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Editor
Carlos Henrique Cardim
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DEP: Diplomacy, Strategy & Politics / Raúl Prebisch Project no. 8 (october/december
2007). Brasília : Raúl Prebisch Project, 2007.
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Published in portuguese, spanish and english.
ISSN 1808-0499
1. South America. 2. Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Guyana,
Paraguay, Peru, Suriname, Uruguay, Venezuela. I. Raúl Prebisch Project.
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The DEP Diplomacy, Strategy & Politics Review is a three–monthly periodical on
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Argentina and Brazil: structural differences and
similarities
Torcuato S. Di Tella
Bolivia: changes and foreign policy
Jean Paul Guevara Avila
Culture, diversity and access
Gilberto Gil
Major turns in Chilean economic policy and their legacy
Osvaldo Sunkel
Colombia, a country of contrasts
Alfredo Rangel
Ecuador: fundamental issues
León Roldós
Summary
D E P
DIPLOMACIA ESTRATÉGIA POLÍTICA
Number 8 October / December 2007
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Guyana: the impact of foreign policy on developmen-
tal challenges
Robert H. O. Corbin
Paraguay: identities, substitutions, and transformations
Bartomeu Melià, s.j.
Peru: electoral surprises and the pending exclusion agenda
Martín Tanaka · Sofía Vera
The Suriname Republic and regional integration
Robby D. Ramlakhan
Uruguay: a brief overview of its economy and politics
Alberto Couriel
The rule of law and social justice under the Bolivarian
Alternative for America and the Caribbean-ALBA
Isaías Rodríguez
Koki Ruiz
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152
165
181
197
209
221
Di p l o m a c y , St r a t e g y & po l i t i c S – oc t o b e r /De c e m b e r 2007
5
Argentina and Brazil:
structural differences
and similarities
Torcuato S. Di Tella*
I
intend to concentrate especially on three relatively recent phases of
our history: rst, the popular movements headed by Perón and by Vargas;
then, the dictatorial regimes that originated in the sixties; and, lastly, the
democratization processes that started twenty years later, with their political
party systems. I shall begin with a brief historical overview of a longer span
than the one I have just circumscribed, as all of us come into the world
bearing the marks of what our antecessors did. But who were our antecessors?
What were they doing when our countries entered an independent life? The
answer will be different for the two countries: great-great-grand parents of
the majority of today’s Brazilians of all social levels were already in Brazil;
ours were far away and it is possible that they were even unaware of our two
nations’ existence. This contrast is quite sharp and has been the subject of
repeated analysis, although not always under a comparative focus. While in
some very signicant decades for Argentina’s formation (say, between 1880
and 1930) the country’s population was almost 30 percent foreign-born, in
* Buenos Aires University
Argentina and Brazil: structural differences and similarities
Di p l o m a c y , St r a t e g y & po l i t i c S – oc t o b e r /De c e m b e r 2007
6
Brazil foreigners accounted for barely over 5 percent of the population. True,
in São Paulo and in the southern states this gure was considerably higher,
but they are states, not a country, and are like an island surrounded by a vast
sea of other ethnic and social characteristics. An obvious consequence is
that, at least in the cultivated classes, there must be a much stronger historical
memory in Brazil than in Argentina, as such a memory is transmitted largely
through family traditions. In this respect, Argentina contrasts not only with
Brazil but also with Chile, which received fewer immigrants as well (5 percent
of its population at the most) and has a very modern political party system,
the one on our continent that most resembles the European system.
1
Would
this mean that Brazil and Chile are very similar as compared with Argentina?
Not necessarily, as the two countries’ social structures are markedly different
– diametrically opposed, one might say. As regards basic social structure, Chile
rather resembles Argentina, with its already settled, long-standing indexes of
urbanization, education, predominance of the middle class, and early labor
and trade union organization.
As a result of this stronger historical memory in Brazil and Chile,
there are in these two countries conservative parties, labeled as such or not,
a trait in common with practically all developed and democratic nations.
2
By
“conservative party” I mean a party with roots in the upper classes, with an
ideology very close to an entrepreneur’s view of things. This is how I see
Chile’s National Renovation Party-PRN and the Independent Democratic
Union-UDI, both with over a century-old history, as they originated in the old
Conservative and Liberal parties. In Brazil I would mention the Progressive
Party-PP (formerly Brazilian Progressive Party-PPB) and the Liberal Front
Party-PFL
3
, rst or second generation offshoots of the National Renovation
1 I have addressed this issue in much greater detail in “El impacto de la inmigración en el sistema político
argentino”, Estudios Migratorios Latinoamericanos 4:12, August 1989, pp. 211-230. See also Oscar Cornblit,
“Inmigrantes y empresarios en la política argentina”, Desarrollo Económico 6 nº. 24, January-March 1967, pp.
641-691; Fernando Devoto and Gianfausto Rosoli, comps., La inmigración italiana en la Argentina, Buenos Aires,
Biblos, 1985; Carl Solberg, Immigration and Nationalism: Argentina and Chile, 1890-1914, Austin, University of
Texas Press, 1970; Herbert Klein, “La integración de italianos en la Argentina y los Estados Unidos: un análisis
comparativo”, Desarrollo Económico 21, nº. 81, April-June, 1981, pp. 3-27.
2 Spain and Italy, until a few decades ago the two major exceptions regarding the absence of a clear Right on
the spectrum of parties, have “normalized” this situation since the gradual strengthening of José María Aznar’s
Popular Party in Spain and of Silvio Berlusconi’s Italia Force movement and its ally, the revamped National Alliance.
3 Recently changed its name to “Democratic Party” (DEM).
Di p l o m a c y , St r a t e g y & po l i t i c S – oc t o b e r /De c e m b e r 2007
Torcuato S. Di Tella
7
Alliance-Arena and the National Democratic Union-UDN, incorporating also
sectors of the old Vargas Right, the Social Democratic Party-PSD (which had
nothing of Social Democracy). In Chile, the two conservative parties can easily
win almost half of the electorate. In Brazil, the PP and the PFL together have a
third of the electorate; and although they are not usually allied, they constitute
a clearly conservative bastion, regardless of their electoral discourse, regionalist
banners, or the alliances into which the PFL has been induced on occasion with
the Center and the Center-Left personied by Fernando Henrique Cardoso.
It should be added that the Brazilian Democratic Movement Party-PMDB, a
problem-ridden heir to moderate Varguismo, has strong rightist leanings, which
bode ill for its continuing unity, already eroded by many schisms since it ceased
to play the agglutinating, anti-dictatorship role it played for many years.
4
The electoral strength of a rightist party rests on two pillars. One,
which weakens over time, is the traditional peasantry that vote for their
bosses or for notable relatives of their bosses. The other, which gains solidity
over time, is the modern, urban middle class: without it no elections could
be won. Some allege that there is a third pillar: the working class Tories
or rednecks or bureaucratized labor unions. This third pillar is somewhat
shaky, i.e., it is not really conservative – at least not the trade unionists. They
may be “socially conservative” (against hippies, gays, and immigrants and
unconcerned with human rights), but there is practically no instance of their
belonging to a country’s main conservative party, i.e., the party that holds the
heart and the pocketbook of the upper classes. Leaving an analysis of trade
unionism’s role for later, let us now look at the middle classes’ position. It is
usual for members of the middle class to envy and at the same time admire
members of the aristocracy or of the jet set and thus accept the leadership
of these hierarchic superiors. This is what occurs in most countries, where,
in their majority, they vote for conservatives, particularly after having been
through phases when their preference went mostly to centrist parties, such
4 Oscar Cornblit, “La opción conservadora en la política argentina”, Desarrollo Económico 14, no. 56, January-
March 1975, pp. 599-639; Douglas Chalmers, Atilio Borón and Maria do Carmo Campelo de Souza, comps.,
The Right and democracy in Latin America, New York, Praeger, 1991; Edward Gibson, Class and conservative parties:
Argentina in comparative perspective, Baltimore, Johns Hopkins University Press, 1996. On comparative elections
data see Torcuato S. Di Tella et al., Estructuras sindicales en la Argentina y Brasil: algunas tendencias recientes, Buenos
Aires, Biblos, 1995.
Argentina and Brazil: structural differences and similarities
Di p l o m a c y , St r a t e g y & po l i t i c S – oc t o b e r /De c e m b e r 2007
8
as the Radicals, the Christian Democrats, or the advanced Liberals.
5
But
what happens in a country such as Argentina, heavily marked by the impact
of immigration? This impact was much greater in our country than in any
other.
6
This made for a great participation void, as the mass of the urban
bourgeoisie and of the urban working classes was overwhelmingly made
up of foreigners that were not entitled to vote, as they had not acquired
Argentine citizenship. This was a serious issue, as those are the two most
strategic social segments for the consolidation of a modern political system.
The result was a weak bourgeois liberal party and a weak social-democratic
or labor party.
On the other hand, it can be observed worldwide that the bourgeoisie in
general, after supporting Liberalism against Conservatives, ends up by merging
into one of these two camps or into one that encompasses both, or into two
nearly always allied, all of which ensures the already mentioned solidity of
the political Right. But, as the overwhelmingly foreign bourgeoisie kept out
of the political parties’ arena, this attitude, often transmitted to the children,
would necessarily affect the health of a modern conservative party and not
only the Liberalism of an earlier phase. This is precisely what happened in
Argentina: the country is too advanced to have the type of markedly archaic
conservatism of rural Brazil and, on the other hand, it has too heavy a foreign
component to emulate the Chilean case. In other words, the mass of the
middle class or of the bourgeoisie of immigrant descent inherited from their
antecessors a dose of contempt for the “Creole country”, including the local
5 It is often argued that today’s tendency is toward the blurring of class lines in party support. Actually, the
parties have never been wholly based on clear-cut class lines. Many individuals hold inconsistent positions,
especially if their status is measured by educational level, which often happens for convenience’s sake. On
the other hand, Conservatism counts on many modest voters, particularly in the rural areas, while the Left
is strong among people with a higher education and a mid-level standard of living. The difference between
a conservative and a social-democratic party does not lie mainly in the social status of the mass of its voters
but rather in the fact that the organized groups in the upper and the lower strata of the social pyramid are
predominantly in one or the other political hemisphere. See Ronald J. Johnston, “Lipset and Rokkan revisited:
electoral cleavages, electoral geography, and electoral strategy in Great Britain”, in R.J. Johnston, F.M. Shelley
and P.J. Taylor, comps, Developments in electoral geography, London, Routledge, 1990. It goes without saying that
where there are serious religious, ethnic, or linguistic clashes, these drastically affect the Right-Left cleavage. In
respect of the United States, see Thomas Byrne Edsall and Mary D. Edsall, Chain reaction: the impact of race, rights
and taxes on American politics, New York, Norton, 1991.
6 In Australia and New Zealand, where the percentage of immigrants was similar to that in Argentina,
immigrants came from Great Britain without losing their nationality, bringing with them the institutional system
of the mother country.
Di p l o m a c y , St r a t e g y & po l i t i c S – oc t o b e r /De c e m b e r 2007
Torcuato S. Di Tella
9
upper classes, which were not able to instill respect in them, differently from
the North-American case.
7
Let us now look at what happens in the popular sector in respect of social
stratication and its political consequences. It is common knowledge that in
the past Brazil has experienced much sharper income differences by regions
and social strata than Argentina. In this sense it is quite appropriate to talk of
“two Brazils”, which still applies, albeit to a lesser degree. The rural condition,
coupled with the lesser weight the modern middle class has historically wielded,
is associated with the late emergence of trade unionism and Centrist parties
such as Radicalism. It is only since 1945 that one can speak of the existence
of a political party system in Brazil, other than the “Republican clans” of the
Ancient Republic and the “legions” and state parties that were organized to
support Vargas in the early 1930s.
This weakness of the Brazilian middle class explains the fact that in the
1920s dissidence came from the Army’s middle echelons, the expression of
which was tenentismo, which had no equivalent in Argentina. In Argentina,
Radicalism and the Left (Socialist and Communist) were the channels of
protest movements. Among those in uniform there were some that sought
innovations in the sphere of authoritarian developmentism, but these
innovations were heavily colored by the Right until they shifted during World
War II to nationalist masonry and the Unication Work Group-GOU, from
which Perón emerged.
It was in 1945 that a convergence and reciprocal imitation between Perón
and Vargas began. I will return to this. Much has been written about the social
conditions underlying the emergence of Peronism and of Vargas’s postwar
populist stance. I tend to stress the determining role of the emergence of new
industrialists in need of “protection or death” and of the new masses newly
migrated from the country to the cities. A characteristic of Brazil’s urban
working masses is worth pointing out here: they resulted from a much more
intense human renewal and generation turnover than in Argentina. In other
words, in the case of an individual of the urban popular sectors in Brazil, it is
7 In the United States, the total number of foreigners never exceeded 15 percent of the population. These
immigrants took U.S. citizenship and their status was clearly inferior to that of the already established population
(slaves excepted).
Argentina and Brazil: structural differences and similarities
Di p l o m a c y , St r a t e g y & po l i t i c S – oc t o b e r /De c e m b e r 2007
10
most likely that his parents had not lived in the same or in another city but had
come directly from the country, from environments that were poorly connected
to the national information network. This accounted for a sparse historical
memory in this population segment. In Argentina, though, an urban resident
had most likely heard his parents, an uncle, or a grandfather speak of their
emotion as they saw Evita on the balcony, or at a failed or successful strike,
or when Babín was arrested and the opposition press was shut down. This
is how political views are transmitted. In Chile, where the contrast between
the country and the city is not as sharp as in Brazil and where the impact of
immigration was not as marked as in Argentina, historical memory is extremely
accurate at all social levels.
These factors, coupled with other circumstances, explain why Varguismo,
the Brazilian populism phenomenon, was less deeply rooted than the similar
phenomenon in Argentina. As a result, its adherents were more easily inclined
to change loyalties. This is why Varguismo’s more radical, caudillismo-imbued
Democratic Labor Party-PDT of Leonel Brizola has become so enfeebled
and why the PMDB, its moderate strain, has lost its Varguismo connotation
and become a version of the various centrist parties in many parts of the
world, pulled right and left, which causes inner divisions, a highly noticeable
phenomenon with the Radical Civic Union-UCR in Argentina.
Varguismo’s feebler connection with the popular segments and the
intensied transformation of its industrial productive system explain why the
social and political scene in Brazil has undergone such radical changes in recent
years. As it left the political scene, Vargas populism gave room to a new Left,
represented by the Workers’ Party-PT, which had its cradle in the industrial
district of Greater São Paulo. In this connection, a signicant role was also
played by the Catholic Church, which gave origin in Brazil to a Liberation
Theology current that was much more inuential than it could have been in
Argentina. This Base Communities Church greatly helped PT’s expansion,
providing protection and supplying devoted militants. In this respect, this
phenomenon resembles British Laborism, for which, as its long-time Secretary-
General Herbert Morrison said, the important “M” was for Methodism,
not for Marx. Moreover, the competition of evangelical churches and Afro-
Brazilian rites forced the Brazilian clergy to modernize to be able to keep its
ock, differently from the Argentine situation. In Argentina, the masses were
won to Catholicism in the early 1940s, through Peronism, by a clergy that was
Di p l o m a c y , St r a t e g y & po l i t i c S – oc t o b e r /De c e m b e r 2007
Torcuato S. Di Tella
11
dissident in its own way and which had the sympathy of popular-falangists
opposed to the most traditionally liberal-conservative, somewhat latitudinarian
attitudes that prevailed in the upper classes.
Moving on to the military regimes, a major difference between the
two countries is also noticeable. In Brazil, the 1964-1985 period was, if not
genuinely constitutional, at least orderly, as presidential succession took place
without internal coups, with voter participation, albeit indirectly. In Argentina,
all military governments from 1943 to 1983 staged at least one, if not two or
three internal coups, whose memory is still sufciently fresh to need mention
here. Why this difference? Was it because the Argentine military were more
undisciplined, authoritarian, or ambitious than their Brazilian or Chilean peers?
This may be part of the answer but it was most likely due to an underlying
cause. In my view, it was due to the vigorous, threatening although not wholly
revolutionary character of Peronism during decades. This movement, which
represented in large measure an urban working class that carried greater weight
than their counterpart in Brazil or Chile and counted on major negotiator
capitani del popolo, has always been an appealing ally for any civilian or military
group. The ghts among ruling factions, which have always existed, found in
Argentina since World War II a likely way of obtaining a winner: an alliance
with Peronism, with the obvious purpose of dominating it. But this is not
so easy, because as soon as the innovating faction imposes itself through a
coup d’etat or an electoral pact, as Frondizi’s, the allies immediately become
insufferable guests, the alliance breaks owing to the excessive weight of its
popular component, and things go back to square one.
8
The main way to
put an end to this mechanism is Peronism’s conversion into a no longer
menacing, rather distributive movement that is a rival but not an enemy of
the Establishment, as occurs now.
In light of the preceding, the following characteristics may be lined up
as working hypotheses:
1. In Brazil, there is a sharper difference between urban and rural living
standards and a greater generation turnover in the popular strata,
coupled with a shorter historical memory at this level and a greater
facility to change political and party orientation.
8 Guillermo O’Donnell has referred to this process as “the impossible game” in his Modernización y autoritarismo,
Buenos Aires, Paidós, 1972, chap. 4.
Argentina and Brazil: structural differences and similarities
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12
2. In Argentina, the impact of the inow of immigrants has given rise to a
shorter historical memory than was the case in Brazil and accounts for less
political participation, as this impact was countered by the weaker inuence
of a liberal or conservative bourgeois party and of a kind of laborism.
3. In their political interventions, the Brazilian Armed Forces have acted in
a more disciplined way, owing in part to the control exerted by civilian
sectors of the Right, which contrasted with the Argentine temptation
to resort to Peronism as a potential ally in the struggle for power.
4. A social-democratic party in Argentina in the rst half of the twentieth
century was weaker than in countries at a similar economic and cultural
development stage (such as Chile, Italy or Australia), owing to the large
percentage of “nonnationalized” foreigners in the working class.
5. In Argentina, Peronism has been stronger, more closely linked to the
urban working class than Varguismo in Brazil. This, coupled with less
intense economic changes, has helped Peronism to endure to this day.
In Brazil, on the other hand, the place formerly occupied by Varguismo
remained vacant, which has permitted the establishment of a new Left,
the Workers’ Party.
Peron’s and Varga’s different trajectories
If brought back to life, a Plutarch wishing to present to Mercosur citizens
the feats of their most famous personalities would certainly include the Perón-
Vargas duo. Without the intention of emulating the Greek historian – whose
methodology would certainly be objected by my more scientic-minded colleagues
– an investigation of this topic from a sociological comparatist standpoint might
shed light on our social development and prospects. Vargas committed suicide
to prevent a coup d’état, while Perón died still in power. And yet, Varguism no
longer exists, while Peronism endures, albeit changed. Vargas as a historical gure
raises little controversy, differently from Perón. Perón left a goodly amount of
books exposing his doctrine, whereas, apart from his speeches, Vargas only left
a quite interesting private diary and a family – both in a strict and in the broadest
sense – that sees that proper rites are conducted at his tomb.
9
9 Getúlio Vargas, Diário, 2 vols., Rio de Janeiro, Fundação Getúlio Vargas, 1995; Alzira Vargas do Amaral
Peixoto, Getúlio Vargas, meu pai, Porto Alegre, Globo, 1960; Valentina da Rocha Lima and Plínio de Abreu
Ramos, Tancredo fala de Getúlio, Porto Alegre, L&PM Editores, 1986.
Di p l o m a c y , St r a t e g y & po l i t i c S – oc t o b e r /De c e m b e r 2007
Torcuato S. Di Tella
13
The better known “parallel lives” images date from 1945, when the close
similarity of the political roles of the two leaders became apparent. Vargas (ten
years Peron’s senior) had had a very long political career; he had reached power
through a civic-military revolution in 1930 and been Governor (“President”)
of an important state, Rio Grande do Sul. That is, he was a member of the
old political class. Although he had a military rank, as was customary among
traditional landholders, he never practiced a military profession.
10
From 1930
on he lived through various stages, principally as “provisional” but innovator
ruler (1930-34), constitutional President (1934-37), “developmentist” dictator
with a Constitution of corporative inspiration until being deposed in 1945,
and, after an interval, President again, now leaning towards the Left (1950-54).
Was this trajectory an example of the “Brownian movement” that according
to some of our critics characterizes the behavior of politicians in this part
of the world? As part of greater self-esteem that should characterize us, I
will attempt to put some order in this type of trajectory, seeing if, though
Ptolemaic, a system may clarify things, so as to place us at least at the level of
the celebrated although not too consistent Whigs and Tories that established
the civic liberties regimen in England.
Perón also oscillated between a Mussolinian inspiration – claiming in
his last years that the Duce was realizing a “local version of socialism” – and
admiration for Mao, whose attempts to build socialism fell perhaps as short
of the aim as the Italian’s, even though both enjoyed much greater credibility
until recently. In his Rio Grande do Sul beginnings, Vargas belonged to
the local Republican Party, of a Comtean positivist cast, clearly inclined to
forming strong governments capable of carrying out profound changes
toward modernization. But this party barely deserved its name; the same
thing happened with the various attempts to form ofcial parties, or rather
“legions”, which the tenentes [armed forces middle and lower ranks] sent out as
“interveners” tried to establish with modest success in the states. As a matter
of fact, in 1937, with the self-staged coup known as Estado Novo, Vargas, unable
to establish an ofcial party, dissolved the few existing parties, from those
that supported him to the liberal, fascist, or communist opposition parties.
The Estado Novo thus never had truly fascist characteristics because, without
an ofcial party, the exercise of totalitarianism was difcult. In the end, the
Estado Novo meant a technocratic dictatorship, which is something else. Vargas
10 Virgílio A. de Melo Franco, Outubro 1930, 5ª ed; Rio de Janeiro, Nova Fronteira. 1980.
Argentina and Brazil: structural differences and similarities
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14
did not establish the corporative representation system his own Constitution
demanded; in view of prevailing critical circumstances, he kept putting it off
until he was able to achieve it in the liberation spring of the war’s end.
11
It is common knowledge that in 1945 Vargas called for free elections,
pressured by public opinion and by the military, which were tired of his
protracted term and apprehensive about his inclination to draw inspiration
from Perón’s now successful example of mass mobilization. To counter this
impasse, Vargas established two parties, just as did his Argentine model. Perón
had the Labor Party, rmly anchored in the unions and signicantly named after
the English worker’s party; and the Radical Civic Union – Junta Renovadora,
a somewhat loose grouping that included free-standing politicians, many of
them linked to the provincial caudillo-style system. Signicantly, the two parties
were merged into one by Perón with the stroke of a pen soon after his victory
at the 1946 elections, evidencing a verticality tendency and the mighty power
of a leader who acted upon a mass that was already largely mobilized but little
used to joint action.
12
Varguismo’s alliance and its mutations
In Brazil, Vargas also established two parties, both named after the
European social-democratic experience, but could never unify them, not
because he did not want to do it but could not, or rather he did not want to do
it because he knew he could not. For the urban popular sector, newly unionized
but with structures much more dependent on the government than was the
case in Argentina, he established the Brazilian Workers’ Party-PTB. For the
local notables, particularly those in the peripheral states, often conservative
but resentful of the centralist dominion, he established the Social Democratic
Party-PSD, an acronym that, differently from PTB, was merely fanciful.
13
11 José Murilo de Carvalho, “Armed Forces and Politics in Brazil, 1930-45”, Hispanic American Historical Review,
62:2, May 1982, pp. 193-223; Virgínio Santa Rosa, O sentido do tenentismo, 3ª ed., São Paulo, Alfa-Omega, 1976
(1ª ed.,1933); Aspásia Camargo et al., O golpe silencioso, Rio de Janeiro, Rio Fundo Editora, 1989.
12 This is not the place to list the extensive bibliography on the role of the pre-existing unions in the making
of Peronismo or on the degree of autonomy enjoyed by those that joined it. See, for example, Juan Carlos
Torre, Perón y la vieja guardia sindical, Buenos Aires, Sudamericana, 1990, and my somewhat different view, which
stresses the dependence with which union leaders acted, in Perón y los sindicatos, Buenos Aires, Ariel, 2003.
13 Lúcia Hippolito, De raposas e reformistas: o PSD e a experiência democrática brasileira, 1945-64, Rio de Janeiro,
Paz e Terra, 1985; Ângela de Castro Gomes, A invenção do trabalhismo, São Paulo, Vértice/Iuperj, 1988; Edgard
Carone, Movimento operário no Brasil, 1877-1944, São Paulo, Difel, 1979.
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Torcuato S. Di Tella
15
Of the two Varguist parties, nearly always allied with each other during the
democratic period that lasted until 1964, PSD was the main vote-getter in the
beginning, owing to the characteristics of the Brazilian electorate. But with
each rally, which attracted urban contingents, PTB’s weight increased and
its more radicalized segments became more active. The PTB-PSD alliance
was to a certain extent equivalent to Mexico’s PRI and to India’s Congress
Party, that is, a party integrated by different classes, although it had two heads
and had not been preceded by a revolution. The fact that there had been no
revolution – despite Varguismo’s renovation bias – may help explain why,
differently from what happened in Mexico for a long time, there has been
from the beginning an electorally strong Right (UDN, then Arena, and PP
plus PFL today). On the other extreme, parallel to the Varguist coalition,
there was an electorally weak Left (mainly the Brazilian Communist Party),
similarly to the Mexican case.
14
Then came the extreme radicalization of the Goulart phase, when
Varguist strains and the Left converged. The situation created the preconditions
for a revolutionary outcome, possibly brought about by the Executive and
its entourage in the form of a self-inicted coup, as in 1937, but on the Left
this time. It is quite certain that the looming revolution would not have been
exactly “socialist” but sufciently threatening and bent on expropriation to
shake awake the property-owning classes, following an intermediate model
between the Mexican Revolution, with high mass mobilization, and the later,
more elitist Peruvian Revolution or one of the revolutions in the Arab world
or in Africa.
15
This leftist reorientation had already been given a thrust by the
late-day Vargas, as he used to say that there are two forms of democracy, one
of which was “liberal and capitalist, based on inequality”, while the other was
“social democracy”, or “workers’ democracy”, which he defended on behalf
of the collectivity.
16
In the tumultuous days that preceded the 1964 military
coup, the Varguist alliance broke up because PSD’s great majority was clearly
opposed to the measures contemplated by Goulart. The coup, then, was not
just a military event; it marked the rupture of a coalition, which indicated broad
civilian support for the new regime, which was approved by the majority of
14 Maria Vitória Benevides, A UDN e o udenismo, Rio de Janeiro, Paz e terra, 1981; Edgard Carone, O PCB,
2 vols., São Paulo, 1982.
15 Denis de Moraes, A esquerda e o golpe de 64, Rio de Janeiro, Espaço e Tempo, 1989.
16 Paulo Brandi, Vargas: da vida para a história, 2ª ed., Rio de Janeiro, Zahar, 1985, pp.204-205 and 211.
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Congress that consisted of the liberal Right (UDN), the Varguist Right (PSD)
and other regional groups, such as the Progressive Socialist Party-PSP of São
Paulo Governor Adhemar de Barros.
Classic Peronism
Differently from Varguismo’s two-pronged alliance, Peronism had always
been more unied, at least in a formal sense. As a matter of fact, though, it
encompassed different internal currents that I would describe as follows:
• The Peronism of the labor unions, based on the workers’ sectors
in the country’s more afuent area, highly mobilized and with a not
negligible association experience;
• The Peronism of the inner provinces, more caudilloist and based on
poor, little mobilized segments of the population; and
• The Peronism of the elites, the signicant minorities not yet well
integrated into their original classes, the Armed Forces, the clergy, the
industrialists, intellectuals of the Right, and other more idiosyncratic
circles.
17
The labor unions current resembles the Brazilian PTB; the difference
is that it is much more dominant. The inner provinces current resembles the
PSD, but with more components given to mobilization, although to a lesser
degree than the labor union current. The current associated with the elites, quite
heterogeneous, resembles Varguismo in many aspects, as the latter in general
found rmer consensus among the upper classes (peripheral and central) than
did its Argentine counterpart. Thus, the upper classes’ Varguist sector, being
quite numerous, does not differ very much from its other segments, as was
the case of Peronism in Argentina.
Early on, the Peronist elite, although a minority among the upper classes,
encompassed a wide sector of some of the Armed Forces, a signicant part
17 See, inter alia, Christian Buchrucker, Nacionalismo y Peronismo: la Argentina en la crisis ideológica mundial, 1927-
1955, Buenos Aires, Sudamericana, 1987; Manuel Mora y Araujo, “Populismo, laborismo y classes medias:
política y estructura social en la Argentina”, Criterio 1755-1756 (1977), pp. 9-12.
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of the less modern-minded clergy, and some industrialists torn between the
benets they derived from the Justicialista government’s protectionist policy
and the headaches caused to their enterprises by social agitation, which was
much more intense than under Vargas. Despite the similarities pointed out
between the Peronist currents we may consider as being of a “PSD type”
and a “PTB type” and their Brazilian counterparts, those of “PTB type” in
Argentina were much more vigorous. As regards those currents of the “elite
type”, they were much more adventurous and daring, much less connected
to their original classes than in the Brazilian case and began abandoning the
movement when it demonstrated its mobilizing power and the difculty in
controlling its members in the leader’s absence became apparent. This is what
may have led the Church to confront the government and, beginning in 1945,
to take precautions to train its own leaders, which was violently countered by
Perón. This is why the 1955 coup, similarly to the 1964 Brazilian coup, can
also be considered not as just a military intervention or a recrudescence of
the combativeness of the traditional opposition rooted in the Democratic
Union, but also as the result of a breakdown of the Peronist coalition, whose
Right had deserted. It is obvious that this Right did not take away many votes
with it, differently from what happened in Brazil, but it did take away major
power factors.
Peronism’s radicalization
Peronism’s radicalization is well known. It began around 1954, was
intensied by the “resistance” and then by the emergence of a guerrilla
faction. Although many members of this faction were not originally or
rmly convinced Peronists, the fact is that they were welcomed into this
movement.
18
In general it can be said, based on worldwide experience,
that in its early or intermediate stages, a popular movement harbors
marked tendencies toward confrontation and even violence. This is why
the incorporation of the popular masses into the political system and their
18 Donald Hodges, Argentina, 1943-1987: the national revolution and resistance, Albuquerque, University of New
Mexico Press, 1987; Daniel James, Resistance and integration: Peronism and the Argentine working class, 1946-1976,
Cambridge, Cambridge University Press, 1988; Roberto Baschetti, ed., Documentos de la resistencia peronista, 1955-
1970, Buenos Aires, Puntosur, 1988.
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integration into and participation in power and inuential circles are the
main problem to be solved in a basic democratization process, such as the
current one in many countries of our continent. Over time, the tendency in
countries with relatively high urban, industrial, and cultural development is
toward the bipolarization of the political scene between a Right and a Left,
both moderate. The often convulsive phase of integration of the masses
is followed by a sort of equilibrium, a social draw, when some consensus
is formed about the rules of the political game, as well as an acceptance
of government projects; this pulls all the sectors into the center, which,
paradoxically, weakens the parties at the Center.
Now, it is possible that the initial model Perón had in mind resembled
the PRI model, which had already stabilized and exerted a great impact
on international public opinion since the nationalization of oil in 1938. In
Perón’s mind, that model interacted with the model Vargas was developing
at the same time; in addition, earlier on, the Argentine leader had drawn
inspiration from Mussolini. Despite his wishes, he was not able to copy
any of these models. Moreover, in the beginning of his participation in the
1943-1946 military regime, he would surely have been shocked at the idea
of starting such a conictive and confrontationist movement as he ended
up by starting. As he used to say even before French politician Alexandre
Ledru Rollin did so at the time of the Paris barricades: “I am a leader and
so I must follow.”
19
Perón undoubtedly hoped to attract the majority of
dynamic entrepreneurs, the professionals, both the urban and rural middle
class, and craftsmen, possibly leaving aside some recalcitrant landholder
sector or extremist groups among the intellectuals and the labor unions.
This is difcult to document, but everything leads one to think that it
was so. Nevertheless, his movement aimed at consolidating the Argentine
community for a great effort toward economic, perhaps also geographic,
expansion, ended up by engendering some of the most serious episodes of
class confrontation in the country’s history.
20
19 Ronald Aminzade, Ballots and politics: class formation and republican politics in France, 1830-1871, Princeton,
Princeton University Press, 1993, p. 52.
20 On Perón’s initial project, see Carlos Waisman, Reversal of development in Argentina: postwar counterrevolutionary
policies and their structural consequences, Princeton, Princeton University Press, 1987.
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This is where Peronism clearly differs from the Mexican PRI, although
the two are often thrust into the same conceptual bag. Both can be included
in a broader concept of populism, or “popular nationalism”, as long as
their differences are kept in mind. Although this is not the time to dwell
too long on comparisons, I should mention that in other works I have
classied the movements that in a broad sense may be called “populists”
into the following types:
• Multiclass integration populism: the Mexican PRI and the Vargas’s
PSD+PTB alliance;
• Middle-class populism: with strong participation of a provincial middle
class, separate from not very central unions, such as in Aprismo and
Democratic Action;
• Social revolutionaries’ populism: characterized by the leading role played
by quite radicalized sectors of the middle classes, with varying degrees
of workers’ and peasants’ inuence. The better known cases amongst
us are Fidelism and Sandinism;
• Workers’ populism: with major participation of urban workers, minor
participation of the middle class, and leading elites ranging much higher
in social status. The classical example is Peronism, which Vargas’s, or
even more, Brizola’s trabalhismo, or workers’ movement approached.
More recently, Hugo Chávez seems to lead a phenomenon of the
same type in Venezuela, as are doing Rafael Correa in Ecuador
and Ollanta Humala in Peru. Evo Morales’ movement in Bolivia is
somewhat similar, but because of the more popular origin of his
leadership, it comes closer to “Aprism”.
To this list it must be added in the popular prole though not in
the populist:
•
Social-democratic parties: although not populist, these popular groupings have
roots in the socialist unions but this does not preclude the participation
of other sectors, such as the intellectuals or often important middle-class
minorities. This category includes European Social Democracy (including
in turn a former Communist variant), or its more radical versions:
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the old Chilean Socialism and Communism, and the Workers’ Party-PT
in Brazil.
21
Outside this group, which represents one or another sector of the
political arena, are situated the centrist parties, such as Radicalismo or
Christian Democracy, and farther away, the rightist parties, to which we
have already referred.
Varguismo’s and Peronism’s transmutations
Varguismo, as we have seen, ended up by dissolving itself in the maelstrom
of urban transformations, with its roots in a proletariat with limited historical
memory severed, or in an elite marginalized by the advance of modernization.
This created a representation void, which the PT was soon able to ll. Leonel
Brizola’s Workers’ Democratic Party-PDT, Varguismo’s radical offshoot,
seemed for a while to continue to hoist the old ags but in the end proved to
be just too personalist when national conditions had already changed.
22
As regards Peronism, its radical period was cut short by Perón himself, as
he used it to return to power, although signicant segments remained connected
to the movement. From then on, Peronism began to evolve in a reformist,
consensual sense, typical of a popular movement after the rst enthusiasms
and battles without quarter give way to more orderly competition. This
process typically occurs when the workers’ movement achieves certain social
conquests and gains access to major positions, if only provincial or municipal,
as in Italy’s case. In Argentina and in other countries of the continent, such as
Chile, former adversaries are drawing closer, despite the poor economic and
employment conditions of a goodly part of the popular mass. This is in part
21 I should clarify that I use the “populism” concept in the sense disseminated by the social sciences in Latin
America in the sixties and not as it has become current among journalists and even more for some social scientist
as synonymous with bad government and unfulllable populist promises. Oftentimes, the populism label has been
attached to any movement, tendency, or public leader that appeals to popular feelings and prejudices. From this
angle, both Margaret Thatcher and Ronald Reagan and even more Le Pen or Hayder would be considered populist.
It is something else when on the basis of these popular feelings and prejudices a strong social mobilization
movement waving anti-oligarchic banners arises, in which case we may speak of populism. See Ghita Ionescu and
Ernest Gellner, comps., Populism: its meanings and national characteristics, London, Weidenfeld and Nicholson, 1969.
22 Moacir Gadotti and Otaviano Pereira, Pra que PT: origem, projeto e consolidação do Partido dos Trabalhadores, São
Paulo, Cortez Editora, 1989; Leôncio Martins Rodrigues, CUT: os militantes e a ideologia, São Paulo, Paz e Terra, 1990.
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a result of the end of the violent state, including civil war, in which we had
been submerged for decades. Hence the political elites’ inclination to clinch
“pacts”, from the early cases of Colombia and Venezuela to the Spanish case to
the more recent instances in Argentina. Justicialismo’s rise to power with Carlos
Menem in 1989 intensied a gradual process already under way, particularly
among the leadership that aspired to wield political power instead of just
confronting it. This reorientation occurred in practically all reformist parties,
whether they had Social Democratic, Communist, or populist roots.
23
This reorientation, though, does not warrant classifying the political
parties of popular origin that follow it as “conservative” or as “popular
conservative”. Otherwise this category would have to include the Spanish
socialists and the British labourites. Where then would be the Peninsula
Popular Party or Great Britain’s conservative party? According to some people,
all parties that carry a certain weight today are conservative; but if this is so,
the term loses its meaning. It is also argued that today the parties are mere
machinery geared to the conquest of power, impelled not by ideology or
class ambition but by a leader’s personality and by alternative, yet very similar,
technocratic projects, which can be changed as one changes clothes. To me, this
is a “postmodern” reasoning that results in a distorted view, which magnies
certain facts taken out of context.
This being said, certain topics should be added to the analysis, to wit:
1. In some cases, alliances may be struck among parties of a different origin
that may join similar or not so similar groupings for tactical motives.
This has occurred in cases from the “Great Coalition” that endured in
Austria for decades or in Germany in the postwar years and today to the
Catalan parties’ and the Basque nationalist parties’ coalitions that joined
off-and-on Socialism and the Popular Party. This is also the Brazilian
case of the alliance between the PFL and the Brazil Social-Democratic
Party-PSDB or perhaps the one between Justicialismo led by Menem and
the neoliberal Democratic Center Union – UCD and other groups of the
Right in Argentina. None of these alliances alone warrants ascribing to
23 For a recent discussion on this issue, see Seymour Martin Lipset, Political renewal on the Left: a comparative
perspective, Washington, Progressive Policy Institute, January 1990; Alejandro Foxley, “After authoritarianism:
political alternatives”, in A. Foxley, M. McPherson and G. O’Donnell, comps., Development, democracy and the art
of trespassing: essays in honor of Albert O. Hirschman, Notre Dame University Press, 1988, pp. 91-113.
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the individual parties that make it up the characteristics of its members,
although its most extremist militants may think so.
2. On the spectrum of parties under scrutiny (social-democratic,
communist, and populist), there is special room for those of a populist
type, whose class makeup is generally more heterogeneous, although
not as extremely so as the Mexican PRI. Peronism, as mentioned, falls
into a particular category, one more deeply rooted in the unions and
in the workers’ context than those more broadly called “populist”.
However, they harbor also a leading elite markedly differentiated from
the movement’s mass. This happens to a certain extent in any political
party, but in Peronism this is more noticeable.
The 1966 Argentine coup: a military-labor pact?
For several decades Peronism has been seen by the upper classes as a
threat to its interests even though most of the time the movement did not
show a revolutionary prole. It did indeed go through periods of violence
and sharp antagonism against the dominant classes, since the burning down
of the Jockey Club and of churches, and particularly during the protracted
ostracism (1955-1973) that led it to strike an alliance with guerilla groups,
some bred within itself and others from the outside. In its leading elite and
union leaders, Peronism has always had a segment oriented toward Third-
World authoritarian nationalism or even fascism. This latter rightist factor
instilled vigor into it, through the roots it launches into signicant minorities
of the dominant classes, while alienating the intelligentsia and broad sectors
of the middle classes, though. All this notwithstanding, for most of the time
Peronism has been seen by the Establishment as potentially more dangerous
than the local Marxist parties.
24
According to political gossiping toward the end of the administration
of Radical President Umberto Illia (1966), there was a formal or informal pact
between the military and the unions to oust him, a “military-labor pact”, a sort
of neocorporatist agreement to divide the spoils of what was left of the country,
24 For different views on the subject, see Carlos Waisman, op. cit.; Juan José Hernández Arregui, Peronismo
y socialismo, Buenos Aires, Ediciones Hachea, 1972; Oscar Terán, Nuestros años sesentas: la formación de la nueva
izquierda intelectual en la Argentina, 1956-1966, Buenos Aires, Puntosur, 1991.
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regardless of the outcome of the elections. This actual or alleged pact must be
checked against the fact that the main objective of all the military regimes that
took power in Argentina from 1945 thru 1976 was to oust or prevent a Peronist
government.
25
The Peronists were indeed the main adversaries of the military
as well as of the entrepreneurial class in general, notwithstanding the intentions
of many of their leaders, who were thus forced to take every precaution and act
with special caution, as any false step on their part would produce an immediate,
violent reaction from the other side. This is why there was always a Peronist
negotiating component, of a labor cast or not, that made utmost efforts to
approach their possible enemies in the pursuit of a coexistence pact at any cost,
including the alienation of segments of their own base. This is why, as General
Ongania took ofce, the metallurgic Augusto Vandor and other leaders were seen
paying homage to the new authorities. This attempt at coexistence did not last,
though, and in a few months, confrontation became very harsh. The negotiators
never ceased to hope for the reestablishment of an alliance between the Army
and the People, which never happened. Peronism’s negotiating leaders knew
full well that the objective of the 1966 coup was to prevent Justicialismo’s sure
victory at the forthcoming presidential elections. They felt too weak to break
the military’s hegemony but were willing to offer a pact whereby they would be
recognized as junior partakers at the table of power, proffering guarantees that
this attitude would lter down to the more radical segments of the movement
itself. But this quite reasonable argument could not win the day because the
contestation-prone, even violent nature of the movement they led prevailed
upon their conciliatory strategies. The organizing force of the pressure groups
in Argentina, coupled with Peronism’s contradictory characteristics, caused the
failure of all Argentine military regimes, which were unable to remain in power,
as was the case in Chile and in Brazil.
It should be pointed out that in the modern world it is practically
impossible to nd political parties that embrace at the same time entrepreneurs,
nanciers, successful professionals, and most of the middle class in general,
as well as the workers’ and the popular segments. Some past experiences
of this type, such as the Mexican PRI, the Varguist PSD-PTB alliance, and
India’s Congress Party, have undergone or are undergoing a denite process
25 Guillermo O’Donnell, El Estado burocrático-autoritario, 1966-1973, Buenos Aires, Editorial de Belgrano, 1982;
Eugenio Kvaternik, Crisis sin salvataje: la crisis político-militar de 1962-63, Buenos Aires, IDES, 1987, and El péndulo
cívico-militar: la caída de Illia, Buenos Aires, Thesis/Instituto de Tella, 1990.
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of disintegration or evolution toward something different. Argentina is not an
appropriate eld for the consolidation of a multiclass integration movement
as structured as the PRI. Moreover, the “popular conservatism” concept does
not nd expression anywhere in the world, unless we apply this label to any
conservative party capable of winning elections and appealing to somewhat
atavistic feelings.
Existing comparative evidence indicates rather that a class-type
convergence as broad as the one that Justicialismo seemed to express under
Carlos Menem (1989-1999) is difcult to maintain and this has been made
clear by the subsequent evolution of this movement reoriented by Néstor
Kirchner. The undeniable existence of this alliance leads us to consider it
rather as a tactic coalition, typical of a postwar situation. The war I am referring
to is not necessarily the “dirt war”, although the latter is not excluded, but
the war that encompasses practically the entire period from 1945 – or 1930,
perhaps – to 1983. It is not that “Peronism may be anything” as it is often
said; but it is a typical agglutinating movement that includes various social
sectors, more noticeable in the peripheral countries than in the First World,
and which tends to change over time. But this does not mean that in the more
afuent regions of the planet parties do not change. Or can also the Spanish
or Chilean socialists that have moved from revolution to reformism, or the
ex-communists of Italy or Eastern Europe, not to speak of the Alleanza
Nazionale fascists, unknowingly be “peronist”?
Outlook for Argentina’s political party system
The Argentine political system is under strong pressure and will very
likely change in an almost unrecognizable way in the coming years, approaching
West Europe’s model, or Chile’s, to take a closer example. This is the issue I
will address now, despite my friend’s earnest advice not to engage in futurology,
as one is master of one’s words only before uttering them and their slave
thereafter. But human curiosity is unfathomable and mine is sufciently strong
as to make me dare tread this path.
For a long time our country has had strictly organized “corporative”
groups (entrepreneurial, labor, professional, and farmer associations, the
Church, the Armed Forces), which is usual in the more developed countries,
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but has had a very peculiar party system. This system has some differences
vis-à-vis the model it is bound to approach, in my view:
1. Absence of an electorally strong Right, a fact that one perhaps should
not lament, but which differs from what happens in most actual
democracies.
2. Enduring force until recently of a Center party, the Radical Civic Union,
albeit without strong roots in entrepreneurial or labor “corporative”
organizations.
3. Absence of a social-democratic voice in the popular classes, lled by
a populist movement rmly rooted in trade unions.
Trade unionism in Argentina during the thirties and the early forties was
very similar to trade unionism in Chile and Uruguay, two countries with which
we share many characteristics. It also followed European models quite closely.
But it differed from what was happening in the rest of Latin America, where
labor organization depended heavily on the State and had often been initiated
and encouraged by the upper echelons, particularly in Mexico and in Brazil.
Since Peronism’s rise, Argentine trade unionism has changed so much as to
differ quite clearly from its counterparts in Chile and Uruguay, which have
maintained many of their traditional albeit modernized forms of organization
and ideology. In Argentina, a caudillo-type of leadership has imposed itself,
which makes for leaders much more distanced from their bases than is current
in countries with a democratic structure. True, owing to the advances of modern
life, trade unionism everywhere has adopted a bureaucratic organization, within
limits, as it has kept its association character, and violence ceased to be endemic
in internal struggles, with notorious exceptions, such as the Teamsters Union in
the United States. In Argentina, the proliferation of violent groups within trade
unionism was part of a reaction to the threat of inltration by rival groups that
were often backed by authoritarian governments, beginning with the so-called
Liberating Revolution. With the consolidation of the Rule of Law, the possibility
or legitimacy of continuing to use these methods must slowly vanish.
In Brazil, the transition from traditionally very manipulative leadership –
the “pelegos” – to leftist forms more directly connected with the militants, has
been obvious and has provided a base for the PT and Lula. Would this process
be possible in Argentina? Perhaps, but with major differences, because, as we
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have seen, Varguismo in Brazil never penetrated as deeply into the popular
classes as did Peronism and because the country has been radically transformed
by massive industrialization, which did not happen in Argentina.
Now, looking at the middle class, one notes that its majority, far from
supporting some conservative party by whatever name – which is the case
in the developed world – has provided the base for the Radical Civic Union-
UCR, which has won battles in the democratic struggle but shows few ties
to corporative interests. This party’s electorate gradually decreased to almost
a quarter or less (21 percent at the 1973 elections, when Balbín ran against
Justicialista Héctor Cámpora), gaining new vigor with the rise of Raúl Alfonsín,
when it attracted a considerable group of intellectuals and people from the Left,
tired of sectarianism and disillusioned with revolutionary Peronism. But the
returns showed that Alfonsín won the 1983 elections thanks to the Right, which
preferred his centrist variant, somewhat inclined towards the moderate Left,
to the threatening, unpredictable justicialista popular mobilization. Despite this
backing, though, Alfonsinism was not sufciently conservative to represent the
corporative interests of the upper classes’ and much less those of the Church
or the Armed Forces. Neither did it display sufcient leftist characteristics to
identify with the unionized segments of the population, whether with their
leadership or with the opposition minorities in each union.
Changes in Peronism
Peronism has undergone profound changes practically from the
beginning. Its protean nature is such that the rst person to be surprised by his
own creation must have been Perón himself. He would have a thousand times
preferred something similar to Mexico’s Institutional Revolutionary Party-
PRI, which encompassed nearly everybody, from industrial entrepreneurs to
dynamic technicians to the middle class, including the peasants and workers’
majority, but all clearly under control. Perón vehemently repudiate class
struggle and his entire initial endeavor was aimed at consolidating the nation
and at preparing it for undertaking huge efforts on the industrial front and
possibly on the war front as well. But in practice, as we have seen, his party
ended up by staging some of Argentina’s harshest confrontations with the
afuent classes.
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Other populist movements typical of peripheral countries, and Varguismo
in particular, have also undergone major changes that have thrust them into
a pendular oscillation between positions that were close to, if not identical to
fascism, and other stances of a clear anticapitalist bias, as illustrated by João
Goulart in the early sixties. In all populism variants, the participation of the
upper or middle classes or of functional groups such as the Armed Forces or
the clergy was central. These minorities within their original class are quite
strategic, as they inject power elements into a movement that, if it were not
for them, would be reduced to a little-organized mass or to their leaders’ inner
circles. Obviously, these minorities endow the movement with a moderate
prole, but any unbiased observer can see that their possibility of controlling
the masses, especially at their leader’s death, would be somewhat uncertain.
The social-democratic phenomenon (or Eurocommunism in its time) also
encompasses segments of the afuent classes that support the movement, but
they are fewer and their attachment to their original classes is more problematic.
In addition, a déclassée, or opportunist minority that swarms around populism is
not always a guarantee of moderation. Many elements, when caught in painful
personal circumstances may, despite their ideology rooted in conservatism,
suddenly change and jump over the ideological spectrum. Thus, the rightist
origin of many guerilla activists in Argentina and in other countries should
not surprise us.
In 1989, the prospect of Carlos Menem’s winning the elections, ever
more assured according to the opinion polls, caused real panic among both
the Right and the intellectuals, as they were, for a number of reasons, worried
about a return of what seemed to be a fundamentalist strain of Peronism.
This was so real that it can be said that hyperination was due not so much to
any possible mistakes in Alfonsín’s economic plan or to punctual speculation,
which inevitably occurs in such cases, but rather to the fear that tortured those
that had something to lose. There was high probability of a replication of the
Cámpora-Perón scenario or of Allende’s in Chile, with a different ideological
but similarly conictive content. The redirection adopted by Carlos Menem and
his advisers, seeking to share power with the country’s major entrepreneurial
groups contributed to general pacication, notwithstanding the economic
results that, particularly in certain situations, had a stronger impact on the
lower, traditionally peronist segments. But given the quite possible alternative
of civil strife and a coup, “Argentina’s Pact” helped consolidate the democratic
Argentina and Brazil: structural differences and similarities
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process. There was a recurrence of situations that neither Spain’s nor France’s
socialism had known, not to speak of Eastern European post-communist
regimes. This reorientation had also some unexpected effects on the political
party system, which will be felt with still greater intensity.
Possibility of party fragmentation
Strangely enough, the rst victim of the new image projected by Peronism
– or Menemism, if you wish, although it is a fact that the majority in the party
followed Menem – was the Radical Civic Union, which began to lose votes
in provincial and national legislative elections. It happened that, in view of
Menem’s pact with the political and economic Right, the “Peronist menace”
began to wane. At rst, public opinion doubted that changes were genuine.
But as time went by and the President paid the price of having alienated
many militants in his own party and in the General Labor Confederation-
CGT, entrepreneurs could breathe at ease. Only one cloud remained: before
the loudly voiced militant clamor of “Treason”, the government could soon
be reduced to a nullity in the electoral eld. Something similar had happened
before in our area with Carlos Ibáñez in Chile in 1954 and also in England to
Ramsay MacDonald, who applied “neoliberal” medicines to the 1930 crisis
and was left without a party, as well as being denigrated by his former peers’
historiography. But, as is well known, this did not happen in Argentina, where
in successive elections Peronism voters only dropped from 50 percent to 40
percent, exactly the same thing that happened to Felipe González in Spain.
As fears dwindled not only among entrepreneurs but also among
intellectuals, each of these traditionally anti-Peronist groups felt free to go its
own ideological way, without having to opt as before for a less evil, i.e., the
UCR. In other words, the center-right and center-left electorate, the base of
what Alfonsinism had added to radical centrism, became free and established
their own organizations: leaning to the Right, Ricardo López Murphy’s Recrear;
toward the left or moralism, Elisa Carrió’s ARI (Argentines for a Republic
of Equals), both leaders being former Radical gures. The persistence of the
electoral force – and thus of social support, whether organized or not – of the
ruling Justicialista Party was consolidated in the 1995 presidential elections. At
those elections, one could no longer say that the discourse was different from
the practice. Justicialismo won approximately 50 percent of the votes, just as it
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had in 1989. Now, however, the makeup of the 50 percent was different, as at
least 10 percentage points were undoubtedly the same 10 percentage points it
had lost to the Left and which it was now recovering from a Right that could
hardly believe it was depositing the ballot with the nation’s emblem in the box,
which it certainly did à contrecoeur.
Peronism’s components
Before addressing Peronism’s future, it is necessary to do an X-ray of
the parts that make it up and that can burst under the effects of economic
changes. A comparison with Eastern Europe shows that the social-democratic
parties that adopt “neoliberal” policies have lost much of their electorate,
which has affected its militancy and its size. Secessionist groups, or new
parties on the Left, have gained strength but do not pose a serious threat,
owing partly to the discredit into which alternative utopias have fallen. Is this
experience applicable? Is Argentina’s economic situation much worse than the
one faced by Europe even in its critical periods? Is Peronism the equivalent
of Social-Democracy? There are certainly differences, but similarities do exist
also, and one should note the converging tendencies that after the crisis that
began in 2001 are quite radically changing Justicialismo and forming a new
agglomeration around President Néstor Kirchner, which includes most of
the Justicialist party as well as other free-standing Center-left groups. The two
main differences between Peronism and Social-Democracy are the nature of
trade unionism and the presence of important though minority sectors of the
upper and the upper-middle classes, the Armed Forces, and the Church. Also
important, and to a certain extent derived from the preceding, is ideology,
largely developed by the aforementioned groups, i.e., by non-labor elites.
