The Monterrey Summit: A Failure for Washington and for the Venezuelan Opposition

The Monterrey Summit of the Americas was a failure for Washington’s ambitious neoliberal goals as Venezuela, Brazil and Argentina took a progressive position. This was also a defeat for the pro-US Venezuelan opposition to Chavez

Translated by Dr. Maria Paez de Victor

The Monterrey Summit of the Americas was a failure for Washington’s ambitious neo-mercantile goals that included getting consensus of Latin American countries on terrorism, immigration and free trade. Also, it was a significant failure for the Venezuelan opposition. Its extreme right wing, reactionary and pro-Washington stance isolated it from new political, economic and social scenarios that are now coming together in Latin America and the Caribbean.

In Monterrey, Venezuela, Brazil and Argentina took a progressive position with respect to the causes and characteristics of Latin America’s difficult situation. As well, they expressed the conviction that economic growth and development cannot be attained through old neo-liberal recipes, but through a new economic model that can guarantee equity, inclusion and social justice. This gave form and content to the Monterrey Summit in contrast to the aspirations of President Bush who tried to make the Summit a platform to launch a regional free trade agreement (FTAA) and to defend Plan Colombia as the centre of the “fight against terrorism”.

President Bush’s intervention in Monterrey outlined his foreign policy towards Latin America:

“…To develop economic growth…a free market that can help people out of poverty and promote the middle classes…to create the free trade of the Americas…to create a culture of transparency that goes against corruption…as in Venezuela o Haiti, or Bolivia, to strand firm with the people of Cuba with our democratic example…to show the world a free society and a free market…” (12 January 2004)

This political stance is fully endorsed by the Venezuelan opposition as indicated in its document: “Unity and Constitutional Government for National Reconciliation and Reconstruction: A Public Policy Proposal for Consensus ” (6 October 2003). It dovetails with the Washington consensus that seeks to definitely shortchange the aspirations for equity, inclusion and social justice that Latin America is today demanding.

This “transition proposal for the country” proposes, “to reinstate the mechanisms for concerted tripartite action among business leaders, unions and government”. What this really means is a return to the terrible collusion model of Punto Fijo[1] whereby power would be reinstated to the corrupt elites of businessmen (Fedecamaras[2]), unions (CTV[3]) and the old political parties[4]. The Venezuelan opposition proposed the following neo-liberal measures:

  • To eliminate exchange control and “adopt some type of competitive exchange”
  • To focus public expenditures “towards strengthening productive activities” and private investments
  • To improve competitiveness and correct market distortions,
  • To bring down the “social costs in the productive sector”
  • To define the State as an entity for “planning and facilitating the execution of decentralized public policies through the private sector”
  • To finance the small and medium size industry exclusively through commercial banks –adhering to Washington’s interest and the demands of the World Bank and the International Monetary Fund
  • To reform the law on land tenure, and determine the yields that Venezuela should produce “according to efficiencies and necessities”.

As to education and social programs, the Venezuelan opposition, biased towards the private sector, proposed the following policies:

  • To decentralize the education system and to “give maximum autonomy possible to schools and high schools”
  • To evaluate the Bolivarian School[5] program and “change what needs to be changed”
  • To implement a social insurance system “without ruling out the options of individual payments for pensions or health”

To all this must be added the recent opposition campaign against the literacy program and the medical assistance program for poor areas, programs which are trying to honor the huge social debt that the State has with the Venezuelan people.

However, the opposition showed its greatest affinity with neo-mercantile policies of the Bush Administration when in came to geo-strategic issues. It espoused the following measures:

  • To adopt a new military doctrine “adapted to the real needs of the country” that would separate de armed forces from civil society
  • To re-establish “solid and trusted relationships with appropriate and natural allies”, meaning dependency links with the USA and organisms such as the IMF and World Bank
  • To abandon the reciprocal solidarity with Cuba and,
  • To seek the best way to “insert Venezuela in the international economy”.

As well, the opposition proposed to overturn current oil policies and base them exclusively on market forces in keeping with the expectations of the Bush Administration. The opposition would establish the following oil policies:

  • Oil overproduction -that would lower the cost of oil barrels
  • To demand that OPEC strategies be in line with this policy and “realign its production capacity according to the market”
  • To redirect profits towards production instead of social investments and “use it as a variable for private investors in assigning areas of oil exploitation and exploration”
  • To re-employ the coup-backing ex- PDVSA[6] employees that were fired, and
  • To “separate” the political management of the oil industry so that it cannot be integrated into the national development plans.

However, at the Monterrey Summit other winds were blowing. Progressive criteria prevailed. These -very different from those the oppositions espoused in its “transition process” document- were divorced from the anachronistic neo-liberal recipes that plunged the region in the most absolute poverty, inequality and exclusion.

