Devastation in the Southern Cone: The Inheritance of the Neo-Liberal Years (1992)
Hobart A. Spalding
Spalding, H. Devastation in the Southern Cone: The Inheritance of the Neo-Liberal Years. Latin American Issues [On-line], 11.
About the Author
Hobart A. Spalding teaches Latin American and Caribbean history at Brooklyn College of CUNY. He has published two books including Organized Labor in Latin America(Harper and Row, 1977), a similar number of monographs, and over forty-five articles, mostly in the field of Latin American labor history and relations between workers in the United States and those in Latin America. He has also done research on Argentina since the 1880s, recent Dominican migration to New York, and contemporary Peru. His articles have appeared in diverse journals such as Latin American Research Review, Latin American Perspectives, Science & Society, Caribe Contemporaneo, Monthly Review,International Labor and Working Class History, Journal of Interdisciplinary History, Migration, Nueva Sociedad, and NACLA’s Report on the Americas, as well as in books and anthologies. His current research concentrates upon the Latin American policy of the AFL-CIO, 1960-1990.
During recent decades Latin America, and particularly Southern South America, has undergone a series of traumatic processes. Politically, these have been characterized by the demise of democratic regimes, the rise of military dictatorships, and, most recently a return to elected governments (often called re-democratization). Economically, the limited growth that had occurred in the immediate post World War II period ground to a halt during the 1970s, typically followed by recession, exacerbated by world economic phenomena such as the precipitous rise in oil prices. Those in power, in many cases military officers, inaugurated new social and economic measures. These had a profound impact upon individual nations.
What follows looks at particular aspects of this impact in four countries: Argentina, Bolivia, Chile, and Uruguay.1 It does not concern itself with the technical side of economic policies nor with their implementation, but focuses upon their results: significant social changes; their influence on class formation; and their environmental impact. Even though the governments or economic teams that wrought these changes no longer hold power, their weight will be felt for years to come.2
The changes in Argentina, Chile, and Uruguay began under military regimes. The civilian governments that followed them often continued and, in Argentina’s case, deepened them. This suggests, however that praetorian regimes do not bear sole responsibility for them.3 They rather represent a particular set of responses to the crisis that swept over Latin America starting in the 1970s. They spring from a common root and the societies in question shared sufficiently similar characteristics to make their outcomes in many ways the same.
The military came to power in a reaction to swings to the left, as in the case of the Allende government in Chile (1970-73), combined with social and economic breakdown, as in Argentina after Perón’s second coming to power (1973-76). Authoritarian governments facilitated the inauguration of new social and economic projects because they could impose them by force. As others have documented in specific cases, a particular confluence of civilian forces could manage the same thing, although, as in Bolivia, they often encountered tougher opposition. Sometimes, in fact, local political conditions could stymie temporarily even mild neoliberal plans of civilian governments as in Argentina.4
Macroeconomic policies involved a series of measures. These include: lowering of tariffs; currency reform often involving the issuance of a new monetary unit; freeing of exchange rates; encouragement of particular export sectors most likely, but now always, of so-called non-traditional goods (for example, fruits and forest products in Chile); severe cutting of state deficits; reduced or no limitations on foreign capital; reduction of the public sector in terms of size, employment, and services; and strict wage and price policies often implemented by freezes and the lowering or eliminating of state subsidies of basic items such as food or fuel. In short, they sought in many areas to allow the free play of the market to set prices and to encourage foreign and local investment by reducing the role of the state.
Much of the above clearly stems from recommendations made by the IMF or World Bank as a means to combat inflation, to keep debt or at least interest payments flowing to the banks and international creditors, and supposedly to initiate economic growth. These measures corresponded to a switch by international agencies and the developed capitalist countries away from pushing the old, tired import-substitution model for Latin America (and the Third World) in favor of an export-driven growth model. In turn, this new direction reflected not only the failure of the import-substitution model to bring any long term growth and the seriousness of the debt crisis, but also the vogue of the so-called Chicago school of economics. In many Latin American countries, especially Chile which initiated this type of model, men who had studies at the University of Chicago, known locally as “the Chicago boys,” formed the corps of technicians who formulated economic policy. Graduates from other United Stated universities held similar posts in other countries. Sometimes foreign economists like Jeffrey Sachs, now at Harvard University, put in place much of the plan, as in Bolivia. With time, locally trained economists quickly learned the basics.5
The ideology behind these new economic programs became known as neoliberalism (neoliberalismo) because it preached a return to some form of Smithian free market enterprise or, at the least, a marked retreat on the part of the state or deregulation in many areas. In very general terms, these policies produced several major effects:
- The creation of a huge informal sector, or perhaps more accurately in some countries, the ballooning of a sector which already had a substantial presence.
- Pressure upon traditional industrial and financial sectors, which sometimes led to the demise of large locally owned corporations of financial groups.
- A process of privatization involving the sale of state-owned companies often to foreign capital or through foreign-local joint ventures. States frequently kept minority holdings.
- A decentralization of government services and of the fiscal system.
- A decline in the relative well-being of significant segments of the population which enlarged social disparities and increased the number of both the poor and of the absolutely destitute.
- Resulting changes in occupational patterns and class formation.
- The weakening of traditional power blocs such as labor and some political parties, combined with the emergence of widespread popular social movements often based upon neighborhood organization.
- Environmental concerns arising from new methods of exploitation of natural resources and the growth of large scale agriculture for export, i.e. agroindustry.
We should keep in mind here that these programs have as much political as economic intent, entailing a “class character and distributional consequences.”6
Much of this transformation resulted from structural factors that had been at work within Latin American societies for years, but neoliberal policies accentuated and accelerated existing trends. Labor unions, for example, already in relative decline, lost further power with the coming of military dictatorships through the imposition of restrictive legislation and use of outright repression even before neoliberalism reigned. But, without doubt, neoliberal policies, including as they did a reduction of labor costs to help attract foreign investment and to make exports more competitive in international markets, actively sought to undermine unions and divide the working class. The informal sector, already more or less extensive, took on new growth patterns and a new dynamic under neoliberal regimes.
The larger social and economic trends analyzed below, in reality, form part of a long process. Even though governments sometimes abruptly imposed neoliberal programs (so-called shock treatments or paquetazos, i.e. literally “big packages”), these interacted with trends already underway and they took time to work through the social fabric. At times, brief populist or centrist regimes interrupted or attempted to stop or slow longer term tendencies, but almost always these periods proved short-lived, as in Bolivia or Argentina. In sum, neoliberal experiments can be best understood as having taken place in steps or laps (with occasional pauses or setbacks) which occurred over intermediate time periods.
The following text looks at the immediate historical background to the contemporary scene and then briefly examines politics and economics. From there it moves to a more substantial analysis of the impact of neoliberal social policies and, finally, focuses on environmental issues. It makes no attempt to examine systematically neoliberal programs nor to demonstrate the impact of every policy or program in each country. It rather shows similar broad patterns in the four nations. Some references to Latin America as a whole are included for comparative purposes.
Other countries might have been substituted for the four included in this monograph without substantially changing the general picture. Peru, for example, during the cycle of Fernando Belaunde Terry (1980-85), Alan García (1985-90), and now Alberto Fujimori (1990-) fits the patterns described above perfectly. Similarly, Paraguay, although not subjected to a specific neoliberal plan during the regime of Alfredo Stroessner (1954-90), exhibits almost all the social characteristics found in neighboring countries. National and regional differences exist which amount to more than local coloration. But the general applicability across the continent of the patterns described here, lends substantial support to the contention that the same forces are at work in all these dependent capitalist societies.
THE HISTORICAL BACKGROUND AND CONTEMORARY POLITICS
The decades after World War II brought Latin America a certain steady if uneven economic development under the banner of import substitution industrialization. From 1950-1980 the area’s GNP grew from $51.8 billion to $190.9 billion. Even in the worst performing countries, GNP more than doubled. This slow process of modernization, however, unleashed explosive social forces. Both emerging middle sectors and masses of workers and peasants, largely excluded from the benefits of this expansion, organized to gain an increased share of their country’s wealth. Sparked by the example of the successful Cuban revolution and its after math, progressive and/or revolutionary movements erupted in a dozen different countries after 1960. Capitalism’s and imperialism’s response to this challenge contained two prongs. First, the Alliance for Progress aimed through extensive foreign investment, United State and European aid, and internal economic and social reforms measures to raise economic growth rates and to meliorate some the capitalism’s worst social and economic inequalities. Second, the intensive training and build up of local military and security forces was designed to stem forcefully the rising tide of popular protest in order to maintain political and social stability. The Alliance-inspired “decade of development,” however, brought little if any permanent relief for most of Latin America’s dispossessed. Per capita growth rates remained low and targets set by the Alliance proved elusive. The military, meanwhile, learned its lessons well. Beginning with Brazil in 1964, urged on by imperialism, and in league in most cases (excepting Peru perhaps) with the local dependent bourgeoisie, the armed forces began to topple elected governments and establish authoritarian regimes as the surest way to prevent violent social change.7 By the end of the 1970s, with the exceptions of Colombia and Venezuela, not a single democratically elected government remained in South America and few existed in Central America or the Caribbean. The night of the generals had come.
Significant economic changes, however, had also occurred. The first oil shock of the 1970s brought a downturn in international markets quickly reflected in local economics. It led the Latin American countries to borrow heavily which provide an immediate relief and kept modes growth going. United States bankers, their vaults awash with petro-dollars, fully understood that Latin American loans brought higher interest rates and profits than domestic ones. As a result, they pushed more and more loans at Latin American governments which eagerly accepted them. Many of these loans carried short maturities and bore interest rates re-set regularly at a standard percentage above those prevailing on international markets at the time. The recession of the 1980s, however, brought this cycle to a screeching halt. This time, foreign borrowing dried up and the crisis deepened. Latin American terms of trade, for example, declined by 28.2% from 1974-1984, resting in 1985 only 4% higher than in the Great Depression.8 The 1980s would become known as the lost decade.
Important developments also took place on the economic and political fronts in these years. Under the influence of foreign economists, mostly North American -the previously mentioned Chicago Boys-, military governments or their surrogates in power implemented neoliberal policies. In many cases, these responded to re-adjustment schemes or IMF-mandated austerity programs imposed by foreign lenders in response to non-payment of foreign debts and/or the serious deterioration of local currencies and economies.9 Such programs ultimately sought to improve trade balances through export-driven growth in order to generate enough hard currency to satisfy foreign creditors. By the end of the 1980s, Latin American debt stood at $415 billion or about $1,000 per capita and the GNP had fallen by 8.3%, but by almost a quarter in Argentina, Bolivia, and Peru. During the decade Latin America exported capital, some $161 billion, $27.6 billion in 1989 alone.10 Argentina, for example, suffered a net negative transfer of $19.6 billion from 1982-1987, a significant portion of which represented capital flight.11
The human cost of these economic plans, however, has been high. According to the United Nations, 44% of the area’s population lives in poverty and of these 48% are classified as destitute, meaning that their family income comes to less than the cost of basic necessities. In 1987, per capita income amounted to 13% less than in 1980 and minimum salaries had fallen by an even greater amount.12 Employment in the traditional sectors of the economy declined steadily and un- and underemployment rose in almost every country. In response, the informal sector of the economy grew rapidly and persistently. In addition, austerity programs meant that governments cut back social services in order to bring budgets into better balance as demanded by external agencies and to achieve “efficiencies.” This, of course, freed up funds for debt and interest repayment, but it also negatively impacted the quality of individual lives.
Ironically, almost no military government survived to the end of the decade. In 1989-1990, the last two major South American nations under formal military rule, Paraguay and Chile, held elections. The opposition movement in Chile finally succeeded in formally driving out the military by peaceful means after winning two plebiscites that would have extended General Augusto Pinochet’s rule. The center-left coalition that came to power in spring 1990, however, remains under close military supervision. General Pinochet retains the right to official veto over any measure that threatens “national security” as defined by the National Security Council which he heads. His mobilization of the troops before an interview with the civilian President clearly signalled his intention to retain his ultimate power. As for other countries of Southern South America: Argentina and Uruguay have now elected two successive civilian governments, and Bolivia three (although the current administration includes an extensive political partnership with an ex-military dictator).
Return to civilian rule happened for varied reasons depending upon the country. By mid-decade it had become obvious, everywhere save perhaps Chile, that the military could not solve pressing economic problems. This helped negate the claim that some officers made that they had seized power to rescue the nation from bumbling, inept, and self-serving politicians. Middle sectors as well as workers and peasants (occasionally joined by small fractions of local capital), mobilized in protest against exclusionary social policies, worsening economic conditions, as well as a lack of formal democratic institutions through which they could voice their grievances and protect their interests. These protests, especially in the case of Chile, served to undermine the legitimacy of military rule. In some countries, military corruption surfaced which served to further discredit that institution. The Bolivian military almost openly participated in the drug trade. In Argentina, the military fiasco during the Malvinas/Falklands conflict with Great Britain helped considerably to erode any prestige the armed forces had left. The revelation of shocking and massive human rights abuses stirred an increasingly vocal opposition that demanded an accounting from praetorian regimes. Lastly, the United States no longer had a pressing need for the military: threats from the left had disappeared; support for right wing, fascistic generals proved embarrassing because it made a mockery of the claim by the United States to leadership of the “democratic” world; and, finally, the Latin American juntas did not always immediately obey United States’ wishes, particularly in areas where national sensibilities came into play.
As lamentable as the repressive aspects of these military regimes are, the import of their tenure goes well beyond the hundreds of thousands killed, tortured, disappeared, etc. Military rule brought with it, almost without exception, new social and economic policies that changed the face of Latin American societies and which continue to influence heavily their course. Some observers have even gone so far as to say that the military lost the battles but it may have won the war in that laws and policies put in place during their years will have a lasting effect upon each country. How and why?
While formal political democracy reigns today, this does not mean that the military has disappeared. Despite having retired to the barracks, the armed forces still count as a major player in the political game. The case of Chile has already been noted. In Argentina, dissident right-wing military have publicly warned that they will not play a passive role in national politics.13 Recently, the civilian government awarded officers significant raises, bring the pay of a Lieutenant General to about 40% above that of the President. In a capitalist society the implication is obvious. The degree to which the military threat remains emerges from the serious comment by a leading conservative Argentine daily, The Buenos Aires Herald, which cited as institutional progress the fact that the president’s messy divorce proceedings had not provoked a coup by morally outraged generals.14 There have been at least two serious military uprisings led by dissident factions inside the armed forces.
Three long term issues insure, moreover, that the armed forces will continue to play a significant role. One, in no country, to date, have those responsible for massive human rights violations been brought to full trial. Instead, civilian governments have, in fact, protected them or else proceeded with utmost caution around the theme. This issue remains particularly thorny in Argentina, Chile, and Uruguay. An attempt in Argentina under the Radical government of Raúl Alfonsí (1983-9) to prosecute those responsible for the “dirty war” went forward for a while, but it faltered in the face of intransigent military opposition. Courts convicted a few generals including two ex-presidents but the government balked at proceeding with the prosecution of lower-ranking military involved in human rights abuses. The successor administration, that of Carlos S. Menem, pardoned some 200 officers either convicted or accused of abuses, despite public opinion polls showing the 80% disapproved. He eventually did the same for the top military people who had been judged guilty.
