Free Markets Have Failed a Continent: Latin America is Gagging on the Prescriptions of the Bush Family

23 July 2002

When George Bush came to power, he was not reputed to be a man with an extensive grasp of the world outside the US. There was, though, one area that he was thought to know a little about. As governor of Texas, he had charge of the largest Latino communities in the US and, it was said, spoke Spanish. Latin America, at least, now had a US president who might understand.

Bush's reputation as a master of the Latin American brief took a knock when he confessed his amazement to Brazil's urbane and intellectual president, Fernando Henrique Cardoso, that Brazil's population was not entirely white. "You mean, you have blacks too?" he said. But then, they speak Portuguese in Brazil, so perhaps it was a special blind spot. Let's hope so, because far from thriving since George Bush became US president, Latin America is looking distinctly frayed.

Ten years ago, the view from Washington was that Latin America was a success story. Democracy had returned to countries that for years had suffered dictatorships - most of them, as it happened, overtly or covertly supported by the US. Only Cuba was left as a lonely memory of a different world and Castro, surely, could not last much longer.

Even more important, the new governments had been persuaded to abandon the economic protectionism that had been the region's predominant economic orthodoxy in favor of free-market liberalism. Prosperity, the new orthodoxy said, would surely follow.

For some it did. But for the majority, the story of the 90s was one of a steadily widening income gap between the few who prospered under regimes of privatization and free markets, and the rest. Now, even that thin prosperity is a fading memory.

Castro is still there and has a new ally in Venezuela's Hugo Chavez, who survived a coup attempt earlier this year, to Washington's ill-concealed disappointment. He remains in power, delivering a message of defiance of the US and populist promises of creation and welfare. At least he remains popular. In Paraguay, President Luis Gonzalez Macchi declared a state of emergency this month after protests against free-market policies left two people dead. He was forced to scrap a privatization drive which was a condition for a standby loan from the IMF. In Bolivia, too, miners recently took to the streets to protest against free-market policies. In Guatemala, where serious malnutrition has been reported, a peace settlement reached after more than 30 years of civil war is coming apart.

And in Argentina, the country that most faithfully followed the the free market and prescriptions of the IMF, national income has shrunk by nearly two-thirds in a year. More than half the people of this once comfortable country are below the poverty line and protests have become a way of life. So absolute is the loss of confidence in government that even former President Raul Alfonsin, who bears no responsibility for the crisis, can hardly venture out for fear of public reaction. It seems only a matter of time before a new demagogue emerges.

Argentina's collapse has taken place with scarcely a murmur from the rest of the world and, even now, the remedies offered by the IMF and the World Bank prescribe yet more politically unsustainable pain.

Colombia, the country with which the US is most directly involved, has a new president-elect, Alvaro Uribe, whose authoritarian instincts were summed up in his campaign slogan, "Firm hand, big heart". Last week, he visited Britain, promoting his ideas for dealing with Colombia's 40-year civil war and drugs crisis. A ceasefire negotiated under the previous president, Andres Pastrana, unraveled in the final weeks of his mandate.

Uribe wants to arm a civilian militia a million strong, a move that will drag into the war a rural population that desperately wants to stay out of it. He plans, too, to weaken the powers of the judicial body that can prosecute those in the army responsible for human rights abuses. He has been in Washington arguing for more military aid and a lifting of restrictions on how it is used. What began as a major US intervention in the name of the war on drugs has morphed seamlessly into a military intervention into Colombia's intractable politics.

It is a dismal panorama and requires attention, particularly from the regional superpower. The team that Bush put in place to attend to Latin America bore a startling resemblance to the one his father relied on when the seeds of today's triumph were planted. Their policy involved support for rightwing regimes, overt and covert military intervention and turning a blind eye to systematic human rights abuses - all in the name of fighting for democracy and the free markets. These arrived and, across the continent, there is rage and hunger. As far as the people on the streets are concerned, the experiment has failed.

Isabel Hilton
Published in the Guardian of London © Guardian Newspapers Limited 2002

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