Arce-Castillo Socialist Alliance for South America
By Oliver Boyd-Barrett – Jul 24, 2021
PART I
Castillo’s Victory in Peru Validated
On July 28th, 2021, Pedro Castillo, son of illiterate Andean peasants will be inaugurated as President of Peru, celebrating the victory of his socialist party Perú Libre in the elections of June. Peru has strong historical ties to other regional powers, most notably Ecuador and Bolivia.
Castillo’s victory follows by two months the swearing in of Guillermo Alberto Santiago Lasso Mendoza as President of Ecuador in May. Although Lasso is center-right, he will be constrained by the continuing hold over Ecuador’s 137 seat assembly of allies of former President Rafael Correa (2007-2017) which maintains the largest bloc with 49 seats, and the leftist Pachakutik party which has unprecedented indigenous influence, holding about 45 seats in alliance with the center-left Democratic Left party. In contrast, Lasso’s center right Creando Oportunidades (CREO), party has just 12 legislators, and an early alliance with the right-wing Social Christian Party fell apart on May 14.
More significant even, Castillo’s victory in Peru follows by eight months the swearing in of Luis Arce as President of Bolivia in November 2020, confirming the resounding victory of the socialist party he founded with Evo Morales, Movimiento al Socialismo–Instrumento Político por la Soberanía de los Pueblos, abbreviated MAS-IPSP, or simply MAS. This in turn followed by under one year the swearing in of Peronist Alberto Fernandez as President of Argentina in December 2019, together with his Vice-President Cristina Fernandez de Kirchner who was President of Argentina 2007-2015 and wife of former leftist President (2003-2007) Néstor Kirchner.
In addition, Castillo’s victory follows by two months a significant progressive development in Chile when, on May 15 and 16, over 6 million Chileans voted for the 155 members of the Constitutional Convention, a body that will be responsible for writing the country’s new constitution to replace that drawn up by the fascist government of Augusto Pinochet in 1980. Independent and left-wing forces obtained resounding triumphs and won the majority of seats in the Constitutional Convention. The clamor for a constitutional convention stems from substantial protests involving millions of Chileans that began in October 2019, demanding faster progress in the task of replacing Pinochet’s constitution, one that was considered to entrench neoliberal economics and the domination of right-wing parties. 78% of voters had approved the decision to rewrite the constitution in a referendum in October 2020. This augurs well for progressive prospects in the upcoming presidential, parliamentary, and regional elections scheduled for November 21 this year, 2021. The Chile Vamos center-right coalition held a legal primary on 18 July 2021, which was won by former minister Sebastián Sichel by 49% of the vote. The Apruebo Dignidad leftist coalition decided its presidential candidate in a legal primary held on 18 July 2021, which was won by lawmaker Gabriel Boric by 60% of the vote.
In regional and municipal elections that were also held May, Chile’s Communist Party and other left-wing movements performed well. In Recoleta, Communist Mayor and Presidential candidate Daniel Jadue was re-elected with over 60 percent of the votes. 30-year-old Communist economist Irací Hassler became Mayor of downtown Santiago. These developments suggest the possibility of a significant leftwing shift in Chilean politics in the upcoming presidential and congressional elections scheduled for November 2021.
In Brazil, elections are scheduled for 2 October 2022 which will elect the President, Vice President and the National Congress. Elections for state Governors and Vice Governors, State Legislative Assemblies and the Federal District Legislative Chamber will be held at the same time.
Brazil’s current President, the pro-militarist, proto-fascist, Jair Messias Bolsonaro, imitating the antics of former US President Donald Trump, has recently taken to issuing threats that he will not accept the outcome of elections that he deems to be fraudulent. That is, any elections that do not vote him back into power. Brazil’s Datafolha institute revealed the results of a May 2021 poll which it puts the former president, Luiz Inácio Lula da Silva, as the favorite over Bolsonaro. Since Lulu was cleared in March of corruption charges by the Supreme Court and has regained both his liberty and his political rights, he has gathered increasing electoral potential as issues such as social segregation and the mismanagement of the pandemic by Bolsonaro make Brazilians yearn for the progressive path of the Workers Party (PT), which produced enormous social achievements in the 2000s.
