With much of Latin America demonstrating a decisively distinct air of autonomous behavior when it comes to responding to U.S. regional policy initiatives, Guyana appears to want to emphasize that it should not be counted in their number. A high-level security conference between the U.S. and Guyana was kicked off on Tuesday December 11, just after the recent revival of a long simmering territorial dispute between Guyana and the Bush Administration’s arch nemesis, Venezuela. The conference was organized by the Guyana Defense Force and the U.S. Embassy’s Military Liaison Office, and is being held against a backdrop of heightened tension between Venezuela and Guyana over the November 15 incident in which the Guyanese government claims that Venezuelan soldiers used explosives and helicopters to destroy two dredges along the Cuyuni River. The Venezuelan government maintains that it was doing nothing more than expelling illegal miners from Venezuelan territory.

This incident comes at a time when Venezuela may be signaling that it isn’t prepared to let the Essequibo territorial dispute be settled unilaterally as a result of Guyana emitting a claim of sovereignty based on granting licenses to foreign companies wanting to do business there. The sequence of events in the past few months, ending up with the destruction of the extractive equipment on the Cuyuni, is not likely a coincidence. The U.S., Venezuela, and Guyana have been engaging in almost unfathomable triangular interchanges for quite some time now, and they may be about to expand, with a little bit of good or bad luck.

In a related matter, on December 12, the U.S. was the center of the latest development in the scandal that had arisen weeks before when Guido Antonini Wilson was detained in Buenos Aires with $800,000 of undeclared cash stuffed into his luggage. The intended destination of the money was widely speculated upon and seemed to involve the corruption of several officials in the soon-to-be functioning administration of President Cristina Fernandez de Kirchner’s husband’s out going government. However, U.S. prosecutors now claim that four suspects detained in Miami on December 12 have provided information that supports the argument that the money was intended as an illegal campaign donation from President Hugo Chávez to Mrs. Kirchner, which, if true, could be enormously embarrassing to the new leader as well, of course, to Chávez, and could provide the U.S. with leverage over her while at the same time tarnish Chávez for purportedly trying to buy influence by means of his petro dollars.

The U.S.-Guyanese conference also comes at a time when, like elsewhere in the hemisphere, street crime in Guyana is markedly rising, specifically the type of which is associated with the peddling of illegal narcotics. In his opening remarks at the security conference, U.S. ambassador to Guyana, David Robinson, reportedly praised the strong U.S.-Guyanese military relationship over the years. He also counted Guyana among those hemispheric countries fortunate enough to be receiving augmented U.S. military training. He also cited Argentina, Colombia, El Salvador and Guatemala as being on the list.

It seems that the U.S. is in fact taking on a more assertive stance against the rising pink tide countries in a traditionally forgotten corner of South America. It will also be of interest to know what card Brazil will play in reaction to these developments, given that it will be the regional power most affected by Washington’s trifling with Guyana and the possibility that this could lead to a regional U.S. base in Guyana in which U.S. forces will be quartered. Such a facility might be aimed at replacing those forces now in Manta, Ecuador, once the lease expires for the base in 2009.

This analysis was prepared by COHA Research Associate Montana James

Bank of the South: Another step toward Latin American integration

* Member countries analyze the proposal as Banco del Sur (Bank of the South) is about to be launched
* Lula, while skeptical, is moving ahead
* Dealing with the opposition to the Bank
* Not a Chávez-controlled institution, but one aimed at development and integration, infrastructure loans and aiding each other’s investment requirements

Since coming to power in 1999, Venezuelan President Hugo Chávez may have been seen as a controversial figure, universally known for his confrontational stance regarding U.S. foreign policy aims. However, his zeal for social reform, promotion of Latin American integration and his unquestionable good will toward other nations will reach a high-water mark on Sunday, December 9, 2007, when the Bank of the South will be formally launched.

Integration has been a recurrent theme on Chávez’s political agenda—not Washington’s kind, but the more regional-centric ALBA (Bolivarian Alternative for the Americas)— which is given reality by the oil concessions Venezuela has negotiated with various Latin American countries, as well as his most recent proposal for a development bank for South America, which has been given the working title of Banco del Sur (Bank of the South).

The Bank of the South appears to be one of the region’s most compelling projects leading towards authentic Latin American financial bolstering, as well as helping to allow for a new-found autonomy. It appears that for the first time in its history, the region actually will have its own entirely autonomous financial institution with each of its members having one vote and which is most likely scheduled to be capitalized from $7 to 8 billion dollars. This large institution will be capable of promoting financial integration and cooperation. Under its members’ jurisdiction, it will support the development of badly needed infrastructure projects, especially in the energy sector. This initiative has the support of seven South American countries (Venezuela, Ecuador, Bolivia, Brazil, Argentina, Uruguay, and Paraguay) in addition to several other Caribbean and Asian nations that already have expressed varying degrees of interest in the project.

Nobel Laureate and Columbia University Professor Joseph Stieglitz gave his blessing to the project after meeting Chávez in Caracas. In a subsequent press conference, he observed that “one of the advantages of having a Bank of the South is that it would reflect the perspectives of those in the Western Hemisphere. It would boost Latin America’s development and provide a useful alternative to the World Bank and the International Monetary Fund (IMF). It is a good thing to have competition in most markets, including the market for development lending.”

Some open questions and possible disagreements regarding the Bank’s policy framework and its objectives persist among the founding countries. Public opinion in Latin America in general has a low regard for International Financial Institutions (IFIs), especially the IMF, which has been widely chastised for its prejudicial treatment of the Argentine economic melt-down earlier this decade and for the scores of years it spent setting harsh conditions in return for providing access to international credit. Therefore, given how Latin American governments are reluctant to seek aid or credit from IFIs, the region needs a large alternative financial institution that would be noted for its transparency and which permits its members to actively engage in the decision-making process, which is exactly what Bank of the South proclaims it will do.

The Proposal

President Chávez initially proposed the creation of Bank of the South at the Cochabamba Summit in December 2006. The initial proposal was to create a development bank for South America to finance regional development projects, while being accountable and seeing to it that provisions be made for the necessary amount of public participation.

The bank project is well underway with a target of raising over $7 billion in initial capital (Venezuela has already offered $1.4 billion and Argentina $350 million). However, there is some disagreement on what the institution’s objectives and framework should be. Should it be an institution designed to aid countries in financial crisis (such as the IMF does)? Will it be in competition with the other IFIs, such as the Inter-American Development Bank (IDB)? Or will it be yet another institution that will, as Prof. Stieglitz phrases it, promote competition in the market for development lending but this time in a higher-minded manner?

Venezuela has taken the lead in proposing the creation of an institution that will be specifically aimed at servicing South America. It is no surprise that Chávez is the leader who first envisioned this kind of institution, considering how he chose to withdraw Venezuela from the IMF and the World Bank earlier this year and how he has publicly attacked those institutions for being instruments of American imperialist design in the region. Venezuela, as the lead country of ALBA, Chávez’s model for an altruistic foreign and financial policy, also insists that the main distinction between the IMF and Bank of the South will be that the latter will not impose a definition for cooperation based on “neo-liberal” mandates. Vince McElhinny of the Bank Information Center points out that Venezuela foresees an institution that will play a significant role in regional monetary policy and provide financing for needy members. Colombia’s approach, on the other hand, would have been pragmatic, rather than provocative, and was not expected to cause Washington any grief.

Colombia’s Explosive Announcement and its Impasse with Venezuela

Colombia’s announcement that it would not be attending the Buenos Aires gathering did not cause any great surprise because it came as a consequence of Colombian President Alvaro Uribe’s angry spat with Chávez. He also presumably felt that attending would put him in hostile territory and that he better identify with the status quo. Uribe managed, until the other day, to have maintained a cordial working relationship with his Venezuelan counterpart while relying on the White House to aggressively lobby the Democratic Party leadership to obtain the necessary backing to get the approval for a Free Trade Agreement with Washington. Uribe’s relationship with Chávez is currently under siege due to his abrupt termination of Chávez’s role in attempting to achieve, with Bogotá’s consent, the release of hostages being held by the leftist FARC (Fuerzas Armadas Revolucionarias de Colombia) guerillas.

Following Uribe’s shutdown of Chavez’ mediation in the conflict, after the latter spoke directly to the commander of Colombian military about the direction of the negotiations, Chávez angrily announced that relations with Colombia would be put “in the freezer.” Due to Uribe’s intemperate actions, Chávez said he was no longer planning on rejoining the Andean Community of Nations, a trade bloc of which Colombia is a major member. The crisis is also expected to affect commerce between the two countries, which share a healthy $5-6 billion in annual trade, most of it in non-traditional products.

The Case of Brazil

Lula’s support for the project has been hesitant, even distant at times, but in recent weeks he considerably has warmed up. Brazil initially was hesitant to give its support to the Bank because its strategy appeared to be based on creating an emergency fund, as the IMF does, to aid countries with urgent economic concerns. Given that the region currently has relatively strong credit ratings and budget surpluses—partly thanks to China and India’s quest for mineral resources—Brazil’s argument that the Bank may turn into an IMF-type of institution that is redundant. But Brazil decided to throw its full support behind the bank, after the bank planners clarified that the new institution would be limited to promoting investment and development in the region.

Another issue that may have promoted misunderstanding involved Brazil, which has the region’s largest economy. Brasilia had opposed the idea that the voting structure of the Bank should be based on the principle of one nation one vote. Rather than equal voting rights, it favored a voting scheme based on the amount of capital that each nation will be pledging to the financial institution’s capitalization allotments. Eventually, Brazil fell into line and agreed with the one vote per nation formula which was espoused by the majority of the membership.

One factor that initially complicated matters was that Brazil already possessed a development bank—the Banco Nacional de Desenvolvimento Econômico e Social (BNDES)—which already has become a powerful domestic financial factor in the country, lending more than $15 billion in the past year for in-country projects. Luciano Coutinho, the president of BNDES, said he was prepared to create a fund through his bank whose purpose would be to replicate the mission of the Bank of the South. This brings up the question of exactly how Brazil will benefit from the Bank if it already has a development bank that finances such projects in the country. Apparently, Brazil’s vision for the Bank is one that adheres to orthodox fiscal standards and basically finds itself involved in financing the infrastructural investment needs of an expanded Mercosur, the southern cone free trade area. Most of the development projects that BNDES finances are in fact of this type and normally tend to relate to Mercosur-associated energy policies. Given that Brazil is Latin America’s largest economic force and a country with immense potential, its support gives the Bank of the South huge legitimacy and will help it materialize other projects, such as a very ambitious proposal for a gas pipeline which would eventually serve most of South America.