In Chile, moreover, a Minster of the recently inaugurated civilian government made it clear that the cases of the disappeared should not be investigated because that might provoke a military golpe. The Corps of Retired Generals and Admirals has looked uneasily at the work of the parliamentary Truth and Reconciliation Commission designated to investigate abuses under military rule and the Corps has warned the government against any “smear” campaign aimed at the armed services and police. That body claims, moreover, that the Law of Amnesty of 1978 absolves all personnel from crimes committed during the first five years of military rule. In addition, a 1990 constitutional tribunal decree prevents the congress from investigating officials of the previous regime, in effect absolving them.15 The Commission’s report to the President clearly documented extensive human rights abuses by the Pinochet government and since then more secret graves have been unearthed. To date, however, the government has taken no meaningful steps in the direction of prosecuting those involved in these abuses. At the same time, substantial public opinion exists that the acts of the military should come under examination, although a minority think that the whole issue should be dropped for fear of a coup and in the name of national reconciliation.
Two, in some countries the military has interests besides their immediate professional careers. An old joke goes that promotions with the Latin American military ranks runs: lieutenant, colonel, general, millionaire. In Chile, it has recently been revealed the Pinochet’s son received over $3 million from the Chilean Army for some as yet unspecified reason. Before retiring, the head of the Investigative Police in Chile, General Horacio Toro expressed his concern over “the immoral conduct of many officers, the pressure, extortion and collusion.”16 Members of the Chilean military, for example, bought blocks of stock in the telephone company at huge discounts when the Pinochet government privatized it.17
Lastly, and perhaps ultimately most important, the armed services have made it clear that they are not about to stand by and watch while “subversive” or “anti-patriotic elements” gain power or threaten the socio-economic system. This may hold particularly true since any incumbent government unfriendly to the military can always start asking probing questions about the past. This, in turn, becomes self-fulfilling in that civilian coalitions, as in Chile, have excluded elements not approved of by the military, in that case the Communist Party. In short, the long shadow of the tanks lingers on.
One can not yet adequately assess the true impact of the military years. Many analysts focus upon immediate political results: the end of bourgeois democracy, the crushing of the armed and often unarmed left opposition, and the systematic elimination of progressive elements (unionists, peasant leaders, leftist politicians, student activists, progressive Catholics, etc). The theme of “redemocratization” has become a leading one in area think tanks and sometimes the term clearly includes not only political democracy but social and economic democracy, too.18
A brief glimpse at the nature of the governments that have replaced the military shows these conservative forces at work. Virtually all of these have been or are centrist or right-of-center because of two factors. First, only such parties and leaders proved acceptable to the military which in many cases, tacitly or openly, vetoed participation by organizations and/or politicians they deemed inappropriate. Second, the long period of military rule undermined the bases of strength of leftist or progressive political parties and institutions. Thus, in Chile a centrist coalition governs, in Uruguay the rightist Blanco Party holds office, in Argentina Menem represents the Peronist right and has made an alliance with the right-wing Unión del Centro Democrático Nacional (UCD) headed by the neoconservative, Alvaro Alsogaray. And in Bolivia a coalition government of right and left-center parties holds office, the former headed by General Hugo Banzer who ruled dictatorially from 1971-1978. Although in the case of Argentina, a centrist government came to power immediately after the military, it moved with extreme caution and in effect implemented policies in most areas consonant with those to the right of center.
The events which transpired during periods of military rule form a very important part of the history of the last years. Their impact may prove lasting and pervasive. However, one should not ever lose sight of the larger historical patterns, which include structural tensions, the influence of the world economy as well as that of foreign governments and international institutions, and the considerable role of civilians in the larger sweep of things.
To understand the full dimensions of the current socio-economic crisis gripping Latin America, we should look at various aspects of the immediate economic context. During the 1970s, at least in terms of raw numbers, the Latin American economies performed creditably. But, as previously noted, things began to change at mid-decade and continued to do so in the 1980s. Several macro-economic factors worked to produce this result:
- Higher energy prices impacted economies because most Latin American countries import a substantial percentage of their oil.
- Continued unfavorable international market prices for natural resources and agricultural exports lowered export revenues.
- Higher prices for machinery and capital goods imports drained hard currency already depleted by weakening exports.
- Increasing debt service payments locked into London market interest rates further drained reserves (Latin American loans are in many cases based on LIBOR -London Inter-Banking Offer Rate- plus 1%, 1.75%, or more).
- Reduced foreign investment and, most significantly, cut-backs in international lending severely reduced funds available for internal investment.
- Growth rates in the developed capitalist countries slowed and they imported fewer Latin American goods.
- Restrictive and/or selective trade policies by the United States and Europe reduced trade volumes.
While all of these played an important part in the short range economic picture marked by economic stagnation or recession, runaway inflation, and deteriorating social fabrics, they only represented the logical outcome of long term structural factors operative since the colonial period and of the particular insertion of Latin America into the international capitalist system.
Neoliberal economic programs had several important impacts. The opening up of the economy to foreign investment and foreign goods led to a shrinkage of the manufacturing sector affecting traditional industry. Large scale commerce suffered too in some areas. Trans-National Corporations (TNCs) continued to invest in Latin America. In the 1980s, however, these giants moved increasingly into natural resources rather than the manufacturing sector. In Chile, for example, they focused on forest products, fishing, fruits, and minerals. Some pockets of local capital, however, prospered under these new conditions, particularly those associated with the export-import sector and those engaged in certain types of financial dealings. In some cases, medium-sized producers and even larger consortia composed of local capitals entered the export sector with some success, sometimes through joint ventures with foreigners.19 In other cases, periodic over-valuation of local currencies led to real estate speculation and substantial overseas investment. It should be noted that as one result of this “prosperity,” significant sectors of national society supported local military regimes, a point often overlooked. In the Chilean case, for example, measured in electoral terms, after almost seventeen years of severely repressive dictatorship, over a third of the population voted to continue military rule in the 1988 plebiscite and the losing Pinochet-backed candidate received even greater support in the 1989 presidential elections. Some people supported the regime from fear of a return by the left (factors of ideological persuasion are discussed below). But the figures clearly demonstrate that a substantial slice of the population thought that the system benefited them sufficiently to warrant its continuation. On the other hand, many local capitals suffered heavily under the competition from foreign imports and invasive, high technology foreign corporations. Wholesale bankruptcies occurred even among leading corporations and financial entities.
The industrial component of the economy in both Argentina and Bolivia contracted under the impact of neoliberal policies. Bolivian industry suffered due to foreign competition after the opening up of the country in 1985.20 Argentine industry began to hurt in the late 1960s when the military government lowered tariff barriers and the weight of manufacturing in the economy stood in 1985 below what it had been in 1970. Industrial output declined 11.9% from 1974 to 1983 and leveled thereafter.21 In the Chilean crisis of the early 1980s, several major national economic groups went under and the state took over eight leading banks. Of course, it later sold these off at bargain basement prices mainly to local investors and civilian as well as military friends of the regime.22
Any discussion of Latin America and the legacy of the repressive years and neoliberal economics should make at least some mention of the debt crisis. We do not need to repeat here the major outlines of the accumulation of huge external (and internal) debt balances built up by almost every Latin American country, most of it during the periods of military rule (and therefore considered illegitimate by many of those who advocate non-payment). By mid-decade, 40% of Latin American export earnings on average went for debt service. For each 10% paid to external creditors, the gross national product fell by 1%. Considering that during the last decade the gross national product fell by 5.5%, the weight of debt payment becomes clear.
The various plans developed by the United States, first the Baker Plan and more recently the Brady Plan, have cancelled debt by drips and drabs or slowed the rhythm of debt accumulation, although often at the cost of increased foreign penetration of the economy through debt for equity swaps. Debt for environment has received considerable publicity but hardly made a dent in dollar terms. Such measures must be seen as providing a more temporary relief than a permanent solution. Despite the fact that debtor nations failed to honor some $18 billion in financial obligations in 1989, according to the Latin American Economic System (SELA), the twenty-seven Latin American countries had a combined foreign debt of $434.6 billion or 1.5% higher than the previous year.23 This means that since the onset of the debt crisis in 1982, the Latin American nations have paid creditors (despite frequent delays of payments and rescheduling) more than $250 billion. On the other hand, they have received only about $50 billion in new loans during that same period; in other words the area has been decapitalized by some $200 billion. No country has kept fully up to date consistently with interest and amortization payments to creditors. The question is only how far behind they have fallen or will likely fall in the near future.
Bolivia represents something of an exception. Although at one point the debt reached crushing proportions, that nation substantially reduced its external private debt in 1988 by buying previous emissions to the private sector at $.11 on the dollar with the help of loans granted by the United States government. In this manner, it halved its private bank debt to $360 million, and the country since then has sought to reduce the figure even further with more purchases and reconversions through the Central Bank. Ironically, these moves raised opposition from the country’s creditors who have refused to sell debt at the internationally quoted figure, claiming that it is actually worth more!24 Uruguay, too, has launched a proposal to buy back a substantial part of the $1.64 billion it owes to seventy-one foreign banks. The Central Bank offered $.56 on the dollar against the $.48-.50 quoted for Uruguayan debt on secondary markets. At the same time, the Bank proposed either a debt stretch-out or lowered interest rates on remaining debt and it said that it would seek new loans. The impact of the Kuwait crisis on oil prices, however, may postpone these plans developed by the energy-dependent nation.25 Chile devotes about 50% of the equivalent of its export earnings to debt service, and in 1988 and 1989 debt payments resulted in the transfer of 4% of the GNP abroad. Still, Chile’s paper has risen on international markets, which reflects the country’s ability to export and the faith of foreign capital in the restructured system.26 The paper of Argentina has similarly almost doubled in value in the last year.27
Nor have neoliberal economic policies resulted in dramatic turn-arounds in internal economic growth. According to the Inter-American Development Bank, for example, after the implementation of a severe neoliberal shock in August of 1985, Bolivian positive growth only returned in 1988 and by the end of 1990 had barely surpassed levels seen in 1985.28 In fact, by the end of 1989 Bolivia’s real per capita GDP stood at 6.3% below that of 1985 despite the imposition of a neoliberal shock treatment.29 Chilean long term growth rates, for example, during the whole of Pinochet’s rule still have lagged behind historic levels, and the same holds true even when just considering the 1980s.30
A. Growth of the Informal Sector
Significant changes have taken place within Latin American society, partly due to the impact of neoliberal policies. In the last decade or so, the economically active population has grown, but its sectoral distribution inside the economy has changed. In the first place, in response to a shrinking traditional sector and squeezes on public employment, increasingly people have joined the informal sector. The relationship between the informal sector and the economy, however, is not one-to-one. This suggests that a permanent pool of people waiting to flow back into the mainstream once things get better does not exist. The number of informals in Latin America almost doubled from 1960 to 1985, and jumped by over 20% from 1981 to 1983.31 Put in different terms, the informal sector increased 55% in 1970-80 and by an estimated 60% during the next decade.32 It now encompasses 30% of the Economically Active Population, that is, about one out of every three workers. In select urban areas the informal sector reaches higher: 40% in Chile, and over 25% elsewhere in Southern South America.33 The Center of Studies for the Development of Labor in La Paz calculated that in 1990 over 60% of all Bolivians belong to the informal sector.34
People in the informal sector form the armies of vendors that clog central streets and badger motorists at nearly every major intersection in inner cities; they are the myriads of women, often carrying infants and accompanied by children who can barely walk, who offer fruits, fried goods, or flowers along the roadsides; they are those pedaling services like shoeshines or house repairs in the plazas or on street corners; they are people who run small businesses at home or in the street; and they are roving construction gangs engaged in an almost daily search for work. Many of those moving into the informal sector enter petty commercial ventures. This however, creates intense competition at the retail level and lowers profits for all, perpetuating poverty.35 A recent study in La Paz calculated that the 25,000 street vendors there often worked 12-14 hours a day, 6-7 days a week in order to make a dollar a day.36 The opening of local markets to foreign products may only worsen the situation by introducing cheap mass produced goods, although the fact that low priced foreign items (often contraband) sell on the street opens more opportunities for vendors.
For all its difficulties, the goal of self employment remains a strong attraction. A study of female migrants in Bolivia, for example, showed that after brief periods of employment as domestics, they left to become street sellers, prizing the independence gained even at the cost of security.37 In fact, insecurity has become a permanent feature of the landscape. In Argentina, for example, only 36.3% of those who work have permanent jobs.38 A 1988 study concluded that a full 40% of all Argentine economic activity transpired underground.39
Neoconservative politicians and economists in the United States and Latin America have tried to show that the informal sector is, in reality, a dynamic one, representing a strata of entrepreneurial individuals previously help down by government regulation. These pundits glorify the work of the Peruvian economist Hernando De Soto whose recent book,The Other Path: The Invisible Revolution in the Third World, claims that if only government would substantially reduce its role in the economy then capitalism would succeed.40In fact, he and others of his persuasion, argue not that capitalism has failed in Latin America but that the continent remains in such dire straits because it has never tried capitalism since the state has played an important (and negative) role in economic development since the colonial period. Last May, President Bush hailed De Soto and the informal sector made up of “thousands of independent and enterprising individuals doing business without the consent of the State” as being responsible for Lima’s economic vitality.41
The reality, however, based upon existing empirical studies is not quite so clear and a violent debate rages around this issue. In some areas, the sector serves as a pure survival mechanism, but in other places informals earn more money than they could in the “formal” sector and therefore it represents a rational economic choice. The function of the sector may even vary within the same economy, playing one role in larger cities, another in smaller ones. It seems, however, on balance that the vast majority of people join the informal sector as a survival, not accumulative, strategy.
One should not see the growth of the informal sector just as a desperation move by impoverished people. It is much more than this. On one level it has been called into being by capital as a response to unionization and “radical” worker demands. Sub-contracting to piece or home workers brings advantages because these people receive no benefits and they can be hired or fired at will. Furthermore, they are virtually unorganizable. On another level, the sector represents a place where workers can supplement inadequate incomes and where they can go when laid off. It may allow a mother, for example, to earn income and take care of domestic duties at the same time. As stated above, some people in the informal sector may make more money there than they could in the formal one. Almost every study concludes that a substantial cross-over exists between the two. But, the real heart of the matter remains as to whether the informal sector can serve as a means of capital accumulation and therefore a basis for local or regional economic development of not. The evidence is contradictory, but those who see informal sector growth as part of a developmental strategy clearly need to prove their case.42
Explosive informal sector growth has monumental implications. Huge numbers of people live out of the reach of meaningful state and municipal control for fiscal purposes. Despite occasionally successful attempts by governments to bring them in tow, they pay few or no taxes and sometimes no licensing fees, although the police often demand regular pay-offs. Most do not belong to any state social security system (informal systems of one type or another may exist), although they may receive some limited help from officially sponsored program designed to help lower income citizens. This indicates an increasing divorce between political and civil society, an important trend that merits more examination by scholars.43
Vast migrations from the countryside continue into secondary as well as primary cities. In part, these are sparked by the encroachment of large international agribusiness firms in the past decades; in part, the result of depression in traditional export sectors like mining in Bolivia; and in part as a result of population and land pressures, although some areas of Bolivia, for example, have actually suffered a loss of population in the last years. As a result, settlements around major urban areas such as La Paz, or Santiago have grown rapidly. At their height, maybe 1.2 million people lived in squatter and informal settlements around the Chilean capital, most of them without adequate services or proper housing.44
B. Changing Class Composition
Neoliberal economic policies of the past decade have accentuated other trends. The percentage of people engaged in industry has grown much slower than those in the tertiary and informal sectors. The growth of those employed in larger manufacturing firms has not matched the general work force expansion. Thus the traditional working class has declined, in some cases both in relative and real terms. At the same time, employment has shifted by sector. In Chile, for example, where the number of industrial workers in 1989 actually surpassed those in 1972, export industries absorbed much of this labor while the numbers employed in traditional areas like textiles and metals fell. Employment in the Argentine manufacturing sector declined by 39.4% from 1974-1983 and a further 5.2% in the next six years.45 Similar trends occurred in Bolivia.
