon them.
In April 2006, Ecuador declared persona non grata Eduardo Somensatto, representative of the World Bank and announced that the share of budget dedicated to debt repayment will be decreased from 38% in 2006 to 11, 8% in 2010. In 2007, the Integral Public Credit Audit Commission (CAIC) was established under the Ministry of Finance to analyse and assess the indebtedness process in 1976-2006, including its economic, financial, social and environmental impacts. The audit will identify interest rates, commissions and penalties in credit agreements imposed often unilaterally, violating the sovereignty of borrowing States, and the consequences of conditionalities on living conditions. It is expected that a multidisciplinary and comprehensive approach will help expose the illegal and illegitimate character of the claimed debt.
In 2006, Venezuela announced its departure from IMF and World Bank. At the same time, Bolivia declared that it no longer recognised the authority of the International Centre for Settlement of Investment Disputes.
Venezuela’s example of repaying its debt in advance, thus saving millions of dollars for the country, was followed by Brazil, Argentina and Uruguay. Venezuela has helped its partners reduce their debt burdens by purchasing the foreign debt. Since 2005 alone, Venezuela has bought 5 billion dollars of Argentina’s debt, permitting the country to honour its creditors without resorting to borrowings at high interest rates. It has also helped reduce the debt burden of Ecuador and Bolivia.
Whatever their approach to debt repayment is, most countries find themselves united around a common project - establishment of the South Bank!
In December 2007, Brazil, Uruguay, Paraguay, Ecuador, Bolivia, Venezuela and Argentina signed a formal agreement to establish the Banco del Sur or the South Bank in their quest for financial autonomy from the IMF/World Bank. The initiative, launched by Venezuelan President Hugo Chavez with the support of Argentina’s President Nestor Kirchner, was signed in Buenos Aires as Presidents Kirchner’s last public act.
On that occasion, Nicanor Duarte, former President of Paraguay, declared, "‘with the Banco del Sur, we are not only initiating a process of financial sovereignty, but a path to political freedom and an end to the cultural domination imposed on us through the use of financial resources by sections that have nothing to do with our history and aspirations."
There is no national project without sovereign control over natural wealth and resources
New Governments are taking bold steps to restore sovereign control over the nations’ natural wealth and resources and to initiate constitutional reforms to return power to the people, to make institutions more democratic and transparent, to end the power of an oligarchy allied to the United States, and to combat corruption.
In May 2007, on the occasion of nationalising the economically lucrative Orinoco Oil Basin, which contains the world’s largest oil reserves, President Chavez declared that there can be no national project if the country had no control over its wealth, its natural resources and its, economy: "Today, it is the end of ‘an era where our natural resources always ended in the hands of all except the people of Venezuela." The natural resources of the region would no longer go to enriching the shareholders of the multinational corporations, but to building "Socialism of the 21st Century".
Bolivia nationalised its oil and gas resources in May 2006. Before that, Venezuela had engaged in a similar operation. Without using the term "nationalisation", 32 transnational corporations on its territory were forced to accept new rules, higher taxes, and merger with joint ventures in which the national corporation PDVSA held majority shares.
In 2007 and 2008, Venezuela nationalised its telecommunication, electricity, steel, and cement industries.
"...we want to be beard as sovereign States, as masters of solutions to our own problems"
From agriculture to health, to education, to public finance, to energy security, Latin Americans are inventing their own solutions.
In 2005, President Lula of Brazil sent a clear message on the occasion of signing an agreement with President Chavez of Venezuela to build the giant Abreu e Lima refinery, a joint venture between their national oil corporations, PDVSA and Petrobras: this Accord reaffirms the autonomy of the South-American nations vis-a-vis the developed countries.... This is something that bothers some people, because people were used to making decisions while we said Amen. We don’t want to take anything from anyone. The only thing we want to tell the world is that we love ourselves. That we do respect and that we want to be heard as sovereign States, as masters of solutions to our own problems. And that we want to share these things, this accomplishment of ours, with our siblings.
A new type of regional
Alternatives to the neoliberal model or corporate globalisation are being sought to strengthen Latin American unity, to acquire greater independence from rich countries and to bring about a higher level of development for its peoples.
The failure of the FTAA (Free Trade Area of the Americas) that the US has been trying to secure since the late 1990s is significant. The objective was to create by 2005 a huge integrated market that would extend from Alaska to Tierra del Fuego based on WTO’s most-favoured-nation principle.
In December 2004, during the III Summit of Presidents of South America held in Cusco, Peru, President Lula’s team and the Argentine delegation to Mercosur, proposed the creation of a South American Community of Nations (CSN) that would bring together in a single body members of Mercosur, the Andean Community of Nations and Caricom.
In November 2005, at the Mar del Plata Summit of the Americas, in the presence of Lula, Hugo Chavez and Fidel Castro, the Latin American partners rejected the proposed FTAA. A dissenting statement in the Mar del Plata Declaration read: "the necessary conditions are not yet in place for achieving a balanced and equitable free trade agreement with effective access to markets free from subsidies and trade-distorting practices, and that takes into account the needs and sensitivities of all partners, as well as the differences in the levels of development and size of the economies."
Mercosur, the regional bloc once restricted to Southern Cone countries - Argentina, Brazil, Paraguay and Uruguay, is facing transformation with the affiliation of Venezuela. The decision taken in December 2007 to establish the South Bank is an example.
ALBA (The Bolivarian Alternative for the Americas) is an economic and political arrangement between Cuba, Venezuela, Bolivia, Nicaragua, Honduras, Haiti, and the Dominica, with Ecuador, Uruguay, the Dominican Republic, and St. Kitts participating as Observers. It is described as an "anti-imperialist" Accord that proposes a new model of political, economic and social integration based on principles of solidarity, cooperation and complementarities.
Its 6th Summit recently (August 2008) ended in Caracas with the founding of a new Bank of ALBA and the signing of a series of economic and social agreements among member States.
Other regional initiatives involve strategic economic sectors. They include transportation infrastructure for oil and gas from the North to the South of Latin America ; the construction of a highway that will link the continent from the Atlantic Ocean to the Pacific ; the creation of TeleSur, an alternative region-wide TV network broadcasting news from a Latin American perspective, jointly owned by Venezuela, Argentina, Cuba, Uruguay, Bolivia, Ecuador, and Nicaragua; Petrosur, an initiative sponsored by Venezuela, Argentina, Brazil, Uruguay and Bolivia, to unite all State-run oil industries in a single Latin America-wide petroleum company that would be an economic weapon capable of challenging US hegemony.
Cuba’s role and involvement in the search for a new model for integration is significant. Cuba has resisted for 50 years now and recent developments in Latin America must certainly bring much satisfaction to Fidel Castro. Cuba’s credibility has grown with its struggle to bring literacy to the continent, its Latin American School of Medicine which qualifies - free of charge - thousands of Latin American medical doctors, or its Operation Miracle jointly conducted with Venezuela to give sight to tens of thousands of Latin American patients suffering from cataracts or other operable eye conditions..