Opposition to the Bank

Opposition to the Bank of the South is centered on the premise that the Bank itself is part of Chávez’s vision for South America, and that any country that supports the idea is backing a socialist scheme for Venezuela as well as the rest of the region. Some have gone as far as to say that some of the South American members are supporting the Bank only to secure the good will of oil-rich Venezuela.

Roberto Teixeira da Costa, a board member of the private Banco Itau Holding Financeira S/A and Sul America Sam, stated that the Bank will overlap institutions dedicated to financing the region—not only the IDB, but also the Andean Development Corporation (CAF), which is partially committed to financing badly needed infrastructural projects. He also alleges that the region is not lacking funding, but rather sound and viable projects to be financed.

Countering the Opposition by Creating a New and Thoroughly Democratic Structure

Indeed, there is little doubt that the Banco will, to a certain extent, overlap existing policies and goals of other lending institutions. However, it should be clear that the proposed charter for the Bank of the South is in sharp contrast to the IDB or CAF when it comes to an open democratic structure in the Bank’s favor. According to Venezuela’s Minister of the Treasury, Rodrigo Cabezas, the Bank’s charter will prevent any country from possessing a majority stock ownership, as well as include other clauses that will prevent the application of adjustment mechanisms employed by the World Bank, IDB and IMF.

Moreover, the Bank of the South should not be looked upon as trying to undermine the role of CAF, the biggest present lender to many Andean nations. However, as Bank of the South seeks for a more wholly democratic structure, it does not intend to achieve this by emulating the hierarchical structure of CAF.

Not a Chávez-Led Institution

The idea that any of the potential members of the Bank of the South will be candidates to also join Chávez’s foreign policy alternative, ALBA, or that the Bank will be controlled by Chávez, is probably riding the wrong horse. While it is true that Chávez took the initiative to establish the Bank, and that Venezuela is positioned to be a major participant in its operations, and that its main headquarters will be in Caracas, this doesn’t mean that Chávez in any manner will directly control its activities, or that the Bank will be used to funnel Chávez’s “Bolivarian” vision automatically into Latin America. It is worth noting that the Bank demonstrably will possess a structure that will enable all of its member countries to actively participate in its operations: or, as Cabezas has stated, the Bank will be an institution “for us, led by us.” Also, while some countries, like Colombia, may have serious ideological differences with Chávez and may not want to be considered part of an institution allegedly led by him, or at least be part of Chávez’s ALBA, this does not mean that they are prepared to turn their backs on the new institution, even though Bogota has now done this, at least for the present time.

In an interview in October with the New York Times, Brazilian President Luiz Ignacio Lula da Silva dismissed such concerns that Venezuela would try to exert control over the Bank. He stated that “it is small-minded to think that one bank created with the multilateral representation of many countries would be at the service of one person or one country. It’s not that simple.”

Conclusion

Although Colombia’s relationship with the Bank has ended, for now, all of the other proposed members seem to be committed to actively participating in the financial institution. Yet, much remains uncertain regarding working out its policy framework and strategies that will be utilized after the December 9 gathering. Much of what will eventually make Bank of the South very successful as well as very popular with its clientele will be its commitment to transparency, participation and accountability.

South American countries must come to see in the Bank of the South as a window of opportunity to create an institutional model for development that, if successful, could be emulated by grouping of countries around the world. There is still a long road ahead, but the Bank’s member countries are set to meet on December 9 to discuss and publicly announce the final structure of the Bank’s operating framework. This meeting is expected to come forth with reasonable understandings on how to proceed so that the project becomes a popular reality in short order.

This analysis was prepared by COHA Research Associate Roberto Mallen

Peru, Yes; Colombia? Free Trade Agreements: Lessons from Latin America’s Recent Past

* Peru’s Free Trade victory in U.S. Senate could later embarrass both Senators Clinton and Obama for their pro Peru stance, but also could spotlight President Garcia’s complicity in massive human rights violations when the Shining Path Guerrillas were active.
* Free Trade Agreements (FTAs) between the U.S. and Latin America may turn out to be not as beneficial as they promised.
* Intra-regional trade could be a viable alternative to FTAs with Washington.

Free Trade Agreements (FTAs) between the United States and several Latin American countries are increasingly being described in the media as the centerpiece of this country's western hemispheric relations. Last Tuesday, the FTA between the U.S. and Peru was approved by the U.S. Senate by a vote of 77 to 18. This gave President Bush his first important victory on trade matters since the Democrats gained control of both houses of Congress a year ago. Susan Schwab, the United States Trade Representative (USTR), said that "With the strong votes by both chambers of Congress, we are sending a strong signal to the world that the United States is regaining its bipartisan footing on trade policy and is a reliable ally to countries that are building political and economic freedom." Meanwhile, Peruvian President Alan Garcia hailed the approval of the FTA by the U.S. Congress, referring to it as an "unprecedented" deal. But in order to reliably predict whether its now achieved FTA with the U.S. will in fact help Peru attain "political and economic freedom," it is important to first understand the history of U.S.-backed FTAs in Latin America.

As for Peru's Garcia, the publicity focusing on him may not be welcome by the Peruvian leader, or, for that matter, by Senators Clinton and Obama, who voted in favor of the trade pact This is because during Garcia's first term as president during the 1980's the Peruvian ministry, under Garcia's instruction, carried out a brutal dirty war against those which it perceived as members or sympathizers of the Maoist Shining Path (Sendero Luminoso) which resulted in thousands of political assassinations by the Peruvian security forces. The UN-brokered Truth and Reconciliation Commission exposé of these killings are sure to deeply disturb the international community's conscience on this matter and point out how Clinton and Obama have trivialized the issue by awarding Garcia a free trade pact.

Aside from Chávez-inspired anti-neoliberal campaigns and the relative minority of economists who feel that free trade does not automatically register a win-win situation, most economists are receptive to concepts associated with 'free trade' such as high export-driven growth, mounting foreign investment, and economic modernization. These aspects are highly inviting to conservative business interests and orthodox economists who are dominant forces behind the Latin American governments presently negotiating FTAs with the United States. However, the alleged benefits that come with free trade deals need to be juxtaposed with the far less glamorous realities being faced daily by the majority of Latin American countries that continue to lack the physical infrastructure, as well as strong democratic institutions, to guarantee that economic success will spill over to the region's most disadvantaged areas.

However, government representatives would be wise to exercise caution, because FTAs are not always one-way tickets to long-term stability. In fact, recent Latin American history has indicated that abruptly opening vulnerable local markets can accentuate already grave domestic social problems. The typical scenario found throughout the region ritualistically portrays a sharp reduction of tariffs by a Latin American country, followed immediately by a wave of U.S. exports that can be counted on to flood the domestic market, and in turn, end up shutting down what has now become non-competitive domestic production. The experience has been that many Latin American markets have proved to be too weak to compete with a highly-subsidized U.S. economy, in spite of benefiting from a competitive advantage offered by cheap wages. It thus becomes pertinent to illustrate the drawbacks that derive from these FTAs, often accentuated by poor representational skills on the part of Latin American negotiation teams, who turn out to be losers in the process more often than not.

Recent Historical Context

In 1990, President George H.W. Bush put forth his ill-fated Enterprise for the Americas Initiative, which sought to bring about economic and political change in Latin America. According to Paul H. Boeker, former U.S. Ambassador to Bolivia and ex-president of the Institute of the Americas at the University of California, Bush claimed that the proposed extension of free trade to Latin American countries would "bring political benefits, particularly in strengthening democracy and creating a stable, long-term basis for better U.S. - Latin American relations." At the time, most heads of states in Latin America embraced the initiative, probably out of the fear of being left behind in the pursuit of some initial benefits of expanding into the global economy. Today, negotiators on the U.S. side of the table continue to try to convince Latin American interests that deals with the U.S. should be seen as a national priority that will undoubtedly benefit their country. This type of thinking often goes unchallenged because it has become customary to see government leaders' work within "the accepted framework of neoliberalism and the Washington Consensus," as political science professor Gary Prevost has observed.

The Mexican Example

The North American Free Trade Agreement (NAFTA) has been focused on boosting trade between Mexico and the U.S since it came into effect in 1994. However, it is undeniable that some sectors of the Mexican labor force, such as the country's farmers, have markedly suffered from this trade deal. Prevost explains that "lower tariffs caused U.S. corn, which is subsidized, to push Mexican prices down further, forcing more than one million small farmers out of business since 1994." The consumers have not noticeably benefited from these transactions, since the price of tortillas (a staple of the Mexican diet) has actually quadrupled in some locales because of the lack of equivalent subsidies from the Mexican government. Thus it is clear that Mexican farmers were not ready to compete with a Washington subsidized, 'factory in the field' U.S.-style agricultural economy. For its part, the Mexican government failed to provide a safety net for its farmers who frequently end up at the bottom of the country's national priorities. Ironically, a substantial proportion of the 1.5 million Mexican farmers who have lost their livelihoods in the past few years are from the same demographic pool which is driven to cross the Rio Grande, only to be condemned by brimming majorities in U.S. economic and political sectors which, in fact, enthusiatically had helped NAFTA get on its feet in the past.

The Chilean Example

Economist Claudio Lara Cortés describes the FTA signed by Chile and the U.S. in 2002 as "a model to avoid." Even though he acknowledges that Chile's exports to the U.S. have boomed since its implementation, and, broadly speaking, has benefited the Chilean economy (in 2006 exports accounted for 42 percent of the country's GDP), he argues that the fundamental flaw of the FTA is that "consumers and workers are excluded from the process, as if they have no rights besides the right to receive promises." More importantly, he shows that the increased exports have not wholly benefited the Chilean populace; as a result, many have been adversely affected by the increasing concentration of wealth in the hands of Chile's business elites. It is the latter who are mainly in charge of making decisions at the peaks of the country's economy—decisions which decidedly reflect the economic interests of the financial titans in Chile.