A Right-Wing Discredited
Confirmation of Castillo’s victory by the Peruvian Electoral Board on July 19th occurred within days of the space flights of British billionaire oligarch Richard Branson (July 11) and of American billionaire oligarch Jeff Bezos (July 20). These represent, on the one hand: a peasant teacher, Marxist and trade unionist, with a program to lift Peru’s largely marginalized and indigenous population from poverty by diverting the country’s wealth from the country’s traditional ruling class and their patrons – foreign extractavist corporations and the financiers who bankroll them. And, on the other hand: two supremely skillful image shapers, technically quite smart but, given their enormous wealth, insufficiently focused on the challenges of climate change, nuclear war, and obscene social inequality.
Their political counterpart was Castillo’s opponent, presidential candidate Keiko Fujimori. Peruvian ruling class support for Fujimori, extending even as far as an embrace by world celebrity author and former presidential candidate (against Keiko’s father, Alberto Fujimori), Mario Vargas Llosa, exposes the unfathomable depths of greed, selfishness, and stupidity which increasingly characterizes the nouveau riche of the global neoliberal parasitic incubus. This is what it is signified when a ruling class can only come together on a candidate whose two previous attempts at the presidency have failed, who is the daughter of a jailed former president, dictator, swindler and torturer, whose offer that Keiko should replace her jilted mother as Peru’s first lady was apparently irresistible at the age of 19, and whose supporters were scarcely embarrassed by a potentially false-flag massacre in May that seemed designed to stall Castillo’s campaign, or by the advice from jailed former CIA-backed eminence-grise and Alberto Fujimori’s head of national intelligence, Vladimiro Montesinos, that the “Fujimoristas” should bribe judges of the Peruvian Electoral Board to rule against Castillo.
The New Pink Revolution
Castillo’s victory in Peru is particularly significant in the light of the return to power last November of MAS in Bolivia, this time under the leadership of Luis Arce. Under the last, most recent MAS president, Evo Morales, Bolivia enjoyed a largely successful socialist advance, for the country and its people, in the period 2006-2019. Morales’s victory in the first round of the 2019 elections was undermined by false charges of electoral fraud suggested by the preliminary “findings”, widely disputed, of the pro-US Organization of American States (OAS), that provided a pretext for military and police pressure on Morales to resign. The transitional administration of Jeanine Áñez – cut. it would seem, from the same neoliberal, conservative and clownish cloth of Keiko Fujimori, Jair Bolsonaro, Donald Trump and other emerging proto-fascists of the global right-wing faux-neoliberal order, in which “free trade” ceded to “heavily managed trade” – was an embarrassing and dangerous disaster that helped guarantee a return to power of MAS in the 2021 elections, albeit under new leadership (note that Arce was Morales’s vice-president, and that Morales continues to be president of MAS), with even stronger electoral backing than for Morales in 2019.
Peruvian-Bolivian partnership based on ideological unanimity creates the prospect of a progressive and, very loosely, North-South Latin American chain that extends from Venezuela down through Bolivia, Peru, a democratically and constitutionally reinvigorated Chile, and Argentina (which occupies most of the continent’s southern cone). This helps offset the darker resurgence of US Empire through its Brazilian ogre, Bolsonaro, allied to anti-, or less-progressive regimes of Colombia, Ecuador, Guyana, Suriname, French Guiana, Paraguay, and Uruguay and, highly likely, Haiti, while the US places increasing pressure on the communist leadership of Cuba, through sanctions and support for the popular protests that sanctions, Covid and the US apparatus of regime change shenanigans have helped provoke. More simplistically, the logic suggests that the inauguration of Castillo solidifies the prospects of a progressive, mainly Pacific corridor for South America plus, from the Atlantic side, Argentina, in opposition to a faux-neoliberal and reactionary South Atlantic corridor.
