WHAT’S EATING LATIN AMERICA ?

I recently spent time in Peru, a place of fabulous resources, gold, gas, gems, phosphate, fish, great agricultural opportunities. You can judge a city by its security. The rich and middle-class are imprisoned behind high walls, barbed wire, electric fences and guards. The wealthy live in fear of the poor. These disparities in wealth, 50% unemployment and seething resentment gives life to extremist politics in the region. There is much though to celebrate. 30 years ago all the governments in the region were neo-fascist, pretend Socialists that, through corporate policies, ran these rich countries into the ground, now all nations, with the exception of Cuba, are democracies, albeit fragile ones. In 1900, Chile, Argentina and Uruguay were richer than New Zealand, Canada or Australia. What went wrong? Protectionist, nationalist economic policies where the rich sought privileges and subsidies.

Government by big business, big church, big unions, big politicians. The military moved in and made matters worse, often supported by the West, by ruthlessly suppressing everyone who disagreed, as anti-Christian Communists. Communists found favour among the desperate and have morphed into ruthless drug gangsters. This is very sweeping but there’s nothing romantic about the Shining Path revolutionaries and other murderous villains who claim to speak for the oppressed. Every great lie has to have a little truth behind it to make it credible. The wave of democracy in the 1980’s, and pro-market policies has not produced the results for the very poor as hoped. Except in Chile, progressively governed by solid social democratic administrations. But something new is happening. Democracy has, for the first time, given power to the millions of marginalized people - especially indigenous peoples who have long lived in the shadows. Brazil’s President Lula, a workers’ leader, won an election and has taken a moderate, progressive line, similar to Chile. This new populist movement has power in the Argentine and Uruguay, promising much.

I didn’t understand until I visited the region, the influence of Venezuela’s President Chevez, a military man, failed coup leader, and now President. Anti-American calling them imperialistic, a military threat, and now best mates of Castro of Cuba, is funding political forces in neighbouring nations.

Producing millions of barrels of oil a day provides a financial lifeline for all sorts of ambitions. His support of indigenous Bolivian leader, Evo Morales, helped him gain power in Bolivia, the poorest country in South America. On May Day, Morales nationalised their gas companies, putting troops in the plants. Wildly popular. This is the third time in 50 years this industry has been nationalised. As an old ‘leftie’, I got misty-eyed when I saw Bolivia’s President being inaugurated, but know it will end in tears because while the diagnosis is correct, the prescription and solution suggested won’t work. They never have. Meanwhile the populist trend continues, promises to cut top civil servants’ pay, soak the rich, sounds good to those locked out, but don’t work either. In Peru, the business community for the ‘right’ came third. They thought their woman candidate would romp in. They claim President Chevez of Venezuela funded the campaign of the nationalist candidate, Ollanta Humala. He comes from old communist stock, his mother suggested gays be shot, his brother accused of murder . He promises to stop globalisation, save the poor and redistribute the wealth. Money is leaving the country.

The conference I attended in Peru was housed in their huge National Museum, which once housed the Ministry of Fisheries, and is bigger than the New Zealand Parliament and National Museum put together. Fear Ministries when they need that much space. In the Peruvian system, if no-one gets 50% of the vote then there’s a run-off between the two top pollers. The other candidate is a former President Alan Garcia who left office to a comfortable exile in Paris amidst accusations of corruption. The political problem many Latin American countries have is a constitutional requirement that you can only be President for one term (to keep them honest), then have to stand down but can run again later after the next guy’s term expires. So Presidents try to make as much as they can to have a go later, or put a surrogate in until their return. Trade liberalisation that brings with it the cleansing air of competition, between these countries is on hold. Their ambitions for sensible regional trade integration in tatters. The people are always right, as I told worried Ministers, even when they are wrong they are right. But what do you do with candidates who suggest if they win there may be no need for any more elections?