To make his point clear, Lara Cortés quotes renowned economist and professor Alexis Guardia, who says that "growth based solely on exportation [in Chile] has a limited effect on employment (20-25 percent of direct and indirect jobs are in the exporting sector), trickling down very little because the exporting sector's connecting links are poorly developed and there is no adequate policy in place that would help them expand." Hence, the FTA with the U.S. may have helped Chile boost its exports, but in the end, has done little to alleviate Chile's remarkably high level of domestic inequality.

The Andean Countries

The U.S. has unwaveringly pushed FTAs with the Andean countries. Criticism of the proposed FTA between Ecuador and the U.S (now indefinitely on hold due to Washington's negative reaction to Ecuador's decision to annul a contract with the U.S. Occidental oil company) is now focused on the agricultural sector. The United Nations Economic Commission for Latin America and the Caribbean (ECLAC) published a study in 2005 that analyzed the consequences of the proposed bilateral FTA in which it found that "Ecuador's agricultural sector loses in all possible scenarios." Once again, a FTA between the U.S. and a Latin American country is expected to distort a sector already on the margins of poverty, which consistently has been left out of the nation's participatory political framework.

The U.S.-Peru trade agreement has just been approved by the U.S. with solid bipartisan support in Congress, and now has been sent to President Bush who will enthusiastically sign the measure. Claims by the Peruvian opposition to the trade deal such as "TLC: Así No"—which translates to "FTA: not like this"—indicates discontent on the part of the populace, especially since the Andean nation can already export most of its products to the U.S. duty-free. The opposition also argues that the trade deal has been poorly negotiated by Peruvian authorities, mainly because average Peruvian citizens have been utterly excluded from the process.

The pending deal with Colombia faces more opposition in Congress due to continuing violence against local trade unionists in the country and huge scandals in which the Presidential office in Bogota has been to blame. Proponents of these FTAs argue that they will help boost trade, offer new employment opportunities, and promote higher foreign investment in the region. But even if these countries at first experience higher GDPs, this does not mean that living conditions will necessarily improve or that deprived sectors of the populace will receive the benefits promised by the authorities. Like in the Peruvian scenario, opposition to the FTA between Colombia and the U.S. has also been rooted in the same principles. Colombian Senator Cecilia López Montaño, a professional economist, criticizes politicians involved in drafting the U.S. - Colombia FTA because "rarely do [they] defend the weak, and as usual they end up embracing the arguments of the obvious winners who, typically in Colombia, have always been the same: the financial sector, the big business, the exporting regions, and the skilled labor force." According to this line of analysis, not even ordinary consumers will receive notable benefits because commercial integrated operations "which import, distribute and sell, are the ones that will end up keeping the subsidies of the products exported by the U.S. to the country Colombia." If the role of the government is to provide equal opportunity to all its citizens, then leaders must guarantee that no one is left behind. This seems to be anything but the case with the Colombia-U.S. FTA, which has not been creatively constructed by concessionally-minded Colombian authorities.

Intra-regional Integration

A number of Latin American governments are anxious to enact free trade deals with the U.S. despite knowing from the start that this country will insist that it holds the strongest cards in the deck. There is, however, an alternative game plan that has not been fully explored, which could help Latin American countries become more competitive in the long run: intra-regional trade.

The Comtrade database of the U.N. compares intra-regional trade performance around the globe. While East Asia has achieved over 50 percent of intra-regional trade arrangements and Europe has nearly reached 70 percent, South America remains woefully behind with a low 20 percent. Perhaps now is a good time for Latin American countries to look to their neighbors to expand upon already existing trade opportunities, as very much has been the case between Colombia and Venezuela. First of all, intra-regional economic integration would imply negotiating among equals, a patently compelling idea for the future but chimerical at the present time. Moreover, it would help fortify and rearrange these countries' physical infrastructure, including transportation, communication, and technological availabilities, while at the same time avoiding the risk of unequal trade dealings which are almost a given when trade with the U.S. is involved. The projected creation of Banco del Sur, a monetary fund and lending institution poised to be at least a partial alternative to the Washington Consensus' IMF, would provide a safety net for Latin American governments seeking to aggressively invest in a much-needed basic infrastructural capacity without succumbing to the "austerity programmes" normally mandated by the Washington-based institution. Lastly, the initial moderate volume of trade could also give the involved countries enough pause to aggregate the necessary capital in order to help to guarantee financial security for those who are exposed in the process.

The proposed Union of South American Nations could be a major step towards intra-regional integration that attempts to unite the continent's two largest existing free trade organizations: Mercosur and the Andean Community. Presidents from both ends of the hemisphere's political spectrum have shown interest in participating in this proposed integration, which could help de-politicize the free trade issue and provide a gradual widening scope for economic liberalization on a more level playing field.

Conclusion

As different outcomes across the region illustrate, Latin American countries often lack the essential institutions necessary to equally and fairly distribute the promised benefits of U.S.-backed FTAs. Therefore, it is crucial that Latin American countries adequately prepare themselves before contracting such agreements by heavily investing in transportation and communication capabilities, expanding subsidies to rural areas including to local farmers, as well as establishing a safety net for those who fail to assimilate in the increasingly competitive market. This type of investment most likely will promote collateral institution-building, a feature that ensures that the benefits from free trade are shared by its participants, instead of simply falling into the hands of an already well-off minority. Intra-regional trade also can play a relevant role in a step-by-step globalization process that can prove its merit with a cautionary tempo.

Democracy in Latin America is too institutionally weak and non-inclusive to afford room for any further mishaps. Despite the indignant outcries of free traders, the absence of sufficient governmental regulations could prove highly damaging for Latin American economies, only prolonging their normally hapless struggle to reduce poverty and attain long-term stability. Even the U.S., today's biggest free trade advocate, has shaped its economic infrastructure through measures that have necessitated active government leadership and ample time for the affected public to participate to the extent so desired. The Peruvian government would be wise to pay close attention to the potential harmful effects of the recently enacted FTA with the U.S. by reaching out to sectors of the populace that most likely will not be favored by the trade deal. By guaranteeing fairness and inclusiveness, Lima could greatly fortify the democratic principles needed for this country's future and equitable development.

The Bush Administration is either too narrow-minded or grossly uninterested with the negative aspects of the recent history of U.S.-backed FTAs in the region to claim that any refusal to approve the pending FTAs with Colombia and Panama would be a slap in the face for democracy in Latin America. Policymakers on both sides must realize that a more comprehensive and unhurried approach to economic liberalization by Washington would help Latin America to gradually adapt itself into the global trade framework. Ultimately, such an approach could confirm that the U.S. is an effective, caring neighbor anxious to work to close the gap between the myth and the reality of hemispheric brotherhood. It can be agreed that this is the preferred approach rather than to make a premature dive by the candidate country into a free trade pact that is too shallow for economic buoyancy to properly function.

This analysis was prepared by COHA Research Associate Manuel Trujillo

12 de diciembre, un proyecto de Nación
Fernando Sánchez Argomedo

No abundaré en los detalles de cómo nuestra historia se ve reflejada en el acontecimiento guadalupano. Esto se describe en un sinnúmero de documentos como el “Nican Mopohua” o el Códice Escalada, otros estudios han llegado a la conclusión de que hay un mensaje en la misma imagen, mensaje claro para los pobladores indígenas de la época. Lo más contundente es la tradición misma que se ve claramente manifiesta cada año a través de los millones de peregrinos que visitan la Basílica de Guadalupe, desde hace más de 300 años.

No hay mexicano que se pueda considerar tal y despreciar a su vez a la Virgen de Guadalupe, su imagen y lo que significa.

No dudo que haya personas extrañas que piensen diferente pero en este caso estoy seguro que serían considerados mexicanos extraños. Estaría en duda su patriotismo y su nacionalidad… ¿Serían mexicanos?

Este hecho nos puede hacer reflexionar en algo muy importante dados los tiempos que vive nuestro país, tiempos de gran oportunidad y necesidad de proyección de lo que somos hacia el mundo. Tenemos una enorme necesidad de consolidar un proyecto de nación que parta de lo que somos, nos diferencie de otros países y nos permita dar un valor agregado al mundo colocándonos como un país que define rumbos y que previamente haya resuelto las necesidades mas básicas de cada mexicano para una vida digna, como son los valores, la competitividad y el empleo.

Suena extraño hablar de algo “religioso” (trascendente) al mismo tiempo que hablamos de nuestras necesidades temporales. Sin embargo no podemos desligarnos de lo que somos de forma integral. Parte de nuestro problema como nación y parte de nuestra gran incapacidad para llagar a acuerdos es que no hemos tenido la capacidad de reconocer lo que somos.

El ser humano que quiere verse proyectado al futuro necesariamente requiere saber quien es y de donde viene. Por eso no podemos ni debemos olvidar que nuestro origen es mestizo, es la mezcla de dos razas. Eso es lo que somos.

Dado el contexto histórico la aparición de Nuestra Señora de Guadalupe resultó un evento por demás relevante y fundador. Es importante recordar que la desunión y desigualdad que privaba en esa época eran muy marcadas. La aparición del 12 de de diciembre, marcó un parte aguas en la configuración histórica de México. A partir de ahí indios y españoles, mezclados, comenzaron a considerarse –ambos- mexicanos, ambos como parte de una sola nación.

¿Que significa este hecho?, que no necesitamos inventarnos ninguna teoría ni necesitamos buscar donde no hay. Nuestro verdadero proyecto de unidad en el guadalupanismo, esto es, la Madre de Dios morena, no plenamente indígena y no plenamente blanca, nos invita a reflexionar nuestro destino: Unidad, Fe, Dignidad y Fundación.

