The illusory appearance of a peculiar isolation from the international picture of stagnation, recession and economic crisis is fragile - a new period of turbulent class conflict lays ahead

The International Executive Committee (IEC) of the Committee for a Workers’ International (CWI) met from 17 to 22 January 2012, in Belgium. This document on Latin America was voted on and agreed unanimously.

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A little more than 10 years ago Argentina was passing through a social and economic situation very comparable to that which exists in a dramatic form in Greece today. The high social cost of satisfying the creditors of the public debt of the country did not avoid a default or economic collapse. It resulted in a situation developing which had revolutionary characteristics with the overthrow of governments; intense popular struggles and some partial conquests for the working class.

In the 10 years that past since the “Argentinazo” the general regional economy has been presented as being totally disconnected from the serious international crisis. The “Latin-Americanisation” of Europe, in the sense of crisis and social upheavals, has been counter posed to a supposed “Europeanisation” of Latin America, or of some of its countries – candidates to become a part of “the first world.”. The recent announcement that the GDP of Brazil has now over taken that of the United Kingdom, transforming Brazil into the 6th major economy in the world, has helped to feed these illusions and ignores the appalling conditions still faced by the majority of the population.

This proud vision under-estimated the gigantic dimension of the international crisis and above all the tremendous contradictions which continue to exist in Latin America as a whole. Against the background of profound changes in international relations, the effects of the crisis are already beginning to arrive in Latin America which will be fundamental to socialists’ perspectives.

It is important to emphasise that not-withstanding a more tranquil economic scenario, Latin America was also witness to gigantic and radicalised struggles such as the Chilean student movement. The unfolding the capitalist crisis, which will affect the region in a pronounced way, can accelerate and radicalise even further these processes and put Latin America back in a series of struggle as it was in a previous cycle.

The economic growth registered principally since 2004 is based in an international context more favourable to Latin American exports – expansion of the Asian market, high commodity prices, growth in foreign investment in the region and a growth in credit for internal consumption. This generated more political stability and illusions in the economic model amongst big sections of the masses.

This process of growth and continued relative stability is now seriously threatened by the international crisis and is now coming to its end. The need to prepare our forces for a more unstable and combative situation is one of the immediate tasks of the members of the CWI and all socialists in the next period.

The Economic Scenario

The international economic crisis resulted in a fall in regional GDP of 2%. 2010 was marked by a stronger recovery than the world average (5.9%). 2011 maintained growth, albeit at a lower rate, mainly in the second half of the year. CEPAL (ECLAC) points to a growth of 4.3% for Latin America and the Caribbean in 2011 and raised a perspective of 3.7% en 2012. This is the best hypothesis put forward in the context of avoiding an international financial collapse.

The slow down in Latin America and the Caribbean already in 2011 was linked to the Brazilian situation – the major economy in the region. Brazil will grow by less than 3% (2.9%) in 2011 following a strong growth in 2010 (7.5% which was a revision of the figures pointing to a growth of 7.8%) which had followed a stagnation of (0.3%) due to the crisis of 2008/9. The Brazilian government headed by Dilma Rouseff of the PT, successor to Lula, opted to implement tough measures of fiscal adjustment following the expansionist measures adopted by her predecessor during the international crisis.

Brazil simply failed to grow during the second half of 2011 as a consequence of the adjustment policies of Dilma, aggravated by the European crisis and also the fall in internal consumption. Industrial activity in the oldest sectors suffered heavily with the exchange rate and resulted in a process of re-structuring and further de-industrialisation which was a consequence of the economic model based on commodity exports. Re-enforcing the agro-export model, the fastest growth sector in the economy continues to be agro-business.

The decline of Brazilian industry is reflected in its commercial balance deficit which grew from US$18 billion in 2006 to US$80 billion in 2011, almost a difference of US$80bn in five years! As part of the fiscal adjustments, the investment by the Social and Economic Development Bank (BNDES) for industry fell by almost half in 2011 compared to the previous year.

The current account deficit of Brazil increased by almost US$55bn in 2011 and the projections of the Central Bank for 2012 are for it to increase by US$65bn to 3,5% of GDP – the level reached by some European countries currently in crisis. The financing of this deficit leaves the country totally dependent on resources which are vulnerable to any major financial turbulence.

