-Peru has launched its biggest exhumation ever, as it tries to find victims from the violence between the Shining Path and the Peruvian state between 1980 and 2000.
-Peru is not the only country exhuming victims of violence. In an attempt to find two missing police officers, forensic scientists in Mexico got more than they expected when their search led to the discovery of 64 bodies buried in mass graves in Jalisco and Michoacán, with the bodies showing signs of torture and indicating they are the victims of ongoing violence between cartels. In spite of the discovery, the two police officers remain missing.
-In the wake of a close election and allegations of electoral fraud, Honduras will hold a recount after thousands took to the streets in support of Xiomara Castro, who allegedly lost the election to conservative candidate Juan Orlando Hernandez (who got 37% of the total vote) and whose husband, former president Manuel Zelaya, was removed from office in a coup d’etat in 2009. The recount comes amidst outsiders’ observations allegations of chicanery and after Honduras’s electoral council was very slow to issue the data from the November 24 election, adding to suspicions of fraud.
-Rio de Janeiro governor Sérgio Cabral announced that he will leave office 9 months early after seeing his popularity plummet in the midst and wake of protests last June, when millions of Brazilians took to the streets to protest a number of causes, including political elites’ disconnect and corruption. Cabral himself became a particular target of that anger in Rio de Janeiro.
-The bad news for governors is not limited to Brazil. In Mexico, former governor of Tamaulipas Tomás Yarrington faces charges in the US of having ties to the drug cartels while he was in office during his 1999-2004 governorship.
-Costa Rica closed a probe into the 1984 bombing that killed 7 journalists and Nicaraguan Contras and wounded 20 more people, after forensics revealed that the attacker died in the late-1980s.
-Mexico’s Senate has approved electoral reform that would allow reelection and would strengthen Congressional power in the face of executive power even while approving President Enrique Peña’s efforts to increasingly privatize the state-run PEMEX oil company in Mexico.
-Francisco Flores, the former president of El Salvador for the conservative ARENA party, is under investigation for the misuse of upwards of $10 million that Taiwan donated to El Salvador during his presidency, money that apparently never made it to its intended institutional destinations.
-Finally, in Brazil, Guaraní indigenous leader Ambrosio Vilhava, whose struggle to help protect Guaraní land was documented in the 2008 film Birdwatchers, was found stabbed to death after his father-in-law allegedly killed him. While the circumstances around his death remain unclear, the fact remains that his death marks the loss of an important activist and leader in Brazilian indigenous mobilization.
When I lived in Brazil six years ago, the country announced the discovery of a massive offshore deep-sea oil field, leading to high hopes within Brazil for the future energy needs and economic growth. However, from one perspective, it would appear things have not gone so smoothly:
Half a decade has passed since Brazilians celebrated the discovery of huge amounts of oil in deep-sea fields by the national oil company, Petrobras, triumphantly positioning the country to surge into the top ranks of global producers. But now another kind of energy shock is unfolding: the colossal company, long known for its might, is losing the race to keep up with the nation’s growing energy demands.
Saddled with a nationalist mandate to buy ships, oil platforms and other equipment from lethargic Brazilian companies, the oil giant is now facing soaring debt, major projects mired in delays and older fields, once prodigious, that are yielding less oil. The undersea bounty in its grasp also remains devilishly complex to exploit.
Now, instead of symbolizing Brazil’s rise as a global powerhouse, Petrobras embodies the sluggishness of the nation’s economy itself, which, after racing ahead at 7.5 percent in 2010, slowed to less than 1 percent last year, eclipsed by growth in other Latin American nations like Mexico and Peru.
Macroeconomically, that certainly sounds troubling. But from a social perspective, things appear a bit different. From the same article:
[...]Petrobras is building new refineries, pursuing offshore oil and buying most of its equipment from Brazilian companies, all of which have created tens of thousands of jobs and delivered some tangible political benefits.
“My life is better,” said Adinael Soares Silva, 38, a welder at a Petrobras refinery under construction in Itaboraí, a city near Rio de Janeiro. He said he was pleased with his salary of about $800 a month. “Where I was, I didn’t have enough to have a savings account,” he said. “Now I do.”