Be as it may, let us now look at each component and see if it shows
inclination to change.
a) Trade unionism
It is well known that Peronism is a special category among the different
types of populism, owing to trade unionism’s marked presence in it, stronger
than in all the other known types, particularly in its early stages. Union
organization is quite different from that of social-democratic labor associations.
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This is due to the way unions were established when the movement began
and were changed soon after under State pressure. Juan Carlos Torre was
right in saying that some members of trade unionism’s old guard had a key
role in the formation of the Labor Party, but he may overestimate its relative
weight. As a matter of fact, soon after the Labor Party was established, Perón
ordered it dissolved, which met with little resistance. The combination of
verticality and popular acquiescence is precisely what characterizes populism
in general and Peronism in particular. Only certain social conditions give rise
to this peculiar combination, which lasts for a long time, oftentimes even
after the original conditions no longer prevail. Over time, new conditions
impose themselves. Today, these new conditions require a less Caudillist union
organization, short of arriving at full internal democracy, in which the bases
fully participate. Acceptance of privatization public policies and other free
market prescriptions is not due to imposition from above but rather to the
reading of the newspapers’ international section or from conversations with
people who attend numerous international meetings, in which their leaders
frequently participate. In this connection, major transformations are expected
with the adoption of more participative agendas, as leaders will have to pay
more attention to the opinion of the bases and live with segments that profess
a different ideology. Many changes have already taken place, particularly at
the local level, and this will entail new versions of the Justicialist ideology
and practice. The loss of unions’ sections and even of entire unions to more
militant opposition groups, whether Peronist or not, will undoubtedly stimulate
this process. In other words, before dying, Peronist trade unionism will decide
to grow, but this implies the adoption of social-democratic practices, whether
they are recognized as such or not.
b) Higher elites
The presence in Peronism of numerous although minor sectors recruited
from the higher social strata is one of the characteristics that differentiate
it from Social Democracy. This does not mean that there are no social
democrats from these higher echelons, but in Peronism this component was
very signicant, particularly at the outset, although it became weaker after the
confrontations at the time of the Resistance and the guerrilla warfare. The
drawing in of conservative leaders and votes under Menem was a different
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phenomenon, as it did not mean a real political merge but rather a tactical
alliance, similar to the one struck in Felipe González’s Spain between the
Socialist Party and the rather bourgeois Convergencia i Unió in Catalonia.
Said tactical alliance was broken when the late-2001 crisis brought down its
symbol, i.e., convertibility (one dollar to one peso). Among the intellectualized
lower-class segments, support for Peronism was generally much weaker than
the support given by such segments to Social Democracy where the latter
predominates. Instead of these middle class “illustrated” segments, culturally
conservative and Catholic groups were a signicant component of Peronism,
particularly in the country’s interior. Peronism’s “higher” segment that provided
much of its purely political leadership has not always been exempt from a
weakness for the fascist model, at least in the beginning and even later. Be as
it may, today it is closer to Christian Democracy or other Christian socialism
variants than to Social Democracy. In general, Peronism is identied with a
classical model of popular nationalism, lled with nostalgia for the golden
years of Juan Domingo Perón and his antiimperialism and antioligarchy
campaign, and little concerned with “formal democracy”. But there are also
in Peronism numerous sectors, at both the political and the trade unionism
level, that consider themselves more to the left and are now discovering that
Social Democracy is not an imperialist invention. Given such a heterogeneous
makeup, the Peronist movement could hardly maintain its cohesion for long. As
a matter of fact, it is slowly unraveling, without serious debilitation, by actually
transforming itself. In Peronism, the main force countering this division is
verticalism and the members’ conviction that their movement is synonymous
with nationality. But time cannot fail to erode this rather primitive belief, as
it has done with other creeds adopted with equal or greater enthusiasm by
militants of popular parties in Europe and elsewhere.
c) Ideology
The lode of Peronist ideas is sufciently rich to provide materials for
constructing practically any other political creed. It has changed many times
and may change again. Peronism’s intellectual heterogeneity is partly due to
its contradictory social makeup but also to the legacy of its founder’s ability to
integrate different elements into a viable whole. This is not just pragmatism; it
is a major contribution some peronist leaders may bring to a future left. One of
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the major components of this multifaceted Peronist corpus is a pragmatic, pro-
unionism reformism quite similar to Roosevelt’s New Deal. The latter mingles
with a Latin American caudillismo of a populist type, with strong roots in our
history since the rst decades of independence. In general, our intellectuals
have not taken this national popular tradition very seriously, except during
periods of enthusiasm for Peronism’s revolutionary potentialities, which they
then mythicized. Once the drunken uncritical enthusiasm has subsided, it would
be worth returning to the study and knowledge of our traditions, attaching
to them at least the same value the French attach to theirs. This would help
situate Peronism in a Latin American context, without, of course, failing to
take into account its afnities and counterparts in other parts of the world.
A futurological excursion
Argentina’s current party system has played out its historical role and now
nds increasing difculty in representing the new conguration of social forces.
This being the case, we will have to go through a period of disaggregation and
disorientation, which will jeopardize the solidity of our still frail democracy. If
we manage to survive this phase of tensions, we will arrive at a modernized,
rejuvenated political parties’ structure. It is possible that Peronism, even if it
loses its own majority in Congress, will continue to be the party with the largest
electorate in the country, with at least a third thereof. The Radicals would
gradually shrink, drawn to the Right or to the Left by alternative strategies,
similarly to what happened to their counterparts in Chile and in France.
A moderate form of the Left, split today into various currents, may eventually
reach consolidation. At some point, a division would occur in Peronism,
something that is already happening and that may intensify. I cannot, nor
is it my intention, to predict the timing or to associate this with any events
or personalities. I rather believe that this division process could result from
the operation, in Argentina, of social forces similar to those that operate
in other countries at a similar development stage, engendering bipolarity
between a sector inspired by entrepreneurial values and a sector inspired
by trade unionist or egalitarian values. A conservative coalition might then
emerge, based on the various center-right, provincial parties, certainly with
a major Peronist component. This Peronist component would then t some
observers’ description of this movement as the main expression of the Right
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33
in Argentina, with a reservation: this would apply only to a minority. On
the opposite side, a leftist coalition could have its main numerical base in a
majority sector of Peronism that might appeal to its “national and popular”
traditions, encompassing a somewhat renovated trade unionism. With the
loss of various supports, the new Peronism needs allies, something that
will become increasingly clear. To nd them, it will have to frequent circles
of the Left, moderate or not, and of Radicalism. In the latter case, this is
already happening.
As regards the future of the Brazilian party system, I prefer not to venture
any comments, as there are many people who know about this a great deal more
than I do, although I have dealt with it in the past. But I wish to point out that
a convergence of mentalities is taking place in our entire region. Some fty
years ago, each country had parties that did not consider themselves as akin to
any others beyond their national borders, which they barely knew about. The
situation has changed and now resembles that of Europe, where the existence
of cross-border parties, such as the Christian Democrats or the Socialists has
greatly helped continental unity. It is said that one swallow doesn’t make a
summer, but many swallows are now ying in our skies.
DEP
Translation: João Coelho.
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34
Bolivia: changes and
foreign policy
Jean Paul Guevara Avila*
Introduction
Changes in a global context
O
ne of the characteristics of our times is change. This historical moment
which the entire planet is living is a time of changes that break away from
previous models and trends. Most of these trends were determined by obsolete
paradigms or unsustainable, upsetting inertia. Complex, profound changes are
the present’s distinguishing feature.
As it is conducted, globalization is being seriously questioned everywhere.
It globalizes costs and debts, but not gains and benets. This globalization
exacerbates competition and private interests, leaving aside solidarity,
complementariness, and mankind’s common welfare. This kind of globalization is
questionable because it is based on and developed at the expense and in spite of
the environment and nature, whereas this planet is our pachamama – the Mother
Earth –, the only space we have in which to live as the human species.
A worldwide consensus is thus shaping up about the need to change this
course and this model. Although changes have distinct characteristics in each
* Ambassador. Ministry of Foreign Affairs of the Republic of Bolivia
Jean Paul Guevara Avila
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country, we are all aware that we have to take charge of this global process
of search for alternatives.
The world
The capitalist accumulation model is incompatible with the planet’s
existence. The ‘western civilization’s’ consumption patterns cannot be extended
to all mankind because the natural resources are not sufcient and are not
renewed at the same pace as consumption.
1
The world energy and food crises
and the effects of climate change are expressions of this process.
2
We are witnessing the decline of the Washington consensus and the
neoliberal model.
3
The policies of trade liberalization at all costs and the
market’s absolute supremacy are being questioned and refashioned to be
recycled under a ‘public-private’ garb. The imaginary nancial bubble is six
times as large as world production, whereas poverty reduction stalls.
Military monopoly and dominion are sufcient for devastating a country or
even a region, but not for imposing the designs of the great powers in crisis. The
force of the stronger is insufcient for subjecting the weaker, but in its desperate
application it only entails destruction, harsher confrontation, and crises.
• Unipolarity in crisis
• Weakened global governability
• Energy crisis
• Booming private economy
1 One individual’s consumption requires an average of 2.23 hectares a year of productive land and water
ecosystems worldwide. This means that one year and three months are needed today to produce what one
person consumes in a year on the average. A European requires 4.8 hectares. If everybody consumed the same
as a European, two planets would be needed. A U.S. citizen requires 9.6 hectares. If everybody consumed the
same as an American, four planets would be needed. Current world economic growth does not reduce poverty;
on the contrary, it heightens inequalities and increases environmental degradation. According to OECD’s 2001
Environmental Outlook, environmental degradation keeps pace with consumption growth.
2 Data from the World Conservation Union (IUCN’s Red List) show that 16,119 of the 40,170 species studied are
under risk of extinction: one in eight birds; one in four mammals; one in three amphibians; eight in ten crustaceans;
and three in four insects. This is the sixth living species extinction crisis. Extinction is 100 times faster now than in
geological eras. In the Pacic Ocean there are today three kilos of plastic for every half a kilo of plankton.
3 The income of the 500 richest people on earth equals the income of the 416 million poorest people. The
income of the three richest people in the world equals the GDP of the 48 poorest countries (UNDP 1998).
Bolivia: changes and foreign policy
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Latin America
Our region also needs new visions and a change of the old models. A look
at current, democratically elected governments shows the extent of change:
we have a worker as president of Brazil, a woman as president of Chile and
another woman as president-elect of Argentina, an Indian as president of
Bolivia, and left currents (more to the left than the label implies) in Ecuador,
Uruguay, Venezuela, and Nicaragua.
It is not a question of homogeneous or homogenizing processes but of
new characters and players that have brought with them a new breath of air,
greater ‘genuineness’ and a much more earnest commitment to their peoples
and to our region.
Bolívia is an important part of this complex change process. Our country’s
foreign policy is one of its major instruments, not only as an expression of
the internal changes that are taking place but also as a tool for playing a major
role in worldwide changes. The advance of Bolívia’s democratic and cultural
revolution is interdependent with world processes.
Under these circumstances, changes have led us to pursue the foundation
of a new State, or to refound Bolívia by proceeding to an internal and external
decolonization.
President Evo Morales’s government, which I represent, is both a product
and a vigorous promoter of these change trends.
It is thus necessary to divulge and share information on the processes
in which we are involved and which we are conducting.
This exposition will address the following topics:
• Historic imperative of change: need and meaning
• Duplicate institutional framework that has prevailed in Bolivian
history
• An indigenous president and his achievements
• The international relations challenge in the current context: a historic
imperative to establish new models
• Bolivia’s foreign policy in times of change
Jean Paul Guevara Avila
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Development
Historic imperative
• Three eras that have exhausted themselves at the same time
January 2006: enter President Morales:
• First indigenous President
• The President elected with the highest number of votes in Bolívia’s
contemporary democratic history
• Six months later he conrmed his electoral support base and ex-
panded it
Signs of the need for and the pursuit of change in society:
• Crisis of the neoliberal modernization and/or development model
· Indication of the need for change
• Voting at the Constituent Assembly
· The meaning of change
· Claims of unmodernized indigenous populations (by exclusion; by
choice)
If change has a reason and a meaning (desire to change and deep-rooted
indigenous and community consciousness):
• Construction of a new State
• Reformulation of foreign policy
• Diversity policy
Results achieved
As this is the case of a democratic revolution, change has two directions
and various complementary instruments:
• Structural changes are being conducted by the Constituent Assembly
• Immediate changes that allow us to go forward under current cir-
cumstances are made through the nationalization and recovery of our
natural resources (hydrocarbons and minerals); a democratic agrarian
reform; and a National Development Plan.
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The new Hydrocarbon Law and the Hydrocarbon Nationalization Law,
which have permitted greater State participation – have achieved these results:
State revenues have climbed from US$324 million in 2005 to US$1.173 billion
in 2007. Recovery of two major reneries will require the investment of
US$98,286,000, which will permit the rening of 95,000 barrels a day after
the project’s completion.
After its nationalization as part of the refounding of the Bolivian Mining
Corporation, the Posokoni tin mine reported in March 2007 a net income of
US$5,135,000.
The Vinto foundry, which was also nationalized and recovered, earned
the State US$2,820,000 last year.
As always, though, the interests affected by the changes we are making
raise every kind of obstacles, as it was to be expected.
In the beginning, they encouraged the culture of fear amongst us. It
was said that things “are simply the way they are” and that they would always
be the same; and that we, the indigenous people, could not tell one end from
the other.
As we started, we were warned of “international isolation;” that “juridical
insecurity” repels investments and that without foreign investments nothing
is possible; that Bolívia is an “unviable country…” And so on and so forth.
And yet, external cooperation and foreign credit and grants have
increased in the last two years. Commercial credit rose from US$190 million
in 2004 to US$35 million in 2006 and to US$210 million in 2007. Concessional
loans climbed from US$51 million in 2004 to US$7 million to US$160 million
in 2007. Grants rose from US$114 million in 2004 to US$51 million in 2006
and to US$63 million in 2007.
The Mutún steel project is expected to invest US$2.1 billion and to
generate 5,000 direct jobs and 10,000 indirect jobs for Bolivians.
Currently, US$9 billion are being invested in a cathodic copper plant.
Public investment has climbed from BOB 670 million in 2005 to BOB
905 million in 2006 and should total BOB 1.116 billion by the end of 2007.
Jean Paul Guevara Avila
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As to roads, an unprecedented investment of US$38 million was made
between January and June 2007.
Net international reserves increased from US$1.856 billion in 2006 to
US$4.922 billion in 2007.
President Morales’s agrarian reform has three components: land
redistribution; ascribing to land a social and economic function to people’s benet;
and respect for lands already under exploitation. Under previous administrations,
36,815 hectares were distributed between 1996 and 2006, whereas the current
government has already distributed 494,899 hectares. Also between 1996 and
2006, title deeds were issued for 9.2 million hectares, while President Evo Morales
has issued titles for 5.5 million hectares in only two years.
Conclusions
Societies’ challenges today:
• Institutional apparatus for living with difference: community
International relations challenge in the new millennium:
• Old players, new scenarios (“Davos paradox”)
New parallel state enterprises: large entrepreneurial groups that under
crisis and conict scenarios replace the State in many areas. This is the case of
old enterprises that, in the midst of political crises and environmental disasters,
have found new market niches in which they obtain extraordinary gains.
This issue was the focus of attention at this year’s Davos World Economic
Forum and gave rise to the Davos paradox: the fact that in spite of wars,
confrontations, high oil prices, terrorist attacks, and stock exchange plunges,
enterprises such as Exxon Mobil (which earned US$40 billion in 2006), or
Lockheed Martin (which won U.S. Government contracts totaling US$25 billion
in 2005), are doing better than ever. This is such a major phenomenon that it
has deserved a specic indicator – the “guns-to-caviar index.”
• Strategic dismantling of the State’s management capacity; bank-
rupt States
This phenomenon affects not only Latin America and the so-called
“underdeveloped” countries. The debilitation of the State is a global phenom-
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enon that also affects post-industrialization countries, particularly the United
States, whose basic management capacity has so diminished that during the
Katrina hurricane tragedy in New Orleans the Federal Emergency Manage-
ment Agency-FEMA had to hire a private enterprise to draft and celebrate
contracts with private enterprises for reconstruction.
4
The Iraq war has entailed many experiences, including some based on
direct observation, that have to do with the new role of private corporations
in respect of dismantled/debilitated states, as related to the Fast Company
magazine by John Robb, a former Delta Force commander in Iraq and current
management consultant. Robb describes the “nal result” of the war against
terrorism as “a new, more resilient approach to national security, one built
not around the state but around private citizens and companies… Security
will become a function of where you live and whom you work for, much as
health care is allocated already.”
The ‘irruption’ of all these corporations into State ‘domains’ is not
limited to crises or emergency situations. In the United States, “contract cities”
are cities that contract third parties (private companies) to manage them. A
recent model is Sandy Springs, in New Orleans. Incidentally, CH2M Hill,
the company that was awarded the reconstruction contract after the Katrina
hurricane, had gained experience in Iraq and in reconstruction work in Sri
Lank after the 2005 tsunami.
Disasters and obsolete institutions
The current international institutional structure is proving obsolete and
inoperative in the face of today’s environmental crises, political conicts, and
trade and economic confrontation. It has no mechanisms capable of establishing
consensus and enforcing agreements on environmental and nature conservation.
The power to decide on and “to legalize” (never mind the expression’s
incoherence) direct military interventions are in the hands of countries that are
the ones directly interested in and beneted by such interventions. The WTO
4 Surprise! The companies that were awarded the largest reconstruction contracts were the same that were
responsible for Iraq’s reconstruction – Halliburton KBR, Blackwater, Parsons, Fluor, Shaw, Bechtel, CH2M
Hill. These contracts totaled about US$3.4 billion.
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is not able to go beyond free trade postulates and market opening, to prevent
industrial countries from subsidizing agricultural products, which exacerbates
and maintains existing economic asymmetries and inequalities.
A historic imperative for the construction of new models
The specic conditions of life production and reproduction on the planet
today force us to face the challenge of establishing new models and paradigms
of international relations. The international institutional apparatus stemming
from the Yalta and the Bretton Woods agreements have proven obsolete and
inoperative at present, when new currents and governments are seeking to
assert their self-determination and ensure their right to development.
• Conceiving relationship modes that respect and reect diversity, to
govern relations between States on the basis of complementariness
and not competition;
• Using power for prestige and not as force; and
• Conceiving paradigms that supersede or bypass modernization.
Pillars of Bolívia’s new foreign policy
Peoples’ diplomacy. A new approach to international relations depends on
a new formulation of diplomacy with the concourse of the different social
players. Peoples’ diplomacy implies the following: (a) listening to all, dialoguing
with all, and working for all and not for just some privileged sectors; and putting
the interests of the nation before the interests of any sector; (b) promoting
relations not only with foreign ofces but also with peoples, as the sap of
integration and change processes run in the people; and (c) and putting human
rights and life’s principles before the market and investment dictates.
Effective exercise of sovereignty. Sovereignty is not a static condition but a
dynamic process. It is not acquired once for all but is exercised, constructed,
and developed through the State’s proposing and coordinating capacity.
Sovereignty’s function is not only defensive (protecting the interests of the
State); it is also assertive (contributing to the conception of new change models
for harmonious international coexistence).
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Cultural diversity. Peaceful coexistence, respect among peoples, and
integration for a more balanced world require respect for and practice of
diversity. No culture stands alone as modern and superior to all other cultures.
Acceptance and recognition of the different systems of human relations and
of the different forms of production, knowledge, and vision; recovery of the
history and memory of all peoples; respect for the different identities, codes,
beliefs, expressions, and values of all the earth’s inhabitants – this is the central
message of the original, indigenous peoples of Bolívia’s culture of life.
Harmony with nature. International relations encompass not only relations
among human beings, societies, and States but also their relations with nature.
Promoting integral, diversied, and integrating development in harmony with
nature is the only alternative for life on planet Earth.
Reduction and elimination of asymmetries. The intensication of inequalities is the
major factor of injustice, conict, and destruction on the planet. An unbalanced
world needs international norms biased in favor of the less privileged. We pursue
complementariness and solidarity rather than competitiveness and reciprocity
based on the mistaken presupposition that all nations and regions are equal. These
precepts should be applied at all levels of international relations: trade, cooperation,
institutional framework, dispute settlement, etc.
Revalorization of the coca leaf. The coca leaf plays an essential role in the life
of the original Andean peoples owing to its nutritional, traditional, ritual, and
religious uses that are deeply rooted in their culture and worldview. And yet,
the coca leaf was mistakenly included on List I of the 1961 United Nations
Single Convention on Narcotic Drugs, as if it were a drug in its natural state.
Revalorization of the coca leaf requires a critical assessment of the coca leaf
agreements; scientic research of its medicinal and nutritional benets; an
inventory of its traditional and cultural uses; the study of its demographic,
economic, social, and environmental implications; and the implementation of
initiatives aimed at promoting its industrialization, marketing, and exportation.
Fight against drug trafcking. The ght against the processing, trafcking,
and consumption of illicit drugs is spurred by the need to address – in
accordance with the international community’s shared responsibility and
respect for national sovereignty and human rights – the negative effects of
such activities on society, politics, the economy, and the environment. Our
Jean Paul Guevara Avila
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policy does not call for zero coca or free coca cultivation. Conscious that
part of the coca leaf production is channeled to the manufacturing of with
narcotic drugs and that today Bolívia’s surplus production may potentially
contribute 9 percent to the world’s cocaine production, the government, in
conjunction with the peasant coca-growing organizations, is working toward
voluntary coca leaf rationalization. The government’s plan is as follows: (a)
to stabilize coca production on about 20,000 hectares at a rst stage; (b) to
withdraw about 4,000 hectares from cultivation through interdiction; and (c) to
industrialize the production of another 4,000 hectares, thereby reducing from
9 percent to 2 percent Bolívia’s potential share in world cocaine production.
In addition, the government is determined to reinforce border control in view
of the mounting ow of cocaine into neighboring countries, particularly into
Brazil, and has celebrated a cooperation agreement with the European Union
for a comprehensive study of the coca leaf market.
Maritime reintegration. Since the war with Chile, Bolívia has afrmed as its
foreign policy’s permanent objective its maritime integration with the Pacic
coast, based on historical and legal rights. This reintegration is imperative for
political, economic, and commercial reasons and for the purpose of gaining
access to the exploitation of marine resources. And yet, in the last 128 years,
Bolívia has achieved no result other than what was agreed under the 1904 treaty.
Since the adoption of a State policy based on dialogue, we have witnessed a
historic change in relations between the two countries. Chile has opened itself
to dialogue and we have managed to agree for the rst time on a 13-item agenda,
which includes Bolívia’s claim for a sea outlet and establishes the content and
timetable of joint work on the various issues of mutual interest. The rst item
on the agenda is the building of mutual trust to allow progress in respect of the
other items, on the basis of friendship and complementariness rather than the
traditional enmity and confrontation. We are working toward opening up new
scenarios and possibilities in Bolivian-Chilean bilateral relations. It is essential
that we adopt initiatives aimed at engendering social awareness, participation,
and transparence in addressing this issue as well as understanding of the new
focus nationwide; at informing people and winning international support for
Bolívia’s maritime claim; and at working toward the inclusion of this maritime
issue on the agenda of international forums, such as the United Nations, the
OAS, the NOAL, among others.
Bolivia: changes and foreign policy
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Indigenous peoples. Practically all over the world indigenous peoples continue
to be treated as aliens on their own territories. Their rights are not recognized
or respected. Their views and message are considered as vestiges of the past
and their identity and culture are reduced to folklore. Bolívia’s and the world’s
future hangs on a change of attitude. The indigenous peoples hold moral
reserve, an ethical view of nature, and the commitment to cultural diversity
and to the democracy of consensus capable of helping us save the planet and
life. In this connection, it is essential to move forward with the approval of
the United Nations Declaration on the Rights of Indigenous Peoples and of
new binding mechanisms to guarantee the rights of indigenous peoples and
their vision of the world.
Biodiversity, water, and climate change. The biological diversity and the water
that sustain life on earth are under risk, owing to the capitalist accumulation
and trade liberalization model.
5
Biofuels,
6
the privatization of water, and the
development of transgenics only aggravate this situation.
7
To this are added the
effects of climate change,
8
which shows that it is impossible to proceed on this
mistaken development road. Implementation of the Convention on Climate
Change and the Convention on Biological Diversity by the more developed
countries is essential for saving the planet. Just as a ‘cultural exception’ is
sought, an “environmental ‘exception’ must also be ensured in the application
of trade agreements. There should be UN binding mechanisms above trade or
other instances to protect biodiversity and water and to control the effects of
climate change. In view of the resulting droughts and oods, Bolívia proposes
that all nations assume responsibility for changing the energetic model and
our consumption habits, for going beyond the Kyoto Protocol, whose targets
are but a fraction of the reduction necessary to signicantly check global
warming. As a base for this policy, Bolivia proposes that the world should
embrace the Culture of Life values as the only solution capable of sustaining
and preserving our planet Earth.
5 Twenty-four percent of the sh are overexploited; 52 percent are near the overshing limit.
6 One hectare of land is needed to produce one ton of biofuels. In 2000, world agricultural production was
equivalent to 10 million tons of oil, i.e., 3 percent of world oil consumption.
7 Dams hold three times as much water as the planet’s rivers. About 1.7 billion people live under water tension
(Millennium Ecosystem Assessment, 2005).
8 In 10,000 years, CO2 on the planet increased approximately 10 percent; in the last 200 years, it increased 30
percent. Since 1860, Europe and North America have contributed 70 percent of CO2 emissions as compared
with the developing countries’ 25 percent; 2005 was the hottest year in the last one thousand years.
Jean Paul Guevara Avila
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Bolivians abroad. Bolívia has never had a migration policy focused on
nationals that leave the country predominantly for economic reasons. We are
now promoting the regularization of the alien status of Bolivians in Argentina,
Brazil, United States, Spain, and Italy and are dening mechanisms to ensure
the vote of Bolivian’s living abroad. To address migration’s structural causes,
a series of initiatives is needed to overcome the sharp inequalities among
nations and to promote full citizenship, so as to for guarantee respect for
human rights in every country.
Areas of diplomatic activity abroad
Under current circumstances, foreign service has to operate in the
following fundamental areas:
a) Political dialogue: for improving reciprocal knowledge and Bolívia’s
relations with other countries and for projecting the image of the
democratic and cultural revolution the country is engaged in, with a
view to reaching agreements on common objectives and on the joint
implementation of programs and projects of mutual interest.
b) Cooperation: for the establishment of mechanisms aimed at reducing and
overcoming, through mutual collaboration, the sharp asymmetries stemming
form colonization and the imposition of neoliberal prescriptions.
c) Trade and investment: for making trade relations more fruitful and
promoting investment in our country, with a view to beneting small
rural and urban producers and ensuring their participation in foreign
trade, while guaranteeing juridical security for all those that make
investments in conformity with the Bolivian Constitution and the
national legislation.
d) Tourism: for promoting knowledge of our country and its cultural
diversity, biodiversity, and people, and for qualifying this sector
for intercultural dialogue, jobs creation, and strengthening of the
national economy.
e) Culture: for providing knowledge of an essential aspect of the
changes the country is undertaking and for ensuring recognition
of the indigenous peoples’ huge contribution to the formation of
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our national identity, thereby putting an end to discrimination and
exclusion and showing to the world our view of welfare.
f) Bolivians abroad: for rendering quality public service to fellow Bolivians
that, for various reasons, had to leave their country to live abroad.
g) Solidarity movements: for achieving the coordination of social movements,
networks, and intellectuals in solidarity with the process of change in
Bolívia and strengthening their relation with national social movements,
thereby making Peoples’ Democracy into a reality.
DEP
Translation: João Coelho
Di p l o m a c y , St r a t e g y & po l i t i c S – oc t o b e r /De c e m b e r 2007
47
Culture, diversity
and access
Gilberto Gil*
Introduction
T
he concert of globalization shifted culture to a unique and strategic
place in the global debate – probably because the traditional ground of
geopolitics in the contemporary world has itself been changing. Upon the
cartography of national maps we see more clearly today the emergence of a
global panorama of huge cultural diversity, with thousands, maybe millions,
of different cultural systems, not all of which coincide with national scenarios.
The region encompassing the north of Argentina, the south of Brazil, part
of Uruguay and Paraguay has the strength of a symbolic system that reaches
beyond national frontiers.
It is not by chance that I bring up this example, to the extent that
Mercosul and the relationship with South American countries has been a
priority in the general endeavor of the Brazilian government to integrate the
region, not only economically, but also culturally. But the change is not only
regional. The planet’s general panorama is redesigned when culture is shifted
to the center of a debate on the kind of development we wish for the globe,
when we examine the limits of the economic model that shaped the 20
th
century
* Minister of Culture of the Federative Republic of Brazil.
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and caused the contemporary migration of production to light, immaterial
forms of value generation. The panorama is also redesigned when we take
stock of the expansion of democracy in the world and the establishment of
education as a global priority, when millions of hitherto excluded subjects
start saying loudly: “we want access to culture”. It is not merely a wider access
to consumption, but expanded access to forms of expression, production
structures and the means of social circulation.
The culture agenda nds today an interface with the international
economic debate. That interface becomes more intense when the economic
debate deals with the discussion of forms of contract, intellectual property
and copyright, identifying the repositioning of old asymmetries and of unfair
terms of trade towards poor and developing countries. Not by chance, one
of the important issues for Brazil, both internally and externally, is the trend
to recognize, examine and make effective policies aimed at the so-called
“Economy of Culture”. These are the new circumstances that make the cultural
agenda a very important agenda for Brazil and for the world.
Within this concert we in Brazil represent a voice increasingly integrated
with the regional destiny of the South American peoples, a voice that recognized
its huge debt to Africa and its cultural brotherhood with that continent. As
one way to expand cultural ties, the III CIAD – Conference of African and
Diaspora Intellectuals – was recently held in Salvador. During the last four
years, the Brazilian Ministry of Culture assumed its regional and international
responsibilities as well as the promotion of Brazilian culture in the world,
both symbolically and economically. A good example is the Year of Brazil in
France, whose activities involved millions of people, as well as the Culture
Cup, bringing cultural diplomacy closer to soccer diplomacy. We have taken
up the responsibility of promoting in many directions this welcome shift of
the agenda: culture as an agent of change of an old form of development.
It is important to recall Brazil’s role, side by side with many other countries,
in the shaping of a large basis for the adoption of the Unesco Convention on
the Promotion and Protection of the Diversity of Cultural Expressions, in
2005. In the years to come, this Convention – recently ratied by the Brazilian
Congress – may come to mean to the cultural agenda what the Kyoto Protocol
means today to the concrete advancement of environmental policies: not only
an effective platform of fundamental principles, but also an agreement on a
new role for the State in what concerns culture and diversity.
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Brazil’s role is important because the way the country was formed is a
fortunate example of diversity and cultural encounter. We are a mixed breed,
a product of diverse and lively populations and traditions occupying a vast
territory and which together make up a wide eld of images. As seen by foreign
eyes, we practice a unique mode of living and being in the world. There is a
universal message of peace, community living and huge creativity expressed
in the way this civilization opened itself and assimilated the values of other
countries and civilizations, in the way this population deals with its customs,
ethnicities, races and creeds. This message of peace is the heritage of the
Brazilian people. In this connection, during the last four years in government,
we have sought to promote Brazilian culture as the bearer of unique contents
and of universal values.
What the Convention makes clear is that these cultural values, both
tangible and intangible, are being increasingly challenged by the process of
globalization. The symbolic load of cultural goods shows the special nature
of such goods and services because they express after all an accumulation
of hundreds of years, the investment of several generations who put into
their expressions the very meaning of human existence. Many people, and
especially the State and its agencies responsible for the cultural agenda have
become aware of the high added value of culture, made clear by the interest of
large corporations in the pharmaceutical knowledge and technologies of the
South American Indians, in the skill of our craftsmen and in the contagious
reproduction of the music and dances of Brazil.
For this reason the Lula Administration and the Ministry of Culture
have been bringing cultural policies to the center of the debate on national
development and the relations of exchange between Brazil and other countries.
We understand cultural policies, together with environmental policies, as
dimensions that qualify, and in certain cases condition, sustainable economic
development. These are policies that promote a balance between economic
production and the welfare of society.
Culture has an undeniable economic dimension. In 2003, cultural
activities accounted for the circulation of 7% of global GDP.
1
Such activities
are not concentrated on the symbolic expressions already recognized – such as
musical, audiovisual and book production chains, more evident today – but also
1 IDB (World Bank)
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in dozens of external features, in contents which, based on the technological
convergence of our time, move among traditional and contemporary media.
These are swift, dynamic contents that add value to sandals, prowess in sports
and fabrics. The advent of digital technology only sharpens these possibilities
of access, employment and exchange that culture carries within itself. It also
strengthens new forms of currency circulation and new economic models
that, in the near future, will be thoroughly established.
The challenge here is to understand the growing economic dimension
of culture and nd forms of cooperation that allow poorer populations
possessing knowledge, culture and identity, to enjoy fully the benets and
wealth from intellectual property. We must nd ways and means to allow
cultivated, formatted and industrialized knowledge to circulate and be accessed,
by balancing copyrights, investor’s rights and rights of access.
Nevertheless, these contemporary features of culture take on other
aspects when they are examined in the context of developing countries, as is
the case in South America. Seen through this lens, international cultural policy
becomes one of the main elements in the confrontation of international
asymmetries which, in the end, result in hegemonic models, in centralized forms
of social communication, in concentration of management and content, and
in industries that pay scant heed to labor and pollute the environment. In the
end, we are dealing with an ongoing struggle to realize democracy in a more
effectively cultural scenario so that it permits better conditions of access to
cultural content and models of protection of the cultural diversity.
We are living in a privileged historic moment. The changes in the forms
of production, signicance and distribution of cultural contents point to new,
dynamic cultural policies. The digital revolution opens new doors to developing
countries. It is a unique chance of insertion in the existing model of globalization:
an opportunity for us to put into practice the joy of cultural diversity.
Culture has an incredible potential to produce sediments that activate
historic change. In many cases, culture is where change effectively takes place.
But its unobtrusive and keen action on the trends of international relations, its
new economic potential and its transversal action still suffer from a great lack
of awareness – and even mistrust – from traditional public bureaucracies. It
is time for us to heed the contemporary strength of culture, and the impetus
to modernize agendas and update public debate, to promote peace, pleasure
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and mutual knowledge – for the sake of developing countries, for the sake
of South America.
From the domestic to the international eld
During the first four years of the Lula Administration, we have
endeavored to guide public cultural policies in Brazil along three conceptual
directives. Culture was understood in its symbolic, economic and citizen
dimensions. Such a concept represents an attempt to organize the role of the
State and recognize the scope of cultural phenomena in the contemporary
world. It represents a way to translate such political and symbolic challenges
into effective public policies.
Cultural Mercosul opened up new possibilities. One of its main axes
stems precisely from the emphasis attributed to the Exchange of National Culture
Policies of Mercosul members. We focused on the interaction of State policies
and programs centered on cultural phenomena in Argentina, Bolivia, Brazil,
Chile, Colombia, Ecuador, Paraguay, Peru, Uruguay and Venezuela.
This is an extremely healthy exchange, because it strengthens our
common patrimony (just as the archeological soil) and our historic and cultural
similarities, besides stimulating mutual learning of programs and mechanism
that produced consistent and important responses to the complexity of the
cultural phenomena that our countries currently house.
Interchange, however, should not be conned to policies implemented
by States. One must take into account cultural manifestations that are
circumscribed, or highly inuenced, by the dynamics of the distribution of
cultural industries. Data from Unesco indicates that in 2002, the United States,
United Kingdom and China alone were responsible for 40% of the circulation
of cultural goods in the world.
2
2 Another consequence of the international
asymmetries in the eld of culture is the importance assumed by the English
language, which became the great medium of contacts among cultures of
other tongues. The largest share of cultural exchanges among the “peripheric”
of the globe is controlled by the center of the system, centered on the axis
United States-Europe-Japan. Mass communications, which represent today a
2 International Flows of Selected Goods and Services, 1994-2003 (UNESCO, 2005).
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fundamental part of the public sphere of expression, debate and formation of
thought, are being increasingly absorbed by large transnational conglomerates,
oligopolies of the production and distribution of mass cultural goods. There
is an incredible potential for interaction among the diverse cultures of the
world, but this potential is dampened by the logic of the distribution of
cultural merchandise.
It is in this environment that access, exchange and diversity can meet.
The position of Brazil in this new scenario must be guided by the exercise
of plurality, against the imposition of a single culture or of culture changed
into mere merchandise. This implies the defense and promotion not only of
the Brazilian cultural diversity, internally and abroad, but also access to other
cultures and exchanges with our neighbors in South America.
Diversity of cultural expression, intellectual property and
development
The implementation of the Unesco Convention on the Promotion
and Protection of the Diversity of Cultural Expressions represents a new
landmark in the international legal order. The Convention seeks to establish
a more balanced international system of exchange of cultural goods and
services, ensuring the sovereign right of States to implement cultural policies
to protect and promote their cultural diversity and to guarantee access to the
cultural diversity of the whole world, for instance through the implementation
of a range of regulatory policies. This Convention permits the creation of a
South-South circuit of exchange of cultural goods and services, raising the
possibility of access, consumption and exchange of cultural production among
developing countries, thus breaking up eventual hegemonies of segments of
the cultural market.
Another international front prioritized by the Brazilian Ministry of
Culture is the participation in the International Network of Cultural Policies
(RIPC), an informal network of culture ministers of the whole world who
meet annually and that may have been the great springboard for the adoption
of the Unesco Convention.
In 2006, when Brazil hosted the annual meeting, we chose the theme
“Access to Culture, Copyrights and New Technologies: Evolving Challenges to
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Cultural Diversity” to promote a reection on two of our political concerns:
copyrights and access to culture. Our main conclusion inferred from this study
was that the copyrights may represent an obstacle for the access to culture,
mainly in view of the new technologies, with obvious consequences for the
cultural diversity.
This may be explained by the growing expansion in the last few decades
of the reach and scope of legislation and treaties regulating this sector,
constraining developing countries to assume very restrictive obligations
regarding intellectual property, even if they do not have the infrastructure and
institutional capacity needed to assimilate the new rules.
The existing system of intellectual property is totally alien to the modern
technological, economic and social trends. It is a system that makes intellectual
property, and within the rights of authorship, into an end in itself.
Our RIPC meeting in 2006 demonstrated that the problem of copyrights
is more serious for developing countries, since in such countries the laws of
authorship are most restrictive, either because of greater vulnerability to the
lobbies of the big corporations in the cultural industry or because of the
absence, in these countries, of civil society organizations that defend the
users of protected works and the public interest in general, as is the case in
developed countries.
The Brazilian Ministry of Culture also put together the Agenda for
Development, in close partnership with the government of Argentina. Our
concern was to include issues regarding rights of authorship in the establishment
of a program in the WIPO (World Intellectual Property Organization) devoted
to development. In this way we are defending an important public domain,
with effective respect to the limitations and exceptions to copyrights as well
as to the promotion of alternative forms of licensing of works, such as Free
Software, Copyleft and Creative Commons.
There is an ongoing debate at WIPO with the active participation of
the “Group of Friends of Development”, a bloc of developing countries led
by Argentina and Brazil in opposition to the group of developed countries.
Depending on the result of the debate, developing countries may be able to
count, at the WIPO, on a program where intellectual property is no longer an end
in itself, but a tool for development, where countries can have room to implement
public policies that ensure access to culture, knowledge and information for their
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populations, as well as an international ow of assets protected by Intellectual
Property in a fairer and less painful way toward the developing world.
Another issue related to intellectual property that we intend to bring out
during the next few months and years – and which is dear to all South American
countries – is the Protection to Traditional Knowledge and Cultural Expressions.
WIPO has a specialized committee on this issue, whose work has not been
up to the expectations. We believe that it is essential to achieve some sort of
protection to such assets. This measure could benet mainly the developing and
less developed countries and within them their traditional populations, which
normally suffer great economic and social deprivation, even if they possess a
rich cultural patrimony. For our region, it is important to have an agenda that
includes the protection of Traditional Cultural Knowledge and Expression as
a fair and just source of economic income for our populations.
Peace, culture and the current crisis of multilateralism
Half a century after the end of World War II, the agenda of culture
once again comes forward in the post-Cold War and post-September 11 world
as a fundamental element for the construction of peace among peoples. The
discourse of the apparent “symbolic collapse” referred to the new forms of
terror and intransigence, leads us again to reect collectively about the future,
as well as to the need to undo warlike, fundamentalist or equally ethnocentric
sentiments that once more come back to haunt mankind.
Just as it was necessary to build a new international organization in the
post-war period, there is today a growing consensus that the United Nations
system needs a deep reform in order to strengthen and adapt itself to the new
times, by becoming even more plural and representative. It is not a question
of supporting just a reform of the Security Council or the General Assembly,
the most important political institutions of the Unites Nations, but to put
into practice in the ensemble of our relations the agenda of the centrality of
culture for democracy, peace and development.
The Unesco Convention will surely be a fundamental tool for global
governance in the 21
st
century, but we must proceed beyond that in order to
deepen the national and regional understanding of this Convention. It upholds,
for instance, the value of cultural diversity in an even wider and more global
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level. By doing so, it faces the argument that legitimizes conict and even that
kind of war that – absurdly – happens through the clash of civilizations; cultural
conicts that would be the most important fuel for the war industry and unilateral
interventions. The thesis that culture is at the genesis of contemporary conicts
intends to deect the real causes of the asymmetries that shape the fate of whole
multitudes, who are doomed to restrictive forms of intellectual property that
limit technology and the social and cultural rights of the population.
All this shows that the notion of diversity is very wide and the instrument
of the Convention must go beyond the aspect of “protection”. It empowers
countries to promote culture as a central element of their development strategy.
This means, for instance, that roads and ports must be built and modernized
according to the public perspective, for the populations are the raison d’être of
such structures; they are the points of departure and arrival of such strategies.
Populations cannot be eliminated from the analysis of costs or from the policies
of the State. If we consider the restoration of historic centers, for instance, not
to take into account the populations involved would also mean to dismiss all
the value of the historic centers, to exhaust the life and the social dynamics of
these centers, their fairs and festivities, which constitute the deeper motivation
for touristic migrations in today’s world. This was what happened in a certain
moment to the city of Salvador, in the state of Bahia, when someone decided
to remove the population of Pelourinho, in the historic center, to proceed
with the restoration work. Those who still understood that the worth of the
city lies in its communities – and not exclusively in its structures – had to face
that decision with pain.
From the exclusively economic standpoint, a pragmatic and realistic
view fails to see that the economy of culture is among the fastest growing
in the world of globalized capitalism, one that grows at a faster rate than the
evolution of the global GDP. The economy of creativity competes with the
war economy in the United States, is already among the most signicant in
the European Union and enjoys a strong showing in less developed countries,
such as Brazil. Culture is the fastest growing sector of the economy in the
world, since it generates in average better wages and jobs, and also – which is
for me most important – social inclusion with full citizenship.
The notion of culture as a right, as economy, politics and identity, that has
slowly come to the fore in the last few decades, must more than ever become
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a part of the ideas that inform proposals for the reform of international
institutions. Instead of a clash of civilizations, culture must be seen as the
mortar of global relations, capable of uniting different social communities,
nations and even whole hemispheres through diversity.
The crisis of multilateralism cannot be overcome without the end of any
aspiration to hegemony. The only acceptable hegemony is that of diversity.
If, on the one hand, unilateral versions of the contemporary world can only
weaken and threaten it, on the other the fragmentation of international
relations – that came about in the last few years as a result of unilateralism –
also reinforces the isolation of cultures, preventing the convergence of cultural
exchanges with the wide opportunities opened by new technologies.
The Brazilian Ministry of Culture works to restore multilateralism in all
its dimensions and meanings. Not only its institutional and decision-making
features, but also the very spirit of cohabitation with multilateralism inspires
the international action of the Brazilian government. The multilateral concept
goes together well with the protection and promotion of the diversity of
cultural expressions, as well as the balance between respect to intellectual
property and a less asymmetric access to culture in its different modalities
and technologic means.
Cultural, historic and even geographic links encourage us to combine our
universalism with more local concerns. In regional terms they strengthen our
ties with South America and with African countries of Portuguese language.
Finally, we may establish with South American countries a multilateral area
of peace and solidarity, especially if compared with other regions of similar
economic situation, with those who speak our language. We can also strengthen
our cultural insertion in the world and at the same time recognize ourselves
in our own linguistic identity.
South America and the Community of Portuguese Speaking Countries
certainly provide us with a sound starting point to face globally the challenges
of the contemporary world with initiatives such as Cultural Mercosul, Recam
(Specialized Cinema and Audiovisual Network of Mercosul), Cultural CASA
of the South American Community of Nations, the Interamerican Cultural
Committee of the OAS and the Conference of Intellectuals from Africa and
the Diaspora. However, the policy of promoting a humanistic culture of
peace, whether on the local, regional or global level, must recognize all existing
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difculties as a starting point. History is marked by conict. Let us not deceive
ourselves. But war is neither an inexorable truth when the culture of peace
leaves the eld of rhetoric and really inuences the great decisions.
Culture as agenda
Finally, a quick view of past events. Since the end of World War II, culture
entered the international agenda as an indispensable element for the harmonic
and peaceful coexistence among States, peoples and nations. The devastating
image of the atomic bomb and of the Holocaust led men and women of the
most diverse origins to reect on the need for a new world pact.
It is within this context, where cultural issues have been the main points
in the political debate that the modern concept of multilateral organs of the
United Nations system has emerged. In these historic circumstances, peace and
culture became complementary forces and features. How can we contemplate
peace, if not through cultural coexistence, in harmony and equilibrium,
among peoples and nations? How can we think of a new geopolitical map,
theoretically multilateral, without recognizing the right to cultural differences
and to different forms of organizing life in the symbolic level?
Not by chance, shortly after its foundation Unesco invited a group
of renowned scholars to elaborate a number of reections with a view to a
scientic review of the racist theories that marked the rst half of the 20
th
century.
3
In this context, the anthropologist Claude Lévi-Strauss argues that
cultural diversity is the main element that promotes human development.
Lévi-Strauss launched one of the rst theoretical seeds of the Unesco
Convention on the Protection and Promotion of Cultural Diversity, which
was ratied by more than thirty countries in 2006. He emphasized the wealth
brought about by the inevitable interaction among cultures.
This new concept did not emerge only as a theoretical debate. It was
awakened through the struggle of the movements of independence and
decolonization, in the post-colonial context, by means of afrmative policies
– of gender, groups and ethnicities – besides the multiple trails opened by
multiculturalism.
3 Raça e Ciência (Race and Science) Vol. I. Unesco (org.) Editora Perspectiva, São Paulo, 1960.
Culture, diversity and access
58
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Thus, in these 60 years, culture became increasingly stated and exercised
as a right, one that is now being deepened in an even more democratic scenario.
It is a scenario that seems more and more to demand the universalization of
the right to culture. Will States be in a position to guarantee this right to their
citizens? Which new updates are needed so that cultural diversity becomes a
starting point for the present forms of development? How can national and
global institutions that nance development be able to incorporate culture as a
guiding principle – just as in the past the environment was included? How can
the social technology developed by peoples be strengthened, free of tutelage
and authoritarianism?
We face today, just as we did 60 years ago, a huge challenge and an
immense perspective of shifting positions, by having the opportunity to
deepen the frame of the presence of culture not only in the world debate, as a
trimming of development, but as a structuring and regulating factor of social
relations and of the very development project of our countries. Society has
progressed, cultures have progressed – the agenda must progress.
DEP
Translation: Sérgio Duarte
Di p l o m a c y , St r a t e g y & po l i t i c S – oc t o b e r /De c e m b e r 2007
59
Major turns in Chilean
economic policy and
their legacy
Osvaldo Sunkel*
1. Introduction
B
asically, four schools of economic thinking have had a decisive inuence
on Chile’s economic policy and reality since the mid-20
th
century: the ECLAC
thinking in the 1950s and 1960s; the socialist thinking in the late 1960s and early
1970s; the neoliberal thinking in its more ideological version, from 1974 to the
end of the dictatorship; and since 1990, a hybrid mix of the more pragmatic
neoliberalism late in the military regime and an emerging neostructuralism
known as “growth with equity,” oriented toward the resumption of a long-
term socioeconomic development strategy.
In this essay I intend to focus on some of the specic expressions that
clearly show the development of economic thinking through the economic
policies adopted by the different currents. I do not ignore, of course, that there
is no unidirectional movement of thinking toward economic policy practice
and hence toward historical reality. Theory, policy, and reality interact with
* University of Chile
osunkel@manquehue.net
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and inuence and modify one another, as becomes clear particularly at times
when signs radically change.
Thus, for example, the Great Depression of the 1930s, with its sequel
of nancial and international trade crises and widespread unemployment,
marked the genesis of the Keynesian policies that prevailed until the 1970s.
Contrariwise, the deceleration of economic growth since the 1960s, growing
scal imbalances, and inationary pressures, coupled with the ineffectiveness
of scal policies in the stop-go seventies, in addition to the oil crises and the
prodigious expansion of the private international nancial system, greatly
contributed to the displacement of Keynesianism and the rebirth of 19
th
century liberalism, or neoliberalism.
The history of economic policy in Chile in the last century was characterized
by substantial changes in the role of State, market, private sector, social policies,
foreign trade, international nancial relations, and so on. In this essay, which is
of a preliminary nature, I insist, I have set myself three tasks. I shall attempt to
show how the origins of these profound changes in economic policy included
equally profound changes in the internal sociopolitical context. I shall also point
out how the signicant role played by major changes in the international context
affected the more fundamental internal changes. Lastly, I shall list some of the
more important long-term consequences of the various economic policies that
were a determinant of economic, social, and human capital accumulation in the
Chilean economy’s major development stages, which thus became a positive or
negative legacy for subsequent periods. In other words, I maintain that although
major turns do occur in it, economic policy does not work in a void but amidst
inherited historical realities amassed in previous periods.
I am particularly interested in showing that, despite the prevailing
orthodox neoliberal discourse that has woven a dark legend around the
statist phase of the mid-20
th
century, many of the foundations of a modern
economy were laid in that period in terms of economic, social, and human
capital accumulation that greatly facilitated the establishment of the neoliberal
model of the subsequent historical phase. Accordingly, a relatively extensive,
detailed section of this essay will be devoted to that period.
As regards the more recent period of transition from the military govern-
ment’s early fundamentalist neoliberalism to a more pragmatic neoliberalism and
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then to a series of democratic governments policies of an increasingly neostruc-
turalist vein, I wish to underline two things in particular: rst, notwithstanding
its serious and admitted deciencies, neoliberalism has also left a very positive
legacy; second, the Concertación governments’ economic and social policies
have also introduced substantial innovations into the classic neoliberal program,
thereby giving it an increasingly neostructuralist character.
2. Three basic assumptions
A review of the tendencies and salient facts in the history of Chilean
economy in the past century may be grouped under three main general,
interrelated assumptions.
According to the rst, since the emergence of the international capitalist
economy in the 18
th
century, economic policy discussions in each country
conform systematically with one of two main views: one that assigns a
predominant role to the market and to private entrepreneurship, and which I
will call a “market-centric” view; the other assigns a predominant role to the
State, which I will call a “state-centric” view. Any signicant modication in
economic policy is intended either to give wider room for the play of market
forces or to allow the State more room for intervention to regulate or replace
market forces to a larger or lesser extent.
In practice, of course, State and market are not mutually exclusive but
complementary to each other; both are present at all times, even in the most
extreme forms of market or planned economy. There has never been and
there will never be a market economy without a State to establish and enforce
free-tradism rules when the market functions reasonably well and to regulate
public and semipublic goods when the market does not function. Similarly,
even under the most radical, centralized socialist planning the market, though
formally prohibited, will always exist in the form of black market.
Thus, the State and the market have been combined in different
proportions according to the different historical periods, so that economic
policy has tended to favor greater predominance of the State over the market
during state-centric periods or to expand the function of the market and private
entrepreneurship during market-centric periods. This historical observation is
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important for an appreciation of the variability of institutional arrangements
over time from a long view perspective.
In Chile, a market-centric model prevailed from the late 19
th
century to
the 1930s. From the 1940s to the early 1970s, a sate-centric model was followed,
which led to an attempt to install a socialist economy under the Popular Unity
government. In the mid-1970s, a market-centric model was once again adopted,
characterized at rst by radical neoliberalism, which was attenuated in the second
phase of the military regime and has undergone signicant changes and revisions
since the return to democracy in 1990. Replacement of one model with another is
a traumatic process of profound structural and institutional change owed in part
to the internal political power structure. This change is not entirely independent,
though, as it is heavily inuenced by changes occurring in the international sphere
also. Despite drastic changes in economic policies, signicant continuities are
also to be found in the established socioeconomic infrastructure, which may
prove to be advantageous or inconvenient to the new phase.
Hence, my second assumption is that the degree of predominance of
the State or the market over the course of history is denitely conditioned by
the extent of integration or disintegration of the international commercial and
nancial markets, particularly in the case of small economies that are heavily
dependent on the world economy, as is the Chilean economy’s case.
It is also necessary to correlate the institutional trade and nancial apparatus
with the economic, social, and power structure and with economic policies.
Particularly important is a look at the transition from one period to another, as
this is when the nancial and political power structures change, and with them
the development strategies, and when the debate about economic theory and
policy ourishes.