The intensification in relations between Brazil and the other Latin American countries, in particular in South America, means that the impact of a de-acceleration of the Brazilian economy will be even greater than previously. While Argentina maintained growth in 2011 to the order of 9%, it will be severely affected by a slow down in the Brazilian economy, together with a worsening of the situation in Europe and Asia.

The relative economic stability of the whole region is directly threatened by the developing international crisis. A worsening of the Euro-zone crisis, dislocation of the economy, and on another level the situation in Asia, will affect Latin America and limit its exports and the price of exported products, reduce foreign investment and limits gains from tourism. Deterioration in the financial situation will also cause more volatility, flights of capital and make access to credit more difficult.

The ability of the Latin American governments to respond to the crisis will also be weaker than it was in 2008/9. The response of the Latin American governments did not reflect a supposed conflict between neo-liberals and state interventionists, as many have argued. During the recession in 2009, anti-cyclical measures of state intervention, with support packages for employers increased public expenditure and were adopted by both neo-liberal governments as in Mexico, Colombia and Chile, as well as by the supposedly anti-neo-liberal governments. In the same way, following this, the policies of re-adjustment, cuts and privatisations were adopted by the PT in Brazil as they assumed a neo-liberal stance.

During the economic stagnation and deterioration in the European situation the Brazilian government stopped raising taxes on savings and adopted timid measures to stimulate credit and production in the country.

The economic difficulties in China are also a very important factor for Latin America. China today is the principal economic partner of Latin America. In 2012 it will look towards increasing its exports to the region given the difficulties in the European market. In countries like Mexico and Argentina, products exported from Brazil, could be substituted by others of Chinese origin.

On the other hand, while the Chinese market continues to represent a stimulus for the exportation of Latin American commodities, the Latin American model, based on the exports of these primary products will further develop a backwards step in industry and greater dependence and semi-colonial subordination to the Chinese economy.

The lack of recovery in the US economy is also a further factor that profoundly affects especially the central American economies along with Mexico – countries which were most affected by the crisis in 2008/9 which resulted in substantial falls in the GDP of these countries.

Economic growth has not impeded struggle by the masses.

The relative economic stability of the recent period has not impeded the development of intense social struggles. Paradoxically, in the vanguard of these massive struggles are countries that have experienced a strong economic growth. This is very clear in Chile. The country grew by 6% in 2011, during which time it saw a massive struggle led by the youth with the participation of some workers which resulted in a big loss in the prestige and authority of the right-wing government of Pinera.

In the same way, Peru, which thanks to exports from the mining sector and commodities in general, had a substantial economic growth (8, 8% in 2010 and 7% in 2011). Big struggles took place against the former government of Alan Garcia which resulted in the election of the nationalist President, Ollanta Humala. This was an electoral response to these struggles. Now this has been followed by an intensification of the struggles against the policies of the new President, principally in the mining sector.

Ollanta abandoned a more radicalised “Chavista” project and came closer to taking up the “Lulista” model of open collaboration with the ruling elites and big capital. Despite this, his election reflected a search by the masses for an alternative to the neo-liberal policies of Garcia.

As the government has come closer and closer to big capital, especially in the mining sector, increasingly the workers have intensified their struggles, reflected in the recent general strikes in Cajamarca in December and January. The declaration of a state of emergency by the government was an historic betrayal by Ollanta. However, it did not prevent a movement against the mining interests and the project to exploit gold reserves which have been discovered that would irreversibly destroy lakes in the region currently used for drinking water.

Also in Brazil, where the movement of the masses was more effectively controlled by the PT under the Lula government, the first year of Dilma Rouseff’s government was marked by an intense wave of struggle. These struggles included the traditional sectors of the trade union movement – bank workers, postal workers, and petrol and metal workers – where the workers demanded their share of the recent economic growth. However, it also included the state employees, who fought against the attacks and cuts being proposed by the federal and state governments. Most importantly some of these struggles developed and the trade union bureaucracy lost control of them. In some cases, the struggles erupted as a result of rebellions by the workers – such as for example was the case of the workers employed in civil construction projects. This was most clearly seen by the workers employed on the Plan for Accelerated Economic Growth (PAC) project especially the workers employed on the new hydro-electric project at Jirau e Santo Antonio. The same was the case with the fire-fighters (a militarised section of the police in Brazil) in Rio de Janeiro. These workers won massive active support from the local population. This resulted in the biggest mass demonstration in Rio de Janeiro seen since the protests demanding immediate elections under the military dictatorship. In various states, the civil and military police have been involved in strikes and mobilisations. In some cases, Maranhao and Ceara, the put the governments up against the wall, won the support of the trade union and popular movement and won some victories.

