Archive for the ‘Latin American Economies’ Category

Chile-Peru Maritime Dispute Settled(?)

January 27, 2014 Comments off


Today, the World Court settled the issue of the maritime border of Chile and Peru, an issue going all the way back to the War of the Pacific in the late-19th century. Peru wanted the border extended, while Chile refused to recognize Peru’s claims. The issue was particularly relevant in terms of economics, as where the border rested could determine who had access to fishing grounds in the Pacific. As for “who won,” the answer appears to be….it depends who you are. The Court did extend the border for Peru, which could seem like a victory, but it didn’t extend it as far as Peru had claimed it should go, leaving the fisheries in Chilean territory and not providing any real material gains for the Peruvian economy and those tied to the fishing industry. It will be interesting to see how the two countries respond to the new borders in the longer-run, and how they go about patrolling/securing their own borders (and how lax or strict that patrolling will be). That said, the decision does have the potential to bring at least some resolution to an issue that’s well over 125 years old.

On the level of minutiae, my favorite part was this:

Outside the presidential palace, scores of people who had watched the verdict being read on two giant TV screens shouted “Long Live Peru” afterward, though there was some confusion as to whether their country had won or lost.

Who says nationalism is dead?

Around Latin America

December 4, 2013 Comments off

-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.

Brazilian Retailers and the Importation of the Worst Elements of US Consumerism

November 29, 2013 1 comment

Since Thanksgiving evening and through today, millions of people in the US are descending on retailers to try to take advantage of deals offered only one day, simultaneously trying to take advantage of the worst excesses of materialism in the US, even while further encouraging the system that creates such excesses.

Sadly and more than a little bizarrely, “Black Friday” has stopped being a strictly US phenomenon. Yesterday was just any old other Thursday in Brazil – the next-to-last day of the workweek as summer approaches. And yet today, numerous Brazilian stores and online retailers are promoting “Black Friday” to try to get Brazilians to shop, too, participating in a decidedly-US phenomenon without any of the traditional celebrations that define the US’s Thanksgiving the day before.  And while the hordes in the US set out to find that great deal on the 60-inch TV but settle for a cheap juicer they won’t even use when the TVs are sold out by 3AM, Brazilians hoping for a deal are often going to find themselves disappointed or ripped off, as many of the “deals” are either false, or tied to other conditions. And it’s not just traditional retailers. Even Carta Capital, one of the more widely-published and generally-respected progressive print journals in Brazil, is offering “Black Friday” discounts on subscriptions today.

Scholars and critics of globalization often lament the homogenizing  and capitalist-driven effects of an increasingly globalized culture. That the very idea of “Black Friday,” or US consumerism at its most bare-faced and vulgar is now becoming the model for other countries is doing little to challenge that perception.

10 Days that Shook Brazil – A Look Back

June 24, 2013 Comments off

I have a piece up that tries to summarize the causes, events, and outcomes of the last ten days of social mobilization in Brazil up at Lawyers, Guns & Money.

…the protests expanded rapidly. On Monday night (the 17th), 230,000 people took to the streets nationwide to protest, in what at the time seemed like a high number. Yet by the middle of the week, the protests were growing; in response, nearly a dozen cities (including São Paulo and Rio) rolled back bus fares.But it was too late. By Thursday night (the 20th), nearly 2 million people across 483 municipalities throughout the country had mobilized. And while two million in a country of 190 million is still a tiny number relatively speaking, the support is much broader, with a poll finding 75% of Brazilians supported the mobilization. Nor was the mobilization limited to a single socioeconomic group, as people from the favelas in Rio joined people from the middle-class Zona Sul on Thursday, leading to at least 300,000 (and perhaps more) in the streets for the largest urban rally in Rio since at least 1984, when the country mobilized for direct elections as the twenty-one-year military dictatorship wound down.

Of course, the events in Brazil have rippled throughout the region in the world. In Paraguay, around three thousand people took to the streets to protest corruption in their own country, with participants openly admitting the events in Brazil had inspired the Paraguayans to speak out as well. More ridiculously, Turkish Prime Minister Tayyip Erdogan has said that the unrest in his own country and now in Brazil is due to foreign conspirators who want to destabilize both countries (though Erdogan was silent in explaining why, out of all the countries in the world, vague “foreign” threats would target Turkey and Brazil). Of course, such allegations are ridiculous, as citizens of both Turkey and Brazil are responding to the abuses of power and national contexts within their own countries. Beyond that, the most obvious similarity between Turkey and Brazil is the police’s overwhelming and disproportionate use of force in each case, based on privatized weaponry and brutality against unarmed protesters found in police forces not just in Turkey, but Davis, New York, and now, Brazil.

You can read the whole thing here.

