Envío Digital
Central American University - UCA  
  Number 371 | Junio 2012


Latin America

The extractive capitalism of Latin America’s progressive camp

South America’s seven progressive governments have many similarities, including continuing the policies of the preceding neoliberal governments. They have an anti-imperialist foreign policy discourse on the one hand, but economic alliances with investors from the empire on the other, including an extractive mining and agricultural capitalism that’s destroying their natural resources. It’s a Left that ceased being red, but is certainly not green. Some have dubbed it brown.

James Petras

In today’s Latin America, the leading agro-mineral exporting countries, including those engaged with the world’s leading mining and energy multi-national corporations, are paradoxically also those characterized as having the most independent and progressive foreign policies. Apparently the primacy of “extractive capitalism” and economies based on commodity exports are no longer correlated with neocolonial regimes.

It can be argued that concessions to the extractive multinationals and the local ‘leading’ classes assure stability and steady revenues and finance the increased social expenditures that permit the re-election of center-Left regimes. In other words a de facto alliance between the “top” and the “bottom” of the class structure is the unstated basis for center-Left electoral successes despite the growing political divergence between the regimes and sections of the social movements.

The “Progressive Camp”

There is a general consensus that the governments of seven countries in South America form what can be called the “progressive camp”: Bolivia, Ecuador, Argentina, Brazil, Uruguay, Peru and Venezuela.

The identifying features usually attributable to the regimes in these countries include: 1) their past political trajectory: most are led by former leaders and activists from social movements, trade unions or guerrilla formations; 2) their relatively independent foreign policy pronouncements, especially regarding US intervention and sanction policies; 3) their ideological rhetoric rejecting US-led regional bodies and favoring Latin American-centered organizations; 4) their populist electoral campaign programs with respect to social equity, environmentalism and human rights; 5) their vehement rejection of neoliberalism and its traditional personalities, parties and privatizations; 6) their strategic perspective, which envisions a prolonged social transformation process that emphasizes an agenda featuring modernization, developmentalist priorities and high levels of investment oriented toward global markets; and 7) their prolonged political incumbency based on constitutional reforms permitting re-election justified by the need to complete their transformative vision.

These progressive governments project a self-image to their electorate as representing a rupture or historical break with the past, first with the traditional neoliberal oligarchy and second with the “statist” Left. In the case of Bolivia, Ecuador and Venezuela, they frequently resort to rhetoric that evokes “21st century socialism.” But the potency of the appeal to radical novelty has a limited time span that depends on the degree to which the regimes pursue policies at variance with the preceding neoliberal regime.

The Left-Right divergences

The perceptions of the objective and subjective divergence between the progressive camp and the Right vary according to whether they emanate from official sources or from a critical empirical investigation.
According to the ideologues of the “progressive camp,” at least five major policy areas reflect the radical rupture with the traditional neoliberal Right.

Nationalism: a) the progressive government secures a higher rate of taxation through renegotiations of contracts with extractive multinationals, increasing revenues for the national treasury; b) via increased state investment it converts wholly owned private firms into public-private joint ventures; c) through increases in royalty payments it lessens “foreign exploitation”; and d) through the greater presence of “local technocrats” it increases national oversight of strategic economic decisions.
Foreign Policy: The progressive camp has pursued an independent, if not explicitly anti-imperialist foreign policy. It has established several Latin American and Caribbean regional organizations, such as ALBA (Bolivarian Alliance of the Peoples of Our America) and UNASUR (Union of South American Nations), which deliberately exclude the presence of imperial North American and European countries. It has rejected sanctions against Cuba, Iran, Syria and Gaza and opposed the US-backed NATO war against Libya. It criticized the US position at the Summit of the Americas meeting in April 2012 on at least three major issues: exclusion of Cuba, British colonial control of the Malvinas and the de-penalization of drugs.

It has expressed its opposition to US hegemony, IMF “structural reforms” and Euro-US control of international lending institutions. And with the exception of Venezuela, it has diversified its export markets. For example, Brazil exports to the US only 12.5% of its goods and services, Argentina 6.9% and Bolivia 8.2%.

Social Policy: The progressive camp has increased social expenditures, especially toward reducing rural poverty; increased the minimum wage and approved salary and wage increases. A few of its countries provide easy credit and financing to small and medium businesses, have given legal land titles to squatters and distributed plots of uncultivated public lands as a kind of ‘agrarian reform.’