In Argentina, the popularity of Cristina Kirchner and the high levels of economic growth have not prevented a big process of trade union and social struggles. The second mandate of Cristina Kirchner began with announcements of re-adjustment packages in order to prepare the country for the effects of the economic turbulence at international level. This means that the cuts and attacks will fall on the workers and are sure to provoke further social mobilisations.

In order to try and take preventative measures against the possibility of mass struggles, which are certain in a new economic cycle in Latin America, against the background of a new wave of international crisis there is a growing and powerful tendency throughout the region of a policy of criminalisation of protests. This is what is taking place in Mexico and Colombia in the “narco-traffic wars” which serves to justify repression of any popular mobilisation. We also see this being applied in countries with governments that are regarded as more “progressive” like Brazil under Dilma or Argentina under Cristina Kirchner.

Political continuity – until when?

The relative economic stability has resulted in a general form a tendency for “continuity in policy” by both the right and the left throughout Latin America.

The largest four countries in Latin America (which represent 75% of the total population) have now existed for a decade with the same political forces in power. This is the case in Brazil with the PT (two mandates for Lula and now Dilma) or in Mexico under the PAN (firstly with Fox and now Calderón) in Colombia with Uribe and now Santos or in Argentina under the Kirchner dynasty of Néstor and Cristina. This phenomenon has also been the case in smaller countries like Nicaragua under Daniel Ortega despite the fraudulent elections, he won in 2011 and began his third mandate. Uruguay has now been governed by the Frente Amplia for a decade. Although in a more turbulent situation, the same is true in Bolivia with Evo Morales and in Venezuela under Chávez who will complete 14 years in power in 2012. If Rafael Correa in Ecuador is re-elected in January 2013 he also will have been in power for a decade.

The re-election of Cristina Fernández Kirchner (CFK) in Argentina in 2011 re-emphasised this tendency. CFK took 54% of the vote in the first round representing almost a difference of almost 40% ahead of the second placed candidate. Despite the economic stability, the clear victory for CFK, reflected the profound weakness of the traditional right-wing neo-liberal forces. The traditional UCR came in third place with 11% of the vote behind the Socialist Party candidate, Binner, who took 16% of the vote.

Although CFK was in competition with two other Peronist candidates – the former Presidents Duhalde and Rodrigues Sáa - it was the weakness of the UCR and also of Peronism from which two right-wing opponents of the government emerged. The candidature of Pino Solanas for the Presidency under the banner Proyecto Sur, supported by some sections of Trotskyism – MST – did not consolidate his position but withdrew to stand in the election for Governor of Buenos Aires. The candidate of Frente Izquierda de los Trabajadores, headed by Altamira of the PO with the support of other Trotskyists groups (PTS and IS) won 2.3%.

The scenario for this second mandate for CFK will be substantially different to that which allowed her to secure this victory. The government is also likely to face a turning point and return to orthodox economic policy. The second mandate of CFK will be marked by more adjustment packages and attacks and a worsening international economic situation. Preparing for this situation, the congress passed a series of laws in 2011 including the “anti-terrorist law” that can easily be used to justify heavy repression against the social movements and shows the real face of the government.

The policy the government wants, will continue with the line of guaranteeing the payment of the debt, and the normalisation of relations with the international financial markets and this will mean attacks against the working class. To begin with, there is the likelihood of the introduction of the “tarifaco” – a generalised increase in tariffs for privatised services from which the government is withdrawing state subsidies.

In this context, the relations between the government and the trade union bureaucracy have already become tenser, opening up the possibility of greater conflicts. In the recent period, there have been important experiences of workers’ struggles which have gone outside or around the trade union bureaucracy. This method of struggle will be fundamental for the Argentinean workers’ struggle.

