Neoliberal Resurgence In Latin America

Vol 23 No 2

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Counterrevolution has gathered momentum in Latin America. Local elites are bitterly determined to reassert their full control of the state and the economy in every country in the region. After restoring their social domination the prime target will be to wipe out all social gains that the impoverished and exploited classes have won through the anti-neoliberal governments in the last decade.

Imperialism – with the United States leading interventions in ‘its own backyard’- is aiding this vicious assault on anti-neoliberal forces through supplying their South American clientele with weapons and bankrolling paramilitary forces, mercenaries and NGOs to destabilise and dislodge even ‘moderately progressive’ governments, like the Workers Party in Brazil. Reports that the intelligence apparatus of imperialist states, like the CIA, are conspiring with assassins to murder leading activists in the region are not surprising. The heinous crimes of these clandestine armies of the bourgeoisies are well documented. They are notorious for thwarting anti-imperialist revolutions and plotting the overthrow of progressive governments in Latin America, Africa and Asia – by any means necessary!

Countries in the region are the victims of the uneven spread of the worldwide capitalist economic slump. When the 2007-09 global recession and food price crisis erupted, several factors cushioned most South American countries against the ensuing slump in America, Europe and other countries. Two triggers of the counterrevolution can be traced to this great recession. First, the boom in raw material prices, primarily oil and agricultural exports to satisfy China’s voraciousness for these commodities, kept these primary exporters afloat. Second, finance capitalists in the imperialist countries used the bailout packages to profit from investing in bonds and varieties of financial speculation that served as artificial economic stimuli. In effect, these factors, taken together, inflated the ‘growth bubble’ that had to burst as the logic of generalised overproduction dictates.

When world oil prices went into free fall, it unleashed foreign exchange and budgetary turmoil in countries heavily reliant on earnings from oil exports. With the implosion of the bubble economies, speculative investors also withdrew and switched to rival financial markets for higher rates of return. The mid-2016 Chinese financial meltdown dealt further blows to Latin America’s raw material exporters. Resurgent neoliberal political groups are exploiting these aggravating economic and social calamities to their advantage, relentlessly attacking anti-neoliberal parties for economic mismanagement, corruption, etc.

Economic crises explain only part of what is behind the resurgence of capitalists and neoliberal politicians in the region. Closely related facets of the explanation must be located in the capacities and programmatic manoeuvres of forces engaged in each country’s class war. In Brazil, for instance, the Workers Party (PT) got ousted from the presidency as a result of a corruption scandal connected with the state owned oil company. The impeachment of Dilma Rousseff, Lula da Silva’s handpicked successor, has the hallmarks of a ‘palace coup’ engineered by the captains of industry, the bourgeois media and bourgeois politicians. But it also exposes naïve and fatal political errors of the PT, such as forging coalition governments with bourgeois parties, entrapment within the bourgeois state and the lack of a revolutionary rupture with bourgeois democracy.

The parties that came to power through a series of electoral landslides in Venezuela (Chavez/Maduro), Bolivia (Morales) and Ecuador (Correa), embarked on an anti-capitalist transition towards socialism. Despite nationalising the oil and big natural resource sectors, investing export revenues for massive living standards improvements of populations beyond their own borders (through ALBA, for instance), the knock-on effects of the global oil price collapse hit these countries hard. But the mechanics of capitalist commodity production, distribution and consumption have not been dismantled and liquidating this dominant mode of socio-economic organisation has proved to be tremendously intricate and tough. In fact, private corporations extensively control manufacturing, retail trade, finance and media, harnessing this economic power to grab state power.

Declining electoral support for parties that uphold ‘socialism of the 21st century’ has been registered in all these countries. Rafael Correa and his Alianza PAIS leftist coalition used this slogan as their governing platform in Ecuador but also confronted explosive anger from mass peasant movements and trade unions who became disenchanted with Correa’s ecological, land and labour policies. Unlike the first round victories in past elections, the Alianza PAIS candidate, Lenín Moreno, narrowly won in a second round (run-off)  election in April 2017 against a finance capitalist behind whom the splintered right regrouped themselves. In Bolivia, the Movement Towards Socialism (MAS) suffered defeats in key regional elections in 2015, barely a year after Morales had won more than 60% of the vote in presidential elections. Subsequently, they lost the February 2016 referendum on a constitutional amendment, thus ending the prospects for Morales to run for the presidency in 2019.

In Venezuela, President Nicolas Maduro and the PSUV (United Socialist Party of Venezuela) are resisting the onslaughts of an arrogant right wing coalition. This heterogeneous mix of groups, known as United Democratic Roundtable (MUD), dominates the National Assembly after capturing two-thirds of the votes in December 2015. One consequence of this has been that the legislative and executive branches of government are in a political stalemate. Whether a Vatican brokered political settlement or Maduro’s constituent assembly proposal will break this impasse is unclear. But fissures in the MUD have widened as coalition parties struggle to agree on participation versus boycott in talks between Maduro’s government and opposition group