More Thoughts on Protests in Brazil

Following the protests in São Paulo (and supporting demonstrations in Rio de Janeiro) last Thursday, the weekend saw protests spread throughout the country. On Saturday, as the Confederations Cup kicked off in Brasilia, protesters demonstrated against the costs of preparing for the Confederations Cup and World Cup. Those expenses were also subject to protests in Rio de Janeiro yesterday, protests that turned violent when police launched tear gas and attacked protesters who voluntarily chose not to provoke the cops (to little avail). And though a Facebook RSVP is far from a rock-solid statistical analysis, over 200,000 people on Facebook said they would attend protests in São Paulo today. As the unrest continues at least in the short term and begins to become something more than an isolated protest gone awry, the question remains: what exactly is going on?

First thing’s first: it’s not a “Brazilian Spring.” The “Arab Spring” was a wave of popular movements demanding an end to decades of repressive and undemocratic regimes; despite the flaws in Brazilian democracy [or democracy more broadly], such conditions do not apply to Brazil, nor is it the subject of protest for Brazilians in the streets. Though police violence was common both in the countries of the Arab Spring two years ago and in Brazil now, the broader political systems are fundamentally different, as are the issues confronting the people. And it’s far from some widespread movement; thousands have taken to the streets, and that’s not insignificant, but in metro areas of 20+ million (São Paulo) and 11+ million (Rio de Janeiro), thousands or even hundreds of thousands is far from a mass movement. That’s not to say people don’t quietly support the demands and issues without taking to the streets, or to say it can’t grow further. But calling it a “Brazilian Spring” (or any popular expression of discontent) is as lazy as slapping a “-Gate” on the end of every political scandal in the US.

So what is it? Well, simply put – it’s complicated. While a quick glimpse seems to suggest a broad movement, the causes of protest in Brazil over the last few days have varied, from bus fares in São Paulo and then to police violence and even to soccer. Throughout it all, on the surface there has not been a unified message that offers a coherent set of political demands. That said, these seemingly disparate issues actually tap into some of the broader, and more historically rooted, processes that are fueling the protests. Indeed, when looking at the actual structural issues at play in bus fare increases, government spending on athletics, or police violence, one sees the long-term historical processes of governance that helps the few at the cost of the many as a common thread throughout.

On the one hand, the bus fares are about a basic issue – increasing the cost of travel for the majority of an urban population, even while the wealthy, with their cars (or helicopters), who can most afford increases in daily expenses, remain exempt from such increases. This issue is not a new one in Brazil; in the 1950s and 1960s, student movements regularly protested against bus fares and demanded exemption for students who had to travel to school. Nor was such activity limited to students; as JF String reminds us, Sao Paulo witnessed protests over an overnight bus fare hike in 1958. Such protests were not just minor incidents of public anger, either; the 1958 protests left four dead after the police and protesters came into conflict.

Which leads us into a second process that has deep historical roots. The brutal and grotesque use of tear gas and rubber bullets against unarmed civilians last week was but another incident of police violence in what is a decades-old phenomenon (and one that arguably has its roots in slavery in Brazil). Throughout the twentieth century, police violence was a feature of arrests and crowd control, especially in poor areas. Even in the 1960s, police death squads operated in favelas during the military regime, prompting the press to distinguish between death squads against “criminals” and torture against political prisoners. The end of the dictatorship did not bring an end to such violence, in no small part because such violence well predated the military regime of 1964-1985, and such violence has continued to define police tactics and methods throughout much of urban Brazil well into the 21st century.

Likewise, government largesse going to those who need it the least also has deep historical roots. The First Republic (1889-1930) was an oligarchy in which regional elites were able to look out for their own interests; the creation of Brasilia in the 1950s gave Brazil a flashy capital to show the world even while it failed to provide for the rural poor who helped build the high modernist capital; the “Brazilian miracle” of 1967-1974 dramatically expanded the gap between Brazil’s rich and poor even while it laid the groundwork for the economic “lost decade” of the 1980s; and the neoliberalism of the 1990s, whose zealous quest for privatization affected everyday expenses in Brazil in a dramatic fashion even while multinational corporations got richer. The government spending on the World Cup itself is vulgar; the costs of preparing for the World Cup have been astronomical, with $13.3 billion originally scheduled for preparations, money that went to new fancy stadiums far more than it did to infrastructural improvements that would benefit all Brazilians. That so little of that money went to infrastructural improvements that would genuinely affect the lives of most Brazilians is unsurprising, just as it is unsurprising that some are now bristling at it.

But these are historical processes that go back decades. Why are Brazilians protesting now?

In part, the answer is because the political space and will are there. There is no openly repressive dictatorship that will support the immediate, disproportionate use of police violence to silence dissent, and that’s not nothing – though it seems a long time ago, it’s only 49 years since Brazil’s 21-year military regime began, and only 28 years since the country returned to democracy (and 24 years since the first direct presidential elections since 1960). Certainly, in many ways, socially, economically, and in terms of police power, Brazil remains undemocratic, but it is still a functioning electoral democracy that cannot support police repression openly the way the military regime did. That’s not to say the police won’t try to use such repression – indeed, that’s exactly what they are trying to do – but in an electorally democratic system, the federal government cannot support such violence without losing much of its legitimacy.