Unidad por que Su imagen es la de todos los que formamos parte de este amado México.
Fe, porque como a San Juan Diego nos llama a tener un proyecto de vida manifiesto en la construcción de un templo, fe por que parecía imposible pero cada día es mas claro que fue posible.
Dignidad porque al ser Madre de Dios y mostrarse como nosotros nos hace como ella, seres dignos. Dignidad por que se apareció ante quien podría considerarse alguien indigno ante los ojos de otros. Dignidad por que nos hizo vernos iguales.
Fundación por que este mensaje contundente logró cambiar la cosmovisión de dos razas, de multitud de personas que han dejado claro que México es de María de Guadalupe.
Un proyecto de nación:

Unidad, porque tenemos que ser capaces de mirar al cielo y reconocernos hermanos. Dejar a un lado las diferencias y buscar lo que nos une, por México y por María de Guadalupe.

Fe en nosotros mismos, en reconocer nuestra capacidad de trascender, en nuestra capacidad de Amar, en nuestra capacidad de reconocernos hermanos. Fe en que podemos ser competitivos, fe en que podemos cambiar.

Dignidad, porque para seguir adelante nos debemos reconocer iguales en dignidad y así mismo preocuparnos igual por quien tiene y por quien no tiene, ayudando al que no tiene y no estoy hablando de materialismo, sino en sentido trascendente quien no tiene una vida digna no es solo el que no puede comer 3 veces al día, sino aquel al que le falta amor, al que le falta cariño al que le falta una familia, al que le falta Fe.

Fundación. Finalmente recordar que hemos sido fundados y que eso significa refrendar nuestro Amor a la Patria, nuestro amor por México, y nuestra capacidad de reafirmarnos con esa característica que nos hace ser más nosotros. La unidad y la diversidad.

Unidos en lo esencial, proyectarnos al futuro desde este que es nuestro pasado será algo muy sencillo. Nuestro referente es quienes somos, así mismo sabemos que hacemos en este momento histórico y podremos encontrar nuestro lugar en el futuro de la humanidad.

Capacidad para competir la hay; inteligencia sobra; hay muchas manos pendientes para trabajar; trabajo no faltará. Habiendo UNIDAD habrá un México Sólido y Grande.

Brazil’s Bolsa Familia at Risk

* With the Calheiros scandal still hanging over it, an increasingly tarnished Lula administration cannot afford to lose the one social program that has brought it a modicum of luster
* Thanksgiving arrived the other day, but 36.1 million Brazilians would not have been at the table. The Getúlio Vargas Foundation reported last September that the income of 19.3 percent of all Brazilians is so low that they can't afford to maintain the minimum 2,288 daily dose of calories recommended by the World Health Organization
* The government's formula is to put children in school as a means of putting food on the table
* Now that the Provisory Contribution over Financial Movements (CPMF) tax is at risk, the funds for social programs might be equally endangered. This would be a catastrophe and would knock out Lula's only clearly successful major social justice program since he became president
* Can the new trend in international development–microfinancing–complement Lula's social flagship, the Bolsa Família program?

In the last few weeks, social reforms intended by Latin America's "New Left," to enhance the social content of their legislative programs, have been overshadowed by challenges to their political agenda. Not only have Venezuelans voted "no" to the constitutional reforms that would have expanded Venezuelan President Hugo Chávez's power, but in an attack against President Evo Morales Bolivia's rich provinces have decided to draft a local applicable constitution that, if achieved, would claim more autonomy from the central government. However, this new counter-trend is not unique to Latin America's "New Left." Brazil and its centrist government are also in the midst of a considerable political challenge, as Lula's main social program, the Bolsa Família, is threatened by a killer tax-cut, and his ruling multiparty coalition is in a free-fall. His comrade-in-arm and president of the Senate, Renan Calheiros has just been forced to give up his post on the basis of corruption charges that have been lodged against him.

With Christmas on the horizon, the hot debate in Brazilian domestic politics has been whether cutting taxes would be tantamount to allowing the Trojan gift to be handed to the state. In the last few months the government and the opposition have been struggling over whether to continue the CPMF. If on one hand tax relief sounds like a blessing to a Brazilian middle-class that has seen its income squeezed during the last decade, on the other hand the poor are still heavily dependent on governmental social programs that are funded by taxes. Now the clock is ticking and a divided Senate needs to decide before the year ends whether the tax is to remain in place next year.

The CPMF Tax and Funding for the Bolsa Família Program

Created in 1997, the CPMF is a tax on financial transactions that, if retained, is expected to bring in to the government around $20 billion in revenue next year. President Lula claims that "everybody knows that the Brazilian state cannot live without both the CPMF and the DRU [which allows the Government to freely spend 20 percent of the taxes] (Agência Brasil: Estado não pode abrir mão de CPMF, avalia Lula, May 15, 2007)." To the President, ending the CPMF means slashing the budget, which would endanger both the government's social flagship program, the Bolsa Familia (Family Fund), and the 11.1 million families that receive its benefits (Ministry of Social Development and Hunger Combat: SENARC information system).

In support of President Lula, the Minister of Social Development and Hunger Combat, Patrus Ananias, released the following figures: In 2007, $3.75 billion of Bolsa Família program's $4.3 billion came from funds obtained through the CPMF. That means that nowadays the Bolsa Família program derives 87 percent of its budget from the CPMF. As a result of this heavy dependence on the CPMF, the Minister voiced the following concerns last September: "If the CPMF ends, the Bolsa Familia might end. (…) We certainly would look for other sources, but we would certainly see a visible loss to the Bolsa Familia (Agência Brasil: Para ministro, fim da CPMF poderia acabar com o Bolsa Família September 4, 2007)." Thus, it is clear that for the Lula administration, cuts in the Bolsa Família would jeopardize their plans for creating a national safety net and promoting anti-poverty measures.

The emphasis on the Bolsa Família program, a national conditional cash transfer (CCT) scheme that rewards families with a micro-grant for sending their children to school and fulfilling a few other healthcare conditions, makes it clear that the government's main long-term strategy for reducing poverty also has been notably successful in increasing primary-education attendance. Thus, the two main issues being brought to the table are whether using taxes to fund education attendance makes sense, and whether the government could minimize its expenditure and still run a successful program.

Education as the Way Out

Among the several possible remedies for reducing poverty, the Brazilian government in the last decade has been strongly emphasizing education, especially tackling problems with a demand-side strategy. This strategy draws on evidence that improving education attendance promotes development. The Academy for Educational Development has observed that, not only does one year of additional education increase individual output by 4 to 7 percent, but improvements in the literacy rate of 20-30 percent have been related to increases in GDP of 8 to 16 percent (The Basic Education Coalition. Teach a Child: Transform a Nation, Washington, DC, 2004, 9).

However, education does more than just increase income; it also can transform a life, exposing one to a background of knowledge on such issues as health and sanitation, food security and family planning, which can significantly improve quality of life. OXFAM has established that adolescents who have completed four years of primary education are less than half as likely to contract HIV as those deprived of it. UNICEF has reported that children of mothers with no education are more than twice as likely to die or to be malnourished, compared with children of those with a secondary or higher-level of education (OXFAM's website; and UNICEF: Progress since the World Summit for Children: a statistical review, 2001, 12).

CCT schemes: the turn-around

In the beginning of the 1990s only 85.8 percent of Brazil's children were enrolled in primary education (World Bank: Brazil Education Profile, Summary, 2004). Professors Eliana Cardoso and André Souza shed some light on the roots of the problem: "The combination of high opportunity-costs of school attendance and an educational system with low quality education will result in the low valuation of the returns of education, and thus low school attendance and high participation of children in the labor market" (Cardoso & Souza: The Impact of Cash Transfers on Child Labor and School Attendance in Brazil, 2004, 7). The federal government's solution was to adopt a national CCT scheme that rewarded the families with a grant for sending their children to school, in addition to fulfilling a few other healthcare conditions. This program, currently called Bolsa Família, evolved throughout the decade and today Brazil seems to be on track to achieve universal primary education: in 2004, only 6 percent of the children of primary-school age were out of school (UNESCO UIS: Education in Brazil, 2004).

Despite its success in improving primary school attendance, the CCT scheme used in Brazil is not shatterproof. The Bolsa Família budget during 2004-2006 was on the order of $9.9 billion, and its estimated annual budget for this year reached $4.3 billion (Brazilian House of the Representatives website). The program's heavy dependence on the federal government may make it inherently unstable. As already charged by the program's founder, Senator Cristovam Buarque, the potential politicalization of the program can lead it to go astray whenever an administration changes (Cristovam Buarque: Brazil's Bolsa Família: A Good Intention Gone Astray, Brazzil Magazine, September 2002). Finally, the reliance of the programs on grants might encourage government dependency instead of promoting people's self-empowerment.

Room for micro-lending

The problems discussed above, which arise when one relies solely on the federal government's Bolsa Família program to solve the demand side problems of primary education, should encourage a search for alternatives to the CCT scheme. One way out could be to turn to micro-lending. In a recent donors' brief, CGAP indicated that access to financial services fostered new income in such a way that the poor could invest in their children's future. In Bangladesh in 2002, figures show that nearly all girls in Grameen Bank client households received schooling, compared with only 60 percent of girls in non-client households, and BRAC reported that basic educational competency among 11-14 year-old children in client households doubled in 3 years, from 12 percent in 1992 to 24 percent in 1995 (CGAP: Donors Brief no. 9, December 2002, 1).

Not advocating the termination of CCT schemes such as the Bolsa Família, which is a key program for those who otherwise have no economic opportunity, and acknowledging a private sector potential for fostering school enrollment among those hovering around the poverty line could be of great benefit to governments like Brazil's. First, as microfinance institutions (MFIs) may allow low-income households theoretically to move up on the social ladder, the opportunity cost of sending their children to school rather than to work will decrease, and the federal government can ease its expenditures on the demand side of education, leaving more leverage to focus on the supply-side problems, which would include the low-quality of public education. Second, MFIs represent an opportunity for CCT beneficiaries to become MFI clients. In this way, low-income households would have an alternative available, allowing them to better cope with the potential political shocks which so frequently accompany changes of administrations in Brasília. The inclusion of MFIs might even signify a change in mentality, from a traditional government-dependent approach based on grants to a more self-reliant approach based on small but frequent loan re-payments.