Lastly, according to my third assumptions, it is important to point out
that no matter how profound the changes are from one period to another of
predominance of a given economic policy, a signicant legacy is passed on from
one period to the next, especially as regards institutional and capital accumulation
aspects, which will have a major inuence on subsequent development.
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3. The international context in the mid-twentieth century
This section explores further the idea that there is a close relation
between the degree of integration or disintegration of the international
economy, particularly of the international nancial markets, and the extent
of protectionism or opening of the national economies, their orientation
regarding resource allocation, their consumption or investment options, the
conguration of their power structures, the extent of State intervention, and
the orientation of economic policy, all of which translates into theoretical and
economic policy reformulations.
During the period of the so-called “outward” development, which extended
from the mid-19
th
century to 1930, a close economic, trade, and nancial integration
was reected in the predominance of the sterling pound, a currency that had rm
economic and military backing, and in major, ever larger international trade, credit,
investment, and migratory ows. In general, this global conguration of the British
Empire and its inuence zones, such as Latin America, and certainly Chile, contrast
with national economies of small, weak states – economies that were very open
and scarcely protected, including both the central and the peripheral economies of
Latin America. This was the phase of 19
th
-century liberal market-centrism under
the predominance of the British Empire.
This led to a process of allocation of resources on the basis of comparative
advantages. As the comparative advantages acquired by the central countries
during the Industrial Revolution were to be found principally in manufactures,
these countries specialized in exporting manufactured products, while the
peripheral countries, which lacked those advantages, specialized in exporting
products that came directly from their abundant natural resources.
To this structural arrangement, there corresponded certain organization
of political power: the exporting sectors (manufacturers at the center, raw
material producers on the periphery), the importing sectors (raw materials
at the center, manufactures on the periphery), the major businesses, and
particularly all the nancial sectors constituted an international or transnational
dominating coalition. Their interest in maximizing trade and international
nances was reected in relatively little State intervention in the economy,
except in areas where the State provided the political services as well as the
transport and communications infrastructure necessary to outward growth
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and to the imposition of appropriate rules of the game. Laissez-faire and free
exchange policies predominated, as did the rationalization of this historical
conguration in theoretical and ideological terms, i.e., the classic liberal theory
of resources allocation through the market both nationally and internationally
(static theory of comparative advantages).
That phase of capitalist development ended with the 1930 crisis that,
together with World War II, gave origin to a series of profound readjustments.
International markets disintegrated, the international financial market
and private direct investment disappeared, and only some reduced trade
ows remained. The generalized crisis of international trade, nances, and
investment was reected in each country in serious disequilibria in international
transactions, marked depression of economic activity, and profound social
and political crises. All countries closed their economies through trade and
nancial protectionist measures and encouraged economic growth through
public spending and deliberate State action. This was the beginning of a
protracted sate-centric phase.
At this point it is worth mentioning something that has not been
sufciently dealt with in the literature. This State protectionism and activism occurs
simultaneously in both the central and the peripheral countries. Import substitution was
not a perverse invention of the peripheral countries, Prebisch, and ECLAC,
as some economists of limited command of history seem to believe. Rather,
it was essentially the tool used by the central countries to address their own
nancial and foreign trade crises, recession, and unemployment. It was the
beginning of the worldwide sate-centric phase that ultimately led to the
European Welfare State, the United States’ full employment and regional
development policies, and to Nazism and Fascism in Germany, Italy and
other countries, followed by social market economies in those countries. This
coincided also with the expansion of socialism, introduced in the Soviet Union
in 1917 and subsequently extended to the countries in the Soviet orbit, as well
as with the State developmentism that took root practically in all the rest of
the underdeveloped world after World War II.
All countries resorted to the State for giving impetus, through
protectionism, public spending and investment, to social protection and
employment expansion as well as to growth and development. They particularly
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sought to protect and foment what they used to import: the central countries –
the United States and the European countries – basically protected agriculture
and this gave origin to a huge State apparatus for supporting and fostering
agriculture and livestock, which after half a century is still an obstacle to
international trade and to the development of peripheral countries. One should
not forget that Europe maintained its protectionist and exchange control
policies well into the 1960s, and neither the European Community nor the
United States has relinquished agricultural protection to this day.
Whereas it led to the changes in the industrial countries, as pointed
out, in the Latin American countries that had already achieved a degree of
industrialization in the preceding period, such as Brazil and Chile, the 1930s
Great Depression led to the protection of the manufacturing industry and
marked the beginning of the import substitution industrialization. A gap thus
occurred between domestic and international prices, reected in a change in
relative prices to the disadvantage of agricultural products and in favor of
industrial products. This in turn led to an adjustment in the allocation of
productive resources in favor of the development of the manufacturing sector
on the periphery and of the agricultural sector in the center.
This process did not occur automatically but through the reorganization,
in both groups of countries, of the hegemonic power coalition within the
leading classes. This coalition, centered on exporters, importers, entrepreneurs,
and nanciers was superseded, not without deep, widespread political conicts,
by a State-intermediated coalition of middle groups, intellectuals, professionals,
and organized labor sectors, together with entrepreneurial sectors that
produced for the domestic market.
This happened from the thirties through the seventies, which were
characterized in many Latin American countries by social-democratic and/
or populist governments that allowed active State intervention in many elds
other than the traditional ones. Industrial development was favored, as was
investment in infrastructure, and certain structural reforms were broached,
such as agrarian reform and income redistribution through the expansion of
social spending and public policies that favored middle- and lower-income
segments. Institutional modernization and planning emerged as guiding tools
for intervening in and complementing the market.
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Prevailing economic theories dealt basically with growth, development
policies, and planning. Theoretical discussion tended toward criticism of the
traditional neoclassic economic theory, given the need for a dynamic theory
of growth and development in underdeveloped, dependent countries. That
was the period when the thinking of Raúl Prebisch and the ECLAC was most
inuential. It was based on a particular interpretation of Latin American
underdevelopment and on the need for economic and social policies geared to
industrialization and economic and social modernization, and for the requisite
economic policy’s operational implementation instrument, namely, planning.
In fact, ECLAC undertook a series of studies in many countries at that time,
based on the Economic Development Programming Techniques developed
by a team headed by Celso Furtado.
This thinking had a powerful inuence in Latin America and particularly
in Brazil and Chile at rst and ultimately throughout the world – but quite
particularly in Chile. ECLAC has its headquarters in Santiago and its novel
ideas were widely disseminated through its staff’s personal relations with the
country’s intellectual and political elites, the courses on Economic Development
it began to offer, and the wide dissemination of its publications, especially by
faculty and students of the University of Chile’s Schools of Economics and
Sociology, and of ESCOLATINA and FLACSO.
While this was happening internally in most countries, and certainly in
Chile, the international economic system was endeavoring to come out of
the 1930s debacle through the action of the national states. The following
decade witnessed a feeble revival of international trade, but private direct and
nancial investments dried up completely. However, some national public
institutons were created, such as the US Eximbank and similar export nancing
institutions in other developed countries. In view of the disappearance of
the private international nancial system after World War II, an international
nancial system of a public nature was created, consisting of the institutions
established under the Bretton Woods agreement, particularly the World Bank
and the International Monetary Fund, and later, GATT. These institutions
were joined thereafter by regional development banks, such as the Inter-
American Development Bank-IADB, bilateral and multilateral nancial
assistance institutions, and state export credit agencies. By the mid-1960s, a
public international nancial system was thus in place.
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It should be noted that this nancing mechanism implied social criteria
of resource allocation, as public international resources were intermediated
by the State, in both the donor and the receiving countries. Public criteria
of resource allocation were set and planning was promoted in support of
sociopolitical options, such as fostering industrialization, providing basic social
capital, carrying out structural reforms and modernizing agriculture, saving
foreign exchange, and creating jobs (the Alliance for Progress comes to mind).
All this conformed to the criteria imposed by the parliaments of developed
countries on their own States and nancial assistance organizations, as well
as to those negotiated and adopted by the underdeveloped countries’ States,
in so far as they reected national, long-term interests.
4. Instauration apogee, decline, and crisis of the state-
centric model
Returning to the Chilean case and the most important, signicant changes
in economic policy that marked the transition form the 19
th
-century market-
centric to the state-centric model that started with the 1930s crisis, those
changes had to do with the control of foreign trade assumed by the Central
Bank and to the external crisis, declining State revenues, and unemployment.
The state changed from a relatively passive into a very active agent in the area
of short-term economic policy, i.e., in the area of macroeconomics.
From the standpoint of long-term economic development, though, the
most far-reaching innovation in economic policy was undoubtedly the adoption
of the idea of development planning, understood as a deliberate public initiative
aimed at achieving profound changes in Chile’s traditional economic and social
structures, particularly in respect of industrialization and the modernization
of productive structures, taking into account the interrelations among the
various sectors and regions, the social ends, and the limited resources available.
Planning became the domain of a key institution in Chile’s economic history
in the past century: the Production Promotion Corporation-Corfo, established
in April 1939. This new institution’s Council was charged with “formulating a
general production promotion plan to raise the population’s living standards,
through utilization of the country’s natural resources, reduction of production
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costs, and improvement of the international balance of payments, taking into
account during the plan’s preparation the need to maintain a proper balance in
the development of mining, agriculture, industry, and trade, as well as meeting
the needs of the country’s various regions.”
Corfo’s establishment and the birth of planning in Chile are closely
associated with two signicant events: the devastating earthquake of January
1939 and the political upheaval of November 1938, which for the rst
time raised to power a coalition of center-left parties – the Popular Front –
which assigned a fundamental role to industrialization, the modernization
of agriculture, and social policies. The external economic crisis and the
reorganization of the internal political power structures had a decisive inuence
on this radical turn in economic policy.
The earthquake that thoroughly devastated the country’s central and
southern regions, where most of the population lived and where most
economic activities were located, caused a national emergency of unprecedented
magnitude. This situation had to be faced by a new government that not only
lacked any administrative experience but, owing to the traditional liberalism
that characterized the Chilean administrative apparatus, was also impotent from
an institutional point of view. The requisite means for providing assistance to
and for reconstructing the devastated regions did not exist. In addition, the
government was in a precarious situation in respect of the resources needed
for this purpose, given the weak, limited tax system in place.
The positive, signicant role played by Corfo in the development of
planning in Chile, as well as its limitations can be understood only in light of
the political upheaval that the Popular Front’s rise to power in 1939 meant. This
political event, in turn, was but the consequence of profound changes in the
economy and in society, occasioned by the structural transformation begun
decades earlier and strongly encouraged by the consequences of the Great
World Depression in Chile.
Until 1930, the dynamics of Chilean economic life was based almost
entirely on mining, which accounted for one third of national income. In
the last two decades of the 19
th
century, the economy saw the addition of
the rich saltpeter deposits in the north and, shortly before World War I, a
modern, mighty copper mining industry was also developed. The primary
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export sector brought to the Chilean economy the modern technology and
entrepreneurial organization forms that were predominant in Europe and in
the United States. This had a profound, substantial effect on some sectors of
the country’s socioeconomic structure, particularly in urban and mining areas.
However, this process barely affected the rest of the productive and social
structures, which continued to operate according to traditional methods, with
large labor surpluses, low productivity, and primitive forms of organization,
particularly in rural areas.
With the expansion of foreign trade, the State secured substantial
additional income from this important source of revenue. The new resources
were invested in the expansion of basic public services and in building urban
and transport infrastructure. With the development of these activities, new
urban and middle class salaried segments emerged, adding to the mining
proletariat and the middle segments grouped around activities related to foreign
trade. Even industry developed to certain extent, fueled by the internal demand
spurred by the boom of mineral exports and by government activities, as well
as by the growth of urban middle sectors.
The changes in the social structure had major repercussions on the
political life of the nation. The development of an industrial proletariat in
the mines paved the way for the Socialist and Communist Parties. Moreover,
the expansion of the middle class and related groups served to increase the
ranks of the moderate, anticlerical left that registered predominantly with the
Radical Party. These new, growing social forces gradually diversied Chile’s
sociopolitical spectrum and had their rst major impact on State policy in the
1920s, when they joined forces to support the passing of an important body
of social laws.
From a political viewpoint, these groups and forces came out fortied
from the catastrophic effects of the World Depression in Chile. The crisis
caused a drastic contraction of foreign trade; external demand for Chilean
exports dropped sharply; and the mining activity practically stopped, causing
massive unemployment. The crisis also produced an abrupt, substantial
reduction of foreign exchange reserves and scal revenue. Unemployment in
export industries was followed by unemployment in the cities and by a rapid
deterioration of the political situation.
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Besides greatly contributing to the acceleration of the changes in the
political structure, the crisis had also major effects on the productive structure,
which over time led to substantial changes in the country’s economy. In
subsequent years, these changes fortied the political position of the center
and left parties at the 1938 elections, as well as playing an important role in
the industrialization process and thus in Corfo’s functions and in planning.
These were the main sociopolitical and economic antecedents of the
rst planning period in Chile, with Corfo as the central technical planning
body and as the executive agency responsible for implementing the plans.
The extent of economic power entrusted to this new State agency can
be explained only by the fundamental changes that had taken place in the
economic and social structure. These changes brought unto the stage new
political forces imbued with varying shades of socialist ideology, and a growing
middle class from which issued engineers, technicians, and specialists that
together with the emerging entrepreneurial groups devoted themselves to the
country’s industrialization, the exploitation of its natural resources, and the
modernization of agriculture.
The development strategy adopted by Corfo was heavily conditioned
by the experience of external dependence that often subjected the national
economy to serious disequilibria caused by uncontrollable external factors.
Hence, the preference for a ‘inward’ development strategy based on greater
and more rational utilization of the country’s human and natural resources.
This orientation was further accentuated with the outbreak of World War II
precisely when Corfo was starting its operations. The international conict
exposed once again the country’s dependence on external events. Although
nancial resources were relatively abundant owing to the expansion of strategic
minerals exports, there was great difculty in procuring abroad the machinery,
equipment and other goods required for expanding the manufacturing industry.
The developed countries’ industrial capacity and means of transportation were
fully absorbed by the war effort.
As a result of these external events and of the internal sociopolitical
changes, the new government’s development strategy boiled down to two
basic lines: social policy and industrialization. The social policy implied mainly
higher urban salaries and new, broader social security, health, education, and
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housing programs. Its effects were impressive and lasting in the areas of social
security and public health, with the establishment of new, powerful institutions,
especially the National Health Service. Education, particularly secondary and
technical education, also received a new impetus.
It should be understood that Corfo did not have to invent an industrial
policy. On the contrary, as shown earlier, the effect of World War II on
the Chilean economy, similarly to its effect on other economies in a similar
situation, was to push it onto the path of industrialization, which was further
spurred by the economy’s expansion and the scarcity of manufactured goods
and imported industrial inputs. By 1940 this industrialization process was
already under way, so that Corfo inherited a general orientation that was
already followed to certain extent and an implicit strategy that only needed to
be rationalized and pursued in a more systematic manner.
In fact, the industrialization process had begun in the previous century
and received a considerable, sustained thrust after the World Depression and
particularly during World War II. The balance of payments crisis and the difculty
in importing goods gave rise to strong protectionism, while governments
maintained or increased public spending to curb unemployment. Thus, the
installation of industries for producing consumer goods was encouraged.
In economies traditionally specializing in the production of exportable raw
materials, this necessarily meant the importation of capital goods and the
requisite intermediary products for the new industries. The importation of nal
consumer goods was thus gradually replaced by the importation of machinery
and other inputs for producing those consumer goods in the country. This
caused a change in the composition of exports, which was the other face of
the process of import substitution industrialization.
An industrial sector in rapid expansion necessarily resulted in the
expansion of the demand for fuels, raw materials, basic metals, chemicals,
energy, transportation, communications, and financial and commercial
services. Also needed were specialized labor and experienced administrators
and entrepreneurs. In addition, owing to industrialization’ strong stimulus
to urban concentration, there was a sharp increase of the need for urban
services: housing, schools, potable water, electricity, sewerage, and marketing
and distribution systems. The rapid progress of the industrial sector and of
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urbanization exposed serious deciencies as well as the lack of exibility in
the supply of services, giving rise to tensions and disequilibria throughout the
economy. This situation was described by the new industrial planning body
as “a large number of specic problems that have gone unsolved for many
years and that require immediate solution.”
Under its organic law, Corfo’s rst task was to come up with a general
production development plan, but accomplishing this task in such a short time
proved unfeasible. Previous data were lacking; no industrial or agricultural
censuses existed; notions of the potential of our natural resources were
incomplete and disorganized; statistics were decient. Drafting a general
development plan within a reasonable period of time was thus impossible.
The solution adopted was to draft the so-called ‘plans for immediate action,’
i.e., efforts aimed at overcoming the more notorious shortcomings and gaps
in the productive structure.
Evidently, the needs deemed more urgent were related to strategic
industrial inputs, such as steel, fuels, and energy. As these intermediary
products and services are required by every activity in the industrial sector,
demand began to rise at such unprecedented pace that it became clear that
Corfo’s main task was to develop these industrial sectors. The scarcity of
these products during World War II and the serious attendant difculties, the
strategic importance of these sectors for the industrialization process, and the
professional preferences of the engineers that formed part of Corfo’s general
staff helped the concentration of the planning effort on these areas.
As it assumed tasks of such magnitude, Corfo had also to start a series of
studies and basic research activities in respect of natural resources, especially
a systematic analysis of the country’s water resources potential, as well as its
forests, soils, and underground resources. The rst sectoral plans drawn and
approved addressed the utilization of hydroelectric power, steel, oil resources
development, and agricultural modernization. Each of these sectoral plans
was implemented by a Corfo subsidiary: the National Electricity Enterprise
(ENDESA), the Pacic Steel Company (CAP), the National Oil Enterprise
(ENAP), and the National Sugar Industry (IANSA). Given its crucial
importance for the subsequent development of the agroindustrial exporting
sector, mention should also be made of the Chile-California Plan developed
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by the respective universities and funded by the Ford Foundation to study the
agroindustrial potential of Chile’s Central Valley.
The extensive research program carried out by Corfo produced the rst
Chilean Economic Geography, a comprehensive, modern, and serious work. The
Foment Corporation had the merit of introducing modern economic research
in the country, especially in respect of national income and national accounts.
The rst result of this work was the calculation of Chile’s national income.
All of this had a crucial importance that is easily underestimated today, now
that this information is digitally available. Before these calculations by Corfo
it was impossible to have an overall view of the economy’s development.
Thus, it was also impossible to draw a coherent, balanced development plan
capable of taking into account the interrelations among the various sectors
and activities and the macroeconomic equilibriums.
For this reason, Corfo’s planning strategy in its rst decades was, owing
to its economic and sociopolitical conditioning and to the precarious economic
information systems, a sectoral, uneven development strategy. Nevertheless,
notable results were achieved in these activities targeted by its main efforts. This
is proved by these efforts’ crucial importance in the subsequent development
of these sectors’ enterprises and activities, so much so that most of them
were privatized during the military government and are today basic pillars of
Chilean development.
Macroeconomic equilibrium in the Chilean development process began to
run into increasing difculties by the mid-fties. Ination escaped any control
as a result of the serious copper exports crisis, and the economy stagnated. The
two phenomena were related, of course, and their causes led to the emphasis on
short-term macroeconomic policies that prevailed from 1953 to 1964, as well as
to the new development and planning strategies adopted after 1964.
In 1954, ination in Chile exceeded 70 percent, so that the following
years a massive effort was done to curb ination. Those were the years of the
well-known ‘stabilization programs’ and of a sharp, prolonged controversy
about the monetarist and structuralist approaches to ination.
Later, long-term planning and vision lost in importance under President
Jorge Alessandri’s government (1958-1964), as it represented the rst attempt
by the political right and the entrepreneurial sector to stop the advance of
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state-centric policies. But in 1960, circumstances forced the government to
formally adhere to the 1961-70 National Economic Development Program that had
been prepared by the Corfo staff several years earlier, and which was hurriedly
updated. Two circumstances led to this decision: once again an internal factor,
namely, the devastating earthquake of May 1960, and a major external change,
namely, a radical turnabout in the U.S. policy in 1961, promoted by President
Kennedy: the Alliance for Progress. The two events led to increased external
assistance to Chile, subject to the presentation of a global development
plan. Corfo’s old plan served this purpose but did not have much inuence
on policy, which remained dominated throughout the decade by short-term
macroeconomic considerations and problems.
In 1964, a new political situation arose with the election of President
Eduardo Frei Montalba and the irruption of the Christian Democratic Party.
Before looking at his planning experience, we must backtrack to the serious
economic evils that led to high ination and stagnation in the mid-fties, as the
diagnostic of those difculties provided an important basis for the formulation
of the new government’s development strategy.
As pointed out, the import substitution industrialization model was the
main driving force of the economy and the basic dynamic element in the general
development process. Induced industrialization, based on the permanent scarcity
of foreign exchange and on an expansionist government policy, led to higher
demand not only for basic materials and services, such as steel, oil, and electricity,
but also for a wide range of industrial inputs. Moreover, urban expansion and
higher income in the cities spurred the demand for the various urban services
and for manufactures and agricultural and livestock products.
To maintain some equilibrium in this process and overcome specic
bottlenecks, production in the entire economy should have expanded pari
passu with the growth and diversication of demand, in view of the limited
external resources available. This would have required a highly exible, elastic,
and dynamic production structure, i.e., a high rate of capital formation, highly
qualied human resources, ‘Schumpeterian’ entrepreneurs, and an appropriate
institutional, values, and attitudes framework. The lack of these conditions is one
of the main characteristics of underdevelopment and explains in large measure
the difculties and tensions attendant to a vigorous industrialization process.
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The major effort to overcome these obstacles had to be made by the
public sector, which was ill prepared for such overwhelming tasks. The State
was forced into an active participation in the creation and reorganization of
the productive infrastructure to support the private entrepreneurial sector and
lead it to introduce and expand new branches of activity. It had to discharge
the responsibility of developing certain basic industrial activities and had to set
up the requisite public enterprises for this purpose. It was under strong public
pressure to improve income distribution and to extend basic social services to
a rapidly growing urban population. It was also pressured to absorb workers
that could not nd employment in private economic activity. All these tasks,
in addition to others, meant a huge expansion of the public sector, in both
absolute and relative terms.
To discharge these new functions and expand existing ones, the govern-
ment had to make use of an obsolete nancial and administrative apparatus.
The dated administrative system was in large measure to blame for inefciency
and for the obstacles encountered, thereby causing serious limitation to all the
administrative sectors regarding the application of planning, programming,
and project preparation techniques. The old scal and nancial system was
another factor that aggravated the systematic tendency to incur large budget-
ary decits, a tendency inherent in the Chilean taxation structure.
Indeed, a high proportion of scal revenue derived from exports and
foreign trade in general. This sector contracted in relation to Gross Domestic
Product while the public sector expanded, which meant a relative reduction
of the most important tax base. In addition, many import and export duties
were specic, so that their real value and incidence declined as prices rose. In
addition, the changing imports structure gradually reduced the relative volume
of high-duty imports (consumption goods), replacing them with lower duty or
duty free goods (raw materials and capital goods), and with increasing public
sector imports, which were also duty free. Transferring the foreign trade’s
tax burden and the multiple exchange rate system to the internal economic
activity was no easy task, as the country’s political structure posed difculties
for a comprehensive tax reform and the establishment of an efcient tax
administration. The result was disorderly annual tax increases and the successive
creation of a large variety of new taxes, which led to an uncoordinated tax
system with little elasticity or exibility.
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The long-term process just described had been evidenced by an
acute crisis in 1953. At that time, serious difculties in the copper market
forced the abandonment of the multiple exchange rate system that strongly
subsidized ‘essential’ imports, occasioning a substantial devaluation of the
national currency. This, coupled with simultaneous salary increases aimed at
compensating consumers for higher prices, triggered an explosive inationary
movement that threatened to escape control.
This short-term problem contributed to the aggravation of the just
mentioned scal crisis in the long run. The public sector’s growing requirements
had been nanced in large measure by heavy, continuously rising taxation of
the major copper exporters through the application of a steadily overvalued
exchange rate. Taxes became so high that copper production stagnated, which
led to a revision of the tax treatment in 1956 with a view to encouraging new
investments. This change in the copper policy that had been in place for over
twenty years, was actually the rst step in the ‘inward’ reorientation of the
development strategy that had been followed since 1940. The second step
– the ‘Chilenization’ of mines – would be one of the mainstays of the new
strategy adopted in 1964.
Another difculty that became more acute in the fties was the lack of
response from the agricultural sector to the growing food demand by part of a
fast growing urban population earning higher income and of a manufacturing
sector whose demand for raw materials rose continuously. The slow expansion
of agricultural production and productivity also had a decisive inuence on
the stagnation of the economy as a whole, not only owing to agriculture’s
relative importance but also because rural stagnation tended to limit industrial
expansion. It was also a basic cause of inationary pressure, which tended to
aggravate balance of payment difculties.
Chilean agriculture had always been characterized by an antieconomic
land tenure structure, with the predominance of latifundia and minifundia,
which meant unused or poorly used land. This hindered the introduction of
modern technology and the rationalization of agrarian resources use. Thus,
production and yield could hardly be raised and it was difcult to increase the
supply of the requisite agricultural products for industrial expansion and for
the system’s development and overall equilibrium.
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Around 1950, Corfo began to extend its activities to the rural sector, by
introducing the cultivation of sugar beet for industrial purposes. As Chile was
a sugar importer, there was a clear import substitution motivation. But, owing
to its secondary effects on agricultural activity, and particularly on cattle raising
and milk production, the measure was also intended to spur the modernization
of the rural areas. In addition, Corfo launched an agricultural mechanization
program whose effect was not only to raise production but also to increase per
capita productiviy, which contributed to the accelaraton of the rural exodus.
But although this meant an ever larger obstacle, it ultimately added another
basic area to the future development strategy.
Industrial development also encountered difculties. The State had
invested heavily on infrastructure (transport, energy, etc.) and established
some basic industries. Private enterprises, highly protected and stimulated, had
made considerable progress in replacing a signicant number of superuous
consumer goods. Each new line of import substitution promised substantial
benets, attracted numerous entrepreneurs, and caused a rapid expansion of
productive capacity. But while the void left by the cutoff of the external supply
was lled, internal demand grew only at a moderate pace, so that activity after
activity began to show excess of installed production capacity.
To continue substituting imports, industry had to begin producing
durable consumption goods, machinery, and equipment as well as intermediary
products. This presented local entrepreneurs with considerably greater
difculties. The required nancial resources were much higher, the technical
problems more complex, the need for qualied human resources more
crucial, and the administrative problems much more complicated. Moreover,
pushing industrialization further in this direction required ever more capital;
the minimum economic plant size had to be increased and often exceeded
the size of the market. For this reason, or owing to monopolistic factors –
which can easily develop in such a situation – an ever larger portion of the
industrial apparatus operated below installed capacity. For all these motives, the
industrialization process reached a point of declining real yield per additional
unit of invested capital.
This complex of factors, combined with the effect of agricultural
stagnation, had several major consequences. First, the pace of industrial
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growth tended to slow down. Second, Corfo had to begin providing nancial,
technical, and other forms of assistance for the establishment or expansion
of industries in these new elds, thereby becoming a sort of industrial bank.
Third, the doors were open and encouragement was given to foreign private
investment, external nancing, association of domestic with external capital,
the use of licenses and patents, etc.
Chile’s industrial development in these decades had serious aws. Started
and carried out in a relatively almost completely protected small market, its
more salient negative characteristics have been inefciency, wasted resources,
high property concentration, and heavy dependence of external nancing,
technology, and administration providers. In addition, the increasingly capital-
intensive character of the industrial apparatus – owing to the adoption of
new, technically more advanced production lines, the replacement of obsolete
equipment in existing plants, and the substitution of primitive manufacturing
by modern industry – led to create a sufcient number of new jobs. Industrial
development thus became another problem sector of economic activity, which
required a thorough reorientation so as to become once again one of the most
important, dynamic factors of growth and development.
Moreover, Chile, similarly to other underdeveloped, dependent countries,
was characterized by halting, unreliable foreign exchange inows. What is
less known is how the import substitution process boosted imports to a large
extent, thereby aggravating the external bottleneck.
Import substitution consisted basically in producing in the country the
consumer goods that used to be imported. But, as the country still lacked a
basic industrial complex, it became necessary to import machinery, equipment,
and a wide range of semi-manufactured products and inputs needed for
making the nal consumer item. Thus, a dynamic industrialization process
gave rise to an equally dynamic demand for imported industrial inputs and
capital goods. As long as foreign exchange could be spared by not importing
nished consumer goods and used for importing production goods, things
went well. But once the substitution of consumer goods ended, continued
industrial development required fast growing industrial imports, while exports
grew only slowly and there was no foreign exchange to be spared by ceasing
to import consumer goods: each dollar had to be used for importing some
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essential item, so that new essential imports could be nanced only by skipping
other equally essential imports.
Naturally, external nancing is the short-term answer to the need to
go on with industrial development, despite a genuine ‘foreign exchange trap.’
Industrial development was not able to contribute signicantly to inject
dynamism into exports, for obvious reasons, such as inefciency and high
costs; foreign investment directed at the internal market through subsidiaries
and license and patent contracts; lack of access to the markets of developed
countries, etc. Thus, external nancing under any form soon became a new
factor of balance of payments disequilibrium. Under the circumstances,
it was necessary quickly to nd new foreign exchange sources, as import
substitution had been exhausted as a means of obtaining external resources,
while the industry created by this process proved incapable of helping to
increase exports, and the foreign debt mounted. Chile’s only way out of these
difculties was to expand copper production and gain some control over the
enterprises’ pricing policies. It was at this point that the cornerstone of the
development strategy was laid by the Christian Democratic government that
came to power in 1964.
A last element to be considered is the effect of the development strategy
on income distribution and marginalization. Estimates showed that income
distribution had improved somewhat in the fties, at least in the sense that
the higher-income groups lost something in favor of the middle- and low-
income groups. However, 10 percent of the higher-income population still
earned 36 percent of total income. In addition, excessive supply and the lack
of jobs for nonspecialized labor gave rise to two diverging movements among
the lower-income groups.
The better organized urban, semi-specialized, and specialized workers and
those employed in modern activities saw their real salaries rise and their relative
position in the income structure improve. Rural workers, though, small property
owners, and family businesses, street vendors and artisans, and nonspecialized,
unorganized urban workers continued to earn subsistence salaries.
The proportion of the population represented by these groups increased.
In every sector and at every level of economic activity, advanced and much
more primitive production methods coexisted; a steadily growing portion of
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economic activity was now using modern technology; and the employment
level per unit produced with modern technology was much lower than with
primitive methods. Thus, job opportunities did not increase substantially
and may even have declined under certain circumstances. In addition, as the
work force grew at a fast pace, the number of unemployed may well have
increased. A clear sign of this was the expansion of slums in big and medium-
sized cities throughout Chile, which became another problem requiring a new
development strategy.
This diagnosis of some of Chilean development’s basic problems
was prepared by a group of Chilean economists in the late fties and early
sixties. One of the strongest stimuli for this analysis was the controversy
about stabilization policies, which caused uproar between ‘structuralists’
and ‘monetarists’. The structural analysis of the problems affecting Chile’s
development was the interpretation adopted by the two main political groups
competing for power in 1964. Thus, the Christian Democratic and the Popular
Action Front (FRAP) programs were based practically on the same strategy,
although the means for their implementation were quite different. Moreover,
the two political groups had as one of their programs’ central points the
establishment of a strong, efcient, and comprehensive planning system, and
promised to use this as a basic tool of their development policy.
This stance of the political groups was partially due to the inuence of
the aforementioned economists. Planning ofces were established as part of
the electoral campaign and charged with the preparation of the respective
government plans. The technical group sympathetic to the Christian Democrats
even became the new planning ofce (Odeplan). This situation partially
reected the ideological position of the two main political parties and the
experience of the previous decades. But the national consensus about the new
development strategy and the importance of planning was also inuenced by
the agreement celebrated in 1961 between Latin America and the United States
under the new Kennedy administration: the Alliance for Progress.
This program coincided in large measure with what would become
President Frei’s development policy – ‘Revolution in Freedom’ – and was
based on the same acceptance of structural reforms, planning, and external
assistance. Actually, external assistance was subject to conditions, as it required
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the presentation of development plans that should include agrarian reform,
social improvement programs, tax reform, etc. International arrangements
were established – such as the ‘Nine Wise Men Committee’ – to evaluate plans
and achievements and to authorize nancial assistance in accordance with the
degree of compliance with the commitments under the Alliance for Progress.
The preparation of plans and the establishment of planning systems were thus
strongly encouraged and even imposed on reluctant countries through external
nancing pressures. To this end the National Planning Ofce (Odeplan) was
set up under the President’s Ofce.
The new government’s program had the following main objectives: agrarian
reform, expansion of copper exports, marked expansion of social services
(particularly housing and education) industrial development, and ination control
above all. To implement agrarian reform and improve peasant farming, two
institutions were strengthened: the Agrarian Reform Corporation (CORA) and
the Agricultural Development Institute (Indap). To impart a vigorous impetus
to the government housing program – a similar program was already under
way in the private sector – a Housing Ministry was established and various
complementary corporations were set up under the umbrella of the existing
Housing Corporation (Corvi), such as the Urban Improvement Corporation
(Cormu) and the Housing Services Corporations (Corhabit), among others. In
the area of copper mining, the government established the Copper Corporation
and proceeded with the ‘chilenization’ of enterprises by establishing mixed
societies. Corfo set up new subsidiaries or especial commissions (Automotive
Commission, Electronic Commission, etc.) to foster industrial development in
certain branches of activity. The Ministry of Education was reorganized and
endowed with substantial additional resources. The macroeconomic stabilization
policy was placed under the sole responsibility of the Ministries of Finance
and of the Economy and of the Central Bank, while an informal Economic
Committee consisting of some ministers and representatives of some public
agencies acted as a short-term policy coordinating agency.
As can be seen, all the main strategic development and stabilization policies
were assigned to powerful state corporations or to Ministries, all of which
enjoyed broad autonomy in the public sector and were backed by powerful
interest groups, such as the Construction Chamber in the case of the Public
Works and the Housing Ministries or by serious political commitments, as in the
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case of the Agrarian Reform and ination control. Given this fragmentation of
the public sector and of the decision-making bodies, a consultative agency such
as ODEPLAN could hardly play a decisive role in coordinating the policy of
these various giants or force them to adhere to some long-term development
program consistent with short-term macroeconomic equilibrium.
Nevertheless, especially in the government’s rst three years, a degree
of coordination was achieved, particularly because this was the rst time
the government was run by only one party, which meant that some basic
decisions for the long term could be made by both party and government.
But as this political unity deteriorated with the passing of time, with increasing
conicts between the party and the government and within the party itself,
this coordination also suffered.
The situation aggravated further because the government had made the
commitment to achieve some highly ambitious objectives in the aforementioned
areas but was also rmly committed to curb ination through a program aimed
at decelerating it in three years. As the economy was relatively depressed, there
occurred the miracle of accelerating growth and simultaneously checking
price increases for several years. As copper prices rose considerably and the
world market was quite favorable, while internal revenue also increased, a
signicant expansion of government spending was possible in the rst two
years, when the ministries and major corporations were beginning to achieve
their ambitious objectives. But as soon as the economy regained high levels
of activity, inationary pressures began to accumulate again and the projected
reduction of price increases turned into the opposite. The need to contain scal
expansion subjected planning to a decisive proof, as a coordinated reduction
of the various programs became necessary, so as to prevent depression or
serious disequilibria in the economy. At this crucial moment for planning it
became clear beyond any doubt that coordination was no longer possible and
that each public sector segment employed all its efforts to maintain its own
program at the expense of the others.
Once again, the need to achieve a reasonable minimum of macroeconomic
equilibriums compromised the achievement of long-term goals. The failure
of the state-centric policies to achieve industrialization, modernization, and
the improvement of the social conditions of the majority of the population
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led, in the sixties, to a critical review of those policies and a serious debate
that issued in three clearly differentiated positions and proposals.
First, there was a neoliberal proposal that radically rejected the policies
implemented in the previous decade, based on a market-centric view. It was
initially formulated by the Klein-Sachs Mission called in to solve the inationary
crisis in the second half of the fties and which was systematically and
progressively carried out by American and Chilean economists, who renewed
the teaching of economics at the Catholic University under an agreement with
the Chicago University. This agreement was inspired and promoted by the U.S.
Government to counter the Eclac and socialist thinking in the context of one
of the most intense phases of the Cold War and of the Cuban Revolution’s
growing inuence.
Second, a current that advocated a deepening of the above described
developmentist proposal of President Frei’s government: industrialization,
agrarian reform and peasant unionization, social policies and popular
promotion, tax reform, planning, etc.
Third, a radical proposal, also based on the developmentist diagnosis
but of Marxist inspiration, as well as on the criticism of one of the currents
focused on ‘dependence, which became popular in the mid-sixties. It basically
argued that development was not viable under the international capitalist
system, because, as one of this current’s most popular authors put it, that
model led to the ‘development of underdevelopment.’
This thinking had a major inuence on the government of the Popular
Unity, a left political current that elected President Salvador Allende in
1970, whose program, in addition to structural reforms, including Agrarian
Reform, created a socialized sector through expropriation of the large private
enterprises, nationalization of the copper mining complex, greater popular
participation, etc.
Popular Unity’s irruption and its subsequent, dramatic collapse cannot
be understood save in the context of the state-centric development model
and particularly of the rise of the working and peasant classes, and the higher
intellectual level of the middle classes – a product of the major social and
economic changes of the fties and sixties.
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The strengthening of the workers’ organizations and leftist parties
reached a zenith with Salvador Allende’s victory in 1970. These organizations
and parties carried out a government program that, based on a developmentist
model but with a Marxist criticism of capitalism, aspired to the building of
a socialist society through the development of social and productive forces
associated with a much more active State, which intervened much more in all
areas of economic activities. This was done – and here lies the novelty – under
strict democratic legality.
The rst year of the Popular Unity government was characterized by great
State activity. A strong impetus was given to scal and monetary policy, aimed
at raising income and at expanding internal demand. This was reected in a
40.7-percent increase in public spending that caused a scal decit equivalent
to 8 percent of GDP. This decit was nanced in large measure by the Central
Bank, which led to rising ination already in the second year.
The expansion of internal demand led to a 9-percent GDP growth, while
unemployment (measured for the rst time in Greater Santiago) dropped to
3.8 percent form 8.3 percent in 1971. But the nancing of the scal decit
through issues triggered the escalation of ination, which reached 163 percent
in 1972 and 500 percent in 1973, entailing the well-known effects on salaries and
contracts. This led the economic administration to set price ceilings, thereby
generating excess demand and the attendant scarcity of goods. In 1972, the
scal decit was12.7 percent of GDP, which in turn dropped 2 percent.
The aggravation of the social and political conict, the radicalization of the
popular movement and of the more moderate and conservative sectors led to
an unprecedented production disarray. Between January and July 1973, industrial
production fell 94 percent. By the mid-1970s the country was paralyzed and
the Popular Unity government’s room for maneuvering had become extremely
limited. The denouement was dramatic, as everyone knows. September 11, 1973
not only marked the beginning of an extremely painful period for the country in
terms of loss of citizen rights and grave human rights violations; it also marked
the end of a project that had mobilized millions of peoples, instilled in the poor
the hope of better living conditions, a hope that was never fullled. Thus, the
state-centric development model that had been highly positive for the country’s
development and modernization came to a traumatic end.
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5. The international context in the 1970s: transnationalization,
rise of neoliberalism and decline of the State
In the sixties, foreign private direct investment reappeared on the scene
by way of the emerging transnational corporations, at rst only from United
States, then from Europe and Japan. These corporations took advantage of
the national markets created in peripheral countries through protectionist
measures and industrial development policies, escaping trade barriers by setting
up or acquiring local manufacturing subsidiaries.
In those years, with Eurodollars reaching a zenith, an international private
nancial market was recreated, whose expansion in the 1970s attained extraordinary
dimensions after the 1972 and 1979 oil crises, thereby facilitating widespread,
unrestrained indebtedness in the underdeveloped world. This unsustainable
situation led to the 1982 foreign debt crisis, when extremely restrictive monetary
policies involving extremely high interest rates were applied in the developed world
to address the disequilibria stemming from the oil crisis.
In brief, the pendulum returned to a new period of international economic
integration, known now as the globalization phenomenon that began with
the recovery of trade, continued with the expansion of transnational private
investment, and was completed principally after 1973 with the creation of a
gigantic transnational private nancial market. This phenomenon has a series
of consequences, but what is worth pointing out rst is the debilitation of the
international public nancial system and, in general, the entire international
system of bilateral and multilateral development assistance.
Throughout the seventies, a considerable part of the national and
international institutional structure that emerged in the preceding period
of systemic changes was once again subjected to signicant reorganization.
Today’s generalized economic reform process actually began in the mid-sixties
with the elimination of the exchange controls of nancial transactions, which
persisted in some countries of the Organization for Economic Cooperation
and Development-OECD since the post-war period (regrettably, its ‘import
substitution’ schemes in support of agricultural protection are still in force);
the liberalization attempts in socialist countries such as Hungary, the USSR,
Poland, and China; and the transition from the import substitution strategies to
exports promotion in Korea and Taiwan. In Latin America, and particularly in
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Chile, steps were also taken in this direction: tariff reduction and simplication
schemes; introduction of exchange readjustability; replacement of quantitative
imports control by long-term deposits; reduction and simplication of
exchange and price controls and subsidies; determined promotion of
manufacture exports in Brazil, of fruit, sh, and forest products in Chile, of
owers in Colombia, and so on. In several countries this process was frustrated
by abortive attempts to carry out socialist revolutions and then by the ‘Dutch
malaise,’ the syndrome produced by the effects of the oil boom in the oil
exporting countries, and by nancial permissiveness and the ballooning of
indebtedness in the late seventies.
The birth of the new international era was foretold by the dramatic
collapse of the Bretton Woods international economic relations system, the
1973 and 1979 oil crises, and the adoption of radical neoliberal policies by
the Thatcher and Reagan administrations. All of this is a key part of the
global changes process. These events, though, and those that suddenly and
unexpectedly erupted in the former countries of the soviet bloc, concealed
deeper forces that had been stirring in those countries and elsewhere.
Some of the more signicant of these phenomena for our purposes are
as follows: the United States has consolidated the overwhelming predominance
it has enjoyed for over half a century and continues to maintain and exercise its
unarguable military power; Europe and Asia, particularly China, are emerging
as economic powers and beginning to play a corresponding political role; the
public multilateral system of international economic relations that emerged
after World War II has been eroded by the expansion of multinational
enterprises, the emergence of global corporations, and international nancial
deregulation. This has given rise to a fully integrated and very powerful
transnational entrepreneurial private sector, particularly in the nancial and
investment areas, as well as to informal, extremely elitist mechanisms of
international economic coordination.
Socialism, as it existed in the soviet bloc countries, collapsed, putting
an end to the East-West confrontation that characterized the bipolar world
system of the Cold War. The disappearance of the Second World has practically
eliminated the North-South confrontation, leaving the former Third World
countries in a process of reabsorption, together with the remnants of socialism,
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by a new globalized capitalist system, or simply abandoned in a limbo in which
they disintegrate economically, socially, and even politically.
A profound scientic and technological revolution has shifted the
former emphasis on the physical and biological disciplines, and through the
development of microelectronics and the information revolution, robotics,
biotechnology, and new materials has produced fundamental changes
throughout the economic and social system, as well as in inter- and intra-
company relations, labor processes, comparative advantages, and traditional
position on the world scene. Environmental degradation, the depletion of
natural resources, and the threat to local, regional, and global ecosystems have
added a new dimension to human affairs – the need of change for sustainable
development, as proclaimed by the Rio de Janeiro Earth Summit.
Finally, the predominant role of the State that emerged after World War
II, under various socioeconomic and political guises, has given rise to a socially,
politically, and culturally renewed, stronger civil society. It may be argued that the
events of May 1968 in Paris and the Prague Spring that followed were premonitory
signals, in both the socialist and the capitalist world, of the strengthening of social
movements that represent the rights of minorities and women, green power, youth,
decentralization and democratic participation, the defense of human rights, and so
on. All of these issues have led to the proliferation of base and nongovernmental
organizations and to a relative withdrawal of the state.
A similar situation has occurred in the economic field, including
particularly the market’s growing predominance and the strengthening of
private enterprises, simultaneously with a declining GDP share of public
spending, massive privatization of enterprises and public services, and a higher
level of private as compared with public investment. This process has been
reinforced by being associated with the notable expansion of the transnational
corporations, which has given origin to an unprecedented globalization process
and to new forms of relations between them and the State and national capital.
All of this has meant a thorough reorganization of relations between the public
and the private sectors, both nationally and internationally.
With globalization and the markets’ more complex private economic
interrelations, the aforementioned phenomena create other problems, such as
those associated with the different national practices that affect international
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competitiveness. These problems inevitably become part of the conditionality
under which economic reform is pursued. Thus, the international and regional
negotiating agencies nd themselves in a critical situation, with ongoing negotiations
that range from the treatment of products to the treatment of policies. This is why
the World Trade Organization should be given a broader mandate to permit it to
assess political and institutional differences as sources of ‘distortions.’
It was in this global context of transnational capitalist integration that
Chile experienced the traumatic collapse of state-centrism and the drastic,
brutal implantation of neoliberal market-centrism.
6. Neoliberal market-centrism in Chile
Chile is an atypical country in Latin America as regards the return of
a market-centrist orientation. The implementation of a radical program for
dismantling the state-centrist institutions and policies of the forties through
the seventies preceded by ve years the 1982 foreign debt crisis that forced
the other Latin American countries to undertake rigorous macroeconomic
adjustments and neoliberal structural reforms in subsequent years as well. In
Chile this was a consequence of the profound economic, social, and political
crisis into which the Popular Unity government and the military coup that
ended it were plunged. Accordingly, another peculiarity of the Chilean process
is that it unfolded under the political conditions of an iron-sted dictatorial
regime. This contrasts with the experience of the rest of Latin America, where
democratic regimes became the rule in the eighties.
Of the three economic policy options that found denition in the sixties,
the deepening of developmentism exhausted itself with President Frei’s
government as did the socialist option with President Allende. After one year
of indecision, the military government chose the third, neoliberal option. This
option counted on a complete, detailed program of drastic economic reforms
and a team that for a long time had been preparing itself for such an opportunity,
and relied on determined support from the national and foreign entrepreneurial
sectors, the international nancial community, and the U.S. Government. All this,
as has been shown, took place in an international context that was undergoing
a profound transformation toward a return of market-centrism.
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The internal crisis of the previous models and particularly the
catastrophic denouement of the socialist experience thus coincided with the
resumption and vigorous expansion of private foreign investments. These
now materialized through the proliferation of transnational corporations in
conjunction with the private international nancial system. This proliferation
began with the Eurodollar markets in the late sixties and grew exponentially
with the accumulation of petrodollar reserves with the private international
banking system as a result of the oil crisis. This coincided with the turnaround
that was taking place in respect of economic policies and economic thinking in
view of the mounting failure of the Keynesian policies in the seventies, which
were aimed at stabilizing the developed economies and at resuming growth.
Later, in the eighties, the foreign debt crisis forced debtor countries
to undertake profound macroeconomic adjustments. The new international
constellation of nancial and commercial interests took advantage of the occasion
to impose an ensemble of structural reforms, eventually labeled the ‘Washington
Consensus, to dismantle the state-centrist institutional apparatus established in
the previous decades. This was done by means of a drastic reduction of tariff
and exchange controls, nancial opening, privatization of public enterprises and
services, deregulation, market liberalization, focused social policy, and in general
the shrinking of the State and its nancing basically through indirect taxes. The
objective was to reestablish and maximize the predominance of the market in an
open, deregulated economy, with as little State intervention as possible.
Transnational nancial integration, the return of easy, wide access to
the private international nancial system, and the possibility of borrowing
on a large scale meant a strong pressure and encouragement for adopting
trade and nancial opening policies. When the political conict among
the various coalitions tended in this direction, this led to a reallocation of
resources toward sectors with natural comparative advantages, extended in
some countries to manufacturing activities with advantages acquired during
the import substitution process. This is a new fact of utmost importance: the
dynamism of nontraditional exports could not be explained apart from the
creation of productive capacity in the preceding stage.
Now, market criteria are consistent with income distribution, the
preferences of higher-income consumers, and national and transnational
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private groups with greater power and economic dynamism. Entrepreneurs
are at much greater liberty but it is doubtful that this broader room for
maneuvering is necessarily advantageous to the countries that receive major
ows of private capital, unless the receiving countries provide institutional
incentives for their productive investment and enjoy macroeconomic stability
for guaranteeing returns. Unless societies are rmly committed to development
policies, the ample availability of external private nancial resources may be
diverted to consumption and/or capital ight instead of contributing to the
expansion and diversication of productive capacity. Moreover, the market
alone is not the most appropriate instrument for directing resources toward the
development of a diversied, sustainable production system with social justice
in the long run. Obviously, this does not lie within the responsibility of the
banks that make the loans but of the borrowing countries. The fundamental
question is: What will be the destination of these abundant international
nancial resources?
All these events have been accompanied by the consolidation of a
new hegemonic coalition. Displaying new vigor and supported by private
international nancing, the exporters, importers, and the trade and nancial
sectors are making a comeback, integrated now in the transnational corporations
commanded and integrated by the nancial sector, forming a coalition that
seeks to replace the former one consisting of the industrial sectors, the middle
groups, and the working sectors. The reduction of State intervention lets
the market – and the major economic groups in particular – operate in total
freedom, in a revival of laissez faire policies and of all the ideology centered on
the market, free exchange rate, comparative advantages, the massive support of
the new international centers of transnational nancial power, and so on.
In this context, the neoliberal prescription in a strict sense was applied
in Chile from 1974 until the early eighties. Its basic elements were as follows:
a drastic scal adjustment based on reduction of public current, social, and
investment expenditures and broadening of the tax base; privatization of most
public enterprises and part of public services; cancellation of the industrial
policy; compensatory focus on social spending; unilateral trade and nancial
opening; and deregulation of the markets of goods and services and of
production factors, namely, of land, labor, and capital.
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It was a question of completely eradicating the state-centric model of
the previous decades, not only in the extreme version of the Popular Unity
government but also since its origins in the pioneering social legislation and
policies of the 1920s. There is a foundational effort to create a free-market
economy and a society based on strict respect for private property, a subsidiary
role of the State, including the reduction of its social and productive commit-
ments, and its concentration on the task of maintaining macroeconomic equi-
libriums (understood as price levels stability), the elimination of corporative
institutions (professional associations, labor unions, etc.), and full integration
into the international market.
This was the culmination of the economic right’s intention of reversing
the statist orientation adopted in the fties, rst at the time of the Klein-Sacks
Mission and then under the Jorge Alessandri government, in close association
with the national entrepreneurial sector and the political right. As to the
Pinochet government, it harbored deep mistrust of politicians, even of the
right, while the Chicago economists mistrusted the national entrepreneurial
sector, traditionally protected until the advent of the socialist government.
As it assumed full economic power with full political backing of the military
government and without having to worry about the social and political
consequences of its actions, the economic team could count on the force of
the dictatorial regime for imposing its program in its entirety.
The most purist phase of implantation of the new economic policy
model lasted through the mid-eighties. The foreign debt crisis early in the
decade produced, among other effects, the bankruptcy of the banking and
nancial system, raised to immeasurable levels the unemployment caused by
the previous policies. Under these circumstances, the neoliberal orthodoxy
that called for a retreat of the State was partially abandoned. Once again the
State began to act energetically, reorganizing the nancial system by means of
rm intervention and state subsidies, substantially devaluating the currency to
stimulate exports as well as import substitution, expanding public spending
and investment to stimulate demand and employment, creating extremely
favorable conditions – meaning granting subsidies – to stimulate foreign
investment, particularly in the mining sector and in the sector of privatized
enterprises and public services, establishing conditions for the setting-up of
private enterprises for managing pension funds accumulated by the old Social
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Security system and oriented toward the high and middle income segments,
as these funds substantially contribute to the establishment of a long-term
nancing system controlled and oriented by the State.
It should also be recalled that in the beginning, before the irruption of
the economic team of the so-called Chicago Boys, the military government
undertook some industrial policy initiatives of utmost importance, which
survived the neoliberal assault of the economic team. They consisted in
subsidies for the development of the forestry sector and in the establishment
of the Chile Foundation, a public institution jointly supported and administered
by the State and the private sector, for promoting the development of new
productive export sectors that incorporated advanced technological innovation.
These two initiatives have been extremely successful in stimulating the growth
and diversication of exports.
The new government inherited exceptionally positive assets from previous
governments. For one thing, it inherited the benets of the nationalization
of the copper mining sector. The exclusion of Codelco, the major national
public enterprise, from the state enterprises privatization program, under the
pressure of some nationalist military, was another notorious exception to the
neoliberal project for withdrawing the productive function from the State,
which thus preserved Codelco’s considerable contribution to public nances
and to the management of the exchange policy.
Of similar relevance are the long-term benets of the modernization of the
agricultural and livestock sector and those of the Agrarian Reform undertaken
in previous decades, as they created the conditions for the development of new
agroexports productive activities and for the emergence of new rural proprietors
that eventually became a modern, dynamic entrepreneurial class.
The autonomy enjoyed by the economic team in the rst years of the
military regime was further reinforced by the debilitation of the manufacturing
entrepreneurial class remaining from the import substitution phase, which was
subjected to an extensive expropriation program during Salvador Allende’s
government, and was replaced by a new, or renewed entrepreneurial class that
began operating under extremely favorable conditions: substantial incentives
to investment, extremely inexpensive labor, stabilization of the rules of the
game, etc., as well as the repression and subduing of the urban workers’
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organizations and unions. All this permitted the formation and restructuring
of a dynamic, modern private entrepreneurial sector and an accelerated process
of capitalization and growth as of the late eighties.
