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News :: Globalization |
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U.S. Economic Prescriptions Still Failing In Latin America |
Current rating: 0 |
by Mark Weisbrot
(No verified email address) |
24 Apr 2003
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Latin Americans are increasingly rejecting "neoliberalismo," the economic experiment that their governments have adopted -- at Washington's urging - - over the last two decades. There can be no doubt as to the failure of this experiment, which has included indiscriminate opening to foreign trade and investment flows, large scale privatizations, and the widespread implementation of unsuccessful macro-economic policies advocated by the International Monetary Fund (IMF). |
With the war in Iraq receding from the media spotlight, the Bush Administration is now turning some attention to our traditional "back yard" of Latin America. U.S. Treasury Secretary John W. Snow has just completed a visit to Brazil, Ecuador, and Colombia.
In Washington circles such attention is seen as a positive development. It is widely acknowledged that our government has no policy toward Latin America other than those dealing with drugs and terrorism, and this is not exactly the best way to make friends.
Anti-U.S. sentiment in Latin America is running about as high as it has been since riots forced Vice- President Richard Nixon to cut short his 1958 goodwill tour of South America. The war in Iraq has been immensely unpopular, leaving many Latin Americans wondering what "regime change" might be next on Washington's hit list.
Closer to home, Latin Americans are increasingly rejecting "neoliberalismo," the economic experiment that their governments have adopted -- at Washington's urging - - over the last two decades. There can be no doubt as to the failure of this experiment, which has included indiscriminate opening to foreign trade and investment flows, large scale privatizations, and the widespread implementation of unsuccessful macro-economic policies advocated by the International Monetary Fund (IMF).
From 1980 to 2000, income per person in Latin America grew by only 7 percent over the whole period. In the pre-experimental years of 1960-1980, it grew by 75 percent. No statistical test is needed to see that something has gone terribly wrong.
The opening years of the 21st century are looking like the beginning of another "lost decade." The downturn of 2001-2002 in Latin America was its worst in nearly two decades. The current recovery is anemic: the IMF projects regional growth of 1.5 percent for the year, which would still leave income per person -- which is what matters for living standards -- stagnant for 2003.
And given the weakness in the U.S. economy -- including a $3 trillion dollar housing bubble that has yet to deflate -- things could turn out even worse. Latin America sends nearly two-thirds of its exports to the United States, so a recession in our economy tends to drag the rest of the Americas down with it.
Latin Americans have increasingly taken to the ballot box, as well as the streets, to demand more effective and fair economic policies. The elections of populist presidents -- Hugo Chavez in Venezuela in 1998 and 2000, Luis Inacio Lula Da Silva in Brazil (last October) and Lucio Gutierrez in Ecuador (November) are among the results of this rebellion.
Washington refuses to acknowledge that any of its economic policies have failed, and since the US Treasury Department controls the IMF -- which heads up a creditors' cartel that most developing countries must deal with -- it has a tremendous influence on economic decision-making throughout the region.
And for our government, the slogan appears to be "not one step back." Treasury Secretary Snow praised Brazil during his visit for its extraordinarily tight monetary and fiscal policies: short-term interest rates are set by the central bank at 26.5 percent, and the government is running a large (4 percent of GDP) primary budget surplus. (The primary surplus is the government's surplus excluding interest payments). The economy is unlikely to grow very much under these conditions, and it will be difficult if not impossible deliver on the social improvements for which millions of Brazilians voted.
In Argentina, the IMF recently signed an agreement that could easily stall the country's slow recovery after the worst depression in its history -- which was itself largely a product of the Fund-supported policies. Yet the IMF continues to prescribe the same medicine of fiscal and monetary austerity.
Other aspects of U.S. foreign policy have stirred deep resentment in Latin America. The Bush Administration's support for a military coup last April against the democratically elected government of Venezuela was reminiscent of the worst outrages of the Cold War era. That seems to have been recognized here -- at least in most policy circles -- as a mistake. Not so for the long-term failure of Washington's economic policies, which have brought enormous harm to almost the entire region. Until these change, the United States' standing among our southern neighbors will continue to decline.
Mark Weisbrot is Co-Director of the Center for Economic and Policy Research, in Washington D.C. (www.cepr.net)
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Argentina's Luddite Rulers |
by Naomi Klein
(No verified email address) |
Current rating: 0
24 Apr 2003
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Workers in the occupied factories have a different vision: Smash the logic, not the machines
In 1812, bands of British weavers and knitters raided textile mills and smashed industrial machines with their hammers. According to the Luddites, the new mechanized looms had eliminated thousands of jobs, broken communities and deserved to be destroyed. The British government disagreed and called in 14,000 soldiers to brutally repress the worker revolt and protect the machines.
Fast-forward two centuries to another textile factory, this one in Buenos Aires. At Brukman, which has been producing men's suits for 50 years, it's the riot police who smash the sewing machines and the 58 workers who risk their lives to protect them.
