# 31 VALDAI PAPERS

October 2015

www.valdaiclub.com

ANOTHER HISTORY (STORY)

OF LATIN AMERICA

Telma Luzzani

About the author:

Telma Luzzani
Journalist, Writer, Anchor of Vision 7 Internacional, Argentina

ANOTHER HISTORY ( STORY ) OF LATIN AMERICA

Latin America, the former laboratory for neoliberal experiments, has become in the
last 15 years a fascinating territory of alternative policies that pursue a more inclusive and
egalitarian society, based on a just wealth distribution and more social rights for vulnerable
people. Although this process is one of the most important geopolitical changes in of this
century, it has had very little exposure. In fact, to be more accurate, we must say that, in
general, the Latin American history is mainly known through the imperialist avaricious eyes
and their distorted news. First came Spain, centuries later the British Empire and then the
United States since its famous Monroe Doctrine of 1823 and its obvious slogan America for
Americans.
As is well known, the Second World War reshaped the global map. Europes most powerful
countries declined and two new superpowers emerged: the United States and the Soviet Union.
That is why, in order to fulfil the hegemonic blueprint for global domination, US strategists
understood that it was necessary, in the first place, to keep Washingtons sphere of influence,
that is to say, all the American countries, under strict control. After 1945, despite changes in
the international strategic environment, USA decided to maintain its military presence around
the world, including many military bases in Central America (such as in Cuba, Panam, Puerto
Rico, Honduras, and so on).
However the strategies pursued in South America were different. During the Cold War,
Washington used a deliberate double standard. While in the name of the Free World, it
claimed that the democratic system was so desirable that it should be established worldwide and
therefore it declared itself the leader of that crusade, in Latin America, the USA has instigated
every coup dtat, since the one against Jacobo Arbens in Guatemala in 1954, and supported
every dictatorship, such as Augusto Pinochets in Chile and Jorge Videlas in Argentina, which
were the bloodiest in the history of the region.
Most of the Latin American dictators, many of whom were guilty of genocide and
Human Rights abuses, were trained in the notorious School of the Americas, located in the US
military base in the Panama Canal Zone, until 1984 (then moved to Fort Benning, Georgia).
In 1996 the training manuals used in this school were declassified. According to a Pentagon
memorandum the instructions included payment of bounties (incentives) for enemy dead,
beatings, imprisonment, executions, use of truth serum and neutralisation, the last term is
euphemism for illegal execution.
During those decades, the South American media, with the complicity of the local
economic establishment and aligned with the US interests, implanted the idea that our
politicians were too incompetent to fight against communism and it was necessary to leave this
task to the military. Those policies became known as the National Security Doctrine.
This strategy, which persisted during almost the whole of the second half of the
Twentieth Century, had a dual purpose. In the first place, to prevent any potential left wing
government, which would probably propose a different economic plan from capitalism or
that could get close to a rival regime such as Cuba or the Soviet Union, from coming to
power. In that time, both countries were the victims of demonization by the US and the
South American media.

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ANOTHER HISTORY ( STORY ) OF LATIN AMERICA

The second and not so explicit purpose was to isolate South America, thereby
maintaining it as a backward region, unindustrialized and economically dependent on
Washington. This was of great benefit for the US multinational companies and, at the end
of the day, it prevented the development of countries such as Brazil or Argentina that could
be future competitors.
However, in the last decade of the Twentieth Century, after the collapse of the USSR,
it was patently obvious that, although the evil was defeated, war, inequity, lack of freedom
and other problems continued. In addition to that, although the red soviet danger had
disappeared there were a lot of New Threats, such as terrorism, drug trafficking, natural
disasters and transnational organized crime, which gave the Pentagon a bunch of new
arguments to maintain an extraordinary oversize military power base to control world affairs.

Imposing the model

In the nineties, as the only remaining superpower, the US was convinced that a new
era required new policies. Therefore, in our region, they decided to get rid of dictatorships
and, instead, encouraged democracy. During the Clinton administrations, democracy was
accompanied by globalisation and reforms of free-market capitalism. In 1994, in Miami, Clinton
promoted the Free Trade Area of the Americas (FTAA), hailed as a natural extension of the
North American Free Trade Agreement (NAFTA) with Mexico and Canada, which sought to
create a large and single market from Alaska to Patagonia, eliminating trade barriers among all
American countries except Cuba.
At the end of the century, globalisation and neoliberalism were successful theories,
adopted in almost every country and studied in many universities as the only viable economic
strategies. However, in practice, they produced neither growth nor development. On the contrary,
instead of the promised benefits, Latin America was more dependent, had less sovereignty, more
poverty, more illiteracy and even, in the health field, the crisis was so deep that old eradicated
diseases such as tuberculosis reemerged among the poorer sectors of society.
Mr. Joseph Stiglitz, the Economic Nobel Prize winner, described this nineties environment
in scathing terms. Both through our own economic diplomacy, and through the influence of
the US-dominated IMF, Uncle Sam became Dr. Sam, dispensing prescriptions to the rest of
the world cut that budget, lower that trade barrier, privatise that utility. The economists and
development experts of the third world were sometimes treated like children, wrote Stiglitz in
his book The roaring nineties: seeds of destruction, published in 2003.
He knew very well about those prescriptions as he worked as an adviser of the
economic team from 1995 to 1997, during the Clinton administration, and was the World