7. From neoliberalism to structuralism
It was in this context that democracy was regained in 1990 and the
process of negotiated transition in the political sphere and of continuity and
changes in economic policy took place. In large measure, the economic system
established by the dictatorship was preserved and then gradually subjected
to reform and adjustments focused particularly on the social area and on the
country’s productive participation in the world economy.
Some of the main changes in the economic and social policy since 1990
are as follows:
• A major tax reform to raise state revenues;
• Reallocation of public spending, so as to substantially increase social
expenditures;
• Labor reform;
• Increase of the real minimum salary;
• Establishment of criteria for periodical minimum salary read-
justment;
• Implementation of various nancial measures, including statutory
reserves, so as to reduce and control the entry of volatile short-term
capital;
• Introduction of the public works concession system (investment in
highways, airports, dams, wastewater treatment, etc.);
• Special social programs for poverty reduction (Chile Barrio, Chile
Solidario);
• Comprehensive coverage and reform of education;
• Public health reform (AUGE Plan);
• Penal procedural justice reform;
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• Public administration reform;
• Free trade agreements (USA, European Community, Asia);
• Reintegration into Latin America (Mercosur and bilateral treaties);
• Establishment of several regulatory bodies (Superintendences); and
• Establishment of an environment institutional structure and policy.
These and many other changes were made possible in large measure by
a negotiated transition between the military regime and the party coalition in
favor of democracy. It is not easy to explain to those that did not experience
the transition period the reasons why a negotiated transition between the
military government and the new democratic regime in 1990 was chosen. Nor
why much of the economic system instituted by dictatorship was adopted,
only to be gradually reformed and adjusted. To help readers understand this,
I permit myself a very personal sociopolitical digression.
The decades from the sixties to the nineties were undoubtedly the most
traumatic in Chile’s history. The citizenry’s coexistence was gradually eroded by
the transformations of every sort the country underwent, with special intensity
from the mid-sixties on. The social fabric was progressively torn by antagonisms
that increasingly hindered normal relations among social groups, thinking
currents, and political sectors. Everyday life was affected by the deterioration of
relations among colleagues, companions, friends, and even family members.
Those decades witnessed the profound institutional and structural
reform processes that were triggered in the sixties and gradually intensied; the
predominance of the left’s thinking and its revolutionary and counterrevolutionary
actions; the increasingly uncontrolled and conict-ridden character of the Popular
Unity government and the opposition; the violent overthrow of President Allende
by military intervention and the intense sequel of repressive actions and human
rights violations; the erce struggle for the restoration of democracy and the
violent and terrorist actions against the military government and its cruel repression
tactics; and the drastic economic, institutional, and cultural changes that were fueled
by the war cries of ‘revolution in freedom,’ ‘the Chilean road to socialism,’ and
‘neoliberalism’ that were made and partially reversed in that period.
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That tumultuous, dramatic period left in many sectors a negative legacy of
deep divisions, hatreds, and fears. Numerous social groups and the individuals
and families belonging to them suffered, in varying degrees, losses, affront,
injustices that they attributed to other sectors, groups, and individuals, who
in turn felt the same way about them. All of them had some measure of
reason. All of us experienced or learned about cases of relatives, friends or
acquaintances that met death or repression, torture, and exile, or lost their
jobs; or expropriation, takeover, occupation, or destruction of their property
or business; and there were those that had to drop a lifetime occupation,
and even leave the country. Accelerated, drastic macrosocial changes are
reected in the daily lives of individuals and families in the form of traumas
and heartbreaks of every sort, which drastically and profoundly altered daily
coexistence and the life project of people and their families, entailing much
suffering and glaring injustices.
However, as painful as it has been for many, such suffering was not in
vain. Mutual recriminations were gradually overcome, despite occasional are-
ups, and a great effort has also been made to appreciate whatever was positive
inherited from such a traumatic period. Along these decades, Chilean society,
through its different segments and components, has taken extremely important
steps that have placed it under relatively favorable conditions, as compared with
its own past and with other countries, to meet the challenge of consolidating
a democracy imbued with solidarity, a dynamic, just economy, and a shared
culture, as well as the challenges posed by the major changes of every sort that
are taking place in the world at the outset of the third millennium.
Thus, on the political plan for instance, the militant exacerbation of global
and exclusive ideological projects of the left, the center, and the right has led
the citizenry’s majority to seek fundamental consensuses for reestablishing
the democratic game in which each sector revises and refreshes is utopian
ideological proposal but understands that for governing here and now everyone
must give up something so as to arrive at what is essential to the consolidation
of democratic coexistence.
On the economic plane for instance, the recognition is dawning that
without the agrarian reform and the policies aimed at creating and encouraging
new tradable sectors in the sixties, we could hardly have a dynamic export
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sector today. But we must also accept that without a drastic reorientation of
the economic policy so as to facilitate the opening of the economy and the
action of the private entrepreneurial sector, those initial steps might not have
been taken so quickly and efciently.
It could also be said that the nationalization of the copper mining
sector was a historical, fundamental achievement. In strictly economic and
nancial terms, it gave a considerable contribution to the nancing of scal
and balance of payments decits, thereby also contributing to a more agile
and efcient management of the scal, exchange, and monetary policies and
to the determined effort to order, modernize, and streamline the public sector,
which was accomplished to a large extent by the military government.
More polemic is the social, generalized deregulation, and privatization
policies that were implemented and that have affected both enterprises and public
services, entailing major social and economic consequences, whose positive and
negative effects continue to be heatedly debated. Perhaps it is possible to clarify
and rationalize this polemics, particularly if it is viewed in its historical context.
In the decades following World War II, the expanded role of the State, despite its
many deciencies, was fundamental in the modernization of Chilean economy
and society. Many of the achievements of recent years would not have been
possible without the previous governments’ action in the areas of health and
education, the building of energy and transport infrastructure, and expansion
and diversication of productive capacity in the different sectors.
But it should be also admitted that this State activism, which provided
decisive support to the private sector over those years, later acquired a too
obvious statist bias that has certainly led to the inhibition and displacement
of private initiative, to exaggerated, renteer protectionism, and to all alls
sorts of bureaucratic impediments, price system distortions, and serious
macroeconomic disequilibria.
A dispassionate look at these pendular movements between excessive
State intervention and abstinence should lead to a more pragmatic assessment
of the most appropriate forms of State complementation and the market, as
well as of the role of civil society and citizen organizations, in respect of the
new conditions, challenges, and tasks, both internal and external, with which
the country is faced.
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A strategic analysis capable of envisaging tasks ahead must have as a central
concern the rapid advance of transnational integration in the economic, political,
and cultural areas, to which the nancial and technological circuits have been
recently added with particular intensity and velocity. This complex, far-reaching
globalization process has dened issues that have the force of ‘imperatives,’ which
no State can elude. The ecological issue is another universal imperative. This
transnationalization process, though, unfolds through segmented circuits that
tend to heighten the fragmentation of our already divided society. Not only past
traumatic experiences but also this new context characterized by these opposite
integration and exclusion movements forces us to rethink the role of the State.
The new situation exposes the magnitude of the problem, as it becomes
necessary to review not only the tasks incumbent upon the State and its specic
action, but also the very concept of national State cohesion in this new stage of
history. From the standpoint of the new democratic phase, it would be opportune
and timely to undertake a collective reection about the new modalities of
organization, action, and management of the State and civil society, suggested
and motivated by the recent, major ideological, socioeconomic, and political
changes occurring in the country and in the world, and to examine them in light
of Chilean reality, with a view to arriving at specic proposals.
The democratic consolidation process began with a wealth of ideas about
the new tasks and challenges to be met in the main development sectors and in
the formulation of specic policies for each sector. However, we lack enough
experience of how to institutionalize and organize these policies’ management
through a renewed State and a reorganized civil society. This requires new
forms of interaction between the State and the market, and between these and
the citizens, civil society, basic solidarity organizations, and the regions. Also
required is greater emphasis on effectiveness, exibility, and decentralization,
as well as a foremost concern for technological aspects.
8. Some preliminary conclusions and lessons drawn from
Chile’s experience
ECLAC period – 1950s and 1960s
The 1930 crisis marked the end of a phase of capitalist development
characterized by a prolonged process of international economic integration. It
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was superseded by far-reaching adjustments to the development policies followed
until then, a process that was in turn characterized by the steady adoption of
protectionist policies and incentives to production and employment through
more public spending and direct, energetic, and increasing State intervention.
In this international context, Eclac’s theoretical contribution to the
Latin American countries played a key role. In particular, the thinking of Raúl
Prebisch, based on his own interpretation of the causes of Latin American
underdevelopment and the need of policies aimed at industrialization and at
the modernization of the economies of the continent exerted a major inuence
on intellectual and political circles, especially in Chile, where physical proximity
(Eclac’s headquarters are located in Santiago) allowed wider dissemination of
ideas, particularly among academic institutions.
The State became very active in adopting economic policies. The
establishment of a series of institutions and the impetus imparted by the
State to universal public policies can be considered the main positive legacy of
this period. Some public enterprises established then included the following:
Corfo, a powerful, lasting institution created for fostering long-term productive
development; Endesa and ENAP, which were responsible for providing energy
infrastructure; CAP, another public enterprise, responsible for supplying basic
industrial inputs; Iansa, charged with the modernization of agriculture; LAN,
in charge of developing national air transportation; and Entel, responsible for
the development of telecommunications.
During that period, Chilean society also underwent major changes. Wider
access to education by the middle class ensured greater social mobility. The
development of public enterprises gave rise to a high-level entrepreneurial class
and an equally high-level professional contingent in the public sector. At the
same time, workers’ organizations and left popular parties gained strength.
While industrial development and public social policies allowed the
development and growth of urban middle segments, in the rural zone agrarian
reform and the peasants’ unionization were the engines of major social and
economic structural changes.
Despite its signicant achievements, this period also left a negative legacy
in some aspects. The persistent macroeconomic instability, with a series of
inationary outbreaks, the stabilization programs, and the external bottleneck
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owing to the lack of a developed export sector were in my view the worst
inheritance of a period characterized by drastic transformation and social and
industrial modernization.
Popular Unity – 1970-1973
Popular Unity’s irruption and subsequent, dramatic collapse can only
be understood in the context of the development of the state-centric model,
and particularly of the rise of the working and the peasant classes and the
intellectual ascent of the middle class, as a result of the major economic and
social changes of the fties and sixties.
Salvador Allende’s government had to face a period of sharp social
contradictions and political radicalization of both the left and the right,
internally and externally, which entailed serious social disorder as well as major
industrial disarray, at a time when the state-centric model was exhausting itself
both at home and abroad.
Despite the acute institutional crisis of those three years, some signicant
achievements of that period deserve pointing out, such as the nationalization of
the copper mining sector and the deepening of the agrarian reform, which led to
the end of the latifundia, which in turn paved the way for increased productivity
and land use. The period’s negative legacy includes major macroeconomic
disequilibria, uncontrolled ination, and productive disorganization.
Neoliberal Orthodoxy – 1974-1990
The exhaustion of the state-centric model and the ensuing economic
and institutional crisis stemming from the Popular Unity experience coincided,
at the international level, with a rearrangement of the dominating ideas,
particularly in the United States and England, where a drastic turnaround was
taking place, from Keynesian-styled to neoliberal policies.
In economic matters, the military government chose the latter. Total
control of the State’s power and the absence and even prohibition of any
type of union or social organization permitted the unchecked application of
an overall economic reforms program. This program was based primarily on
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a drastic scal adjustment based on reduction of public current, social, and
investment expenditures, and broadening of the tax base through indirect taxes;
privatization of most public enterprises and part of public services; elimination
of the industrial policy; compensatory focusing on social spending; unilateral
trade and nancial opening; and deregulation of the goods and services market,
and of production factors, i.e., land, labor, and capital.
The period of strictest application of the neoliberal prescriptions extended
from 1974 through the mid-eighties. However, the country experienced a
sharp economic recession between 1982 and 1984, after which more pragmatic
economic policy measures were adopted, which allowed the economy’s recovery
and the beginning of a process of accelerated growth with relative stability.
There is no doubt that some of the positive milestones inherited from
the more orthodox application of the neoliberal market model are related
to the permanent pursuit of macroeconomic equilibriums; the rehabilitation
of public nances; the creation of macro conditions for the development
of the export sector; institutions and policies for productive development;
privatization of public enterprises (notwithstanding procedures subject to
criticism); formation of new entrepreneurial classes in the private sector; and
maintenance of a strong State.
Despite these achievements, the application of this economic orthodoxy
also left a very negative inheritance: profound social deterioration; the
dismantling of public services, especially in respect of health and education;
widening social inequality; high concentration of power and wealth; foreign
indebtedness; and marked deterioration of the middle classes.
Neostructuralist period – 1990 on
The return to democracy marked the end of a period of sharp
confrontations in Chilean society. Between the sixties and the nineties, drastic
institutional and structural reforms were tried, under the mottoes “revolution
in freedom,” “the Chilean road to socialism” and “neoliberalism.” These
reforms were imposed, and partially reversed thereafter.
There is a consensus today that the return to democracy was deliberate
and negotiated. The incipient administration opted for a consensus policy both
Osvaldo Sunkel
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in the economic and in the political domains. To a large extent, the economic
system established by the dictatorship was embraced and gradually reformed
and adjusted, and its focus directed particularly at the social sphere and at the
country’s participation in the world scene.
The main achievements of the post-1990 period were geared to preserve
and reinforce macroeconomic equilibriums, with rm adherence to scal
equilibrium, which has been maintained and has inspired high condence. Other
achievements included a tax reform that could soon support a much more
expansive and focused social policy aimed at reducing poverty, which dropped
from 45 percent in 1990 to 18 percent in 2003. Efforts were made to correct
externalities inherent to the market, through the establishment of a strong
institutional regulatory framework. The market was called upon to take over
traditional State tasks, such as public works, through strong concession policies.
Technological and productive development was encouraged. Environmental
institutions and policies were established. Finally, there is no doubt that Chile’s
enhanced participation in the international scene on the economic and political
planes is also an achievement of this period.
Notwithstanding these major achievements, much that was negative in the
most orthodox neoliberal period still lingers, such as the excessive concentration of
wealth and power; the sharp distributive inequality; the lack of a territorial regulatory
policy; and the lack of a vision and a strategy of long-term development.
By way of conclusion: lessons from the Chilean experience
The analysis and review of the history of the changes in economic policies
in Chile warrant signicant conclusions, as well as dispelling some confusion
in the minds of many who deal with economic science, who tend to look at
the application of economic policies without putting them in the context of
the period when they were developed both internally and internationally.
The following conclusions may be drawn from a review of Chilean economic
policy in the past century, in respect of the more recent market-centric period:
(1) The determinant importance of the legacy of strategic public produc-
tive enterprises established in the state-centric period and privatized
by the military regime;
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(2) The crucial importance of the basic structural and institutional
reforms of the ECLAC and the socialist periods, especially the
agrarian reform and the nationalization of copper mining;
(3) The Chilean case is not a chemically pure example of successful
neoliberal policies, as is commonly thought: the State played a decisive
role in important productive development public policies since the
outset of the military government and in the Keynesian reactivation
after the debt crisis; and
(4) Since 1990, the Chilean model has become even less identied with
neoliberalism. One should not confuse neoliberalism with respect
for macroeconomic equilibriums and the market economy, which are
inherent in any contemporary economy. Moreover, since 1990, the State
has been strengthened by reforms pertaining to taxation, social issues,
regulatory tasks, production, public works concessions, and so on.
(5) The recipe of the Chilean success since 1990 seems to be based
mainly on the following:
• The legacy of an economy in relative macroeconomic equilibrium
and of high investment, exports, and growth rates;
• Maintenance and improvement of macroeconomic equilibriums;
• Tax reform;
• A strong emphasis on social policies, particularly as regards labor,
poverty, health, and education;
• Strengthening of technological innovation and productive
development policies;
• Establishment of incentives to private investment in infrastructure,
particularly through the concessions system;
• Establishment and strengthening of the various regulatory bodies;
and
• Policies geared to the active promotion of exports and of the
country’s participation in the international scene.
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A common denominator stands out in these conclusions: a strong, proactive
State that feels no inhibition before the market but rather develops a wide range
of public policies to inuence the market.
9. Bibliography
Ahumada, Jorge. La Crisis Integral de Chile. Editorial Universitária, Santiago,
1966.
Correa, Sofía. Con las Riendas del Poder. La Derecha Chilena del Siglo XX.
Editorial Sudamericana, Santiago, 2005.
Cariola, Carmen and Osvaldo Sunkel. Un Siglo de Historia Económica de
Chile: 1830-1930; dos Ensayos y una Bibliografía. Ed. Universitaria,
Santiago, 1991.
Ffrench-Davis, Ricardo. Entre el Neoliberalismo y el Crecimiento con Equidad.
Tres Décadas de Política Económica en Chile. 3rd. Edition, LOM Ediciones,
Santiago, 2003.
Godoy, Hernán. Estructura Social de Chile. 2nd edition. Editorial Los Andes,
Santiago, 2000.
Hunneus, Carlos. El Régimen de Pinochet. Editorial Sudamericana, Santiago,
2001.
Instituto de Economía de la Universidad de Chile. Desarrollo Económico de Chile.
1940-1956. Santiago, 1956.
Meller, Patricio (Ed). La Paradoja Aparente. Equidad y Eciencia: Resolviendo el
Dilema. Taurus Editora, Santiago, 2005.
Meller, Patricio. Un Siglo de Economía Política en Chile: 1890-1990. Editorial
Andrés Bello, Santiago, 1998.
Muñoz, Oscar. Chile y su Industrialización: Pasado, Crisis y Opciones. CIEPLAN,
Santiago, 1986.
Oficina Central de Planificación, Comando Nacional de la Campaña
Presidencial del doctor Salvador Allende. Las Bases Técnicas del Plan de
Acción del Gobierno Popular. Santiago, 1964.
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Pinto, Aníbal. Chile, un Caso de Desarrollo Frustrado. 2nd. edition. Editorial
Universitária, Santiago. 1962.
Sunkel, Osvaldo, “The unbearable lightness of neoliberalism.” In Bryan
Roberts and Charles H. Wood (Eds.). Rethinking Development in Latin
America. Pennsylvania University Press, 2005.
_____ (2002). “Trascender el dilema estado-mercado: un enfoque sociocéntrico”.
Agenda Pública, No. 1. December 2002. Instituto de Asuntos Públicos
Universidad de Chile.
_____ (1991,1996). El desarrollo desde dentro; un enfoque neoestructuralista para América
Latina. (Ed.). Fondo de Cultura Económica, Mexico.
_____ (1992). “La Consolidación de la Democracia y del Desarrollo en Chile:
Desafíos y Tareas.” In Estudios Públicos, No. 48, Santiago.
_____ (1970). “Cambios Estructurales, estrategias de desarrollo y planicación
en Chile (1938-1969)”. In Cuadernos de la Realidad Nacional. No. 4, June
1970. Universidad Católica de Chile.
_____ (1986, 1989). Debt and Development Crises in Latin America; The End of an
Illusion. (with Stephany Grifth-Jones), Oxford University Press, Oxford,
UK.
_____ (1965). “Cambio Social y Frustración en Chile”. In Economía. Revista de
la Facultad de Ciencias Económicas y Administrativas, Universidad de
Chile. Year 23, 3rd and 4th quarters, Santiago.
_____ (1958). “La Inación Chilena: Un Enfoque Heterodoxo”. El Trimestre
Económico, Vol. 25, No. 4.
Valdes, Juan Gabriel. La Escuela de Chicago: Operación Chile. Ed. Zeta S.A., Buenos
Aires, Argentina, 1989.
DEP
Translation: João Coelho
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Colombia, a country
of contrasts
Alfredo Rangel*
C
olombia is the third most populated country and the fth economy in
Latin America. It is the fourth largest country in South America, with an area
equivalent to that of Portugal, Spain, and France combined. It enjoys a privileged,
highly diversied geography, as it is the only country with an outlet to the Atlantic
and the Pacic, and is at once Caribbean, Andean, and Amazonian. Occupying
only 0.7 percent of the Earth’s surface, Colombia harbors 15 percent of the
world’s biodiversity, being surpassed only by Brazil in this respect.
With a population of 42 million, Colombia is demographically deconcentrated,
as 28 percent of Colombians live in the four major cities – Bogotá, Medellín, Cali,
and Barranquilla. Bogotá alone has 15 percent of the total population. There are
eight cities with over half a million inhabitants, and 22 with more than 100,000.
Economic deconcentration is also a fact: 22 percent of economic activity takes
place in Bogotá, 15 percent in Medellín, and 12 percent in Cali. The economy
is highly diversied: 55 percent of exports consist of products other than oil,
coal, and coffee, the major exports, and account for 25 percent, 13 percent, and
7 percent of the total, respectively. But it is also a very little globalized economy,
as its exports represent only 17 percent of its internal product.
* Director of the Security and Democracy Foundation
alfredorangelsuarez@yahoo.com
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The country’s intricate geography has militated for decades against
national integration. Communication difculties have hindered the regional
economies integration with one another and with external markets. Colombia
has been a quite insular country that only recently started opening up to
the world. And yet it has always had one of the region’s most educated and
sophisticated political, intellectual, and entrepreneurial elites. With Brazil and
Argentina, Colombia has the largest number of competent professionals,
particularly at the highest corporate levels, and has become a net exporter of
qualied human capital.
Paradoxically, it has been at the same time the region’s most violent
country and the most economically and politically stable in the last decades.
It has the Americas’ second-oldest Constitution after the U.S. Constitution. It
also has the region’s oldest political parties and in it lives and ghts the world’s
oldest guerrilla.
Colombia is a country of contrasts and paradoxes. A country with
a strong civilian tradition in which the military forces have never wielded
signicant political inuence, even though in its rst century of independent
life it experienced nine general wars and fty-four local revolutions that
culminated in the Thousand Day War at the beginning of the 20
th
century,
then a parties’ confrontation in the 1950s and an insurgent armed conict in
the last forty years that has not yet ended. A civilian-minded country without
a militarist tradition, but with a deep-rooted political party sectarianism among
civilians – possibly unrivaled in the region- has led to frequent armed contests
between members of the two traditional political parties, namely, the Liberal
and the Conservative.
Recent history
After the One-Thousand-Days War at the closing of the 19
th
century
and the beginning of the 20
th
century, which opposed the Liberal and the
Conservative parties, Colombia experienced half a century of political peace
that was broken by a new party confrontation in the early-1950s. This period,
known as The Vivencia [the living experience], caused between 300 and 500
deaths and an intense migration of peasants to the country’s major cities.
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This confrontation was interrupted by General Gustavo Rojas Pinilla’s
caudillo-style military coup. General Pinilla, who curiously enough had the
support of a segment of the ousted president’s Conservative Party, decreed
a general amnesty that demobilized most of the party forces that had risen
in arms against each other. This dictatorship lasted only four years and was
replaced by a very brief military government that prepared the way for a return
to democracy. To put an end to party violence, the two traditional parties
agreed to alternate in power, and this was done in the following sixteen years,
during which time the State bureaucracy remained unchanged.
This pact became gave rise to a National Front. Although it put an end
to party violence, the National Front closed political spaces and suffocated
democratic pluralism. In the 1960s and 1970s the country experienced
accelerated urbanization, an educated middle-class began to emerge, the mass
communication media multiplied, and the National Front’s political regime
began to show signs of exhaustion. Meantime, some of the armed peasant
groups remaining from the party violence did not accept amnesty and started
the Revolutionary Armed Forces of Colombia-FARC guerrilla, adopted
the communist ideology, and thus began the gestation of their insurgence
project. At the same time, another guerrilla movement of Cuban inspiration
emerged, known as National Liberation Army-ELN, whose leaders were mainly
university students and which initially built a small peasant base that would
sustain it. In the early 1970s, the April 19 Movement-M-19, an urban guerrilla
movement emerged, which defended General Rojas Pinilla’s supposed victory
in the 1970 elections, which, according to his followers, had been usurped by
the National Front alliance of the traditional parties.
In the beginning, these guerrilla groups were weak, poorly armed,
nancially strapped, had inexpressive social backing, and precarious military
capacity. The ELN and the FARC hibernated in their rst twenty years in
markedly marginal areas of Colombia. Their existence was known only
because of occasional raids on remote towns to rob their small banks and
steal weapons from their few policemen. The M-19 was as poor as the rural
guerrillas but this was compensated by bold armed propaganda activities in
the cities, which found great repercussion in the media. This situation changed
when the ELN, at the brim of extinction in the early eighties, found in the
extortion of oil companies a huge source of funds, while the FARC did the
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same to get resources from the drug trafc. The M-19 never had an efcient
nancial strategy and thus remained poor, and was forced to take refuge in
the rural areas after its backbone had been broken by State security forces in
the late 1970s.
The eighties proved to be one of the country’s most convulsion-ridden
decades, owing to the irruption of drug trafcking as a novel force, with major
drug cartels that violently fought against the State to prevent the extradition of
drug trafckers to the United States. Those were the narco-terrorism years, when
the maas assassinated presidential candidates, judges, members of the military,
police ofcers, high authorities, parliamentarians, and hundreds of common
folks, both in selective actions and in indiscriminate massacres aimed at instilling
terror in the population. That was the era of Pablo Escobar and Rodríguez
Gacha, two of the most famous members of the Colombian maa.
At the same time, the FARC and ELN guerrillas became stronger, expanded
their area of inuence, increased their military capacity, and attracted further
social and political support. The M-19, now fortied in the rural areas, kept up
its spectacular actions, such as the taking of the Dominican Republic’s Embassy
in Bogotá, when dozens of diplomats were made hostages. It was then that
President Belisario Betancurt started peace negotiations with the guerrillas,
particularly with the FARC and the M-19. A general amnesty of the guerrillas
was proclaimed and a political solution for the armed conict became a key
issue on the national political agenda. Unfortunately, this rst peace effort ended
catastrophically with the taking of the Palace of Justice in Bogotá by the M-19
after an incident-ridden truce violated now and then by both sides.
This notwithstanding, late in the decade the Virgilio Barco Government
managed to arrive at a peace agreement with the M-19. César Gaviria, Barco’s
successor, did the same with four other small groups: the EPL, the Quintín
Lame, the PRT, and the CRS. A Constituent National Assembly was then
convened. It expanded political spaces and introduced major institutional
reforms to democratize the political regime. A few years later, the main drug
cartels were dismantled; this did not mean the end of drug trafcking but the
emergence of small cartels that, differently from their predecessors, did not
pursue violent confrontation with the State; they kept a low social and political
prole, although their fortune was also enormous.
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The peace dialogue the Gaviria Government attempted to establish
with the FARC and the ELN together, rst in Caracas and then in Tlaxcala,
Mexico, failed. Ernesto Samper, Gaviria’s successor, headed a government
affected by the scandal of the use of drug trafcking money in the nancing
of his campaign. The ensuing political crisis prevented the continuation of
the peace dialogue. Rather, it provided the background for FARC’s major
military escalation, which dealt the Colombian Army the severest blows it ever
suffered in combating counterinsurgency. At this time, strong paramilitary
groups entered the scene; although basically regional organizations, they
banded together into a nationwide organization known as the United Self-
defense Forces of Colombia-AUC. These organizations began the systematic
extermination of those they thought were guerrilla supporters, which led to
massive displacement of people throughout the country. In a short time, the
guerrilla reacted with similar tactics against the paramilitary support bases; a
full-edged humanitarian crisis set in owing to the spreading of the barbaric
armed conict throughout the country.
The combination of military failure, guerrilla escalation, paramilitary
vigor, and the humanitarian crisis led the country to call for a resumption of
the peace dialogue with the guerrilla. This determined the outcome of the next
presidential election, won by Andrés Pastrana, who soon after being elected
demilitarized an extensive area of the country – over 40 square kilometers
– to start peace conversations with the FARC. This awed attempt ended in
resounding failure, for which both sides bore responsibility. The guerrillas
assumed a triumphalist posture based on their newly-won military victories
and, expecting to go on advancing on the military terrain to defeat the National
Army and take over the government, they used the peace dialogue as a political
tactic of their war strategy. They never intended to arrive at an agreement.
The Pastrana government, in turn, never had a clear negotiation strategy; he
relied on goodwill gestures more than on political efcacy, and was deemed by
public opinion as extremely naïve and weak vis-à-vis an ever prouder guerrilla.
Guerrilla abuses against the population in the demilitarized zone soon blew
the peace dialogue, which was broken a few months before the elections that
chose Alvaro Uribe as Pastrana’s successor.
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The current situation
The 2002 presidential elections turned into a referendum against the
guerrilla and in favor of a strong arm against it. As a candidate, Uribe convinced
the electorate that he was the best choice for returning security to the country
and for curbing violent acts. He ran as an independent, although all his life he
had been an outstanding member of the Liberal Party, whose candidate, who
seemed poised for victory, he defeated at the rst balloting, an extraordinary
event in Colombian elections’ history.
Faithful to the mandate received from his electors, Uribe made
democratic security his government’ major concern. His objective was to
recover control over the area in the hands of the violence perpetrators, ensure
the population’s enjoyment of the liberties that had been restricted by the lack
of security, and weaken the irregular groups so as to force them to negotiate
the State’s terms. To this end, he sought to strengthen and modernize the
State’s security forces, expand manpower strength, improve communications,
enhance mobility, intensify training, and increase and upgrade equipment. He
also appealed to citizens to voluntarily organize themselves and actively support
the State through extensive informant networks, in its endeavor to defeat the
agents of violence. He sought not only to maintain but also substantially to
increase the efforts begun by his predecessor, such as the Colombia Plan, a
broad cooperation program adopted two years earlier with the United States
Government, which feared that the guerrillas might destroy Colombia’s
democratic regime.
Nevertheless, Uribe’s government left the door open for peace negotiations
with any irregular group, while adding to the negotiation conditions. Some
of the major conditions included unilateral, unconditional truce on the part
of the interested group, an agenda strictly limited to agreement on juridical
and social conditions of its demobilization and disarmament, international
supervision to guarantee the earnestness of conversations and commitments
undertaken, and the outright refusal to demilitarize any zone of the national
territory for carrying out this dialogue. The guerrillas atly refused to accept
these conditions but the paramilitary groups did accept them. Thus began these
groups’ demobilization, which culminated three years later in the disarmament
of most of them.
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To ensure demobilization, the Colombian Congress approved a special
juridical framework known as the Justice and Peace Law, to be applied to
paramilitary accused of crimes of lese-humanity or war crimes. This law
provides for a substantial penalty reduction if the defendant reveals all
his crimes and surrenders all his possessions for reparation to his victims.
Noncompliance with any of these conditions causes the defendant’s transfer
to ordinary courts, under which he is subject to the full force of the law, which
multiplies manifold the number of years of imprisonment with which he has
to pay for his crimes. The paramilitary found not guilty of these crimes is
pardoned of the crime of association for committing a crime.
This process resulted in the demobilization of 32,000 members of
paramilitary groups, 16,000 of whom surrendered their weapons; the others
had provided logistic an intelligence support. The fty main leaders of these
groups are being held in maximum security prisons. Many parliamentarians and
politicians that allied with them are also in prison and are being tried for this.
Similarly, the guerrillas have been weakened by the State and have been
forced to redeploy. Their manpower strength has decreased and the number
of their violent actions has substantially declined. The ELN saw its numbers
drop from 4,500 to 1,200, while its kidnappings decreased from 680 in 2001
to only 60 in 2006. The FARC armed members declined from 18,000 to about
14,000 and the number of towns taken over by them dropped from 60 in 2002
to only four in 2006.
With the strengthening of the State, the demobilization of the paramilitary,
and the weakening of the guerrillas, security has been signicantly restored in
Colombia. In the last ve years the rate of homicides per 100,000 inhabitants
dropped from 63 to 33, and the number of kidnappings for extortion purposes
declined from 1,700 in 2002 to about 280 in 2006, while the number of highway
blockages dropped from 180 to 9 and the guerrilla attacks on towns declined from
32 to only four. This substantial improvement in security has had a very positive
effect on the national economy, which is growing at 8 percent, as compared with
its recent historical average of only 3 percent. Foreign investment, whose average
was US$2 billion a year, will surpass U$7 billion this year. As a result, the unem-
ployment rate, which stood at 17 percent in 2002, is now 10.5 percent. These are
just some indicators of the positive effects of greater security on the economy.
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The preceding notwithstanding, drug trafcking resists giving in in
Colombia. The current Government’s failure adds up to the failure of previous
governments that were unable to implement a successful strategy to reduce
the quantity of cocaine produced in and exported from Colombia. After ten
years of fumigating coca crops and extraditing hundreds of Colombians
to the United States, the quantity of cocaine produced has not diminished.
What has diminished is the area planted to coca, but this is Pyrrhic victory, as
the same quantity of coca is produced in half the previously cultivated area,
thanks to the growers’ and trafckers’ success in substantially raising crop
productivity. Faced with this situation, the Government seems to be looking
more carefully at the results of the antidrug ght; it has announced a reduction
in crop fumigation and is laying more emphasis on manual eradication and
on the prohibition of illegal drugs. This business’s high returns, though, and
the unrelenting expansion of its international markets militate against these
new efforts’ eventual success.
However, there has been substantial progress in other indicators of
political freedom as well. Past October’s local elections took place under the
most secure circumstances and with the least violence of the last ten years.
Voter participation struck a record as did the number of registered candidates.
Despite the violent group’s intention of sabotaging the elections, this time there
were twice fewer assassinations than in 1997, 36 times fewer kidnappings, and
the number of municipalities affected by violence was three times lower.
The last elections also showed the strength and pluralism of Colombian
democracy. Independent candidates, on both the left and the right, who ran
against consolidated political apparatuses, became mayors of Bogotá, Medellín,
Cali, and Cartagena, among other examples. Four recently founded national
parties came out stronger also – the Partido Social de Unidad Nacional, the
Cambio Radical, the Convergencia Ciudadana, and the Polo Democrático
Alternativo. But the traditional Liberal and Conservative parties, whose
obituary had been written by some, demonstrated renewed vigor and strength,
ranking rst and second in the voters’ preference; but they are no longer the
parties that some decades ago rmly and exclusively dominated the national
political scene.
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Prospects for security and peace
Despite the major progress achieved in the last ve years, security and
peace continue to gure prominently on the national political agenda.
The Alvaro Uribe Government, elected for the second time on the
rst balloting in 2002, has established a plan for consolidating democratic
security. To this end, it will have at its disposal over the next four years the
largest security budget the country has ever had, fortied by an extraordinary
tax to be paid by society’s higher economic echelons. These additional funds
will enhance the State’s presence throughout the national territory and allow
the State to go on undermining the capacity and reducing the presence of
illegal armed groups, so as to restore the State’s monopoly of armed forces
and to further guarantee the citizens’ exercise of their rights and enjoyment
of their liberties.
To ensure peace it is still necessary to achieve a successful completion
of the process involving the paramilitary and agreements with the FARC and
ELN guerrilla groups. As mentioned, the main leaders of paramilitary groups
have submitted themselves to the Justice and Peace Law and it is expected
that the ongoing judicial proceedings will arrive at a signicant dose of truth,
justice, and reparation to victims, something the previous peace processes
involving the guerrillas failed to accomplish. This Law is indeed the most
advanced and rigorous in the world as regards the transitional justice that
has been applied for achieving peace and resolving armed conicts. It is also
expected that the State will succeed in dismantling some of the groups that
have recently emerged, small bands that did not agree to demobilization,
consisting of recidivist paramilitary. These groups seem to be of a different
nature, not as bent on insurgency as the already demobilized groups, but rather
devoted to drug trafcking and to obtaining other types of illegal earnings in
some regions of the country.
Moreover, for two years now the Government has carried on peace
conversations with the ELN in Havana, Cuba. Although no major progress
has been made, the important thing is that this insurgent group seems to
have made the decision to abandon arms as a means of political action and
to accept a peace agreement with the State. Apparently, this decision is due to
the group’s own debilitation and to the advances made by the democratic left
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in Colombia and on the continent. The negotiation process may be slow but,
differently from other occasions, this time it seems to be irreversible. ELN’s
demobilization is thus a question of time, of two or three years at the most.
The hardest part is FARC’s demobilization. These forces do not yet seem
convinced of having reached the limit of their political possibilities through
armed conict. Although for the rst time they have seen a reduction in their
manpower strength and been forced to leave areas where they had been strong
and over which they had relative control, the FARC rely on the fact that the
Government was unable to defeat them after having launched the Patriot Plan,
its strongest military effort in the forty years of their insurgence. This leads
them to adopt a very hard line in any peace negotiations.
The humanitarian agreement to exchange kidnapped politicians in the
guerrillas’ power for guerrilla members in prison is the rst crucial step for
further peace conversations between the Government and the FARC. After
unsuccessful efforts by national mediators, including a former president of
the Republic and the Catholic Church, the process of humanitarian exchange
seems to have been freed up by the request submitted to President Uribe to
make the Venezuelan President a mediator in this humanitarian issue. Chávez
has instilled strong dynamics into the process and the probability that his
effort may be crowned with success is very high, as he has the condence of
both parties, a requirement for a successful outcome. After Chávez’s talks with
Uribe and the FARC, a meeting of the two parties – something unthinkable
only a few months ago – may be possible in Venezuela, at which Chávez may
present proposals for overcoming the main procedural obstacles that have so
far prevented this humanitarian encounter.
If Chávez’s mission succeeds, the exchange might take place in less than six
or eight months. It is unlikely that, with his complicated and conictive domestic
and international agenda, Chávez will be able to devote much time to this question.
If the exchange takes place, the next step would be to agree on the terms of a new
political negotiation between the Colombian State and the FARC.
Under the best hypothesis, peace conversations could start in two
years’ time and an agreement could be reached in another three or four years.
Accordingly, the most optimistic prospects envisage peace in Colombia in
over ve years.
Alfredo Rangel
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These dynamics will have great inuence on political and electoral
perspectives in Colombia, where a third term for President Uribe begins to be
discussed. Should expectations of a fruitful peace dialogue materialize before
President Uribe’s current term expires, the likelihood of his second reelection
would be very strong.
DEP
Translation: João Coelho
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Ecuador: fundamental
issues
León Roldós*
N
o State, nation or society can exist apart from others because it is
socially, politically, and economically self-sufcient. Major collective efforts
are necessary to ensure that relations among nations are maintained in dignity
and with a view to development. The main burden of responsibility rests on
the dominant classes, and their role is seeing that there is justice and equity,
as well as preventing and punishing injustice and inequity. No one should stay
away; everyone is under the obligation to contribute.
Dignity has to do more with principles and imperatives than with results.
In the pursuit of success, players must act with dignity, without corrupting or
submitting themselves to corruption, without lying or making false promises, and
without betraying those that have made success possible. Nor should they pretend
to be omnipotent and infallible – or even worse – purposely use half-truths to
attain success. They should be magnanimous in victory and fair in discharging their
responsibilities. Fairness implies avoidance of excesses and of belittling others,
moved by prepotency, persecution, or vengeance. This also implies believing that
forgiving and forgetting the faults of others contribute to the common welfare
and that impunity is a form of injustice that leads to recidivism.
* Chancellor of the State University of Guayaquil
leonroldos@yahoo.com.mx
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One must maintain dignity even before defeat and sacrifice, never
humiliating oneself or giving in to bitterness, remembering that not even death
is the end, as physical disappearance may lead to other forms of life. Collective
processes may lose protagonists, which is natural, but as no one is indispensable
and irreplaceable, others will replace them and build a different reality.
Development also necessarily implies justice and equity and in this lies
its difference from growth and accumulation alone. True, wealth must be
created, as one cannot distribute poverty, but it is a fact that macroeconomic
growth and accumulation result from exploitation without respect for social
values, including labor and the environment, is a crime.
The territory and its boundaries
The shrinking of our national territory to 256,310 sq km is a salient
feature of our history. The Francisco de Orellana’s expedition that left from
Quito in the 16
th
century showed that through the Amazon River it was possible
to connect the Pacic to the Atlantic. Yet, from the time of the Royal Audience
of Quito imposed by Spain and subordinated to the Vice-kingdoms of Bogotá
and Lima to the agreements with Peru in October 1998, we, Ecuadorians, have
watched our country being slashed again and again.
We are not going to discuss the juridical aspects of boundary conicts
or military threats or the circumstances under which timorous negotiators
were dismissed, but will focus on the following facts: in the 19
th
and the
20
th
centuries, foreign policy was conditioned by territorial issues; in the 21
st
century, the feeling is that the amputations have ended. Today, we must deal
with the real Ecuador.
We face the challenge of developing the areas bordering on Colombia and
Peru, which seems possible, as they have an economically active population,
but more difcult in the Amazon region, where the environment, which cannot
be discarded, raises serious obstacles to investment.
Although Ecuador and Brazil do abut each other, macropolicy for the
Amazon requires that agreements be celebrated by the Amazon basin countries.
Much has already been done in this respect, but timely decisions are needed,
based not on the investment interests of enterprises seeking prot but on
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the convenience of the nations involved and of all mankind. If the benet
of environmental conservation reaches beyond the Amazon countries and
states, we ought to be entitled to compensation from other nations and states,
particularly from those with greatest economic growth, which are responsible
for the environmental deterioration that we must reverse in an attempt to
restore environmental quality.
Two border issues do give rise to concerns, though.
The rst is the dominant presence of Colombian guerrilla in certain
border areas, which has led the Ecuadorian Minister of Defense, perhaps with a
dose of exaggeration to sound an alert, saying recently that instead of bordering
on Colombia under an elected, sovereign government, Northern Ecuador
borders on the Colombian guerrilla and the drug trafcking power. So far, the
major damage has been caused by the spray of aerial fumigation with highly
toxic products, now suspended; and the displacement of people. Ecuador
has asked Colombia for compensation; it seems that this request means the
assertion of a position rather than an attempt to enforce the claim.
The second issue has to do with Peru. The October 1998 agreements
signed in Brazil by the Ecuadorian and the Peruvian governments, based on the
opinion of the guarantor countries of the Rio de Janeiro protocol of January
29, 1942, to which was assigned a binding force, pertained to continental
Ecuador, without any specic mention to maritime limits, which may not have
been considered necessary in view of the instruments signed by Ecuador, Peru,
and Chile under the Southern Pacic Agreement of the 1950s. This agreement
had set the outer limit of the territorial sea at two hundred miles – which is
not accepted by other states or by the Convention on the Law of the Sea.
Under the agreement, the tree countries declared that the maritime line was
the parallel intersecting the point where the land joins the sea. In 2005, though,
Peru put forth the thesis of the bisecting line created by the prolongation of
the continental boundary line and not the geographical parallel and apprised
Chile accordingly, saying that the Southern Pacic Agreement established
economic zones, not limits. The Toledo and the García governments were
explicit toward Ecuador and the divergence ended with the signing of the
October 1998 instruments. In Ecuador, though, some people worry lest Peru
should raise any pretension against Ecuador, similar to its claim against Chile,
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and think that Ecuador should approach the Chilean government for arriving
at a common position.
The best thing is not to entertain any doubts and fears or any attempts
at confrontation. Social and economic integration is indispensable. Good
examples are provided by Europe, where hundreds of conicts and two world
wars, with millions of the dead, and expenditures on killing and destroying
under the argument or pretext of boundaries, are things of the past.
Population’s makeup
The Ecuadorian population should reach fourteen million by end-2008,
while about to million emigrants are concentrated in the United States and
in Europe.
Ecuador is a multiethnic, multicultural country.
The self-accepted and self-declared indigenous population accounts for
10 percent and lives mostly on the highlands, or Sierra – with a high degree
of integration – and in the Oriente or in the Amazon regions, with a lesser
degree of integration. To this day, there are some indigenous peoples that have
not been affected by miscegenation. Afro-descendants account for 4 percent
of the population and native descendants of Europeans and Orientals, also
unaffected by miscegenation, account for 1.5 percent.
Foreign descendants’ application for citizenship in their forefathers’
countries should not be taken as negation of or resistance to miscegenation
but as interest in preferential treatment in obtaining visas, given the spoliation
and exploitation attendant to the procedures for entering the United States
and the European countries.
Some members of high- and middle-income segments have the custom
of traveling to the United States for the birth of their children, which would
be understandable for medical reasons; but the intention is to ensure U.S.
citizenship for their offspring.
Mestizos account for 84-85 percent of the overall population.
The indigenous and Afro-Ecuadorian cultures have enhanced their
strengths and inspired ethnic pride.
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The indigenous peoples demand that they be recognized as ‘nations’ and
the Ecuadorian State as ‘multinational,’ not just multiethnic.
The multinationality issue fueled the indigenous peoples’ political
organization, which in the late 1990s advanced to the vanguard of social causes,
given the crisis of the union movement and of other social organizations.
This will carry great weight at the National Constituent Assembly called to
reform the State’s institutional structure and draft a new Constitution. Eighty
of 130 members of the Constituent Assembly are members of the Country
movement headed by President Correa.
Not much more can be said about multinationality, which is to be embodied
in the magna charter, together with the recognition of cultural and language
diversity, as well as some economic and social rights, including the maintenance
of consuetudinary justice that does not violate human rights conventions.
In my view, there is one issue related to multinationality that will not be
accepted, namely, the nations’ territoriality, as this would seriously limit the central
government’s right to make decisions about investment in the oil, mining, and
infrastructure areas. Hearings with the various nations may be scheduled, but
President Correa certainly will not relinquish his decision-making power.
Territorial political division. Administration: centralism
and autonomy
The Andes divide the country into three distinct regions. The Coast, lying
between the mountains and the Pacic Ocean, consists of six provinces, ve
of which are historical: Esmeraldas, Manabí, Los Ríos, Guayas, and El Oro.
The sixth coastal province, the Santa Elena Peninsula, was recently created
through the partition of the Guayas province, which thus lost access to the
open sea, except for areas on the rim of the Gulf of Guyaquil.
The Sierra, between the Western Cordillera, including the western
parapet-like foothills descending towards the Pacic, and the Central Cordillera,
formerly called Oriental or Eastern Cordillera for the chains of mountains
along the foothills sloping down to the Amazon basin, is known as the Central
Cordillera. Until the 21
st
century there were ten provinces: Carchi, Imbabura,
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Pichincha, Cotopaxi, Tungurahua, Chimborazo, Bolívar, Cañar, Azuay, and
Loja. The recently created province of Santo Domingo de los Tsáchilas on
the western foothills was formerly a part of the Pichincha province.
The Eastern Region is situated in the Amazon lowlands and its territorial
division reects the presence and force of settlers from different parts of
Ecuador, most of them mestizos, rather than the will of the original peoples.
The region has six provinces: Sucumbíos and Orellana – the two that account for
most of the country’s oil wealth – and Napo, Pastaza, Morona, and Zamora.
The Galapagos archipelago is also a province.
Continental Ecuadorian regions have no juridical autonomy to manage
their own affairs. Some coastal provinces have closer social and economic ties
to the highlands than to other coastal provinces.
Provinces are divided into cantons – in the last quarter century the
cantonization frenzy was unstoppable, as a way of ensuring resources for local
development.
In turn, the cantons are divided into urban parishes – forming part
of the canton’s capital – and rural parishes, run by parochial boards of little
actual weight.
The indigenous peoples – or nations, as they dene themselves – on the
highlands and in the Amazon, as well as the original social organizations in parts
of the coast and of the highlands, known as communes, manage communal
affairs and goods, as they have their own government and regulations that are
partially recognized by the national legislation.
With the promulgation of the Constitution of December 1946 the
provinces gained force owing to the establishment of sectional governments,
known as Provincial Councils, consisting of popularly elected mayors and
council members.
However, the socially and politically most important local governments
are the municipal governments, whose highest authority is the mayor, who is
popularly elected, as are the council members. Since the 1998 Constitution,
their economic weight has increased, owing to the delegation of attributions
by the central Government and to budgetary transfers.
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President Rafael Correa’s government has announced that it will propose
to the Constituent Assembly a different territorial division based on regions –
the possibility of seven to nine provinces has been mentioned – which would
integrate the eastern and western provinces regardless of their natural situation
on the Coast, the Highlands or in the Orient, with metropolitan districts
exceeding a million inhabitants, such as Quito and Guayaquil, in addition a
the special Galapagos District.
The integrated regions scheme proposed by Correa is based on social
ows, similar or complementary economies, riverbeds and basins, and existing
or projected roads.
In the seventies, the military government, supplied with much oil money, had
already attempted a similar project, which called for a unied region made up of
the northern provinces: Esmeraldas, Carchi, Imbabura, and Napo – Napo, in the
Amazon, had not yet been partitioned into Sucumbíos and Orellana. The attempt
failed owing to opposition by the provinces’ dominant sectors, under the argument
that the imposed reorganization was actually meant to intensify centralism.
Prior to the Spanish occupation and before and during the Inca Empire,
the indigenous peoples seemed to have been concentrated on the highlands,
with sporadic contacts with the peoples by the sea. It was during the Spanish
colonial times and jurisdiction that Quito interconnected the Coast and the
Sierra and sent expeditions toward the Amazon. Orellana, the Spaniard who
reached the Atlantic Ocean by navigating down the Amazon River, founded
Guayaquil on a hill at the conuence of the Babahoyo and Daule Rivers that
form the Guayas Ria, South America’s major river basin on the Pacic, which
ows into the Gulf of Guayaquil, the region’s main sea outlet.
When the major means of communication and transport were by sea,
which lasted until the early 20
th
century, Guayaquil was vital for survival.
Independent Guayaquil launched the revolution of October 9, 1820, thereby
starting the liberation campaign that, backed by Bolívar forces under the
command of Antonio José de Sucre, known later as the Marshal of Ayacucho,
and by one of San Martín’s battalions, culminated in the Pichincha battle that,
on May 24, 1822, freed Quito from the rule of Spain. Quito’s population had
declared its independence on August 10, 1809, and assumed in the America’s
the defense of Spain against Napoleon’s invasion.
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Guayaquil inspired Bolívar’s attempt to annex it to Colombia and San
Martín’s intent to annex it to Peru. There Bolívar and San Martín held an
encounter July 25-27, 1822; that event and the documents it produced soon led
to the battles of Junín and Ayachucho, on Peruvian territory, which denitively
ended Spanish dominion in South America.
Quito, Guayaquil, and Cuenca, the Royal Audience’s three main cities,
were designated by Simón Bolívar as part of Southern Gran Colombia; and
as part of the Republic of Ecuador in 1830.
Federalism was never adopted in Ecuador because no cities developed
as capitals of federal states with sufcient economic and political weight,
except for Guayaquil, whose declaration, as that of Loja, was taken as mere
separatist pretension.
Another fact that may have inuenced the option for a unitary State was
that dominant Guayaquil sectors, beginning with Vicente Rocafuerte, the second
President of Ecuador, Throughout much of the country’s history, those dominant
segments unfortunately exercised power through centralist practices. The main
historical events in the political processes, which can be classied as revolutions,
had Guayaquil as their main setting: the Marchist Revolution – thus called because
it happened on March 6, 1845 – against the government of Venezuelan General
Juan José Flores, Ecuador’s rst and third President; the Liberal Revolution of June
5, 1895, through which General Eloy Alfaro took power; the Julian Revolution
of July 9, 1925, which ended the era of the liberal banking bourgeoisie – Alfaro
had been assassinated on January 28, 1912 – and which, together with the State’s
modernization – fate’s paradox – reinforced centralism; and the Revolution of May
28, 1944 that, with the 1944-45 Constituent Assembly, promoted socialist reforms,
but was exceeded by the only Ecuadorian that was ve times elected President of
Ecuador and a decisive factor in the country’s history from the mid-1930s till 1972:
José María Velasco Ibarra, a conservative and liberal in the 18
th
century and early
19
th
century mold, but an earnest Latin America advocate and anti-imperialist.
Guayaquil, the breeding ground of the most important political processes
and the major economic center owing particularly to agricultural exports,
the birthplace of dozens of ruling leaders, rightly claimed to be affected by
centralism, although in other less developed provinces there was talk of a
‘Quito-Guayaquil bicentralism.’
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Since the 19
th
century, Guayaquil has also been known for nding local
solutions for needs unmet by the Central Government. In the area of health,
for instance, for over a century the best public hospitals have been run by a
Benecence Board, a private foundation that also administers the country’s
only authorized lottery; a Road Committee cared for the construction of
roads, until it was suppressed under the dictatorship in 1970; a Guayas Transit
Commission had charge of road and transit matters for sixty years, until it was
taken over by the Central Government, which changed its top structure.
Entities active in the area of health in general or specializing in combating
tuberculosis and cancer, as well as in the areas of management, maritime port
and air trafc authorities, for instance, had their beginnings in Quayaquil.
Before it began to export oil in the seventies, Ecuador had in agricultural
exports produced in the coastal region its major source of foreign exchange.
I do not hesitate in expressing my thoughts on one of the most sensitive
issues of macro importance, namely, the territorial and political regime and
its administration.
I am against centralism and power accumulation and believe in real
decentralization, not to be confused with the mere decentralization of
procedures. I believe in advancing toward financial and administrative
autonomy centered on the local governments, greater delegation of functions,
quality spending, and reliable auditing.
The autonomous regions must contribute to solidarity and complementariness
so as to reinforce national identity macro policies and help depressed or less
developed areas. They should help make Ecuador an inclusive country and
demonstrate that they harbor no separatist intention – an exaggeration of which
Santa Cruz de Bolívia is accused. Nor should they permit the formation of
dominant groups that protect and are protected by local authorities, which sooner
or later challenge the central government in their own interests, forgetting that the
internal migratory ows that inate the peripheral, marginalized sections of the
large cities usually come from the most depressed social and territorial sectors, a
reason why citizens see themselves as victims of the major dominant groups.
The regions established from above, without a consensus that could
be achieved only through popular consultation, run the risk of reinforcing
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centralism, unless they have government agencies that are independent from
the central government.
