N° 15, Agosto-Noviembre
de 2003
U.S.'s ratings of Latin American regimes
James Petras *
What emerges from interviews and conversations with
Wall Street investors and risk managers and trade and commerce officials in
Washington, as well as from a close reading of World Bank and IMF reports, the
Wall Street Journal, the Financial Times and the financial pages of the New
York Times in the first 6 months of this year (2003) is that there is a
hierarchy of favorites and enemies among Latin American governments. The criteria that used to judge regimes is
their willingness to follow the Wall Street-Washington neo-liberal policies,
their ability to implement them and their ability to secure political
legitimacy. The establishment rankings have changed over the past year
particularly where regime favorites have either been ineffective in imposing
policies or have become politically isolated. For example a year or less ago
the Bolivian President Sanchez de Losada, Peruvian President Toledo and the
Uribe regime of Colombia ranked high because of their strong support for Latin
American Free Trade, their programs of privatization, commitment to prompt and
full debt payments and unconditional support of Bush's military interventions,
in Colombia, Afghanistan and Iraq. This year they have been downgraded, not
because they have changed their politics but because they are almost bereft of
political support - isolated and discredited clients, of limited value in
pursing Washington and Wall Street's agenda.
Wall Street's Favorites of 2003
At the top of the list of favorites are the Brazilian and Ecuadorian regimes. While
most of the more astute senior diplomats and veteran State Department officials
knew before the 2002 presidential election that Lula was no longer a radical
threat or even a consequential reformer, most Wall Street and Washington
policymakers, surprised by Lula's selection of an orthodox liberal economic
team, were perfectly ecstatic when he began to forcefully push through a
radical neo-liberal agenda, including privatizing social security,
substantially lowering pensions for public sectors employees and reducing the
cost and easing the requirements for capitalists firing workers. One Washington
official commented to me that Lula's forthright repudiation of the Keynesian
re- distributive politics of his party (the Workers' Party) reminded him of
Gorbachev's rejection of communism and handing over Eastern Europe to
Washington without any coercion or trade offs. The consensus on Wall Street is
that the only significant economic difference between Lula and Bush is that the
Brazilian President is a more consequential free market advocate than Bush. He
demands that Washington lower its trade barrier on a list of protected products
(orange juice, steel, textiles, etc.). Brazil currently
ranks highest in the U.S. establishment because of four factors: 1) what one
cynical broker on Wall Street (a former Leftist) called Lula's “taliban
neo-liberalism” (meaning his dogmatic embrace of the whole IMF repertoire from
fiscal austerity to his appeals to the multi- nationals to fight poverty); 2)
Lula's immediate vigorous implementation of the harsh neo-liberal agenda even
forming alliances with rightwing parties and disciplining left-wing dissident
deputies from his own party who disagree; 3) the fact that Lula retains a
popular majority in the polls and has been successful in co-opting or
neutralizing the left trade union organization (CUT) and in ignoring the
demands of the MST; 4) that Lula continues to push the IMF agenda despite a
negative growth rate for the first 6 months of 2003.
The second most popular
President is Lucio Gutierrez of Ecuador who has reaffirmed the dollarized
economy, confirmed the U.S. military base in Manta, supports the U.S. directed
military intervention in Colombia (Plan Colombia) and proposes to privatize the
key petroleum and power and light industries. Before his election Gutierrez was
thought of in Washington as a kind of quirky opportunist who spoke in favor of
Pinochet and Castro depending on who paid his travel expenses. Soon
after the first round of the elections Gutierrez went to Washington where he
was considered a “docile listener” according to one Washington official who
spoke off the record. Once elected Gutierrez “spoke to the Indians but worked
with us” according to a leading petroleum investment advisor. Much to official Washington's pleasure he
has split the once powerful Indian movement co-opting its political wing
Pachacuti by giving a few notables, ministerial pests (with little effective
power) and providing some of the local politicos minor posts on the
administration. The Indian social movement CONAIE is further divided between
leaders and followers on whether to break with Gutierrez, severely weakening
efforts to unify the opposition. The same co-optation process is true with the
once powerful Petroleum workers union. All this is good news to the Washington
establishment, as Ecuador has seen two previous U.S. client Presidents
overthrown by CONAIE and its allies in the electrical and petroleum workers
unions. A bit further down in the positive rankings is President Fox of Mexico,
Uribe of Colombia and Lagos of Chile. All are devoted disciples of Washington's
neo-liberal ALCA agenda. Several factors have caused these client Presidents to
lose top ranking. First Fox has been unable to push through the privatization
of petroleum and electricity agenda, which Wall Street promotes; and Fox still
insists on a quid pro quo on legalizing 4 million Mexican workers in the U.S. Secondly,
Fox allowed Washington's number one asset Jorge Castaneda to be ousted from the
foreign office. In addition Fox did not side with Bush on the Security Council
vote on the U.S. invasion of Iraq.
Likewise Uribe slipped a notch because of his failure and incompetence in
implementing Washington's war against the guerrillas and his growing political
and social isolation. Uribe promised Washington he would militarize the
country, and destroy the guerrillas. After over a year of combat he has totally
failed. Pentagon sources claim that Uribe's military commanders are more
interested in confiscating drugs for resale than engaging the guerrillas in
close combat.
Lagos is still highly rated in Washington but with the neo-Pinochet right
gaining strength and the pro-Lago coalition immersed in corruption scandals,
Washington has slightly downgraded Lagos, particularly after he waffled on the
Iraq resolution at the Security Council.