Regulation: With varying degree of consistency, the progressive camp has imposed controls over the financial sector, regulating the flow of speculative capital and the volatility of financial markets. With regard to the extractive sector, regulations have been relaxed to permit the large-scale inflow of capital and the pervasive use of toxic chemicals and genetically modified seeds by agro-business. It has permitted the expansion of mining, agriculture and the timber industry into indigenous people’s land and natural reserves. It has financed large-scale infrastructure projects linking extractive enterprises to export outlets, trespassing onto previously regulated, protected natural habitats. Regulatory norms have been harnessed to facilitate “productive” extractive developmentalism and limit the financialization of the economy.
Labor Policy: This has been based on a tripartite corporatist model of business-state-trade union negotiations and conciliation to limit lockouts and strikes and maintain growth, exports and revenue flows. Labor policy has been conditioned by the policy of limiting budget deficits and fixing wage increases to the inflation rate. In line with orthodox fiscal policies, pensions for public sector workers have been frozen or reduced, especially among the middle and high-end functionaries. Traditional job security guarantees have been maintained but not augmented, and severance pay has not been raised.

Strikes by public sector workers, especially among teachers, medical staff and social service workers, have been frequent and have led to government mediation and marginal gains. Government policy has been oriented toward protecting managerial prerogatives, while respecting and upholding the legal status and collective bargaining rights of trade unions.
State-appointed directors rule within the nationalized firms; there is no move toward worker self-management or even “co-management”—except in limited cases in Venezuela. The structure of labor relations follows the private corporate hierarchical model. Labor has, at best, an advisory role regarding health and safety but no determining influence or investment within this corporate framework.

Pressure via strikes and protests by trade unions has been necessary, frequently in alliance with community groups, to rectify the most egregious corporate violations of health and safety rules. While the progressive regimes publically eschew neoliberal “labor flexibility” policies, they have done little to expand and deepen labor prerogatives over the labor and productive process.

The principal difference in labor policy between the progressive regimes and the traditional Right is the “open door” to labor leaders, their willingness to mediate and grant incremental wage increases, especially of the minimum wage, and generally the reduction of harsh, violent repression.

Continuities and similarities
with the neoliberals

Writers, academics and journalists on the Right and center-Left emphasize the difference between these progressive regimes and the past neoliberal ones, overlooking the large-scale structural socioeconomic and political continuities. A more nuanced, balanced and objective analysis requires that these continuities be taken into account because they play a major role in discussing the limitations and emerging conflicts and crises facing the progressive regimes. Moreover, these limitations, based on the continuities, highlight the importance of alternative development models proposed by grassroots social movements.

The agro-mineral export model has demonstrated profound strategic deficiencies in its very structure and performance. The promotion of agro-mineral exports has been accompanied by the large-scale, long-term entrance of foreign capital, which in turn determines the investment rates; sources for inputs of machinery, technology and ‘know-how’; as well as control over the marketing and processing of raw materials. The multinational “partners” of the progressive regimes have conditioned their involvement based on the deregulation of environmental controls, termination of price controls and introduction of “international prices” for sales to the domestic market and freedom to control foreign exchange earnings and remit profits overseas.

They also control decisions regarding the exploitation of mineral reserves. Expansion of production is dependent on their own global criteria rather than the needs of the host country. As a result, despite the renegotiated contracts, which the progressive regimes hail as a “giant advance toward nationalization,” the cumulative losses in revenues and in rebalancing the economy are substantial.

The Repsol case

If one looks beyond the agro-mineral enclave, the negative impact to further development is substantial. The very limited impact of the agro-mineral model on the economy as a whole has led to occasional conflicts between the foreign corporation and the progressive host governments. A case in point is the conflict between the nominally Spanish oil company Repsol and the Argentine government of Cristina Fernández in April 2012.

Repsol’s behavior illustrates all the pitfalls of collaboration with foreign overseas extractive corporations. It refused to increase investments, claiming that local regulated prices reduced profit margins. As a result, Argentina’s energy bill rose three-fold between 2010 and 2011, from $3 billion to $9 billion.
Furthermore, Repsol repatriated its profits, paid high dividends to overseas stockholders and thus had little impact in creating domestic industries to produce inputs or refineries to process petroleum.