But it’s not just a change in political systems that help explain why these protests are taking place. After all, Brazil was under an electoral democracy throughout the 1990s, when stories of police-led massacres were common, be it the Candelaria Massacre of eight unarmed street children in 1993 or the murder of 102 prisoners (another nine apparently died at the hands of their fellow inmates) in the 1992 Carandiru Massacre. And even in the 2000s, as  many condemned the ongoing violence, it did not bring people to the streets. So what has changed?

I think in part, it comes back to what has happened in the past ten years. At the macro-economic level, the gap between the rich and poor overall shrank somewhat, but it’s still grossly unequal.  On top of that, the economic message, both within Brazil and projected to the rest of the world, has I think played no small part in helping to explain the protests. By the second Lula term, both the government and outside economic analysts were pointing to Brazil as a new emerging global powerhouse. They pointed to its ability to weather the global recession of 2008-2009 and the efforts to eliminate extreme poverty as example of Brazil as a new economic haven, one that had finally found the path of widespread growth and stability after decades (or centuries) of exploitation, inequalities, and uneven growth. Even its inclusion in the fictional BRIC [Brazil-Russia-India-China] made it seem like a new economic age had arrived, one that disregarded the lack of unity between the four countries and smacked more of analytical laziness than any genuine explanation of global economics. Many commentators viewed Brazil winning the right to host the 2014 World Cup and the 2016 Olympics as the final example that the country was set to show the world how far it has come.

And at first, many people in the mid-2000s began to feel this change. The purchasing power of the working class expanded, even while analysts trumpeted the apparent growth of the middle class. For decades, many Brazilians had been told that the economy was about to give them more, only to find such promises to be hollow. The last ten years seemed to suggest to many people that finally, the time had arrived where they, too, could finally have “more” – more stuff, more purchasing power, a more improved standard of living, a more just and equal society. Yet such promises may have been premature, as recent macroeconomic policies and trends have once again shaken Brazil in the global economy. Yet this time, things are different than previous times when economic success was promised, only to not arrive to a majority of the population. This time, it seemed the change could be real, that perhaps such promises of sustained and more-equally distributed stability could happen. Though it is “only” about ten years of relative economic stability for many (though certainly not for all), ten years is a long time in a country where dramatic economic troubles hit in the 1960s, 1970s, 1980s, and 1990s. Indeed, for many Brazilians, recent years have marked  the first time government optimism and reality seemed even close to corresponding for nearly a decade.

And then the bus fare hikes happened amidst growing inflation and economic uncertainty, affecting most those who could least afford it. And then the police turned to the same transparently repressive, brutal, and excessive tactics that they’ve used for decades. And then, on Saturday, Brazil kicked off a sporting event displaying opulence and excess to the world, even while it in reality benefited very few Brazilians in substantive ways (and indeed denied many the right to live in their own homes). And as these superficially disparate inequalities erupted at the same time, a general discontent that old structures of inequality have persisted became the discourse that draws these protests together. That helps to explain why some protesters are now (in many ways erroneously) equating the government of center-left president Dilma Rousseff with the conservative political elites; even though she has very real differences from conservatives in Brazilian politics, her government (and Lula’s before her) have apparently not done enough to erode those structures.

And in some ways, things have visibly changed for the better for many in the last decade. Programs like Bolsa Familia and Fome Zero have had real impacts for millions of Brazilians, and  affirmative action has helped address racial inequalities in higher education. But, as the bus fares, the spending on athletic boondoggles, and the police violence all made clear in the last few days, many other things remain the same. The problems that brought Brazilians to the streets aren’t strictly economic, but economics is involved; they aren’t strictly social, but social struggles are involved; they aren’t strictly political, but the history of political hierarchies is involved. In short: the conditions for protest are perhaps new, but the problems fueling those protests are old.

On Copper’s Importance to Chile

April 25, 2013 Comments off

I’m a bit late in getting to this, but last week, JF String had a great piece that reveals just how vital to the Chilean economy copper continues to be. Among other data:

The labor of every Chilean miner is today, on average, responsible for producing ~ $60 million (chilean pesos) in mineral wealth per year. That’s four times greater than a Chilean working in the banking sector ($15 million/year) and six times greater than someone working in the country’s retail sector ($10 million/year). […]

In terms of the total percentage of federal budget revenues, the industry’s contribution represented 20.7% in 2011 compared to 10.5% in 1991. However, the 2011 figure is down from its peak in 2006 when the copper industry represented 34.1% of federal budget revenues. […]

The wealth generated by copper in Chile has not been distributed equally across the nation. According to Meller’s study, per capita GDP in Chile’s copper regions is around 163% greater than in non-mining regions. The money that does leave, says Meller, is unsurprisingly concentrated in the wealthiest neighborhoods of Santiago.

Sting also has some interesting observations on the ways in which copper in Chile and oil in Venezuela compare and contrast with regards to their respective national economies. The whole piece is not too long and definitely worth checking out..

On the Current Petrobras Challenge in Brazil

March 27, 2013 Comments off

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.


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