Valdai Papers #31. October 2015

ANOTHER HISTORY ( STORY ) OF LATIN AMERICA

Bank Chief Economist from 1997 to 2000. At that time, the heralded transition of excommunist countries to a market economy, which was supposed to bring unprecedented
prosperity, brought unprecedented poverty, wrote Stiglitz. We can say the same for Latin
America.
A World Bank study in 1982 estimated that 40 % of households in Latin America lived
in poverty, meaning that they could not purchase the minimum basket of goods required for
the satisfaction of their basic needs, and 20 % of all households lived in destitution, meaning
that they lacked the means of buying even the food that would provide them with a minimally
adequate diet.
At that time, Brazil, a country with rich resources and potential, had extremely rich elite
of around 5 % of the population and about 80 % sunk in deep misery. Around one-third of the
Brazilians lived below the poverty line and didnt have enough to eat. It was called Belindia: a
few lived like Belgians and the rest like Indians. In the nineties these circumstances deteriorated
and Brazil continued to regress as austerity measures were imposed according to the standard
IMF formula.
The same was true in Argentina. By 1960, this country was close to full employment,
working class was the highest-paid in the region and around 40 % of the population belonged
to the middle-class, which was the largest in South America. After three decades of free-market
reforms, the country sank into the most catastrophic crisis ever seen with 25% of unemployment,
half of the population below the poverty line and 25 % in destitution.
According to official figures, in Bolivia, in 1992 more than 70 % of the population was
poor (94 % in rural sector and 51 % in urban areas). In Ecuador, poverty leapt from 34% in 1995
to 71 % in 2000. Even the oil-rich Venezuela had 40 % of its inhabitants living in extreme poverty
as the Chamber of Food Industries reported in 1989. With neoliberalism the gap between the
rich and the poor grew dramatically in the whole region.
In addition, one of the effects of the IMF programs was the substantial expansion
of the national debts which became impossible to pay under austerity conditions. To deal
with this situation many South American nations were forced to cede democratic control
of their economies, education and health programs to these international actors. In the
last decades of the twentieth century the US-dominated IMF and Dr. Sam decided not
only who must be the ministers of Economy, Defense, Central Bank, Education and Health
but also which laws must be passed by the Legislative body. Our countries lost all capacity
of self decision.
In that context, after more than a century of plundering carried out by the abovementioned empires and more than twenty years of Washington Consensus, our region
began a fascinating process with new policies and perspectives. I would like to analyze here,
those changes in a particular space South America- and time: from 1999 to the present
day, understanding that the first signs of that new era emerged with the triumph of Hugo
Chvez in Venezuelas presidential election in December 1998. (Actually, he took office in
February 1999).

