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Latinamerica 2007: stability and the end of an era

Friday, December 29th 2006 - 20:00 UTC
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Latin America enters 2007 with renewed political leadership and generally booming economic prospects but highly dependent on the current global bullish market for commodities.

New governments, especially in the Andean countries, are looking for different options to neo-liberalism and the free market approach that has dominated economic and political thinking in the region for years. But the largest countries have voted for stability in a year of a dozen presidential elections. In Brazil, President Lula comfortably won a second term in office, despite major political scandals in his Workers' Party. In Colombia and Venezuela, two very contrasting leaders, Alvaro Uribe and Hugo Chavez, were also rewarded with second terms in office, while it seems likely that in Argentina, President Nestor Kirchner's political machinery will be given another four years in power next October 2007, be it re-election or with First Lady Cristina Fernandez leading the ticket. Such presidential continuity is new to the region since many of the countries have only recently changed their constitutions to allow the president to stand a second time. The challenge for the incumbents is to make good on promises that have often eluded them in their first period in office and to invest heavily in lagging infrastructure which could hinder the booming export trade and sustained economic expansion. In Brazil, Lula will need to make real inroads in the fight against poverty. He came to power in 2002 promising to make hunger a thing of the past in his country, but so far has been unable to make much progress except for a basic food and money distribution program for millions which opposition parties claim was decisive for his re-election. On the other hand a strong currency and bottlenecks in the roads network, ports, storage capacity plus energy shortages have become the great challenge to help South America's largest economy expand at least at double the rate of the last four years, and thus honor electoral promises regarding poverty and employment. Mr Uribe convinced the Colombia electorate that his "democratic security" policies could end the vicious civil conflict that has claimed thousands of lives over many years. But so far the conservative president's attempts to disarm the right-wing paramilitaries and cajole the left-wing guerrilla groups into peace talks have met with limited success. He now has another four years to see if he can achieve something that has been beyond the grasp of his predecessors. Furthermore evidence is emerging of alleged "cozy" relations between the paramilitary and some of his close aides in cabinet and Congress, which is proving debilitating for his image. In Venezuela, President Chavez has vowed to use his new six-year term to deepen his "Bolivarian Revolution", his socialist movement named after Simon Bolivar, the 19th Century independence hero. Observers say this means that he must make greater attempts to address structural changes to the Venezuelan economy rather than using buoyant oil revenues for programs, described by critics as paternalistic, to help those most in need. While Mr Chavez is busy dispensing largesse at home, some see him trying to spread anti-US sentiment throughout Latin America and practicing insistent meddling in other countries internal politics in support of candidates who profess similar thinking. This was particularly evident in the Peruvian and Mexican elections where he openly backed candidates that lost by slender margins and refused to accept the final vote count or Chavez taunted by calling them "corrupt US puppets". In the last year Mr Chavez has had to remove diplomatic personnel from Chile, Peru, Mexico and even Argentina, for having been grossly involved in local politics. However Brazilian leader Lula da Silva prefers to have him "inside the fold" (Mercosur) rather than "on the full wild" with his extravagance capacity and radio talk shows calling President Bush "Mr Danger" and the "devil". The Venezuelan leader has also spent billions of US dollars in new military hardware which is causing certain restlessness among neighbors. Corruption and graft is known to be rampant and analysts estimate the Bolivarian revolution can only be sustained on the long term with a barrel of oil in the range of 45 to 50 US dollars. An example of stability was given by the Peruvian electorate which in a much contested "least bad" candidate election, finally reluctantly voted for the "bad boy" of the eighties, Alan García instead of a pro-Chavez figure. To everybody's surprise a "re-born" Garcia has chosen business friendly Chile as the model to follow, "which we will catch up with in five years" and is openly attracting foreign investment. Lima's press like to emphasize the contrast with his first mandate, 1985/1990, when with tender 35 years he preached nationalization, defaulting on the country's foreign debt and taking head on the IMF and World Bank "villains". Obviously