The attempt by President Kirchner to increase “national ownership” by bringing in a local private capitalist (the Peterson Group) had no positive impact; it merely entrenched Repsol’s control. When his wife Cristina Fernández, who was elected to succeed him in 2007, took majority shares in order to establish public control and increase local production, the entire Eurozone leadership, headed up by the Spanish government, with the Western financial press in tow, launched a virulent campaign, threatened litigation and predicted economic disaster. The problem of “inviting” foreign multinationals to invest is that it’s hard to disinvite them. Once they enter a country, it is difficult to rectify or undo the damage, no matter how unfavorable their performance, and move onto a new public-centered development model.

Neoliberal extractivism in Bolivia and Ecuador

All the progressive regimes, with the possible exception of Venezuela, have signed long-term large-scale contracts with major foreign extractive multinationals. Apart from the increase in royalties, these agreements do not differ greatly from contracts signed by preceding rightwing neoliberal regimes.

Evo Morales signed a large-scale exploitation contract with Jindal, an Indian multinational, to exploit the Mutun iron mine with virtually all inputs—machinery, transport, etc.—imported and with very limited industrializing of the raw iron ore, mostly into simple iron nuggets. The bulk of Bolivia’s gas and oil is exploited by foreign multinational-public joint ventures and is shipped abroad, leaving most of the country’s 60% rural households without piped gas, and resulting in Bolivia having to import most of its diesel.

Under President Correa, another leading progressive, Ecuador signed two big contracts with foreign oil groups in February 2012, despite the opposition of the majority of indigenous organizations including CONAI. In Ecuador, as in Bolivia, big oil and gas companies, while raising objections to the renegotiation of contracts leading to an increase in royalty payments and an increased presence of public officials, retain a privileged position in crucial decisions regarding management, marketing, technology and investment. Despite claims to the contrary, the leaders of the progressive regimes sign off on these strategic agreements without consulting the communities affected. Decisions are based exclusively on executive privilege. The style and substance of the distribution of powers and privileges in the oil and gas agreements between the progressive governments and the multinationals are no different than what transpired under previous neoliberal regimes. Moreover, many of the “technocrats” and administrators who worked under the previous neoliberal regimes in both Ecuador and Bolivia play a prominent role in running the joint venture.

Economic growth but no
redistribution of wealth

While progressive regimes have pursued anti-poverty programs and registered some successes in reducing poverty levels, they do so as a result of the economic growth, not a redistribution of wealth. In fact, the progressive regimes have not pursued redistributive polices: income and land concentrations, including high levels of inequality, remain intact. Nor have they altered the hierarchy of the class structure and in most cases have reinforced it by including new entrants into the upper and middle class. These include many former leaders and activists from the lower middle and working classes who have entered the government, as well as “new capitalists” benefiting from state contract agreements with the progressive regime.

The financial system has remained intact and prospered under the progressive regimes, especially because of the regimes’ tight fiscal policies, build-up of foreign reserves, control over government spending and low inflation rates. Financial sector profits are especially high in Brazil, Uruguay, Peru, Bolivia and Ecuador. Brazil, in particular, has attracted large inflows of speculative capital from Wall Street and London because its interest rates are higher than those in the United States and Europe.

Alongside the concentration of ownership in the extractive and financial sectors, the progressive regimes have not introduced progressive taxes to reduce the disparities of wealth. The income of the agro-business elites in Bolivia, Argentina, Uruguay, Brazil and Ecuador is several hundred times that of the bulk of subsistence farmers, peasants and rural laborers. Many of the latter remain subject to brutal working and living conditions, yet in many cases, the progressive regimes have done little to enforce the labor and health codes in the giant agro-business plantations where workers are subject to unregulated toxic chemical sprays.

They have accentuated dependency

If the configuration of ownership and wealth remains relatively unchanged from the neoliberal past, the progressive governments have accentuated the trend toward export specialization. Under the progressive governments the economies have become even less diversified and more dependent on agro-mineral and energy exports, and more dependent on large-scale long-term foreign investments for growth. State revenue and growth depend more on primary product exports.