And then there’s the fact that,
Despite the challenges it faces, Petrobras remains profitable and much less constrained by political ideology than some other large national oil companies. In Mexico, for instance, Pemex has long retained its monopoly status despite production declines, and now the government is considering opening it to greater private investment.
Petrobras is also far more transparent than Petróleos de Venezuela, the national oil company that President Hugo Chávez, who died this month, transformed into an extremely politicized pillar of his government, purging it of thousands of employees after a bitter strike and forcing it to focus on new tasks like food distribution.
Maria das Graças Foster, the chief executive of Petrobras, has been exceptionally frank about the company’s problems. In recent conference calls with analysts, she said that oil production should remain steady this year or perhaps even decline slightly again. But she also responded sharply to critics, claiming that output from the new deep-sea fields had reached 300,000 barrels a day. By 2020, the company expects to double overall production to 4.2 million barrels a day.
A few quick comments regarding these seemingly contradictory views. First, this isn’t the first time that energy dependence on importing oil/gas has caused economic problems in Brazil. Indeed, the oil shocks of the 1970s and Brazi’s dependency on foreign oil played no small part in the end of the economic “miracle” and the rising inflation of the 1970s and early 1980s. That’s not to say that this new situation is nothing, nor is it to say that the inflation crises of the 80s and 90s are going to repeat themselves now; for the time being, this seems a hiccup, and an addressable one.
One way to address that situation that is probably not available, however, is to privatize Petrobras. It is not just because such an option is off of the table for Dilma Rousseff; it is because the Brazilian population would likely push back against such a process. How do we know? Because of the 1990s. Between 1995 and 2003, president Fernando Henrique Cardoso implemented neoliberal policies that privatized many state-run industries, and (unsuccessfully) attempted to even privatize Brazi’s federal education system. However, when he considered privatizing Petrobras, he ran up against such significant public opposition that he had to abandon the full privatization and selling off of the company. Indeed, in many ways, the election of Lula in 2003 marked a repudiation of Cardoso and his party’s neoliberal policies, which by 2000s had led to significant problems in the Brazilian economy once again, even while social programs had failed to address gross socioeconomic inequalities that affected an not-insignificant portion of the population. Privatization hit Brazil (and much of Latin America) particularly hard in the 1990s and early-2000s, leading to the rise of the so-called “Pink Wave”/”New Left” of leaders throughout the region.
Certainly, Brazil’s energy challenges (and the related economic issues) are not limited to just gasoline. A burgeoning population is creating real questions in energy policy beyond gas. This is not to say the Petrobras issue is inconsequential, or that these economic issues are phantoms; rather, it’s to say that the economic level is not the sole, nor even the final, determinant of success or impact.
The battle between state and federal power in Brazil has heated up recently. Last year, Congress passed a law that transformed the distribution of oil revenues in Brazil. Under the old system, the royalties from oil revenues mostly went to the states that were closest to the offshore deposits – in this case, Espírito Santo, Rio de Janeiro, and São Paulo. This created a natural disadvantage for Brazil’s interior states or for states like Bahia that do not have oil deposits off the shoreline. Additionally, Rio de Janeiro and São Paulo historically have been Brazil’s richest states for hundreds of years; with the oil royalties remaining there, they continued to benefit from better infrastructure and social programs than areas like the poorer Northeast, perpetuating and further exaggerating regional inequalities. In order to address this issue, last year Brazil’s Congress passed a law designed to more equally redistribute oil wealth throughout the country. Naturally, Rio de Janeiro and São Paulo howled – people in Rio took to the streets to protest the law in late 2012 – as they faced reductions in their state budgets from the law. Compounding matters is that the law would immediately go into effect on all current contracts as well as future contracts. In order to try to find a solution, President Dilma Rousseff used her line-item veto to make the law applicable only to future contracts, allowing Rio, São Paulo, and Espírito Santo to maintain the monopoly on royalties from current contracts. However, Congress has overridden her veto, making the law applicable to both present and future contracts. Unsurprisingly, opponents to the law in oil-rich states are fighting back, with some occupying airports while Rio’s governor has suspended all the state’s payments and legislators prepare to appeal to the Supreme Court. In sum, it has turned into quite the debate over the question of resources, capital, and national wealth versus state wealth.