When I espouse the concept of autonomy, I do not correlate it with
the autonomy model in Spain, as Ecuador, with a population that is 84-85
percent mestizo, cannot be compared with the nationalities and regions that
coexist in Spain, including the conciliating Catalonia and the demanding
Basque people.
Ecuador displays different nuances among its natural regions and its
populations. Diversity must be respected and one must build on its reality, as
this is the best way to contribute to national unity.
Growth and development
Ecuador is no exception in Latin America. Its economic growth surpasses
its development level, as accumulation has niches of beneciaries, including
monopolies and entrepreneurial cartels and even the State, which is no example
in respect of the allocation of resources.
The Constitution’s economic model is a social market economy; in practice,
though, social is only a word and the market is in large measure a ction.
In the 1990s, Ecuador’s juridical, economic, and entrepreneurial system
entered a phase of modernization and opening to foreign investment and
concessions. This was not an accelerated process as in other countries of the
region. Thus, when mention was made to the advance of privatizations in
Argentina, with Menem and Cavallo, in Bolívia, with Sánchez de Lozada, and
in Peru, with Fujimori, Ecuador was accused of “missing the train of history.”
Over time, the Argentine convertibility model collapsed, Sánchez de Lozada
was tried and had to ee Bolívia, and Fujimori is in jail.
The preceding is not meant as a defense of statism or of the old Eclac
model of import substitution and subsidies.
The common denominator underlying the delays and failures is
corruption encouraged by privileges and impunity.
Oil prices and correction of State participation has raised scal revenue.
Increased imports in recent years have affected the non-oil current account of
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the balance of payments but the volume and price levels of non-oil exports
have been favorable.
The economy’s decelerating trend owing to the economic players’ doubt-
ridden expectations as regards politics may reduce imports for the moment.
This might be a good thing as regards consumer goods, as it would allow
businesses to move out accumulated stocks; but if this reduction applies also
to capital goods, it may affect production and investment. Moreover, these
doubts may trigger the ight of liquid resources. Accordingly, the Executive
and the Constituent Assembly should think about this and adopt measures
to inspire condence.
As to external indebtedness, President Correa has indicated that, save for
already committed credits from the Andean Development Corporation and its
outstanding disbursements, it is possible that Ecuador will no longer require
external loans. With respect to the previous debt, whose relative burden on
the State’s Budget and its GDP percentage are steadily declining, it has been
subject to political investigation under the allegation of illicit indebtedness, but
it seems that such allegation was unfounded, and the debt service proceeds
with absolute regularity.
Correa has politically distanced himself from the International Monetary
Fund and no letter of intent to it is being contemplated; and from the
World Bank, because of its conditionalities. I do not expect the next step of
withdrawing ourselves from these organizations will be taken, but relations
with them will be frozen. The situation in regard to the Inter-American
Development Bank and the Andean Development Corporation is different.
Correa’s role in giving impetus to Banco del Sur as a source of credit
and depositary of the Central Bank’s and the State’s liquid assets has been
very important. The Bank’s professionalism and nonpolitization could ensure
its success.
The pretension of a regional currency is something else; it would be
impossible in the short and in the medium term, as it would require the
homogenizing of economic policies. The time frame cannot be accelerated;
it might not require decades, as in Europe, but neither would it be a question
of just a few years.
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The monetary issue in Ecuador is complex. Before coming to power,
both President Correa and Alberto Acosta, the likely President of the National
Constituent Assembly, based on economic theory, called for the elimination
of the dollarization established in 2000, when the emission of sucres stopped.
But during the electoral campaign and in the discharge of their duties, they
have been emphatically in favor of maintaining dollarization as an irreplaceable
reality in the next few years, while rejecting the pretension of the political right
and entrepreneurial sectors to make it constitutional.
Recently, President Correa made harsh references to the dollar’s loss of
value against the Euro and other currencies that have appreciated, pointing out
that there was no devaluation of the sucre until the early 2000, but through
dollarization our monetary reality deteriorates and drags the dollar in its wake.
The President suggested that oil exports could be settled in stronger currencies
than the dollar; accordingly, part of public liquidity abroad and of the national
accounts could be denominated in these other currencies.
How would social and economic players react to having two or three different
currencies circulating in Ecuador? Will President Correa’s statement carry the day
if the Assembly decides in favor of the currency diversity? Will players that deal
in liquid assets be scared, regardless of the latter’s amount? If it were up to me,
I would maintain dollarization in the liquidity of payments; as to the amounts in
other currencies, I would enter them in the dollar accounts; and would treat as
foreign exchange increases the differences stemming from the dollar’s devaluation
and the appreciation of the strong currencies. The latter should be selectively
dened, though, not just as the adoption of currency symbols of other countries,
even when concealed in business or investment ows, or of new currencies for the
purpose of eliminating zeros from those that have been in circulation, regardless
of the discipline or liquidity of the issuing country.
The expected question is: Why would Correa make such radical changes
in the Ecuadorian economy, which still keeps its statist, centralist bias? Without
the shadow of a doubt, because of the intense iniquity in economic relations,
accumulated or potentiated by the dominant groups’ links with those who
used to hold actual political power.
The widespread bust of the banking system with the freezing of
deposits and the devaluation of the sucre, the national currency, which led to
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dollarization, causing bankruptcies, depletion of savings, emigration driven by
desperate poverty and lack of jobs, has not yet been penalized as it deserves to
be. The economic players and politicians that caused, permitted, or concealed
it were let go scot-free and continued to govern in the following years; some
even dare to assume leading positions, from which they ponticate about
politics and the economy.
To this should be added the practice of tax evasion and elision, the
business circles within the State, simulation, lack of transparence in the balances
of State concessions, and other forms of corruption.
Monopolies and cartels that eliminate competition continue to exist. The
most pathetic case, connected to the banks’ cartel, is the cost of money, for a
dollarized economy free from devaluation against the dollar has ination of
less than 3 percent, passive operations payments of less than 5 percent, excess
liquidity, credit interests in the various sectors far above the annual average of
15 percent, as the authorities take as their calculation basis the banks’ average
monthly charge.
I will participate in the Constituent Assembly, where I will rmly
stand for the following: preventing monetary uncertainties; strengthening
the State’s regulatory and control capability, without unnecessarily adding
to the statization of the economy; respecting private property for social
purposes, without any conscatory attempts; ensuring the transparence of
concessions; encouraging productive, competitive investment; incorporating
more economic and social players into production; establishing clear, mutually
benecial investment and labor rules; dismantling monopolies and preventing
the formation of entrepreneurial cartels; punishing corruption, including
those responsible for impunity; rehabilitating public contracting, without the
use of foundations that channel business toward dominant circles or declare
emergencies so as to skirt public contractual rules; stimulating regional Latin
American integration; ensuring that the environment and the proper use and
exploitation of water are taken into consideration in every investment and
in all public and private works.
As to public spending, my intent is to favor the allocation of resources
for the social area, including economic support for those who have been
historically marginalized in terms of work, housing, and other requirements.
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Health, education, culture, sports, social security are in need not only
of resources but also of quality. Bright statistics are worth nothing if quality
is lacking.
We must have positive expectations, objectivity, courage, and the
opportunity for assuming attitudes and for practicing wisdom and tolerance.
Governability
Ecuador’s social, economic, and political deterioration has accelerated since
the 1990s. Under the pretext of governability, the Constitution and the legislation
were reformed so as to perpetuate parties and dominant groups, which President
Correa has called ‘partycracy’ and ‘the hairy ones,’ respectively.
I once qualied the actual exercise of power by the dominant groups
as a pressing mill because those that reach a power position questioning the
perverse reality sooner or later give in, to the point of becoming dispensable
and being thrown out as bagasse.
International circumstances were propitious to Rafael Correa’s victory.
His questioning of the United States, particularly in connection with the
negotiations of a Free Trade Treaty and the closing of the Manta Base, the
empathy of the Latin American left, and the frank, clear inuence of Colonel
Hugo Chávez, among other factors, were decisive.
Rafael Correa benets from Hugo Chávez’s experience, but I do not
think he is Chávez’s unconditional follower. Indeed, the United States and
Colombia, whose governments have been questioned by Correa, have preferred
not to contest him and have opened orthodox room for conciliation, as did
the social democracy-tinged left governments – Brazil, Argentina, Chile, and
Uruguay – as well as Spain and Italy.
On the domestic front, Correa elicits and replies to confrontation in
words and actions. In addition to winning the presidential elections, he also
won by a large margin the two matches related to the National Constituent
Assembly: the referendum about its convening and the election of its members.
In the latter case, he obviously made use of all the opportunities attendant to
power, including State funds for publicizing his administration, and increasing
Ecuador: fundamental issues
130
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and creating subsidies, which was no novelty, as this had always been the
practice of the partycracy decried by Correa.
The Government’s strength lies in the fact that it has challenged and
continues to challenge the actual dominant powers. One cannot expect from it
any compromise with them, but tolerance and respect for fundamental liberties.
As Assembly members and citizens, we shall go to the National
Constituent Assembly determined to reinforce the changes, democracy,
and the building of a new, strong institutional apparatus and a juridical and
constitutional order that will allow us to act with justice and equity.
DEP
Translation: João Coelho
Di p l o m a c y , St r a t e g y & po l i t i c S – oc t o b e r /De c e m b e r 2007
131
Guyana: the impact
of foreign policy
on developmental
challenges
Robert H. O. Corbin*
Preface
I
n his recent publication
1
, Guyana’s former Foreign Minister Rashleigh
Jackson reected on Brazil’s diplomatic tradition as follows:
“My rst contact with the high quality of Brazilian diplomacy occurred in 1963 when
I attended a diplomatic training course for Caribbean personnel, which was organized
by the UN and held in Barbados. Among the panel of distinguished lecturers was
Ambassador Roberto Campos of Brazil. He impressed the participants with the
brilliance of his intellect and his demonstration of what a good diplomatic should be
like... My contacts with these two diplomats, (the other being Mr. Costa E Silva),
1 Rashleigh Jackson (2003), Guyana’s Diplomacy: Reections Of a Former Foreign Minister, Free Press
Georgetown, ISBN: 976-8178-11-6
* Ex-Secretary-General of the People´s National Congress (PNC)
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stirred my interest in the training of Brazilian diplomats. Subsequently, I became aware
of the high reputation and excellent facilities of the Rio Branco Institute. It is a source
of satisfaction to me that when I was Minister, young Guyanese diplomats were selected
to attend that institute through Brazilian scholarships. They performed well.”
2
This institution, among others, can take credit for Brazil’s ne diplomatic
tradition. I feel privileged to have been asked to deliver a lecture on Guyana to
this distinguished institution, which is playing such a pivotal role in the training
of students of International relations from across the continent. The fact that
other countries on the continent entrust the training of their diplomats to this
institute attests to the esteem in which it is held.
Introduction
Guyana is a multi ethnic, multi-cultural plural society that has faced
numerous problems before and after independence from the British in 1966.
Among the many challenges are, the achievement of national unity and social
cohesion in a society that has been plagued with racial, ethnic and political
conict and confrontations; the acceleration of economic development and
the reduction of poverty in an increasingly hostile global environment; the
preservation of its territorial integrity in the face of claims by two neighbours;
and, the exploitation of its abundant natural resources.
This lecture paints a brief sketch of Guyana and the origin and nature
of a few of its problems, the solutions to which have posed serious challenges
for the people of the country. It would not sufce, however, simply to provide
a biographical sketch of Guyana.
I would not venture to provide any professional guidance on the
techniques required in the pursuit of inter state relations which involve complex
negotiations and behind the scene consultations that demand great skill. The
successes in diplomatic efforts make attractive media headlines but the hard
work and careful planning, more often than not, attract none
3
. I hope however
that I can at least provide you with a perspective on Guyana that is relevant
to your own professional pursuits.
2 IBID, P. 40.
3 See, Jackson (2003) p. 1.
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Since this presentation is intended for practitioners in international
relations, it provides some insight into how the pursuit of Guyana’s foreign
policy and international relations has contributed to the resolution of some
of these problems and the achievement of national objectives, particularly
the preservation of its territorial integrity
4
. Special emphasis is placed on the
bi-lateral relations between Brazil and Guyana.
Brazil – An economic power
I have had the privilege of serving in government in Guyana in the
political administration that pioneered formal relations with Brazil. It seemed to
me then, as it does now, that we embraced our continental destiny almost four
decades ago by reaching out across our borders to “touch base” with neighbors
from whom we had become disconnected by accident of history. I hasten to
add, however, that the disconnect was an altogether coastal phenomenon,
since there have always been ties between indigenous peoples across borders.
Those ties have endured and have grown stronger.
Brazilians will recall the dramatic image of the jaguar invoked by the
National Treasury to illustrate the robust performance of the country’s
economy during the presentation of the country’s economic results at the
start of 2006. In June this year, during a presentation in Georgetown, His
Excellency Arthur V.C. Meyer, Brazil’s Ambassador to Guyana, noted that
since the beginning of the present decade the growth rate in Brazil’s real Gross
Domestic Product had increased by around 3 per cent annually and that current
forecasts for 2007 indicate a growth rate of around 4 per cent. As far as the
external sector of the Brazilian economy is concerned, he said this:
“ There have been surpluses in the current account balance of payments in the last three
years. The turnover of the merchandise trade ows accounts for about 25 per cent of
the national GDP while the total amount of merchandise exports largely surpass the
US$100 billion gure. As a consequence the total amount of Brazil’s external debt
has been steadily declining and foreign reserves of Brazil today reach the signicant
level of US$140 billion. Foreign direct investments and foreign portfolio investments
4 Venezuela continues to claim some two thirds of Guyana’s territory to the West: Essequibo; Surinam claims
territory to the East: The New River triangle; The maritime boundary issue was recently settled by arbitration.
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into Brazil have also been growing at impressive rates. Brazil is nowadays one of
the most important developing countries in terms of attraction of foreign investment.
The prospects for the Brazilian economy are increasingly good”.
Brazil’s status as a fast emerging global economic power is simply not in
question. Additionally, through institutions like the Amazonian Cooperation
Treaty and MERCUSOR, Brazil is integrally involved in the economic progress
of the rest of the continent. Far from being what one might call, a next-door
neighbor, Brazil is, as far as Guyana is concerned, a vital strategic ally. In the
words of Former Minister Jackson:
“those relations have not only political and economic connotations; they also have
implications of a security nature. Relations with Brazil comprised an essential component
of a coherent and internally consistent frontiers policy. They were also important in
helping to consolidate the identity of Guyana as a South American state without
diminishing its role or impacting negatively on its character, as a Caricom state.”
5
This view has been endorsed by the present political administration in
Guyana, which, while in opposition, had expressed misgivings when, in 1969,
the Guyana government established an Embassy in Brazil
6
. The value of
Guyana’s relations with Brazil has been acknowledged by both the Ministry
of Foreign Affairs in Georgetown and by President Bharrat Jagdeo
7
. Ours
has been a history of constructive engagement, of peaceful coexistence and
of good neighborliness and I believe it surely serves as a model for broader
inter-state relations on the continent.
Guyana: the genesis of the challenges
Guyana’s challenges began with the struggles of our indigenous people
against colonization and threatened genocide. Then there was slavery, the
struggle against colonialism and the ght for political independence. There
were also the struggles for workers rights and for economic independence.
5 IBID, P. 45
6 See, PPP Press Release of August 1969, “The latest waste of public funds is the setting up of an Embassy in
Brazil”; See also, Mirror of August 10, 1972, “The Question of Brazil; See also Jackson (2003), p. 42.
7 See, Annual Report of the Ministry of Foreign Affairs of 2000; see also, President Jagdeo’s speeches during
the recent Rio Summit held in Georgetown.
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Contemporary Guyana is the product of an interesting geo-cultural
circumstance. While we are situated on the continent of South America, our history
and culture have been decidedly Caribbean. We share with Brazil the experience
of indigenous people whose presence in the hemisphere long predated the arrival
of the Europeans and the other races that currently make up our country.
Guyana
8
, the only English speaking country in South America, is uniquely
bordered by Spanish, Portuguese and Dutch
9
speaking nations. It provides an
interesting, if not sad, case study of a country struggling for development in the
context of a multi-cultural, plural society in which ethnic conict has dominated
politics. The population of less than one million citizens
10
comprises peoples
of six ethnic origins
11
residing on a land mass of 83,000 square miles (214,970
square kilometers). It should be noted that ninety percent of Guyana’s population
resides on the narrow 470-mile Atlantic coastal strip. This former British colony
12
has, unfortunately, found it difcult to exploit its abundant natural resources
13
and provide a reasonable quality of life for all of its citizens.
The voyages of Columbus to the new world ushered in a period of
prolonged European rivalry to establish colonies in the West Indies and South
America for the purpose of extracting wealth, rst thought to exist in cities
of Gold. This search for the elusive El Dorado stimulated many voyages. The
last one by Sir Walter Raleigh, (1617), cost him his head because of his failure
to deliver the prized commodity to the Crown. Raleigh’s claim that El Dorado
had, “more abundance of gold than any part of Peru and as many or even more
great cities”
14
was never substantiated. It was agriculture that brought Europe
its Caribbean wealth.
15
Sugar became King. Mineral wealth came much later,
but by that time sugar, along with rice and bauxite, were already the mainstay
8 An Amerindian word meaning, “Land of many waters” out of recognition of the numerous rivers and
waterways that dissect the landscape.
9 Venezuela on the West; Brazil on the South and South East; Suriname on the East.
10 The last census statistics in 2000 stated that the population was 750,000.
11 Indigenous Amerindians of several tribes; European; African; East Indians; Portuguese; Chinese.
12 While the British was the last colonizing power the country was also periodically colonized by the Dutch
and French.
13 Rich tropical forests, a variety of minerals, including gold, diamonds, bauxite, uranium, oil; an arable coastal
plain supporting a variety of agricultural crops including, sugarcane, rice, and green vegetables; a rich marine
Atlantic shelf, enabling a thriving shing and shrimp industry.
14 See, Adamson and Holland, (1969), p. 232; see also Barber and Jeffrey, (1986), Guyana:Politics, Economics
and Society, ISBN: 0-86187-418-8, p. 4.
15 Cotton, tobacco and sugar.
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of Guyana’s economy. This status quo prevailed for nearly two centuries until
the exploits of BG Consolidated Gold Fields Ltd
16
. More recently, Omai gold
mines
17
discovered its own El Dorado.
Long before European rivalry began, the aboriginal peoples had settled
these lands
18
. They survived the worst ravages of disease and inhumane
treatment and today they represent some 10% of the population
19
. Equally
signicant is the fact that they have retained their various languages
20
.
The Dutch established the rst settlement in Guyana in 1616, a trading
post on the Essequibo River
21
. Originally divided into three colonies, Essequibo,
Demerara and Berbice, separated by three rivers of similar names, which all
ow into the Atlantic Ocean, and with a Northern coastline frontier spanning
432 kilometers, Guiana was nally united in 1831 under British control. The
intervening period witnessed the three colonies changing hands several times
among the Dutch, French and English
22
. Evidence of this can still be found in
the contemporary architecture and in the names of various places in present day
Guyana
23
. The British continued the extraction of wealth and maintained control
until independence on the 26
th
May 1966 under a Westminster type Constitution.
In 1970, Guyana became a Republic with an executive presidency.
It was the decline in the production of cotton and tobacco and the huge
prots derived from sugar, that proved the catalyst for the unique conguration
of Guyana’s physical landscape
24
and demographics
25
. The African slave
16 A Company that extracted large quantities of gold from the Tumatumari area in the Mazaruni region
establishing in the process, the rst hydro power facility to facilitate their operations.
17 A Canadian Company established in an area of the same name in 1989 and exported the largest quantity of
gold by any operation in Guyana.
18 According to one account, as early as 900 AD.
19 See, Guyana Population and Housing Census Report, 2002.
20 The Arawaks and Caribs have basically lost their languages but the Amerindians from the inland communities
still speak their various languages: Arawak, Carib, Warau, Patamona, Akawaio, Arecuna, Macushi, Wapishana
and Wai Wai, making English their second language.
21 Historians differ as to whether the rst settlement was at New Zeelandia or Kyk-Over-Al but Guyana
accepts the latter.
22 See, Baber & Jeffrey.
23 Today, many places still retain Dutch or French names such as the Stabroek Market, La Reconnaince, La
Bonne Intention.
24 The reclamation of land from the sea: the massive sea wall built by the Dutch stretched along the coast to make
the coast, some six feet below sea level, cultivable; the massive system of canals, drainage schemes and trenches
and dams built largely by slave labour which today are still essential for agricultural production on the coast.
25 Importation of slaves and indentured labour from several countries.
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population rose from 2,500 in the 1660’s to 100,000 by 1812
26
. By 1891, the
Decennial census reported a total population of 278,328.
27
. Some historians
have, however, numbered in millions those Africans who actually left for the
new world, but never arrived.
The abolition of the slave trade, (1807), and later slavery, (1838), forced
the plantation owners to look elsewhere for labour. The experiment with
Europeans failed miserably and as one writer puts it, “the experiment with Germans
was a disaster: at one point they even refused to go to the elds.”
28
The Portuguese from
Madeira fared better, (40 were rst brought in 1834 and 429 were brought
in 1835) but, like the Chinese who were imported from 1853, they proved
an unreliable source of labour due to their preoccupation with entering into
commerce as soon as their contractual periods were over
29
.
It was from India that most of the indentured labourers came, the rst
arrivals being recorded in 1838. When the indentured system was ended in
1917, a total of 31,645 Portuguese, 238,979 Indians, 14,189 Chinese, and
42,343 West Indians had arrived in the colony and by 1921, the Census report
indicated a population of some 297,691 persons.
30
Eighty-one years later, in
2002, the census report reveals a declining population. Today, the population
comprises 43% East Indian, 30% African, 10% Amerindians, 17% mixed and
the other groups less than 1%.
31
Ethnic, political and social conict
Some writers contend that the involuntary coexistence of ethnic groups
in Guyana created the conditions for conict and that this was fostered by the
colonial power to facilitate a system of divide and rule
32
. Others have pointed to
26 ARF Webber.
27 Decinnial Census, 1841-1891, cited in Moore, B L (1987) Race, Power,and Social Segmentation in Colonial
Society, London, Gordon and Breach, p. 274; see also, Kampta Karran, (2004) Racial Conicts in Guyana,
reproduced in, Racial Conict Resolution and Power Sharing in Guyana, Selected Readings, Kampta Karran,
ed. (2004) ISSN: 10128239 Offerings (Georgetown), p. 69.
28 See,Baber & Jeffrey, Guyana: Politics, Economics and society, (1986), p. 12.
29 See, Mary N Menezes, (1986) Scenes from the History of the Portuguese in Guyana, London, p. 6.
30 Baber & Jeffrey, (1986), p. 13.
31 Guyana Population and Housing census Report 2002.
32 See Baber and Jeffrey, at p. 13
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the inuences of the plantation economy, cultural pluralism
33
, the problems
inherent in a plural society
34
, the impact of class divisions
35
, political rivalry
36
and cultural differences
37
. A more recent study
38
cites the inuence of religion
coupled with notions of racial superiority as major factors that created a cycle of
racial antagonism in Guyana. While some political leaders
39
have tried to dismiss
race as a major cause of conict, Guyana today is faced with serious challenges in
seeking to address escalating ethnic conict
40
and credible contemporary claims
of racial marginalization
41
resulting from the misuse of political power. Later, I
will discuss the role of foreign relations in efforts to resolve these challenges.
Real economic development is unlikely to be realized in the present
condition of ethnic division. Several organizations
42
and intellectuals
43
have
advanced the proposal for institutional changes as a means of addressing the
problem, the most recent of these being shared governance, a proposal that has
been treated with scant regard by the present administration. The “National
Development Strategy, (2001-2010): Eradicating Poverty and Unifying
Guyana”
44
, states, inter alia:
“The major obstacle to Guyana’s development is to be found in the divisive nature of
its politics. Ever since the years leading up to the country’s independence, the nation’s
every activity has been dominated by two political parties, the main followers of which
are drawn from one or other of the two major racial groups. Largely, Indo-Guyanese
33 See George Beckford,(1972) Persistent Poverty: Under development in plantation Economies of the Third
World, London: Routledge.
34 See J S Furnival, (1948) Colonial Policy and Practice: a comparative study of Burma and Netherlands
India, Cambridge University press; M G Smith (1965) The Plural society in the British West Indies, Berkeley,
University of Californa Press; Leo Despres (1967), Cultural Pluralism and Nationalist Politics in British Guiana,
Chicago: Rand Mc Nally & Co.; see also, Kampta Karran (2004) Racial Conict Resolution and power Sharing
in Guyana, 1831-1905, Selected Readings, pp. 13-15.
35 Clive Thomas (2000), Revisiting theories of Class and ethnicity in the Caribbean, in Kampta Karran (ed),
Race and Ethnicity in Guyana: Introductory Readings, Guyana: Offerings Pub; see also, Baber & Jeffrey,
Chapter 3, Guyanese Social Structure – Race and Class,pp.38-54.
36 See,Jagan Cheddi, West on Trial.
37 See, George Beckford,(1972) Persistent Poverty: Under development in plantation Economies of the Third
World, London: Routledge.
38 Kean Gibson, (2003) The cycle of Racial Oppression in Guyana, University Press Of America.
39 Cheddie Jagan, Forbes Burnham, Walter Rodney.
40 See, Baber & Jeffrey, Guyana: Politics, Economics and society, (1986).
41 The PNCR politicl party, ACDA: African Cultural Development Association, and many other organizations.
42 ACDA, PNCR.
43 Dr. David Hinds, Kampta Karran, Clive Thomas.
44 Government Publication: National Development Strategy (2001-2010): Eradicating Poverty and Unifying
Guyana, A Civil Society Document.
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support the Peoples Progressive Party and the African Guyanese the Peoples National
Congress, (Now Peoples National Congress Reform).
Partly because of the prevalence of erce racial political rivalries between these two
groups, and partly because Guyana’s constitution is largely based on the Westminster
model which does little to embrace inclusivity in governance …. There has been little
or no meeting of the minds between these powerful political parties on any major
political, social or economic issue since Guyana became independent.
It is evident, however, that if Guyana is to attain even a modicum of development in
the next ten years or so, it is essential that a number of decisions, that are based on
intelligent, objective discussions and consultations between the two Parties, be made.”
Chapter three of the Strategy Document which is devoted entirely to the
issue of governance concludes that, “the picture that emerges is very disturbing.”
45
It recommends that consultation and participatory procedures needed to be
institutionalized in all aspects of government. It emphasizes that the history of
governance in Guyana demonstrates that the country’s very origins, its various
constitutions, its political congurations, etc., have militated against consultative
democracy. The current systems of local and regional government
46
also do
not lend themselves to meaningful participation and in fact only accentuate
the imperfections of the central government. Finally, among the many others,
was the recommendation that every opportunity be taken,
“to examine the relevance of the Westminster system of Government to Guyana; and
to have a series of structured national discussions on, (i) the meaning of consociatism
and federalism and other forms of inclusivity and power sharing, and (ii) their
applicability to Guyana.
47
”
45 IBID p. 8, para. 3. II. 2.
46 The country is divided into ten Administrative and political regions, and sixty-ve local government bodies
called, Neighbourhood Democratic Councils. There are also xx Amerindian Village Councils that administer
the local affairs in the respective communities.
47 IBID, p. 15, para. 3.IV.1.1.10.
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Despite constitutional changes
48
, electoral reforms
49
and dialogue
50
be-
tween the main political parties and Leaders, the goal of a new and enlightened
system of governance remains elusive.
The existence of a Development Strategy Document is, in itself, an example
of the impact of foreign relations on domestic policy. The document has its
genesis in the involvement of former United States President Jimmy Carter, in
seeking to broker solutions to political differences between the major parties. The
involvement of Caricom, the role of the Commonwealth Secretariat, including
its appointment of a special envoy to facilitate the political conict resolution,
all point the impact of foreign relations on domestic policy.
The Guyana economy
In his February 2, 2007 Budget presentation to the Parliament of Guyana,
the Minister of Finance Dr. Ashni Singh painted a glowing picture of the Guyana
economy. Using as his reference point the latest edition of the World Economic
Outlook, which estimates global growth in 2006 at 5.1% (with the United States
recording 3.4 % growth), he posited that the 4.7% growth recorded for Guyana
was commendable. He argued that sugar production grew by 5.5% to 252, 588
tonnes, and that rice surpassed the 2005 levels by 12.4% to reach 307, 041 tonnes.
He also said that, while there was a decline in some sectors
51
, several other sub-
sectors of the agricultural sector recorded strong performances
52
. With the
ination rate declared at 4.2%, a slight depreciation in the exchange rate of the
Guyana dollar to the US dollar by 1.13 % and the increase in wages and salaries
by 5%, he asserted that Guyana was doing well economically.
48 The most recent being after the 1997 Election Violence and the involvement of CARICOM, a constitutional
Commission was set up and changes were made by 2000; The Constitution was also changed previously in 1980
to a Socialist Constitution.
49 Fundamental Electoral Changes in 1992, 1997, 2001; see, Report on the recommendations of the
Constitutional Reform Commission 1999.
50 Between Opposition Leaders and President, Hoyte/Janet Jagan 1997. Hoyte/Jagdeo 2001, Corbin /Jagdeo
2003; also between the major political Parties.
51 Mining and quarrying sector fell by 22.4%; bauxite production at 1,538,587 tonnes: a decline of 9.2%;
declaration of gold at 200,000 ounces: a 23.3% decline.
52 Forestry sub-sector by 11%; manufacturing sector by 4% buoyed by 36.5% expansion in private sector
credit; engineering and construction sector by 12%; transport and communication sub-sector by 12%; overall
balance of payments increasing to US$44.9 million from US$8.1 million in 2005; Bank of Guyana reserves
stated to be US$278 million.
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The citizenry, however, did not share that view. In fact, it is widely
acknowledged that if it were not for the high level of remittances from abroad,
the cost of living would have had an even more serious impact on the lives
of the people.
An analysis of the budget
53
done by the Accounting Firm of Ram and
McRae rejected the picture painted by the Minister. It openly questioned the
real growth and ination statistics, pointing out that the growth rate gures for
sugar and rice were not sufcient to reverse the losses of 2005. It concluded,
inter alia, that with no major new measures and with growth and ination
projected at 4.9% and 5.2% respectively, “it does not inspire condence that Guyana
will return to the high growth seen in the early 90’s anytime soon
54
”.
The point should be made that the ‘high growth rates in the 90’s were
the result of the Economic Recovery Programme (ERP) introduced in 1989
by the administration of President Desmond Hoyte (1985-1992).
Tyrone Ferguson
55
, provides a structured analysis of Guyana’s economy,
the contextual circumstances of Political Economy Reform and the impact of
the ERP. Ferguson argues that the post World War II manifestations of Guyana’s
political economy have arguably been determined by the interplay of domestic
considerations and external inuences during specic periods. These he identies
as the period of the struggle for political decolonization of the 1950’s and early
1960’s characterized by, “an internal contestation for control of the political economy, involving
ideological divergences, racial-ethnic rivalries, and the personalistic ambitions of the pre-eminent
political leaderships.”
56
The economy became hostage to external involvement, as there
was deliberate manipulation of the prevailing situation of tension and conict on
behalf of a larger global-strategic imperative linked to the cold war.
Ferguson characterized the next period, the 1970’s, as one of, “radical, structural
transformation of the political and economic relations of the country”
57
, with far reaching
new departures linked to the continuation of severe competition for control over
relatively scarce national resources on behalf of sectional interests. This was only
53 Focus On The Budget, (2007) Published by Ram % McRae, Chartered Accountants, Professional Services Firm
54 IBID, p. 6.
55 Tyrone Ferguson, (1995), Structural Adjustment And Good Governance: The Case of Guyana, Public
Affairs Consulting Enterprise, ISBN 976-8136-69-3.
56 IBID, p.1.
57 IBID.
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possible because of a largely permissive international environment that presented
developing countries with a range of options for both the organization and
functioning of their political economies and the conduct of external relations.
The focal period of his study, 1985 to 1992 reected a similar pattern.
However, unlike the previous period, there were, “sharpened struggles for political
ascendancy in tandem with a reversal of socialist economic experimentation and the radical
reconguration of the economy in keeping with capitalist principles of organization and the
triumph of the market economy”
58
. This was facilitated, he claimed, by the activist
intrusion of major western governments and international institutions to
ensure the implantation of the guiding features of political economy.
The Economic Recovery Programme, ERP, (1989-1992) was also
attended by a shift in ideological direction and is generally acknowledged as
an economic success
59
. There was a high social cost and it could not have
succeeded without the support from the Donor Community,
60
The role of the
Guyana Foreign Service in the realization of the ERP cannot be overstated. In
addressing Guyana’s Heads of Mission Conference on 17
th
July 1987 President
Hoyte stated, inter alia,
“our foreign policy must promote our domestic objectives and cannot be divorced from
them. That is why no Ambassador can be effective unless he has a keen understanding
of the evolving internal situation and can personally make the linkage between national
objectives, the internal situation and the foreign policy he is required to execute
61
.”
President Hoyte was reafrming what his predecessor
62
fully understood
and pursued
63
and which the present administration has emulated in its quest
for debt write offs
64
and foreign investment.
58 IBID.
59 See Eradicating Poverty and Unifying Guyana; Natianal Development Strategy, 2001-2010, Chapter 4 at p.
21.para, 4.I.
60 See, Guyana: The Economic Recovery Programme and Beyond: Report fo a Commonwealth Advisory
Group, Commonwealth Secretariat Doc. (August 1989).
61 Hoyte (1991) Guyana Economic Recovery: Leadership, Will-Power and Vision, Selected Speeches, Free
Press Georgetown, p. 48 “Economic Independence and Self Reliance”; See also IBID p. 23, Speech on 11
th
July 1986 to Heads of Mission, “The Economy: the diplomatic effort”.
62 Linden Forbes Burnham, Prime Minister from 1964 – 1980 and President from 1980 –August 6
th
1985.
63 Links with USSR, Yugoslavia, China,India the Non Align Movement, CARICOM, Group of 77, The ACP
etc, to offset the hostile west to his socialist pursuits.
64 President Jagdeo has demonstrated this recognition by refusing to delegate the handling relations with the
IFI’s and has personally pursued the diplomatic effort as it relates to economic affairs, e.g the ACP negotiations
on the future of sugar.
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There is no disagreement among economists that the economic advances
recorded in the 1990’s
65
, long after the Hoyte Administration had left Ofce
were attributable to the ERP
66
. An examination of the 2007 budget will
however, reveal that Guyana is still heavily dependent upon those traditional
sectors for economic success, despite the learning contained in The National
Development Strategy paper that,
“The basic problem is that Guyana’s economy is too narrowly based and is not
sufciently diversied. Moreover, the country relies almost exclusively, for its economic
development, on the production and export of raw materials.”
67
Notwithstanding this, the Minister of Finance, in outlining Vision 2011
68
,
pointed to the “agship project”: the US$169 million for the Skeldon Modernisation
Project
69
scheduled for completion in 2008, which will facilitate value added
production and reduce the cost of production of sugar. The expansion of this
sector at a time when ‘King Sugar’ is now hostage to the European Community
70
in the new global trading environment has been questioned. What ever may be its
merits, the acquisition of the resources to undertake such a project must be hailed
a diplomatic success. Having regard to the state of sugar in the global economy,
the continuous need for supreme diplomatic effort cannot be underestimated.
Here again, the bilateral co-operation between Guyana and Brazil may prove
mutually benecial, particularly because of Brazil’s experience and expertise in
alternative energy and ethanol production.
In looking to the future the Government has outlined a vision to
restructure the economy including, strengthening the traditional sectors;
developing a strong vibrant, diversied and globally competitive manufacturing
sector; promotion of the tourism sector; encouraging development and
expansion of the livestock, seafood and aquaculture, and forestry sectors,
focusing more effort in the emerging IT sector and preparation for the effects
of Global warming. Additionally, much expectation is placed on the success
65 1991:5.9%; 1992: 7.7%; 1993: 8.3 %; 1994: 8.5%; 1995: 5.1%; 1996: 7.9%; 1997: 6.2%; 1998: -1.3%; 1999:
3.0%; See National Development Strategy p.22, para 4.I.6.
66 Ferguson, (1995) Structural Adjustment and Good Governance: The case of Guyana.
67 NDS, p.23, para, 4.I.13.
68 Budget Speech 2007, p.24.
69 The Construction of a new massive Sugar renery in the Berbice area.
70 See, Reform of the European Union Sugar Regime: ACP Sugar Industries Under Threat, A compilation of
Speeches and Articles, Printed Ministry of Foreign Affairs: Pavnick Pess (2005).
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of oil exploration, especially after the satisfactory conclusion of the dispute
with Suriname over the North Eastern maritime boundary.
Whether this will satisfy the requirements of diversication is still to be
seen. Two points need be restated. First, a political solution is essential for
lasting economic progress in Guyana; secondly, effective diplomacy is essential
to economic success.
Foreign policy and relations
Guyana’s objectives upon attainment of independence included
preservation of the country’s territorial integrity; forging national unity and
realizing economic development
71
. Its independent status necessitated new
political and economic relationships and the restructuring of old and traditional
associations. Consequently, between 1964 and 1992, Guyana’s diplomacy straddled
the ideological divide and embraced Third Word and Caribbean countries.
Naturally, the association with the region had economic and other objectives, such
as surviving in a hostile Cold War environment and facilitating active support
for the independence of southern Africa, but the priority of preservation of
territory was a major determinant. As Prime Minister Burnham once mused, “you
have to have territory before you can talk about developing it” Membership Associations
with the Non-Aligned Movement, the Group of 77 and the United Nations were
also considered important in the context of developing alliances to forestall the
violation of Guyana’s territorial integrity.
For example, membership of the Non-Aligned Movement obviously
emboldened Prime Minister, Forbes Burnham to announce annual nancial
contributions to the Liberation Movements of Southern Africa at its 3
rd
Summit in Lusaka, Zambia (1970).
Guyana’s principled position on the Liberation struggle of Africa, and
indeed, the liberation struggle worldwide, was informed not by narrow domestic
considerations, but by its principled foreign policy of the right of peoples to
self determination and the principle of non-intervention in the internal affairs
of independent states. It was this principled position that made it easy for
71 See, Rashleigh Jackson (2003), Guyana’s Diplomacy: Reections Of a Former Foreign Minister, Free Press
Georgetown, ISBN: 976-8178-11-6, Foreword by Dr. Cedric Grant, p. vii.
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Guyana to condemn the invasion of Grenada by the United States, equally as
it condemned the USSR intervention into Czechoslovakia, illustrating Prime
Minister Burnham’s earlier statement that, “We shall be pawns of neither East
nor West.”. Similarly, when the Falklands Island issue arose, and a sister South
American country faced conict with a major power of the North, it was difcult
for Guyana to revert from its principled position. First, to do so would have put
in jeopardy its own position with respect to its two border controversies, that is,
that border issues settled in the past should not be reopened, and second, the
principled position of peaceful resolution of conicts.
It was not the rst time that the self-interest of countries of the region
came into conict, nor was it the last. The self-interest of Brazil, Guyana and
another sister Caricom country clashed in 1985 over the election of a Judge for
the International Court Of Justice
72
. Yet, because of good diplomatic efforts,
such temporary differences of positions did not lead to permanent friction
in diplomatic relations. It is in such situations that the true mettle and quality
of foreign affairs ofcials are tested and, perhaps, the reason why Brazil has
paid so much attention to the training of its diplomatic staff.
Caribbean or continental destiny
Guyana’s geo-cultural circumstances have given rise to debate about
where our rst loyalties ought to lie insofar as relations with other states are
concerned. Adherents of what is described as Guyana’s ‘continental destiny’
contend that geography or, if you will, proximity, ought to be the primary
determinant of our diplomatic ties. There are those, on the other hand, who
contend that the experience of British colonialism, which we share with the
Caribbean and the consequential social, economic and cultural commonalities,
have bequeathed to us a Caribbean destiny.
What both schools of thought have perhaps ignored is the fact that
Guyana’s ‘geo-cultural circumstances position the country to embrace both
‘destinies’ – so to speak – without compromising either one or the other.
Indeed, the reality that is increasingly emerging is that of a Guyana that serves
72 Dr. Mohamed Shahabuddeen, former Attorney General of Guyana was Guyana’s candidate and he was elected;
the other candidates were an incumbent Brazilian Judge and a candidate from Jamaica; see, Jackson, (2003) at p. 9.
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as a bridge between the Caribbean and the continent. That, in my opinion, is
the reality that Guyana must embrace. Indeed, with the advent of Suriname
and Haiti to Caricom, the movement has lost its commonality of language
that used to be its hallmark.
The achievements of the Caribbean Community (Caricom) – and
Guyana’s considerable contribution thereto – in forging a common foreign
policy position on issues of shared interest among its members, more than
justies Guyana’s relations with the Caribbean. The recent emergence of a
CARICOM Single Market promises to be one of the signal achievements of
the Community
73
. Moreover, the relevance of both Caricom and the African,
Caribbean and Pacic Group, (ACP) best understood in the context of the
current efforts to salvage the regional sugar market in the once protected
environment of the European Community.
Guyana’s relationship with the continent has been hindered by a colonial
policy that dictated bilateral relationships between colonies and the imperial power
Even in the immediate post-colonial period the reality of ‘colonial bilateralism’
which embraced commercial, political and human relations continued to
discourage any aggressive reaching out to our neighbors on the continent.
The future
While the main determinants of Guyana’s foreign policy are unlikely
to change, there will be changes in areas of emphasis in context of the
changing global circumstances. Climate change and the implications for the
environment have become matters of utmost global importance. Of course,
the importance of the environment was recognized several years ago when
one million hectares of our rain forests was bequeathed to the world as a huge
environmental laboratory for careful use and study.
The terms of international trade as reected by the recent and current
DOHA negotiations
74
,and the other troubled agenda of the W.T.O., tourism
73 See, Hall, Kenneth O (ed.) (2001),The Caribbean Community: Beyond Survival, Ian Randle Publishers,
University of West Indies, Mona Campus, ISBN 976-637-047-8.
74 Doha Development Agenda (DDA); see also, President Jagdeo’s Speech to Rio Summit, Georgetown, (2007).
Robert H. O. Corbin
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and the promotion of new investments will assume greater priority on Guyana’s
foreign policy agenda
75
.
Guyana-Brazil relations
I hope that I will be forgiven by participants from other countries of the
continent for devoting special attention to Brazil/Guyana relations, but the
reality is that I am in Rio. In 1968, Guyana and Brazil established diplomatic
relations. Since then, several high level delegations have been exchanged,
commencing with the visit of Deputy Prime Minister of Guyana, Dr. P.A. Reid.
The establishment of the Brazilian Embassy and the Brazilian Cultural Centre
in Georgetown followed that visit. Guyana’s pursuit of active relations with
Brazil, however, began in earnest during the late 1970’s and, according to Dr,
Mark Kirton
76
, arose out of “the need for diversication of international contacts as
well as the prospects for new economic and diplomatic opportunities in Latin America.”
Another factor that delayed close bilateral relations between Guyana
and Brazil during the rst decade of Guyana’s independence was the anti-
communist hysteria driven by the United States that frowned on the socialist
policies of government of Guyana. Indeed, the most difcult period in
relations between Guyana and Brazil coincided with the use of Guyana’s
territory for refueling Cuban planes en route to Angola during the war of
liberation in that country.
The owering of relations between Guyana and Brazil began in earnest
around 1978 when, according to Dr. Kirton, the Brazilian Government
commenced “a new foreign policy approach… in the region in general and in relation
to Guyana in particular and a reduction in the mutual mistrust and suspicion which had
characterized those relations before this period.” In fact, it was in 1977 that signs rst
began to appear of a realigning of Brazil’s hemispheric foreign policy. This was
a period during which Brazil began to see its own development much more in
tandem with that of the rest of the continent and when the inuence of Non-
Alignment caused it to espouse the concept of ‘South-South Cooperation.”
75 See, President Jagdeo’s speech to Rio Summit, Georgetown, (2007).
76 One of Guyana’s foremost students of Guyana-Brazil relations.
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These modications in Brazil’s foreign policy, which, incidentally, were also
inuenced by its search for new economic allies in the hemisphere, coincided
with the establishment of closer relations with Guyana.
The signing of the Treaty of Amazonian Cooperation in 1978 promoted
bilateral cooperation in a wide range of areas including scientic and technical
research, economic and social development as well as consultation on the
development of frontier areas, the development of transport, communication,
tourism and health. Generally, developments during the period of late 1970’s
including the owering of Non-Alignment, created a platform that allowed
Brazil, Guyana and several other developing countries to fashion foreign
policies that were more independent of Washington.
The inaugural meeting of the Guyana-Brazil Joint Commission in January
1979 witnessed the signing of several agreements
77
; Much more was achieved after
the visit to Guyana by the then Brazilian Foreign Minister Ramiro Saraiva Guerreiro,
(January 1982) followed by a state visit to Brazil by President Forbes Burnham in
the same year. It is signicant that four of six Executive Presidents of Guyana
have visited Brazil. These were not mere diplomatic excursions. They reected a
recognition of the importance of Brazil as a strategically signicant neighbour.
It is, of course, entirely accidental that my visit here coincides almost
exactly with the 25
th
anniversary of the signing in 1982 of the inter-connection
agreement between Guyana and Brazil on the establishment of a highway
between the two countries. This occasion, however, affords me the opportunity
to reect on the visionary nature of Guyana foreign policy which, all those
years ago, thought through the role of such a highway in further cementing
relations with Brazil. It is a tribute to both countries that the bridging of the
Takatu River is almost complete.
Early in his tenure as Burnham’s successor, the late President Hugh
Desmond Hoyte, noted that “Guyana’s foreign relations with its neighbors and with
Brazil in particular have become priorities in Guyana’s foreign policy.” The Hoyte
administration’s emphasis on free enterprise created greater scope for bilateral
economic cooperation. It was President Jose Sarney, I believe, who made the
point during his tenure that:
77 The Agreements embraced the training of Guyanese technicians, the provision of pharmaceutical and
hospital equipment to Guyana and the development of the agricultural and industrial sectors in Guyana.
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“Brazil’s relations with Latin America and the Caribbean and especially with all
of its immediate neighbors are among our major priorities. Our Magna Carta has
enshrined regional interaction as a constitutional imperative.”
What was also signicant about the period between the mid-1960’s –
when Guyana secured its independence – and the mid 1980’s was the signicant
increase in economic activity between the two countries. One can scarcely
believe, for example, that in 1967 Guyana’s imports from Brazil amounted
to a mere US$183,000.00. By 1980 that gure had reached US$6.6m, which,
though still miniscule, serves to illustrate some movement in economic and
trading relations, which a little more than a decade earlier had been virtually
non-existent. During the same period, Guyana’s exports to Brazil moved from
US$48,000.00 in 1967 to US$2,48m in 1980. Again, the numbers are far less
relevant in themselves than in the story they tell about the emergence of a
gradual strengthening of Guyana-Brazil relations. For example, it is noteworthy
that the Brazilian government provided valuable funding, through the Export
Promotion Financing Agency in the Brazilian Central Bank (CACEX), for the
construction of the road linking Georgetown and Boa Vista.
The early years of the twenty-rst century have witnessed a urry of
diplomatic activity, beginning with the First Meeting of Mechanism for Bilateral
Political Cooperation
78
; the completion of another phase of the ongoing joint
border markers exercise by the Guyana-Brazil Mixed Border Commission; and
the second meeting of the Guyana/Brazil Group on Consular Cooperation
held in Georgetown (2005).
The outcomes of the visit to Guyana in November 2005 by President
Luis Ignacio Lula Da Silva are fully documented in the Joint Communiqué
issued at the conclusion of that visit and which I am tendering as an appendix
to my presentation. President Lula Da Silva’s visit was a signal development
in relations between the two countries.
There are challenges, however, some of which I will allude to briey.
First, there are the barriers of language and culture that will persist until there
is signicant acceleration in the movement of peoples in both directions
across the border.
78 June 2004.
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Second, there are the security implications of increased trans-border
movement, some of which are already manifesting themselves in Guyana.
Third, there is Guyana’s apparent lack of capacity to take full advantage
of the bilateral assistance forthcoming from Brazil.
Fourth, there are the challenges that the Guyana productive sector will
face in responding to the signicant market opportunities that will arrive with
the completion and use of the road link.
Fifth, there is the challenge of ensuring that both countries recognize
and responsibly execute their obligation to the protection of their indigenous
peoples, their ancestral lands and the shared environmental resources.
It is important that both governments address the need to establish
a mechanism to examine those challenges ahead of the completion of the
road link.
The new opportunities that are emerging for relations between Guyana
and Brazil can, and, in my view, will impact on continental relations as a whole
and will create new linkages between South America and the Caribbean. Both
Guyana and Brazil, therefore, seem set to make an impact of regional and
hemispheric international relations in a manner that transcends the boundaries
of both countries. That, in my view, promises to be an awesome achievement.
Conclusion
In examining the problems and challenges faced by Guyana in pursuit
of economic development to provide a better life for its people, it is clear that
the foreign policy and relations have signicantly inuenced their solution. The
role of the diplomatic service in creating the environment for international
assistance has been clearly illustrated in the examples cited in this presentation
such as, the Economic Recovery Programme, arrangements with International
Financial institutions, the Skeldon sugar project and, more recently, in the
huge debt write-offs. The impact of the association with Caricom and other
Organisations such as the ACP are also highlighted in the common approach
to negotiation with the EEC on sugar and the establishment of the Caribbean
joint negotiation machinery.
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Similarly, the benets of international relations in preservation of territorial
integrity should also be obvious. The involvement in the Commonwealth,
Caricom and the Carter Center are also illustrative of the impact of foreign
policy and relations on domestic issues such as conict resolution.
Time constraints prevented more elaboration on some of these issues
but I hope that sufcient has been said to provide an informed basis for any
evaluation or assessment of the situation in Guyana and to aid any diplomat
wishing to prepare for an assignment in Guyana.
Finally, I wish to conclude by pointing out that I have been unable to
paint other angles to the sketch of Guyana in this short discourse. One writer
describes the country as, “a land of contradictions and superlatives”. He was
referring to, what he described as, the true beauty and subtle spirit that can
only be experienced by journeying to the hinterland. A hinterland that is also
the home of the giant otter, the jaguar, the largest open – toed sloth and the
Arapaima, the world’s largest freshwater sh. There too can be found the
biologically diverse tropical rainforest ecosystem that is part of the Amazonia.
It has been disclosed that 6,100 species of plant, 1000 species of tree, 450 types
of bird, 400 species of sh, 120 species of amphibians and 180 species of
mammals have been recorded so far in area that is some 80% of country.
When one adds to this, the unique cultural and religious mix that gives
expression in the cuisine and national celebration of Christian, Hindu, Muslim,
African, Indian and other festivals and occasions, and, the fact that a period
is set aside in each year for the recognition of the various ethnic groups, a
wider picture emerges.
Guyana, another writer states, presents “a tabula rasa, a clean slate on which
to write your vision of paradise, miraculously transforming the way you view your existence
on earth”.
I submit, however, that, with the myriad problems and challenges being
experienced, the people have long passed the stage of wanting to write their
vision of paradise. They want their paradise manifested here on earth now,
and not in their dreams.
DEP
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152
Paraguay: identities,
substitutions, and
transformations
Bartomeu Melià, s.j.*
I
n its current form, Paraguay originated in a colonial process that
cannot as yet be seen as completed. Modern colonization, including Spanish
colonization since the 16
th
century, seems to have pursued identical objectives,
adopted similar structures, and obeyed equally similar processes. Yet, it displays
particular forms owing not so much to the colonizer’s actions as to the ways of
those to be colonized – the existing Guarani substratum, in Paraguay’s case.
The historical colonial process may be characterized in different ways,
based on the form of contact between two or among more than two peoples
and on the outcome of such contact. The imaginary effects of history are well
known. History is always selective memory. In history, causes are generally
projections of contemporary ideas.
Processes and results, it is true, change meaning according to the ideological
prism through which they are seen. The idea held by the colonizer, who has in his
possession or at his disposal documents and images that are in turn reinterpreted
* Center for Paraguayan Studies Antonio Guasch – CEPAG
Bartomeu Melià, s.j.
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in light of his own system, is different from the view and imagery held by the
colonized societies that saw and suffered the new form of life presented to and
often imposed on them. The new power not only affected a person’s individual
freedom but also extended to that person’s linguistic, religious, and economic
system, to name just a few of the more fundamental aspects.
Conventionally, Paraguay’s history and colonial process are divided
into a Guarani “pre-history”, a colonial phase (1537-1811), and a period of
independence. Although this division is rmly rooted in the popular mind and
in culture – as this has been transmitted by ideologue historians and ofcially
taught in school – it must be asked whether it dos not act as opium fumes that
prevents one from facing the new, decisive forms of more recent colonialism
– not only those introduced after the so-called Great War of 1865-1870 but
also the latest form, which started after the Itaipu Treaty (1973).
The colonial scaffolding
The arrival of others triggered processes that may be schematically
categorized as follows:
1. Destruction;
2. Cover up;
3. Substitution;
4. Transformation; and
5. Creation.
None of these processes is complete in itself or acts entirely by itself.
Each, though, is sufciently determinantal to be taken as a specic indicator.
This scheme is applied to the colonial world by antonomasia, but its categories
may transcend time and be recurrent.
1. Destruction
Of nearly all the peoples and societies found in the early days of the
conquest, only the memory of their names remain and no information exists
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about their language or the kind of society in which they lived. The breath
of the novel European presence was the harbinger of irreversible death.
It is difcult to guess the extent of the disaster and the magnitude of the
genocide. Although one may fall prey to exaggeration, either downward or
upward, the fact is sufciently serious to alert one to the consequences of
the colonialist adventure. The so-called Western peoples hardly seem aware
of these destructive results; it seems to them that their “civilizing” project
justied and still justies these “collateral” damages.