Although microfinance is not without its critics, combining micro-lending with the Bolsa Família micro-grants could help to produce development through education in Brazil, with more children attending better quality schools. Therefore, it might be wise for the Brazilian federal government to start exploring the possibility of a seesaw relationship with the private sector, retreating as the expansion of the latter makes publicly funded programs less necessary. This would provide Brasília with the opportunity to steer more resources toward improving the quality of public education, thus re-focusing the government's education strategy from the demand to the supply side. Furthermore, this strategy would provide the Bolsa Familia with a way to cope with the potential phasing out of the CPMF and the implications of such a development on the program's poor beneficiaries.

This analysis was prepared by COHA Research Fellow Thomaz Alvares de Azevedo e Almeida

‘Dialéctica de una derrota’
Por: Atilio A. Boron
Página 12

¿Cómo explicar la derrota del SÍ, y hasta que punto fue solo una derrota?

Chávez se enfrentó a una fenomenal coalición política y social que aglutinaba a todas las fuerzas del viejo orden, carcomido hasta sus entrañas pero con sus agentes históricos librando una batalla desesperada para salvarlo. La gran burguesía autóctona; los terratenientes; el capital financiero; la dirigencia sindical corrupta; la vieja partidocracia; la jerarquía de la Iglesia Católica; la embajada norteamericana, obsesionada con derrocarlo y, coronando todo este rejunte, una confabulación mediática nacional e internacional pocas veces vista en la historia que reunía en sus ataques a Chávez a los grandes exponentes de la “prensa libre” de Europa, Estados Unidos y América Latina. El líder bolivariano atrajo contra sí todos los esperpentos sociales con los que debe lidiar cualquier gobierno digno en América Latina, y los combatió casi en soledad y a mano limpia. Lo que unificó a los conservadores no fue la cláusula de la “re-elección permanente” sino algo mucho más grave: la reforma le otorgaba rango constitucional al proyecto socialista en gestación, algo totalmente inaceptable. Pese a tan descomunal disparidad el resultado electoral fue prácticamente un empate.

Para muchos venezolanos la elección no era importante, lo que explica el 44 % de abstención. La gran mayoría de quienes no concurrieron a votar lo hubieran hecho por el SÍ, lo cual revela la debilidad del trabajo de construcción hegemónica y de concientización ideológica de los bolivarianos en el seno de las clases populares. La redistribución de bienes y servicios es imprescindible, pero no necesariamente crea conciencia política emancipadora. Por otro lado, algunos gobernadores y alcaldes chavistas no se jugaron a fondo por una reforma constitucional que democratizaría, en detrimento de sus atribuciones, la organización política del estado al crear nuevas instituciones del poder popular. Hay que tener en cuenta, además, que luego de nueve años de gestión cualquier gobierno sufre un desgaste o deja de suscitar el entusiasmo colectivo de antaño. A esto hay que agregar, además, algunos errores cometidos en la intermitente campaña electoral de un presidente que, por su papel protagónico en el escenario mundial, no dispone de mucho tiempo para otra cosa.

De todos modos, pese a la derrota Chávez sale muy bien librado. Sus credenciales democráticas se fortalecieron notablemente. La oposición llegó a los comicios diciendo que jamás aceptaría un triunfo del SÍ. En caso de producirse lo repudiarían por ser producto del fraude y pondrían en marcha el “Plan B” de la Operación Tenaza. Los sedicentes demócratas confesaban que sólo se comportarían como tales en caso de ganar; si no, su respuesta sería la sedición. Chávez, en cambio, les dio una lección de republicanismo democrático al aceptar con hidalguía el veredicto de las urnas. Imaginemos que hubiera ocurrido si por esa ínfima diferencia hubiera triunfado el SI. Los voceros de la “democracia” habrían incendiado Venezuela. Pese a su derrota, la estatura moral de Chávez y su fidelidad a los valores de la democracia convierte en pigmeos a sus oportunistas adversarios, que sólo respetan el resultado de las urnas cuando los favorece. Y, de paso, deja en una posición insostenible a los senadores brasileños que pretextando la débil vocación democrática de Chávez quieren frustrar el ingreso de Venezuela la MERCOSUR.

Por: Alberto Montero Soler/Pascual Serrano
Rebelión

Más allá de golpes de pecho, atribuciones apresuradas de responsabilidades o denuncias desmedidas contra el Imperio y su capacidad de influencia en la realidad interna venezolana, el rechazo electoral de la reforma constitucional debería hacernos reflexionar, con un mínimo de distancia y objetividad, sobre alguna de las causas subyacentes que pudieran haberla provocado para tratar de evitar la reiteración de errores de cara al futuro.

Y ello es especialmente necesario porque los datos de la derrota electoral ponen algo muy evidente sobre la mesa: mientras que la oposición tan sólo ha aumentado su masa crítica en 100.000 votantes con respecto a las elecciones presidenciales de diciembre de 2006, por parte del chavismo han dejado de acudir a las urnas más de 3 millones de votantes.

Así que hablar de la desmedida campaña mediática de la oposición contra la reforma o de la injerencia interna de Estados Unidos en el proceso no es más que un recurso fácil para tratar de calmar conciencias a través del autoengaño: el aparato mediático y su dinámica de funcionamiento siguen siendo los mismos que en anteriores plebiscitos; por no hablar de la influencia norteamericana. Y la incidencia conjunta de ambos factores sólo han aportado ese mínimo crecimiento del voto opositor.

Las causas, entonces, habrá que buscarlas en otros lugares más distantes de ese recurso fácil en el que se ha convertido la teoría de la conspiración para quienes se niegan a ver la realidad que les circunda o para quienes no quieren asumir la responsabilidad que les corresponde.

En este sentido, este artículo no pretende ser un catálogo exhaustivo de ellas. Pero, aún a riesgo de dejar algunas en el tintero, creemos necesario poner al menos éstas en negro sobre blanco en unos momentos en los que, si de algo necesita el proceso venezolano, es de autocrítica desde la más absoluta lealtad.

Una reforma adelantada a su tiempo

Uno de los elementos que no puede hurtarse al debate en estos momento es hasta qué punto la reforma constitucional llegaba en el momento adecuado o, por el contrario, era demasiada precipitada dadas las condiciones objetivas y subjetivas en Venezuela.

Las opiniones al respecto son de todo tipo y recurren a las fuentes históricas más diversas y a los autores de más lustre para justificar las correspondientes posiciones. En cualquier caso, parece que un proceso revolucionario tan sui géneris como el venezolano que no implica una ruptura radical con el régimen anterior sino que se va construyendo día a día, en una tensión dialéctica permanente entre sus aspiraciones socialistas y su cotidianeidad capitalista, no puede ser analizado en términos miméticos y buscando todas las analogías posibles con otros procesos de transformación social que lo han precedido en el tiempo.

Resulta del todo punto descabellado pretender que el socialismo, aunque sea el del siglo XXI, se puede construir por la vía de su mera declaración en un texto constitucional cuando la realidad, por otra parte, se aleja tanto de la praxis socialista. Ante este error estratégico es lógico que las bases hayan optado, en el mejor de los casos, por el escepticismo; tanto más cuanto su participación, en una democracia que se declara participativa, se ha limitado a demandar su refrendo a través del voto, como en la más vulgar de las democracias representativas burguesas. Pretender imponer el socialismo desde arriba -al tiempo en que se desestiman los mecanismos utilizados en el siglo XX para tal fin- se ha encontrado con el rechazo de quienes durante los últimos años han escuchado hasta la saciedad que su participación a todos los niveles es un requisito imprescindible para transformar la realidad.

De modo que es comprensible la actitud de aquellos chavistas que no fueron a votar, aún deseando la transición de Venezuela hacia el socialismo y respetando la figura de Chávez como líder carismático capaz de ejecutarla.

Esa transición no puede acontecer de otra manera que mediante la activación de la voluntad popular a través de una Asamblea Constituyente que entre a reformar el texto constitucional. Sólo entonces la vía será jurídicamente la adecuada (porque así queda sancionado en la Constitución de 1999) y estratégicamente la conveniente.. Sólo entonces el paso de la transición hacia el socialismo gozará de la legitimidad y fuerza necesaria para convertirse en una realidad. Mientras tanto, las posibilidades de construcción de un entramado normativo que facilite y profundice los cambios hacia el socialismo son perfectamente viables dentro del actual texto constitucional y, precisamente por ello, no debiera entenderse la derrota electoral como un freno en el proceso de transformación social sino, tan sólo, la postergación de su sanción más elevada hasta un momento en el que la conciencia colectiva se encuentre más identificada con la idea socialista.

De ahí se deriva, además, otro de los errores que creemos importantes en el planteamiento de la reforma desde su origen: la falta de valentía para deslindar el tema de la reelección presidencial del resto de cuestiones, de mayor calado, contenidas en la misma.

Primero, porque indica una precipitación innecesaria dado que podía haberse retrasado en el tiempo, aunque siempre dentro de este mandato presidencial, hasta que el contexto social para los cambios normativos que se planteaban para profundizar en el socialismo hubieran estado un poco más maduros.

Y, segundo, porque en ese caso sí que no era necesaria la activación de una Asamblea Constituyente y había un clima de opinión muy favorable al respecto como indicaban todos los sondeos, es decir, hubiera bastado con convocar, como se ha hecho, un referéndum para esa única cuestión. El que se haya tratado de revestir algo que de por sí ya era importante, como es la supresión de la limitación a la posibilidad de reelección, con algo que, sin duda, es mucho más importante porque trasciende la figura del líder y afecta al propio proceso, ha sido un error táctico que ha tenido como coste el que ambas propuestas hayan sido rechazadas.

Un partido unido entre quiénes y para qué

Dentro de los elementos de reflexión tampoco debemos dejar de lado preguntarnos acerca de dónde estaban el día 2 de diciembre los más de 5 millones de militantes del Partido Socialista Unido de Venezuela. Porque de la respuesta a esa pregunta se pueden derivar consecuencias no del todo agradables de asumir.

Así, votaron a favor del SI menos personas (4.379.392 para el primer bloque y 4.335.136 para el segundo) que aspirantes a militantes (5.200.000) tiene el nuevo partido liderado por Chávez, el Partido Socialista Unido de Venezuela. Sospechoso eso de que supuestos militantes después ni siquiera apoyen a su partido en las urnas. A lo que hay que añadir el preocupante dato de que el 44,11 por ciento de los venezolanos no se molestase en votar y que tiene su contrapunto en las votaciones en Cuba, donde más del noventa por cien de los ciudadanos van a las urnas.