The second ranking clients have the virtue, in Wall Street's eyes, of being strategic
neo-liberal allies, even if their occasional mild expression of dissent
irritates Rumsfeld's Pentagon.
The third level in the positive rankings include many of the previous first
rankers, Batlle of Uruguay, Sanchez de Losada of Bolivia and Toledo of Peru. Batlle
is running a bankrupt corrupt-ridden regime which stays in power largely thanks
to the inertia of the political system and the ultra- legalism and prudence of
the center-left parliamentary opposition. Sanchez de Losada and Toledo have
less than 10% support and are constantly facing massive opposition in the
streets. They are totally inept and lack the power to implement Wall Street's
privatization agenda, Washington's repressive policies toward coca growing
farmers as much as they would like to.
Washington/Wall Street continue to support these regimes up to now, but look
forward to discarding them if the popular pressure builds up. They then
have the choice of looking for a “responsible” centrist (like Alan Gareen of
APRA in Peru) to put out the fire or military-civilian junta in Bolivia (as
Ambassador Greenlee implies) to seize power to “save democracy” according to
the Rumsfeld formula.
Between the positive and
negative rankings is the new Argentine President Nestor Kirchner. Washington
demonstrated its negative reaction to the defeat of its two preferred
ultra-rightwing candidates (Menem/Murphy) by sending a low level Cuban émigré,
Cabinet minister to Kirchner's inauguration. Wall Street is keen to see how
Kirchner handles negotiations with the IMF, how soon he restores debt payments,
and how long he can maintain order and secure an agreement with local financial
elite and the multi-nationals. Both Washington and Wall street did not like
Kirchner's declaration of political independence from the corporate elite and
the priority he gave to regional integration as opposed to ALCA. But both Wall
Street observers and Washington professionals are used to populist and
nationalist post-election rhetoric and are awaiting to see what concrete
politics Kirchner will pursue. “As governor in the oil rich province of Santa Cruz,
Kirchner backed the privatization of the lucrative petroleum industry, and that
counts for something”, a financial journalist commented to me. Washington and
Wall Street place Kirchner in the unranked box with an asterisk signaling, “Awaiting
implementation of political economic agenda.”
On the negative rankings stands
Venezuela and Cuba in that order. Venezuela is negative in Washington's
rankings but plus and minus on Wall Street. The discrepancy has to do with
President Chavez heterodox politics. He pays his debts on time to Wall Street
Banks; he is a loyal supplier of oil to the U.S. even during an imperialist
war; he has not nationalized any U.S. property or imposed graduated taxes. His
neo- liberal economic team and policies are seen as pluses on Wall Street. He
has however, fired the most malleable and corrupt pro-Wall Street executives
from the state petroleum company, diverting profits to investments in internal
development instead of to the U.S. stock market, costing Wall Street firms
lucrative commissions. He has instituted capital controls, limiting the outflow
of capital and profits, licit and illicit, to U.S. banks and real estate
investors. While there is some ambiguity among Wall Street regarding
Venezuela's economic performance in Washington Venezuela's ranking is totally
negative. President Chavez defeated CIA directed Venezuelan “assets” and
Washington's political- economic clients who twice tried to overthrow the elected
President. Chavez has taken a
critical position on the U.S. war on terrorism, Plan Colombia and ALCA in the
name of peace, anti- militarization and Latin American integration. Venezuela
under Chavez, has friendly trade and diplomatic relations with Cuba. In the
Rumsfeld- Wolfowitz world view Venezuela needs a “regime change.”
Cuba is clearly on the lowest
pedestal in Washington's rankings. The Bush administration has labeled
Cuba a military target, as part of the “axis of evil” to be invaded, if Cuba
didn't have the best-trained armed forces in the Third World, a superb security
system and the popular backing of millions of Cubans. Cuba is enemy number one because it is a
clear alternative to the region's neo-liberal colonies. Cuba is a major force in
the United Nations and in all international forums, expressing its solidarity
with the anti-globalization and anti-imperialist movements and opposing U.S.
imperial designs in Asia, the Middle East and especially Latin America. While
Washington gives Cuba the lowest ranking possible, Wall street, or at least
sectors of the big ago-business sector, does not always agree. The U.S. Chamber
of Commerce, major agricultural exporters and giant grain shipping firms have
given Cuba a positive economic ranking in terms of its availability as a
market, as have important tourist, airlines and service industries.
Conclusion
The U.S. rankings reflect the changes in the complex political and social
forces working within Latin America as well as the success and failure of
Washington and Wall Street's policies. While popular movements have undermined
the rankings of several U.S. client regimes as effective instruments of U.S.
policy, in other important cases the right-wing evolution of certain popular
political leaders has resulted in Washington's adding their countries to the
highest rankings. In large part U.S. rankings of Latin American regimes is a
result of the internal political and class struggles, the failures of
neo-liberal economic policies, and the struggle between imperial intervention
and anti-imperialist movements and nations. Secondly, it is clear that while in
many cases Washington and Wall Street coincide in their rankings there are
cases of some divergences. Finally in the case of Lula's Brazil we have a peculiar
situation in which the Bush-Rumsfeld administration and the center left
politicians in Latin Americas converge with high rankings. Washington's
positive assessment is based on Lula's actual policies, the center-left on
their mistaken expectations or illusions.
* Rebelión,
June 2, 2003.
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