The first signs of divergence from the Washington consensus came from the president of Peru, Alejandro Toledo, who supported “economic growth with equity” and “investing more in the social areas” (13 January 2004) and from the prime minister of Canada, Paul Martin, who indicated the need to implement social policies “so that all the citizens can live in a equitable manner” and “to create a social style, with health and education, and all these things in an inclusive manner …towards a equitable society” (12 January 2004).

The president of Venezuela, Hugo Chavez, further elaborated on the concept of development with equity: “it is clearly demonstrated that within the framework of the neo-liberal model it is impossible for the people of Latin America and the Caribbean to reach that goal”. President Chavez steered the debate towards a development model that would put “the economy in the service of the human being, in the service of human well-being and the common good…to generate true development with social justice.” (12 January 2004)

President Lula of Brazil maintained the same position. He considered it essential “to guarantee the social development of our nations…to fight against hunger, poverty and social exclusion” (12 January 2004) adding:

“In Latin America, the number of people in conditions of extreme poverty passed 48 million to reach 57 million people; 26% of the population lives off less than two dollars per day; there are 19 million unemployed and of every ten new jobs created, seven are informal…The lack of jobs affects in a particularly perverse way, women, Blacks, Indians and youth. Unemployment and misery grew exponentially creating grave social and ethical impacts, among them frightening family disintegration…in 2002, more than 50 million people, almost a third of the Brazilian population, suffered daily food insecurity.”

Lula pointed out that the grave situation of Latin America,

“…is not a secondary or accidental consequence of an otherwise benign and adequate economic policy. We are dealing with a perverse model that mistakenly separated the economic from the social, opposed stability to growth and divorced it from responsibility towards justice…Economic stability turned its back on social justice…Historical experience shows that economic balance is unsustainable without social balance and our challenges are to combine production expansion and efficacy with income distribution and to face fiscal responsibilities with sustainable development”.

For Lula,

The time has come to rescue and affirm once and for all the superiority of the collective interest and of the public good in the Americas”. And proposes, “to work with a new development concept, in which income distribution would not be a simple consequence of growth, but its basic lever.”

The president of Argentina, Nestor Kirchner, agreed with this “new development concept” that Lula proposed for Latin America when he stated the necessity of having “a new, inclusive, equitable, development paradigm” and severely criticized the neo-liberal model that the White House espouses: (13 January 2004):

“We have to understand that the principles rigidly maintained in the decade of the 90’s that ranged from indiscriminate financial openings to the disappearance of the State in favor of privatizations at any cost, constituted a model of injustice, of economic concentration, of bankruptcy for our economies, deepening to extremes the unjust distribution of incomes, exclusion and corruption in our nations.”

For Kirchner,

“It is necessary internalize a new paradigm that recognizes that there is no sustainable development without equity and which would evaluate differently the way to meet fiscal and economic goals…It would mean increase of production and investments, creating wealth and distributing that wealth in a better way.”

Clearly, for Kirchner, as for Chavez and Lula, the neo-liberal model drove the region towards absolute poverty, inequality and exclusion. The Argentinean president stated, “It is unacceptable, from the most objective and rational standpoint, to insist on recipes that have failed.” Kirchner made it quite clear that “no Free Trade of the Americas agreement (FTAA) is going to work. Signing a pact is no easy way towards prosperity.” That is precisely why Venezuela, it signed the “Nuevo Leon Declaration” (13 January 2004) stated that its reservations to the paragraph about FTAA were “due to principles and profound differences with respect to the concept and philosophy contained in the proposed model, as well as for the way specific subjects were treated and the deadlines set.”

While true that the Monterrey Summit will not translate into economic and social progress for Latin America, in political terms it represents the crossroad at which the progressive countries of the region distanced themselves from the old neo-liberal recipes and the neo-mercantilism that Washington promotes. It was a defense of a new proposal for a democratic, participatory, integrationist and solidarity-oriented development model that will isolate the Venezuelan opposition at the same time that it definitely leaves its mark on the destiny of our Americas.

[1] The Punto Fijo Pact was the pact made by the leading political parties, COPEI and Accion Democratica, representing also the financial elite and union bosses, to govern Venezuela with a faulty constitution that assured their collusion and power. Translator’s note

[2] Fedecamaras is the national chamber of commerce, an organism that represents the interests of the business and financial elites. Translator’s note

[3] CTV was the main labor union, mired in corruption such that impeded proper election of its leaders. Translator’s note

[4] Specifically, Accion Democratica and COPEI. Translator’s note

[5] The system of Bolivarian Schools is based on the community schools model of education with a high degree of parent and community participation. Translator’s note

[6] PDVSA is the Venezuelan state-owned oil company. It backed the coup d’etat in April 2002 and in December 2002 staged a lockout with extensive sabotage that brought oil production to standstill for two months.