Even though socialist parties have led many of the South American governments for the past decade and a half, none of their leaders ever indicated any intention to build socialism in their respective countries. But this position changed earlier this month when President Chavez announced that as his firm intention for Venezuela. With his close allies also aiming at the same direction, it is obvious that socialism is now taking new roots on the South American continent.
The leftist political trend in Latin America , and more particularly on the South American continent, became pronounced in the 1990s with socialist-oriented parties winning power in free and fair elections after a long period of right-wing dictatorships in many of the countries. However, there was no concerted rush to implant socialist programmes, and to a large extent, these leftist governments applied post-Cold War World Bank-IMF free market policies known as the Washington consensus. These included privatisation of state enterprises, tax reforms and the encouragement of foreign investment. The aim was to improve efficiency in governance and economic management.
By applying this economic model since the start of the 1990s, there was a rush to privatize and many sluggish state enterprises were gobbled up by local and foreign investors. But even though the Washington consensus was accepted as part of general economic reforms, some important state-owned businesses were never sold off. According to the World Bank, state-owned enterprises currently account for about 10 percent of Latin America’s GDP and 5 percent of formal employment.
With the resurgence of democracy from the 1990s, people saw a silver lining and expected rapid development, hoping that benefits would accrue to them almost immediately. But to a large extent, that has not happened. And now more and more, they are demanding that their leaders spur effective change.
Faced with this situation, the new leaders, with their support rooted among the poor masses, have begun to re-orient their countries economies with increased emphasis placed on social programmes. And so, countries like Argentina, Brazil, Chile, Guyana and Uruguay have modified the Washington consensus model in order to deal with the problems of poverty affecting them.
But the pace of economic and social development has not been as fast as people expected, and so some administrations feel that with popular support behind them (as in Venezuela, Bolivia and Ecuador), socialist programmes should be resuscitated to rectify the problems which the free market economy could not solve.
Evidently, privatization has spurred modernization, but critics across the continent complain that the fortunes reaped have been squandered and the buyers failed to make new investments in the various countries. And even though it has also helped to promote economic growth, not all the privatized enterprises have shown success. Some have collapsed from bankruptcy and even mismanagement, while others have been re-sold to new investors for stupendous profits.
Faced with this situation, some governments are deciding to re-nationalize or to take majority shares in some of the privatized enterprises. President Morales has already done that with the Bolivian gas industry, and more recently, President Chavez announced that his government would nationalize the electricity and telecommunications sectors. This announcement caused an immediate selling off on the New York Stock Exchange of shares in the telecommunication enterprise, but the situation quickly stabilized after the government announced it would negotiate fair market prices for the businesses.
Currently, Venezuela remains a vibrant capitalist economy. But with nationalization and state majority in some key industries, including petroleum, the government is pushing for a mixed economy involving the private sector, the state, and producers’ cooperatives especially in the rural areas.
In the general definition of socialist ideology, nationalization is regarded as one of its main economic base factors. But both Presidents Chavez and Morales also see nationalization as essential to national pride and security.
The “socialism” for Venezuela has not yet been defined, but President Chavez describes it as “twenty-first century socialism”. There is no mention of Marxism-Leninism, even though Chavez has stated that people must read Marx and Lenin to understand what socialist ideology means.
A clearer view emerged on January 18 when Chavez explained in Rio de Janeiro, where he was attending the Mercosur summit, that his vision of “twenty-first century socialism” is different to the failed Soviet model which he said was unsuccessful because it was not democratic and did not give power to the people. He added: “In a democracy, in an authentic socialism, power must be given to the people. We have to construct a truly socialist model that does not copy models from other countries.” This statement is significant since Chavez’s opponents vociferously claim that he wants to set up a Cuban-type of socialism in Venezuela.
Across the Andes, the new Ecuadorian President Rafael Correa has also announced his intention to introduce a socialist programme. He plans to call a national referendum to support the re-writing of the nation’s constitution aimed at reducing the power of political parties and giving more power to the average citizen. He intends to increase the state’s control over the economy, especially the banking system, and to expand the state’s role in oil production. He is also critical of free market policies which he says has failed to improve the lives of his people, and has rejected a free-trade agreement with the US saying it will hurt Ecuadorian farmers.
In his inaugural address on January 15 he said the consequences of twenty years of the Washington consensus policies have been disastrous. Announcing the possibility of debt cancellation, he explained that the funds for repayment could be better spent on social services. Debt repayment, he added, has seriously hampered the growth of the domestic economy, with 65 percent of Ecuadorians living in poverty.
This view on the debt question has long been expressed by President Bharrat Jagdeo of Guyana who has been in the forefront in campaigning for debt relief for the world’s highly indebted poor countries.
How will this resurging socialism in Venezuela and elsewhere in South America be pursued? The trend, it seems, will be the pragmatic fashioning of a “mixed” economy with a co-existence of both private and state sectors working side by side through an evolving form of cooperation. No political leader wants to revert his/her administration to that of the problem-laden socialist political system which faced severe confrontation – political and economic – during the Cold War years.
To be fair, the pro-socialist administrations of the past failed for one reason or the other. In some cases, they were not rooted in democracy and had little popular support. In others, Cold War pressures, destabilization, and covert and overt opposition from the West removed or overthrew democratic socialist governments as in pre-independent Guyana in 1962-64 and Chile in 1973.
Currently, socialist countries like China and Vietnam are now mixing their economies with market-oriented production and trade links and are making significant economic progress. Maybe, this is the direction that the socialist leaders in the South American region may be examining as they develop their own political and economic strategies.
Meanwhile, as the glow of socialism spreads through the Venezuelan llanos and across the Andes, more and more voices are sounding from the grassroots in support of the ideology. According to public opinion polls, the majority of Venezuelans want a socialist system but not an implantation of the Cuban system in their country. The critics of the free-market reforms also emphasize that capitalist polices have been in operation in the region for centuries, in many cases uninterrupted, but have failed to alleviate the economic plight of a vast section of the population.
Recognising this situation, the Venezuelan government has already set up its anti-poverty programmes – the Bolivarian Missions – which have brought health, education, housing and basic food products to Venezuela’s poor as never before.
But, anti-socialist political groups in South America are already expressing the old Cold War fear of this socialist resurgence in the region, and even claiming that the democratically elected “socialist” leaders, by promoting this ideology, are exposing their “totalitarian and dictatorial” tendencies!
Significantly, this fear of socialism drew the wrath of the United States against the Cheddi Jagan government in pre-independent Guyana in the early 1960s. As a loyal ally of the United States at that period, Venezuela was used as a willing tool to apply imperialist pressure and destabilize Jagan’s government by resuscitating a claim to Guyana’s western Essequibo territory.
Interestingly, Jeronimo Carrera, Chairman of the Communist Party of Venezuela which is part of the government alliance, wrote on September 3, 2006 in the Caracas weekly La Razón that Venezuela formed part of strong imperialist pressures against Guyana in the early 1960s, but now with the Venezuelan government being firmly anti-imperialist, “it is my opinion that a decisive step of the present Bolivarian foreign policy sponsored by President Hugo Chavez would be to eliminate definitively that absurd claim. Such an action would free us of a ghost and open the door to a real and beneficial approach to the entire English-speaking Caribbean region.”
Since anti-imperialism is also a crucial tenet of socialism, Guyanese surely hope that these noble words are heeded. Guyana must not be held hostage because of past imperialist actions.
Caracas, 25 January 2007
(The writer is Guyana‘s ambassador to Venezuela. The views expressed are solely those of the writer.)