Y ello es preocupante, de entrada, porque si hubieran votado todos, disciplinadamente, no se hubiera perdido la reforma constitucional y se entiende que los militantes de ese partido estaban a favor de ella.

Y, de salida, porque entonces la pregunta que cabe hacerse es si en lugar de convertirse en la vanguardia política del proceso de transformación, el propio PSUV, y, consiguientemente, la inscripción en el mismo, no estarán siendo vistos por muchos de sus militantes como un mecanismo clientelar que refuerza la posibilidades de acceso a los beneficios de las Misiones o, en el peor de los casos, la permanencia en una estructura burocrática del Estado sobredimensionada y manifiestamente ineficiente.

Algo de ello tiene que haber en el ambiente cuando la primera estructura de la que se ha dotado el partido es, sorprendentemente, de un tribunal disciplinario con objeto de poner coto a esa utilización interesada del partido.

En cualquier caso, no estaría de más comenzar un proceso de reflexión acerca de los vínculos espurios que pudieran estar estableciéndose entre el partido y el Estado, generadores de estructuras clientelares radicalmente contrarias a cualquier proceso de transformación hacia el socialismo y utilizadas, por muchos, para acceder a los recursos públicos o a los resortes del poder. Y, tras dicho proceso, comenzar una purga enérgica de todos aquellos militantes que pudieran estar utilizando al partido y las posibilidades que les abre para sus fines particulares.

La corrupción sigue suelta

El término purga nos lleva de pleno a otro de los graves problemas que aquejan al proceso bolivariano y frente al que, a pesar del cansancio de la población y de la retórica enérgica del presidente Chávez al respecto, casi nada se ha hecho.

El problema no es otro que el de la corrupción que sigue campando por sus respetos en el país y que es percibida como una lacra por el pueblo, deteriorando, de paso, la credibilidad del gobierno para acometer su erradicación. Una credibilidad que difícilmente puede mostrar cuando en ningún momento ha habido una política decidida de lucha contra la misma o cuando determinadas medidas aprobadas e implementadas en otros ámbitos con éxito, como es el caso de las más que necesarias Misiones, se convierten en focos de corrupción al amparo de la falta de transparencia presupuestaria con la que se rigen.

Y, aunque por supuesto que no se puede decir que la corrupción en la actualidad sea mayor que en los periodos anteriores a la presidencia de Chávez, sí es cierto que se mantienen igual los procesos abiertos contra gerentes y dirigentes políticos, o sea, bajo mínimos.

En ese contexto, plantear la constitucionalización de las Misiones en lugar de una reforma de la Administración pública que no sólo acabara con la ineficiente burocracia herededada de la IV República sino que también abrieran la Administración a la participación popular a todos los niveles, era una propuesta arriesgada que también ha encontrado muchos detractores en el camino. Sobre todo, porque no sólo constituye, como hemos señalado, un peligroso foco de corrupción sino porque supone la consolidación de una estructura paraestatal que en ningún caso sustituye a la existente y multiplica, en consecuencia, el gasto y la ineficiencia.

Las Misiones deben ser una terapia de choque y el futuro debe pasar necesariamente por la institucionalidad y un estado eficiente más que por la duplicación de estructuras estatales. En ese sentido, la consolidación de las Misiones a nivel constitucional suponía renunciar a que los correspondientes ministerios asuman sus obligaciones.

En cualquier caso, nada más lejos de nuestra intención que estigmatizar a la Misiones atribuyéndoles en exclusiva el monopolio de la corrupción y mucho menos teniendo en cuenta su tremenda aportación a la mejora de las condiciones de vida de las clases populares venezolanas.

Ese problema es un mal endémico que aqueja a gran parte del aparato estatal venezolano en todos sus niveles de gobierno y, en consecuencia, que debe ser atajado a partir de una política integral y radical. Sólo queríamos advertir de que, si bien la propia filosofía de las Misiones trasciende la lógica burocrática convencional de las políticas públicas y en ese sentido constituyen un avance importante, la ausencia de mecanismos de control presupuestario y la falta de transparencia en la gestión de los recursos públicos han acabado asociándolas a un nuevo foco de corrupción que empaña todo el éxito del que han gozado.

Las condiciones materiales son tan importantes como las ideológicas

Si las condiciones subjetivas para el cambio quizás no se encontraban aún maduras, la situación económica no era tan poco la más propicia. A pesar de que Venezuela se encuentra a la cabeza de América Latina en lo que a tasa de crecimiento económico se refiere y a que los esfuerzos redistributivos de la renta petrolera por parte del gobierno son encomiables existen determinados desequilibrios en la economía que se hace perentorio resolver, sobre todo aquellos que afectan a las condiciones de vida de las clases populares.

La escasez de determinados alimentos utilizada como arma política de manera reiterada por la oligarquía en los momentos previos a las citas electorales junto a la pérdida de poder adquisitivo de los salarios, dada la persistente y elevada tasa de inflación, minan la capacidad de acceso de la población más desfavorecida a unos niveles de vida superiores.

Si el primer problema, el de la escasez provocada, es previsible por cuanto de repetitivo tiene la estrategia de la oposición, su solución debería constituirse en una prioridad del gobierno cuando se avecinan consultas electorales. Y así, aunque es verdad que existen sectores empresariales que acaparan productos de primera necesidad para boicotear el proceso venezolano, no es aceptable que, más de tres años después de la creación de Mercal, un sistema estatal de distribución de alimentos entre los barrios más humildes, éste siga siendo incapaz de garantizar suministros tan básicos como la leche o el café por mucho boicoteo que haya de distribuidores o productores.

El segundo problema, el de la inflación, va adquiriendo una naturaleza endémica que, si bien en términos macroeconómicos no es preocupante, en términos particulares sí que lo es porque afecta en mayor proporción e intensidad a aquellos que menores instrumentos tienen a su disposición para prevenirse del encarecimiento de la cesta básica y que, en gran medida, son el gran pilar de la revolución.

Si el modelo de integración latinoamericana propuesto en el ALBA ha sido interiorizado y juzgado como beneficioso por las clases populares allí donde se aplica es, precisamente, porque ha traducido el tema de la integración económica y social en una realidad concreta y fácilmente perceptible para las mismas como son las mayores cuotas de bienestar que proporciona, por ejemplo, la asistencia sanitaria recibida al abrigo de la Misión Barrio Adentro.

Ésa, y no otra, es la lógica interiorizada por las clases populares en su apuesta y apoyo por la revolución: la de que necesariamente debe traducirse en mejoras materiales y un mayor bienestar. Todo lo que no sean hechos materiales al respecto es pura retórica que no sacia el hambre ni calma la sed y que, en consecuencia, acaban minando el apoyo al proceso de transformación social.

Si a ellos unimos los escasos avances en materia de creación de empleo, la persistencia en la informalidad de gran parte de la población activa, la carencia de una estrategia clara a medio y largo plazo acerca de cómo se quiere “sembrar el petróleo”, la resultante es que parte del rechazo a la reforma constitucional puede interpretarse también en clave de llamada de atención acerca de la necesidad de acometer reformas que, más allá de consagrar constitucionalmente al socialismo, faciliten cuanto antes unas condiciones de vida digna a toda la población.

¿Dónde estaba el Presidente cuando se le necesitaba?

Dado el contenido de la reforma, en la que al tiempo que abrían cauces para unos mayores niveles de participación popular se propugnaba una concentración de poderes muy significativa en la figura del presidente de la república, la figura de Chávez era singularmente relevante para defenderla.

De entrada, porque era él quien tomó la iniciativa de reforma constitucional y, por lo tanto, sobre su persona recaía un mayor grado de responsabilidad de cara a informar a la población de su contenido y a convencerla de su necesidad y de la importancia de votar a favor de la misma. Pero, además, porque difícilmente el pueblo admitiría una concentración de poderes tan importante en la figura de otro personaje que no fuera aquél que ha liderado el proceso de transformación desde sus inicios y cuya legitimidad transfería a la propia reforma.

De hecho, Chávez se encargó bien de separar los artículos de “su” propuesta inicial de los añadidos posteriormente en el trámite parlamentario lo que, de haberse aprobado la “suya” y no la de la Asamblea Nacional, la legitimidad de ésta, en cuanto institución representativa de la soberanía popular, hubiera quedado seriamente dañada. Afortunadamente para el caso ambas han sido rechazadas por una diferencia de apenas 40 mil votos, lo que no es políticamente significativo. Aunque esa distinción entre su articulado y los de la Asamblea Nacional sí deberían inducir a la reflexión acerca de la posibilidad de que el líder del proceso permita o no la consolidación de responsabilidades políticas distintas a la suya propia y que gocen de una legitimidad no permanentemente cuestionada. No olvidemos que una de las cualidades del líder es también la de saber rodearse de competentes y valiosos.

Lo que sí resulta relevante desde el punto de vista político es la tremenda desinformación que ha rodeado la propuesta. El escaso esfuerzo mediático desarrollado para explicarla y defenderla ha sido fácilmente sobrepasado por la ofensiva intoxicadora de los medios de comunicación de la oposición, mucho más agresivos en su intento por hacerla aparecer como lo que no era y, por lo tanto, con mucho mayor éxito si no en atraer a los indecisos hacia su terreno sí, al menos, en sembrar la duda entre quienes, aún en las filas del chavismo, no estaban seguros acerca de lo que efectivamente iban votar.

A ello se le une el hecho de que el Presidente, en pleno proceso electoral, se ausentara del país por más de una semana para acudir a Chile y, seguidamente, a Arabia Saudí, Irán, Francia, Portugal y Cuba.

Que, además, esa ausencia estuviera marcada por el conflicto con España durante la Cumbre Iberoamericana en donde volvió a utilizar un foro internacional para hacer política nacional y generar, con ello, una tensión innecesaria entre el resto de países latinoamericanos que podrían ser sus socios estratégicos en el proceso de integración del hemisferio.