These changes have posed a serious problem for organized labor. Although on the one hand the organized work force still carries substantial weight due to its location within key sectors of the economy (e.g. traditional and increasingly non-traditional exports), it has become more and more isolated and unstable at the edges. Significant growth in unemployment has helped pressure wages downward, particularly in lower skill level jobs. Workers now cross over between the formal and informal sectors on a regular basis. This, in part comes from choice, but also because firms in competitive sectors sob-contract out more and more of their work to home workers or small shops in order to avoid paying “high” union wages and benefits. In addition, at least in textiles, piece workers at home produce more items per hour than those in the factory for the simple reason that the former get paid per item while the later get paid the same no matter how many garments they sew. The informal sector thus becomes a cushion and bleeds union solidarity by providing a non-combative solution for the worker and his or her family.46 Further, this tends to undermine traditional union politics not only because numbers decrease and alternatives for capital grow, but because for many workers on the brink do not run the risks involved in a strike, job action, or protest. Some recent evidence indicates that employers or the state may be able to buy workers out as a means of peacefully reducing labor forces and/or getting rid of older workers who have accumulated seniority benefits. Such a solution provides money with which individuals can start up their own business, a situation for many preferable to life on the production line or in the public sector.
Neoliberal policies have brought substantial changes in rural areas as well, especially in Chile. These policies have created new and complex patterns. The military’s dismantling of agrarian reform drove peasants into the wage labor force, many as temporary and/or itinerant workers. While capitalist relations have developed in the countryside, the numbers of peasants have increased, contrary to classical patterns of modernization experienced in Europe. As a result, the peasantry controls some 40% of the agricultural land, although not the most arable. Until the early 1980s, it produced a significant percentage of the products marketed for internal consumption. Since that time, larger productive units owned by corporations and highly technologized have taken over internal markets, while producing also for export. This process has pressured the peasantry which found itself with less and less land and in poorer and poorer conditions. As a result, younger rural dwellers tend either to leave for urban areas or else become itinerant laborers. At present only 20% of all peasants are under forty years old, a figure which bodes ill for the future of the class.
Contemporary data indicate that the poorer peasants produce less than they consume, meaning that they have to make up the difference with casual labor. Yet, in Chile as elsewhere, richer peasants with capital, land, and therefore access to credit, rode the export boom too. Even the rich peasantry, however, has found itself in a constant position of subordination to local markets and marketers. Final sale prices, for example, range about ten times the amount received by a peasant for his or her product. Further, restricted internal markets mean widely fluctuating prices and frequent overproduction. Potatoes are often used as food for hogs and even thrown into the sea rather than onto an already saturated market where they would drive down prices further. This represents the logic of the capitalist market place. Yet millions of Chileans at the same time do not have enough to eat. Under these conditions, marketing and markets (and along with them credit and infrastructure) become the major problems rather than the production process itself.47
Cooperative and communal efforts in Chile have been discouraged in favor of private property and free market policies. The number of cooperatives, for example, fell from 300 in 1973 to 70 in 1982, and those which survived operated at a very precarious level. At the same time, perhaps as much as 75% of the land expropriated under the Popular Unity period no longer remains in the hands of the peasantry but now rests under strictly commercial domination. Such things as privatization of irrigation systems has placed small and medium producers at an additional disadvantage. This represents only one aspect of the dismantling of state agencies that provided rural services prior to 1973. These pressures have contributed to the increase in migrant and temporary labor. Much of the latter comes from marginal urban dwellers who work in Chile’s central valley by day. The net result has been lower wages for members of this reserve army and higher rates of accumulation for producers. The military’s labor law virtually prevented these workers from organizing and by making it easy to keep most workers in the temporary category, guaranteed them few or no benefits.48 At the same time, the dismantling of the cooperative structure and privatization of property places it on the market, paving the way for the expansion of large and medium size holdings, and it turns peasants into owners. As one researcher wrote, “The military regime tried to eliminate the concept of campesino as a social category and to replace it with that of private entrepreneur.”49
All of the above raises important questions about class solidarity as well as cross-class relationships. What will this increasing diversity lead to for the working class and for organized labor? Will the gap between those employed and those not, those in the informal sector and the traditional sector, rural and urban workers, small property owners and day laborers result in splits or outright antagonisms?50 Does the new situation in the countryside in Chile, for example, make organizing there easier or more difficult? Some progressive sectors within the labor movement are now actively advocating that workers should, indeed must, make alliances with social movements such as women’s groups or neighborhood associations, human rights advocates, etc. in order to present a united front against dominant elites.51 Reasonably powerful labor movements emerged in the four countries under examination in the recent past along with leftist or nationalist political movements based in large part upon the input from organized labor and the traditional working class. The four labor movements, however, are currently at a comparatively low ebb. Not only have they been subject to restrictive legislation embodied in labor law, but they also have been weakened by structural changes that have taken place.52 Competitive capitalism, moreover, can only survive on an international level (and, in open economies, on the domestic scale) by driving down the cost of labor which means taming unions. In the countries under study, that process in now well underway, a process initiated under military rule but continued by the governments that followed. Neither the Alfonsín nor Menem governments, for example, substantially modified existing Argentine anti-union laws and the changes in Chile since 1990 leave a great deal to be desired.53
C. Deteriorating Living Standards
In most countries the relative well being of the population has eroded substantially. This applies not only to the working class and peasantry but also to much of the rest of national society, excluding the upper brackets where the opposite holds true. The case of workers provides one illustration. During the first half of the last decade, for example, for Latin America as a whole, real salaries of workers in the manufacturing sector declined by 12.2%, minimum urban wages went down by 16.3%, while those of workers in the public sector shrunk by 17.1%.54 Selected other data reveal similar patterns. In Chile, the purchasing power for a family worker’s minimum salary had fallen by 33% in real terms from 1970-1987 and all salaries and wages averaged over 15% lower than in 1970.55 But even in the 1980s, a period of relatively strong growth, real average wages only rose 1%, prompting one scholar to observe that “it is safe to assume that profits and property income have absorbed most of the recent impressive growth.”56 And even supporters of the current economic model admit that it will take some fifty years at current growth rates to substantially reduce poverty.57
In Argentina, real salaries in May 1990 for industrial workers, bank employees, public sector workers and employees, teachers, and commercial employees all had fallen in relation to 1986, some by as much as 50% but most by at least 25%.58 Figures from Uruguay show a similar story. Real salaries shrank by over 38% from 1968 to 1988.59 In Bolivia, real wages in the productive and services sectors have declined by 54% and 49% respectively in recent years.60 One study claims that it would take forty years of an annual growth rate of 3.5% in Bolivia to restore incomes to the level of 1978.61 Even in dynamic sectors of the economy, wages in recent years have tended to remain low, one fact which of course sparks that dynamism. In Chilean agriculture, the 1985 real earnings of temporary workers (a healthy percentage of total employment in this very seasonal sector) stood well below that of their 1965 levels.62
The failure to create jobs at a rate anywhere near the number necessary to satisfy the demands of those in and coming into the job market (almost half of most national populations are under 18 year of age – in Bolivia the age is sixteen) has led to growing numbers of un- and underemployed, an increase in the informal sector, and to a marked rise in poverty. In fact, one could say that pauperization has become a major characteristic of contemporary Latin America. The raw statistics tell the tale. Seven to nine million Argentines, almost 30% of the population, live under the poverty line.63 In greater Buenos Aires, 44.3% of the population and 36.7% of households can be considered poor. Of the latter, 68.7% had recently fallen into poverty due to economic stagnation, lack of employment, and decline in real wages.64 In Chile, poverty may have reached a startling 56% of the population in 1983 and included a whopping 33% classified as indigents. Some researchers have challenged this figure as too high, but almost all studies agree that at the end of the decade it stood well above 40%.65 In Bolivia, despite some improvement over 1977, 64% of all citizens lived below the poverty line and of these 33% survived under conditions of extreme poverty according to data for 1988. In zones such as Potosí near the now defunct mines, poverty reaches 90%.66 Indigenous people make up two-thirds of the country’s poor.67 In Argentina, average monthly wages stood at $205 in May 1989. This figure covered 59% of a family’s basic needs, five years earlier it bought 82% of the same needs. By May 1990 it had shrunk to 46% of basic needs.68 Of course, many households attempt to make up for the loss in real purchasing power by having additional members go to work, one source of the growth of the informal sector discussed earlier.
A corollary to poverty is undernourishment. According to the Food and Agricultural Organization of the United Nations, Chile is the only country to have gone from one which fed its population adequately to one where a significant percentage of its inhabitants are at risk of insufficient caloric intake. In 1969, 47.6% of all homes did not consume an adequate diet, in 1978, 54% and in 1984, 61%.69 The percentage of Chilean households unable to meet established minimum caloric and protein requirements even when allotting all their income to food rose from 6% in 1970, to 23% in 1984, and to 24.7% in 1986.70
Even in a country like Argentina, a major agricultural producer and exporter, food has become increasingly a major expense for those in lower income brackets. The major food riots of 1989 represent one sign of this. Another sign is the sight, witnessed by the author and previously unthinkable in Buenos Aires, of people searching restaurant garbage for food. The national government now gives food handouts to those who cannot afford to buy enough. This program as of 1985 cover 5.5 million out of a population of some 30 million.71
In Bolivia, only extensive United States food aid allows the country to feed itself and one of every eight people received food on dole.72 In part this stems from the coca industry which uses land for leaf instead of food crops, but it also is a product of state subsidies for agricultural export sectors and a declining peasant agriculture which receives little or no official encouragement (e.g. credit, marketing). The country even buys potatoes from neighboring Peru.
Lower incomes or declining resources come at a time for many when state social services are being cut across the board.73 In Chile, for example, social spending per capita in education, health, and housing (already down from 1973) declined by more than 10% after 1982. Or put another way, social spending measured by 1970 standards fell almost 25% for the 1983-85 period. Health outlays went down over 35% per person.74
A few caveats should be made when looking at poverty statistics. Although no one would deny that millions of Latin Americans live without access to basic necessities, measuring poverty proves difficult. Apologists point out, for example, that people’s standards of living have been improving over time, defending the trickle down theory. If one reduces poverty to a purely relative statistic, then the argument holds some truth. Using access to modern conveniences (e.g. radio, TV, or kitchen appliances) or potential educational opportunities as a measure of poverty, for example, then many people appear less poor today than twenty or thirty years ago. First, however, one must define what are necessities or basics in any given time period since these may change. Second, much of the supposed improvement in recent years responds to the fact that substantial numbers of poor have moved from rural areas to urban ones which has led to an easier access to (but not necessarily deliver of) things like electricity or education.75 Third, on a more practical level, researchers have found that many families in poor neighborhoods own electrical appliances or gas stoves but cannot afford to operate them, although in all urban areas considerable pirating of services exists.76 All the above must come under consideration. Looked at in comparative terms and/or measured in basics such as health, housing, education, or nutrition, poverty not only exists everywhere but clearly remains on the rise in Argentina, Bolivia, Chile, and Uruguay. A 1989 United Nations study found that more than half of all Bolivians live in “relative poverty” with insufficient incomes to cover basic needs. A million live in critical poverty, which means if they spent all their income they still could not cover minimal nutritional needs as measured by the United Nations.77
Recent studies of poverty distinguish between “regular” poverty and “extreme” poverty (indigence) as well as between hard core or “historical,” and newer “structural” poverty. One researcher found that in greater Buenos Aires, the newly pauperized outnumbered the structural poor by a 5-2 ratio, clearly reflecting the country’s precipitous downward economic slide of the past decade.78 These distinctions are important because the potential for mobilization by those who have slid down the scale seems far greater than among those who have lived in poverty generation after generation.79 We shall return to this point later.80
The obverse of growing poverty has been income concentration. In Chile, for example, 20% of all homes take in 60.4% of all income, while the lowest 20% receive only 4.2% of the total. In greater Santiago the lowest 40% in income spend only 12.6% of family expenditures.81 In fact, consumption per capita in Chile which increased at an annual rate of 1.5% from 1960-70, fell 1.2% per year from 1974-1987 despite the fact that the country experienced a 2.6% annual economic growth during that same period.82 Between 1978 and 1988 the richest 20% of the population increased its share of national income from 51.9% to 60.4%. At the same time, the poorest quintile saw its percentage fall from 4.6 to 4.2.83 Higher income earners, at the same time, received tax breaks from the state to encourage investment.
Argentina once boasted one of the more egalitarian income distribution patterns in Latin America, primarily due to the fact that the middle sectors had grown considerably. In 1960, the top 10% of income recipients got 39% of GDP, but this changed drastically under policies introduced by military governments. By 1980, that same group claimed 44% of GDP and by 1988, 46%. In Uruguay, while real wages fell, entrepreneurs doubled their monetary intake.84
D. Women and Children
The new social and economic trends have impacted all groups, but perhaps none quite so much as women and children. Women have flowed into the labor force in larger numbers and faster than ever before. This has occurred because families need the income from a second (and often a third and fourth) job and due to the fact that men have lost their employment in large numbers. In emergency situations, women have fairly easy and rapid labor force entry through domestic service. Women also work because they head households with increasing frequency. They make up anywhere from 25-33% of the labor force in the four countries.85
In Uruguay, skilled workers (overwhelmingly men) have emigrated in large numbers. Women in Montevideo, for example, now form 47.8% of the labor force as compared to 33% in 1973. Many of the jobs held by women are low paying, unskilled, and temporary in nature. Females receive salaries about half that of men (ranging from 49-60%) and the jobs they hold often come without benefits or even contracts.86 During 1985, in Montevideo, 76.1% of all women workers held white or blue collar jobs representing 42% of all workers in that category, and 17.5% worked for themselves (40% of the overall total). Women made up 40% of those in manufacturing, concentrated particularly in leather, clothing, and textiles. Women are also heavily represented in service trades such as nursing and teaching. Women work as domestics and do piece work at home which allows them to mind the children and keep the house while making money on the side.87 Unemployment among women ranges consistently higher than that among men by about 50%. The average woman still labors a double shift. Only 35% of women in one sample reported that men helped with household chores, but without specifying an exact division of labor.88 Women make up one stream of those flocking into the informal sector. There they encounter all the same problems as men (low salaries, long hours, lack of market and technical knowledge) but they also find it harder to secure credit or raise capital.89 The situation of women in other countries is similar. Women, particularly lower class women, have only recently begun to organize in meaningful ways.
Obviously, women in more poverty stricken situations have a tougher time. A recent study of slum dwellers in Santiago reveals some of the grim aspects of women’s lives there. Most women married or coupled for purely negative reasons, among them poverty or the social rejection experienced as a single female. Most women exercised little or no control over the choice of family size, although high fecundity is not a survival strategy, but a decided threat to living standards. Women preferred to bear male offspring because they thought women’s role too full of suffering. Few of those interviewed received substantial help in “female” tasks from their husbands. In most cases a traditional division of labor and in authority held sway.90 In Bolivia, street vendors are mainly women and one third of those in La Paz are also heads of households. They often work up to eleven hours a day and then spend five more hours on domestic chores.91 In Chile, women do seasonal work in agriculture as pickers and packers in order to maintain family incomes. Evidence exists that this leads to deterioration of households.92
No less is the plight of children. Given the harsh economic reality many families face, children may go to work in some way or other at a very early age with an adverse impact upon their development and the formal learning process. Since poorer families have more children, the incidence of poverty among children remains higher than that of adults. Mothers in the informal sectors who work out of the home often take their children with them. Families who cannot support their offspring abandon them or they run away from home to escape unbearable material and/or psychological conditions. In most large cities increasing numbers of these homeless children roam the streets surviving as they can, many of them involved in illegal activities. Bolivian estimates run as high as 30,000.93 Infant mortality has risen in many countries. In rural Bolivia it may reach as high as 32% of live births and in the nation as a whole, one child of four dies before reaching its first birthday.94 In Chile, infant mortality has declined during the past decade or so, but less in poorer areas than elsewhere.