Mexico – return of the PRI?

Despite the general tendency of “continuity”, there already exist signs of an important discrediting of governments in various countries, which as the crisis develops, will only grow stronger.

In Mexico, there is now the possibility of the return of the PRI to government. Its most likely presidential candidate is Enrique Pena Nieto – the governor of the State of Mexico – in the July 2012 elections. This is because of the lack of a clear opposition from the left to challenge the neo-liberal PAN which will complete two mandates following 2000 – when it replaced the PRI which had ruled for decades.

After excluding the possibility of an alliance between the PAN and PRD to prevent the PRI returning to power – although it is not totally excluded – it is likely that Andres Manual Lopez Obrador (AMLO), who was defeated by Calderón, will stand for the PRD.

The PRD today is a party that has completely incorporated itself into the logic of the Mexican political system. Although he is more radically positioned than the Movimiento Regeneración Nacional (MORENA), AMLO also counts on the support of some employers and adopts “pragmatic” positions. However, as the promoter of the mass mobilisation against the electoral fraud of Calderón in the last elections, his criticism of the government means he is seen by a layer as a democratic alternative to the unpopular government of the PAN.

The Zapatista movement (EZLN), which abandoned the armed struggle in 2005, continues to abstain from the electoral struggle. This together with its failure to offer a clear perspective and programme means that it has lost support. An important left alternative could have emerged from the struggle of the electricity workers against privatisation policy of Calderón. The closure of the electricity company, Luz y Fuerza del Centro represented a big defeat for the workers and their union SME – Sindicato Mexicano de Electricistas. The proposal to form a workers’ party based on the unions therefore did not develop.

Following the massacres by the police in the “war on drugs” by Calderón, which represented the killing of more than 50,000 since the government came to power, a powerful mobilisation of the families of the victims took place against the militarisation of the country. This movement can gain a massive momentum in the next period. Led by the poet, Javier Sicilia, this movement maintains close links with the Zapatistas and has widespread popular support.

Chile – a radically new stage

In Chile, the election of the right-wing Pinera in 2010 represented a protest against the long years of Concertacion government. As the CWI ha previously explained, the victory of Pinera did not signify a shift to the right in the balance of forces in society of in the consciousness of the masses. This has been more than confirmed by the enormous mobilizations of the youth during many months and the enormous opposition to the policies of the government, which should see itself punished in the municipal elections of October this year, despite the lack of a consistent left alternative.

The struggle of the students against the privatization of education and for a decent public system ended up leading to a serious questioning of the country’s entire capitalist model. The specific demands of the movement quickly became more general, such as the demand to nationalise the copper industry, for more taxes on the corporations and an end to the power of the banks etc. The slogan of a constituent assembly also resurfaced during the movement, which reached a high level of support and a certain unity with the workers, inhabitants of the poor neighbourhoods and other exploited sectors

The high point of the mobilizations was the general strike called by the CUT for 24 and 25 August, which despite not achieving a full paralysis of the economy, due to the role of the union leaders, was transformed into a massive day of national protests against the government. Huge widespread dissatisfaction with the government and the power of the mass movement now stands as clear, despite the brake on the struggle by the union bureaucracy and sectors linked to the Concertacion.

None of the manouevres of the government (in many cases supported by the Concertacion and the CP) to isolate the student movement achieved effective results. The small concessions made by the government (more grants for poorer students and the reduction in interest rates paid to the banks on the cost of studies) failed to satisfy the overwhelming majority of the students, whose main demands remain unresolved. This tends towards a perspective of renewed student struggle in 2012.

Uncertainty for Chavez in Venezuela

The most significant electoral process of 2012 will be the Venezuelan elections in October. The intense disillusionment with Chavez of the last years, a result of the country’s economic difficulties and Chavez’s increasing bureaucratic tendencies, has opened up new hopes for the right-wing opposition. The revelation of Chavez’s cancer has increased their hopes that he may not stand as a candidate.

However it seems that follwing a period of political disenchantment, Chavez is recuperating some electoral support. Polls give him more than 50% as opposed to the near 30% for the opposition.

The relative economic recovery with the rising price of petrol (after 2 years of negative growth), along with new investments in social programmes and new partial nationalizations by the government are factors which assist a renewal in support for the government.