The free market policies of the progressive agro-mineral export regimes have stimulated the growth of large-scale commercial activity. The commercial sector is increasingly influenced by the large-scale entrance of foreign-owned multinationals like Wal-Mart, which outsource their products overseas, undermining local small-scale producers and retailers.
The appreciation of the currency has adversely affected traditional manufacturers and the transport industry, causing significant job losses in Brazil, Bolivia, Peru and Ecuador, especially in textiles, footwear and automobiles. Moreover, favorable polices promoting large-scale agro-mineral exporters have been accompanied by a credit squeeze on local small businesses, especially producers for local markets who have also been hit hard by the import of cheap consumer goods from Asia. Farmers producing food for local markets have been downgraded in the drive to expand cultivation of export crops like soya.

A double discourse of many facets

In summary, the progressive regimes have pursued a multifaceted double discourse: an anti-imperialist, nationalist and populist rhetoric for domestic consumption while putting into practice a policy of fomenting and expanding the role of foreign extractive capital in joint ventures with the State and a rising new national bourgeoisie. They articulate a narrative of socialism and participatory democracy but in practice pursue policies linking development with the concentration and centralization of capital and executive power.

They also preach a doctrine of social justice and equity and a practice of co-opting social leaders and clientelism via poverty programs for the poorest sectors of society.

They have combined incremented income policies with large-scale structural changes that benefit the extractive primary sector. Stability of the progressive camp is utterly dependent on the increasing demand for raw materials, high commodity prices and open markets. The progressive regimes have successfully linked trade unions and sectors of the peasant movement to the State and have undermined or weakened independent class organizations, replacing them with tripartite corporate structures.

They practice efficient neoliberalism

They have successfully “reformed” or replaced the chaotic, deregulated, conflictive, racist policies of their predecessors and institutionalized “normal capitalism.” They have introduced rules and procedures favoring institutional stability, fiscal discipline and incremental but unequal gains. In other words, the “parameters of neoliberalism” are now effectively administered and legitimated by faux nationalism based on greater political autonomy and market diversification. Centralized executive decision-making based on agreements that require extractive multinational corporations to invest and develop the forces of production is legitimated by an electoral framework and a multi-class political coalition.

They oppose imperialist militarism but
collaborate with economic imperialism

The domestic and foreign policies of the progressive extractive regimes reflect two contradictory experiences: their radical origins in the lead-up to taking power and their subsequent adoption of a developmentalist agro-mineral export strategy, favored by neoliberal technocrats. The “synthesis” of these two apparently contradictory experiences finds expression in the adoption of an independent, critical political position toward imperialist militarism and interventionism and economic collaboration with the agencies of economic imperialism, namely the signing of long-term and large-scale contracts with US-EU-Canadian agro-mining and energy multinationals. In other words, the progressive extractive regimes have “redefined” or reduced imperialism to mean its state structures and policies rather than its economic components, i.e. the multinationals engaged in extracting raw materials and exploiting labor.

In the same fashion, they redefine ‘anti-imperialism’ to mean opposition to political-military interventions and a “fair” distribution of profits between the regime and its multinational “partner.” This redefinition allows the progressive regimes to claim popular legitimacy on the basis of periodical criticisms of the policies and practices of the imperial State while collaboration and agreements with the multinational corporations allow the progressive regimes to retain support from domestic and overseas business interests.

The Repsol case teaches
the limits of that support

When a progressive regime, as is the case of Argentina ruled by Cristina Fernández, decided to “nationalize” or more correctly secure the majority shares in Repsol, the entire financial press, the European Union and Washington denounced the move and threatened reprisals. Put another way, the unstated pact between the progressive camp and the imperial regimes is that political differences are tolerable but nationalist economic measures are unacceptable. Renegotiations of contracts to increase state revenues may cause a temporary suspension of new investments but not a political confrontation. However, the public takeover of a foreign extractive firm evokes predictable hostility and retaliation not only from the affected firm but also from the imperial States.

The Argentine progressive government’s embrace of a policy of economic nationalism was, however, enterprise- and sector-specific. No other extractive firms were expropriated nor are there plans to do so, as the measure was not part of a general nationalist strategy to shift toward greater public ownership. Rather Repsol’s refusal to increase investments and production was increasing Argentina’s dependence on imported oil, which was deteriorating its balance of payments and foreign currency reserves. Repsol’s refusal to comply with Argentina’s developmentalist agenda was based on President Fernández’s policy of keeping the retail price of oil for the domestic market below the international price. Repsol’s decline in production was a way of leveraging the regime to lift price controls. However, a higher petrol price would have a negative impact on industrial and private consumers, raising costs and reducing the competitiveness of Argentine exporters and domestic producers.