Housing forms another problem area for many people. This applies in both rural and urban areas, although the problems vary in each. More people own homes in the countryside but they have access to far fewer services than their urban counterparts. In general, people suffer from overcrowding, a lack of basic necessities, and too few units. Studies have calculated that the Argentine housing deficit (buildings in vital need of repair plus new housing) amounted to anywhere from 1.5 to 2.3 million units in 1987. Another researcher found 28.8% of all housing inadequate. This figure, however, ranges greatly from 4% in the Federal Capital to over 70% in heavily rural Misiones and Chaco provinces.95According to the Camara Argentina de Construcción (the construction industry association and lobbying group), 40% of the population lacks adequate housing.96 In Montevideo, 13.8% of all housing can be classified as deteriorated and 14.6% of homes lack one or more of the basic necessities (e.g. private plumbing). In ten percent of living spaces the inhabitants use every room for sleeping, a good measure of severe overcrowding.97
In Bolivia, about half of the families living in major urban centers do not have their own house and a third live in one room. About 39% of all families with four or more members also make do with a single living space. Further, 25% enjoy no running water and a third no indoor hygienic facilities. A survey done by the National Institute of Statistics in the nine provincial capitals and El Alto (a shantytown abutting La Paz and now one of the country’s largest cities) found that only one in two homes received basic services such as water, light, drainage/sewage systems. This represents, however, Hilton-like luxury when compared to rural areas where fully 85% have no hygienic facilities on the premises and 57% of all housing consists of one room.98 The government has pledged to build 2,500 units in the next three years, while the National Institute of Housing estimates the deficit at 400-500,000 houses.99
The plight of Chileans compares with that of others. There the military has clearly stated that housing belongs to the private sector with minimal state intervention. To quote General Pinochet in 1977, “Housing is a right that is acquired through family effort and savings…it is not the role of the State to build houses, distribute them, or administer a mortgage portfolio.”100 It should therefore come as no surprise that housing, especially for those who cannot afford private financing, leaves much to be desired. A 1988 study estimated that a 1,139,000 unit deficit existed. Building meets only 25% of annual demand and fully 40% of all families need housing, a figure that has doubled during the dictatorship. But shortages are unequal; fully 55% of those in the two lowest income quintiles lack adequate housing, representing 85% of total demand. State-sponsored building does exist, but its quality is suspect. Under Allende the average government-constructed house covered 60 square meters, under Pinochet 24; in the meantime, only a small reduction in family size has occurred. In order to survive many families either take in others or permit them to build some kind of shelter on their lot. These people are known asallegados. According to a Catholic Church organization some 135,000 such families dwell in metropolitan Santiago.101
Another sign showing the deterioration of the quality of life for vast numbers of Latin Americans shows up in a faltering educational system. A whole generation has matured which has received inadequate or no schooling. This, of course, raises serious questions about the characteristics of the labor force in years to come. Or, as some observers have noted, perhaps future Latin American societies will just exclude the bottom 25-40% from the possibility of meaningful employment which requires minimum learned skills, considering that segment too costly to educate. Conversely, a policy of income concentration brings immediate pay-offs in terms of sales, savings, and/or investment.
Several factors lie behind the trends in education. One, governments have reduced expenditures sharply. In Uruguay, for example, real expenditures per pre- and primary school student in the decade after 1973 fell by 27.5%; they declined by 34.2% for secondary schools, by 52.1% for technical education, and a whopping 69.4% for the university system.102 In Chile, per capita educational outlays fell 29% between 1970 and 1986.103 Two, in some countries the decentralization process which forms a part of the neoliberal package has meant that local governments have had to administer to education and pick up more of the tab. These entities often lack preparation for this task. Three, tracking at the lower levels and a severe weeding out of students who go to higher levels (giving advantages to those from better backgrounds) in effect rob universal education of significant meaning. In addition, under hardship conditions the opportunity cost of sending children to any school has become too high for many families since all hands are needed to earn whatever monies they can, to help run what small, domestic or external enterprise a family may engage in to stay alive, or to watch over brothers and sisters while mother works. As a result, despite laws making schooling obligatory for youngsters, the reality often turns out differently. In Bolivia, two thirds of all school age children eventually drop out, with much higher rates for girls and in rural areas.104 In Chile, 287,309 fewer children received primary education in 1987 than in 1973 despite only a 68,944 decrease in the age bracket.105 In all, about 40% of all eligible children do not attend Chilean secondary schools and in rural areas fewer children went to school in 1988 than in 1974.106
In Uruguay, 40% of those in the 15-19 age bracket participate in the labor market and among the lower income groups the figure surpasses 60%. This makes high school education difficult and takes some luster off the fact that only 10% of all children do not attend first grades.107 In Argentina, where rates for access are fairly high (90% for primary school and a third for secondary) only 17.8% make it through secondary education.108 This fact, of course, means that a large number of those workers entering the labor force lack the basic skills needed to perform adequately in the modern sectors of the economy. This forces them to join the informal economy, to take up low paying temporary positions, to remain in unskilled dead end jobs, or else join the reserve army of the unemployed. In fact, an increase in temporary, ill paid labor has been noted across the continent. In Chile, some 400,000 people, half of them women and children earn $2-4 a day working seasonally in the fields. This pattern, in part, responds to shifts in agricultural tenancy (also see below) and employment.109
A further examination of educational systems reveals some additional impacts of neoliberal policy. Schools became a central battleground where military governments sought to impose their ideology. The generals and their bureaucrats formulated programs and mandated course content without consultation. They banned “dangerous” subjects such as sociology, modern psychology, or socio-historical schools considered subversive (e.g. Marxism or progressive Catholic social doctrines). One analyst characterized education under the Argentine military as: elitist, authoritarian, obscurantist, and geared to the quickest pay-off possible.110
In Chile, the dictatorship broke the progressive teachers’ union as a part of its anti-union campaign after the coup, substituting its own creation, El Colegio de Profesores (The College of Professors). It used its power over pension and welfare benefits as well as more direct means such as firings (as many as 30,000 teachers lost their jobs immediately after the coup and many others subsequently received their walking papers), to try and build a corps of teachers subservient to its aims. In the December 1987 elections, the democratic teachers’ slate led by the Christian Democrats just barely nosed out government-sponsored candidates who polled over 30% of the vote.111 Studies done on educational content in Chilean schools indicate an emphasis upon individualism, traditional conservative family values, and, at times, exaggerated nationalistic/militaristic attitudes.112 The fact that over one third of the population supported Pinochet’s candidate in the national elections surely had some relationship to the junta’s school programs which condemned the left.
The universities have experienced similar problems. The military systematically underfunded higher education (in Uruguay, for example, it cut the university budget by almost 70%), leading to severe deficits in physical plant and necessary facilities such as libraries. Enrollments fell drastically due to ideological purges as well as to deteriorating economic situations. In Chile, for example, university attendance dwindles from 145,663 in 1973 to 125,529 in 1988, the latter figure representing about 10.5% of those theoretically eligible and down from 16.4% at the time of the coup.113 Over the life of the dictatorship a deficit of some 300,000 places accumulated. Similar processes took place in other countries. Finally, educational quality and research capacity has suffered due to a desire to produce graduates in fields demanding little infrastructure.114
When elected governments took office, educational policies changed. But several problems persisted. First, formerly excluded as well as new students now crammed into existing spaces and swamped underfinanced systems. In Argentina between 1983-1986 enrollments in higher education climbed by 322,000 students and technical schools gained 57,000 more. Professors I the National University of Buenos Aires found themselves teaching as many as 2,000 registrants in basic courses. Lack of space meant that lectures took place in local theatres. Teachers had no budget for xerox or similar aids. In return, those giving courses received the munificent sum of about $150 a month in a city with prices approaching those found in the United States. Obviously, the quality of education had to suffer. Second, hard pressed national governments could not suddenly turn on the fiscal spigot and channel significant sums to university systems. As a result these have remained severely under-funded. At the primary and secondary levels, problems persist, too. Reformers do not always know the best ways to change the system. In important topics like civics, for example, new programs have not immediately replaced those imposed by the right-wing military.115 In short, everywhere the public education system from top to bottom has yet to recover from military rule.116
Another trend which has impacted education (and other areas as we shall see below) is the move towards privatization and decentralization. In Chile, where the process has progressed farthest, the military gave control over public schools to the municipalities which assumed complete responsibility for hiring and firing as well as spending. In turn, General Pinochet, as head of the ruling junta, appointed all mayors. The junta also placed education partly under the Ministry of Interior, clearly indicating the political nature of its educational policies and creating a double ministerial bureaucracy (Interior and Education) to further confound students and teachers. In turn, the government subsidized local municipios (municipalities), but on an equal basis. This move clearly has a class content in that units with the greatest resources could offer better education.117 One researcher summed it up thusly: “this system legitimizes different levels of quality according to the socio-economic status of the students, better for those who have more, worse for those who have less.”118 Proof of this can be seen in the fact that subsidies have not kept up with costs. This has led to cutting of class hours, reducing the number and scope of courses, the firing of teachers, and even to school closings. Drop out rates have increased over time, particularly in poorer districts, and have reached 10% for primary education (they amount to less than 1% in upper class zones). Similar phenomena exist for secondary education as well.119
Private education has received official encouragement in several countries. To continue with the Chilean case, the government there subsidizes private education so that parents can choose to send their children to these schools. Studies, however, of such institutions indicate that many of them are run purely as businesses, “escuelas-empresas,” and are more concerned with matriculating students and collecting fees than educating them for future life or even preparing them for the next step up the educational ladder.120 By 1988, fully 40% of all children matriculated in subsidized and non-subsidized private education and the figure reached over 50% in Santiago.121 Tests show the class character of the educational system. Children from families in the lowest income decile achieved lower scores on national exams than those in the next decile and 10-12% less than those in the third and fourth deciles from the bottom.122 In mathematics upper income children scored 30% better than those from poorer families. Lower income groups average 5-7 years of schooling while the upper class students get 10-11; the national average is 8.1 years.123
Universities for all their problems still graduate too many students for existing jobs at acceptable levels, particularly in the social sciences and humanities. While huge numbers of students enroll in universities, comparatively few receive degrees each year because they have to work and therefore make slow progress. Those who do, face a frustrating experience of job hunting. This has led, in Argentina at least, to a serious revision of the myth that education provides the key to success. More and more people believe that study does not automatically mean advancement but that either luck, individual connections, or personal hard work provide the keys.124
The theme of privatization/decentralization has acquired importance for other reasons. The governments of all four countries have been engaged in trying to sell of government owned and/or run businesses to private investors, although not without some controversy at home. In part this initiative represents a means to reduce swollen foreign debt by accumulating dollars, but governments also intend to lessen deficits by shucking off money-losing enterprises. In addition, conventional economic wisdom says that the private sector will run these companies much more efficiently than the state has in the past, a claim which rings almost true. A side effect, of course, has been and will be massive layoffs of workers who have passed from the public to the private sector as capitalist “rationalization” takes place after the sale. Conveniently, governments use existing labor law or are changing it to make paring of work forces easier in both private and public sectors. In addition, the long-range costs of foreign ownership must be weighed against immediate benefits, nor should we ignore nationalists’ warnings about loss of control over key sectors of the economy (e.g. communications, transportation, energy).125
But powerful supporters of these policies exist. President Menem’s restructuring policies have been dubbed “menemtroika” and the Wall Street Journal recently called him the Gorbachev of Argentina (presumably because both are dismantling “socialism”!).126 His program includes selling off the national telephone system (60% to foreign companies and the remainder floated publicly) and the state airlines (85% to foreigners) as well as leasing to foreign corporations vast acreage once reserved for the state oil monopoly. The government also plans to sell to private investors significant trackage belonging to the national railway system, the subway system, the capital’s electric utility, and the gas system. It has also divested itself of some stretches of highway. These moves would, among other things, reduce the $5.2 billion annual deficit that the state sector generates and lower the nation’s external debt by at least 8.1%, according to government calculations.127 Presumably the sales of other state entities will follow. Menem recently put in place sweeping deregulation measures, dismantling the majority of Argentina’s tariffs and price controls. He has announced plans for firing some 130,000 government workers and so far has refused to enforce worker protection clauses benefiting fired workers in the private sector.128
In Uruguay, President Luis Alberto Lacalle has put forward a plan to privatize the fishing industry, the state airlines, the portworks, and the telecommunications system as well as other lesser state-owned businesses. Twenty percent of those employed work for the state (including half the country’s unionists), so Lacalle’s plans carry considerable potential for social disruption should wholesale rationalization of workers occur after those sales.129 In September 1991, the congress authorized the sale of the airlines (PLUNA), and telecommunications administration (ANTEL), the gas company, and the Montevideo portworks after a year of partisan wrangling with only the minority leftist coalition, the Broad Front (Frente Amplio) opposing the measure.130
Privatization also proceeds apace in Bolivia where the current government has indicated its intention to try and sell interest in that nation’s 159 public companies which include the railway network, the electric corporation, the airline (Lloyd), mines (COMIBOL), and national oil company (YPFB). There, too, popular opinion has voiced itself against such moves.131 In Chile, the Pinochet regime sold off many state corporations before it left office, a great number of them at bargain basement prices and to a small circle of business people, army men, or relatives of officials. The Chilean development corporation (CORFO) owned 460 enterprises and 19 banks in the mid-1970s, but by the 1980s this had shrunk to a mere two dozen companies.132
The United States government encourages privatization. On June 27, 1990 President Bush announced the “Enterprise for the Americas Initiative” designed to “forge a genuine partnership of free market reform to promote economic growth and political stability in Latin America and the Caribbean.”133 It proposes the establishment of an Enterprise for the Americas Fund at the Inter-American Development Bank (IDB), to which the United States would contribute $100 million annually for five years. Other countries would also donate money. The fund would make seed grants to local entrepreneurs and foreign investors in countries that privatize government owned assets and industries. The IDB would undertake a lending program for nations that take significant steps to remove barriers to international investment. In addition an Enterprise for the Americas Facility would administer debt reduction for nations meeting investment reform and other policy conditions. To qualify, countries would need: an IMF program or an equivalent in place, a World Bank structured or sectoral adjustment loan if appropriate, have implemented major investment reforms in conjunction with an IDB loan or more liberal investment rules, and have negotiated satisfactory financing programs with commercial banks. In sum, recipients must adhere unconditionally to the “export growth to pay for debt” economic model and open their countries for greater foreign investment. Qualifying nations would also receive some debt reduction on AID or PL480 (Food For Peace) obligations as well as reductions of Eximbank and Commodity Credit Corporation debts. But these would be made solely to facilitate debt-for-equity or debt-for-nature swaps. In theory, these programs could result in the cancellation of some $12 billion owed to the United States Treasury.134
Decentralization, the process of placing more control in the hands of local governments, results in substantial pressures upon municipal governments which have neither the resources nor the trained personnel to cope with the tasks government has just dropped in their laps. All of a sudden, municipalities are being asked to oversee housing, transit, water systems, pavementing, health, education, and tourism, almost always without adequate resources to do so, despite some heavy state subsidies. One response has been that municipalities raise fees for services which cuts of the poorer people from them. As in the inner cities in the United States, however, people pirate services when they can.135
In Chile, for example, space has assumed a highly charged classist nature, leading some to claim that the junta practiced “class apartheid.” During its reign the military systematically funneled poorer settlers into designated areas, most of them far (5-15 kilometers) from the city center in a process of forced, but legal, decentralization. It uprooted settlements adjacent to upper class residential neighborhoods, allowing these to spread their bases as well as isolating them from unsightly poverty and the “great unwashed.” Upper class zones have their own shopping centers (offices too are increasingly located there) and are pretty much self-contained entities. This segregation, given that municipalities must bear more of the burden, further accentuates class differences. In Santiago, the richest municipal district (comuna) spent $85 per inhabitant while the poorest one spent less than $4. Over half those dwelling in the latter represented persons relocated in previous years.136 Distance means heavier transport costs and more time spent in commuting to work. As a result, people on starvation budgets cannot accept certain low paying jobs due to the extra travel expense. Not all poorer urban dwellers live far away from the center. In the case of Montevideo, for example, substantial pockets of poverty exist near central downtown but a process of socio-economic segregation has taken place.137
NEW SOCIAL MOVEMENTS
The decentralization process goes hand in hand with growing organization and protests at the local level. As in the rest of Latin America, the emergence of new social movements marked the 1970s and 1980s in Argentina, Chile, and Uruguay.138 This happened among urban shantytown groups and in poorer areas of large cities as well as among rural dwellers for several reasons. One, people shoved out of or who never joined the formal economy or who had lost or never made contact with institutions such as unions or political parties that could channel their grievances, participated in these movements as a means to express their needs. Second, isolation, both physical and economic, in shantytowns and poorer areas led to local organization as people began to invent responses to their new circumstances and search for alternative means of survival. Many of the new movements remained neighborhood-based, although some spread over particular zones or even had citywide ramifications. Attempts to form national coalitions almost always failed or had very limited success. Three, during the initial stages of the military dictatorships many of the institutions which had worked among the poor stopped functioning or cut back substantially. Some did so because the military prevented their representatives (often by the use of violence such as temporary or not-so-temporary disappearings, i.e. kidnapping) from contacts because it saw them as “subversive.” Other entities no longer had the resources to operate effectively. Still others, as in the case of progressive political parties, ceased to exist legally and thus could only operate with great risk and difficulty. The new social movements filled resulting vacuums. It should be noted, however, that many of these groups received important, sometimes vital, help from a whole range of Non-Governmental Organizations (NGOs) funded by the Catholic Church and/or a host of foreign donors, some church connected and some not. Fourth, people quickly learned that contacts with progressive political elements often brought repression and this led them to organize independently from the parties. Sometimes, in fact, neighborhood or shantytown groups actively rejected the presence of political activists out of fear from the potential consequences.139
At the local level these efforts included, among many others, soup kitchens (ollas comunes); credit and buying cooperatives; communal gardens; improvement organizations of various kinds concentrating upon issues ranging from housing to sewage; tenants’ groups; family or neighborhood run artesanal shops; health groups; housing organizations; children’s breakfast programs and/or day care centers, and small businesses based n the barrio. They also have included specialized organizations such as women’s or youth groups.140 Sometimes, as movements local in origin and local in character, and rarely associated with a larger political cause, they focused on immediate demands at the neighborhood level. Municipalities in many cases became targets of protest, but almost always proved unable to respond adequately, if at all. This process often led to alienation of citizens from local government. Meanwhile, the real centers of political power at the national level sometimes escaped direct fire.141
Not all of these organizations, however, focused purely on local themes. In Chile, particularly in the 1980s where the strongest grassroots social movements developed among the countries under consideration, shantytown dwellers organized against the dictatorship, and often bore the brunt of brutal retaliation. Many organizations originally had links to political movements, but the connection between these protests and political parties remains controversial, although it is safe to say that in many cases slum dwellers rejected the “leadership” of people who came from the outside and proceeded to tell them what to do and then retired to their middle class homes far away.142 Current testimony shows that many dwellers in poor areas resented what they called paternalistic efforts by outsiders and voiced the feeling that they had only received limited amounts of knowledge or acquired partial skills but not in sufficient quantities to operate independently. To quote one woman, “they give us wings but they cut off our wingtips.”143 In other words, real empowerment did not occur.
