Thursday, September 11, 2008

Why governments are unstable in Latin America

Venezuelan President Hugo Chavez has nationalized a number of industries and shut down a television network that criticized him.

Historians generally agree that the instability in Latin America boils down to a couple of things.

Men not laws
Governments traditionally have been all about men, not laws. In fact, many times a newly elected president will undertake rewriting the constitution so that it supports his party, political beliefs and so on. (This is happening right now in Ecuador, Venezuela, and Bolivia, to name three). So the constitution is often about the person, not the country. When a new president comes in, a new constitution or constitutional reform is often a part of the new regime.

And let´s not be smug. The U.S. and Great Britain had civil wars on their way to creating viable representative democracies, and we still have plenty of corruption. Still, what is different in Latin America is that the revolutions of 1810-20 that kicked out the Spanish did not result in the creation in each country of a constitutional convention, passage of a bill of rights and creation of a viable institutional framework to support a democracy. Basically, whichever clever and powerful person could pull together enough support to control the capital could to some extent control the country.

Multinational companies support dictators
Democracy is messy, so multinational companies, with the support of Democratic and Republican presidents alike over the last 200 years, have supported dictators who guaranteed stability (often through violent repression of dissenters) and no disruption in business. It´s embarrassing for an American to read about all the assassinations and coups we have supported in the interest of protecting the flow of low-cost natural resources, manufactured goods and agricultural products.

The lack of strong local industries has meant these countries are subject to the fluctuations of international commodity prices and other external forces, creating conditions for economic instability, which translates into social and political instability.

Three socialist presidents: Daniel Ortega of Nicaragua, Evo Morales of Bolivia, and Hugo Chávez of Venezuela are part of the new wave in Latin America. Morales and Chavez accuse the U.S. of supporting coups to overthrow their governments. Given our history in Latin America, this argument wins believers. It is also a convenient way to villify opposition movements. (AP photo)

Socialists come to power

Socialist leaders of various stripes have risen to the top recently in Argentina, Brazil, Nicaragua, Bolivia, Venezuela and Ecuador by promising to kick out multinationals and share more of the wealth and the land with the majority. These countries suffered terribly in the 1980s and 1990s when they tried to adopt market-driven economic policies imposed by the International Monetary Fund and World Bank. (These policies are known disparagingly in Latin America as neo-liberalism.) So now these countries are swinging in the other direction, toward state-run economies. The U.S. is worried but shouldn´t be. There is an opportunity to work in a hybrid of the two economic models.

Weak institutions, strong dictators

Today, most countries in Latin America have weak institutions that the public does not respect -- courts, police, congress, executive -- so they trust a system that is like that run by the mafia: you take care of me, I´ll do a favor for you. It´s all about relationships, family connections, friendships, alliances. The law is not trusted, respected or used to resolve disputes. There is even a recognized occupation for people whose job is to facilitate paperwork (gestor in Mexico, tramitedor in Bolivia) by strategic gifts (mordidas en Mexico, coimas in Bolivia) Investors shun a lot of these countries because contracts are hard to enforce (no seguridad jurídica).

Druglords (narcotraficantes) fill the vacuum left by weak institutions. The druglords build schools, playgrounds, hospitals and provide food programs for the poor. In exchange they expect, and get, silence and cooperation. They have destabilized the rule of law in large parts of Chihuahua and other Mexican states.

The rich and the poor
Also you don´t have a big middle class here. When you have a middle-class majority, you have a built-in self-interest in stability. Here there is institutionalized wealth and poverty, which means that you almost always have a very unhappy majority.
In Mexico, which is a relatively prosperous country, more than 40 percent of the people live in poverty, according to a study I read recently. Some 23 million adults in this country of 100 million are either illiterate or didn´t finish primary school.

Most of the poor are indigenous people, usually farmers (campesinos). In the U.S. and Canada we wiped out and moved out all of the indigenous peoples. In Latin America, the Spanish and Portuguese used them to work on their farms and in their mines. The majority in most countries is of indigenous or mixed descent.

So you have built-in social instability that the ruling class has declined to rectify through a program like the New Deal.

Obviously, this is a generalization and simplification. Others could add nuance and more information. John Charles Chasteen´s book Born in Blood and Fire (2000) is very informative, as is Frank Tannenbaum´s 1966 book Ten Keys to Latin America.

Cristina Fernandez, president of Argentina, who succeeded her husband, Nelson Kirchner, in the job.

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