Certainly, the outrage in Rio, São Paulo, and Espírito Santo is understandable. As the article points out, Rio alone is set to lose nearly $1.6 billion in revenue this year alone under the new law. At the same time, though, it’s an entirely defensible law. On sheer numbers alone, helping 27 states instead of three states is entirely reasonable.
And that’s not taking into consideration the regional inequalities that have defined Brazil for centuries. After the Dutch occupation of Pernambuco and surrounding areas between 1630 and 1654, the sugar economy that had been the central pillar of the Brazilian economy since the latter half of the 1500s began to decline. Portuguese Brazil, centered in the Northeast (in today’s states of Bahia and Pernambuco in particular) had maintained a near-monopoly on sugar production up to that point, but after the Dutch occupation, Brazil faced competition from the Dutch and English Caribbean; though the Northeast continued to be the colonial center throughout the 1600s, the sugar economy was not as strong as it had been. By the early-1700s, settlers found gold and diamonds in the Southeast in Minas Gerais. The new colonial economy increasingly relied on mining throughout the 1700s, leading to a shift in settlement and wealth in the Southeast, with Rio de Janeiro increasingly serving as the port for importing slaves to the mines and exporting minerals to Portugal. By 1763, the regional shift was complete, as the colonial capital relocated from Salvador da Bahia in the Northeast to Rio de Janeiro in the Southeast, marking the broader economic shift from one region to another.
And so it has remained throughout most of Brazil’s history. Rio was the capital until the inauguration of Brasília in 1960. São Paulo became an economic powerhouse, first with its coffee production in the 1800s and then becoming the industrial center of Brazil in the 1900s. These two states were not alone in wealth; southern states like Rio Grande do Sul also became increasingly powerful, both economically and politically. Nonetheless, the Southeast came to be the richest part of the country, even while the Northeast and North continued to confront socioeconomic inequalities at the most basic levels of society, from income to education, from land ownership to literacy. The Southeast got richer while the Northeast continued to languish. Indeed, in part the rapid growth of Brazil’s cities (from a 70%-30% rural/urban society in 1930 to a 30%-70% split in 1980) was due in no small part to the poor from the Northeast moving to cities like Rio and São Paulo hoping to find work in the bustling cities, often ending up in favelas [suffice to say, the issue of internal inequalities in cities like Rio are a powerful reminder that, even within the wealthiest states, said wealth does not benefit all citizens equally]. These migrants were not always welcome – for example, in São Paulo, people not-irregularly apply the derisive term “baianos” to everybody from poor drivers to less-“cosmopolitan” individuals, implying backwardness that carries more than a hint of racism while revealing the regional inequalities that citizens of states themselves perpetuate. Even today, after programs like Bolsa Familia and Fome Zero [Zero Hunger], designed to improve the lives of Brazil’s poor, notably in the Northeast and North, regional inequalities are still evident – for example, through oil revenues.
All of this is to say that, while the outrage in Rio, São Paulo, and Espírito Santo is perhaps understandable from a state level, it is ultimately hard to feel terrible for these states in the face of the new law. Certainly, they are going to have real challenges in governing with reduced incomes, and there aren’t necessarily any easy solutions to that problem. But to continue the regional inequalities that have defined Brazil for centuries in the name of local governance in the wealthiest states is not a solution to those inequalities either, and Congress’s actions are entirely understandable, even if they hit the largest states in Brazil the hardest.
-An editorial in the New York Times makes the compelling (and correct) case for compensating Guatemalans whom the US infected with STDs without their consent in the 1940s.
-As another reminder of the shifting context of hemispheric geopolitics, Argentina signed a defense agreement with China, even while Caribbean countries debate between alliances with Taiwan or with China. Meanwhile, Margaret Myers provides yet another excellent summary of Chinese headlines on Latin America from the past month, including a unique take on the Paraguayan removal of President Fernando Lugo.
-Is a Chilean bill proposing an increase in minimum wage at risk?
-Nobel laureate Gabriel García Marquez is suffering from dementia, according to his brother.