On Monday, the Brukman factory was the site of the worst repression Buenos Aires has seen in almost a year. Police had evicted the workers in the middle of the night and turned the entire block into a military zone guarded by machine guns and attack dogs. Unable to get into the factory and complete an order for 3,000 pairs of dress trousers, the workers gathered a huge crowd of supporters and announced it was time to go back to work. At 5 p.m., 50 middle-aged seamstresses in no-nonsense haircuts, sensible shoes and blue smocks walked up to the police fence. Someone pushed, the fence fell, and the Brukman women, unarmed and arm in arm, slowly walked through.
They had only taken a few steps when the police began shooting: tear gas, water cannons, rubber bullets, then lead. The police even charged the Mothers of the Plaza de Mayo, in their white headscarves embroidered with the names of their "disappeared" children. Dozens of demonstrators were injured.
This is a snapshot of Argentina less than a week before its presidential election. Each of the five major candidates is promising to put this crisis-ravaged country back to work. Yet Brukman's workers are treated as if sewing a gray suit were a capital crime.
Why this state Luddism, this rage at machines? Well, Brukman isn't just any factory; it's a fabrica ocupada, one of almost 200 factories across the country that have been taken over and run by their workers in the past 18 months. For many, the factories, employing more than 10,000 nationwide and producing everything from tractors to ice cream, are seen not just as an economic alternative, but as a political one as well. "They are afraid of us because we have shown that, if we can manage a factory, we can also manage a country," Brukman worker Celia Martinez said on Monday night. "That's why this government decided to repress us."
At first glance, Brukman looks like every other garment factory in the world. As in Mexico's hypermodern maquiladoras and Toronto's crumbling coat factories, Brukman is filled with women hunched over sewing machines, their eyes straining and fingers flying over fabric and thread. What makes Brukman different are the sounds. Along with the familiar roar of machines and hiss of steam is the Bolivian folk music, coming from a small tape deck at the back of the room, and softly spoken voices, as older workers show younger ones new stitches. "They wouldn't let us do that before," Ms. Martinez says. "They wouldn't let us get up from our workspaces or listen to music. But why not listen to music, to lift the spirits a bit?"
In Buenos Aires, every week brings news of a new occupation: a four-star hotel now run by its cleaning staff, a supermarket taken over by its clerks, a regional airline about to be turned into a co-operative by the pilots and attendants. In small Trotskyist journals around the world, Argentina's occupied factories, where the workers have seized the means of production, are giddily hailed as the dawn of a socialist utopia. In large business magazines such as The Economist, they are ominously described as a threat to the sacred principle of private property. The truth lies in between.
At Brukman, for instance, the means of production weren't seized -- they were simply picked up after they had been abandoned by their legal owners. The factory had been in decline for several years, and debts to utility companies were piling up. The seamstresses had seen their salaries slashed from 100 pesos a week to two pesos -- not enough for bus fare.
On Dec. 18, the workers decided it was time to demand a travel allowance. The owners, pleading poverty, told the workers to wait at the factory while they looked for the money. "We waited until night," Ms. Martinez says. "No one came."
After getting the keys from the doorman, Ms. Martinez and the other workers slept at the factory. They have been running it every since. They have paid the outstanding bills, attracted new clients and, without profits and management salaries to worry about, paid themselves steady salaries. All these decisions have been made by vote in open assemblies. "I don't know why the owners had such a hard time," Ms. Martinez says. "I don't know much about accounting, but for me it's easy: addition and subtraction."
Brukman has come to represent a new kind of labor movement in Argentina, one that is not based on the power to stop working (the traditional union tactic) but on the dogged determination to keep working no matter what. It's a demand that is not driven by dogmatism but by realism: In a country where 58 per cent of the population is living in poverty, workers know they are a paycheck away from having to beg and scavenge to survive. The specter haunting Argentina's occupied factories is not communism, but indigence.
But isn't it simple theft? After all, these workers didn't buy the machines, the owners did -- if they want to sell them or move them to another country, surely that's their right. As the federal judge wrote in Brukman's eviction order, "Life and physical integrity have no supremacy over economic interests."
Perhaps unintentionally, he has summed up the naked logic of deregulated globalization: Capital must be free to seek out the lowest wages and most generous incentives, regardless of the toll that process takes on people.
The workers in Argentina's occupied factories have a different vision. Their lawyers argue that the owners of these factories have already violated basic market principles by failing to pay their employees and their creditors, even while collecting huge subsidies from the state. Why can't the state now insist that the indebted companies' remaining assets continue to serve the public with steady jobs? Dozens of workers' co-operatives have already been awarded legal expropriation. Brukman is still fighting.
Come to think of it, the Luddites made a similar argument in 1812. The new textile mills put profits for a few before an entire way of life. Those textile workers tried to fight that destructive logic by smashing the machines. The Brukman workers have a much better plan: They want to protect the machines and smash the logic.
Naomi Klein is the author of No Logo and Fences and Windows.
© 2003 Bell Globemedia Interactive Inc
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