Y, por último, y con el fin de mantener vivo el conflicto que él entendía propicio a sus fines de cara al referéndum, que a su retorno se anunciara en reiteradas ocasiones una posible nacionalización de los bancos españoles en Venezuela que, si bien sirven para granjearse la simpatía de las clases populares que, evidentemente, carecen de fondos depositados en esos bancos, sí que pudieron asustar sin fundamento alguno a sectores de las clases medias afines al proceso pero, también y lógicamente, celosos de sus modestos ahorros.

Con lo cual la resultante ha sido un conflicto abierto con España cuya opinión pública, desde entonces, no cesa de acusarlo de dictador, totalitario y varias lindezas más de ese tenor. El malestar de gran parte de países latinoamericanos por el referido enfrentamiento les obligó a posicionarse del lado de España cuando podían haber estado junto a Nicaragua y Venezuela en su denuncia de las tropelías de las transnacionales españolas. El saldo, como puede apreciarse, no resulta demasiado positivo.

Y los medios de comunicación oficial tampoco ayudan mucho

Por otro lado, y tal y como señalamos al comienzo de este artículo, el discurso de la dictadura mediática de la oposición en el panorama interior de Venezuela tiene cada vez menos validez. Tal vez pueda ser una razón para Bolivia, Ecuador o en Europa y Estados Unidos para explicar los procesos latinoamericanos, pero Venezuela tiene ya cuatro cadenas de televisión públicas que emiten en abierto: VTV, Vive TV, TeVes y Telesur; decenas de radios comunitarias y todos los medios escritos que son capaces de hacer. Quizás va siendo hora de pedir cuentas a todos esos medios de comunicación de su ineficiencia para tomar las riendas de la difusión de información sobre la revolución bolivariana. ¿Por qué no hay un buen periódico que explique la revolución bolivariana? ¿Por qué la mejor página web sigue siendo la misma que hace cuatro años, Aporrea, y apenas sirve para explicar el proceso fuera de Venezuela, aunque ahora esté siendo, una vez más, el mejor ejemplo de debate público? Es hora de preguntarse por la audiencia que tienen las cuatro televisiones y su diligencia a la hora de contar la realidad venezolana y del mundo.

Pongamos un ejemplo que es singularmente ilustrativo de la ineficiencia y falta de criterio de los medios oficiales. La noche electoral éramos muchos los que pretendíamos seguir la información a través de esas televisiones por Internet. La emisión online de VTV estaba colapsada, Tves prácticamente no tiene web y tampoco tiene informativos, en Vive TV había una tertulia que no tenía relación con el referéndum y en Telesur, un reportaje sobre Colombia y analistas en el estudio que no decían nada que no pudieran haber dicho una semana antes. Todas las personas que consultamos nos han indicado que, al igual que nosotros, tuvieron que seguir la información por la web de Globovisión, donde transmitían la emisión en directo en condiciones técnicas perfectas y con enviados por todo el país que informaban -o desinformaban-, pero a pie de la calle.

Igualmente, hay que destacar errores de comunicación gravísimos en relación con todo lo que ha rodeado el debate en torno a la reforma constitucional. No se puede denunciar la interceptación de un correo entre el embajador estadounidense y el director de la CIA, donde se revela un plan de desestabilización en un programa político en clave de humor para incondicionales como es La Hojilla. Un documento de esa trascendencia debe ir acompañado de una rueda de prensa del presidente denunciando la conspiración, de otra forma nadie que no sea simpatizante del chavismo se lo tomará en serio, que es lo que sucedió.

También es triste que el medio venezolano que mejor explicara al mundo el tiroteo con los estudiantes en la Universidad central de Venezuela (UCV), tan utilizado y manipulado contra la revolución, haya sido la radio YVKE Mundial, que ni siquiera tiene dominio de Internet propio.

Finalmente, la rueda de prensa del presidente del día anterior al referéndum también merece algún comentario. Al haberla planteado en la jornada de reflexión no pudo hablar del tema que interesaba, es decir, explicar y defender los puntos de la reforma, de manera que se dedicó a refrescar todos sus frentes internacionales abiertos, algo que, precisamente un día antes de las votaciones, no era lo que más podía preocupar a los venezolanos. No sé puede intentar recurrir al liderazgo presidencial para defender una reforma si el presidente se encuentra dedicado a viajes de la OPEP, canjes humanitarios en Colombia y reyertas interoceánicas con orígenes de quinientos años.

A modo de excusatio final

Todo el análisis precedente no debe hacernos olvidar la miseria de los análisis internacionales que dicen que la victoria del NO es la prueba de que existe democracia en Venezuela, algo que no dirían si hubiese ganado el SI. Estamos ante una forma elegante de afirmar que sólo cuando pierde Chávez hay democracia.

Y, por otro lado, se nos podrá criticar que parece que sólo insistimos en nuestro análisis en destacar los elementos negativos de este proceso, silenciando sus logros y esperanzas, pero es que intentar detectar los errores también debería ser un logro de la revolución y una esperanza para que puedan ser corregidos. Ese es y será siempre nuestro ánimo.

*Alberto Montero Soler - amontero@uma.eses profesor de Economía Aplicada de la Universidad de Málaga.

*Pascual Serrano - www.pascualserrano.net - es periodista.

Empty Calories of Economic Growth and the Battle for Participatory Democracy—Latin America's New Middle Class
The past two decades have witnessed a series of political and economic rollercoaster rides all over Latin America. However, with economic "stability" being used as a tagline for positive growth and suitable political fervor, a novel way of life has been emerging that is affecting millions of citizens who now consider themselves members of a new middle class. This "Great Global Middle Class" has been illuminated perhaps more brightly in Latin America than anywhere else, due to its longstanding and hard-fought struggle with income inequality and socially repressive regimes.

Brazil, pointed to as a showcase for both its economic boom and the vast inequality that still persists in parts of the country, has become the new face of this emerging middle class. For the first time, many of the region's poorer citizens have made the inter-class transition and are now able to buy high-ticket consumer goods such as televisions, DVD players, motor vehicles, and personal computers. Never in their wildest dreams did these disfavored Brazilians, wedged in the hapless trenches of urban favelas, believe that they could imagine themselves as part of the middle class. As Rogerio Schmitt, a political consultant at Tendencias Consultoria in São Paulo, noted in an interview with the BBC, "Brazilian society has always been a frozen society. People who were born poor, die poor. People who were born middle-class, will die middle-class. That's beginning to change and this is probably one of the biggest social transformations that we have had in Brazil since the end of slavery in the 19th Century."

Many economists agree that Latin America is indeed heading in a positive financial direction, but this trend is not the only development catching the eye of the international community. The rise of "new leftist" leaders, such as the strong-willed, if not somewhat eccentric, Hugo Chávez of Venezuela and the embattled indigenous spokesman Evo Morales of Bolivia, not only can be found preaching their ideas of social democracy, but also putting it into action in the form of constitutional amendments incorporating key social programs. However, when analyzing these changes to the hemispheric landscape, one key question that arises is: What started this trend? Was it the economic boom that led to the expansion of the pre-existing middle class, or did leftist leaders successfully spread the Bolivarian ideology and commit themselves to energizing the poorer regions of Latin America through the medium of a new, more socially minded middle class? Conceivably, if the answer is known, a more rapid pace of growth and development in the region could be made possible, and through a combined opening of society, the future of Latin America would no longer be left completely up to chance.

Economic Indicators: The forecast looks bright (at least for some)
Throughout the 20th century, volatile commodity markets and bouts of high inflation have plagued Latin American economies. As a result, external debt owed to developed nations—much of it to the U.S.—began to mount, averaging almost 50 percent of the region's GDP in 1980. At this point, the need for a debt management initiative came to be seen as imperative to the future stability of the region. Most of Latin America by now has abandoned Import Substitution Industrialization (ISI)-based economic policies and has become more open and export-oriented, relentlessly following the neo-liberal strategies recommended by the International Monetary Fund (IMF) and the World Bank, which in the end tended to leave the region more vulnerable to economic shock than ever.

Some would argue that Foreign Direct Investment (FDI) has also played a major role in helping the region create formidable export industries and solid financial institutions. For example, in the report Foreign Investment in Latin America and the Caribbean (2004) prepared by José Luis Machinea, Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), FDI in Latin America and the Caribbean rose 44 percent in 2004 to reach US$56.4 billion. This was the first year that FDI in the region had positively risen since 1999. Now, seven years after the turn of the century, the economic outlook for Latin America continues to impress investors around the world. "Foreign direct investment will go back to the highest levels seen in the 1970s," predicts Citibank Brazil President José Monforte, and it will gravitate toward telecommunications, energy, automotives and durable goods.

A Boost in Consumerism

The former president of Brazil, Fernando Henrique Cardoso, has pointed out that this new middle class is very different from the one Latin America experienced in the 1940s and 1970s, in that it is more dependent on the market than on the state. His assumption seems to be that this is a good thing, but why? The tide is rising for nearly all economic sectors in the region, particularly those which are resource-based, and as a result, these seemingly meager increases in personal income are resonating, but with Latin Americans dwelling at the bottom of the economic ladder. The Brazilian government, for example, plans to raise the minimum wage again in April 2008, this time by 7 percent. This will allow monthly earnings to increase from US$193 to US$207. This extra income will help the population to begin planning for the future, rather than just living exhaustive day-to-day lives; it will also enhance their ability to purchase small luxury items that before they could never even dream of owning.

A 2005 study conducted by the Fernand Braudel Institute surveyed four favelas in the city of São Paulo and found that all of the households contained color televisions, one-half owned cell phones, and almost 30 percent had a functioning automobile. More Brazilians have started to take out mortgages thanks to the relatively low interest rates that resulted from a new generation of public financial institutions, which strive to maintain low levels of inflation through fiscal mechanisms. Increasing air-travel—growing at approximately 6.6 percent annually (second only to China)—is another indicator of the economic growth being witnessed throughout the region. Boeing reports that Latin America is now being seen as an attractive growth area for the aviation industry because of the long distances between major cities in the region, poor existing ground transportation links and a sizeable boost in the number of prospective people able to afford air fares.

The conclusion that Latin America, as a whole, is heading in a optimistic economic direction has little cause to be disputed. But, has overall economic growth done enough to, in turn, shrink the large existing income gap, and show the vast number of people living in poverty that a price must be paid to forge their own path toward prosperity?