-The US government has confirmed that a DEA agent killed another alleged drug trafficker in Honduras last week. This is the second incident involving DEA agents in Honduras in less than a month; A DEA agent shot and killed another alleged trafficker at the end of June.
-A new report says that Benoni Alberaz, the army officer responsible for torturing Dilma Rousseff and many others, the current President of Brazil and an anti-dictatorship activist in the late-1960s, died twenty years ago (even while security apparatuses were continuing to report on Rousseff and other former activists) meaning he never had to answer for his crimes.
-Peruvian troops managed to free ten child hostages and captured the eleven members of the Shining Path movement that had taken the children. The capture and rescue provided Peruvian President Ollanta Humala with a brief bit of good news as he faces growing criticism for the ongoing and increasingly violent protests against mining projects in the northern part of Peru.
-Meanwhile, in Bolivia, protests against a Canadian mine left at least one farmer dead amidst conflicting reports. Some accounts say police clashed with protesters, while the Bolivian government countered that the farmer “died in a dynamite accident” (though those two explanations are not mutually exclusive). However, the ongoing protests have led the government to consider nationalizing the Canadian mining company’s claimed property.
-Ecuador’s dependence on oil revenues is revealing its shortcomings, as the country had to seek out a $515 million loan from the Latin American Reserve Fund in order to counter a global drop in oil prices.
-In more depressing animal news, workers in Trinidad trying to divert a river in order to protect a hotel ended up crushing tens of thousands of sea turtle eggs.
-There have been anti-mining protests in Peru for the past several months, but yesterday, one of the protests turned violent, with at least three people dead and 21 wounded in a confrontation between police and residents protesting a massive mining project in Cajamarca. The protests took place even as a new report suggests efforts towards transparency are failing to meet local populations’ expectations, perhaps adding to the protesters’ causes for mobilization. Meanwhile, President Ollanta Humala shook up the military forces yesterday by relieving 22 generals of command in an administrative shuffle designed to revitalize the armed forces.
-In yet another example of humans doing all they can to destroy oceans and marine life, overfishing of hatcheries in South America has left Chile at “critically low levels” of fish available.
-The League of United Latin American Citizens, or LULAC, officially supported equal marriage rights for gays and lesbians yesterday, becoming the second Hispanic organization to support gay marriage. LULAC joins the National Council of La Raza, which supported marriage equality last month.
-Mexico’s elections may have ended, but the news and controversy has not. In the wake of reports of the PRI buying votes even as the Elections Agency plans to recount 1/3 of the ballots, all of which adds to runner-up Andrés López Obrador’s refusal to concede defeat amidst allegations of electoral fraud. López Obrador also objected to the 2006 elections which he lost by fewer than 250,000 votes (or just over 0.5% of the total vote count).
-Colombian ex-general Mauricio Santoyo, who was the commander of the military police under president Álvaro Uribe and who has been tied to paramilitary groups and the drug trade, turned himself into Drug Enforcement Agency officials today to face trial in the United States. Santoyo is just the latest in a long line of officials who were top-level politicians and advisors with ties to both the Uribe government and to paramilitary groups during the president’s time in office from 2002 to 2010.
-The constitutional turmoil in El Salvador intensified yesterday, as there are now two different groups of judges both claiming to represent the Supreme Court. Tim’s analysis is excellent (and his blog is one of the only places to find more about what’s going on in El Salvador regarding the constitutional crisis specifically and El Salvador more generally).
-Honduran President Porfírio Lobo has suggested a constitutional reform to give the military the power of a police force . However, human rights group The Committee of Families of the Disappeared and Detainees in Honduras (COFADEH) has appealed the reform to the supreme court in an attempt to prevent an increase in the military’s power in what opponents see as a clear constitutional violation of the separation of military and police. (And of course, (the last time a constitutional reform was proposed in Honduras, it did not work out well for the previous democratically-elected president.)
-Argentine workers have defied a court order to end their protest and continue to blockade a major site of oil and gas production. The workers, who are temporary workers, are demanding a salary level similar to that of permanent workers at the Cerro Dragon energy compound. Meanwhile, the Argentine Supreme Court dealt a blow Canadian mining corporation Barrick Gold’s plans in Argentina after the court temporarily reversed a lower court’s decision to block a federal glacier protection law.