Imperial Vultures
Notwithstanding the hopeful embryonic core of a new, more realistically progressive South American continent, the land mass still reflects or represents not simply accommodation to or resistance against the northern hegemon, the USA, but also the strong, continuing influences of former imperial powers. Most notable are Spain and Portugal whose legacy includes not simply an inclination to regular recourse to caudillo-style military dictatorships (usually of the right but, sometimes – as at different times in Venezuela, Peru and Bolivia – of the left) but also a distinctive, southern European, circular dance between liberal and conservative wings of the ruling classes. Occasionally, through liberals, the choreography breaks form to allow greater, though often temporary, or iterative, integration of the interests of workers and indigenous when economic conditions are propitious. In addition, we should note northern European influences along thecontinent’s north-east coast, as in the former British (1796 to 1966) colony of Guyana, the former Dutch (1815-1954) colony of Suriname and the ongoing French (from 1667) colonization of French Guinea (home to France’s Guiana Space Centre, which is also used by its NATO allies). These represent not simply the lingering cultural incursions into South America of northern Europe but also symbolize the strong influence throughout the continent of NATO power generally, now challenged to a modest degree by China.
Consider that the longest border France has with any country is the border between French Guiana and Brazil: some 450 miles. Its border with Suriname (former Dutch Guiana) is 345 miles. Journalist Rick Rozoff has weighed recent NATO activities in the region. These include a 2006 visit by the Standing NATO Maritime Group One to fellow NATO members’ possessions in the Caribbean and engage in exercises with the owners. The preceding year then-Venezuelan President Hugo Chavez accused NATO of planning an invasion of his nation under the code name of Operation Balboa. In 2018 Colombia was admitted to NATO’s Partners Across the Globe program. Continental USA provides NATO a 2,000-mile border with Mexico. Other NATO possessions in the New World include: (for Britain): Anguilla, Bermuda, the British Virgin Islands, the Cayman Islands, Montserrat, Turks and Caicos Islands; (for France): French Guiana, Guadeloupe, Martinique, Miquelon, Saint-Barthélemy, Saint Pierre and Saint Martin; (for The Netherlands): Aruba, Bonaire, Curaçao, Saba, Sint Eustatius and Sint Maarten; (for the USA): Puerto Rico and the U.S. Virgin Islands.
Invoking cautions of former and continuing imperial influence, Bolivia’s former president and continuing president of MAS, Evo Morales, recently denounced what he described as the new U.S.-led Operation Condor. This was in reference to a notorious US-directed secret intelligence program in the 1970s and early 1980s affecting Chile, Argentina, Brazil, Bolivia, Uruguay, and Paraguay, and that resulted in the torture and “disappearance” of thousands of people. Uppermost in Morales’ mind was the sending of war materials by the former faux-neoliberal presidents of Ecuador (Lenin Moreno), and Argentina (Mauricio Macri), in support of the 2019 coup against Morales – based, as already described, on false allegations of electoral fraud and corruption – and a letter of thanks allegedly sent by Bolivian Air Force General Terceros to Macri in gratitude for Argentina’s armed support. Morales also referenced the assassination in July 2021 of the President of Haiti, Jovenel Moïse, by former Colombian military personnel trained in the USA, and US support for protests against the communist regime of Cuba. Morales asserted that the progressive Bolivian government of Arce was targeted by the USA because Bolivia had recovered control over its natural resources, nationalized strategic companies, and closed the US military base in Chimoré.
Just six weeks before the election in Peru, the USA had dispatched a new ambassador, Lisa Kenna, an adviser to former US Secretary of State Mike Pompeo, a nine-year CIA veteran and former US State Department official in Iraq. In other suspicious imperial moves, CIA Director William J. Burns had visited Colombia a week before the assassination of Haitian President Jovenal Moïse. In a March 2021 interview, former US ambassador to Haiti Pamela White talked about a plan to “put aside” President Moïse, leaving power in the hands of an interim Prime Minister, possibly with a view to avoiding the democratic elections which the population have been calling for since early 2020. In Nicaragua, having failed to unseat President Daniel Ortega in the elect ions of 2018, the USA unfolded a new plan of destabilization against the Sandinista administration of Daniel Ortega. The plan, entitled Responsive Action in Nicaragua (RAIN), was managed, and financed by the United States Agency for International Development (USAID), and leaked from the US embassy in July 2020. The plan called for an unconstitutional “transition” and for promoting “transition-related activities.”
In Venezuela, in July 2021, the socialist president Nicolás Maduro, detailed and denounced two assassination attempts against his life in just the preceding two weeks. Maduro also recently denounced the US Southern Command and CIA for plans to attack Venezuela from Colombian territory.