The right wing is looking for a unified candidate which will be decided in primaries in February. The most likely candidate now seems to the the governor of Miranda, Henrique Capriles. Even with a unified campaign, the fragility of the right-wing opposition is another factor favouring the government.

However, serious uncertainties still exist approaching the elections. The more conservative direction, adapting more and more to the logic of capitalism, which Chavez has taken only serves to open doors for the right.

The search for initiatives organization and struggle by the working class, independent of governments and bosses is a vital part of the activity of socialists in Venezuela. Maintaining a dialogue with the base of supporters of Chavismo and denouncing the right-wing, such an independent class position in defence of a socialist alternative, should also be reflected in the elections.

Turn to the right by Evo Morales

We arte witnessing a clear process of a shift to the right by Evo Morales’ government. This is not a new process, dating back to the concessions made to the right wing at the time of the approval of the new constitution, especially in the failure to impose the limits on land-holdings retrospectively, in effect legalising the power of the big landowners.

With the defeat of the most vicious right wingers in media luna, the government sought a pacification of relations, which led it into growing hostility with the struggles of peasants, workers and the indigenous people. In the 2009 elections, Morales had already adopted a position much closer to the banks and big business. In the municipal and regional elections of 2010, his alliances with the right wing were deepened.

In December 2010, the government withdrew its state petroll subsidy and provoked an explosion of social struggles which obliged it to step back. In 2011, the government violated its own constitution, beginning with the construction of a motorway over the Tipnis national park without consultation with the indigenous communities of the region, subordinating itself to Brasilian “sub-imperialism”. A struggle of workers and indigenous against this, including a general strike called by the COB, put the government up against the wall saw the fall of ministers and Morales had to step back again.

Innumerable workers’ strikes for salary adjustments then led Evo to push through a new labour reform prohibiting strikes in the public sector and promoting the individual, instead of collective, resolution of disputes. His new welfare policies exclude informal and rural workers and put the entire burden of financing the system on the shoulders of the workers, benefitting the bosses.

The disillusionment with Evo could lead sectors of the population to look for an alternative on the right, or along the path of passivity. But there also exists a space for left alternatives. Among the miners and other sectors of the working class, such as the factory workers, there is a willingness to engage in an independent struggle against the government around the so called “October agenda” the collection of demands of an anticapitalist character, raised during the “gas wars”, and included the demands to nationalise the hydrocarbon industry and mines, and for the abolition of landlordism.

The support for the idea of building a real workers’ party in Bolivia has also grown. The miners show this when they defend the necessity of a “political instrument of the workers” in their thesis to the COB congress. The future of this initiative is key to the development of the struggles of workers, peasants, indigenous and the poor in Bolivia.

Cuba’s future

Reflecting the impact of the international ecopnomic crisis, the leadership of the Cuban Communist Party has come to defend a package of “modernising” reforms, which in reality serve to widen the influence of the market in Cuban society. Among these was the cutting of half a million posts from the state sector, to orientate them towards the private sector.

The sixth congress of the CPC en April 2011 maintained the general orientation of pro-market reforms although it partially eased their pace. The year 2011 was marked by the slow implementation of economic reforms. The regime is moving in a hesitant and cautious manner. This is mainly due to the social and political impact which these measures could provoke. At the same time, these pro-market measures, from the regime’s point of view, should not lead to the end of state control over the economy.

These reforms point to the growing point of reference that is the Chinese model, for an important part of the Cuban bureaucracy. This model, of a hybrid economy moving in the direction of capitalist restoration, together with a strong political control of the state and Communist Party bureacracy continues to be a possible horizon in the debates within the regime.

A national CPC conference will take place on 28 January 2012 in which the decate over these reforms will continue, as well as dealing with the structures and workings of the party and the political system. However, it is unlikely that the conference will represent a big change in the direction of greater democracy.

Political and economic changes are necessary in Cuba, as well as a direction opposed to the path of capitalist restoration. Cuba needs a genuine workers’ democracy, the only factor capable of giving a socialist planned economy an efficient and dynamic character. An authentic workers’ democracy in Cuba also requires an integration of the Latin American continent on a socialist basis. These should be the rallying cries of socialists who defend the gains of the 1959 revolution and struggle against political and economic degeneration in the country.