Valdai Papers #31. October 2015

ANOTHER HISTORY ( STORY ) OF LATIN AMERICA

Counter-hegemonic policies
As a consequence of this dramatic crisis, most South American voters decided to elect
presidents who promised counter-hegemonic policies, inspired by a welfare model in which the
state plays a key role, both in economic and political issues. For example, by paying attention
to the protection of vulnerable people, the fairer distribution of wealth and the promotion of
social rights based on the principles of inclusion.
Hugo Chavez was the first, in isolation, to question the supposed success of the
neoliberal reforms, to oppose the FTAA agreement and to resuscitate words such as socialism
or anti-imperialism which were condemned to exile after the USSRs collapse. He took office
in 1999. Then came Luiz Inacio Lula da Silva (Brazil) and Nstor Kirchner (Argentina), in
2003; Tabar Vzquez (Uruguay) in 2005; Evo Morales (Bolivia) and Michelle Bachelet (Chile)
in 2006; Rafael Correa (Ecuador) and Cristina Kirchner (Argentina) in 2007; Fernando Lugo
(Paraguay), in 2008; Jos Mujica (Uruguay), in 2010; Dilma Rousseff (Brazil) in 2011 and
Nicols Maduro (Venezuela) in 2013. Despite the persistent criticism of local media of these
presidents and Washingtons neoliberal there is no alternative propaganda, so far all these
progressive governments have been re-elected in free and democratic elections.
Despite external and internal pressure, these presidents have introduced many important
measures, such as reversing the privatisation process and promoting a new nationalisation of
resources (e.g. oil and gas). However, there is no doubt that social policies and their highly positive
effects have been the most outstanding. Some figures provided by the United Nations Economic
Commission for Latin America and the Caribbean, known as ECLAC (CEPAL in Spanish) speak
for themselves. In 1990, poverty and destitution affected 48,4 % of Latin American population
while in 2014 it had fallen to 28 %. Regarding child health, the region reduced the under-five
mortality rate by two-thirds, between 1990 and 2015.
In 2011, Belindia disappeared. The Brazilian newspapers, even those who opposed Lula
and Rousseffs governments, admitted: The greatest expansion of the middle class (described
as people earning at least four times the poverty line) has taken place in Brazil where 38 million
have climbed to that status in the last ten years, totalling 61 million middle class Brazilians.
Regarding the Gross Domestic Product, per capita in Latin American countries increased
from 6.160 US dollars (1990) to 9.324 US dollars (2014). Meanwhile, the Gini index which
refers to income distribution and where zero is total equality fell, between 2002 and 2013,
approximately 10% from 0.542 to 0.486.
Bolivia is, by far, the country with the best results: over eight years under President Evo
Morales the country has grown much faster than in any period over during the past 35 years.1
In 2003 Bolivias international reserves were 12,1 % of GDP and now are more than 48% . In
addition, while the business press consider nationalisations to be anathema to attracting
international investment, in 2013 Bolivia actually had the highest level of direct foreign
investment, as a percentage of GDP, in South America. This country, once the second poorest
in the continent (after Hait), launched its first telecommunication satellite on December
2013 and in July 2014 the United Nations Educational, Scientific and Cultural Organization
1

http://www.cepr.net/blogs/the-americas-blog/bolivias-economy-under-evo-in-10-graphs.

Valdai Papers #31. October 2015

ANOTHER HISTORY ( STORY ) OF LATIN AMERICA

(UNESCO) declared it a territory free of illiteracy. A country is declared free of illiteracy

when it maintains a rate below 4%.

Breaking the historical dominance

In foreign affairs, the presidents of this significant process have designed a new strategic
map in order to achieve an independent Latin America. This new model includes closer ties with
other regions like Africa and Asia, encouraging heterodox alliances with China, Russia, Iran and
India and a totally different model of international relations, regarding these nations to be on a
par with the USA and Europe.
Of even greater importance, in this process, Latin Americas integration is considered to
hold a key role in shaping the future of the continent, an experience never seen in our history
since the Independence period in the nineteenth century. Chavez and his Bolivarian Revolution
are, once again, an indispensable reference. Venezuela was the first country to promote
institutional initiatives associated with regional integration, cooperation and solidarity. With
this purpose in mind, a lot of noteworthy projects were initiated, however on occasion with
different degrees of success. Here, there is an outline of the most important examples.
Chvez and the former Cuban president Fidel Castro promoted the Bolivarian Alternative
for the People of Our America (Alternativa Bolivariana para los Pueblos de Nuestra Amrica,
ALBA in Spanish) an intergovernmental organization proposed as an alternative to the FTAA,
the continental market which Washington attempted to impose. Currently, ALBA includes eleven
countries of South America and the Caribbean. Its aim was firstly to present an anti-neoliberal
model, based on the idea of cooperation instead of competition. Secondly, it proposed a new form
of exchange not governed by market rules or rates, where each country gives according to what its
resources and receives according to its needs. For example Venezuela and Cuba swap oil for the
Cuban high level expertise in education and health. Thank to this, UNESCO declared Venezuela an
illiteracy-free territory, the second one in Latin America after the island. The third was Bolivia.
ALBA was strongly resisted by the USA. When the elected president of Honduras, Manuel
Zelaya, was dragged from his bed at 3 AM and flown out of the country in his pyjamas in June of
2009, it was no surprise to find that this classic coup dtat was led by a graduate of the School of
Americas, general Romeo Vsquez. One of the causes of that coup was Zelayas decisin to join
ALBA and Petrocaribe. Petrocaribe is another alternative model designed by Venezuela. In this
case, Caracas sells energy supplies to the region based on a system of deferred payment. Its
aim is to provide fuel to lesser developed countries of the Caribe.
As far as FTAA is concerned, it was finally rejected on November 5th of 2005, at the
Summit of the Americas which took place in Mar del Plata (Argentina).