In Honduras, US officials, notably then-Secretary of State Hillary Clinton, had played an important role in preventing President Manuel Zelaya’s return to office in 2009 and allowing the military junta who ousted him time to consolidate its power in the face of massive nonviolent citizen protests. Top US officials had been in discussions with the military commanders and right-wing politicians who organized the coup shortly before Zelaya’s overthrow. During the subsequent protests and over the ensuing years thousands of indigenous activists, peasant leaders, trade unionists, journalists, environmentalists, judges, opposition political candidates, human rights activists, and others have been murdered. Hundreds of thousands of Hondurans have fled the subsequent worsening economic conditions and intense gang activity that exacerbate the pressure of refugees on the southern border of the USA.
Zelaya had incurred US displeasure by moving his government to the left, raising the minimum wage, providing free school lunches, milk for young children, pensions for the elderly, creating additional scholarships for students and, legitimately, paving the way for constitutional change, badly needed, that might have allowed him a second term in office. He built new schools, subsidized public transportation, and even distributed energy-saving light bulbs. Leader of the coup, Honduran General Romeo Vásquez Velásquez, was a graduate of the notorious US School of the Americas. In recent years, the USA has poured hundreds of millions of dollars in security assistance to Honduras, supposedly to fight drug traffickers. Yet in January 2021, federal prosecutors in New York presented evidence to suggest that the nation’s President Juan Orlando Hernández (who is supposed to step down later in 2021) had helped traffic drugs. Prosecutors claimed that the President had used his nation’s armed forces to protect huge shipments of cocaine in exchange for hefty bribes, and cited documents that accused Hernández of stating, in front of an unnamed witness, that he had embezzled aid money from the USA through nongovernmental organizations. Hernández denied all wrongdoing, saying that cartel leaders had falsely accused him precisely because he has successfully cracked down on trafficking.
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The Morales and Correa Miracles
It can be argued that the pink revolution of the 2000s rode the crest of an economic wave of neoliberal globalization that finally gave space to South American countries to modestly redistribute wealth to the working and indigenous peasant classes. Neoliberalism was able to do this not so much because it is a magical formula – it isn’t – but because it took money, assets and markets from State institutions and handed them over to domestic and international private corporations and the banks that finance them.
Additionally, it can be argued – especially with respect to the administrations of Morales in Bolivia and Correa in Ecuador, along with others that will be discussed later – that these neo-socialist states systematically established ownership, structural, financial, and equitable conditions designed to ensure that national wealth was conserved primarily for national and popular benefit, and only secondarily to satisfy international markets and local oligarchs. They shared a far more realistic awareness than their twentieth century predecessors of the imperial and predatory role of IMF and World Bank loans in tethering and subordinating national wealth to the needs of international capitalism. Most of the pink revolutionary states performed acceptably well up until 2014 when the commodities boom came to an end; they subsequently glided and then crashed as the result of the 2020 pandemic.
The achievements of Morales and Correa were far more than happy surprises contingent on a rising sea that lifted most boats. Analyst Carwill Bjork-James of Vanderbilt University has noted that the Morales and Arce team became:
“Experts at playing against type, contrasting their moderate polices with their radical reputation. They maintained small fiscal deficits, large currency reserves, and a high growth rate in GDP. Accordingly, the international capital markets have provided Bolivia with financing, while gradually upgrading its bond rating”.
Perhaps for that reason, therefore, the USA did not react with quite the expected level of hostility when in the first five years of Morales’ presidency:
Bolivia re-nationalized its gas fields and infrastructure (under the state-owned YPFB), electrical grid (ENDE), telephone company (ENTEL), the Huanuni and Vinto tin mines (COMIBOL), major airports (SABSA), and the Vinto smelter (Empresa Metalúrgica de Vinto). It also created a new national airline, BoA; and a series of light manufacturing enterprises producing cardboard (CartoBol), packaged milk (LacteosBol), Cement (ECEBOL), paper (PapelBol), clothing (Enatex), and refined sugar and alcohol (San Buenaventura).