The destruction of the peoples of the River Plate and other regions
covered a wide spectrum. What happened to the Arachane and the Carijó?
Where are the Chandule, the Querandi, the Charrua, the Yaro, the Boahane, the
Chane, and the Mepenes? How did the famous Agace and Payagua upstream
disappear? One could add the endless list of indigenous peoples mentioned
in the conquest reports. True, not all of them vanished right at the beginning,
but vanished before the close of the colonial cycle, most of them before the
20
th
century. Often only their names disappeared, as some of these Chaco
societies reemerged later under other names, as will be seen.
There are some who answer this question with the levity and ippancy
so typical of a mentality that still prevails to this day, saying that the indigenous
peoples are “naturally” destined to die.
“As the Spanish advanced, all these generations declined noticeably to the point that
some disappeared while the others merged with more vigorous races. Some formed
settlements under the Seraphic [Franciscan] priests.” (Cayetano BRUNO, Historia
de la Iglesia en la Argentina, Buenos Aires, 1966, p. 37).
In respect of languages alone, as can be seen from the indigenous languages
catalogue prepared by Cestmir Loukotka (1968) and Antonio Tovar (1984), losses
were enormous and irreparable. The same occurred in relation to the indigenous
cultures, whose value we still refuse to admit, owing to the time distance, oblivion,
and disdain. As it happened, millenary peoples could not resist even for a few
days the colonial contact, when epidemics and wars broke out, accompanied
by mistreatment. Their end was not inevitable and no cultural, economic, or
political theory could justify it. The destruction is a historical and thus human
fact, and man has to shoulder the responsibility for it.
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On the other hand, the fact that some indigenous peoples escaped total
destruction, as is the case of the Guarani, only reinforces the appreciation
and recognition of the worth of their contributions to the future. Not only
their language but also their indigenous way of being – their teko – seen from
an economic, political, and religious aspect are increasingly proving to be
more modern in a world whose values are being fast eroded and becoming
unsustainable. Indigenous problems are not a problem but a solution.
2. Cover-up
Although colonial cover-up was less cruel than destruction, it had similar,
though ambiguous effects. The discoverer becomes the coverer-up. He insists
on not seeing, not knowing how to look at, or on concealing that which he
nevertheless often beholds, torn between admiration and fear.
In several of her works, such as Los aborigines del Paraguay I y III/1, subtitled
Etnología de Chaco Boreal y su periferia (Siglos XVI y XVII) and Etnohistoria de los
chaqueños (1650-1910), Dr. Branislava Susnik describes in great detail how the
Chaco Indians remained on the margin of the Paraguayan colonial process, which
they shunned and from which they ed as they could, repeatedly threatening
it and into which they were never fully integrated. Concealing themselves for
centuries, they reappeared, attracted by the quebracho tannin industry and by
the incipient cattle ranches, where they worked under a regime close to slavery,
or contacted by religious organizations not completely alien to colonization’s
interests, such as the British Mission among the Enlhet Indians. Los indios del
Paraguay (Madrid, 1995) by Branislava Susnik and Miguel Chase-Sardi, provides a
more concise summary of this same process so marked by cover-up and disdain,
which explains why Paraguay was practically ignorant of the existence of these
peoples and why it has never consciously assimilated any of their values, not
even in respect of ecology, in which they are masters. It can be said that, at least
at rst sight, the Paraguayan culture has absorbed nothing from these Chaco
peoples, whose roots and development have remained so unfamiliar to us.
As regards the Guarani, the situation is more complex. It is thought that
the Guarani stock is the common substratum of Paraguay’s identity and that the
Guarani culture has been assimilated by Paraguayans, who have transformed it
and made it their own. This is a way of covering up reality. “Tribal” Guarani
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consist of six different peoples, are alive, and in good cultural health. This
reality must not be concealed or covered up, as is done. Paraguay ignores the
free Guarani, discriminates against them and marginalizes them. Yet, a Guarani
world cannot be constructed without the contribution of the Guarani peoples
of Paraguay. It is precisely owing to this contribution that the Guarani world
can still be useful to the Paraguayan world and give it meaning.
The cover-up often results from our structural incapacity to look at and
understand systems that are alien to us. Only attention to and admiration for
what is alien could partially lift the veil that conceals a reality from which all
of us could learn.
I have addressed this “cover-up,” its mechanisms and ramications in
the essays “El encubrimiento de América” (Razón y Fe 1.108, Madrid, February
1991: 159-167) and “El quid pro quo del descubrimiento-encubrimiento de
América “(Fronteiras, Revista Catarinense de História, no. 8. Universidade Federal
de Santa Catarina. Florianópolis 2000: 9-31), an idea that has been taken up
by Augusto Roa Bastos in chapter XLVI of La vigilia del almirante (Madrid:
Alfaguara, 1992: 331-333).
In this connection, attention should be called to the inconsistency and
even foolishness of the task often undertaken by the national society in wanting
to legislate on realities almost completely concealed from it, and still worse,
which it has concealed itself.
3. Substitution
Upon arrival, the colonizer occupies a space from which he little by little
excludes the previous inhabitants, uprooting populations from their lands,
luring them into Spanish dominion or pushing them out to more or less distant,
marginal areas. Instead of attacking, the Indians ee.
Displaced from their habitat, people nd that things are different elsewhere,
and this occurs particularly with indigenous and peasant societies.
With colonization, the transfer and displacement of points of reference
was considerable. On the one hand, the city was an enclave where the
indigenous society had no place. Nakedness was substituted by dress, days
and hours by a new calendar and compulsory tasks, the reciprocity-based
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economy by the vindictive price of things. Gradually, the “naturals” (as the
indigenous people were called) were forced to leave their lands, increasingly
occupied by implacable cows.
“[The cows] damage the crops and plantings of the Indians around this city, causing
them to suffer need and hunger, and forcing them to leave their traditional homes and
move to remote areas, thereby becoming separated from Christian doctrine and from
service to the Spaniards to whom they have been entrusted” (Order by Juan de
Garay of October 17, 1578, in Aguirre, Diario I, 1
st
part: 197-98)
The Altos reducción originated in 1580 as a cultural and social
answer for protecting the Guarani farmers from Spanish cattle raisers
(see Necker 1970:64).
“As the Spaniards got nearer the Indians to establish their ranches and [found that
they] were divided into groups… they took one group into a reducción in an area
located in a village called Los Altos to this day” (“Report of 1618” in Enrique
de Gandía, “Orígenes del franciscanismo en el Paraguay y Río de la
Plata,” Revista del Instituto de Ciencias Genealógicas, año 5, n. 6-7, Buenos
Aires, 1946-47: 48-82, p. 60).
Domingo Martínez de Irala saw the problem quite clearly as a decline
in productivity:
“no one may disturb them in respect of their lands, elds, pastures, hunting grounds,
sheries, foundation of towns, and boundaries they own and have owned through usage
and custom […]”(Order by Irala 1556, quoted by Susnik 1979-1980:112).
The disarrangement of the ecological panorama and of space, in addition
to being a violation of human rights was both culturally and economically
counterproductive. The substitution of physical and cultural spaces is still
practiced today, with the same nefarious effects.
Substitution, consistently sought after but not always achieved, was meant
to extend to all aspects of life and culture. In positing miscegenation as the key
for interpreting the colonial process, Paraguayan historiography leads to the
assumption that spaces were respected and that the new society was formed
by sound inclusion and without traumatic exclusion. The Guaranis’ frequent
revolts and escapes from the colonial setting warrant a different conclusion.
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4. Transformation
Historic reticence before the killing and destruction of so many people
and forms of life and the ideological need to create a homogeneous society
of citizens that are equal before the law have set up the cultural miscegenation
model as the comprehensive interpretation of the Paraguayan people’s
formation. The choice of partial data and some naïve, poorly documented
interpretations fed the illusion of something original. The generalization
of the use of the Guarani language by all segments of Paraguayan society
reinforced such stance.
The Guarani were not destroyed, covered up, or substituted: they were
simply transformed into a harmonious blood and cultural mix. Of course,
the Spaniards did not disappear, either, and their presence is felt everywhere.
This has been the predominant thesis to this day, although one does not
know precisely which science would account for this transformation. We
guess it and look for arguments to support it. This “report” should produce
proofs thereof and will do it, although with a critical intent, by examining the
questionable passage between substitution and transformation. This is the
crux of the matter.
In addressing miscegenation, one cannot disregard demographic
statistics, although such statistics for the colonial era are no more than a
“guessing science,” as noted by Silvio Zavala (1977:138).
In any case, the successive polls and censuses showing the low density of
the Spanish population do not indicate the intense miscegenation, particularly if
one bears in mind that in the Indian villages – ruled by clergymen, Franciscans
or Jesuits – where most of the province’s population lived, the habitants
were exclusively indigenous. Nor should one forget the high percentage of
“browns,” who accounted for 11.1 percent of a total population of 96,526 in
1782, on the eve of independence, while in Asunción they accounted for 24.9
percent of a population of 4,941. In general, they lived in coexistence and in
social and cultural communication, with their particular conicts. Ultimately,
transformation – or substitution – never occurs on the basis of genetics or
biology, but of imagination, persistent and aggressive, associated with physical
traits and color, in other words, on the basis of racism, from which we are
seldom free.
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Around 1782, “Spaniards” made up slightly over half the Paraguayan
population: 55,616, or 57.8 percent. In Asuncíon, there were only 82 native Spaniards
(1.7 percent) and colony-born Spaniards numbered 2,038 (41.2 percent).
In colonial times, those who we now suppose to have been of mixed
race identied themselves as American-born Spaniards, as opposed to the
peninsular minority. Leaving aside their birth place, the sharpest difference
between them was probably the fact that the former spoke almost exclusively
Guarani, while the latter spoke no or very little Guarani. Society was not
bilingual, although “ofcial” administration used Spanish (in relations with
the mother country and other provinces, in the juridical area, and to a certain
extent in religious matters). This bilingualism gives the measure of the cultural
changes that occurred.
A genetic change also occurred, which did not affect cultural – economic,
social, and political – practices with the same mechanical biological symmetry.
The mestizo is a product of destruction, substitution, and transformation,
which cannot be generally but only individually applied. Many of these changes
occur also in the colonized indigenous society. Coloniality tends to be pervasive
wherever it takes hold, although not always to the same degree or extent.
Cultural changes in Paraguay follow what we might call isobaric lines
according to specic colonial, relatively homogeneous pressures. The development
of these pressures in Paraguay has been neither constant nor uniform, but as
we look back, we can visualize a map with well dened regions.
The rst stage of the conquest, which we may place between 1537 and
1556, and its continuation from 1556 to 1610, experienced a tremendous,
horrendous drop in the Guarani population, from 200,000 to no more than
20,000, a very plausible assumption for the area under Spanish inuence
(See Necker 1979: 145-46). Only the reducciones or villages established by
the Franciscans around 1580 (ibid: 62) managed to stabilize the population,
which instead of declining maintained a nearly horizontal line, with decline
and recovery points, according to the location and to the years.
If we ash back to around 1650, when the conquest had already been
interrupted, we see a few Spanish towns and three classes of indigenous peoples:
those recruited by the secular clergy, Franciscans, and Jesuits, and an assumed
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free indigenous population in the wilderness, both in the East and in the Chaco
region. This scenario points to the complexity of the Paraguayan colony.
Miscegenation, more of an imaginary and cultural construction than a
biological fact, may be accepted as an appropriate, good-humored summary
that seems to have prevented social tensions for a while. This model could
be applied with relative success to different epochs, although the ratio of its
elements varied greatly.
After the expulsion of the Jesuits (1768), a series of events occurred,
among which Independence in 1811 was a minor one, whose meaning would
materialize in the dictatorship of José Gaspar Rodríguez de Francia. For the
19
th
-century French and English travelers, Paraguay’s exotic vision did not
fail to have its charm; but it also displayed the irreversible substitutions and
transformations that had taken place. To the foreigner arriving between 1811
and 1853, Paraguay offered a romantic image (Nagy 1990), which to this day
remains as a nostalgic reference to a lost Paraguay.
This paper attempts to examine in detail the drastic rupture that took
place after the Great War, which ended in 1870, leaving a fragmented country
under the illusion of a democracy based on parties with a liberal ideology.
5. Creation
Transformation is a movement that creates new forms through
dialogue between two or among more elements that come into contact,
which in its various relations, even if conictive, leads to a new way of being.
Transformation opens the way for the invention of new realities that in turn
lead to creation. The Paraguayan people’s formation may be considered from
this angle, which though ambiguous and deceiving, should not be discarded.
Even substitutions can be creative and surpass the original subjects. Creation
is distinguished by qualitative jumps allowed by free, imaginative action. This
is why there are relative and specic creativity conditions that occur on some
occasions and not on others. Where and how did the Paraguayan people’s
creativity originate?
There are many forms of creativity, according to the dialogues carried
out, which this paper purports to examine.
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The Paraguayan Guarani world
If we look for the Guarani world in the Paraguayan world while excluding
the language, we nd ourselves in a garden where paths intersect each other,
leading to no certain destination. Here, echoes seem to shatter themselves into
a thousand fragments that fail to form a clearly intelligible phrase.
Paraguay has been dened – and denes itself – as a mestizo, bilingual
country. These images result from a synthesis of opposites, although these
opposites preclude any possible synthesis, unless it is a fake one.
In Paraguay, the so-called Creole is mestizo, and a mestizo passes for a
Creole. This invention goes back to Azara’s time, in late 18
th
century: a type
of person that will be called Paraguayan, capable of sustaining quite well an
independent Paraguayan nationality.
The Paraguayan process that ultimately imposed itself was that of a
population that was mostly Guarani by descent and language, physiognomic
traits, way of being, and culture, in which the political and economic systems
had been unhurriedly but steadily, noticeably but not drastically divested from
their Guarani legacy. The class of encomenderos and the military ofcers, their
successors, gave origin to the peasant condition with which traditional Paraguay
has identied itself.
A new colonialism began in Paraguay in the 20
th
century, announced in
many ways but which decidedly asserted itself since the Treaty of Itaipu (1973).
Modernity, projected and promised by its attendant capitalist mechanisms,
brought no progress or development to the country. Society thus feels
“misplaced,” according to Luis A. Galeano (2002), among the hunters – the
image is appropriate – and the farmers, whose labor is “hunted” for under
a system that creates exclusion, through new, massive internal and external
migration, for instance, as well as through poverty and frustration.
The ongoing colonization process in which we are submerged affects
particularly the peasant majority, which has suddenly abandoned its condition by
migrating to the urban centers. There is a pressing need to understand this new
process. The fast deforestation to which today’s Paraguay is being submitted is
not only an ecological disaster and an unsustainable form of economy, but also
a troubling metaphor of disasters and impasses of every kind.
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Must one accept a radical break between Paraguay prior to 1870 and the
Paraguay that has emerged in the 20
th
century? Admitting that it is a case of
a new colonization, is this colonization the same kind of that that anteceded
the Great War?
It seems today that the place for culture is located in a mythical and mystic
hiding place with a narrow gate that can be entered only by “experts in Paraguayidad.”
These experts, though, do not come with something signicant and communicable
in their hand. Identity dies as a weak anecdote, something traditional and folkloric,
of no interest to others. Identity would be a shameful attitude hidden behind doors,
which does not dare to claim its place in the sun.
Indeed, the process follows a historical continuous line, with one part
of society keeping its distance from the other, the two being united only by
the frail threads of an alleged common heritage – the Guarani heritage.
But this very Guarani world, even when better known, is relegated to a
remote past, alien and strange. The virtues of the Guarani world, though very
real and dynamic, have no part in the construction of the country, whether in
the economic or in the political areas. The very Guarani words that refer to
these areas – karaí, mburuvichá, jopói, tepy – have undergone such radical changes
that their origin and meaning have become unrecognizable. It is an illusion
to think of reclaiming and reasserting the Guarani world in today’s Paraguay.
Just look at the conditions of the two most authentically Guarani experiences:
the indigenous villages and the Jesuit ruins. In no way do they serve as valid
reference for the nation’s construction.
Since the beginning of the 21
st
century, Paraguay has been exposed to
the most extensive and radical colonizing process of its history. At no previous
time had Paraguay so “generously” opened up (let pass the irony) its territory
to colonization. The lands that are now the property of large enterprises –
Industrial Paraguay, Carlos Casado, Mate Laranjeira – have fared better in the
hands of the proprietors that owned and exploited them; they did indeed
degrade them, but did not colonize them in the real sense.
Since the Mennonite colonization, timidly begun in 1927, with a small
contingent of some 1,250 people, and the Brazilian, whose beginning can be
dated to the opening of the Friendship Bridge on March 27, 1965, colonialism has
assumed a different guise. What was Paraguayan, however this may be understood,
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does not count, not even as a reference; neither does the State as such. But it is not
only a question of these communities that are in Paraguay but are not Paraguayan,
but of a varied economic society segment, supposedly modern as regards the
management of technology and products – livestock, soybeans, data processing, to
cite only the most notorious – that harks back to a model of retrograde, paralyzing
colonialism that is both active and efcient. For this sector, the Guarani world and
its different manifestations are but a residual element.
In cultural terms, this tendency excludes as a remnant – a vestige still
to be overcome – the Guarani world, with its language and way of being. It
is allowed to come to view only travestied as something exotic and as history
of a Paraguayan ‘peculiarity” now concentrated in the old population nuclei,
marginalized and inclined to emigrate.
Some biographical notes
In the intricate jungle of titles about indigenous, Jesuit, colonial, and
contemporary Paraguay listed in Mundo Guaraní (Bartomeu Melià, Asunción,
2006, p. 187-261) one can nd Carlos PASTORE, 1972, La Lucha por la tierra en
el Paraguay. Montevideo: 526 p., and the literature by some foreign researchers
– albeit of little inuence in Paraguay – such as Jan M. G. KLEINPENNING,
1992, Rural Paraguay, 1870-1932, (Amsterdam: CEDLA, 1992, 528 p.) and
Paraguay
1515-1870: A Thematic Geography of its Development (2 vols., Madrid,
Frankfurt am Main: Iberoamericana-Vervuert, 2003, 1820 p), as well as more
recent studies about the entry of Brazilians in Paraguay, such as that of Sylvain
Souchaud, Pionniers brésiliens au Paraguay (Paris: Karthala, 2002, 406 p.), now
available in Spanish. It addresses mobility and the reshaping of a map in the
process of being developed, which seems typical of Paraguay today – land
without men and men without land – and, rather than politics, the work focuses
on the play of typically colonial economic and cultural interests in which we are
submerged. In view of the lack of relevant historical and sociological studies,
one should resort to the specialized eld of economics and population, without
neglecting ction literature. The Second Paraguayan Congress on Population,
16-18 November 2005, Memorias (Asunción: UNFPA/ADEPO, 2007, 178
p.), for example, is of utmost interest in this respect. The sparse institutional
university output on Paraguayan reality is regrettable.
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It is not surprising that some international organizations are willing to
undertake studies about the Paraguayan’s identity and his Guarani heritage,
with special emphasis on the mestizo segment of the peasant and urban
population, separately from the Guarani language, which would lead to a
revision of policies being currently implemented by the pertinent institutions;
to an identication of gaps and contradictions in policies, legislation, and
institutional organization; and to the conception of a realistic, viable cultural
policy proposal. This policy should include the following elements, among
others: recovery of Paraguayans’ Guarani identity; valorization of this identity
and adoption of the requisite measures for ensuring its valorization, inclusive
in the areas of education, advertising, and means of communication, as well as
the necessary rules and incentives for this purpose; identication of Paraguay
as the hub of the Guarani World before the international community; and
denition of the Guarani identity’s role in the citizens’ coexistence; denition
of the different roles of the central and provincial government, the private
sector, civilian society, the indigenous peoples, and other ethnic minorities in
the implementation of said policy.
DEP
Translation: João Coelho
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165
Peru: electoral
surprises and the
pending exclusion
agenda
Martín Tanaka*
Sofía Vera**
Summary
I
n Peru, 2006 was an election year, during which elected authorities were
replaced. The most salient event was Alan García’s victory at the presidential
elections; also surprising was the ascent and subsequent plunge of Ollanta
Humala, the anti-establishment candidate, between the April presidential
elections and the regional and municipal November elections. Retired army
ofcer Ollanta Humala’s anti-establishment discourse and the authority image
he projects elicited broad voters support, whose geographic distribution brought
into relief some of the social rifts countrywide. The April election returns made
* General Director of the Peruvian Studies Institute
mtanaka@iep.org.pe
** Research Assistant at the Peruvian Studies Institute
svera@iep.org.pe
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social inclusion the central issue on the political agenda. However, owing to the
weakness of the opposition to García’s government the issue gradually lost force,
although the fundamental reasons for its continued relevance still prevail.
1. Situation
In Peru, 2006 was an election year, during which popularly elected authorities
were replaced, namely, the President of the Republic and members of Congress;
the regional presidents, provincial and district mayors and their respective councils.
The most salient event was Allan García’s victory at the presidential elections,
despite the bad memories of this rst administration (1985-1990). His victory
became possible because he succeeded in placing his candidacy at the center of
political debate as an alternative to both the National Unity’s ‘candidate of the
rich,’ Lourdes Flores, and the radical anti-establishment candidate Ollanta Humala,
whose irruption onto the electoral scene was unexpected. Humala won the highest
number of votes at the April round (30 percent), but despite having won 47.4
percent of the votes at the second round in June, he was defeated by García, who
had 52.6 percent of the votes. His anti-establishment discourse and the image of
authority he projected won retired army ofcer Ollanta Humala broad voters’
support, whose geographical distribution brought into relief some of the social
rifts countrywide. Outsider Humala scored his highest number of votes in the
southern Andean regions, in the poorest, most neglected areas, and in localities with
minority ethnic groups. García won in Lima and in more modern cities forming
part of the more dynamic economic circuits, located on the coast.
This outcome made social inclusion the central issue on the political
agenda. Although the economy in general is doing well, as shown by favorable
economic indicators and there is an incipient perception of optimism about
the country’s future, Peru remains a country with half the population living in
poverty. The economy has grown for sixty consecutive months, gross domestic
product (GDP) is expected to grow at 7.7 percent in 2007, as compared with
2006, and tax revenues in 2007 are expected to grow 98 percent as compared with
2001.
1
Yet, poverty and unemployment indicators and salary and wage levels have
not improved in recent years. However, the combination of a relatively favorable
1 Source: Central Bank of Peru, 2005 Report and Apoyo Consultoría SAC.
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economic situation, increased scal revenue, prudent political management, and
the opposition’s weakness explain why the rst seven months of Alan García’s
government have been characterized by relative stability.
On the international front, the most relevant issues included the so
far unsuccessful efforts of both the Alejandro Toledo and the Alan García
governments to secure the approval of the Free Trade Agreement with the
United States; Hugo Chávez’s intervention in the presidential campaign in favor
of Ollanta Humala, which has muddled bilateral relations in view of García’s
victory; and the recurrent tensions in bilateral relations with Chile (in respect
of the denition of maritime boundaries, for instance), which personal contact
between Presidents García and Bachelet are attempting to improve.
There follows an overview of the most important political events of
2006 and of 2007 so far, as well as the ongoing political processes likely to
open new prospects for the country.
2. Institutional changes
The change of government has not meant a drastic change in public
policies or a signicant alteration in the functioning of Peruvian institutions.
The new administration that came into ofce in July 2006 is starting to make
some decisions aimed at reforming the State, with emphasis on austerity and
greater efciency. The previous government introduced some changes in the
electoral system and in the parties’ legislation, which applied to the 2006 electoral
process. The November 2003 party law set minimum requirements for political
organizations interested in presenting candidates, while the October 2005 law
on electoral barrier sought to prevent the parliament’s extreme fragmentation.
The outcome of the elections showed that partial changes alone do not solve
the weakness of the party system. Neither was the number of candidates smaller
this year, nor consolidated party blocs have been formed in Congress.
3. Elections
Three types of elections were held in 2006: presidential; congressional;
and regional and municipal. The presidential election, which was won by Alan
García Pérez, was in two rounds – the rst on April 9 and the runoff on June 4.
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The Peruvian electoral system requires that the winner of presidential elections
has to have at least 50 percent of the votes plus one valid vote. Otherwise, the
candidates that have received the most votes enter a runoff election. Ollanta
Humala, the Union for Peru candidate, who topped the others with 30 percent
of votes, had to compete with Alan García, leader of APRA, the country’s
oldest party, and former president of the Republic (1985-1990).
Ollanta Humala attempted to run under a new party, the Peruvian
Nationalist Party (PNP) but, as he was unable to register, his candidacy was
sponsored by the Union for Peru party. Humala presented himself as a leader
of the radical opposition to neoliberal policies, the candidate that embodied a
“turn to the left,” similarly to what was happening in Venezuela and Bolivia,
whose presidents publicly expressed their political support for his candidacy.
2
Humala won the rst round. García won by a narrow margin over Lourdes
Flores, but their votes combined defeated Humala at the runoff elections
Returns were unexpected in view of campaign developments. Lourdes was
ahead in the voters’ preference until February 2006, but was thrown out of the
race by losing one percentage point to the APRA candidate. Another surprise
was the Alliance for the Future, the group of Fujimori adepts, which ranked
fourth, despite the events that forced Fujimori to step down as President in
2001 and the legal proceedings started against him. Martha Chávez won more
votes than Valentín Paniagua, the Center Front candidate, notwithstanding the
positive view of his administration as transitional president in 2000-2001.
The distribution of rst round votes shows in general terms that Humala
won in most regions, Lourdes Flores only in Lima, and García on the north
coast. Humala’s votes exceeded the average in the southern Andean regions,
where the majority of the population of indigenous origin lives and where
the highest levels of poverty are recorded. The sectors more closely linked to
the economic circuits backed more moderate political options.
2 As expressed at Humala’s Caracas meeting in March 2006 with Bolívia’s Evo Morale and Venezuela’s Hugo Chávez.
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Table 1 – Percentage of votes at presidential elections
Candidates (#20)
1st round
(April 9)
2nd round
(June 4)
Ollanta Humala (UPP) 30.62 47.4
Alan García (APRA) 24.32 52.6
Lourdes Flores (UN) 23.81 —
Martha Chávez (Alianza por el Futuro) 7.43 —
Valentín Paniagua (Frente de Centro) 5.75 —
Other candidates (less than 5% of votes) 8.06 —
Total 100.00 100.00
Chart 1 – Returns of presidential
elections by regions – 1st round
Congressional elections, which coincide with presidential elections, were
also held on April 9. The Peruvian Congress is unicameral, with 120 legislators
elected in 25 electoral districts by proportionate voting. Each district has from
one to seven wards; Lima, the largest district has 35 wards. Each voter votes for
UPP
APRA
UN
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one of the lists competing in his district and then can vote specically for one
of the candidates on the list (preferential vote). The UPP-PNP alliance won the
largest number of wards represented in Congress (45 seats), followed by APRA,
with 36 seats. It should be noted that although both political camps garnered
21 percent of the votes (2,213,623 and 2, 274,797, respectively) the national
distribution of their votes gave UPP a much higher number of wards.
Table 2 – Votes percentage and number of seats won by the
different political groups in the 2006 congressional elections
Political Party
Unión por
el Perú
Partido
Aprista
Unidad
Nacional
Alianza por
el Futuro
Frente de
Centro
Perú Posible
Restauración
Nacional
Others 1/ Total
Region
% votes
n° wardss
% votes
n° wardss
% votes
n° wardss
% votes
n° wardss
% votes
n° wardss
% votes
n° wardss
% votes
n° wardss
% votes
n° wardss
% votes
n° wardss
Amazonas
23 1 22 1 10 0 10 0 18 0 3 0 3 0 12 0 100 2
Ancash
21 2 26 2 13 1 7 0 4 0 3 0 4 0 21 0 100 5
Apurímac
34 2 17 0 9 0 3 0 5 0 1 0 4 0 27 0 100 2
Arequipa
35 3 14 1 14 1 10 0 4 0 2 0 0 0 22 0 100 5
Ayacucho
54 3 6 0 8 0 11 0 4 0 1 0 0 0 16 0 100 3
Cajamarca
20 2 18 1 12 1 17 1 7 0 2 0 2 0 20 0 100 5
Callao
14 1 26 2 22 1 12 0 5 0 5 0 5 0 9 0 100 4
Cusco
39 4 19 1 7 0 4 0 8 0 1 0 3 0 19 0 100 5
Huancavelica
46 2 11 0 8 0 17 0 6 0 3 0 0 0 10 0 100 2
Huánuco
36 2 13 1 8 0 6 0 7 0 2 0 9 0 20 0 100 3
Ica
22 1 25 2 22 1 6 0 5 0 4 0 3 0 13 0 100 4
Junín
29 2 18 1 13 1 15 1 6 0 2 0 0 0 16 0 100 5
La Libertad
10 1 45 5 11 1 7 0 2 0 2 0 4 0 19 0 100 7
Lambayeque
16 1 32 2 11 1 13 1 5 0 1 0 3 0 19 0 100 5
Lima
14 6 17 7 20 8 19 8 8 3 7 2 5 1 10 0 100 35
Loreto
22 1 15 1 10 0 2 0 17 1 1 0 14 0 19 0 100 3
Madre de Dios
20 0 12 0 15 0 3 0 4 0 14 0 21 1 12 0 100 1
Moquegua
30 1 22 1 14 0 3 0 14 0 2 0 2 0 13 0 100 2
Pasco
18 1 1 0 8 0 20 1 10 0 3 0 6 0 35 0 100 2
Piura
19 2 28 1 13 1 9 0 7 0 5 0 4 0 15 0 100 6
Puno
36 3 12 3 7 0 7 0 9 1 3 0 4 0 22 0 100 5
San Martín
29 1 21 1 13 0 17 1 7 0 1 0 6 0 6 0 100 3
Tacna
32 1 20 1 12 0 3 0 11 0 1 0 0 0 20 0 100 2
Tumbes
19 1 22 1 14 0 11 0 11 0 5 0 8 0 11 0 100 2
Ucayali
22 1 21 1 12 0 5 0 10 0 1 0 4 0 25 0 100 2
Total
21 45 21 36 15 17 13 13 7 5 4 2 4 2 15 0 100 120
1/ Less than 4 percent of valid votes
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Congressional elections results by region
UPP seats APRA seats UN seats
UPP-PN has congressmen in all regions, except for Madre de Dios;
APRA elected congressmen in 21 of the 25 regions, with a higher number of
votes in La Libertad, Piura and Ancash. Unidad Nacional, the third political
force in Congress, fared better on the coast and in Lima (highest number of
votes in Lima, Callao, and Ica). Although seven groups elected representatives,
it should be recalled that 24 lists were presented.
Regional and municipal elections were held only ve months after general
elections, in November 2006. Twenty-ve representatives were elected for 25
regional governments, 195 for provincial municipalities, and 1,830 for district
municipalities. Regional governments with elected authorities were created in
2002 in the course of the regionalization process. They were based on the
departments’ circumscription, which during Fujimori’s government functioned
under the authority of Regional Administration Transitional Councils (CTAR)
appointed by the Executive.
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Table 3 – Percentage of valid votes, posts won, and
candidates presented by political organization
at the regional and provincial elections
Political organizations
Regional Presidents (#25) Provincial Mayors (#195)
%
valid
votes
%
posts
won
%
candidates
presented
%
valid
votes
%
posts
won
%
candidates
presented
Partido Aprista Peruano 18% 8% (2) 100% (25) 14% 9% (18) 94% (184)
Partido Nacionalista 8% 0% (0) 100% (25) 6% 5% (10) 79% (155)
Unión por el Peru 6% 4% (1) 68% (17) 5% 9% (17) 72% (140)
Unidad Nacional 3% 0% (0) 36% (9) 17% 2% (4) 26% (51)
Restauración Nacional 3% 0% (0) 40% (10) 7% 4% (7) 35% (69)
Fuerza Democrática 3% 4% (1) 16% (4) 1% 2% (4) 15% (29)
Partido Movimiento
Humanista Peruano
3% 4% (1) 8% (2) 0% 0% (0) 4% (8)
Si Cumple 2% 0% (0) 64% (16) 3% 1% (1) 36% (71)
Acción Popular 2% 0% (0) 40% (10) 4% 5% (9) 51% (100)
Avanza País - Partido de
Integración Social
2% 4% (1) 16% (4) 1% 0% (0) 7% (14)
Perú Posible 2% 0% (0) 24% (6) 0% 1% (2) 12% (23)
Other Political Parties 1/ 6% 4% (1) — 12% 12% (23) —
Independents 2/ 43% 72% (18) — 30% 51% (100) —
Total 100% 100% (25) 100% 100% (195)
1/ Less than 2 percent of total valid votes at the regional elections.
2/ Eighty-one independent organizations presented candidates at the regional elections and 217
at the provincial elections.
The results corroborate the dispersive nature of the Peruvian party
system and point to regional scenarios disconnected from each other and with
little inner cohesion. In seven of the twenty-ve regions, candidates backed
by some national political party won, while the other twenty-eight remained
in the hands of ‘independent’ regional political organizations. This means that
on the political map, there is a predominance of independent leaders without
any formal political ties to other regional presidencies and that belong to
political organizations without national expression. As to APRA, although the
percentage of votes it won in the April presidential election did not signicantly
declined, it lost nine of the regional presidencies it had won in 2002, so that
its representation was reduced solely to the Piura and La Libertad regions,
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its traditional ‘electoral bastions.’ As to the other political groups, this time
Ollanta Humala’s Nationalist Party and Union for Peru went their separate
ways. They got 8 percent and 6 percent of the valid votes, respectively, while
at the rst presidential elections round Union for Peru obtained 30 percent
of votes and 21 percent of valid votes at the congressional elections. The
other national parties practically vanish at the regional and local level, where
independent leaders predominate.
What could be said about the great diversity of regional movements?
Here are some observations: only one of those elected in 2002 managed to be
reelected; many of the elected had already run at the 2002 elections; in some
regions, the winning movement also won the provincial mayor ofces, while in
others there was marked dissociation between the regional and the provincial
spheres; many regional presidents have political and administrative experience,
differently form those elected in 2002, which warrants some hope that they
will perform well. But some presidents with no signicant experience were
elected by narrow margins or with a low percentage of votes, which could
create governability problems in a fragmented regional context.
Table 4 – Percentage of valid votes and percentage
difference with the second position in regional elections
Region Regional Presidents elected
%
valid
votes
% difference
with the 2nd
position
Puno
Pablo Fuentes
(Avanza País - Partido de Integración Social)
18.8 0.4
Lima
Nelson Chui
(Concertación para el Desarrollo Regional Lima)
20.3 0.0
Piura César Trelles (APRA) 24.7 2.5
Ayacucho
Isaac Molina
(Frente Independente Innovación Regional)
25.2 6.2
Pasco Félix Serrano (Movimiento Nueva Izquierda) 25.5 5.2
Junín Vladimiro Huaroc (CONREDES) 25.8 8.1
Huancavelica Federico Salas (PICO) 26.6 1.2
Amazonas Oscar Altamirano (Fuerza Democrática) 26.8 6.1
Moquegua
Jaime Rodríguez
(Movimiento Independente Nuestro Ilo-Moquegua)
26.9 0.5
Huánuco Jorge Espinoza (Frente Amplio Regional) 27.0 9.1
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Region Regional Presidents elected
%
valid
votes
% difference
with the 2nd
position
Apurímac David Salazar (Frente Popular Llapanchik) 27.0 4.2
Ancash
Cesar Álvarez (Movimiento Independente Regional
Cuenta Conmigo)
28.3 10.8
Cajamarca Jesús Coronel (Fuerza Social) 29.2 11.8
Ica Rómulo Triveño (PRI) 32.1 10.1
Cusco Hugo Gonzales (Unión Por el Perú) 32.6 5.1
Tacna Hugo Ordoñez (Alianza por Tacna) 32.7 13.1
Tumbes
Wilmer Dios
(Movimiento Independente Regional Faena)
32.8 1.3
Madre de Dios
Santos Kaway
(Movimiento Independente Obras Siempre Obras)
33.5 18.1
Ucayali Jorge Portocarrero (Integrando Ucayali) 34.1 3.5
Arequipa Juan Guillén (Arequipa, tradición y futuro) 34.9 14.7
Lambayeque
Yehude Simon
(Partido Movimiento Humanista Peruano)
39.6 20.9
Loreto Yvan Vasquez (Fuerza Loretana) 42.0 17.1
San Martín César Villanueva (Nueva Amazonía) 44.5 21.8
La Libertad José Murgia (APRA) 48.0 34.1
Callao Alexander Kouri (Chimpun Callao) 49.6 16.3
In all the 2006 electoral processes, voter participation exceeded 85
percent: 88.71 percent in the general elections (presidential and congressional);
87.71 percent in the presidential runoff; and 87.41 in the regional and municipal
elections. In previous years, voter participation was slightly higher – 84 percent
3
in the 2002 regional elections, for example. It should be noted that in Peru
voting is compulsory up to the age of seventy; failure to vote is subject to a
ne. The voters’ registry consists of the population aged 18-70 enrolled in the
Peruvian civil registry (RENIEC). Since 2005, members of the Armed Forces
and the National Police are also eligible to vote.
3 12,800,000 out of 15,298,237 eligible voters, according to the National Electoral Ofce-ONPE’s 2002
voters’ registry.
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Table 5 – Voter participation in the 2006 elections
2006 elections
Presidential elections
1st round
(April 9)
Congressional
elections
(April 9)
Presidential
elections
Runoff
(June 4)
Regional and
municipal elections
(November 19)
Total votes cast 14,632,003 14,625,000 14,468,278 14,505,647
% voter
participation
(1/and 2/)
88.71 88.66 87.71 87.41
1/ Eligible voters participating in the presidential and congressional elections: 16,494,906
2/ Eligible voters participating in the regional and municipal elections: 16,594,824
As to the representation of groups at a disadvantage, the number of
congresswomen is now 35, while in 2001 only 22 women got elected. In the
Executive, there are six women among the 16 ministers appointed by the
new APRA government.
4
This situation is not replicated in the case of the
new regional and local authorities. No woman was elected regional president
and only four provincial mayors are women (2 percent), while 46 women
were elected district mayors (3 percent).
5
Women’s participation in politics
is now ensured by a gender quota regulation in force at the last elections,
which requires that 30 percent of the list of congressional, regional, and local
candidates must consist of women.
6
The regulation does not specify what
position women should occupy on the list.
4. The Executive
The Executive has sixteen ministries, whose Councils are appointed and
dismissed by the President of the Republic, according to the Constitution.
The President can also appoint the other ministers on a proposal and with
the approval of the Council President.
7
Alan García Pérez took ofce July 28,
2006 and appointed Jorge del Castillo, an APRA member of his condence,
as President of the Council of Ministers. The cabinet has a pluralist makeup:
4 Pilar Mazzeti, Minister of the Interior, has been since dismissed and replaced by Luis Alva Castro.
5 Transparencia, electoral data no. 27.
6 Resolutions 1230-2006-JNE; 1247-2006-JNE; and 1234-2006-JNE.
7 1993 Peruvian Constitution.
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there APRA members and independents of various orientations, who in their
ensemble project a professional image.
Table 6 – Cabinet at the beginning of
Alan García Pérez government (July 28, 2006)
Ministry Name Party Birth date Profession
President of the
Council of Ministers
Jorge del Castillo APRA 2 July 1950 Lawyer
Agriculture Juan José Salazar APRA — Agronomist
Foreign Trade and
Tourism
Mercedes Aráoz Independent 5 August 1971 Economics
Defense Alan Wagner Tizón Independent 7 February 1942 International Relations
Economy and Finance Luis Carranza Independent 21 December 966 Economics
Elucidation José Antonio Chang Independent 19 May 1958 Industrial Engineer
Energy and Mines Juan Valdivia APRA 6 February 1948 Architect
Interior Pilar Mazzetti Soler Independent 9 September 1946 Medical Surgeon
Justice María Zavala Independent 15 January 1956 Lawyer
Women’s and Social
Development
Virginia Borra Toledo APRA — Economics
Production Rafael Rey Rey
Renovación
Nacional
26 February 1954 Industrial Engineer
Foreign Affairs José A. García Belaúnde Independent 16 March 1948 Diplomat
Health Carlos Vallejos APRA — Medical Surgeon
Labor Susana Pinilla Independent 31 May 1954 Anthropology
Transport and
Communications
Verónica Zavala Independent 1968 Administration and Law
Housing and
Construction
Hernán Garrido Lecca APRA 1960 Economics
In addition to the President of the Republic and the President of the Council
of Ministers, the Legislative may also dismiss ministers. The Constitution provides
that “any motion of censorship against the Council of Ministers or any minister
must be endorsed by no less than 25 percent of the legal number of Congress
members. Their approval requires the vote of more than half the legal number of
Congress members. A censored Council of Ministers or Minister shall resign.”
8
This is indicative of the weight the Legislative has vis-à-vis the Executive.
8 1993 Peruvian Constitution, Art. 132.
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As to the functioning of the Council of Ministers presided by Jorge del
Castillo and its relations with the President’s Ofce, we notice that President
Alan García’s style emphasizes the President’s leading role, while the Council
of Ministers plays a subordinate role. In his rst months in ofce, García
showed himself to be ‘above’ the Council of Ministers’s mistakes and inner
conicts, and set himself up as a conciliator. So far, this seems to be working,
as indicated by the high rates of approval of his administration, above that of
his ministers, and by the fact that some scandals that attained the legitimacy
of some of his Ministers have not touched him.
5. The Legislative
The 2006-2011 legislature begins with a Congress in which the UPP
holds the largest number of seats (45) but does not have a majority. Some
of the elected Congress members were working with UPP, while others were
working with Ollanta Humala’s PNP. The alliance between these two forces in
Congress soon broke, though, and the UPP suffered additional desertions.
9
The
President’s party won only 36 seats, or 30 percent of the total. A comparison
with the 2001-1006 Congress shows the current one as less fragmented. In
addition, the 2001-2006 Congress was plagued by serious internal discipline
problems: for example, Perú Posible (PP) suffered from many desertions,
to the point that in the last year of the Toledo administration its number of
seats had dropped from 47 to 34. Likewise, Unidad Nacional had trouble in
maintaining unity in 2001-2006 and lost six of its original 17 congressmen.
Congresssional makeup 2001 Congressional makeup 2006
9 There were three desertions: Gustavo Dacio Espinoza, Rocío de María Gonzales, and Carlos Alberto
Torres Caro.
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The most inuential political parties in Congress in the last two
legislatures have been UPP, APRA, UN, and PP. UPP, founded in 1994 by
former United Nations Secretary-General Javier Pérez de Cuéllar, participated
in the 1995 elections against Fujimore. Soon after, Pérez de Cuéllar left the
party and joined the Nationalist Party to support Ollanta Humala’s candidacy.
He forms part of the center-left political tendency. APRA is Peru’s oldest
party. It was founded in 1924 by Víctor Raúl Haya de la Torre, who never
became President of Peru. The rst APRA government was headed by
García (1985-1990), when his administration could be classied as center-
right. Perú Posible was founded in 1999 and its candidate Aejandro Toledo
ran against Fujimore at the questionable 2000 elections. Toledo was elected
President in 2001 when he competed with Alan García at the runoff. PP
could be considered a center party.
Congress is structured into 25 ordinary commissions (in addition to ad
hoc investigation, special, and ethics commissions). These commissions debate
bills submitted to Congress. After a favorable report by the Commissions, bills
are discussed at a plenary session, where their approval requires a majority.
The 2001-2006 Congress approved 4,116 laws; so far, the 2006-2011 Congress
has approved 117, which seems to indicate that efciency in passing laws has
increased in comparison with previous legislatures.
As to the current Government, although APRA does not have a majority in
Congress, it has nevertheless succeeded in achieving a majority by associating with
UPP, UN or AF, depending on the issues under discussion. The general perception
is that there is currently no signicant opposition to the Government.
6. Relations between the Executive and the different levels
of government
A combination of a relatively favorable economic situation, scal bonanza,
and a weak opposition has allowed García to exercise his political leadership
comfortably so far. Some worrisome signs include the persistent gap between
the nation’s capital, where García’s popularity is on the rise, and the rest of the
country, where it holds or declines; the continuously high poverty and exclusion
levels, while no major reform initiatives are visible as yet; lastly, certain social
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unease in some sectors of the country, as, despite economic growth and increased
budgetary resources, the families’ situation is not changing, which could lead
to protests. In a context of weak parties, such manifestations tend to proceed
through ways that are neither structured nor institutional and that are quite prone
to resorting to violence. For now, the García government is not concerned over
Congress or the regional governments and provincial mayors, even though it
does not have a majority at those levels. The main conicts that are currently
posing difculties to his government are the inner ghts in his party, which the
President administers so as to come out always as the decisive power.
7. General assessment of the functioning and quality of
democracy
Democracy in Peru seems to be at a crossroads, as graphically illustrated
by the results of the last presidential elections. On one side, a more integrated,
modern, basically Limean and coastal country, that looks expectantly to the
current economic growth cycle and prefers gradual corrections to the political
and economic model followed in the country in recent years; on the other side,
a country marked by poverty and inequality, located basically on the sierra and in
the rainforest, which sees that the benets of growth do not reach it, mistrusts
institutions and the political and social elites, and thinks that a radical change and
a refounding of institutions is what the country needs to move forward. These
two visions displayed parallel forces at the April and June presidential election
rounds. In the end, the former vision prevailed, thereby distancing Peru from
the course that Venezuela, Bolivia, and Ecuador seem to be following, and rather
approaching the path followed by Colombia today, for instance. On the fate of
the García government depends Peru’s consolidation of this course or its fall into
polarization and instability as in other examples, including of its own history.
Bibliography
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político en América Latina?” In Democracia, descentralización y reforma scal
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Balbi, Carmen Rosa. “Las elecciones de Perú del 2006 en el Perú y el
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IEP, 2006.
Meléndez, Carlos. “Perú: Partidos y outsiders. El proceso electoral peruano del
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DEP
Translation: João Coelho
Di p l o m a c y , St r a t e g y & po l i t i c S – oc t o b e r /De c e m b e r 2007
181
The Suriname
Republic and regional
integration
Robby D. Ramlakhan
*
General information
S
uriname is located in the north of South America bordering French
Guyana in the east, Brazil in the south, Guyana in the west, and the Atlantic
Ocean in the north. It is the smallest South American country in surface area
and population. 80% of its 163,820 km² are covered by tropical rainforest.
At the end of 2006, the country’s population was 498,000. 220,000 people
live in the capital city, Paramaribo. The ofcial language is Dutch, however,
Sranan tongo, a local dialect, is also used, along with Hindustani, Javanese,
and English. Due to a strong presence of Brazilians and Chinese, Portuguese
and Chinese are also spoken in the country. The country has a parliamentary
democracy, meaning that the people elect the members of parliament for the
National Assembly and they, in turn, elect the President and Vice-President.
The President is the Head of State and Government.
* Ambassador. Ministry of Foreign Relations, Suriname Republic.
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The name Suriname comes from an indigenous tribe, the Surinen, and
Paramaribo is a variation of Parmurbo, an indigenous village formerly located in
the current capital city. The country was discovered by the Spanish in the 16
th
century and since the 17
th
century many attempts were made by the Dutch and
English to colonize the country. With the Treaty of Breda, in 1667, Suriname
was denitively handed over to Holland. At that time, Suriname belonged
to England who made a trade with Holland for New Amsterdam, currently
New York. Slaves were brought in from Africa to work on sugar and cotton
plantations but were very mistreated by farmers. Many ed to the forest and
began attacking the plantations. These fugitives were called Marrons and their
actions contributed to the abolition of slavery in Suriname in 1863.
To replace the eld workers, the Dutch brought in workers from China
and later hired workers from India and Java.
This explains the diversity in the composition of Suriname’s population:
37% of Indian origin,
31% of African origin,
15% of Javanese origin,
10% marron,
2% indigenous,
2% Chinese, and
3% European and others.
These gures must be adjusted because it is estimated that in the last years
somewhere between 30,000 and 40,000 Brazilians moved to Suriname to live
and work, especially in the clandestine mines. Also, many Chinese migrated
to Suriname and are mainly working in trade.
The Surinamese are:
27% Hindu,
25% Protestant,
23% Catholic,
20% Mohammedan, and
5% traditional and others.
The most important aspect derived from this mixture is mutual
acceptance. Suriname is described as a small United Nations because of its
diversied unity.
Robby D. Ramlakhan
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Politics
Suriname gained partial autonomy in 1954 and its independence was
declared on November 25, 1975. The country underwent a military coup
d’état in 1980 and democracy was restored in 1987 through general elections.
A new coup occurred in 1990, and once again democracy was restored in
1991. Suriname’s last elections were in 2005 and the next will be in 2010.
The current government is composed of a coalition of 8 political parties.
In the 2005 elections, a coalition of 4 traditional parties had a decrease in
its participation from 33 to 23 seats in Parliament out of 51. A new, mainly
marron based party received 5 seats and the old coalition signed a cooperation
agreement with this party.
Soon after, another member of parliament joined the coalition and the
government then had 29 seats in Parliament. Consequently, the largest political
party, with 15 seats, became an opposing party. The main representative of
this party lead the two military coup d’états.
It is worth mentioning that this military ofcer was convicted by the
Dutch legal system for illegal drug trafcking and is wanted by Interpol.
Economy
Suriname is going through a growth period with improvements in its
economic principals. In the October 2006 Eclac Annual Report, Suriname is
referred to as a country with continued growth. The real GDP grew 8% in 2004
due to new investments in mining. In 2005 the GDP was US$ 1.4 billion, a 5%
increase compared to the previous year. That same year ination rates went
up to 17% because of the increase in the price of oil. The annual economic
growth in the last 5 years was 4.2%. The per capita income was US$ 4,300 in
2004. The 2005 trade balance had a US$ 42 million decit whereas in 2006 it
had a US$ 96 million positive balance. This result came as a consequence of
an improvement in the price of our commodities such as oil, aluminum and
gold, and a signicant increase in tourism.
Suriname has great potential. Amongst its products for trade are: gold,
bauxite, wood, rice, banana, oil, and sh. Eco-tourism and agriculture also
offer great opportunities leading the World Bank to conclude that Suriname
The Suriname Republic and regional integration
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is one of the wealthiest countries in terms of its natural resources. Currently,
the country is very dependant on mining: from 70% to 80% of Suriname’s
exports come from ore. The 2005 oil production reached 4.4 million
barrels, a 5% increase compared to 2004. Alumina exports reached US$
450 million in 2005 and increased to US$ 643 million in 2006. In 2005, the
ofcial gold production was 2,500kg and it increased to 16,000 kg in 2006,
although accurate data is hard to obtain due to a large number of clandestine
miners that illegally remove gold from the country. The agricultural sector
contributed with 5% of the GDP and 7.5% of the exports (sh, rice,
and banana).
Tourism has become a priority sector due to the contribution it gives
to economic diversication. The amount of tourists increased from 100,000
in 2000 to 138,000 in 2004 with an 8% average increase per year. 160,000
tourists visited the country in 2006 and lately Suriname has become a stop
for eco-tourism cruise ships.
According to this data, with all its potential and small population,
Suriname has all the necessary conditions to become a rich country. But why
is there no sustainable development in Suriname?
One explanation is that there is a very unequal distribution of income.
A small part of the population has a large part of the wealth. However, a
more balanced redistribution of wealth requires political will, which is not
always easy.
Another explanation is that the State does not benet much from its
national resources because foreign companies dominate the important sectors
such as bauxite and gold due to unfavorable agreements signed in the past
during inexperienced negotiations with transnational companies.
International market price uctuation of our commodities also affects
the country’s trade balance. The fact that Suriname had a positive trade balance
last year is a consequence of better prices in gold and alumina, and not greater
production.
World trade liberalization consequent of globalization and the elimination
of traditional preferences such as tax preference agreements with the European
Union have also pressured our competitiveness. All of this means that the
world is changing, and apparently, not in favor of smaller countries.
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A world under transformation
Contemporary events restate the existence of a new global order.
Some characteristics of this new order are:
• The new political and economic context consequence of the
globalization process;
• Neoliberal practices imposed on international economic relations;
• The creation of regional blocks;
• The elimination of preferences present in traditional preferential
agreements;
• The growing importance of telecommunications at a global level;
• The effects of the September 11, 2001 attacks leading to greater
attention given to security and terrorism combat in the agendas of
developed countries;
• The weakening of multilateralism and the manifestation of
unilateralism, and
• The appearance of emerging countries such as Brazil, Russia, India,
and China.
I began mentioning that the world is changing and mentioned some
characteristics of this change. An example of this change can be found in
current global trade. The commodities share in global trade decreased from
23% in 1985 to 12% in 2000. Manufactured goods produced with natural
resources dropped from 20% to 16% in the same period. However, the basic
and intermediary technology products share increased from 43% to 46%, and
high technology products increased from 12% to 23%. This means that over
two thirds of global exports are made of technology products and the high-
tech product share is growing rapidly. Commodities and semi-manufactured
exports are still the most important income source for our countries but we
cannot produce commodities forever. We must reach a higher technology level
to continue participating in foreign trade.
Another example of this change is the growth in services in the global
economy going from US$ 400 billion in 1980 to US$ 1.6 trillion in 2002.
Sectors such as tourism, information and communication technologies,
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and outsourcing are taking more room in the global economy. Therefore,
a change in the composition of global economy trade is occurring going
from commodities and products based on natural resources to technological
products and services. What we must do is transform our commodities based
economy into an economy with technological products. We must also develop
specialized services. It is extremely important that our countries take these
trends into consideration and try to create an opportunity to ensure our
national interests.
But how much opportunity do we have as developing countries? The
WTO must ensure the compliance of norms and regulations destined towards
global trade liberalization. Every country, be it large or small, strong or weak,
rich or poor, must follow these regulations to participate in foreign trade.
