In the last two years, four Latin American governments (in Ecuador, Peru, Argentina and Venezuela) have been toppled by popular uprisings, although in Venezuela a countercoup with farcical touches restored President Hugo Chavez to power in 38 hours.
In Ecuador, an Indian revolt against the adoption of the dollar as official currency triggered a coup by Vice-President Gustavo Noboa against President Jamil Mahuad (the dollar survived as the official currency).
In Peru, popular insurgence threw Alberto Fujimori from power. Alejandro Toledo won the elections, but the perpetuation of past habitspolitical persecution, corruption scandals, lack of reform to end the unemployment traphave led to nationwide protests that threaten the regime.
In Argentina, President Fernando de la Rua inherited a six-billion dollar fiscal deficit from Carlos Menem, a huge debt and an over-regulated environment with 16 percent unemployment, under a currency board monetary system incompatible with such imbalances. The people expelled him from power, and the man who ended up as President, Eduardo Duhalde, is himself hanging to power by a thread.
In Venezuela, Hugo Chavez put an end to four decades of democracy with traditional party rule born out of the Punto Fijo accords of 1958a period rich in corruption, pork and fiscal irresponsibility. But Chavez tried to concentrate near-dictatorial powers in his hands and to establish a quasi-socialist economy by decree involving rural expropriations and surreal levels of taxation affecting investment. His government collapsed after people took to the streets, but quickly regained power.
What are the lessons of this succession of political cataclysms that seems to owe so much to magical-realist literary tradition? There are two, one positive, the other negative. First the bad news: Latin America has not reached puberty, despite what specialized publications, investment bankers and some Western governments would have had us believe during the 90s. Latin America is still in its mischievous, self-destructive infancy. It mirrors its own stereotype. The economy, which grew slightly more than it did in the 80s, but only half of what it grew in the 70s, has not reduced the poverty affecting 50 percent of the population. So democracy is losing legitimacyall over again.
And now the good news: for the first time in Latin Americas history, an embryo of civil society is developing. It lacks clear leadership and it does not carry a cogent message yet, but it is a force against the status quo, the political and business elites. It does not know what it wants to replace the status quo with, and it is very disorganized. Its ideological leaning is mixedfrom nihilist to anarchist to socialist to libertarian. In its civic and civilian nature, and its young, iconoclastic energy, there are elements hitherto absent from Latin Americas public life. The people, not the military, are for the first time the key factor in bringing about the fall of governments. Even in Mexico this phenomenon is evident, except that President Ernesto Zedillos vision helped dismantle the PRI system from within the PRI itself, thereby channeling that energy to a peaceful and democratic solutionthe victory of Vicente Fox.
This civil society force is not yet armed with a specific government blueprint. It is a republican-like movement against monarchic-like presidents and systems of privilege, without a yet well-formed idea of how to give institutional shape to that libertarian instinct of opportunity and participation. That is why, confusingly, there is also a touch of socialism in some dimensions of that loose movement. Although directed against specific governments, these uprisings aim at the way power has been exercised for decades in Latin America. It is the political counterpart of the silent revolution undertaken by the informal entrepreneurs of the economy, who now account for 60 percent of the man-hours worked but, because of low productivity resulting from that very system they reject, only around 35 per cent of the GDP.
People are realizing the solutions they once supported are as bad as the preceding problems. Chavez spearheaded a revolt against the traditional political culture of a country that wasted 250 billion dollars of oil revenues in the last twenty decades. The traditional Venezuelan political parties, Accion Democratica and Copei, and a closely-knit business elite, enjoyed those golden years to the last drop with a web of monopolies, tax exemptions and exchange differentialsand 80 per cent of the nation, feeling cheated, produced the Chavez phenomenon. But, like Fujimori in Peru, he made matters worse. So the people are now questioning the whole system, not just the old faces.
An old era, begun in 1980 with democratization, and continued through the 90s with insufficient reforms that strengthened power enclaves while reducing inflation and lowering trade barriers, is coming to a close. Opportunities were opened during those yearsbut not to the poor, mainly to the privileged few who benefitted from monopolies through crony privatizations that contradicted the stated aim of fostering competition, lowering prices and encouraging a new business class (privatization has slowed dramatically since 2000, when there was a 58 percent drop in the sale of state assets).
This cumulative frustration has driven people to set up all sorts of civic organizationsfrom groups formed by Buenos Aires neighborhoods to the networks of hundreds of thousands of destitute women set up principally to channel state-aid in Lima but which have shown enormous managerial skill without government direction.
The great question is: Which of the two lessons of the recent upheavals will prevail? If its the negative one, confirming our stereotype of political and economic chaos, this nascent civilian society will end up unwittingly bringing the military back. If it is the positive one, that is to say if a constructive force brings to the decision levels of these countries a clear vision that puts no limits to the creativity and capacity of those that have been left out thus far, then it may not be too late to start all over again.
Alvaro Vargas Llosa is Senior Fellow of The Center on Global Prosperity at The Independent Institute. He is a native of Peru and received his B.S.C. in international history from the London School of Economics. His Independent Institute books include Global Crossings: Immigration, Civilization, and America, Lessons From the Poor: Triumph of the Entrepreneurial Spirit, The Che Guevara Myth and the Future of Liberty, and Liberty for Latin America.
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