Dr. Francisco Dominguez, Latin American expert at Middlesex University has helpfully enumerated the many achievements of the Morales-led MAS-IPSP government in Bolivia, 2006-2019:
• GDP up from US$9,574 bn in 2005 to US$40,000 bn in 2013 (an increase of over 400%), that is, an annual average of 4,6%, the highest in the region
• A fiscal surplus in 2006 for the first time in Bolivian history; and by 2018 it had US$8,946 million in international reserves
• Extreme poverty reduced from 38% in 2006 to 16% in 2018 (a historic low)
• Infant mortality declined by 56%
• Social bonuses (the elders, primary and secondary school pupils, pregnant women) benefited 5,5 million people (more than 50% of the population)
• Domestic savings in the period 2006-2018 up from US$4,361 million to US$27,123 million
• External debt down from 61% of GDP in 2004 to 23% in 2018
• Number of health centers up from 2,870 to 3902, and 49 new hospitals were built, well equipped by the state with the latest medical technology (public health is free of charge)
• With Cuban help, Operation Miracle conducted over 3 million ophthalmological visits and 742,000 surgeries leading to many Bolivians having their eye sight restored.
• The budget for health up from 2,5 million Bolivianos (national currency) in 2005 to 18, 805 million in 2018
• Illiteracy eradicated by 2014.
• Between 2014-18 the nine-lines metro-cable in La Paz (completed in 2014), had transported 174 million passengers
• Drinking water by 2020 reached 9,7 million people out of total population of 11 million
• The end of the latifundia system led to the redistribution of about 1 million hectares of land to peasants and peasant families
• In 2005 only 18% of the parliamentarians were women; by 2018 this had increassed to 51%
• 4,796 new km of roadway were added to existing motorways in the period 2006-2018
• All of the above was financed by the renationalization of the energy industry (mainly gas, also oil)
• The Tupac Katari satellite was placed in space.
• The re-nationalized ENTEL (telecommunications company) granted Internet access to millions of Bolivians free of charge, as a fundamental right
• 36 indigenous nations were recognized
• Special cultural and ancestral land rights were enshrined in the new Constitution of the Plurinational State
• National sovereignty was affirmed by eliminating foreign (US) interference, with the expulsion of the DEA, USAID, CIA and even the US ambassador.
The Post-Morales Era
MAS-IPSP recovered the presidency with a 55% of the votes cast, against 28% of right-wing Carlos Mesa, and 14% of extreme right-wing Luis Camacho. This was a much-improved performance compared to the election in November 2019 when their candidate, Evo Morales won with 48% against right wing Carlos Mesa’s 36%. All international election observation missions confirmed that there had been no electoral fraud and that the elections proceeded smoothly and properly. The results also showed that MAS achieved a better result with a candidate other than Morales, suggesting that his insistence on running again after three terms in office was neither necessary nor smart. Arce has said there would be no place for Evo Morales in his government.
Most political actors quickly recognized the result, with only a few radical right-wing groups refusing. MAS-IPSP won in 6 out of the country’s 9 departments with the right wing winning in two and the extreme right wing being victorious only in Santa Cruz. The 6 departments where Arce was victorious contained nearly 7 million of Bolivia’s total population of 11 million. MAS-IPSP candidates obtained 75 out of the 130 seats of the Plurinational Legislative Assembly, and 21 out of 36 in the Senate. The MAS-IPSP presidential candidate also won in 314 municipalities, the extreme right in 21, and the right wing in 18.
This victory was achieved despite or perhaps because of traumatic, systematic, political, and judicial persecution against the MAS-IPSP, its leaders and cadre before and after the 2019 electoral fiasco. Morales himself was charged with terrorism, forcing him to seek refuge in Argentina. Leftist social movements were suppressed by means of murder, massacre, illegal imprisonment, harassment, exile, and judicial manipulation (“lawfare”). Fascist violence was unleashed on indigenous women, and in massacres against social movements defending their rights and fighting for democracy.
Jan Souverein, head of the Friedrich-Ebert-Stiftung’s office in Bolivia explained MAS success in terms of strategic decisions taken by MAS, the wretched behavior of its political opponents, the poor governance of the transitional government, and the economic and social consequences of the Covid 19 pandemic. One important strategic decision of MAS was its chosen candidate duo: a cosmopolitan economist who had worked for the Bolivian Central Bank from 1987 and who was a former successful Minister of Economy and Public Finance – Luis Arce – together with David Choquehuanca, a former foreign minister of indigenous Aymaran ethnicity.