A more detailed study demonstrates that the wealthiest countries are fully
interested in the rigorous compliance of the WTO regulations. From the point
of view of developing countries, advantages will be greater for the bigger
and more industrialized countries such as Brazil, India, China, South Korea,
South Africa, etc. that have greater access to foreign markets thanks to a larger
productive base. Smaller countries do not have the necessary conditions and
are greatly dependent on preferences that are being eliminated.
Smaller countries also have underdeveloped industries that will not
survive global competition. Simultaneously, tax collection on exports will
decrease due to foreign trade liberalization. Requests made by these countries
for special and different treatment go by unheard. Another important fact
is that a large part of these countries rely on agricultural product exports
to rich countries as their most important source of income. Therefore, the
liberalization of the agricultural sector could open opportunities for these
small countries. However, this is precisely the sector for which rich countries
deny opening their internal markets.
Suriname’s foreign policy
The following are the guiding principles of Suriname’s foreign policy:
• Respect the dignity of Suriname and the Surinamese;
• Maintain relations with other countries based on mutual respect and
benet, trust, and sovereignty;
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• The maintenance, promotion, and expansion of national, regional,
and international security;
• The promotion of cooperation aimed at sustainable growth and
development;
• Respect the principles of democracy and the rule of law;
• Respect of human rights, and
• Environmental protection.
The main objectives of foreign policy are:
• Sustainable economic development where trade based on honest
competition is seen as an important instrument;
• Participation in integration processes relevant to Suriname;
• Cooperation relations with partner countries and multilateral
organisms, and
• Regulation of migratory trafc and defense of the interests of
Surinamese citizens abroad.
“Trade diplomacy”, that is, diplomacy guided towards development, is
an important instrument for foreign policy. This means that the Surinamese
diplomatic representations and Honorary Consuls abroad disseminate what
Suriname has to offer, contributing to socio-economic development. The
Surinamese contribution in the Diaspora is also important within this context.
With regards to the bordering countries, foreign policy is based on the
principles of good neighborhood relations, cooperation, and peaceful dispute
settlement. The following are considered bordering countries: Brazil, Guyana,
French Guyana, and Venezuela. The relations with these countries will be
intensied and cooperation will be based on the specic needs in the elds of
trade and investments, education, health, agriculture, justice, defense, culture,
and technical assistance.
Importance is given to the relation with Brazil due to:
• its geographic location as a bordering country;
• the substantial presence of Brazilian citizens in Suriname;
• Brazil’s political, commercial/economic, military, technological, and
cultural leadership;
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• the bilateral cooperation potential, not only in technical aspects, but
also in combating international crime;
• the cooperation within the context of the South American Community
of Nations (CASA), Amazon Cooperation Treaty Organization
(ACTO), and the Initiative for the Integration of Regional Infrastructure
in South America (Iirsa), and
• Brazil’s support in gaining access to the Mercosur market (the North),
as was the case with the rice agreement signed in 2005 when Suriname
had the opportunity of exporting rice to the north of Brazil.
The importance of the cooperation with Guyana must be put into the
following context:
• its geographic location as a bordering country;
• its similar/identical situation in various sectors such as production,
trade, exports, and infrastructure;
• intense migratory ows consequent of better access to territory in
both countries;
• cooperation within Caricom, CASA, ACTO and Iirsa, and
• the existence of a border dispute in the northern and southern
borders.
With regards to the northern border dispute, it is important to mention
that in 2004 Guyana led a lawsuit against Suriname. The arbitration within
the context of the “United Nations Convention on the Law of the Sea”
to determine the maritime border between both countries is about to be
concluded and a decision will be made in June (with respect to the northern
border). As to the southern border dispute, both countries seek to settle this
matter through dialogue.
Suriname also aims at improving its relations with French Guyana, which
belongs to France. This is due to:
• its geographic location as a bordering country;
• migratory ows;
• the presence of many Surinamese citizens in French Guyana;
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• the fact that French Guyana is part of Europe;
• the cooperation with France within the context of the EU-ACP;
• France’s interest in contributing to the development of the border
area, and
• the possibility of having through the French Guyana a land connection
with the rest of the continent.
The relation with Venezuela is also important due to:
• the geographic location of this country;
• the already existing cooperation within the CASA, ACTO and Iirsa, and
• existent cooperation in shery and oil.
Priority is also given to the integration of Suriname in the region in the
implementation of its foreign policy.
As a frail economy, Suriname must continuously maintain itself up to
speed with international developments in order to protect its interests. As to
the integration process occurring globally, Suriname is seeking to participate
in regional economic and political blocks.
Suriname’s participation in Caricom since 1995 and in the South
American Community of Nations since 2004 must be understood within
this context. Attention will continue to be guided towards integration in the
Caribbean region, especially due to the establishment of the Caribbean Single
Market and Economy, when formulating the implementation of foreign policy.
Suriname is an active participant in the ACTO and Iirsa as well as the South
American Community of Nations – CASA. A possible participation in the
Aladi – Association for Latin American Integration will be analyzed since it
will be used to access the free trade zone of the CASA. Within this context,
Suriname’s commitments with Caricom will also be considered. Suriname’s
integration policy will not limit itself to nancial and economic aspects since
physical infrastructure, energy, and telecommunications integrations will be an
integral part of this policy. Suriname is placed in a strategic position since both
Guyana and French Guyana are accessible through the East-West connection.
A permanent connection by building a bridge over the Marowijne and Corantijn
rivers and a connection by land to Brazil are also objectives to be carried out.
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Since Suriname is a small economy, it must closely and continuously follow-
up the international developments so as to defend and ensure its national
interests. Global trends such as the development of blocks, international trade
liberalization, terrorism combat, the threat to the environment, etc. and their
consequences are so broad and drastic that constant monitoring and adaptation
are required. Reality forces us to acknowledge that based on individuality,
Suriname will not be able to face these challenges and that the best response is
to intensify bilateral and multilateral relations and the participation in regional
and extra-regional blocks and agreements.
With the signed declaration by the Heads of State of the Caribbean
Community to establish the Caricom Single Market (CSM) during its formal
launching on January 30, 2006, the process for the Caricom Single Economy
in 2008 was initiated. Suriname’s participation in Caricom since 1995, ACTO,
Iirsa, and CASA must also be inserted in this context. The intensication of
relations with French Guyana, that is, with France, is also included in this
integration strategy. This way, Suriname’s position in the center of trade routes
between the Caribbean, South America, and Europe through French Guyana
will be optimized.
With its active participation in Caricom, CASA, and Iirsa, Suriname tries
to function as a bridge between the Caribbean, South America, and Europe.
Another strategy is to identify strategic partners and sectors. National
development objectives are a starting point to identify strategic sectors that
in the short term can contribute to improve the life conditions of citizens.
During this phase, the following sectors are identied: oil, gold, services,
shery, agriculture, bauxite and byproducts, information and communication
technologies, tourism, and wood. Our foreign relations aim at maintaining
close cooperation relations with external partners such as the United States,
Europe, Brazil, Japan, Canada, Caricom, India, China, etc., all partners who
can contribute to reach our development.
Examples:
Data from the US Geological Survey from the United States Geology
Department show that Suriname has a gas reserve of 15 billion barrels, the third
largest in the regions after Campos Basin and Maracaibo Lake in Venezuela.
Three companies from Spain, Denmark, and the United States have executed
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exploring activities in Suriname’s off-shore area and are currently preparing
for production. Canada has great experience in gold and for that reason a
Canadian company was licensed to explore gold in Suriname. I can also say
that recently the Vale do Rio Doce Company also demonstrated interest in
Suriname’s mining sector.
In shery we have a tradition of cooperation with Japan and taking
into consideration our positive experience, this bilateral cooperation will be
expanded and intensied.
It is clear that the climate and geographic similarities make Brazil
Suriname’s best partner to develop the agricultural sector. Brazil has great
experience in agricultural research and is a global leader in some sectors,
such as coffee and ethanol. Embrapa is known throughout the world and has
signed a cooperation agreement with Suriname’s Ministry of Agriculture to
share Brazil’s experiences.
India has a good reputation with regards to information and
communication technologies. Suriname is very glad to have a historical and
intense relation with this country. Following the examples of Jamaica and
Barbados, with economies that take more and more advantage of outsourcing
and data processing, Suriname can choose to have India as a partner to develop
this sector.
I intend to demonstrate with these examples that Suriname conscientiously
promotes closer cooperation with partner countries that can contribute to our
economic development, in other words, diplomacy for development. We are
not saying that the relations with other countries do not contribute to our
development, but we have reached the conclusion that equal cooperation
agreements with many countries do not lead to the desired development.
Therefore, for greater efcacy and efciency, sectoral cooperation agreements
will be concluded after assessing strong and weak points.
Along with identifying strategic partners, Suriname must also identify
strategic products that can become catalysts for economic development.
Alumina is still the most important export product. For a long time, bauxite
drove the economy, however, its production and export is in the hands
of transnational companies. Suriname is unable to inuence volumes and
production and export prices and for that reason this sector cannot be a catalyst.
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Rice and banana exports were never able to bring long-lasting economic
development, and currently, these sectors face grave problems due to the
elimination of preferences granted by the European Union.
However, there are other products to drive Suriname’s economy forward.
As was already mentioned, Suriname has great oil reserves and the high
prices in the international market might transform this sector into a catalyst
of economic development. The biggest problem is that Suriname has a very
small production (13,000 barrels a day). An increase in production in the short
term with foreign technology and capital is an urgent necessity.
Suriname also has large amounts of gold. Exports totaled over 15 tons
last year, but no one knows how much gold was smuggled by thousands
of clandestine miners. The price of gold has increased substantially, but
the State is not taking advantage of this due to an unfavorable agreement
with a transnational company. We are currently assessing our options to
increase our protability through a renegotiation of the agreement and
combating smuggling.
Two other products that in medium term offer good perspectives to
Suriname are ethanol and soybean. Ethanol is seen as the energy source of the
future and soybean as white gold. Brazil has great experience and know-how
in both and has already declared itself willing to share this experience with
other countries in the region. Suriname was formerly a plantation colony and
these old plantations maintain good infrastructure. With little effort, they can
be transformed to plant sugar cane and soybean.
I have already mentioned that the Surinamese territory is covered by
tropical rainforest. Much is said nowadays of carbon credit as a source of
income for countries with a lot of forest coverage. This is a new modality
to preserve the forests and simultaneously make money out of it, say the
protagonists. However, critics say that the proposal is a setup so that developed
countries might continue polluting. Whichever the case, the proposal is worth
studying. In Suriname, debates on this matter are just beginning.
In the beginning of this presentation I mentioned that services were just
now taking a more important position in global economy. Suriname is aware
that its current production structures are unable to compete internationally.
Thus, it is necessary to direct attention towards the rendering of international
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services. I have already mentioned the growing contribution tourism is
making to the Surinamese economy, yet services are not limited to tourism.
Outsourcing, data processing, offshore banking (with adequate monitoring) and
services in the elds of security and telecommunications can also contribute
to economic development.
In my point of view, these sectors and products offer good opportunities
for economic growth in the short and medium terms. Suriname is still very
dependent on commodities exports. Due to competition, low international
market prices, and huge subsidies in rich countries, our export revenue has
decreased considerably. Unfortunately, we are in no position to demand change.
For this reason, collaboration with other countries and the diversication of
our production and export infrastructure are important elements for Suriname
to have a successful participation in global trade.
Integration in South America
Everything that can be said for Suriname can also be said for most South
American countries. We know South America has amongst others, a wealth
in natural resources, a large internal market, and a relatively well instructed
population, but we also have great differences amongst ourselves in terms of
economic development, not very competitive economic structures, and great
income inequalities.
Right now, our greatest challenge is to integrate our continent to
the global economy taking these factors into account. We know that in
South America, participating of the globalization process is a necessity.
We are trying to adapt ourselves in the best way possible to contemporary
circumstances through continental integration. Initiatives such as Mercosur,
CAN, CASA, ACTO, and Iirsa, aim to harmonize and intensify political,
economic, and technical cooperation between our countries to ensure our
effective participation in global trade. The continent has two integration
systems, Mercosur and CAN, and our leaders have committed themselves
to integrating them to facilitate the development of a South American
economic space. Mercosur is composed by ve members who, together, are
responsible for 75% of the South American GDP. CAN was greatly weakened
by Venezuela’s withdrawal since economically it was the most important
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member of the block. On the one hand, Venezuela weakened CAN by
withdrawing, on the other, its entrance in Mercosur is extremely important
because of its geographic connection between the Amazon region and the
Caribbean and due to its large gas and oil reserves. Uruguay recently signed
a bilateral trade agreement with the United States. This fact will certainly
not cause instability or take down Mercosur.
As part of the South American continent, it is important for Suriname
to follow these events closely. We are not yet members of CAN or Mercosur.
CAN is exclusively for Andean Community countries, to which Suriname does
not belong, yet for other reasons, for example, within Iirsa, we are discussing
our participation at the CAF. As for Mercosur, it is not that we do not want to
be a part of it, but to do so would require further studies. A condition for this
is Suriname’s participation in Aladi, which is still not the case. On the other
hand, Suriname is a full member of Caricom, where we also have obligations.
Therefore, we must consider if our participation in Aladi will be compatible
with our obligations at Caricom.
Mercosur and Caricom are negotiating a closer cooperation and we do
not want to waste time, energy, and money seeking out a bilateral understanding
with Mercosur. We will wait and see how these negotiations move along.
Meanwhile, Aladi is very important to us. Without it we will be unable to
participate in the economic integration process for the continent. We are
working alongside the Aladi General Secretariat to prepare and facilitate
Suriname’s participation in this organization.
Our policy is guided towards maintaining our Caricom membership while
simultaneously participating in the South American union. This strategy ts
perfectly into our policy of connecting South America and the Caribbean.
Other events in the region call Suriname’s attention. I am referring to
the extra-regional relations such as ASPA (South America – Arab Countries),
Afras (Africa – South America) and, soon, the Focalal (the Forum for East
Asia and Latin America). Suriname is a member of CASA and therefore fully
supports these initiatives based on the assumption that a small country has
better bargaining opportunities and can gain more through a joint effort.
Reality, however, forces us to closely examine our own interests. Within the
CASA framework, Suriname does not speak loudly. It is the smallest member
and it is expected that the larger members will have their own interests in mind
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rst. At rst glance, Suriname’s advantages in these initiatives are slim. On the
other hand, Suriname already has intense cooperation with Arab countries
because it is a member of the Organization of the Islamic Conference (OIC).
As a result of this cooperation projects in the elds of education and health,
for example, are already in execution phase. Historically, Suriname has had
strong relations with Africa and the intensication of these bilateral relations
is important for our foreign policy. The situation is not much different with
Focalal. Bilateral relations with some Asian countries, especially the so-called
“countries of origin”, from where many of our ancestors came, are very
good and have greatly contributed to our own development. We will certainly
not risk a sure bilateral cooperation for a regional cooperation lled with
uncertainties for us. Just to clarify, we support the initiatives destined towards
bi-regional cooperation, yet the continuation of bilateral cooperation for
our own development receives greater attention in our foreign policy. Of
course, we want, and are ready to contribute to the integration of the South
American continent; however, we still have a long path ahead of us.
As we move forward we will face many difculties. Integration, however,
is a historic process and cannot be judged by events in a random moment. The
European unication process did not move forward without problems and to
date not all countries have accepted the Euro as a single currency. The South
American unication process will also take a long time because the region is
dealing with diverse interests, in some cases, even conicting.
The current problems are part of a learning process for the continental
integration. Along with the South American political and economic integration,
is the problem of the economic asymmetries, which must also be dealt with.
Special measures must be taken in order to give support to the economically
weaker countries, as happened in the European Union. The long term
development strategy must be the driving force of the economic integration
instead of short term advantages for interest groups. We must not forget
that the union is a “conditio sine qua non” for South America to ensure our
rights. Negotiations carried out with weak and fragmented positions never
lead to good results. During the FTAA negotiations, Mercosur demonstrated
that it is an excellent vehicle to defend the South American interests, leading
to the recommendation that cooperation within Mercosur be greater and
possibly broadened.
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Conclusions
Globalization did not bring the results promised by the neoliberal
protagonists. It seems that the rules for contemporary international trade
only serve to defend the interests of the oligarchy. Only the large developing
countries will be able to adapt to the new rules and enjoy the advantages
of liberalization. Small developing countries are unable to respond to the
challenges of globalization on their own. Their production and export
structures are not competitive and their private sectors cannot drive forward
their economic development. Therefore, the State will have to continue
fullling an important role in the economic life of these countries. Our South
American political leaders are aware of the fact that integration and intense
cooperation are the best response to the globalization challenges. However, the
continent is very fragmented and for continental integration to be successful
we must rst reduce economic asymmetries between the countries. We must
also aim at a better income distribution, an improvement in production and
export infrastructure, etc.
Suriname is trying to protect itself in the best way possible against the
negative impacts of the international changes. Regional integration and the
identication of cooperation sectors and partners offer new possibilities. It
is a great challenge, but Suriname has enough potential to ensure prosperity
and well-being to each citizen.
It is just a matter of making the right choices.
DEP
Translation: Cynthia Garcia
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Uruguay: a brief
overview of its
economy and politics
Alberto Couriel*
A. Uruguay, a different country
U
ruguay is positioned as a sort of buffer State between Argentina and
Brazil. It has an area of 178,000 sq km (about 68,000 sq mi) and a population
of 3.3 million. Average per capita income measured by purchasing power parity
is US$12,300, as compared with US$17,000 in Argentina, US$13,800 in Chile,
US$9,500 in Brazil, and US$7,400 in Venezuela. Life expectancy at birth is 76
years. Uruguay’s history has been different from that of other Latin American
countries because of its political and social stability, deep-rooted democracy,
quality of life, and social integration.
This differentiation began in the rst third of the 20
th
century, when
Uruguay’s economic growth was fueled by animal product exports produced
by national livestock farmers countrywide, some of whom produced primary
products with some degree of industrialization that imparted dynamism to
the port city.
* Senator of the Oriental Republic of Uruguay
acouriel@parlamento.gub.uy
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A highly urbanized country, Uruguay had become a welfare state prior
to the Nordic experience, offering pioneering free education, health care, and
social security systems in the region. Another sign of the Uruguayan model’s
originality was the establishment of public enterprises in the areas of nance,
energy, fuels, and railways. These economic and institutional components allowed
a high degree of social integration with low illiteracy and mortality rates.
Moreover, Uruguay has been a country free of ethnic conicts since the
extermination of indigenous populations in the rst half of the 19
th
century.
The rst half of the 20
th
century was marked by large waves of European
immigrants, who brought with them their knowledge, values, and culture
and became fully integrated into Uruguayan society, a further proof of the
country’s deep-rooted attachment to democracy and to respect and tolerance
toward other values, cultures, and religions.
The nature of its exports, quite different from those of other countries
of the region, and the creativity of its welfare State made possible a fair income
distribution that is still maintained, as witness its 0.44 GINI index, one of the
lowest in Latin America.
Throughout its history, Uruguay has been an open, receptive country
– open to immigrants, including those from Argentina, Brazil, Paraguay, and
Bolívia seeking political exile; and open to nancial planning, as it has for long
endeavored to maintain a nancial environment that has been characterized
since 1974 by unrestricted freedom of capital movements. It is a country free
of border conicts, enjoying a reasonable degree of public security and a
democratic culture. As Carlos Real de Azúa has said, it is “a neighborhoods
country,” where everybody knows everybody else, everything is close by, and
personal relations among the different social segments are distinguished by
a high degree of equality. In comparison with other countries of the region,
it enjoys an elevated cultural level greatly inuenced by Europe, to the point
that the secondary education curriculum is the same as France’s.
It is a stable country, where changes are gradual and where the degree of
social integration has facilitated both implicit and explicit social pacts and a culture
of political agreements, characteristic of its history of bipartisan coexistence.
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B. Brief economic overview
Uruguay experienced signicant outward growth fueled by the dynamism
of its export sector until the 1929 crisis. Similarly to other countries of the
region that had set out on the path of industrialization, it continued to grow by
emphasizing its manufacturing industry during World War II. Taking advantage
of the higher prices owing to the Korean War, it sustained its dynamism until
1955, when the industrialization process stalled and the country entered a
stagnation phase that lasted over twenty years. Capital inows, which had
favored growth in the second half of the seventies, were affected by an
inadequate exchange policy, known as ‘la tablita,’
1
which triggered intense
capital ight, heavy external indebtedness, and severe nancial crises. The
eighties are known in Uruguay and in most Latin American countries as the
lost decade. Economic policy was focused on ensuring the payment of the
foreign debt service in accordance with IMF’s classic prescriptions: sharp
devaluations and contraction of internal demand through credit, scal, and
salary policies, so as to ensure trade balance surpluses. The sharp devaluations
triggered ination, while the restrictions on internal demand affected economic
activity and growth. The costs of the foreign debt were paid exclusively by the
debtor countries through net transfers of about 4 percent of GDP.
In the nineties, growth was resumed, thanks to new capital inows. That
was the decade of neoliberalism’s apogee, when it sought to minimize the role
of the State, as it was maintained that the private sector and the market were
capable of solving economic problems and social conicts. That was the era
of privatizations, trade and nancial liberalization, economic deregulation, and
labor exibility. In Uruguay’s case, trade liberalization was intensied, with
unilateral outward opening beyond Mercosur, whereas nancial liberalization
had already been accomplished in 1974, ensuring unrestricted freedom of
capital movements. The classical privatization process could not be carried out,
as a 1992 referendum prevented the privatization of the State’s communications
enterprise. The economic policy was focused on ensuring the stability of the
nancial environment and on advancing toward prices stabilization through
the adoption of an exchange anchor, similarly to the convertibility law in
Argentina. The exchange lags in Argentina, Brazil and Uruguay between
1 N.T. Preannounced mini-devaluations.
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1994 and 1998 intensied trade within Mercosur. In 1998, the destination
of 53 percent of Uruguay’s exports was Mercosur countries. The Brazilian
devaluation in January 1999 exposed Argentina’s and Uruguay’s exchange lags,
causing difculties for the integration process, difculties that persist to this
day. The development style permitted growth, albeit with productive crises,
especially in the manufacturing sector, and with social crises that culminated
in a severe nancial crisis in 2002.
C. Main political features
The Uruguayan political system and society have strong leanings toward
democracy, freedom, and justice, universal suffrage and a multiparty system,
guarantee of human rights, and an independent Judiciary for ensuring the rule
of law. Democracy is deeply rooted in Uruguayan society, which is well informed,
politicized, and participative. Uruguayans like to vote and there are norms that
encourage forms of direct democracy. The Constitution admits the possibility
of contestation, through a referendum, of any law passed by the authorities.
Referendum was the means for contesting privatizations and for the approval
of a recent law voiding the defense of members of the military who violated
human rights during the dictatorship to which the country was subjected from
1973 to 1985. That dictatorial regime coincided with similar regimes in various
countries of the region, where, under the leadership of the United States,
international communism and guerrilla actions with alleged links to the Cuban
revolution were combated. For a country with an intensely democratic culture,
that dictatorship period was an exception to the rule. In the thirties there had
been another break in democracy, but without Armed Forces’ intervention.
Political institutions have the following characteristics:
(a) The Executive consists of a President of the Republic directly elected
by universal suffrage and the Council of Ministers. To be elected
President, the candidate has to have 50 percent plus one vote of the
total number of votes, a system adopted in 1996 lest the left might
win the elections. At the 1999 elections, the Frente Amplio [Broad
Front] scored a victory at the rst round, but as it failed to achieve
absolute majority, runoff elections were held. This time, the Blanco
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and the Colorado parties joined together and won. At the following
elections, in 2004, the Frente Amplio won at the rst round, as it
surpassed the required 50 percent of votes. Historically, Uruguay has
had an Executive based on collegiate regimes; this and social cohesion
earned the country the epithet of “America’s Switzerland.”
(b) The Legislative is bicameral, with little differentiation of functions
between the two Chambers. Legislators are directly elected by universal
suffrage, according to a list, and are designated on a proportional
base, according to the total number of votes cast.
(c) The Executive has preponderance over the Legislative because it
has the power of veto, of dissolving the Chambers, and of taking
exclusive initiatives, such as granting tax exoneration or imposing
limits to budgetary expenditures. The Legislative is subordinated
to the Executive in so far as, for example, it does not have its own
information system and, in respect of economic policy, only the
scal policy passes through it. In essence, the Executive is more
directly linked to power factors, including on the international front;
this enhances its constitutionally established predominance. Save
for interpellations, parliamentary debate is scarce. Great debates are
actually carried out through the means of communication.
Political parties enjoy a high degree of stability. The two traditional
parties – the Blanco and the Colorado – have existed for one century and
a half and governed the country up to Frente Amplio’s victory at the 2004
elections. The parties, encompassing various classes and representing different
ideologies, have had a determinant inuence on the nation’s construction. In
essence, a bipartisan regime has prevailed throughout, with the Colorados in
power, except for 1959-1967 and 1990-1995, when the Blancos ruled.
The major political change occurred with the fracturing of the bipartisan
system at the 1971 elections, when Frente Amplio won 18 percent of the votes.
Frente Amplio is both a coalition and a movement that came into being with the
participation of the Communist, Socialist, and Christian Democratic Parties,
sectors of the Blanco and the Colorado Parties, and independent sectors. The
main reasons for the founding of Frente Amplio were as follows:
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(a) In the sixties, social conicts and political clashes became more
intense. That was a period of economic crisis, stagnation of
production, capital ight, nancial crises, and extremely high ination.
Ination stemmed from economic stagnation, which entailed strong
competition for income distribution, basically between the cattle
ranchers and exporters sector and the unionized urban workers;
(b) Labor unity in the mid-sixties was a relevant factor that helped unite
the left;
(c) The profound crisis of the traditional parties, unable to find
appropriate formulas for overcoming the economic crisis;
(d) The urban guerrilla multiplied conflicts, although it was also
represented at the founding of Frente Amplio; and
(e) Frente Amplio’s founding was immensely helped by distinguished
personalities such as Líber Seregni, Zelmar Michelini, Rodney
Arismendi, Juan Pablo Terra, Héctor Rodríguez, and José Pedro
Cardozo, among others.
Frente Amplio was much persecuted under the dictatorship and had
to face prison, torture, exile, and death. This intensied the unity of the left,
which won 21 percent of the votes in 1984, although Líber Seregni, its main
leader, could not run as candidate. Neither could Wilson Ferreira Aldunate,
the National Party’s leading gure, who also had to suffer many years of exile,
nor Jorge Batlle, for the Colorado Party. In 1989, after an internal split, Frente
Amplio once again won 21 percent of the votes and for the rst time secured
the Montevideo Department’s government, a position it still holds. In 1994,
it won over 30 percent of the votes, closely behind the winner. This led to a
constitutional reform to require runoff elections if no candidate secures 50
percent of the votes plus one vote. In 1999, it won the rst round with 40
percent of the votes, but lost the runoff. Finally, in 2004, it won the national
elections with over 50 percent of the votes at the rst round. In addition, it
won the elections for governor in eight departments.
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D. The current situation
The Frente Amplio government inaugurated March 1, 2005 inherited
a country ridden with critical problems: a heavy foreign debt equivalent to
100 percent of GDP, stemming from the severe 2002 nancial crisis; a social
situation in which nearly one third of the overall population was living in
poverty; a 13-percent rate of open unemployment; average real salaries 22
percent lower than in 2000; and a marked migratory outow of the youngest
and the best qualied. To this should be added a high degree of informality
and precariousness that had increased in the nineties and been aggravated by
the 2002 crisis, triggering a process of social disintegration that put an end
to the history of an integrated, socially cohesive Uruguay. The existence of
wealthy ghettos and especially of ghettos of the poor, with differentiated
values and motives, imbued with a poverty culture – that will take a long time
to be overcome – unveiled a new Uruguay.
The new government received a State undermined by the previous
governments and by neoliberalism, with poorly qualied personnel unable
to reect and to guide – a State that had lost sight of its basic functions,
together with social integration and income distribution. Public enterprises had
deteriorated and were full of irregularities and bloated owing to the political
parties’ patronage policy. One of the few institutions that still maintain a
degree of professionalism is the Central Bank, at which ideologies imported
from international nancial organizations predominate.
Power relations bear the marks of the inuence of international factors,
particularly of the United States’s hegemony, on the nancial system, the means
of communications, the Armed Forces, the transnational enterprises operating
in the country, and even on the ideological eld, as occurred in the discussion
of the Free Trade Agreement with the United States. Force relations constitute
a rst tier of nancial power, with the predominance of international banks,
the owners of the means of communication, the transnational companies
with operations in the country and their national allies. The second tier would
consist of the different productive and trade associations with limited inuence
capacity, the labor unions, which were seriously affected in the nineties, and
even the Armed Forces, which have steadily weakened since the democratic
opening. Also to be noted is the low prestige accorded the intellectuals and
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the universities, which have lost their capacity of producing specic proposals
for the region and have limited research possibilities.
The 2002 crisis and the left’s 2004 victory clearly point to the country’s high
degree of political stability and to the strength of the democratic institutions.
During the election years, when the victory of the left was anticipated, the
country experienced no capital ight, no speculative or inationary processes,
but economic recovery at an accelerated pace instead.
E. The Frente Amplio government
Signicant economic growth occurred in 2005, 2006 and the rst three
quarters of 2007, far exceeding expectations and the record of Uruguay’s past
fty years. GDP grew 6.6 percent in 2005, 7 percent in 2006, and 6.2 percent in
the rst half of 2007 – very impressive rates indeed. The determinant factors of
this growth have been the favorable behavior of international prices of exports
as a result of the demand fueled by China’s and India’s dynamism, signicantly
higher investment in the construction sector with external nancing, and the
government’s capacity to inspire condence and trust in the economic agents.
This has permitted the improvement of real salaries, a marked decline in open
unemployment, now at 8.5 percent, which in turn permits social betterment.
Ination holds at one digit, and although the debt is still heavy, it has been
adequately rescheduled.
In the social area, negotiations between entrepreneurs and workers have
resumed through collective bargaining, salary councils have been reestablished,
and unions have gained greater negotiation power. Unionization has increased,
as has the number of unions. This has reestablished balanced relations of
forces between capital and labor. An interim social emergency plan has been
introduced, particularly to address indigence, similar to plans adopted in several
countries of the region. Poverty, which still stands at 24 percent, has declined
and so have indigence and child mortality.
A major achievement of the new government has been in the eld
of human rights. The remains of persons that had been arrested and then
disappeared have been sought and identied, and notorious Army gures
guilty of violating human rights are now in prison.
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Structural reforms have been started. In 2006 a tax reform was approved,
with the introduction of the personal income tax, although on a dual pattern
that differentiates income from work and from capital gains, which are
taxed at different rates. The reform eliminated a series of taxes of high
administrative cost, without increasing the tax burden. Congress is currently
considering a major health reform, which should maintain a mixed system,
decentralizing public hospitals and attempting to solve the problems of private
sector pensioners that have rendered a major contribution to the country. In
as much as the tax reform did not contemplate health reform nancing, a
contribution system has been introduced, which adversely affects relations
between active workers and retirees. Active workers feel affected by the low
birth rate and emigration, while the number of retirees rises owing to longer
life expectancy. In addition, under the contribution systems that have been
relevant for Uruguay’s social security and national health insurance systems,
most workers had formal jobs and contributed to their respective pension
schemes. Today, over 50 percent of the population do not participate in the
social security and national health insurance systems owing to informality and
open unemployment, and their only possibility of receiving care is through
public institutions.
Short-term economic policy preserves some orthodox traits, particularly
in the monetary and exchange areas. The exchange policy is not implemented
because of the requirements of competitiveness and tends to repeat blatant
errors, such as “la tablita” of the late seventies and early eighties and the
exchange lag of the nineties, all of which led to severe nancial crises.
F. International policy and Mercosur
International policy has reected Uruguay’s historical characteristics and
is focused on international peace and on the principles of self-determination
and nonintervention. Very good relations are maintained with the United
States, which helped the country during the 2002 nancial crisis, facing up to
the IMF, which favored default on the debt, and became one of Uruguay’s
major importers, especially of beef, owing to the mad-cow disease in Canada
and the foot-and-mouth disease in Argentina and Brazil. Nevertheless, it also
attempted to drive a wedge into Mercosur by seeking a bilateral Free Trade
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Treaty with Uruguay. Reality elicited different responses within the Uruguayan
government: some sectors that advocated the FTT with the United States
tried to add to Mercosur problems by aggressive statements, while others
were against the FTT and sought to improve the possibilities offered by the
regional integration process. As it happened, the FTT with the United States
did not materialize – as it was not permitted under Mercosur’s Customs Union.
Uruguay then joined the Group of 20 headed by Brazil in the area of trade, for
addressing the problems caused by the developed countries’ farm subsidies.
The international situation makes the formation of a regional bloc
indispensable. We live in a world of globalized nances, technology, and
communications, with strong economic blocs, especially the blocs of North
America, headed by the United States, and of the European Union. In addition
to the military domain, the United States exercise a clear hegemony also in
the nancial area, given the importance of the Federal Reserve’s policies and
of the New York nancial center, as well as in the eld of communications,
as about 80 percent of the images seen the world over originate in the United
States. This ensures that country a marked predominance in the political sphere,
which has been affected by the international repudiation of Iraq’s invasion.
There is a crucial need for a Latin American bloc to guarantee regional
integration, based on shared proposals and maximum political cooperation
for negotiating with the developed world. Negotiations involve both politi-
cal and economic issues, especially negotiations pertaining to trade, nances,
and production.
Negotiations are essential in matters of trade to counter the farm
subsidies of the developed countries and the various forms of nontariff
protection and economic policy measures that affect the terms of trade for the
region’s countries. As Latin America has only a 5-percent share of world trade,
the banding together of allies is crucial, as occurred with the incorporation
of China, India, and South Africa into the G-20.
On the nancial plane, negotiations are important for changing the
conditionalities imposed by the international nancial organizations, for
regulating speculative capital movements, 90 percent of which are for less than
a week, and for designing new mechanisms to solve with greater equanimity
the foreign debt problems of the countries of the region.
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In the field of production, it would be useful to undertake joint
negotiations with transnational enterprises to conciliate their interests with
national and regional interests and to counter attempts such as the one aimed
at a Multilateral Investment Agreement.
The regional integration process provides a series of economic
potentialities, such as the following:
(a) Energetic integration based on Bolívia’s and Venezuela’s oil and gas
reserves;
(b) Infrastructure works for transport and energetic integration;
(c) Financial integration, which is emerging as a new phenomenon in the
region. The high international prices of export products and better
terms of trade for some countries have made possible a considerable
increase of international reserves and some autonomy in relation
to the IMF. To this should be added the existence of nancial
institutions, such as the Andean Development Corporation-CAF and
the establishment of new ones, such as Banco del Sur, for extending
development credit and helping the countries of the region to be in
better condition for facing eventual nancial crises.
(d) Production integration is a key component of the integration process, an
area in which progress has been rather limited. Basically, there has been a
sort of passive integration under which tariffs are lowered, and the private
sector and the market dene trade relations. Integration has to become
a more active process and this requires strategic lineaments to guide the
establishment of productive structures based on competitiveness and
employment as part of the countries’ national projects. Our history
shows that our productive specialization and thus the productive
structure have been determined from outside to meet the needs of
the developed countries. The hour has come for the countries of the
region to move forward toward national projects to determine their new
productive structures. These strategic lineaments should be coordinated
and consistent and lead to regional projects capable of addressing current
asymmetries, thereby beneting the relatively less developed or smaller
countries. These countries could then participate in dynamic productive
processes and benet from measures aimed at helping them to trade
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goods with a higher aggregated value and technological content. New
productive structures should be exible and open so as to keep up with
the pace of technological changes on the international plane. A good
example of possible new forms of productive complementariness relates
to Brazil’s demands. Brazil demands special regimes or higher tariffs
on capital goods, data processing items, and the automobile industry.
Uruguay can agree to Brazil’s needs but should be able to participate
with some degree of specialization in the production and exportation
of these products or in part of their production.
The integration process has problems. Two major steps forward were taken in
1994 and in 1998, when Brazil, Argentina, and Uruguay had considerable exchange
lags, which intensied trade among them. The January 1999 devaluation exposed
Argentina’s and Uruguay’s lags, giving rise to disputes and complaints among
the Mercosur members, a situation that was aggravated by subsequent nancial
crises. There are some political conicts, as the current one between Argentina
and Uruguay about the pulp plants built in Uruguay. There are no community,
supranational institutions, no application of decisions of arbitration courts, and there
are nontariff barriers, often imposed by the states, that affect the normal course
of the integration process. Limited trade relations among the various countries
hinder the coordination of macroeconomic policies, such as was possible in the
European Union. There is some ideological criticism on the part of those who
never accepted the integration process because they believed that it would cause
trade distortions; they thus advocate unilateral opening, especially toward developed
countries. Power relations also affect the integration process, such as the weight of
the big transnational corporations, whose specic interests often differ from what
the countries may have agreed. Ideological and political motives also lead some to
criticize the integration process because it purports to achieve bilateral free trade
agreements with the United States, particularly on the Pacic coast.
In essence, the future of integration depends on pertinent political
agreements but also on the capacity of eliciting emotions, values, and
motivations conducive to a regional consciousness, which is still very limited,
as well as to forms of regional identity.
DEP
Translation: João Coelho
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The rule of law and
social justice under the
Bolivarian Alternative
for America and the
Caribbean-ALBA
Isaías Rodríguez*
A
n announcer in Venezuela always starts the newscast with a reference
to the “planet earth” as if the earth were a “spaceship”. The spaceship
earth metaphor originated with Kenneth Ewart Boulding, a highly respected
economist, ecologist, and active pacist.
As in any spaceship, according to Boulding, survival depends on the
equilibrium between its load capacity and the requirements of its passengers.
To achieve equilibrium, it is not enough to have the justice of the lone gunman
of American westerns, which is meted out through shots and is subject to no
other rule than the gunman’s own.
* Attorney General of the Bolivarian Republic of Venezuela.
isaiasrodriguez@scalia.gov.ve
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Only society as a whole – and not a lone gunman – can guarantee peace
and harmony. This is what some call equilibrium and equilibrium is nothing
other than the humanity of our acts and the exact opposite of what the lone
gunman knows under the label of merchandise.
Both the International Covenant on Civil and Political Rights and the
Covenant on Economic, Social, and Cultural Rights (signed in San José, Costa
Rica on November 22, 1969 and in San Salvador on November 17, 1988,
respectively) advanced positive law to counteract any structures, whether State
or otherwise, that constitute serious threats to human rights. A mythology
made into doctrine, which dates back to Hobbes’s The Leviathan, maintains
that the State is the only being capable of violating human rights.
This mythology, embraced as ideology now as then, sees the State as
the only body that poses a threat to individual freedom and this is why, since
Locke, the liberal human rights doctrine has sought to make us believe that
“the only” permanent requirement to protect the individual from the State
is to make solely the State, and not private individuals, accountable for the
violations of individual or collective human rights.
Time has past by and two issues have arisen, which seem to have eluded
the drafters of the two aforementioned international covenants.
One, worth reection, makes clear that the State, in addition to supposedly
being a threat to human rights, is also the guarantor of these rights. A second
issue leads to the conclusion that, similarly to the State, private economic
organizations can perfectly raise obstructions and challenges and denitely
pose serious threats to human rights, to the point of interfering with and
resisting everything that has to do with the citizen’s rights embodied in the
two covenants.
Despite the correctness of the liberal view that the States act or can act
against these unalienable conquests of mankind, any such action accounts
for an almost insignicant share of the problems citizens have to face for
effectively exercising their human rights.
Edgardo Lander, a Venezuelan scholar concerned with this topic, calls
such situations an “expression of the minimal State”, taking into account the
fact that what is at stake is not the State as a body that sponsors violations,
but the Sate as the intermediary of some rules not always set by itself, which
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are communicating vessels whereby “the private property of capital and the
means of production” generates a superstructure that harm these rights.
According to Lander, this manipulation is in itself a clear, denite
interference in State policies and a visible and tangible violation of human
rights perpetrated, not necessarily just by the State as the only one accountable
for such policies.
It is evident that this one way of thinking has hallowed private property
above freedom and this has introduced the concept of property in these policies.
With the intention of confusing or simply manipulating, [this concept]
places on an equal footing “goods for personal consumption” and “production
goods”, although this does not correspond to reality.
Goods acquired through the owner’s labor (such as a home, a TV set,
a car, or a refrigerator) are thoroughly distinct from goods obtained through
capital accumulation. They are accorded a different, less privileged treatment
than goods obtained through capital accumulation and exploitation, which also
derive from labor, but from subordinate labor bought for a salary by whoever
directs labor as a subordinate activity.
These goods do not result from the personal work of those who produce
them but from the sweat and the effort of others, whose fatigue is exploited.
Examples abound: a textile enterprise, a trademark used to exploit others, a
metalmechanic industry, and the blest “intellectual property” under which
personal labor is expropriated, as when laboratories pack drugs and medicines
on which our health and nearly always the life of the poorer depend.
Some neoliberal theoreticians (and, of course, the practitioners of the
indiscriminate use of workers’ exploitation) may nd it strange that an Attorney
General, whose competence lies in dealing with criminal matters, should speak
about these issues.
One of the functions vested in the Public Attorney’s Ofce under the
Constitution of the Bolivarian Republic of Venezuela is “to see to the strict
compliance with the Constitution and the laws”; art. 285 adds: “to guarantee,
in court proceedings, respect for constitutional rights and guarantees as well
as for international treaties, covenants, and agreements.”
Avoiding what occurred to the drafters of the aforementioned covenants
on civil, economic, social, and cultural rights, the clear wisdom of the
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Venezuelan Constitution writers was such that, admitting that the functions
assigned the Attorney General’s Ofce might over time be enfeebled, they made
a clearly enunciated addition, which the international covenants lack: “and any
other functions that may be established by this Constitution and by law.”
On this basis, we have dared to address the issue and to invoke the 1962
United Nations General Assembly’s Resolution 1803, which reads as follows:
“ The right of peoples and nations to permanent sovereignty over their natural
wealth and resources must be exercised in the interest of their national development and
of the well-being of the people of the State concerned.” And: “The free and benecial
exercise of the sovereignty of peoples and nations over their natural resources must
be furthered by the mutual respect of States based on their sovereign equality.”
On the same basis, we also invoke the 1974 UN General Assembly’s
Charter of Economic Rights and Duties of States, which states that:
“Every State has the sovereign and inalienable right to choose its economic
system as well as its political, social and cultural systems in accordance with the will of
its people, without outside interference, coercion or threat in any form whatsoever.”
And Art. 2 provides that each State has the right:
“a) To regulate and exercise authority over foreign investment within its national
jurisdiction in accordance with its laws and regulations and in conformity with its
national objectives and priorities…” and
“b) To regulate and supervise the activities of transnational corporations within
its national jurisdiction and take measures to ensure that such activities comply with
its laws…”
The Charter also states that “All States have the right to associate in organizations
of primary commodity producers in order to develop their national economies…”
Today, slightly over forty years after the adoption of these international
agreements or covenants, we are under the obligation to look at and analyze
all the different universes entailed by the development of these national
economies.
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Santiago Ramentol, a Spanish sociologist at the Barcelona University,
identies six such universes: (1) Imperial globalism (which Robert Kagan
considers benevolent); (2) Worldwide liberalism; (3) Automatist expansionism;
(4) Post-industrialism; (5) Information society; and (6) the so-called shock
of civilizations.
Up to now, we have moved in one of these universes, namely, that of
“imperial globalism”. In it, liberal representative democracy has lived in an
allegedly tranquil relationship with the market.
But this “tranquility” is not really complete. There have been long periods
in which “our countries’ freedom has not existed” or been reconciled to liberal
society’s allegedly democratic structure.
Nor is it true that imperialism has been a benefactor or that the market
has benevolently regulated the fair sharing of wealth.
This is what Santiago Ramentol has called “multiuniverse II”, in which
“imperial globalism” benets, basically and essentially, the transnational
corporations.
In this multiuniverse II power is exercised on a planetary scale: the role
of the United Nations is dismissed and the authority of the International
Penal Court is rejected. In it, the public sphere has changed, as has the scope
of the human rights addressed by the aforementioned international covenants;
human rights have been transformed into a mere “client-enterprise” relation
of a thoroughly mercantile nature.
This multiuniverse is where the “juridical-cultural” concept of every
known notion of law has been almost completely depoliticized. In this respect,
the logic of commercial law has prevailed over the logic of democratic rights
and particularly over the logic of economic, social, and cultural human rights.
Neoliberalism, or “imperial globalism”, has literally trampled underfoot,
or demeaned economic, social, and cultural rights, tactically ranking them –
with a skill more appropriate to better causes – below the so-called “civil and
political rights”.
Neoliberals have given rise to a current that maintains that the nature of
social rights is different from that of civil and political rights and go as far as
positing rst, second, and third generation rights, so as to classify “economic,
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social, and cultural rights” as “second generation” rights – I wonder whether
they mean “second generation” or “second in importance”.
Be as it may, the intention here is to maintain that “only civil and political
rights are justiciable”, as the covenant that recognized economic, social, and
cultural rights provides only for the “possibility” of achieving their full
realization… to the maximum of each State’s available resources.” In other
words, a State is not under obligation to realize them if it lacks the requisite
resources, whereas it is obligated to come up with the resources for the
realization of the other rights.
But the just expounded concept is not enough, as the realization of
these rights under international law is voluntary or optional, while under
commercial law (as is certainly the case of rights recognized by international
civil covenants) they are not compulsorily claimable but have rather been
institutionalized through international treaties that can be implemented through
coercive mechanisms.
The international commercial law instruments, according to Edgardo
Lander, have ever greater capacity to impose rules to be compulsorily followed
in nearly every country.
Liberal commercial law is becoming a sort of “universal law” or even a
kind of “parallel global constitutional law.”
We should in full conscience deny that trade agreements are covenants
under which “one achieves some gains and sustains some losses.” This is not
correct. The issue before us encompasses a highly signicant part of our
countries’ and our citizens’ human rights.
The fact that, as the United States did not succeed at the World Trade
Organization the unanimous, worldwide recognition of the priority of
“commercial rights” over human rights, it has done everything possible to
achieve this at the regional level and, with its usual skill, has invented the Free
Trade Area of the Americas – FTAA.
What is the FTAA?
It consists in trade treaties that envisage a free trade area. The apparent
objective is to eliminate customs barriers and duties on imports among
countries.
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The FTAA encompasses agriculture but treat it as “an international trade
discipline”, as trade in goods, and accordingly ties it to foreign investment
protection.
The FTAA was launched in 1994 and the proposal was later formalized
after the 1998 Presidential Summit in Santiago.
Why was it formalized at that time and not earlier?
Because the U.S. President needs authorization from the U.S. Congress
to sign such commercial treaties and this authorization had been denied then
President Bill Clinton. After the 2001 Presidential Summit in Quebec, George
W. Bush requested this authorization, which was granted by Congress in 2002.
Why, after formalization, has this enterprise not been fully implemented?
Because of agriculture. Agriculture is what has trammeled the FTAA.
The United States maintains a system of domestic farm subsidies, which also
include farm exports subsidies.
But this is not the only reason.
Since 1980, world grain production has grown at a slower pace than the
population in view of the restrictions imposed by the great powers to prevent
grain prices from falling. Nothing has mattered to these great powers as long
as they could maintain the asymmetric distribution of agricultural wealth.
Mercosur, Caricom, and the Andean Community of Nations have
refused to negotiate under these conditions not only the agricultural issue but
also all other issues as long as an equitable, adequate solution is not found for
the question of subsidies.
Mercosur, with a few exceptions owing to political and economic
pressure, has stood by its refusal to negotiate free trade agreements with the
United States as long as unequal economic conditions prevail in the region.
Brazil, for instance, has been tactful and diplomatic in negotiations, consistently
favoring regional integration.
Accordingly, we nd it regrettable that Colombia and Peru have signed
a Free Trade Agreement with the United States. These two countries’
markets will be absorbed by U.S. corporations, “deregulation” will be surely
imposed, and this will inescapably affect public revenues of the Peruvian
and Colombian States.
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Most liberals, as a Spanish essayist says, do not practice their religion.
Their faith is rather ckle. Their protection measures are in agrant opposition
to their neoliberal rhetoric and religion. At the 2003 WTO Meeting in Cancun,
for example, the United States refused to cut down its 3.3 billion dollars in
subsidies to its cotton producers.
The same thing was done by Europe and Japan in November 2005.
It is widely known that in every situation the rich countries impose their
commercial interests on poor countries and that the modest advances in respect
of agriculture have been nullied by the road roller of services and industrial
tariffs that affect and hinder the development of poor countries.
Europe, Japan, and the United States have refused to open their markets
in areas in which the poorer countries could exceptionally compete, and
agreed on tariff exemption for their products in all those areas in which they
could not compete at all. We have a word for this in Venezuela: caradurismo
[brazenfacedness].
Indeed, while tariffs on manufactures (from rich countries, of course)
dropped from 40 percent in 1950 to 4 percent in 2001, these countries have
maintained tariffs on farm products from poor countries above 40 percent.
But this is not the only problem. The United States complement their
protection measures with the so-called antidumping laws and their only too well
known compensatory rights. And if these were not enough, the United States also
claims the unassailable faculty to apply its own laws under the jurisdiction of
its own courts.
This makes for grotesque, immoral economic and commercial asymmetry.
On top of this, all of our poor countries are forced to make concessions, but
not the United States.
This is what Héctor Moncayo calls “recolonization through free trade
agreements.”
But even more serious is the fact that, to ensure the survival of human
beings (eight billion people by 2020), globalization is devising a terrible,
sophisticated extermination plan to bring the world’s population down to four
billion inhabitants by 2020.
Protectionism in favor of certain products from rich countries could be
an expression of this “sophistication” aimed at killing off the poor, because
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for neoliberalism “the growth of the poor alone” jeopardizes the planet’s
future. It is certain that by 2050 the world would be unable to feed so many
people and thus the neoliberal solution is “to kill the poor.”
Scientic data show that the per capita cultivated area in the world in
2002 was 0.26 hectare. By 2050, this gure is expected to drop to 0.15, while
there will be an additional 2 billion people on earth, living with less water and
this craziness of climate change, which is no different from what is being
called “nuclear winter.”
For imperial globalization, the extermination plan is the only way to save
mankind, or rather “its mankind.”
All this has to do with a fundamental, essential right of people: the right
to food security, i.e., the right to food.
It should be born in mind that production is not restricted to the
production of goods; it is a way of life that implies, among other things, the
preservation of culture and the relationship with nature, and this has to do
with our people’s security and sovereignty.
There is thus a sharp contradiction – or agrant hypocrisy – when the
United States establishes a human rights doctrine while at the same time it
establishes a “free trade treaty” doctrine. The latter nullies the former.
This inconsistency has been pointed out by Colombian jurists. In
Colombia, our sister country, the Constitutional Court has established that:
“…international human rights treaties and not economic treaties are constitutional;
the former have preeminence over the latter and over any other kind of treaty.”
Accordingly, we say that Colombia will be affected by the Free Trade
Treaty it has recently signed with the United States. Moreover, in the view of
its jurists, Colombia has violated its Constitution in signing this treaty, as its
own Constitutional Court has declared.
The Colombian Constitutional Court’s sovereign decision has led
people to disqualify it, calling it irresponsible and ignorant, and to accuse it
of “obligating the Colombian State to a presumptive public expenditure that
does not take into account the country’s macroeconomic conditions.”
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One cannot say whose ignorance it is, or what the limits to cynicism,
impudence, insolence, affront, and the rank insolence of immorality are.
The preceding does not mean nor warrants the conclusion that trade
treaties should not be signed or that we should shut ourselves into an absurd
isolationism, cut ourselves off from the world, cease communication with our
neighbors, go into seclusion like hermits, and live as a lone society.
Not at all! It means that we must reafrm the right assured us under the
1974 United Nations Charter of Economic Rights and Duties of States, which
states that “Every State has the sovereign and inalienable right to choose its economic
system as well as its political, social and cultural systems in accordance with the will of its
people, without outside interference, coercion or threat in any form whatsoever.”
The Bolivarian Alternative for the Americas and the Caribbean – ALBA
has been proposed by Venezuela to counter the FTAA. ALBA is a tool to
overcome the obstacles to integration, including: (a) poverty; (b) inequalities
and asymmetries among countries; (c) unfair trade; (d) the burden of an
unpayable foreign debt; (e) the imposition of structural readjustment policies
by the IMF, the World Bank, and the WTO, which undeniably undermines the
base of our States’ social and political support.
ALBA is a strategy to clear the obstacles that prevent our access to
information and the related technology under intellectual property agreements,
among others.
ALBA provides guidance on how to address with rmness deregulation,
privatization, and the dismantling of the institutional apparatus, supposedly
conceived by the international organizations submitted to the empire, for
“economic success”, which has been unquestionably proven false.
ALBA is a proposal centered on the ght against social exclusion. It is
a set of basic criteria to make solidarity into an emblematic ag under which
we will defend the State’s role against the laws of the jungle, on behalf of our
sovereignty, development, and integration.
Noam Chomsky has expressed this quite well by this transformational-
generative grammar theory, saying that the grammar of any language consists of
a system of rules that make possible the formation of understandable sentences.
This grammar has a deep and a supercial structure. Let us look at the
deep structure in ALBA and forget for a moment its supercial structure.
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For Chomsky, grammar’s structure is universal; it is lodged in the human
brain and is inherited. Children learn to speak spontaneously. They have a natural
predisposition for communication. They build their sentences intuitively. All of
them begin to say “dad”, “mommy”, and “water” without any prior experience.