In Chile, some 2,500 self-help economic organizations existed by 1989 and perhaps 15%-20% of all shantytown dwellers participated in one or another type of organization. Attempts at coordinating these groups at the national level, however, failed to produce a vibrant or vital coordinating body.144 The exact role of these organizations after the transition period initiated in 1990 has not yet been fully resolved. The question stays open: will they again become subordinated or heavily influenced by political parties or will they evolve an independent life of their own capable of some kind of input at the national level? Relationships between them and the government remain complicated. Nor is it clear what role the NGOs which provided a lot of support for these organizations during the difficult years of the dictatorship will play now, especially in view of the complicated government-foreign donors-grassroots organizations-NGO quadrangle.145
Environmental issues have received increased attention in many Latin American countries. While the question of the systematic destruction of the Amazon Basin gets most of the headlines due to its magnitude and importance, similar controversies rage elsewhere. Environmental and ecological movements are alive and well and governments increasingly acknowledge their petitions in addition to concerns of international groups such as Save the Earth or Greenpeace. These concerns are just beginning to shove onto the national agenda in Uruguay and Argentina.146 In Chile, on the contrary, they have already reached the boiling point. The dictatorship legislated loose or no environmental standards in order to attract foreign companies to exploit natural resources or to allow local capital to compete better on international export markets. The issue became particularly sensitive because of the economy’s dependency on the export of copper, forest products, fruit, and fish exports. Each area raises environmentally sensitive issues. And these are hard to ignore. Chile’s fishing industry currently is suffering from a reduced catch (down 16% in 1989) because of overfishing and water pollution. The latter ironically results largely from mining run-offs and the use of pesticides in agriculture which seep into rivers and thence into the sea. Similarly, Chilean lumber and agricultural products have experienced difficulty in external markets because sometimes they have failed to meet even the minimal safety requirements laid down by international agreements. The over-use of pesticides on fruit, which recently resulted in a temporary suspension of grape exports to the United States, is an example.
The growing drive for some kind of legislation to protect the environment has met, oddly enough, little opposition from the TNCs who dominate much of the export sector. Why? Not because they want to increase expenses, but because they have been forced to take such stands in order to meet international pesticide standards, weak as these may be. TNCs, therefore, would not overly object to the state legislating industry regulation that would apply to all, thus equalizing costs. Local growers, in the meantime, do not wish such legislation and fear it would undermine their competitive position as smaller producers, a position already under pressure from larger, mostly foreign, firms. In many cases they prefer outright violation of international standards and the risk of confiscation of their exports.147
The present Chilean government seems committed to the formulation of policies that will both protect the environment and continue to promote economic growth. Some Green groups challenge the assumptions behind this. They see a fundamental contradiction between capitalism and a whole earth policy. Environmentalism constitutes one major area in which policies set under the military governments in the 1970s may first get seriously challenged and could undergo substantial modification.
Governments in other Southern South American countries have shown some interest in taking at least preliminary steps toward protecting natural resources and the environment. Pushed by world opinion, the IMF and World Bank, both major lenders to Latin America, recently announced the founding of a Global Environment Facility or Green Fund. Its $1.2 billion would go for loans to projects which protect the environment. Critics have called this “greenwash.” They ask why the agencies do not use their $22 billion lending capacity instead and make all their loans environmentally conscious. To date none of the countries under consideration have received funds from this source, but those trying to clean up the Patagonian Coast from repeated oil spills and to save its unique whale and penguin populations, for example, have applied to international agencies for money.148
Debt-for-nature swaps, once trendy on the international scene, have lost some headway very recently. The basic point remains, however, that environmental damages stemming from the colonial period, and exacerbated under the impact of neoliberal economic policies, have reached crisis proportions from the point of view of people, as well as that of general animal and vegetable life in many areas.149 Can the new governments undo the policies of their predecessors? Doubtful. Certainly, they can pass new legislation that would protect the environment more than at the present time, but funds for massive clean ups or clean industry do not exist. Nor are foreign investors interested in putting funds into countries which have passed legislation which restricts severely their rights to pollute. The New York Times said it all by citing a Chilean report as admitting that, “the economic growth of Chile has taken place at the expense of the environment. You can say that the so-called export ‘boom’ was based on the use and abuse of natural resources, permitting the degradation of the eco-systems greater than their ability to regenerate.”150
Given the picture painted above, what does the future hold in store for these four countries, and, if they are typical, for Latin America? What perspectives exist for those seeking to remedy the injustices that abound within these and other Latin American societies? In general, short run answers are not encouraging. On the political level, left and left-of-center parties are just beginning to recover from years of repression or else the left has still not revived. In Argentina, it remains almost nonexistent as an independent force or within the larger Peronist movement which at one point contained a vibrant, left nationalist wing. Progressives within Peronism entertained hopes of staging a comeback after the election of Menem, but he quickly moved right and excluded them from power. As of 1991, no left political movement of national significance has emerged.
The centrist coalition of sixteen parties led by the Christian Democrats which took office during spring 1990 in Chile, still enjoys a honeymoon period, but the menacing presence of the military clearly limits its ability to act. So does the fact the due to manipulation by the out-going dictatorship (including senators appointed by Pinochet), although the coalition gained a solid electoral majority, it won only a minority of Senate seats. As a result, that body can block any legislation that the government may propose. Just how it can fulfill its electoral pledges which call for greater social equity, sound environmental policies, and political democracy, remains unclear even more than a year after the inauguration. Some evidence has surfaced that people who took government positions because they felt that they could make a difference are becoming disillusioned and wish to return to private life which includes NGOs from when they came, although no conclusive trends have emerged.151 The progressive parties within the coalition (e.g. the Socialists) and those outside it, seem to have few chances of making their influence immediately felt in any meaningful way at the national level. The recent disintegration of the Communist Party which for years played a major political role leaves a large vacuum, but just what will fill it remains still unclear. (See below for more on this point.)
In Bolivia, popular forces also find themselves in check at this time. No significant national, broad-based leftist party exists, although significant mass mobilization against regressive government policies has continued by both urban and rural groups. New political forces have appeared outside of traditional frameworks with a populist bent and which appeal directly to poorer groups in Bolivian society, but it is too early to tell what role they will play ultimately on the national scene.152
Perhaps Uruguay represents the exception which proves the rule. The Frente Amplio, a Broad coalition of progressive groups, lost the recent national elections but managed to win the mayoralty of Montevideo (Intendente), the fourth most important post in the country (the commander in chief of the armed forces, the United States ambassador, and the country’s president rank ahead -but not necessarily in that order). In addition, the Frente won 22% of the congressional seats. It is now positioned to increase that total in the future, provided it can efficiently govern the capital city in the next years. Recent polls indicate the Frente could finish first in the next national elections. It almost assuredly would not win a majority, however, which means that it could then lose a runoff election to a united ticket of the two major traditional parties which for all practical purposes divide the rest of the vote. Significantly, the Frente has tried to work with grassroots organizations inside the capital and become sensitive to their needs, not just its own national agenda. It also seeks to broaden its appeal to those in the countryside, including property owners, a strategy which appears necessary for it to triumph.
If political parties do not appear poised to lead, what about other social forces? One traditional source of opposition to elite-imposed policies has been the working class and its institutional expression, the labor movement. Workers still confront these policies, but they do not possess the clout that they once wielded. Structural weaknesses haunt organized labor. First, neoliberal policies put in place during the past ten years have taken their toll on labor and working class militancy, although outright attempts by military governments to subordinate totally the unions clearly failed. Further, labor has traditionally maintained close ties with political parties and the weakening of these has also hurt its ability to make itself heard at the top. Although in the long run this distancing may lead to a more independent and ultimately more healthy, viable workers’ movement, in the short run it hurts unions’ ability to negotiate at the national level. Second, the ranks of the organized, in relative and sometimes absolute terms, have been getting thinner. The Bolivian movement and its heart the COB (Confederación Obrera Boliviana), for example, suffered a severe blow in the 1985 “white massacre” (a part of the Sachs plan) in which only 7,125 of the 30,518 employees of the state mining corporation (COMIBOL) kept their jobs.153 Third, levels of unionization have declined and some of the newer dynamic growth sectors are barely unionized or not unionized at all. Organizing some TNCs successfully has proven difficult. Public sector white collar workers practically represent the last bastion of solid unionization, but they too have suffered both from a reduction in forces and from more stringent labor legislation. Almost 45,000 public sector workers lost their jobs in Bolivia from 1985 to 1988, resulting in a decrease of 12.5% in that sector.154 Fourth, employers have developed more sophisticated tactics to frustrate unions, often aided by labor legislation passed by the military and still on the books. Company unions or individual unit bargaining have become more common. The TNCs, in particular, have learned that the trade-off, higher pay for labor peace, makes good business if it holds down current demands and results in a disciplined work force, although the long term success of this strategy can hardly be assured.155
In specific terms the union picture seems mixed. Peronist unions, for example, while opposing standardized economic plans which call for wage compression and layoffs, have not developed a comprehensive socio-economic plan other than one in which they receive a higher share of the wealth, the state maintains an important role, and stricter controls reign over foreign capital. In Uruguay, the CNT-PIT (the country’s most important labor organization) has revived since the advent of elected governments but still has not recovered its former power.
It seems a bit too early, however, to totally count out organized labor as an important player in the game. In Chile, the two Socialist Party lists garnered 37.5% of the vote in recent union elections. Despite seventeen years of illegality, Communist Party slates won 25.6%, which meant that the left still commanded the loyalty of 63% of organized workers. Even considering those changes that have been made in Pinochet’s highly restrictive labor laws under the new government, organized workers face a tough struggle to claim a fair share of the pie or even increase the meager slice they get now. They work in several key sectors of the economy (e.g. copper mines, ports), however, which still means that they represent a force with which capital and politicians must reckon.156
Somewhat similar is the situation in Bolivia. The COB, once at the center of class struggle, has recently undergone significant changes. Its blue collar and government worker white collar constituency has declined while its peasant and informal components have increased. This has had a significant impact upon the organization’s strategy and tactics, but the long range impact remains unclear.157 It is still too early to tell what effect privatization will have upon unions and, in places like Chile, too soon to see how the relations between labor, the government, and political parties will work out. Clearly, however, the whole questions of just how organized labor (and of workers and peasants, formals and informals) fit into national society needs drastic rethinking. Whatever else, we can safely say that things will never return to where they stood during the heyday of organized labor.
If political parties and the labor movement do not by themselves constitute forces for change, what about those outside of or excluded from the traditional labor market? Here the evidence seems less clear. The poor or informals, for example, organize for the most part not as an overt political act (in fact, they may actively shun politics in the traditional sense) but because they have to survive. Exceptions of this exist particularly in Bolivia where street vendors have organized into associations or unions. The flower sellers, for example, almost all of them women, formed a combative union some time ago.
Local and neighborhood movements display similar characteristics. For the most part, particularly under repressive conditions, outside agencies or groups provide inputs. Some of these entities may be: the Catholic Church or a Catholic oriented group; another religious entity (e.g. an evangelical sect); one of a host of NGOs; or political groups, etc. The nature of this contact may vary from manipulation to paternalism, from clientelistic to egalitarian relationships, but studies have conclusively shown its importance for the immediate survival of local level entities. Too often when the outside agency pulls out or is prevented from participating, the enterprise in question falls apart.158 On the other hand, some of these groups clearly have a life of their own and have managed to exist with little or no outside interference. The whole question of the relationship of external forces to grassroots movements seems a key one in terms to determining future trends.