In effect, Repsol’s intransigence threatened to undermine the social and political balance of forces between capital and labor and between extractive exporters and the grassroots consumers who sustained the regime’s majority coalition. In brief, the measure was nationalist in form but capitalist developmentalist in content. Even so, the measure polarized the global economy between the imperial West and the Latin American Left, with the usual imperial satraps in Latin America (Mexico’s Calderón and Colombia’s Santos) backing Repsol.

The progressive regimes came to
power thanks to the social movements…

Prior to coming to power via electoral processes, the progressive leaders maintained close ties to the social movements and actively supported and participated in their street actions and mass struggle. They embraced the banners of economic nationalism, ecological conservation and respect for the indigenous communities’ natural reserves, social equality and reconsideration of the foreign debt, including repudiation of “illegal” debts.

The social movements played a major role in politicizing and mobilizing the working and peasant classes to elect the progressive Presidents, but this convergence was short-lived. Once in power, the progressive regime appointed orthodox economic ministers to run the economy. They in turn adopted the extractive strategy, shifting from a nationalist public sector economy, designed to diversify the economy, to a mixed economy based on joint ventures with overseas extractive capital.

…then neglected and
failed to consult them…

First, the indigenous communities of Peru, Ecuador and some sectors in Bolivia went into the opposition, arguing that their interests were neglected and they weren’t consulted. Second, sectors of the working class and public employees struck for higher salaries and increased public spending. Small farmers and manufacturers demanded economic incentives for family farms and local industry rather than subsidies for agro-mineral multinationals, fiscal orthodoxy and export strategies based on lower labor costs and neglect of the domestic market.
Radical trade union, peasant and indigenous leaders of the social movements called into question the entire agro-mineral extractive strategy and the distribution and administration of state revenues and expenditures. They reasserted their support for a social program embracing agrarian reform, including the expropriation of large plantations and redistribution of land to landless peasants. Workers’ leaders called for an industrial policy to process the raw materials extracted in order to create manufacturing jobs. Some trade unionists called for the nationalization of strategic industries and banks.

…and then won over the
less radical sectors

However, despite some major protests, the bulk of the social movements’ followers and the majority of their leaders soon shifted from radical rejection of the extractive model to demands for a bigger share of the revenues. The progressive regimes attracted the bulk of the social leaders to tripartite conciliation councils to negotiate and secure incremental changes.

They also highlighted their opposition to “neoliberalism,” redefining it as unregulated capitalism based on low royalties and underfunding of social programs. The progressive regimes successfully divided the social movements between “utopian” radical opponents and progressive reformists. In time of social strife, the governments evoked a “Left-Right alliance,” charging their social critics of acting on behalf of imperialism, impervious to their own collaboration with imperial-based multinationals. Presidential appeals, a nationalist populist discourse and increased revenues to fund social expenditures weakened the opposition from the left. Moderate but sustained increases in anti-poverty programs and minimum wages neutralized the appeal of the radical leaders in the social movements.

The key to their electoral success

Despite the progressive regime’s break with its radical egalitarian roots, it was more than able to secure large-scale electoral support, based on the overall dynamic growth of the economy and steady growth of income. Both were underpinned by long-term high commodity prices.

While grassroots support was important in sustaining the progressive regimes against US- and EU-backed rightwing destabilization campaigns, the backing of the military, sectors of the business elite and extractive capitalists was of equal or greater importance. By adopting “moderate” policies—including business subsidies and generous pay hikes to the military—the progressives were able to divide the elite, retain military support and isolate the rightwing opposition. The Right has remained electorally marginal, providing very limited leverage for US-EU interference and influence over the progressive agenda.

Popular extractivist Presidents repeatedly won elections by substantial majorities and were able to mobilize sectors of the moderate social movements to counter anti-extractivist social movements. The high prices of commodities and multiple opportunities for exploitation of resources attracted foreign investors despite the higher royalty payments. They were were also attracted by the social stability ensured by the progressive regimes in contrast to the instability of the previous neoliberal regimes. The progressive regimes thrived on economic ties with the multinational corporations and an electoral alliance with the lower classes.