Le us, like Chomsky’s children, begin to say “dad”, “mommy”, and “water”
starting from integration and let us dare to give a sovereign answer against an
unjust system that is unequal, distorting, arbitrary, and absurdly hegemonic.
The ght for democracy is a worthy cause. We must give reality to the
new forms prompted by humanism. The defense of these rights requires that
we exorcise the danger that a supposedly educated elite might make decisions
for us, thereby impinging on our freedom and sovereignty.
Democracy is noble, but frail. It is always at risk. It has to be pampered,
nourished, strengthened, and above all perfected to keep it from becoming the
shelter of those that only wish to maintain and consolidate power, which is blind
to majorities, looks askance at peace, and sneers at our desire to be sovereign
and to determine our own juridical, cultural, economic, and political system.
Norman Mailer, a great writer, will assist us in summing up these scattered
ideas with which we have attempted to translate our concerns about the frailty
of our democracy. No one has expressed these concerns better than him.
Speaking in San Francisco, he expressed with the force of strong
conviction the idea that “Real democracy comes out of many subtle individual
human battles that are fought over decades and nally over centuries, battles
that succeed in building traditions. The only defenses of democracy, nally,
are the traditions of democracy.”
According to him, “Democracy is perishable. The only defenses of
democracy, nally, are the traditions of democracy which have been socially and
democratically built with patience and perseverance. “Democracy is a state of
grace that is attained only by those countries that have a host of individuals not
only ready to enjoy freedom but to undergo the heavy labor of maintaining it.”
I would only add that besides working hard so as be able to enjoy and
maintain our liberties, we must have the courage and the political will to foster
our people’s unity and fraternity.
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Translation: João Coelho
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Koki Ruiz
“
I
was born in the countryside among simple working folks: carpenters,
masons, and farmers – lords of their own time, masters of their satisfying
daily chores... Life-sustaining women, strong and gentle... Children in unbarred
houses, vast schoolyards, and bird-lled plazas...
Banda Koygua
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In my childhood I met every one of the future subjects of my pictures:
carpenters powdered with sawdust, callous hands wielding nail, hammer, and
saw... Busy masons building little houses, mixing lime, sand, and bricks... Tanned
harvesters in the sun, loading mountains onto wagons...
Gleeful musicians made of wine and passion, merry-making in
nightspots... Expecting mothers riding buses or in hospital waiting rooms, at
market or at Sunday mass... Faces roughened by life... Tender babies nestled
in their mothers’ warm bosom...
Children rounds, a whirlwind of white aprons streaming out of school...
Kite ying or ball games at any time of the day...
In memory hues I paint my childhood village.
I paint my village today in the colors of its dreams and hopes.”
(Koki Ruiz)
Curriculum
1957 Born in San Ignacio, Misiones, Paraguay
1977-1978 Attended Plastic Arts Studios at Mackenzie University, São Paulo,
Brazil, where he participated in his rst group shows
1985 First solo shows, Propuesta Gallery, Asunción, Paraguay and El Viejo
Salón Gallery, San Bernardino, Paraguay
1986 Participated in “Arco 86”, Spain’s major contemporary art show,
Madrid, Spain
1987 Canning House, London, England
_____ Juscelino Kubitschek Memorial, Brasília, Brazil
_____ Las Malvinas Foundation, Buenos Aires, Argentina
_____ Düsseldorf Hotel, Düsseldorf, Germany
1988 Itinerant exhibit, Rabo Bank, The Netherlands
1990 Michelle Malingue Gallery, Asunción, Paraguay
1992 Pueblo Blanco Gallery, Punta del Este, Uruguay
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1993 Galerie de France, Miami, United States
1995 Montalbán Gallery, Madrid, Spain
_____ Della Rovere Gallery, Madrid, Spain
_____ El Escorial Cultural Center, San Lorenzo del Escorial, Spain
1997 Scorpio Salón, Punta del Este, Uruguay
1998 Second Latin American Art Salon, Mexican Cultural Center, New York,
USA
1999 Le Latina Renoir Gallery, Paris, France
2000 La Perrine Museum, Laval, France
2001 Amal Gallery, Punta del Este, Uruguay
2002 World Cup Painters, Busam, Chon JU, and Seoul, Korea
_____ Mailletz Gallery, Paris, France
Monuments, sculptures, and events
Tañarandy, “El arte con la gente”
Founder of the Tañarandy Project in the San Ignacio Tañarandy
community in 1992 – a nonprot initiative for social development through
the arts, carried out with community participation.
Tañarandy resembles an open-air popular art gallery. The recognizable
painted signs on the house fronts indicate the activity carried out inside and
the name of the family that lives there.
Tañarandy is the scene of the Good Friday ‘Estacioneros,
1
’ a major art
installation, internationally known as The ephemeral baroque, which combines
elements of folk religiosity and universal art: the estacioneros’ mournful singing,
bitter-orange lamps, baroque music, and the living tableaux of great works of
universal art by members of the community.
The Mill Theatre, another Koki nonprot initiative occupies and old rice
mill that provides theater lovers of any age a space of their own.
1 Estacioneros are community members who reenact the Stations of the Cross during Holy Week.
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Monuments
El Reloj Solar [The Sundial], located at the entrance of San Ignacio,
Misiones, Paraguay, the rst mission founded by the Jesuits.
El Reloj Solar celebrates the Indians who defended their culture against
foreign invasion, an event symbolized by a sundial and “the good use of time.”
The resisting Indians look toward the rising sun as the symbol of life, while
those that gave in look at the setting sun.
La Caballería del 70 [The 70s Cavalry], San Ignacio, Misiones,
Paraguay.
La Fuente de los Reducidos [The Fountain of the Catechized Indians],
a stone monument, Santa Rosa’s central plaza, Misiones, Paraguay.
El Kurupi [The Kurupi – a mythological forest imp], Santa Rosa plaza,
Misiones, Paraguay.
El Kurupi II, Latin American Art Park, Seoul, Korea.
Reviews
Koki Ruiz’s works are immersed in a post-impressionism drenched in primary colors.
His ‘Motherhoods’ are shaped as women charged with vitality and primitivism. In his well-
resolved Trades series he sancties work, playing with contrasts with black and other dark
tones, giving bodies an expressionistic cast, merely suggesting with a stroke of a nger or a
spatula, for he shies away from precise contours.
(Carlos García Osuna, Diario ABC, Madrid).
Paraguayan Koki Ruiz’s subjects move on the canvasses in island colors and innocent,
rhythm-charged games, through the lights and shadows of now soft now broad, bold strokes,
in an environment fraught with expectation.
(Lidia Garrido, El Siglo Magazine, Spain).
Koki Ruiz’s exhibit unveils an art full of force and color. His painting shows another
way of handling the brush and another way of using the force of color to bring out a small
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detail hidden behind other colors. Devoid of difcult, affected forms and displaying a perfect
combination of simplicity and luminosity, his painting brings to the fore both distant and
near worlds, at once similar and different. These qualities and the singularity of his work
account for Ruiz’s successful appearance in San Lorenzo del Escorial.
(Margarita Martín, El Mundo¸ Sierra Magazine, Madrid).
Koki Ruiz knows the virtue of silence. This personal aptitude, this pause amidst the events
of the world, allows him to capture reality with intuitive clarity.
His subjects – though alive, recognizable, and quotidian – stray from mere
representation and come to us transformed, charged with mutation, after having traveled
the vast space of his interior time.
In the territory of his recent experience, there emerge the secret love and complicity
of mother and child; the nakedness of a woman whose forms strongly reect an adolescent,
violent, and brazen eroticism struggling to come free of taboos and impositions.
The honest practice of his craft without heeding cultural fashion is a characteristic
of Ruiz’s work. The artist elects man as the object of his conceptual concerns and places
him in a particular environment in sound harmony with his bodily expressions, the rhythm
of his activities, and his chromatic universe.
(Adriana Almada, journalist. Asunción, Paraguay).
Allegedly man has not changed in over two thousand years and nothing can be said
about his condition and conicts that has not been said by the Greeks.
Al
legedly, nothing new can be said in the arts that take man as their subject. Although
this may be true, there is the possibility of choosing the form of stating what is said, written, or
painted – or, more precisely, the possibility of renewing themes and revitalizing questionings,
according to the keenness or individualism of the discourse. The artist elects man as the object
of his conceptual concerns and places him in a particular environment in sound harmony
with his bodily expressions, the rhythm of his activities, and his chromatic universe.
This is brought to mind by Koki Ruiz’s painting, its language that is difcult to
situate in time and the simply classical concept of its theme.
(Juan Manuel Prieto, art critic, photographer, and journalist
Asunción, Paraguay).
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Construtora
Norberto Odebrecht
Odebrecht’s 2007 highlights in South America
O
debrecht’s commitment to socioeconomic development in South
American countries goes back to 1979, when the enterprise began the
internationalization of its operations. The rst, successful projects abroad were
the construction of the Charcani V hydroelectric power plant in Peru, and the
deviation of the Maule River to the Colbún-Machicura hydroelectric system in
Chile. These rst contracts marked the beginning of Odebrecht’s interaction with
other nations, cultures, and technologies. This dynamic process has lent support
to the development of the enterprise’s workforce and yielded economic fruits for
Brazil and the client countries. In addition, these initiatives laid the groundwork
for the establishment of the trusting relationship Odebrecht maintains with its
South American clients, paved the way for long-term partnerships, and opened
up new opportunities for the enterprise and its contracting parties.
In 1987, Odebrecht started its operations in Ecuador with the
development of the Santa Elena irrigation project in the Guayaquil region.
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In 1989, it constructed the Pichi-Picún-Leufú hydroelectric power plant in
Patagonia, its rst project in Argentina. In the 1990s, Odebrecht extended
its operations to North America and Asia, expanded its presence in Africa,
and decisively increased its activity in Latin American countries. In Peru, it
implemented the second phase of the Chavimochic project, begun in 1990, for
the irrigation of desert areas. In 1992, it began operations in Venezuela with
the building of the Centro Lago Mall; in Uruguay, with the implementation
of the Montevideo sanitation system; and in Mexico, with the construction of
the multipurpose Los Huites dam. In 1993, it extended its activity to two other
countries, after its successful bid to build the La Loma-Santa Marta railway in
Colombia and the Santa Cruz de la Sierra-Trinidad highway in Bolivia.
Currently, Odebrecht operates projects on four continents, employing
46,000 people of twenty different nationalities practicing ve religion and
speaking a couple of dozen languages. In the last ve years it entered four new
markets – the Dominican Republic, the United Arab Emirates, Panama, and
Libya. Notwithstanding the enterprise’s projection overseas, South America
remains its main market, where it has consolidated its strongest bonds with clients
and the communities it serves. Consistently with the global macrotendency of
economic growth and international trade promotion, the South American region
increasingly demands that it be provided with an infrastructure grid conducive
to increased production and better transport. Demand for these essential factors
for integrating regional productive chains, creating economies of scale, and
improving the South American products’ competitiveness conditions, has opened
to Odebrecht new work opportunities in 2007 as well as further possibilities of
reafrming its leadership in the civil engineering sector in South America.
In 2007, Odebrecht completed twenty years of operations in Ecuador.
In this period, we have implemented ten large-scale projects in the areas of
transport, irrigation, energy, and sanitation. In June 2007, the Ecuadorian
government received the delivery of the San Francisco Hydroelectric Power
Plant, Odebrecht’s most recently concluded project in that country. The plant
uses the turbinated discharge from the Agoyán hydroelectric power dam and has
a 230 MW installed capacity. The two turbines are generating 1,446 GW/hour a
year, which accounts for 12 percent of all the energy available in Ecuador.
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San Francisco Hydroelectric Power Plant in Equador
San Francisco is an impressive project, as it consists entirely of tunnels,
galleries, and underground caverns. This makes it invisible to those driving by on
the highway that follows the course of the Pastaza River, leading to the Ecuadorian
Amazon a short distance ahead. At the peak of construction, approximately one
thousand workers were local. Another 600 lived in two lodgings – one near the
worksite and one in the city of Baños de Agua Santa (pop. 10,000).
Currently, hydroelectric power accounts for 52 percent of Ecuador’s
energy matrix. To meet the remaining demand, Ecuador resorts to
thermoelectric plants, which hinders greater diversication of its energy
matrix. But even with recourse to such alternative sources, the country still
needs to import electricity from Colombia and Peru. Under this scenario,
the San Francisco Hydroelectric Power Project imposes itself as a strategic
undertaking to offset the current electric power decit in Ecuador.
In 2000, twelve South American Heads of State meeting in Brasilia signed
a commitment to build nine integration axes on the continent, under a project
known as Initiative for Regional Infrastructure Integration in South America-
Iirsa. Four of the contemplated axes cross the Peruvian territory. Odebrecht
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actively participates in this undertaking, by constructing the Inter-Ocean Axis,
the 2,603-km long South Corridor, known as Iirsa South, which connects
Urcos to Iñapari; and the Multimodal Amazon North, known as Iirsa North,
consisting of a 955-km highway linking the Paita Port on the Peruvian coast
to the Yurimaguas river port in Peru’s Amazon region, where it connects to
the waterways leading to Iquitos and Manaus.
In July, some stretches of the highways under construction were open to
the Peruvian population. On the South Inter-Ocean Corridor – an undertaking
that will benet ten Peruvian departments (30 percent of the national territory)
and six million people (20 percent of the Peruvian population) – Odebrecht
delivered part of the rst phase of stretch 2. The work consisted in paving
42 kilometers of roadway and in the construction of 42 bridges, among other
works, in the districts of Ccatca and Ocongate, in Cusco. It also concluded the
rst phase of stretch 3 on the road linking Ponte Inambari to Iñapari, which
consisted in paving 60 kilometers of roadway and in 162 meters of bridges and
retaining walls, among other works. On the North Road Corridor, work was
completed on stretch 1, between Yurimaguas and Tarapoto, and on stretches
5 and 6 on the Paita-Piura-Olmos highway.
The work under way has yielded social and environmental benets for the
population. The team working on the South Inter-Ocean Highway Corridor
has implemented the Estrategia Integral de Acción y Contribución Socio Ambiental
and designed plans of action to be implemented in 2006-2010, as follows:
(1) Social Issues Management Plan, consisting in the following programs:
“Community Relations,” “Hiring of Local Labor,” “Land Negotiations,” and
“Incentive to Local Production;” and (2) Social Responsibility Plan, consisting
in the “Tourism and Hotel Administration Training Program” and the “Mobile
Health and Education Support Program.” As a result of these initiatives, 11,500
people beneted from the mobile program, for which over 60 percent of the
hired workforce was local, and from the issuing of identity documents to over
4,000 children and young people, among other benets.
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Workmanships in execution in the South Iirsa, Stretch 2, in Peru
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In addition to these initiatives, Odebrecht is proceeding with the
implementation of the Olmos Project for irrigation and energy generation, by
building a system for siphoning water through the Transandino Tunnel into
the Limón reservoir. There is also the Pampa Melchorrita LPG Plant and the
Iquitos potable water system. Today Odebrecht is Brazil’s largest exporter
of engineering services to Peru, where it has operated for thirty years and
implemented over fty projects.
In Argentina, Odebrecht has recently begun work on the expansion
of the Argentine Gas Transportation System, under two contracts for the
construction of loops, i.e., new stretches of gas pipelines parallel to existing
ones. In connection with the Cammesa gas pipeline, 979 kilometers of pipeline
and 12 compression stations will be constructed. The Albanesi gas pipeline will
be 648-km long and will have three compression stations. The two pipelines
will cut the country from the farthest south to the north; after completion,
they will increase the capacity of the Argentine gas transportation system by
15 million cu m/day.
In Venezuela, Odebrecht has completed fteen years of operations.
In 2007, the main highlight was the construction of a third bridge over the
Orinoco River. This bridge will be 4.8-km long, with towers reaching a height
of 137 meters, and a railway running in the lower deck; it will connect the
municipalities of Caicara del Orinoco, in the state of Bolívar, and Cabruta, in
the state of Guárico. Work started in 2007 and will include one 3.5-km long
north viaduct and one 2.5-km long south viaduct.
Equally important was the successful bid for the construction of the
Manuel Piar Hydroelectric Power Plant in Tocoma; this will be Odebrecht’s rst
project in the energy sector in Venezuela. Work started also 2007, in Tocoma,
15 km downstream from the Simón Bolívar Hydroelectric Power Plant in
Guayana, the last location of exploitation of the hydroelectric complex on the
Lower Caroní, Venezuela’s second largest river. Upon completion, the Tocoma
hydroelectric power plant will have an installed capacity of 2,160 MW.
Also important was the beginning of the construction of the Caracas
Metro’s Line 5, which will extend for 7.5 km, with six new stations to be
connected to the existing two. This line will carry from 227,000 to 300,000
passengers per day; it forms part of the transportation system that begun
with the construction of Line 4 in 1998 and of Line 3 (which is under way,
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will extend for 5.9 km, with four stations, and carry 240,000 passengers per
day). Still in 2007, work has also started on the extension of the Los Teques
Metro, with the construction of a new 12.1-km line and six stations in that
municipality of Greater Caracas.
Workmanships of the Highway El Cármen – Arroyo Concepción, Bioceânico Corridor, in Bolivia
In Bolívia, Odebrecht is building the El Cármen-Arroyo Concepción
102-km highway and working on stretch 5, which links Santa Cruz de la
Sierra to Puerto Suárez. The construction work employs of 900 people – 95
percent of them members of the local community. The nished highway will
link Brazil and Bolívia. Stretch 5, contracted out by Administradora Boliviana
de Carreteras-ABC and nanced by the Andean Development Corporation-
CAF with a total US$75 million, forms part of the Two-Ocean Corridor that
will establish a land connection between Brazilian seaports, such as Santos,
to the Peruvian and the Chilean coasts. This will facilitate transportation and
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reduce transportation costs between Mercosur and the Andean Community.
In addition, the construction will signicantly improve transport conditions
between the Brazilian border and the Santa Cruz province, bringing down the
number of hours required by train, car, or bus travel to eight hours after the
road’s completion in 2008.
Odebrecht’s undertakings in Bolivia extend to the communities adjacent to
its worksites. This is the case of the Yacuces town, which has seen its main square
reformed and provided with lighting, and beneted from a social and medical
assistance program, including free consultation with doctors. There, Odebrecht
has already helped 3,000 Bolivians through its social assistance initiatives. These
initiatives range from the hauling of tons of garbage from an empty tract of
land to doctor’s assistance to the community members at request.
These highlights illustrate South America’s relevance to Odebrecht, as
well as the contribution of infrastructure engineering services not only to South
American countries’ development but also to improving life quality for the
citizens of our continent. Since the launching of its international operations,
Odebrecht has completed over 700 projects on four continents. South America
has rendered a major contribution to these achievements.
Currently, over 65 percent of Odebrecht’s gross annual receipts come
from abroad, while in 1985 no more than 30 percent of the enterprise’s
contracts were with other countries. At end-2006, the number of its employees
abroad exceeded for the rst time the number of its employees in Brazil. Today
Odebrecht has over 26,000 employees in foreign lands and almost 20,000 in
its homeland. These gures, coupled with the above-mentioned achievements
and realizations, show that 2007 has meant another important step forward in
the enterprise’s internationalization, a dynamic process that further contributes
to the South American nations’ integrated development and inspires us to go
on serving as best as we can the communities of which we are a part.
Version: João Coelho
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Grupo
Andrade Gutierrez
South America: the challenge of the infrastructure
U
nder the current Brazilian government’s foreign policy priority is given
to South America, whose integration is viewed as a political project that far
exceeds the notion of mere economic coordination among the countries of
the region. This emphasis on our geographical surroundings does not imply
the abandonment of the long-standing ideal of Latin American solidarity
but rather gives it a more pragmatic direction, so as to better identify what is
possible to do in each area.
This becomes clearer through the observation of our approach of
international affairs since early in the current government rather than simply
through the interpretation of the public statements of our highest authorities
during the 2002 electoral campaign or at the beginning of this Administration.
There is thus a marked interest in maintaining closer relations with Mexico
as well as with Central American and Caribbean countries, in addition to a
growing presence of Brazilian enterprises in the area. Owing to feasibility
considerations, though, the grand political integration project is seemingly
circumscribed to South America, as it would be unrealistic to extend it to
countries already bound to the United States by legal ties of an economic
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nature. But this does not mean that we are not developing or do not intend
to develop a strong Brazilian presence in those countries.
It might be said that in its basic discourse the Lula government has
seemingly embraced with even greater emphasis the regional vision of
Fernando Henrique Cardoso’s, at whose initiative the rst summit of South
American countries was convened. In an article published at that time in
Carta Internacional,
1
Luiz Felipe Lampreia, Cardoso’s Foreign Minister, made
it clear that a decision not to include countries that were “more closely and
directly linked to North America, and to the United Sates in particular” had
been made at a meeting that envisioned a “pragmatic project for organizing
the South American space.” Notwithstanding possible differences of
means and styles, continuity can be observed in connection with the
establishment on the continent of a new kind of regionalism, namely
South-Americanism, different from both Monroe’s Pan-Americanism and
the traditional Latin-Americanism of remote Bolivarian inspiration. This
new kind of regionalism can better identify the most appropriate approach
to each region without excluding but rather seeking to reinforce ties to
other countries of the Americas.
The current orientation would thus seek – without clashes or attrition with
the northern “hyperpower” – to circumvent the engulng Pan-Americanism
that can, owing to the dynamics of prevailing forces, more or less formally
draw all the countries of the continent into Washington’s orbit. The intention,
as expressed by Celso Amorim, our current Foreign Minister, is to develop
a mature, more strategic relationship with the United States, in which our
country would be seen as “a partner indispensable to the stability of South
America and even of Africa.” The objective, then, is to assert our geopolitical
position in South America, while taking a qualitative jump in our relations with
the United States, and thus avoid a more delicate management situation by
leaving in a kind of constructive indeniteness the specic form of relationship
with the area that is already de facto particularly linked to the United States.
In rather simplied terms, our geopolitical view of the continent unfolds in
concentric circles: rst comes South America, which we wish to see as a close-
knit community of democratic States; then, in terms of prior denition of
our future action, come Mexico, Central America, and the Caribbean, where
1 “Cúpula da América do Sul”, Carta Internacional, No. 87, ano VIII, May 2000.
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Binational Usina of Itaipu (Brazil - Paraguay)
Photo: Archive Andrade Gutierrez
our capability for diplomatic action would be less signicant, not the least
because of that area’s strong ties to the United States; lastly, the United States
and Canada, with which our relations would have a clearly distinct character
from our relations with the other regions just mentioned.
Thus, instead of the more comprehensive and somewhat vague options
offered by Pan-Americanism and Latin-Americanism, which have made little
progress in the past, what the Brazilian regional policy proposes today is to
give emphasis to South American integration, based on an already existing
integration project, namely, Mercosur, despite its aws and limitations. To this
end, Mercosur must be strengthened so as to become the nucleus of a future
subcontinental, integrated bloc. The ultimate objective is thus the integration
of South America as a whole, and Mercosur would be a rst stage or a requisite
instrument for achieving this goal.
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This is a highly positive project for both Brazil and all of South America,
as systematic, wide-ranging cooperation among all of our countries will make
possible the exploitation of potential, so far latent or neglected synergies. This
positive character is due not only to the clearly growing political projection of
the countries involved but also, in a more restricted, specic sense, to areas such
as environmental protection and the development of regional infrastructure,
both of which are essential to the area’s full, sustainable economic development.
It remains to be seen whether such a scheme is feasible or, more specically,
in what timeframe it could be accomplished.
The very nature of the project requires that the rst stage should be the
strengthening of the structure created under the Treaty of Asunción, as the
cornerstone of Brasilia’s South American project would be a Mercosur deserving
of its name as a Southern Common Market. As this stage would partially consist
in the fulllment of commitments already undertaken under that international
instrument, two questions immediately come up. The rst question is why, after
about seventeen years since the treaty’s signing, so few of these commitments
have been actually fullled. The second question is whether there are now
conditions to establish within a reasonable timeframe a common market and the
requisite institutional framework for its functioning. In other words, whether the
four signatories of the Treaty of Asunción believe that they can now do what
they had, in 1991, promised to do but have been unable to do so far.
In economic, demographic, and territorial terms, Brazil and Argentina
make up 95 percent of Mercosur. In this respect, the two countries practically
are Mercosur. Overall progress thus presupposes a far-reaching, stable
understanding between these two major parties about what they think this
political and economic grouping should represent for its member countries,
both at home and abroad. As long as one or both see the Treaty of Asunción
as a mere trade agreement or as just an element of their subregional policy;
as long as Brasília and Buenos Aires fail to have a common perception or at
least converging perceptions about how a genuine integration of the Mercosur
countries (and ultimately of all South America) will enhance the international
image and foster the sustainable development of each country, and that the
two countries’ must thus work in coordination and solidarity on the external
front; and as long as this situation prevails, it will be impossible to achieve
effective political commitments and institutional changes capable of making
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Mercosur into more than a mini-Aladi. And, still worse: there is the risk that –
as it is apparently happening already – that its relevance for the States Parties
themselves will decline instead of increasing.
Converging political perceptions between Brazil and Argentina are thus
crucial to Mercosur’s progress – but not enough. The advance of a political
and economic grouping presupposes equal functioning to a certain degree to
ensure that the smaller partners will wish to contribute to the progress of all.
Today, neither Paraguayans nor Uruguayans seem to believe that the integration
process in which they are participating is ensuring this equity or that Mercosur’s
current institutional framework is capable of redressing perceived injustices, or
of sufciently reducing divergences among its Member States. In Paraguay’s
case, it is quite signicant that in a recent interview to a Brazilian newspaper
2
Mrs. Bianca Ovelar, who is running for President of her country at next April
elections, referred to a pervading feeling among Paraguayans against “Brazil’s
historic unilateralism when dealing with bilateral issues.” She added that although
this feeling “has signicantly changed under President Lula’s government… we
still have a long way to go to arrive at an entirely just relationship.” This is not the
place to determine whether these claims are justied or not. The point is that if
public opinion in the neighboring country did not have such a strong perception
of injustice – whether well-grounded or not – such statements would not have
been made by someone running for President of Paraguay. As regards Uruguay,
it has clearly expressed its interest in celebrating a bilateral trade agreement
with the United States – which would certainly have a negative impact on the
system established by the Treaty of Asunción – as well as its dissatisfaction
with Mercosur as it exists today. Moreover, the controversy with Argentina over
Uruguay’s construction of a pulp plant near the Argentine border evidences a
lack of proper regulation in such a key area as environmental protection and
the ineffectiveness of common market institutions in solving divergences about
issues that are relevant to regional integration.
Such divergences and feelings of frustration are common to all
integration schemes where there are marked asymmetries among the Member
States. Accordingly, it is essential to solve them and to prevent justied or
unjustied perceptions of injustice from undermining the stability of the
desired integration. Mercosur cannot escape this rule.
2 O Globo, 10 February 2008, p. 37.
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So far we have dealt basically with issues that are directly connected to
Mercosur, although we have made it clear that Mercosur is only the rst step on
the long way toward the ultimate objective of South American integration. With
the specicities of each national situation, the problems mentioned here by way
of illustration will tend to multiply as the scope of integration widens.
In a vast integration area characterized by major internal asymmetries, as
is the case of South America, two issues inevitably come up. The rst is the
need for some degree of harmonization of the positions and perceptions of
the major partners as regards the main lineaments and objectives of integration.
This harmonization is essential for keeping at manageable levels the inevitable
differences that arise when the decision-making bodies are at work, so as to
allow the main players to act in consonance with each other, thereby ensuring the
advancement of their common project. A classical example is the cooperation
between France and Germany in building today’s Europe, which made it possible
for them to move from a past of bloody conicts to the construction of the
European Union. A second issue is the establishment of a working system
that ensures a minimum structural equity in the distribution of integration’s
benets among all participants so that even the smaller partners may feel that
the necessary punctual concessions are more than offset by the advantages of
their successful common project. Once again, the European Union provides
a cogent example, as its construction required the adoption of mechanisms
capable of promoting the prosperity of less endowed regions, without prejudice
to economic and trade integration. Such mechanisms permitted the integration
of some of the world’s most advanced economies with other economies that
were relatively poor at the time of their accession, and greatly helped expand
the Europe of Six (the signatories of the Treaty of Rome) to the twenty-seven
that comprise the European Union today.
The situations mentioned in the preceding by way of example, which
illustrate the two types of difculties pointed out in respect of Mercosur,
tend to multiply and to aggravate with the endeavor to extend the integration
process to all of South America. This is already noticeable in countries that are
only associates of or in the process of being admitted into Mercosur. Without
going deeper into an analysis or into the merit of their respective positions,
it is easy to see that the Venezuelan government’s foreign policy approach
and activism, for example, substantially differ from the stance of some other
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countries of the region while approaching or inuencing the stance of some
others. But this should not make us forget that Venezuela is a key piece in
any general scheme of South American integration. It is also equally valid to
point out that during the negotiations for full membership, a country such as
Bolivia, now a Mercosur associate, will have sound arguments for demanding
provisions aimed at offsetting some of its economic disadvantages.
The problem is particularly complex because although it may fall into one
of the general categories pointed out, each national situation has peculiarities
that make extremely difcult a satisfactory solution according to the general
formulas applicable to all Member States. It may be relatively simple to
formulate general equity or compensation principles regarding situations of
agrant asymmetry but it is much more difcult to move on to operational
formulas capable of offsetting actual or perceived equity aws. Hence, the
great difculty in making operational such a comprehensive instrument as
the Treaty of Asunción through full compliance with the commitments and
good intentions embodied in it. This would be even more difcult in relation
to a still hypothetic, similar instrument encompassing all of South America,
if and when such an instrument could be adopted.
In brief, we have a valid regional policy goal, whose achievement
could enhance the international presence of the countries involved and
lead to the solution of common regional problems, and which is accepted
by all potential participants, as no South American country is avowedly
opposed to our subcontinent’s integration. The great problem is that,
understandably, different countries have different perceptions as to what
integration should be in practice. Reconciling these differences so as to
make possible the establishment of an integration system acceptable to all
the countries of the region and which at the same time goes beyond a set
of good intentions and commitments that remain on paper will probably
be achieved only in a very long run. And to borrow Keynes dictum, in the
long run, we are all dead…
What should we do? Abandon a worthy political project only because
it cannot be fully achieved within the foreseeable future? Attempt to carry
out the premature negotiation of a grand integration scheme in a quixotic
effort likely to discredit a desirable objective? Or to move on to undertakings
of a lesser scope and thus more realistic, capable of actually bringing South
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American countries closer together and of directly or indirectly contributing
to the achievement of the ultimate objective of regional integration?
In principle, any understanding that involves more than one South
American country in the achievement of a common objective helps cultivate
cooperation habits. This in turn can facilitate, if modestly and indirectly, a
greater effort toward regional integration. Certain areas should be contemplated
in any integration scheme, in which transnational actions of a limited scope
will have a more direct effect on the nal objective. Such actions might include
arrangements aimed at facilitating trade between neighboring countries;
binational or plurinational understandings on environmental protection; or
undertakings related to regional infrastructure or even to national infrastructure
in which entities of more than one country are involved. Regional infrastructure
is of utmost relevance as it is essential for the physical integration of South
American countries, without which the wished-for political and economic
integration will be little more than a rhetorical expression. It is obvious that
without proper highways, railways, and waterways as well as an adequate
communications network, even the most carefully conceived integration treaty
will be worth little more than the paper on which it is written. Diplomacy and
civil engineering must thus walk hand in hand if we wish to make into a reality
the major objective of South American integration.
Brazil nds itself in a particularly favorable situation to carry out
such actions. As South America’s largest, most developed economy, with
a population of 180 million, it is a particularly attractive market for the
neighboring countries. It may, with greater likelihood of success than most
of the other countries, promote geographically limited arrangements that can,
even without having the substantive coverage of an integration scheme, take
into account possible asymmetries and foster its own sustained development
as well as that of its partners.
At the same time, our country’s vast territory that borders on all South
American countries except two and the advanced stage of our civil engineering
industry make it important for us to develop a regional transportation and
communications network and enable us to render a signicant contribution to
its construction. It may be recalled that the only Latin American enterprises
on a list of the world’s fty largest civil construction companies are Brazilian.
This explains the strong presence of Brazilian enterprises such as Andrade
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Gutierrez and other major companies in several South American countries,
including Argentina, Ecuador, Peru, and Venezuela. In the last analysis, the
participation of Brazilian private enterprises in the implementation of large-
scale infrastructure projects of interest to our neighbors creates cooperation
habits among countries and contributes to South America’s physical integration,
which is essential for achieving the unanimously endorsed objective of political
and economic integration.
The importance attached by the subcontinent governments to the
development of an adequate infrastructure is demonstrated by the launching
and unanimous approval of the Initiative for the Integration of Regional
Infrastructure in South America-Iirsa in Brasília in August 2000. Iirsa provides
a forum for dialogue among the authorities responsible for transportation,
communications, and energy infrastructure in the twelve South American
countries. Its objective is the development of the region’s infrastructure to
facilitate the participating countries’ physical integration and promote a model
of equitable and sustainable territorial development. Iirsa’s central body is the
Executive Steering Committee-CDE, made up of senior representatives from
national agencies deemed competent in this eld by each government. The
Technical Coordination Committee, subordinated to the CDE, consists of
representatives from the governments and from the three international nancial
organizations directly involved in the initiative, namely, the Inter-American
Development Bank-IADB, the Andean Development Corporation-CAF, and
the Fund for the Development of the River Plate Basin-Fonplata. Iirsa has
adopted a 2005-2010 Consensual Implementation Agenda consisting of a
rst set of thirty-one projects, mainly in the area of transportation, already
approved by the participating governments.
It may be too early for assessing Iirsa’s actual contribution to the
development of physical integration in South America, as by nature
infrastructure projects take a long time. But the work done so far – including
both the plurinational coordination effort and the specic projects executed by
major engineering companies such as Andrade Gutierrez – seems to reinforce
this article’s contention about the convenience of concentrating efforts
on undertakings that though substantively and geographically limited can
signicantly contribute to any more comprehensive integration scheme. This
does not mean abandoning the more ambitious idea of the South American
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Interoceánica road (Iirsa)
Photo: Archive Andrade Gutierrez
countries’ political and economic integration but simply drawing practical
conclusions from facts that seem incontestable. Although desirable, the grand
project for integrating all of South America involves, by its magnitude, much
greater difculties and its realization requires much more time. Meanwhile,
competing or conicting initiatives could emerge, making the completion
of the grand subcontinental project even more problematic. In a way, this
is what happened with the Initiative for the Americas launched by President
Bush (father), which led to the much more specic proposal of a Free Trade
Area of the Americas-FTAA. The least that can be said is that this process
distracted the Latin American countries’ attention from the idea of their own
integration with the mirage of an unrestricted opening up of the immense
United States market. In the case of South America, it did even more, seducing
countries that were part or associates of an existing subregional system with the
prospect of bilateral agreements with Washington, considered more attractive
than integration with the much more modest markets of our subcontinent. A
second conclusion is that we can contribute to the success of the nal project
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by making progress in less controversial areas with undertakings that, although
also requiring time and effort, such as the aforementioned construction of a
regional infrastructure network, must be carried out anyway before or after
the political decision on subcontinental integration is formalized.
In brief, the idea is to keep alive the objective of South American
integration but to do so realistically, attaching priority to those areas in which we
have competitive advantage and which are more relevant to the ultimate objective,
such as the building of a regional transportation and communications network,
as well as to areas in which the scale and relative development of our economy
place us in a natural, especially privileged position in South America.
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Embraer – Empresa Brasileira
de Aeronáutica S.A.
Embraer goes international
I
ntroduction
Airspace industry, of which Aeronautics is the most signicant segment,
has a wide range of highly demanding characteristics that make it special and
differentiated.
Few industries in the world are faced with such an array of awesome
challenges as aeronautics – from the simultaneous employment of multiple
advanced technologies to highly qualied manpower to the requirements
of a global industry by denition to the requisite exibility to respond to
abrupt scenario changes to the enormous amounts of capital required for its
operations.
Based on the experience amassed in over three decades of activity in
this competitive, aggressive, and sophisticated market, we at Embraer like to
say that the aeronautics business rests on ve major pillars, which in turn rest
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on a single foundation – our clients’ satisfaction, the source of the results
that will ensure our stakeholders’ gains and the enterprise’s continuity over
time. These pillars are as follows:
• Advanced technologies: in view of the highly demanding operational
requirements pertaining to safety, drastic environmental changes, and
weight and volume restrictions, the aeronautics industry employs a
wide range of point technologies and serves as a lab for their ne-
tuning before they are passed on to other productive segments and
activities. Complex, sophisticated technologies are involved not
only in the product but also in the development and manufacturing
methods and processes, in addition to the use of the best practices
available in nancial and human resources management.
• Highly qualied manpower: to ensure the efcient, productive, and
consistent use of these advanced technologies, it is essential
that qualied personnel be available at all levels of the industry’s
operations: computer-supported projects, relations with suppliers
and clients around the world, manufacturing using sophisticated
numerical control machines, and the devising of elaborate nancial
solutions with international institutions.
• Flexibility: abrupt scenario changes that affect the world economy
and the geopolitical order, the most recent example of which were
the terrorist attacks of September 11, 2001, have immediate impact
on the air transport industry and thus on aircraft manufacturers.
Flexibility in adapting to such changes with a minimum loss in terms
of efciency and costs is of crucial importance for ensuring survival
and preservation.
• Capital intensity: owing to the massive investment required for
developing new products and raising quality and productivity, coupled
with long development and maturation cycles, capital intensity
is another major feature of this business sector. For example: the
development of the Embraer 170/190 aircraft line required an
investment of US$1 billion and the new A350 Airbus plane should
require no less than US$15 billion!
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• Global industry: low output and the high cost of production
makes the aeronautic industry an exporting and global concern
by nature, as regards both its client and supplier base and the
nancial institutions that back it. The same Embraer 170 aircraft
that operates under the ag of Finnair, Finland’s airline, in the
severe Scandinavian winter must also stand the high humidity and
temperature levels of southern United States, where it operates
under United Express’s ag. In both cases, Embraer must be
permanently available to its clients, providing local technical
support and immediate access to parts and components, thereby
honoring its commitment to the success of their business and
aiming always at their full satisfaction, which will in turn ensure
additional orders in the future. At the same time, Embraer must
experience the different environments in which it operates, so
as to detect positive or negative tendencies and changes in the
scenarios and to be able to provide a speedy response.
Legacy 600
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All these characteristics make the aeronautic industry into a fascinating as
well as a high-risk business. Failure of a new product may make the enterprise
that developed it unviable and force it out of the market. The disappearance
of traditional enterprises, such as the Dutch Fokker’s and the Swedish Saab’s
exit from the civil aeronautic market are two examples of this harsh reality.
Notwithstanding the major risks involved, developing an autochthonous,
strong, and autonomous aeronautic industry has been part of the strategic
agenda of many nations, which invest heavily in its development over the
years, recurrently supporting it by various schemes – celebrating major
Defense systems and products contracts, nancing new aircraft development
programs under favorable terms, and providing all sorts of tax incentives.
Embraer goes international
Aware that winning new markets, which are essential for is growth and
consolidation will become effective only if backed by its physical presence
in these markets, through industrial plants or units for rendering post-sale
services and support to clients, Embraer has, since its privatization in 1994,
gradually extended its operations internationally as a strategic objective.
Far from losing its Brazilian identity and distancing itself from its origins,
Embraer will, through internationalization, ensure new business deals, the
strengthening of its trademark, and the generation of higher-qualication
jobs in Brazil, in proportionately higher numbers than in its subsidiaries and
controlling enterprises abroad.
In 1997, as it regained strength after introducing in the market its
ERJ 145 commuter jet, Embraer launched its internationalization strategy
by adopting measures that included (1) expanding or opening sales and
marketing ofces and replacement parts distribution centers; (2) participating
in joint ventures; and acquiring traditional, renowned enterprises specializing
in aeronautic services.
United States and Europe: consolidated presence
Embraer has long been active in the United States and in Europe –
since 1978 and 1983, respectively – through sales and marketing ofces and
client support units (parts and services).
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The two units have had and continue to have a vital role in the expansion
of its operations in those two main commercial aviation markets in the world.
Including Brazil, 950 commercial jets, in addition to 800 turboprop planes as
well as military planes made by Embraer are now ying. The U.S. and the
European markets account for 95 percent of its total exports.
Facilities at the U.S. unit, located in Fort Lauderdale, FLA have been
expanded to keep up with Embraer’s operation since it delivered the rst ERJ
145 commuter jet in December 1996 in that market. In November 2006 it
had 234 employees and a spare parts stock of over 50,000 items.
With the increase of its business and client base in Europe, Embraer
decided to concentrate into one place, located in Villepinte, near the Paris
Roissy-Charles de Gaulle airport, its sales and marketing and client support
units, including a major spare parts warehouse, one of which was already
located in Villepinte while the other was previously located at the Le
Bourget airport. The new integrated facilities should enhance the operational
efciency of a body of 194 employees charged with managing assets totaling
172 million euros and providing services to 37 clients.
Phenom 100 and Phenom 300
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China and Pacic-Asia: strategic markets
Given the importance of its economy, which has steadily grown at high
rates for the last two decades, as well the strategic signicance of air transport
as and integrating factor and a development engine on a continental-size
territory, China has been selected by Embraer as a strategic goal, which
requires specic, differentiated treatment in view of its cultural characteristics,
far removed from the Western world.
Embraer’s presence in China started in May 2000, with the opening of
a sales and marketing ofce in Beijing, followed soon after by the opening of
a spare parts distribution center in the same city.
In 2001 and 2002, it negotiated an agreement with Chinese authorities
under which it would be allowed to install an industrial plant to make ERJ
145 family aircraft for the Chinese market.
Finally, in December 2002, an agreement was signed with Aviation
Industry of China II (AVIC II), establishing the Harbin Embraer Aircraft
Industry (HEAI), a joint venture controlled by Embraer, which holds 51
percent of voting shares.
In February 2004, Embraer announced its rst sale in China through
HEAI: six ERJ 145 jets sold to China Southern. Other signicant sales
followed: the same number of the same model sold to China Eastern Jiangsu
in March 2005 and to China Eastern Wuhan in January 2006.
In August 2006, Embraer announced the sale of 50 WRJ 145 planes and
50 EMBRAER 190 jets to the HNA Group, China’s fourth largest air company.
This deal was the rst sales contract of an E-Jet on mainland China, with a list
price of US$2.7 billion. ERJ 145 delivery will start in September 2007. The
50-seat jet will be made by HEAI in Harbin, in the Heilongjian Province.
By end-2006, HEAI will have delivered 13 ERJ 145 planes, which,
together with the ve sold in 2000 to Szechuan before the establishment of
the joint venture, will bring to 18 the total number of these jets currently
operated by Chinese airlines.
As regards the Pacic Asian region, in December 2000 Embraer opened a
sales and marketing ofce in Singapore, entrusted with implementing the enter-
prise’s trade strategy for the region’s markets, including the Indian subcontinent.
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The Indian aeronautic market is undergoing a deregulation process
and shows bright growth prospects. In this context, Paramount, a recently
established company, has announced the start of its operations, based on the
operational leasing of two jets: Embraer 170 and Embraer 175.
Also in India, Embraer has signed a major contract with the government
for the sale of ve Legacy 500 jets, particularly adapted to meet the comfort
and safety requirements of that country’s authorities.
Expansion of Embraer’s client services and support base
Embraer plans to continue expanding its client services sector not only
to ensure that its clients will achieve excellent dispatchability rates for their
aircraft eet but also to provide them with other services, such as aircraft
maintenance and repair, to their full satisfaction, which is essential for the
achievement of our goals and the growth of our operations.
Embraer’s Headquarters. São José dos Campos
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Thus, in addition to consolidating its client services in Brazil through
the transfer of its Services Center to the Gavião Peixoto Unit, it has
expanded its services operations in the United States, with the addition of
the new facilities of the Embraer Aircraft Maintenance Services-EAMS, in
Nashville, Tennessee, and in Europe, with the acquisition of OGMA-Indústria
Aeronáutica de Portugal S.A., in Alverca, Portugal, announced in December
2004, at the completion of its privatization process.
Early in 2005, EAMS expanded its facilities at the Nashville International
Airport to raise its services capacity, in view of the growing eet of Embraer
aircraft in the United States. This major decision led to the progressive hiring,
as of 2005, of additional EAMS employees, bringing their total to 277 by
November 2006.
Since its establishment in 1918, OGMA has devoted itself to aircraft
maintenance and is today a major representative of the European aeronautic
industry, providing maintenance and repair services for civil and military
aircraft, engines and components, and modication and assembling of
structural components, as well as engineering support.
Its main clients are the Portuguese, the French, and the U.S. Air Forces
and the U.S. Navy, Nato’s Maintenance and Supply Agency, and the Dutch
and Norwegian Navies, among others. In the trade area, OGMA also provides
services to airlines such as TAP, Portugalia, British Midland, and Luxair, and
to enterprises, including Embraer and Rolls-Royce.
In addition to doing maintenance work, OGMA also manufactures
structural components and composite materials for Boeing, Airbus, Lockheed
Martin, Dassault, and Pilatus. By November 2006, its work force totaled 1,606
employees, which makes it Embraer’s largest unit and subsidiary.
Preserving culture, values, and attitudes – an enduring
challenge
The velocity of Embraer’s expansion since 1996, when its ERJ 145
aircraft went into operation, has brought with it formidable challenges in
respect of the preservation of culture, values, and attitudes, a concern that
continues to guide the enterprise’s actions.
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To illustrate the magnitude of such a challenge, sufce it to mention
that in April 1997, Embraer had only 3,200 employees scattered through ve
operational units – three in Brazil and two abroad. Today, nine years later,
it has 18,670 employees, scattered through thirteen operational units – ve
in Brazil and eight abroad. In just one of its units, located in France, 26
nationalities and 19 languages are represented in a work force of 194.
One of the managers’ top priorities is to recognize the worker’s ethnic
and cultural diversity and their different working environments, including
specic labor legislations, while developing their maximum potential by
directing their energy toward the business’s objective, in perfect consonance
with the enterprise’s ethical and moral values.
The main element for the achievement of this intent is the so-called
Management Methodology through Action Plan. Each year Embraer
prepares an Action Plan based on a ve-year perspective and follows a
strategic planning model that takes into consideration markets, competitors,
the enterprise’s capabilities, opportunities, and risks, priorities, and results,
among other factors.
EMBRAER 170/190 family
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The Enterprise’s Action Plan is based on the equivalent internal plans
for each corporate, functional, and business area, reaching down all the way
to the plant oor, all in accordance with the general guidelines issued by the
enterprise’s top management. The enterprise’s variable pay policy, encompassing
all employees, takes into account the targets agreed by the leaders and the led
along the entire chain of command. The Action Plan is thus the key instrument
for the management of the business, and for all the employees’ alignment with
and commitment to the agreed targets and results.
In addition to the Action Plan Methodology, Embraer maintains
a strong Internal Communication culture aimed at integration with its
employees and their families and at disseminating Embraer’s central values
and concepts.
Internal Communication works in a global, integrated manner, through
the use of tools that are both modern of highly attractive to the employees:
•
Embraer’s Director and President has his own tool for communicating
with employees, called Em Tempo, issued simultaneously in Portuguese
and in English. More recently, Em Tempo has been issued in special
editions on video;
•
Embraer Intranet is a tool of corporate reach and our employees’
main source of information, which is accessed an average of 24,500
times a day;
•
Some 600 internal communiqués are issued annually and made
available to employees through Intranet and bulletin boards; 25
percent of these communiqués are of corporate reach;
•
The Embraer Notícias [Embraer News] is devoted to issues that
are essential to Embraer’s culture: the Management Methodology
through the Action Plan, the importance of cost discernment and
contention, combating waste, team rallying around Embraer’s broad
entrepreneurial objectives, etc.;
•
Interviews with Embraer’s top executives are translated and sent
to the units located abroad. As they consistently address market
evaluation and the enterprise’s strategies and objectives, they are well
heeded by employees;
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• Articles published in the national and international media on themes
of interest to Embraer’s business are translated and made available
to employees.
Armed with this vision and determination, grounded on ethical and
moral values, and having integrity as the spring of it actions, Embraer
embarks upon an extremely challenging and competitive entrepreneurial
activity. And in so doing it brings to the markets the image of an efcient,
agile Brazilian enterprise known for its quality products and technological
state-of-the-art.
Translation: João Coelho
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7
25
47
78
90
112
141
The recovery of Argentina’s economy
Aldo Ferrer
The Bolivian economy: diagnosis and plans for 2008
Luís Alberto Arce Catacora
A qualitative approach of the Brazilian economy
João Paulo de Almeida Magalhães
Chile’s economy and development challenges
Mauricio Jelvez M.
The Colombian economy: a critical approach
Darío Germán Umaña Mendoza
The Ecuadorian economy: overview and a new concept
of development
Fander Falconí Benítez
The Guyana economy, review and prospect
Rajendra Rampersaud
D E P
DIPLOMACIA ESTRATÉGIA POLÍTICA
Number 7 July / September 2007
Summary
260
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156
171
192
206
217
235
Paraguayan economy at a slow pace: current situation
and outlook
Dionisio Borda
The Peruvian economy and the challenge of growth with
social inclusion
Enrique Cornejo Ramírez
Surinam: macroeconomic evolution
André E. Telting
The Uruguayan economy: an entrepreneurial standpoint
Jorge Abuchalja
The present growth period of the Venezuelan economy
Nelson Merentes
Philip Moore: an ancient soul in a modern body
Agnes Jones
261
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D E P
DIPLOMACIA ESTRATÉGIA POLÍTICA
Number 6 April / June 2007
Summary
5
15
35
48
59
73
88
Reality of Argentina and the region
Cristina Fernández de Kirchner
Diplomacy for life
Pablo Solón
Brazil 2007: ready to grow again
Guido Mantega
Regional integration: factor of sustainable development
Emílio Odebrecht
The quest for development with equity
Ricardo Ffrench-Davis
Colombia: challenges until 2010
Álvaro Uribe Vélez
A plan for Ecuador
Rafael Correa Delgado
262
Di p l o m a c y , St r a t e g y & po l i t i c S – oc t o b e r /De c e m b e r 2007
Cultural identity & creolization in Guyana
Prem Misir
Paraguay: State patronage and clientelism
Milda Rivarola
Coloniality of power, globalization and democracy
Aníbal Quijano
Drug trafc combat in Suriname
Subhaas Punwasi
Mercosur: project and perspectives
Luis Alberto Lacalle de Herrera
About the utmost importance of a party
Hugo Chávez
Guayasamín by himself
94
105
127
173
186
194
221
263
Di p l o m a c y , St r a t e g y & po l i t i c S – oc t o b e r /De c e m b e r 2007
D E P
DIPLOMACIA ESTRATÉGIA POLÍTICA
Number 5 January / March 2007
Summary
5
25
35
39
54
74
82
Ideas, ideologies, and foreign policy in Argentina
José Paradiso
Infrastructure integration in South America:
stimulating sustainable development and regional
integration
Enrique García
Elections and patience
Antônio Delm Netto
The outlook for Chile-Bolivia relations
Luis Maira
Colombia’s strengths
Fernando Cepeda Ulloa
Foreign policy and democratic and human security
Diego Ribadeneira Espinosa
Cheddi Jagan’s global human order
Ralph Ramkharan
264
Di p l o m a c y , St r a t e g y & po l i t i c S – oc t o b e r /De c e m b e r 2007
88
103
123
137
171
179
Paraguay’s economic situation and prospects
Dionisio Borda
A strategic regional view of Peru’s foreign policy
José Antonio García Belaunde
Suriname by its authors
Jerome Egger
Mercosur: quo vadis?
Gerardo Caetano
Full Petroleum Sovereignty
Rafael Ramírez
Silvano Cuéllar – Allegory of the Nation
María Victoria de Robayo
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D E P
DIPLOMACIA ESTRATÉGIA POLÍTICA
Number 4 April / June 2006
5
16
27
44
66
84
100
Summary
Objectives and challenges of Argentina’s foreign policy
Jorge Taiana
Bolivia, a force for integration
Evo Morales
The brazilian economy’s challenges and prospects
Paulo Skaf
Program of government (2006-2010)
Michelle Bachelet
The trap of bilateralism
Germán Umaña Mendoza
The Amazonian Cooperation Treaty Organisation
(Acto): a constant challenge
Rosalía Arteaga Serrano
Guyana – linking Brazil with the Caribbean:
potential meets opportunity
Peter R. Ramsaroop
Eric M. Phillips
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Di p l o m a c y , St r a t e g y & po l i t i c S – oc t o b e r /De c e m b e r 2007
Paraguay’s political crossroads
Pedro Fadul
The great transformation
Ollanta Humala
Suriname: macro-economic overview, challenges
and prospects
André E. Telting
Uruguay’s insertion into the world economy:
a political and strategic view
Sergio Abreu
“There is another world and it is in this one”
José Vicente Rangel
Pedro Lira
Milan Ivelic
118
131
151
164
200
226
267
Di p l o m a c y , St r a t e g y & po l i t i c S – oc t o b e r /De c e m b e r 2007
D E P
DIPLOMACIA ESTRATÉGIA POLÍTICA
Volume I Number 3 April / June 2005
268
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269
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D E P
DIPLOMACIA ESTRATÉGIA POLÍTICA
Volume I Number 2 January / March 2005
270
Di p l o m a c y , St r a t e g y & po l i t i c S – oc t o b e r /De c e m b e r 2007
271
Di p l o m a c y , St r a t e g y & po l i t i c S – oc t o b e r /De c e m b e r 2007
D E P
DIPLOMACIA ESTRATÉGIA POLÍTICA
Volume I Number 1 October / December 2004
272
Di p l o m a c y , St r a t e g y & po l i t i c S – oc t o b e r /De c e m b e r 2007
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