Seldom do community-based groups, however, turn to political action beyond immediate and very local goals. Many are single issue oriented. Poverty, at least according to existing evidence, does not constitute a source of demands for revolutionary transformation. On the other hand, the record clearly shows that poverty does not constitute a hopeless state into which people sink never to arise.159 The very fact that some neighborhood groups place demands upon the system means that they are political. Demonstrations for better housing, cheaper electricity, or sewer installation sooner or later must translate into a political agenda in order to have any chance of success. Surely some political parties will attempt to channel these demands for their own purposes or temporarily champion the cause hoping to capture blocs of votes. This raises a whole host of questions around the nature of the relationship of parties to popular organizations.
The problem, however, appears more complicated than simply one of organizing people or of people organizing to act on their own behalf. Years of military rule marked by repression have taken a heavy psychological (as well as physical) toll. Although probably the most extreme example, the Chilean case can provide an illustration. Research among shantytown dwellers has shown them very wary of any acts that might cause them trouble. The cult of individualism pushed by the military government on several levels, combined with real experiences of friends and relatives, has left a mark. One researcher concluded: “To be political is for many shantytown dwellers the same as being a devil. To work combining forces with others makes one a communist. To be a communist is illegal. To ask for one’s rights is equivalent of going against the government. If anyone goes against the government they will be repressed.”160 People think that survival means to fall back upon one’s own personal resources. Even those who do join in cooperatives and collective work express fears. Another report found that women often had only one female friend whom they trusted and that they refused to get involved with anyone else or in any organization. Reciprocity, for example, represents a form of social security for the poor but it operates on an individual level. Many people though that repression came about because of activist neighbors, not due to any attitude on the part of the authorities.161 And we should remember that maybe only 15%-20% of shantytown dwellers belonged to some kind of local organizations during the military period, which means that 80%-85% did not.
On the other hand, people who have worked with those who live in poorer areas argue that the presence of political people formed a crucial variable between neighborhoods which organized and those which remained mired in hopeless passivity.162 A number of observers have argued that the grassroots movements of the past fifteen years could possibly form the basis for a new democracy, at least if they can remain independent of political parties and government bureaucrats and at the same time gain legitimacy to break the socioeconomic exclusion imposed during the military years. This, of course, poses a crucial distinction. That is, there is a critical difference between participatory democracy in the workplace, neighborhood, or home and a tutelary, restrictive, and top-down “democracy” that is led by the government or the middle-class cadres of political parties or that is inspired by the foreign-funded and/or religiously-oriented organizations and program.163 I do not wish to argue, as it may seem from above, that by definition parties, government entities, or NGOs have to act in a self-serving manner, but that danger remains real and recent history serves as a guide.
In addition, a variety of interests are represented inside the popular forces. These range from those employed in the traditional sector (in turn divided into white and blue collar workers, state and private workers), informals, unemployed, lumpenproletariat, women, etc. Getting them to act together may prove difficult even without the presence of competing political ideologies. How they could demand a hearing at the national level, without organizing into a new political party or joining an old one, remains very problematical.
So, what are the prospects for those committed to social justice and seeking more egalitarian societies? On the positive side, first steps have been taken in that political democracy, fragile as it may be, has now become the norm across the continent. This will at least give forces committed to social and economic as well as political democracy an, albeit temporary and small, breathing space. But, having achieved the latter, how can these societies arrive at the former? This frames the question for the 1990s. The dominant elites which continue to hold ultimate economic power, backed by and in league with foreign capital, have little or no interest in basic social changes which can only harm their short-term interests. As a result, any process will take place only with difficulty and, in the absence of militant and well-organized national movements, progress can only come slowly.
An important test for the immediate future will occur in Chile. The economy has experienced real growth of over 6% for the last six years. The new, democratic government plans to sustain this rate of expansion by maintaining the liberal foreign investment law (Decree Law 600) of the Pinochet dictatorship which guarantees favorable taxation, liberal rates of profit expatriation, and broad legal protection. It expects almost $20 billion of foreign investment in the next five years, a substantial increase over past years. In 1991, it attracted $3.39 billion from over 54 foreign countries, the largest sums coming from the United States, Japan, Finland, and Australia. About 68% of this investment went into the mining sector. The five year figure obviously assumes an expanding world economy. But, with recession rather than expansion looming or under way in Europe, the United States, and Japan, as well as a strong competition for investment capital coming from Eastern Europe and China, one can only view these assumptions as highly optimistic. So far, however, Chile has been relatively successful in attracting foreign capital, no doubt due to its solid commitment to continue the Pinochet economic plan. Returns on foreign investment, moreover, have exceeded 30% annually over the past six years, a powerful incentive. Whether this influx of capital will translate in the short or long-term into greater wealth or social equality for all Chileans remains highly questionable.164
Chile’s favorable economic macro-environment, an exception in Latin America, has been based upon increasing exports in four areas: minerals, primarily copper whose price has appreciated substantially this past year; forestry products; agriculture, in large part fruits (Chile supplies 80% of all table grapes to the United States and Northern Europe); and fishing. Although transnationals have played a significant role in this expansion, local capital has also benefited. The cases of medium agricultural producers or larger size forestry companies are examples. The cost of this state-encouraged export growth, as we have seen however, has been high for those shunted aside.
The new government plans to maintain the basic features of the previous regime’s economic plan which has brought relative economic stability (i.e. low inflation) and increasing foreign investment. At the same time, it hopes to diversify its markets beyond the traditional United States/European partners. It claims, however, that by introducing new social policies it can bring relief to the poor and substantially equalize incomes and opportunities. It further says that it can accomplish this, everything else being equal, without disturbing the rhythm of economic growth.165 It plans to double outlays for education, health, and housing over the next four years. These figures, although insufficient in the long haul, represent a good start towards remedying existing inequalities, depending upon their realization and, importantly, upon effective delivery to those in need.166
Critics of the government maintain that the inherent contradictions between the people’s welfare and that of big capital make such a balancing act improbable if not impossible. Nor is history on the government’s side: nowhere in post World War II Latin America -from Arbenz and Arevalo to Allende- has a comprehensive program of social and economic reform been implemented without meeting the determined opposition, usually fatal, of local elites and foreign capital, and therefore eventually the army. Given the composition of the present Chilean government, changes may prove largely cosmetic rather than basic, but only time will tell. Merely providing government subsidies and meliorative programs will not prove sufficient for ultimate solutions to the existing and, up to now, increasing inequalities within Chilean society.167
One thing, however, becomes clear when looking at the contemporary scene. Given present social structures, the forces assigned revolutionary roles under traditional analyses no longer appear strong enough by themselves to successfully carry out that task by ballot, much less by bullet. If they are to complete their historical agenda, they must find a way to ally with other groups. At this point, that particular task seems difficult at best, and the pitfalls of popular front type strategies have been demonstrated in other contexts. Political movements involving people with a variety of experiences and relationships to the dominant system are difficult to coordinate. Those involving poorly or recently organized, let alone institutionalized, groups appear at even greater risk. On the other hand, given the degree of class polarization and its likely deepening in the future, the possibility for unity among the oppressed, at least on a subjective level, grows ever greater. Decentralization, for example, should breed greater participation at the local levels which might form the basis for concerted political action at the national level at some future time.168
In the intermediate run, the role of the middle sectors could loom large. If these groups can be successfully accommodated within the emerging economies of the 1990s, it then becomes feasible to project electoral and socio-economic coalitions that could maintain at least a fictive democracy. The “have-nots” could be effectively neutralized by several means: legal discrimination such as literacy tests, or a lack of political representation among available candidates, although campaign rhetoric will always appeal to the masses. People can then vote for “their” candidates, each representing a different version of status quo. In Argentina, the people elected a “Peronist” candidate and found that he represented something else. In Peru they rejected the white, elitist, US supported candidate only to find out that the people’s choice, in this case Alberto Fujimori, decreed an economic shock treatment far more severe than his rival had projected.
Coalitions based on the elites and middle sectors could maintain an electoral majority and, when necessary, a hard line rule over the 25-40% of the population abandoned by the system. If, as appears the case in several countries, the middle groups cannot climb aboard the luxury liner, but are left in its wake, they then might provide resources and leadership for the disadvantaged at least in the first stages of anti-status quo social movements. This scenario has occurred in other situations both in Latin America and elsewhere in the Third World. Yet, a fundamental contradiction remains between poor, shantytown “clienteles’ and middle sector politicians or do-gooders.
Looked at within a longer range context, however, the panorama changes. Given the staggering social and economic problems that exist in the countries of Southern South America and Latin America as a whole (and which seem to be getting worse) along with the well-documented rapacity of international bankers and capital, the chances appear slim that the system can pay off both international creditors, foreign investors, local dependent elites, and the middle sectors, not to mention providing anything meaningful for the rest of society.
- Many of the ideas for this monograph developed as a result of Latin American trips in May-June 1990 and August 1991, first as a part of a team evaluating the Latin American Programme of the Swedish Agency for Research Cooperation with Developing Countries (SAREC) and then as a co-evaluator of that Agency’s Women’s Research Program. A significant percentage of the publications cited are a product of SAREC-funded research centers. See Hobart A. Spalding, Barbara Stallings, John Weeks, SAREC’s Latin American Programme, An Evaluation 1990 (NACLA, New York, 1990). return to text
- The author would like to thank the editors of Latin American Issues, Mark Fried and Rob Saute of NACLA, and his colleagues Philip Dawson and Myrna Rodriguez for their valuable comments on the first draft. return to text
- See, for example, the material on Bolivia in Catharine M. Conaghan, James M. Malloy, and Luis A. Abugattas, “Business and the ‘Boys’: The Politics of Neoliberalism in the Central Andes” in Latin American Research Review, Vol. XXV, No. 2, 1990, 3-30. One can argue that some of the trends considered started in Argentina during the late 1960’s. return to text
- Malloy argues the Bolivian case convincingly in Conaghan, et al.; for frustrated neoliberal plans in Argentina see William C. Smith, “Notes on the Political Economy of Alfonsinismo,” a paper prepared for the XV International Congress of the Latin American Studies Association, Miami, December 4-6, 1989. return to text
- See Conaghan et al. and Jeffrey D. Sachs, ed., Developing Country Debt and the World Economy (University of Chicago Press, Chicago, 1989), esp., Chapter 3. return to text
- See, for example, the discussion in Arthur J. Mann and Manuel Pastor, Jr., “Heterodox Policies in Peru and Bolivia: 1985-1988,” paper given at the XV International Congress of the Latin American Studies Association, Miami, December 4-6, 1989. The quote is on p. 25. Dr. Mann served as Director of the Harvard Institute for International Development project in Bolivia’s Ministry of Planning and as a consultant to the World Bank-financed project in Bolivia’s Ministry of Finance. return to text
- In 1963 the combined British and United States operations against the freely elected government of Dr. Cheddi Jagan in Guyana which undermined his authority and eventually drove him from office, represent the first of the long line of post-1960 forceful interventions by the United States. At about that same time, the United States began to conspire against President Juan Bosch in the Dominican Republic which would result in his overthrow in the Fall of 1963 and eventually in the invasion of 1965.return to text
- Alejandro Portes, “Latin American Urbanization During the Years of Crisis” in Latin American Research Review, Vol. XXIV, No. 3 (1989), 9-10. return to text
- Among others on the 1970’s see Cheryl Payer, The World Bank: A Critical Analysis (Monthly Review, New York, 1982) and The Debt Trap: The International Monetary Fund and the Third World (Monthly Review, New York, 1974); on the 1980’s Jackie Roddick, The Dance of the Millions. Latin America and the Debt Crisis (Latin America Bureau, London, 1988). Sue Branford and Bernardo Kucinski, (Latin America Bureau, London, 1988). Sue Branford and Bernardo Kucinski, The Debt Squads. The US, the Banks, and Latin America (Zed Books, London, 1988), or “Debt and the World Economic System” an issue of Latin American Perspectives, Vol. 16, No. 1, Winter 1989. Also Sachs, ed. return to text
- Comisión Económica Para América Latina (CEPAL), Balance preliminar de la economía de América Latina y el Caribe, 1989 (Santiago, Chile, 1990) and Banco Mundial, Informe sobre el desarrollo mundial (Washington, DC, 1990). return to text
- Cono Sur (Santiago), Vol. IX, No. 3 (Mayo-Junio, 1990). 11. return to text
- CEPAL, Balance, and Organización Regional Interamericana de Trabajo (ORIT), Desafío del cambio. Nuevos rumbos del sindicalismo (Nueva Sociedad, Caracas, 1989). 19. return to text
- For example, see Council on Hemispheric Affairs (hereafter (COHA). Washington Report on the Hemisphere, Vol. 11, No. 4, November 14, 1990, 8. return to text
- June 17, 1990, 3. return to text
- COHA, Washing Report on the Hemisphere, Vol. 11, No. 1, October 8, 1990, 7. The constitutionality of this decree has come under some question, but it has not been overturned. return to text
- Andean Newsletter, No. 47, October 9, 1990, 2. return to text
- James Petras, “El ‘milagro economico’ chileno: Crítica empírica” in Nuevo Sociedad, Mayo-Junio 1991, 154. return to text