-Ten months after Brazilian judge Patrícia Acioli was gunned down in front of her home after sentencing police officers tied to militias a new report finds that the number of judges under threat has actually increased in the past year in what is certainly a threat to judicial independence and to efforts to curb paramilitary violence in Brazil.
-Less than two months after famed Mexican author Carlos Fuentes passed away, the Mexican government announced plans to create a literary prize named after the writer. Fuentes was renowned the world over for his style, garnering the praise of respected authors (including Philip Roth) and the general public alike.
-Finally, some Brazilian air force pilots may be in trouble after a planned flyby in Brasília flew so close to the ground it shattered the windows on government buildings, including the Brazilian Supreme Court.
-Peru’s Minister of Defense and Minister of the Interior have resigned in the wake of clashes with Shining Path rebels that left several soldiers dead.
-Some supporters of Hugo Chávez are furious over a Venezuelan crossword puzzle that they say contains threats against Chávez’s brother.
-Argentina’s Senate was busy this past week. On Wednesday, it passed a “dignified death” law that allows those who are terminally ill to have more control over the way their lives end. In that same session, the Congress also passed a gender identity equality law that recognizes transgender rights, making Argentina the “new world standard” in gender legal rights.
-Meanwhile, in Chile, after languishing in Congress for seven years, politicians finally passed a law prohibiting discrimination and hate-crimes, spurred in part by the tragic death of Daniel Zamudio in a brutal homophobic attack earlier this year.
-Six UN peacekeepers from Uruguay are facing charges of sexual assault of a nineteen-year-old man in Haiti last September, and this week, the victim testified in Uruguay, where the trial is being held.
-While Spain was at the forefront of efforts that ultimately led to the indictment, conviction, and house arrest of Augusto Pinochet and in trying human rights violators from the Argentine military regime of 1976-1983, it is facing criticism for failing to address justice issues for victims of the dictatorship of Generalíssimo Francisco Franco.
-Peruvian indigenous groups fighting against the oil industry’s environmental degradation of their homelands took their case to Canada this week to raise awareness of Canadian industry’s complicity in the environmental and cultural degradation of indigenous rights and history.
-After being criticized for delays, Brazil has finally appointed the members to its Truth Commission, which the country formally established late last year in order to investigate (but not prosecute) torture and other human rights violations during the military regime of 1964-1985.
-In Chile, renowned Japanese astronomer Koichiro Morita was murdered during a robbery attempt. The Atacama Large Millimeter Array, or “ALMA” Observatory, in the Atacama desert in northern Chile, will provide humans with glimpses into the deepest parts of the universe in an attempt to better understand the origins and development of the universe and galaxies.
-Finally, a Haitian beer, Prestige, won a Gold Award at the recent World Beer Cup, held in San Diego this year. Prestige won the gold for the “American-Style Cream or Ale category.”
-In a process that continues to go through fits and starts, Brazil’s Congress has begun investigating human rights abuses that the military committed during its 1964-1985 dictatorship. Though President Dilma Rousseff authorized the creation of a Truth Commission late last year, it has yet to get off the ground, and earlier this year, a judge declared that torturers could not face prosecution after federal prosecutors tried to treat the “disappearances” of dozens of people as “ongoing” crimes in order to try to get around the amnesty law of 1979.
-After escape attempts, gun battles, and irreparable structural decline, Venezuela has begun relocating prisoners from the La Planta prison in Caracas. However, the Venezuelan NGO Una Ventana a la Libertad (A Window to Freedom), which focuses on prisoners’ rights, has expressed concerns about transfers from the prison (where a fire killed 25 prisoners in 1996), claiming it will only add to the already-overcrowded prisons in other parts of the country.
-Fourteen people have died in a fire at a rehab center in Peru after they were unable to escape from behind locked doors. The fire is the second of its kind to take place in the last four and a half months. In late-January, a similar fire took the lives of 29 people seeking treatment. The fires are yet another reminder of the very real challenges and limitations facing private drug treatment centers, which make up an overwhelming majority of the country’s rehabilitation centers.