“Lulaism” as a model and the sub-imperialism of Brazil

There is practically no country in Latin America today in which workers, the indigenous and poor population are not in struggle against the actions of Brazilian multinationals involved in the building of motorways, hydro-electric factories and other big projects. The example of Tipnis park in Bolivia or of Brazilian construction companies in Ecuador are typical. The same applies to the economic expansionism of Brazil in the markets of the region which leads to the closure of local companies and unemployment. In the same manner, the Brazilian armed forces led the foreign intervention in Haiti which provoked intense popular anger, especially following the terrible epidemic of cholera, sparked off by foreign troops in the country.

At the same time as being a country dependent on and subordiante to imperialism, Brazil plays a sub-imperialist role in relation to many Latin American countries. This did not change under governments of the PT, but on the contrary has deepened under the false pretense of a process of “Latin American intergration”.

The investments in infrastructure with a view to integrate South America serve the interests of the multinationals installed in Brazil, as well as Brazilian agro-business and Brazilian construction, which are interested in the South American market and access to the Pacific. Those who suffer from this are the indigenous populations, and poor peasants as well as the environment of Latin American countries, including Brazil itself.

At the same time, reflecting the interests of the mineral industry, agrobusiness and the Braziliand multinationals, the “Lulaist “ political model of the management of capitalism, combining rhetoric and authority inherited from the left with open conciliation to the elites and big business, has been gaining fans faster than those more openly neo-liberal governments, or those which maintain certain anti neo-liberal measures, like Chavez.

For example, even in countries with governments to the right or left of “Lulaism”, like Colombia and Venexuela, have sought a convergence towards the political “centre”. This (as well as Lulaism in Brazil itself) has only been possible based on a relatively stable economic situation. The situation tends to shift back towards a polarisation in times of an intensification of the crisis.

Even in Brazil, where the Dilma Rousseff, where the government tries to apply a “Lulaism” without Lula, it is encountering difficulties. Seven Ministers have fallen in the governmenr’s first year, six of them under direct accusation of corruption. A ministerial re-shuffling is coming soon, attempting to re-stablise the pro-government alliance after a period of intense internal disputes.

New attacks against the workers (spending cuts, salary freezes and neo-liberal welfare and labour reforms, etc) could provoke a continuation of the relative increase in industrial struggles which marked 2011. The municipal elections in October 2012 will be based around the struggle to succeed Dilma in 2014. Despite the predicted gains for the PT and pro-government parties mainly due to the crisis of the traditional right, the socialist left could also gain ground, especially if it does not capitulate to electoral “pragmatism”.

PSOL, despite being small, has a strong base in a number of important cities in the country and could perform well, especially in Rio and Belem. The last congress of the party however, did not close the doors to coalitions with the government parties, without a base in the struggle of the working class. The right wing of the party works with the perspective of a strategic alliance – with an eye on 2014 - with Marina Silva, who broke with the PT from the right, standing as the presidential candidate of the Green party in 2010, winning 19% of votes and now tries to form a new party.

The building of a Left Front involving PSOL, the PSTU and the PCB Communist Party in the 2012 elections, with the defence of a socailist programme and with roots in the social struggles could take the socialist left to a new political level, combined with the perspective of new struggles as the impact of the crisis on the situation in Brazil increases.

A socialist Alternative for Latin America

The year 2011 ended with a meeting of the Cummunity of Latin American and Caribbean states (CELAC) which, for some of the rulers present, took place with a perspective of creating a new alternative to the OEA (Organization of American States), which is totally subservient to the US. This process does not eliminate the enormous weight of imperialism in the region, which is seen still in bilateral agreements and the privileged relationship the US retains with countries like Colombia.

At the same time, the formation of CELAC points to the fact that sections of the capitalist class in Latin America is searching for some autonomy in relation to the US. This process of regional integration reflects the economic interests of the Latin American capitalists, above those of the poor people, the indigenous and the workers.

A real way to effective independence for the Latin American people from imperialism can come only through another type of regional integration, based in public ownership by the workers of the main means of production, and governments of working class organizations. A genuine integration could only take place on the bases of a Socailist Federation of Latin America and the Caribbean.

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