- On this theme Spalding et al. Also see Paulo J. Krichke, “Chile Reinvents Democracy” in Latin American Research Review, Vol. XXV, No. 3, 1990, 21-35 which analyzes five books published by FLASCO-Chile on democratization. Some thoughts on this theme for Uruguay are contained in Gerónimo de Sierra, comp., Hacia donde va el estado uruguayo? Concentración de poder y democracia (Fundación de Cultura Universitaria/CIEDUR, Montevideo, 1987), and José Luis Castagnola and Gerónimo de Sierra, La democratización y el debate sobre la modernazación (CIEDUR/CLAEH, Montevideo, 1989). return to text
- See, for example, Maria Elena Cruz, “La experiencia neoliberal en la agricultura chilena, sus exitos y su pobreza.” Series, Apuntes de Trabajo, No. 7, Grupo de Investigaciones Agrarias (GIA), Santiago, 1988, 12-32. return to text
- Linda Farthing, “The New Underground” in NACLA Report on the Americas. “Bolivia: The Poverty of Progress.” Vol. XXV, No 1, July 1991, 17-18. return to text
- Confederación General Económica de la Republica Argentina (hereafter CGE), Estrategia para el crecimiento con equidad, 1990-1995 (Instituto de Investigaciones Económicas, Buenow Aires, 1989), 180 and Smith “Notes on the Political Economy of Alfonsinismo,” 41. return to text
- Lois Hecht Oppenheim “Introduction” to issue on “Military Rule and the Struggle for Democracy in Chile,” Latin American Perspectives, Issue 68, Vol. 18, No. 1, Winter 1991, 7-8: and Petras, “El Milagro Económico,” 148. return to text
- See “Latin Debt Grew in ’89” in The New York Times, August 31, 1990, C8. return to text
- Carlos Diaz de la Guardia, “Crisis y ajuste de la economía boliviana” in Cono Sur (FLASCO-Chile). Vol. VIII, No. 6, November-December 1989, 13. return to text
- The Wall Street Journal, November 8, 1990, A21. return to text
- Petras, “El Milagro Económico,” 149-150. return to text
- Chilean debt paper stood at over $.80 and that of Argentina at almost $.40 as of Fall 1991, but both are extremely volatile. Quotations are available, for example, inBaron’s Weekly. return to text
- Inter-American Development Bank, Economic and Social Progress Report in Latin America. 1990 Report (Distributed for the Inter-American Development Bank by the Johns Hopkins University Press. Washington, D.C., 1990), 60. return to text
- Mann and Pastor, 23. return to text
- Petras, “El Milagro Económico,” 147. return to text
- Portes, “Latin American Urbanization,” 26-27. return to text
- ORIT, Desafío, 59. return to text
- Ibid., 56. return to text
- Quoted in Ecumenical Committee on the Andes, Andean Focus, Vol. VII, No. 4, October 1990, 6. return to text
- Susana Donos de Baixeras, Teresa Delfin de Canedo, Gilmar Torrez Riorilo, responsables, “La pobreza en bolivia,” mimeo (Proyecto PNUD RLA/86/004, La Paz, Junio 1990). Tomo I, 40-41ff. return to text
- Ecumenical Committee on the Andes, Andean Focus, Vol. VII, No. 4, October 1990, 6. According to NACLA the street vendors’ union in Bolivia counts on 80,000 members, see “Bolivia: Poverty of Progress” in NACLA Report on the Americas, Vol. XXV, No. 1, July 1991, 9. return to text
- Farthing, “The New Underground,” 22. return to text
- CEPAL, Balance. return to text
- Eduardo Helguera, “Argentina Casts a Vote for Freedom” in The Wall Street Journal, October 26, 1990, A15 citing the Institute for Contemporary Studies. return to text
- First published in 1989 in Spanish, the English version is put out by Harper and Row, New York, 1990. It contains a forward by Mario Vargas Llosa, the losing presidential candidate in Peru in 1990, backed by the United States and the local conservatives. The inside cover contains quotes of praise by George Bush, Richard Nixon, and Zbigniew Brzezinski among others. The title is a play on the Shining Path (Sendero Luminoso), the rigid Maoist guerrilla movement which for ten years has smoldered in Peru and which despite all attempts by the authorities to crush it appears to be slowly gaining social and territorial space. See for example, Hobart A. Spalding, “Peru on the Brink” in Monthly Review, January 1992. It contrasts a “peaceful” capitalist path with a violent revolutionary one. DeSoto, once head of the Central Bank, is now a close advisor of Peruvian President Alberto Fujimori and acted as chief negotiator for Peru in conversations about a new foreign aid package and debt renegotiation. More on Sendero and Peru in “Fatal Attraction: Peru’s Shining Path” in NACLA, Report on the Americas, XXIV, No. 4, December 1990. return to text
- President George H. W. Bush, “Latin America’s Year of Freedom,” a speech delivered to the Council of the Americas on May 22, 1990 (United States Department of State, Bureau of Public Affairs, Current Policy No. 126, Washington, D.C., 1990), 2. Compare this evaluation of Peruvian reality with the data in Spalding “Peru on the Brink.” return to text
- See Alejandro Portes, Manuel Castells, and Lauren A. Benton, eds., The Informal Economy, Studies in Advanced and Less Developed Countries (Johns Hopkins Press, Baltimore, 1989) which raises many of these issues although it tends to shade towards the accumulation side of the debate. Especially see the articles by Juan Carlos Fortuna and Susan Prates on Uruguay, 78-94, and José Blanes, 135-149, who found in Bolivia that informality represented a pure survival strategy. Also see Farthing, “New Underground,” 22-28. return to text
- Some of these themes can be found in Gerónimo de Sierra, comp., Hacia donde va el estado uruguayo? Concentración de poder y democracia (Fundación de Cultura Universitari/CIEDUR, Montevideo, 1987). return to text
- Loreto Jansana, El pan nuestro, Las organizaciones populares para el consumo (PET, Santiago, 1989), 5. return to text
- See Alvaro Diaz, “Modernización authoritaria y regimen de empresa en Chile” in José Bengoa, ed., Proposiciones (Ediciones SUR, Santiago, 1990), No. 18, 55-69. For this reason the term deindustrialization used by many observers may not always be correct; in some countries “restructuring” makes a better description. Argentine data are from Smith, “Notes on the Political Economy of Alfonsinismo,” 41. return to text
- For Uruguay, see Juan Carlos Fortuna and Susana Prates, “Informal Sector Versus Informalized Labor Relations in Uruguay” in Portes, et al., 78-94. return to text
- On the land tenancy question and strategies of survival and activities of small, medium, and rich peasants, see Rigoberto Rivera A., Los campesinos chilenos (GIA, Santiago, 1988); Lovell S. Jarvis, “Chilean Fruit Development Since 1978: Manipulating the Cornucopia to what end?,” a paper presented to XVI International Congress of the Latin American Studies Association, Washington D.C., April 4-6, 1991; and Patricio Silva, “The Military Regime and Restructuring of Land Tenure” in Latin America Perspectives, Issue 68, Vol 18, No.1, Winter 1991, 15-32. return to text
- The above discussion comes from Cruz, “La Experiencia Neo-Liberal,” 22-28, Jarvis, and Silva. Temporary workers, for example, get no vacations or social security.return to text
- Silva, “The Military Regime,” 21. return to text
- See, for example, Soñia Dávila, “In Another Vein” in “Bolivia: the Poverty of Progress,” NACLA Report on the Americas, Vol. XXV, No. 1, July 1991, 11-16. She analyzes the impact of the changing composition of the labor force on the once powerful Bolivian labor confederation, the Confederación Obrera Boliviana (COB). return to text
- ORIT, Desafío, especially Part Three. return to text
- For the Chilean case see Jaime Ruiz-Tagle, “Crisis de la Experiencia Neo-Liberal en Chile. Cambios en las relaciones laborales y respuesta sindical: 1981-1988.” PET,Documento de Travajo, No. 61, 1989. return to text
- See, for example, J. Samuel Valenzuela and Volker Frank, “The Labor Movement in the Chilean Transition to Democracy” a paper presented at the XVI International Congress of the Latin American Studies Association in Washington, D.C., April 4-6, 1991. They contrast the treatment of labor under Pinochet with that under present administration. My reading of the situation varies with theirs, in that the differences, if important at the level of increased freedoms for unions, i.e. free elections, lack significance in terms of meaningful leverage versus capital. The Alfonsín government (1983-89) attempted changes in Argentine labor laws, but purely to bolster its own political position and even those attempts either failed to pass Congress or else had little effect on democratizing the labor movement. See Edward C. Epstein, “Democracy and Political Conflict in Alfonsín Argentina: Relations with Peronism and Organized Labor,” a paper presented to the XV International Congress of the Latin American Studies Association, Miami, December 4-6, 1989. return to text
- ORIT, Desafío, 122. return to text
- CIEPLAN, “Balance económico social del régimen militar,” Apuntes CIEPLAN, No. 76, (Santiago, 1988), 21, 23-25. Also see, Esteban Jadresic, Salarios reales en Chile: 1960-1988. CIEPLAN, Notas Técnicas, No. 134 (Santiago, September 1989). return to text
- Ernest Bartell, “Business Perceptions and the Transition to Democracy in Chile,” a paper presented to the XV International Congress of the Latin American Studies Association, Miami, December 4-6, 1989, 6. return to text
- Phillip Oxhorn, “The Popular Sector Response to an Authoritarian Regime: Shantytown Organizations Since the Military Coup” in Latin American Perspectives, Issue 68, Vol. 18, No. 2, Winter 1991, 71. return to text
- La Nación, June 3, 1990, Section 3, 3 quoting the Instituto de Economía Industrial. For the case of labor, see Adriana Marshal, “The Fall of Labor’s Share in Income and Consumption: A New ‘Growth Model’ for Argentina?” in William L. Canak, ed., Lost Promises, Debt Austerity, and Development in Latin America (Westview Press, Boulder, 1989), 47-65. return to text
- Augustín Canzani, La sociedad montevideana: Problemas y desafíos (CIESU, Montevideo, 1989), 17. Also see Jorge Notaro and Alberto Hintermeister, Política económica y sectores populares (CIEDUR,Uruguay Hoy, No. 2, Montevideo 1989), Table 4, 22 which shows sectoral differences. return to text
- Bolivia Bulletin, Vol. 6, No. 4, August 1990, 2. Some recuperation of purchasing power has occurred in the past year or so for those employed in the private sector. See Juan Antonio Morales, “La transición de la estabilidad al crecimiento sostenido en Bolivia” in José Pablo Arellano, comp., Inflación Rebelde en América Latina(CIEPLAN/HACHETTE, Santiago, 1990), 109-140. return to text
- Linda Farthing and Carlos Villegas, “After the Crash” in NACLA, “Bolivia: The Poverty of Progess,” 28. return to text
- Jarvis, “Chilean Fruit Development,” 11. return to text
- CGE, Estrategia para el crecimiento con Eguidad, 113. return to text
- María del Carmen Feijdo, “La pobreza latinoamericana revisitada” in Nueva Sociedad, No. 126, Julio-Agosto 1990, 32. return to text
- Javier Martínez, “La pobreza en Chile,” PET, Santiago, 1988, 9-10ff. Portes, in “Urbanization,” 32, says that in 1985 poor or indigent households amounted to 45.5% of the total. He defines poor as those with incomes below two times the value of the basic food basket, and indigents as those with incomes lower than the price of that same basket. The latter totaled 19%. return to text
- Donos de Baixeras, et al., “La Pobreza Latinoamericana,” Tomo I. Part IV. return to text
- Bolivia Bulletin, Vol. 6, No. 4, August 1990, 2. return to text
- La Razón (Buenos Aires), June 10, 1990, A13. return to text
- Gonzalo D. Martner, El hambre en Chile. Un estudio de la economía agroalimentaria nacional (GIA/UNRISD, Santiago, Chile, 1989), 9-10. return to text
- Fernando Ignacio Leiva, “New Social Actors and Popular Education Around Economic Issues in Chile,” a paper presented to XV International Congress of the Latin American Studies Association, Miami, December 5, 1989, 3. return to text
- Elaina Cardoso and Ann Helwege, “Below the Line: Poverty in Latin America,” a paper presented to the XV International Congress of the Latin American Studies Association, Miami, December 4-6, 1989, 20. return to text
- Farthing, “New Underground,” 21 also discusses the dependency and passivity that food programs foster. return to text
- In most countries state programs exist to help those in the worse straits either through some kind of jobs program, food supplements, pension increments, school meals, low cost or free health care, or housing subsidies. In Chile, where such programs developed more than in the other countries, the results proved very mixed. First, despite official rhetoric, funds dedicated to these social programs amounted to no more than 15% of shrinking social expenditures. Thus, the numbers of people covered remained small and the results meager in terms of the magnitude of the problem. See Pilar Vergara, Las políticas hacia la extrema pobreza en Chile, 1973-1988 (FLACSO, Santiago, 1990). return to text
- CIEPLAN, “Balance,” 39-46 and Joaquin Vial, “El desafío económico de los noventa. Progreso para todos,” in Revista CIEPLAN, No. 17, Enero 1990 (Santiago), 33.return to text
- A good theoretical discussion of the problem is Javier Martínez, “Alternativas metodológicas para el examen de la magnitud y características de la pobreza: Un estudio de caso,” Mimeo, (Santiago, 1988). return to text
- See Mariana Schkolnik and Berta Teitelboim, Pobreza y desempleo en poblaciones, La otra cara del modelo neoliberal (PET, Santiago, 1988), 248. return to text
- Susanna Rance, “The Hand That Feeds US” in NACLA, “Boliva: The Poverty of Progress,” 31. return to text
- Feijdo, “La Pobreza latinoamericana,” 30, makes a clear distinction between the new and the old poor. On Chile, Schkolnik and Teitelbolm, 254. return to text
- On poverty begetting poverty in one country, see José Blanes, “La pobreza crítica en areas rurales de Bolivia,” Mimeo (CEBEM, La Paz, Bolivia, 1990), 20-21. return to text
- A useful discussion of the whole issue of how to measure poverty and basic definitions of it can be found in Cardoso and Helwege, “Below the Line,” especially, 10-12.return to text
- Vial, “Desafío económico,” 33. This article shows a constant deterioration of income distribution under military rule. Also see the data found in El Mercurio (Santiago), 4 June, 1990 quoting the Instituto Nacional de Estadísticas. return to text
- CIEPLAN, “Balance,” 22, 6. return to text
- Vial, “Desafío,” 33. return to text
- Smith, 42 for Argentine data. On Uruguay, Danilo Veiga, “El Uruguay actual” in Cuadernos, Facultad de Derecho y Ciencias Sociales, Secunda Serie, No. 11 Montevideo, 1989, 141. return to text
- Statistics on working women in Latin America appear in Inter-American Development Bank, 207-256. return to text
- Data from Rosario Aguirre, “Los efectos de la crisis sobre la mujer en el Uruguay,” (CIEDUR, Documento de Trabajo, No. 60, Montevideo, 1990); Nea Filgueira, “Elementos para un diagnóstico: Las mujeres en el Uruguay,” (GRECMU, Montevideo, 1991): Fortuna and Prates, 81. return to text
- On domestics and the bad conditions under which they labor, see Susana Rostagnol, Las trabajadoras en el servicio doméstico (CIEDUR, Montevideo, 1988). return to text
- Information in Estela Méndez, Mujer y Trabajo. Una problemática específica? (CIEDUR/DATES, 2nd ed., Montevideo, 1989). return to text
- For more on these topics, see Cristina Torres, El trabajo doméstico y las amas de casa. El rostro invisible de las mujeres (CIEDUR, Montevideo, 1988) and Rosario Aguirre, Las trabajadoras informales (CIEDUR, Montevideo, 1988). return to text
- See the material in Teresa Valdes, Venid benditas de mi Padre: Las pobladoras, sus rutinas y sus sueños (FLACSO, Santiago, 1988). return to text
- Farthing, “New Underground,” 22. return to text
- Jarvis, “Chilean Fruit Development,” 12. return to text
- Bolivian figures from Bolivia Bulletin, Vol. 6, No. 4, August 1990, 2. For the extreme case on children in Latin America, see New York Times, October 3, 1990, 3. return to text
- Bolivia Bulletin, Vol. 6, No. 4, August 1990, 2. return to text
- CGE, Estrategia, 342, 348, 350. return to text
- Buenos Aires Herald, May 28, 1990, 3. This group estimated the country needed 3.3 million new units to eradicate the housing deficit. return to text
- Viega, “Uruguay,” 144; Canzani, “La sociedad,” 14-16. return to text
- Susana Donoso de Baixeras, “Los efectos sociales de la crisis, la hiperinflación y las políticas de ajuste en Bolivia,” Mimeo, Sao Paulo, 1989, 16. return to text
- See Andean Focus, Vol. VII, No. 4, October 1990, 7 for the results of the survey cited above and housing estimates. return to text
- Clarisa Hardy, La ciudad escendida. Los problemas nacionales y la región metropolitana (PET, Santiago, 1989), 126. (My translation-HAS.) The following material on Chile comes from that same source, 126-134. return to text
- Information on allegados in Petras, 152. return to text