-Brazil’s Supreme Court has approved the use of racial quotas in university admissions. The decision is designed to address the gross inequalities between Afro-Brazilian descendants and “white” Brazilians, inequalities that Henry Louis Gates explored in a PBS series and that I discussed (including the issue of affirmative action and the tensions over it) here.
-A new report claims IKEA relied on the labor of Cuban prisoners to produce its furniture in the 1980s.
-After announcing Venezuela may leave the IACHR, Venezuelan Foreign Minister Nicolas Madura called on Latin American countries to create their own human rights organization that would operate independently of the United States’ influence.
-Guatemalan President Otto Pérez Molina is staying true to his campaign pledge to be tough on crime, but the new strongarm tactics have some wondering about the fate of human rights in Guatemala.
-Let the “Hugo Chávez’s successor” speculation begin again in the wake of his recent appointment of 10 members to the Council of State
-Massive floods in the Brazilian state of Amazônas are threatening the homes of thousands, even while the Northeastern part of the country continues to suffer from major drought.
-Argentine President Cristina Kirchner has named Miguel Galuccio as the new head of YPF, finalizing the reappropriation of the oil-producing company.
-Peruvian authorities are cautioning people to stay away from beaches after hundreds of pelicans have washed up dead. The pelicans only add to the mystery of dead animals on beaches; in the last few months, 877 dolphins and porpoises have also been found dead on Peru’s beaches.
-Lloyd Brevett, the bassist for foundational Jamaican band The Skatalites, has passed away at the age of 80.
-Rio de Janeiro has joined São Paulo in combating visual pollution by tearing down billboards and banners that pepper buildings throughout the city. I previously discussed the benefits of this type of urban beautification project here.
-Nélida Gómez de Navajas, one of the founders of the Abuelas de Plaza de Mayo (Grandmothers of the Plaza de Mayo), a group that joined the Madres de la Plaza de Mayo to protest the kidnapping, torture, and “disappearances” of their relatives, recently passed away. Gómez de Navajas formed the group when she learned her daughter, Cristina, whom the regime had kidnapped and “disappeared,” was pregnant at the time of her abduction, and eyewitnesses said Cristina did give birth. The fate of the baby has yet to be discovered.
-A new report cites “neglect” as a major cause in the death of 361 prisoners who died in a Honduran prison fire that killed 361 prisoners, many of them not even convicted of or charged with crimes, back in February.
-Jamaican Courts recently rejected police officers’ attempts to challenge the powers of an independent commission designed to investigate crime or corruption within the police forces. The court’s ruling means the commission can compel officers and others to participate in investigations into probes of police abuse.
-Ecuador is set to pay Brazilian oil company Petrobras $217 million dollars in compensation for ending its contract with the company in 2010.
-In a rare bit of good environmental news, the critically-endangered “chicken frog” is surviving after being introduced to the island of Montserrat.
-Venezuela has announced its belief that it should to withdraw from the Inter-American Commission on Human Rights (IACHR), with one Venezuelan official claiming the IACHR is biased against Venezuela, and the US has responded by describing the decision as “regrettable.”
Earlier this week, Argentina made headlines the world over after President Cristina Kirchner nationalized the oil company YPF, an Argentine company controlled by the Spanish company Repsol. The move caused significant ripples throughout the international business world. The European Union lambasted Argentina for the move, which could damage the traditional “special ties” between Spain and Argentina. Spain has already begun to mobilize international support in opposition to Argentina’s move even while Spanish companies reconsider investment in Argentina as a means to spur growth and help the Spanish economy stabilize. Even Mexico and Brazil, who nationalized their oil industries in the 1930s and the 1950s, respectively, have become critical of the move (although Venezuela was quick to condemn British and Spanish criticisms of the move, even while Bolivia remained circumspect and Colombia tried to use the situation to its own advantage). Mexican President Felipe Calderon criticized Argentina’s efforts, while some media figures in Brazil are critical of the move even while government officials spoke about respecting Argentina’s sovereignty. (And as I mentioned here, Míriam Leitão is far from an impartial or reasonable analyst on the issue of nationalized vs. privatized companies, given her frequent role as a standard-bearer for neoliberal policies.)