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ANOTHER HISTORY ( STORY ) OF LATIN AMERICA

Among the most important post-neoliberal organization are the Union of South American
Nations, (Union de Naciones Suramericanas, UNASUR in Spanish) and more recently the
Community of Latin American and Caribbean States, (Comunidad de Estados Latinoamericanos
y del Caribe, CELAC in Spanish), both crucial initiatives to consolidate the integration process.
Unasur is composed of all the free, independent and democratic countries of South
America, except the remaining French colony of Guyana, making twelve in all. The organization
has a strong political character and is not only trade related. Thereby it has twelve councils,
including defence, health, science, economy, anti drug trafficking, education and others, whose
target is to unify policies in all these areas. Unasur has also a Democratic Clause which allows
for the application of economic and political sanctions against a member-state whose democratic
system is interrupted. The first time this clause was invoked was in June 2012 against Paraguay,
when democratic president Fernando Lugo faced a sort of impeachment considered illegal by
Unasur members. Whats more, the role of UNASUR was decisive in preventing both the coup
dtat against Evo Morales in September 2008 and another against Rafael Correa two years later,
in September 2010.
Regarding CELAC, it was the newest and most ambitious regional organization. Never
before in our democratic history had American countries created a political body without the
United States. CELAC consists of 32 countries of the Three Americas, including Cuba. Due to
the focus of the organization on integration and independence, USA, Canada and the European
colonies (territories of France, Netherlands, Denmark and United Kingdom) are excluded.
CELAC has adopted unthinkable measures. Firstly, Cuba, expelled from the Organization
of American States in 1962 by Washingtons diktat, was not only invited as a full member but
also his president, Raul Castro, was one of the first leaders to lead the organization. The fact
that all members of CELAC condemned the US embargo against Cuba was, without doubt, the
prologue of the Barack Obamas later decision to change the US policy towards Cuba. Secondly,
at every CELACs summit there has been a strong statement backing Argentina in its dispute
with United Kingdom over the Malvinas islands (called Falklands Islands in UK). The dispute
dates back to the nineteenth century and led to a war in 1982. Finally, CELAC and China held
their first summit in Beijing in January 2015, which was reported as a success, showing that the
USA has become increasingly less important as a trading partner for the region.
Other regional integration projects are: the Unified System for Regional Compensation
(Sistema Unificado de Compensacin Regional, SUCRE in Spanish) a regional currency
proposed for commercial exchanges between members of ALBA to replace the US dollar
as a medium of exchange. Bank of the South (Banco del Sur), a monetary fund and lending
organization established in 2009 to lend money to South American countries for social
programs and infrastructure. This bank, which is not fully operational, is not designed as a
copy of the IMF or World Bank. On the contrary, it aims to provide an alternative source for
development project lending. The Pipeline of the South (Oleoducto del Sur) is a gas pipeline
which will connect Venezuela, Ecuador, Bolivia and Argentinas rich gas areas to deliver the
fuel, firstly, to continental countries or regions that need this resource and, secondly, to
trade with the rest of the world market in better conditions, for the time being nothing has
come of this project.

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ANOTHER HISTORY ( STORY ) OF LATIN AMERICA

Challenges
During the first decade of the twenty-first century, Washington has confronted the
dynamic changes and creative policies of the South American progressive governments with
traditional strategies. That is to say, attempts to denigrate the progressive presidents through
local and international media; to weaken the process by market strikes or political destabilization
which could even include a coup dtat (Venezuela 2002, Honduras 2009); arbitrary measures
and sanctions against our nations, e.g. the Executive Order of March 2015, declaring Venezuela
a threat to the national security and foreign policy of the USA. Far from undermining Nicols
Maduros government, the E.O. has provoked strong and unanimous solidarity with him from
both CELAC and UNASUR.
However, it is easy to perceive some changes in US foreign policy toward our region in the
last five years. The most remarkable is the approach to Cuba, shown by Washington as a turning
point in hemispheric relations. Another one are the peace talks between Colombian president,
Juan Manuel Santos and the highest military commander Timochenko of the guerrilla
Revolutionary Armed Forces of Colombia (Fuerzas Armadas Revolucionarias de Colombia, FARC
in Spanish) that are taking place in La Habana. The success of these talks could put an end to the
oldest civil war in our region. It is relevant to be aware that Colombia is the most important US
ally in the region and that in its territory the South Command of the Pentagon (USSOUTHCOM)
has established at least seven military bases.2
After a number of defeats at regional summits where the US position became increasingly
isolated, the White House has decided to add a diplomatic strategy to the traditional one
mentioned above. That explains the dramatic change in US policy towards Cuba and just a few
weeks later, the E.Os. against the Bolivarian government.
In a nutshell, these are the future challenges for our region: to preserve the achievements
and to continue along the path towards development with integration and independence, in full
knowledge that the most powerful nation in the world is striving to reverse the process. A new
multipolar world is emerging and a post-neoliberal Latin America has enough experience to
play an important role in it.

2
Luzzani, Telma. Territorios Vigilados. Cmo operan las bases militares norteamericanas en Amrica del Sur, Random
House Mondarori, Septiembre 2012. (Territories under surveillance. How work the US military bases in South America).

Valdai Papers #31. October 2015

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