- Carlos Filgueira, “Notas sobre las reformas educativas en la transición democrática en Uruguay” in PIIE/ICI, Las reformas educativas en las transiciones democráticas(PIIE/ICI, Santiago, Chile, 1990), 65-66. return to text
- Christian Cox D. and Cecilia Jara B., Datos básicos para la discusión de políticas en educación, (1970-1988) (CIDE/FLACSO, Santiago, 1989), Table 5, 8. return to text
- Bolivia Bulletin, Vol. 6, No. 4, August 1990, 2. return to text
- Ivan Nuñez P., “La educación chilena en año 2000. Desafíos y opciones.” Mimeo, “Seminario Sobre Chile Hacia el Año 2000. Desafío y Opciones.” Documento No. 11 (PIIE, Santiago, 1987), 1. return to text
- Cox and Jara, “Datos básicos,” V 16. return to text
- Filgueira, “Notas,” 68. Little hard evidence exists, however, that high school students who work actually earn lower grades than “regular” students. return to text
- Confederación General Económica, Estrategia, 344. return to text
- Gonzalo Falabella, “Trabajo Temporal y Desorganización Social” in Proposiciones, No. 18 (Ediciones SUR, Santiago, 1990), 251; also see Jarvis. return to text
- Cecilia Braslavsky, “El caso argentino: entre el pesimismo y la esperanza,” in Reformas educativas, 30. return to text
- Cox and Jara, “Datos básicos,” Table 21, 24. The election results showed 85.8% for the slate led by the Christian Democrats against 32.1% for the military government’s candidate and 13.7% for the Communist Party list. The fact that 49% voted clearly against the government despite potential personal risk pays tribute to resistance against the dictatorship and, ultimately, to its failure to intimidate a significant number of teachers. Including all anti-regime votes, in fact, more than half the teachers voted “no.” On the deterioration of education and of teacher’s quality of life, see Larissa Lomnitz and Ana Melnick, Chile’s Middle Class: A Struggle for Survival in the Face of Neoliberalism (Lynne Rienner Publishers, Boulder, CO, 1991). return to text
- See Alejandra A. Ortózar A., La autoridad vista por niños y niñas (PITE), Santiago, 1989). Traditional gender attitudes, never totally eradicated from the Chilean school system, also revived, as documented in Josefina Rossetti G., “Educación y subordinación de las mujeres” in Juan García-Huidobro, ed., Escuela, calidad e igualdad. Los desafíos para educar en democracia (CIDE, Santiago, 1989), 104-116. return to text
- PIIE, ed., Educación y transición democrática; propupestas de políticas educacionales (PIIE, Santiago, 1989), Table No. 9, 215. return to text
- Braslavsky, 30; also Spalding et al., SAREC’s Latin American Programme, 1990. return to text
- Argentina information above from Braslavsky, 31-32 and the author’s conversation with teachers and professors on trips to Buenos Aires in 1985 and 1990. return to text
- For the negative impact on university research, see Hobart Spalding, Lance Taylor, and Carlos Vilas, SAREC’s Latin American Programme (LAP): An Evaluation(SAREC, Stockholm, 1985) and Spalding, et al., SAREC’s Latin American Programme, 1990. Private think tanks, financed from abroad, became the center of academic research during the military period. They have maintained that function since the return of elected governments. Funding derives predominantly from institutions like The Ford Foundation or quasi-government agencies like the Inter-American Foundation, which means that outsiders get to set much of the agenda for the centers. A goodly number of European government and church-supported institutions also give substantial grants to research centers. Only the Swedish Agency for Research Cooperation with Developing Countries (SAREC), a division of the Swedish International Development Agency (SIDA), provides support which encourages centers to develop independent research agendas. return to text
- The government continues to foot most of the bills, some 93% in 1987. Municipalities are ill-equipped to administer, let alone finance, education. See PIIE, Educación y transición, 37-38. return to text
- Vincente Espinola “Decentralización del sistema educativo y el acceso al la educación: antecedente para evaluar la calidad de la educación básica subvencionada,” Mimeo, (CIDE, Santiago, 1988), 4. (My translation.) return to text
- Hardy, La Ciudad Escendida, 149-158. return to text
- See among others Abrahám Magendzo, Loreto Egaña, and Carmen Luz Latorre, La educación particular y las esquemas privatizantes en educación bajo un estado subsidiario. (1978-1987) (CIDE, Santiago, 1988); Viola Espínola H., “Los resultados del modelo económico de la enseñanza básica. La demanda tiene la palabra” in Garcia-Huidobro, ed., Escuela, 41-81; and Nuñez, “La educación,” 3-4. return to text
- Cox and Jara, 12. return to text
- Luis Zuñiga, “La educación y la política social: lugar de la educación de los niños en las estrategias de superación de la pobreza,” CIDE, Documento de Discusión(Santiago, 1989), Table 1, 18 citing Ministry of Education data. return to text
- Hardy, 158-160. return to text
- Braslavsky, 33. return to text
- See, for example, El temor empresarial frente apertura económica” in La Razón (Buenos Aires), 28 May, 1990, 4. return to text
- Thomas Kamm, “Menem Becoming the Gorbachev of Argentina…” in The Wall Street Journal, October 23, 1990, A14; more on his plans in “Privatization Campaign in Argentina Bogs Down,” October 25, 1990, A16, and “Going Private With No Holds Barred” in Business Week, September 24, 1990, 60-61. return to text
- The sale of Entel-North (representing one half the telephone system), for example, will require the buy out of $2.2 billion of Argentine debt as a part of the financing and the total phone system will generate about $5 billion in debt reduction. See The Wall Street Journal, October 29, 1990, A10, and COHA, Washington Report on the Hemisphere, Vol. 10, No. 23, August 1990, 1, 7. The sale of the government’s last 30% share was recently completed, but some foreign observers harbored substantial doubts about the ultimate value of the company and queried the lack of available financial data. See Linda Sandler, “It’s Dial M for Mystery About Financial Data on the Eve of Argentina’s Big Telephone Sale,” in The Wall Street Journal, December 12, 1991, C2. Shirley Christian, “Argentina Closes Sale of Airline” in The New York Times, November 23, 1990, D1-2. The latter article indicates that the government will thus redeem $2.01 billion of foreign debt paper (selling at $.18 on the dollar at the time of sale), that employees will continue to own 10% of the company (their unions had steadfastly opposed the sale prior to its execution), and that the government would retain an ultimate veto power over all decisions (a clear sop to nationalist interests). return to text
- See COHA, “Hasta la Vista, Mr. Argentine President,” November 25, 1991, 2-3. return to text
- COHA, Washington Report on the Hemisphere, Vol. 11, No. 2, October 17, 1990, 4. return to text
- COHA, Washington Report on the Hemisphere,October 30, 1991, 8. return to text
- See Bolivia Bulletin, Vol. 6, No. 5, 1990, 1-3. President Zamora recently announced plans to go ahead with the sale of sixty-owned corporations over the next two years. See “Bolivia’s Economic Reputation Imperiled” in COHA’s Washington Report on the Hemisphere, September 11, 1991, 4. return to text
- Petras, 150. return to text
- United States Department of State, Bureau of Public Affairs, Gist (September 21, 1990, Washington, D.C.). The President sent a legislative proposal to implement this initiative to Congress on September 14, 1990. return to text
- COHA, Washington Report on the Hemisphere, Vol. 10, No. 23, October 22, 1990, 5, and COHA in the News, 1990, 896. Also, The Fresno Bee, June 30, 1990. return to text
- See, for example, Susan Peñalva and María Grossi, “Gobierno y y democracia local en América Latina. Procesos y tendencias de la administración y de la política municipal” in Jordi Borja, et al., eds., Decentralización y Democracia, Gobiernos locales en América Latina (CLACSO/SUR, Santiago, 1989), especially 487-489. On local government in the rural arena, see GIA, Gobierno local y participación social. Debate desde una perspectiva agraria (GIA, Santiago, 1988). return to text
- Portes, “Urbanization,” 21-24. return to text
- On Montevideo, see Enrique Mazzel, comp., “Expansión de la pobreza en Montevideo: La tugurización de sus áreas urbanas céntricas” in Mariana González, et al.,Ensayos sobre el Uruguay de los 80, Actores, situaciones e intereses (CIESU/Ediciones de la Banda Oriental, Montevideo, 1989), 149-204, Danilo Vega, “Segregación socioeconómica y crisis urbana en Montevideo” in Lombardi and Veiga, 265-302. On Buenos Aires, Fernando Brunstein, Beatriz Cuenya, Nora Ciichevsky, “Crisis y condiciones de vida en el Gran Buenos Aires” in Lombardi and Veiga, 135-174 and on Santiago, Eduardo Morales, “La crisis urbana en el Cono Sur. Paradigmas y enfoques. La ciudad de Santiago de Chile,” in Ibid., 223-238. return to text
- Information on Argentina in Elizabeth Jelin, comp., Los nuevos movimientos sociales. Mujeres. Rock nacional. Derechos humanos. Obreros. Barrios (Centro Editor del Libro, Buenos Aires, 1989). return to text
- On these movements and the separation between politics and social movements, see Rodrigo Baño, Lo social y lo político: una dilema del movimiento popular (FLASCO, Santiago, 1985). return to text
- Three publications among many on these groups are Elizabeth Jelin and Brenda Pereyra, “Caring and Coping: Household, Communities and Public Services in the Making of Women’s Daily Lives” CEDES, Documento 35, Buenos Aires, 1990) which focuses particularly on women; Jorge Scherman Filer, Techo y Abrigo. Las organizaciones populares de vivienda: Chile, 1974-1988 (PET, Santiago 1990); and Silvana Bruera, Mariana González, and Carmen Midaglia,”Las comisiones vecinales del departamento de Montevideo,” Mimeo, CIESU, Montevideo, 1989). return to text
- Feijdo, “La pobreza latinoamericana,” examines neighborhood organization and its political or apolitical implications. return to text
- See, for example, Cathy Schnieder, “Mobilization at the Grassroots. Shantytowns and Resistance in Authoritarian Chile” in Latin American Perspectives, Issue 68, Vol. 18, No. 1, Winter 1991, 92-112 and Oxhorn, 79-80. return to text
- Fernando Ignacio Leiva, “New Social Actors and Popular Education Around Economic Issues in Chile,” paper presented at the XV International Congress of the Latin American Studies Association, Miami, December 4-6, 1991. This paper discusses tensions between grassroots organizations and NGOs; the quote is from p. 4. return to text
- Oxhorn, 80-82. return to text
- On these thorny questions, see Brian Loveman, “NGOs and the Transition to Democracy in Chile” in Grassroots Development, Journal of the Inter-American Foundation, Vol. 15, No. 2, 1991, 8-19 and “Private Development Organizations and International Cooperation: Chile 1973-1990,” a paper presented at the XVI International Congress of the Latin American Studies Association, Washington, D.C., April 1991. return to text
- On Uruguay, for example, see Daniel Panario, “Efectos ambientales de grandes proyectos de aprovechamientos multiples. El caso de Salto Grande,” CIESU, Serie Documentos de Trabajo, No. 142, Montevideo, 1988), and Ricardo Carrere, El complejo forestal: situación actual y perspectivas (CIEDUR-DATES, Montevideo, 1989).return to text
- For more on the environment in Chile, see, for example, the work done at the Centro de Investigación y Planificación del Medio Ambiente CIPMA). The Center’s magazine Ambiente y Desarrollo carries articles on environment and ecology. It also publishes articles in a Series Documentos de Trabajo, bibliographical items, and mimeographed papers on various aspects of the subject. Information on the environment in Chile comes mostly from these sources and conversations with researchers on the environment there. return to text
- COHA, Washington Report on the Hemisphere, Vol. 11, No. 2, October 17, 1990, 9. And Flavio Tavares, “Signs of Environmental Disaster in the Atlantic” in Latin America News Update, December 1991, 29. return to text
- See, for example, “Reconquest of Nature, 1492-1992” in NACLA’s Report on the Americas, Vol. XXV, No. 2, September 1991, 5-40. return to text
- Quoted in Nathaniel C. Nash, “Chileans Pay Dearly for Economic Growth” in The New York Times, November 10, 1991, E4. return to text
- Loveman, p. 13. return to text
- Analysis in René Antonio Mayorga, “Tendencias y problemas de la consolidación de la democracia en Bolivia,” a paper prepared for XV International Congress of the Latin American Studies Association, Miami, December 4-6, 1989. Also see Linda Farthing, “New Underground,” 20-21. return to text
- This event formed a key part of the paquetazo of that year, Dávila, 12. return to text
- Farthing, “New Underground,” 18: José Balnes, “El Estado y el mercado de trabajo en Bolivia: redefiniciones a raíz de la crisis económica,” (CERES, La paz, 1989), 11.return to text
- On the problems facing organized labor in recent years, see, for example, Edward Epstein, “Austerity and Trade Unions in Latin America” in Canek, ed., Lost Promises, 169-189, and especially Manuel Barrera and Gonzalo Falabella, comps., Sindicatos bajo regimenes militares. Argentina, Brazil, Chile. (CES/UNRISD, Santiago, 1989); on Chile, Guillermo Campero, “El sindicalismo chileno en el régimen militar (1973-1984)” in Rigoberto García, ed., Chile 1973-1984, (Institute of Latin American Studies, Monograph No. 12, Stockholm, 1985), 175-188: Patricia Frias, El movimiento sindical chileno en la lucha por la democracia (PET, Santiago, 1989): and Janine Miguel M., “El movimiento sindical chileno después de 15 años de dictadura militar (Septiembre de 1973-Septiembre de 1988), Latinamerika-Institutet, Stockholm,Informe de Investigación, No. 59, 1988. One scenario for organized labor’s counterattack can be found in ORIT, Desafío, Parts II and III. return to text
- Valenzuela and Volker discuss legislative changes, voting figures from p. 29. They indicate that labor won a 1% real increase in the last round of bargaining. return to text
- See Soñia Dávila. return to text
- One detailed study of neighborhood groups found that 29.8% of the entities which met actively experienced a hard time staying alive due primarily to inactivity or lack of interest among their constituents. Organizations existing for the longest periods of time had the best chance of survival. In general, difficulties centered around the fact that too few people came to meetings, not enough volunteers stepped forward, petty rivalries prevented cohesion, and/or the leaders burned out. See Bruera, et al,“Comisiones,” 16-21. return to text
- Feijdo, “La pobreza latinoamericana.” On trips to the four countries during 1990 and 1991, those involved in community projects repeatedly made the point that communal movements tend to fail once outside support ceases or decreases substantially. On the other hand, they also emphasized that enormous amounts of untapped energy simmer within these movements. return to text
- Eduardo Walker L., “Compromiso de pobladores ‘comunes y corrientes’ en acciones de desarrollo: reflexiones de una experiencia de trabajo con vecinos (CIPMA, Santiago, 1989), 49. (My translation.) return to text
- Francisca Sabatini and Eduardo Walker, “Informe SAREC. Linea Gestión Urbana desde la Comunidad,” Mimeo, (CIPMA, Santiago, April 1990), 13. return to text
- Schneider makes this point very forcefully on the basis of her fieldwork in Chilean shantytowns. See claims that about 20% participated in organized activities. return to text
- For a discussion of these points, for example, see Oxhorn and Loveman. return to text
- COHA, Washington Report on the Hemisphere, Vol. 11, No. 4, November 14, 1990, 4; The Wall Street Journal, December 31, 1991, A4. return to text
- See, for example, “Chile Combines Open Politics and Open Economics,” an interview with Heraldo Muñoz, Permanent Representative of Chile to the Organization of American States, in COHA Washington Report on the Hemisphere, August 26, 1991, 2. return to text
- The best seller by the current Finance Minister Alejandro Foxley, Chile y su futuro. Un país posible (CIEPLAN, Santiago, 1987) contains one optimistic vision of the future. But also keep in mind the figures cited earlier on what it would take to restore incomes to their 1970-73 levels. return to text
- For an optimistic view of labor policy in both the last Pinochet years and the present transition period, see Valenzuela and Volker. return to text
- See the interview with Chilean congresswoman Laura Rodriquez, who represents the recently formed Humanist/Green Alliance. She firmly advocates such diverse alliances and believes that they are not only possible but necessary. She also recognizes the existing gulf between new social movements and political parties. Published inNACLA Report on the Americas, Vol. XXV, No. 1, July 1991, 6-7. return to text