However, not all are critical of the move, and Mark Weisbrot provides some reason in an echo chamber of indignity in the international community.
The Argentinian government’s decision to renationalise the oil and gas company YPF has been greeted with howls of outrage, threats, forecasts of rage and ruin, and a rude bit of name-calling in the international press. We have heard all this before.
When the government defaulted on its debt at the end of 2001 and then devalued its currency a few weeks later, it was all doom-mongering in the media. The devaluation would cause inflation to spin out of control, the country would face balance of payments crises from not being able to borrow, the economy would spiral downward into deeper recession. Then, between 2002 and 2011, Argentina’s real GDP grew by about 90%, the fastest in the hemisphere. Employment is now at record levels, and both poverty and extreme poverty have been reduced by two-thirds. Social spending, adjusted for inflation, has nearly tripled. All this is probably why Cristina Kirchner was re-elected last October in a landslide victory.
Of course this success story is rarely told, mostly because it involved reversing many of the failed neoliberal policies – that were backed by Washington and its International Monetary Fund – that brought the country to ruin in its worst recession of 1998-2002. Now the government is reversing another failed neoliberal policy of the 1990s: the privatisation of its oil and gas industry, which should never have happened in the first place.
Weisbrot goes on to point out that YPF’s failure to provide supply to meet the demand of the growing country is a very real problem both for daily lived experiences of Argentines and for broader macroeconomic issues facing Argentina. In many ways, then, the nationalization was the right thing for Argentina’s domestic economy, providing a more equal balance of trade.
And it’s not like Kirchner nationalized a company that had a rich history of private investment. YPF had been a national industry in Argentina until the 1990s, when ex-president Carlos Menem (like his Brazilian counterpart, Fernando Henrique Cardoso) went on a privatization binge, selling state properties, utilities, and resources left and right with a neoliberal zeal that characterized much of Latin America in the 1990s. While leaders like Menem, Cardoso, Peru’s Alberto Fujimori, and others thought neoliberalism would be the economic savior of the region, it had become clear by the end of the decade that the policies not only failed to improve Latin American economies or the region’s standing in the global community; they also exacerbated very real social problems and inequalities in the countries that implemented them. In this context, a series of center-left leaders like Lula, Nestor Kirchner (Cristina’s late husband), Evo Morales, and others ended up winning election in the 2000s based on public discontent with the neoliberal policies of the right in Latin America. So in many ways, Argentina’s nationalization of YPF is simply returning to conditions that worked far more favorably for the Argentine economy up until the 1990s, abandoning what Weisbrot rightfully calls the “failed neoliberal policies” of the late-20th century.
Weisbrot wraps up by pointing out that
Argentina is catching up with its neighbours and the world, and reversing past mistakes in this area. As for their detractors, they are in a weak position to be throwing stones. The ratings agencies threatening to downgrade Argentina – should anyone take them seriously after they gave AAA ratings to worthless mortgage-backed junk during the housing bubble, and then pretended that the US government could actually default? And as for the threats from the European Union and the rightwing government of Spain – what have they done right lately, with Europe caught in its second recession in three years, nearly halfway through a lost decade, and with 24% unemployment in Spain?
I think this is exactly right. While European leaders can lash out against the growing importance and autonomy of Latin American nations with regards to resources, and while neoliberals can continue to decry the injustices of nationalizing industries, they do so as increasingly impotent and diminished authorities on the global economy in the 21st century. And it’s not like threats not to invest in Argentina are really powerful tools of coercion; many multinationals and European countries have avoided investment in Argentina in the decade since the 2001 economic collapse (brought about, of course, by aggressive neoliberal policies). And yet Argentina’s economy has done remarkably well. It’s not in Kirchner’s interest to kowtow to foreign private companies; it’s her job to make sure she implements policies that ensure her country’s economy has the best chance at long-term success. Nationalizing YPF is part of those policies, and those who speak out against it do so from an increasingly anachronistic and out-of-touch understanding of the global economy in the 21st century.