There are differences among them

While the seven regimes that form the progressive camp share a common development strategy based on the export of primary commodities, there are significant differences in the levels of diversity of their economies, the nature and character of the commodities they export, the degrees of social polarization and social cohesion and the size and scope of the opposition. In line with these differences there are also substantial differences in the degree to which the “progressive and extractive model” is sustainable or subject to upheaval or reversal.

The progressive camp can be divided in many ways, for example between those regimes based on charismatic leaders and extreme dependence on primary exports (Bolivia, Peru, Ecuador and Venezuela) and those with developed industrial sectors and institutionalized political leadership (Brazil, Argentina and Uruguay). There are also significant differences in the degree of class and ethnic conflict: Peru, Bolivia and Ecuador are experiencing significant mass resistance from substantial indigenous communities, while there is only isolated opposition in Brazil, Argentina and Uruguay, where the indigenous population is sparse.

In terms of class struggles, Bolivia has experienced widespread protests by health, education, mining and factory workers. Venezuela has faced lockouts and boycotts organized by the economic elite (“class struggle from above”). Ecuador faced widespread protests from the police. Most of the rest of the countries (Brazil, Argentina and Uruguay) faced limited strikes, largely on wage issues.

With the exception of Bolivia, the major trade union confederations work closely and collaborate with the progressive regimes; in contrast, the peasant and rural workers movements in Brazil, Ecuador and Peru have retained a greater degree of independence and militancy largely because they have been the most prejudiced by the agro-mineral export strategies. In Venezuela and Brazil, large landowners’ private armies have played a major role in combating land reform beneficiaries with relative impunity.

All are responsible for
environmental disasters

The most pervasive environmental degradation has occurred in Brazil, where millions of acres of rainforest have been “cleared” during the decade of Worker Party rule. Chemical exploitation of agriculture is strong in most countries, especially Brazil, Argentina and Uruguay, where soya production has become a dominant crop. All the major agro-industrial exporters (Brazil, Argentina and Uruguay) rely on toxic chemicals and genetically modified seeds with numerous cases of toxic consequences for indigenous residents and their natural habitat. The issue of toxicity and environmental degradation resulting from the giant mining and timber companies has been well documented in Peru, Ecuador and Uruguay.

The “moderate” progressives have the most egregious (and well-documented) record of ongoing environmental degradation. In Peru, Humala has given the green light to mining exploitation, threatening the livelihood of thousands of peasants and local business in Cajamarca; Both Presidents Lula da Silva and Dilma Rouseff of the Workers Party promoted the destruction of millions of acres of the Amazon rainforest and displacement of scores of Indian communities in a decade. In Uruguay, despite mass protests, the Broad Front Presidents Tabaré Vasquez and Mujica promoted the highly polluting Botina cellulose factory, thus contaminating the Parana River.

Overall, the greater the urban population and the more dispersed the adversely affected rural communities, the smaller the environmental protest or the likelihood that NGO ecologists will play a leading role in it. And given that the extractive industries are outside of the major urban centers, macroeconomic imbalances, commodity dependency and related structural vulnerabilities have not resulted in major confrontations between labor and capital. Most of the major trade union confederations are collaborating with the progressive regimes and securing incremental wage increases, and the overall economy has been growing and unemployment declining.

The worst conflicts
have been with the Right

The most contentious conflicts that have occurred have been between the progressive regimes and the orthodox neoliberal elites backed by US and European powers. Several cases come to mind.

On April 12, 2002, and in December 2002-February 2003 the Venezuelan capitalist class backed by the US and Spain organized a coup that was reversed and a petrol industry lockout that was defeated. An uprising in 2011 led by the police in Ecuador and a coup attempt in Bolivia were also put down successfully, before they gained traction. A large-scale agro-business protest against an export tax in Argentina in 2008, which paralyzed the agro-export sector, ended with concessions by the government.

In large part, these “class struggles from above” worked in favor of the progressive regimes because they allowed the governments to pose the issue as one between a popular democratic regime and a retrograde authoritarian oligarchy. As a result the governments were able to neutralize, at least temporarily, internal critics from the left. The defeat of “the Right” burnished the credentials of the progressive camp and raised their popularity.