Peru ended bankrupt both politically and financially and Garcia was followed by ten years of authoritarian Alberto Fujimori. But there are also three recently-elected left-wing leaders who seem more inclined to follow Venezuela's Chavez than Brazil's Lula or the Chilean model, be it for his political standing or the checks and accessible oil that come with such support. In Nicaragua, the once-revolutionary Daniel Ortega will, like Brazil's Lula, be trying to reduce poverty and bring some semblance of justice and equity to an impoverished country where the situation has been made even worse by corrupt politicians. To win the election Ortega had to reach an agreement with some of the most conservative and corrupt groups he combated against in the late seventies. In Ecuador meanwhile, US educated Rafael Correa faces the task of ruling without any political party directly behind him, as he attempts to resolve the split between Congress and the presidency which has made the country almost ungovernable in recent years. He has plans to convene an elected assembly to redraft the constitution bypassing Congress. He inherits two big challenges: international banks fears that he may be intent in restructuring Ecuador's debt and a windfall tax controversy with US Chevron which has irritated relations with Washington. Correa admits having described President Bush as "stupid" but points out he "loves and admires the US people" where he graduated in Economics. Similarly he points out the difference between being a "good friend" of Chavez and an "admirer", which he denies. Political reform is also high on the agenda in Bolivia, where Evo Morales has fulfilled his election promise to bring the oil and gas industry back under national control. President Morales now has to build on that, and make sure he uses his past as a union leader to take a majority of Bolivians with him, avoiding the risk of this Andean country splintering, especially when a constituent assembly begins its deliberations in the coming months. This will need particular political tact since the provinces rich in hydrocarbons and farming have promised to declare themselves autonomous if President Morales goes along with his "Socialist" programs of distributing land and ignoring free market policies and property rights. Bolivia's first indigenous president has managed to convince Argentina to pay international prices for natural gas sales, but still has a similar job pending with Brazil, which is the country's main gas partner. "We need Bolivian gas, but Bolivia also needs us", Brazil's President Lula recalls with reiteration. But if Latin American countries are likely to be too busy setting their own affairs to form a coherent challenge to the United States and the perceived neo-liberal model it promotes in the region, Washington does have two major concerns. In Mexico, the July 2006 elections saw more political continuity, with conservative Felipe Calderon, the candidate from President Vicente Fox's PAN (National Action Party) elected for the next six years. But the margin of his victory over left-winger Andres Manuel Lopez Obrador was so slender that the defeated candidate has been mounting a noisy and occasionally massive campaign against the result. This could combine with other destabilizing factors, from local disputes in the state of Oaxaca to drug violence in many other states, to give Washington a headache. Besides, Mexico needs a business friendly atmosphere to ensure investments and sustained economic expansion helping to contain illegal migrant pressure on the US border. But the greatest uncertainty in 2007 for the United States, Latin America, and the rest of the world, lies in the future of Cuba. The year 2006 saw the death of two monolithic symbols of past authoritarian rule in the region. Paraguay's former President Alfredo Stroessner died in exile in August. In Chile, former military ruler Augusto Pinochet died at the age of 91. Although he had not held power for 16 years, his presence still cast a shadow over political life there, which should now return fully to its democratic ways. But in Cuba, President Fidel Castro is still there. After almost 48 years as undisputed leader of the Cuban revolution, ill-health has meant him handing over power to his younger brother Raul since July. Since then there has been little sign of political change or unrest, but when Mr Castro dies, it will be the end of an era for Cuba, the whole of Latin America, and for the United States. Washington has already been trying to make provision for what it calls "a transition to democracy". Its worst fear is that the end of the Castro regime could create violence that would provoke a mass exodus from Cuba and the heavy involvement of Cuban Americans in any political upheaval that followed. But perhaps the new-found political stability and maturity of Latin America could lead it to play a decisive role in ensuring that whatever comes after Fidel Castro is the genuine expression of the Cuban people's political aspirations and is definitively a "peaceful transition".

Categories: Latin America.

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