Income Inequality: Is the gap closing?
Unfortunately, the direct answer to the above queries, for the most part, is no.

As IMF Managing Director Rodrigo de Rato notes, despite recent successes in macroeconomic management, such as the transformation of the financial credit sectors (in terms of their ability to sustain external economic shocks), as well as the impressive gains from rising commodity prices, the income inequality gap in a number of Latin American countries has either failed to improve, or done so almost imperceptibly. The IMF 2007 October World Economic Outlook, entitled "Globalization and Inequality," offers some newly available data on income and consumption, showing that inequality—as measured, for example, by the widely used Gini coefficient—has risen over the past two decades in most regions, such as in developing Asia, developed Europe, and certainly in Latin America. However, despite this observed rise in relative inequality, per capita incomes have grown across virtually all regions and for all segments of the population, including the poorest. The Economist recently reported that between 2000 and 2005, the number of households with an annual income of $5,900 - $22,000 grew from 14.5 million to 22.3 million just in Mexico and Brazil alone. In addition, Spain's Banco Santander estimates that 15 million people throughout Latin America have moved into the blossoming middle class between 2002 and 2006. As a result, the poor are now better off in absolute terms, although in most cases incomes have risen at a relatively faster pace for those who are already wealthy.

Recently the international community has discovered an evolving trend that may have helped spur the formation of a new middle class, which is occurring throughout Latin America: the rise of several leftist political movements which have now taken office and are beginning to promulgate an avowed system of democratic socialism.

Consolidation of a Murky Past

Along with a wide variety of economic difficulties which took place at the tail end of the 20th century, corrupt elections, military coups and U.S.-sponsored or tolerated dictators time and again seemed to overpower any solid prospect for democratic stability. Unless recalcitrant regimes wanted to run the risk of economic blockades and CIA assassination attempts, it was either "Washington's way or the highway." However, much of the deepening of democracy being witnessed today was made possible due to the fact that for the first time since the end of the Cold War, Washington no longer has been able to prevent left-leaning leaders from coming to power, mostly in part because its attention has been occupied elsewhere, primarily in Iraq and Afghanistan.

In the meantime, the governments of Venezuela, Costa Rica, Argentina, Uruguay and Bolivia have all declared that they will no longer send students to the School of the Americas (now named the Western Hemisphere Institute for Security Cooperation)–the infamous police and military training center in Fort Benning, Georgia, where many of the region's most notorious killers learned the latest in "counterterrorism" techniques, and soon directed them, at least in the past, against campesinos in El Salvador and auto workers in Argentina.

Several theories have attempted to respond to the question of why democracy—as championed by the U.S. and other developed states— has failed, in any number of instances, to become an ingrained part of Latin American society. Some see it as a matter of chronic inherited economic disadvantages burdening a given regional nation, while others claim that the lack of political and social stability in the region originates purely from an unfair distribution of wealth and resources, leading to a disengaged civil society. However, as Guillermo O'Donnell and Eric Selbin have hypothesized, it may actually be a combination of both. They assert that a deficiency in economic and social development as well as a belief in democratic practices seems to be keeping Latin America from fully institutionalizing or consolidating such desiderata.

The lack of an abiding confidence in democracy itself is a common problem among many citizens in the region, who have witnessed a cyclical pattern of failed regimes and resurrected successors throughout the past century. The 2006 AmericasBarometer, conducted by the Latin American Public Opinion Project (LAPOP), surveyed the health of democratic processes throughout the Western Hemisphere. The following are some of the most salient results pertaining to democratic consolidation:

A strong indicator of the prospects for democratic stability in a given country is citizens' belief in the legitimacy of their governments and their willingness to respect the right to political opposition. By that standard, the highest scoring countries (on a 0-100 scale) are Canada (68), the United States (64), Costa Rica (50), Uruguay (46) and Mexico (41). At the low end are Nicaragua (25), Haiti (24), Paraguay (20), Bolivia (20) and Ecuador (12).
Economic conditions play a strong role in determining how much Latin Americans trust their political systems. Respondents who believe that their personal economic situation is poor or that the national economy is performing poorly express far less trust in their political system than those who see their personal and/or national economy as performing well.

A Shift to the Left

The push for a more authentic democracy in Latin America has not gone unnoticed; rather, it has spurred a new form of political governance which, although it may not follow a North American or European ideal, has gained some popularity among a number of nations. Since the 1998 election of Hugo Chávez as president, there has been a dramatic rise in the discussion of the suitability of democratic socialism as one of the region's political systems of choice. In launching the Bolivarian Revolution, with its goal of redistributing wealth and improving living standards for his nation as well as the region, Hugo Chávez has become an irrepressible presence in the region and the world, for better or worse.

In 2005, Bolivians, in electing Evo Morales as their nation's first indigenous president, chose a leader who also professed that he too was a "democratic socialist" and a close ally of Venezuela. Morales ran for office on an agenda focused on the nationalization of oil and natural gas industries. Shortly after taking office, he issued a decree nationalizing Bolivia's hydrocarbon resources. In Nicaragua, the Sandinistas made an electoral comeback in 2006, when for a second time their leader, Daniel Ortega, was elected president of Nicaragua. In the same general period, Ecuador, Brazil, Uruguay and Argentina have also seen the election of center-left governments that, while not exactly filling the same pair of shoes, nor being inherently socialist in nature, are relatively supportive of Hugo Chávez and are willing to distance themselves from Washington to one degree or another.

Reasons for the Increased Popularity of Democratic Socialism
An encouraging product coming from the limited spread of democratic socialist theory and practice in the region is the targeted social programs that deal directly with the problem of poverty. These began to be seen during the 1990s with Mexico's Progresa, a program that gave small stipends straight to the poor on the condition that parents agree to send their children to school. Under the name Oportunidades, the program was vastly expanded under President Vicente Fox after 2000, to cover the whole of Mexico. This approach was copied and amplified by Brazil in its Bolsa Família program, which now reaches one in four Brazilian families.

The kind of democratic socialist elements expressed above usually go hand in hand with an established participatory system, which aims to bring more direct representation to its citizens. Unlike in the U.S., where legislators are elected as representatives of the populace, participatory democracy, or "direct democracy," is supposed to give ordinary citizens a larger, more personal voice in the decision-making process. If successful, this may leave the door open for a more energized civil society—something that, as mentioned before, is normally necessary for democratic consolidation. It is easy to see why this form of government is so readily accepted among many Latin Americans, even though "socialism" as an ideology, more often than not, possesses an attached negative connotation. In addition, democratic socialism's positive qualities closely resemble those of populism, which also aims to bring improved living standards and some sense of common connection to the citizen base.

Populism, in its modern incarnation, has played an important role in the political history of Latin America, dating back to the 1930s, if not before. It is commonly identified with charismatic leaders such as Juan Domingo Perón, former president of Argentina, the late Prime Minister Maurice Bishop of Grenada, and today with Hugo Chávez. However, the more recent pattern that has emerged in Latin American populism has been socialist in context, and appeals to the bulk of the poor by promising redistributive social policies and state control of the nation's energy resources, as seen in the case of Venezuela and Bolivia.

Nevertheless, populism in Latin America has been criticized by the international financial establishments for the irresponsible fiscal policies of many of its leaders, but, on the other hand, has also been defended for having allowed historically weak states to maximize their cohesion and present a solid front against their would-be enemies and to use their assets to achieve social order through moderate policies of mobilization and modernization. During periods of relative hopelessness, strong-willed populists at least kept alive the vision of what the poor might one day attain, but many still wonder how long it will take for their resources to run dry before they are allowed to benefit from them.

Putting It All Together: Political implications for the future

Regardless of a persistent income inequality gap, the consensus among many Latin Americans is that life is getting better, and for those who may not have yet experienced such benefits, a change in attitude towards the future has made all the difference in terms of political legitimacy. Believing in their role (seen with the indigenous in Bolivia and Ecuador) as agents of change and makers of their own destiny is something not to be minimized. Although this newly enfranchised middle class may not look the same as it does in developed countries, those who belong to it will certainly be happy to experience reliable electricity and waste disposal, or to buy digital music players for their grandchildren, for example. This process is bringing an entirely different dynamic to the local and national political scene. A middle class that breaks away from its traditional definition of being self-absorbed, to be replaced by being partial to a just society that features material equality is important not only for economic productivity, but for establishing humane relations. Since many people in the middle class in fact consider themselves to be members of the "working class," many of them also make up a large percentage of the voting population. It is this element of the electorate which is providing the impact for the creation of left-leaning parties. Now, either through increased civil society participation—as fostered by democratic socialism—or by means of economic freedom, citizens have the ability to hold their government and its officials more accountable than in the past.

Likewise, the emergence of a middle class in Latin America has the potential to accelerate some aspects of state reform, while improving the rule of law, which is perhaps the most important factor now underway and is one area in which progress is measurable. Institutionalized political corruption has infected the region for decades. At the end of last year, for example, a fifth of the members in the Brazilian Congress were recently under investigation for malfeasance (which didn't stop them from voting to raise their salaries by 91% for the next Congress). However one must take note that democracy, which may seem to offer a quick fix, is in itself an ongoing process that is still at doubt and it may take years, if not decades, for it to be fully consolidated in Latin America.

Conclusion

Democratic socialism, although not an American archetype, must be seen as a contending form of democratic expression that is now taking the stage in Latin America, and will surely develop as the middle class grows and demands more of the same social programs and services which political leaders of the poor routinely call for. Now, it is up to these new leftist leaders to prove to their home constituencies as well as to the world that their policies are more than just a popular quick fix or a self-serving platform for re-election. Moreover, it is the responsibility of the Latin American electorate to hold government officials accountable for their actions, and to continue to build solid institutions so that the fragile, if not failed, democracies from the past do not come back to haunt them.

Economic progress in the past decade has helped give the region a sense of legitimacy as well as extra funds for the improvement of the social sector, which allows for some of the benefits generally associated with the middle class to become more widely available. As for the question of what came first, the emerging middle class or democratic socialism, the actual answer would appear to be less relevant than the assurances offered by all sides, that this cycle can be counted on to produce an improved society as well as a welcomed increase in exercisable democratic options and economic prospects.

This analysis was prepared by COHA Research Associate Katie Dickson