The degree of “progressiveness”
also varies substantially

The Chávez government has advanced an anti-imperialist and socialist agenda involving rejection of US coups, wars and blockades of independent States; it has supported the renationalization of oil, aluminum and other raw material, mining and energy sources. Its extensive agrarian reform, benefiting 300,000 families, is aimed at food self-sufficiency. Universal free public health and higher education, subsidized basic food prices via publicly owned supermarkets and large-scale low-cost public housing for the poor along with literacy campaigns and the formation of thousands of neighborhood councils to adjudicate and resolve local issues have deepened and extended the socialization process.

On a far lesser scale, Bolivia, Ecuador and Argentina have pursued independent foreign policies. Their partial and selective nationalizations are designed to increase revenues rather than form part of a long-term, large-scale transformation strategy. They have not followed Chávez’s lead on agrarian reform and on greater enhancement of social spending on health, housing and higher education. They offer remote public lands of dubious quality as “land reform.” They have advocated incremental changes involving wage and social benefits commensurate with the rise in revenues from commodity exports and in line with the inflation rate. Bolivia and Ecuador have dislodged land squatters and defended the major agro-business land holdings.

The least reformist regimes with the most dubious progressive credentials are Brazil, Uruguay and Peru under Ollanta Humala, which have adopted a free-market agenda. They actively promote large inflows of unregulated foreign investments, degrade millions of acres of the rain forests (Brazil especially), promote agro-business and oppose agrarian reform in all of its forms, relying on the dispersion of peasants and landless to the cities and towns, where they serve as a labor reserve for capital or join the low-paying informal sector.

These “moderate” progressive regimes have signed military accords with the US, and adopted a low profile in opposition to US imperial policies in the Middle East. Their “progressiveness” is found in their support of regional integration, their opposition to US hemispheric hegemonism (opposing the US coup in Honduras, blockade of Cuba and interference in Venezuela), and the diversification of overseas markets.

Brazil leads the way in catering to Wall Street speculators and in government anti-poverty spending on minimum food baskets. Poverty reduction is matched by the spectacular growth of millionaires linked to the finance and agro-mineral export sector.

The “report card” of these
governments in summary

While it’s difficult to generalize about the performance of the progressive camp given the divergences in social and economic policies, a “report card” of sorts can be drawn up. All regimes have lowered poverty levels and increased dependence on agro-mineral exports and investments. All have signed and/or renegotiated contracts with extractive multinational corporations, while few have diversified their economies. Those with a substantial industrial base (Argentina, Brazil and Peru) have suffered a severe decline in the manufacturing sector because of appreciating currencies and loss of competitiveness resulting from high prices for commodity exports. Incremental wage agreements have lowered the level of social conflicts in the cities (except in Bolivia), but displacement of peasants and degradation have intensified conflicts in the interior between rural communities and the multinational corporations, leading to state repression (Peru).

The social impact of the progressive regimes has the widest variation, with Venezuela registering the most far-reaching structural changes and the rest lacking any vision or project for redistributing wealth, income or land. Their common support for regional integration is matched by important divergences in accommodation to US military policy. Venezuela, Ecuador and Bolivia, the ALBA members, reject military treaties, while Brazil, Uruguay and Peru have signed military agreements with the Pentagon.

The overall economic performance is mixed. Brazil’s economy, especially its manufacturing sector, is stagnating with zero or negative growth in 2011-2012; Venezuela is recovering, but with over a 20% rate of inflation; while the rest of the progressive camp is experiencing steady growth, but increasing dependence on commodity exports to the Asian (China) market.

Alternatives to the status quo extractive economies vary enormously. In Venezuela, the regime has made diversification a high priority while the Brazilian and Argentine regimes are taking protectionist measures to promote industry, albeit with limited success especially as their policies are countermanded by the real expansion of acreage for soya production and exports. Uruguay, Peru, Ecuador and Bolivia talk of diversification but have avoided taking measures to shift to food production and family farming and have yet to take concrete measures to stimulate local industry via a publicly funded industrialization policy.

In sum, while these seven governments have significant differences, they all have a very similar MO.

James Petras is a retired Professor Emeritus of Sociology at Binghamton University, New York and a current adviser to the landless and jobless in Brazil and Argentina. This text appeared in www.rebelion.org. He can be reached at: jpetras@binghamton.edu

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