Opposition candidates had focused their campaigns narrowly on preventing MAS from returning to power – hardly a message likely to secure the support of the working and indigenous classes whose interests had been so thoroughly neglected by the transitional government of a relatively unknown senator, Jeanine Áñez Chávez, whose authoritarian and illegitimate leadership exposed to the world all the ugliness of contemporary right-wing Latin American (and global) movements. This included disregard for the requirements of democracy and disdain for the indigenous. The latter was manifest in public burnings of the wiphala or indigenous flag and brutal suppression of the protests staged by indigenous peoples. The resulting deaths were deemed massacres by The Inter-American Commission on Human Rights. The grossness of the crime was aggravated by the granting of immunity to the soldiers responsible. The incompetence of the transitional government was further manifest in mismanagement of the health crisis, poor political coordination with sub-national levels, reckless expenditure on the comforts of the already privileged, and cases of egregious corruption. Añez’ economic policies aimed to demolish the accomplishments of the Morales years and reverse all his social policies that had benefited the people. She then requested unnecessary financial emergency assistance from the IMF whose loan of US$327 million came with the customary onerous conditionalities undermining Bolivia’s economic sovereignty. Arce has since flung it back.
PART II
Commonality of Challenges
Arce in Bolivia and Castillo in Peru face some similar challenges: paralyzed economies, the exhaustion of some sources of income such as natural gas and the emergence of others (e.g. lithium); the pandemically-related rise in poverty; deep social divisions between rich and poor and between well-endowed areas and areas less fortunate; a historical legacy of ruling class entitlement; health and education systems in great need of additional resources, especially in the poorer and more remote regions; environmental challenges such as the destruction of the Amazon rain forest; the insistent pressure for access and profit by multinational corporations, especially in the extractivist industries; the need to fortify and expand national institutions and the role of the State in the national economy; the always looming threat of the regional hegemon, the USA and its allies, both local and global, which, when angered sufficiently stifle economic and political development through the application of sanctions and financing of local “pro-democracy” movements. In both Peru and Bolivia, it must be expected that the right-wing will seek revenge and redress for electoral defeat by resort to anti-democratic practices, rabble-rousing, the withholding of all cooperation with the administration in power, and backdoor, treasonous collaboration with the USA, western multinational corporations, their own militaries, and right-wing neighbors.
Arce’s first acts in power may also resonate with Castillo’s program. They include establishment of the Bonus Against Hunger program, which provides 1,000 Bolivianos (US$150 / £100) aimed at the most disadvantaged – some 4 million people; tax reduction on credit card payments from 13% to 8%, returning the difference (5%) to the customer; return of VAT to low-income people; taxes on large fortunes; negotiation for credit with the World Bank and Inter-American Development Bank, without economic or political conditionalities attached, and for a moratorium and condoning of the country’s debt and the interest on it; maintenance in the value of the currency; import substitution; stimulation of economic demand via subsidies to the poorest; professionalization of the judiciary, on criteria of merit and qualification rather than political quotas determined by the relative strength of existing political forces; continuing industrialization of lithium and iron; food sovereignty; promotion of domestic tourism; export of electricity and the industrialization of gas broadly under state control and ownership. Other polices include 10-11% increase in State expenditure on health and education; increase in public investment to achieve a rate of economic growth of 4,8% for 2021 and return of the IMF loan contracted by Añez in 2020.
Arce is committed to the production of industrial inputs from raw materials, a strategy he believes generates employment and reduces economic dependency But neo-socialism in both Bolivia and Peru has yet to construct programs of State-directed equitable economic growth and redistribution which do not simultaneously contribute to planetary destruction. For example, debt-financed public investment is planned to build thirty-five hydroelectric dams at a cost of US$27 billion, providing 9.9 to 11 GW of power by 2025. Among the largest is the El Bala/El Chepete complex, which is set to flood parts of the Amazon basin in northern La Paz, including in the Madidi National Park. This energy is not needed within Bolivia, whose peak electricity consumption is well under 2 GW. Instead, the government hopes to make electricity into a major export commodity, sent overland to Brazil, Argentina, Chile and Peru.
Regional Networks
Arce has resumed the country’s membership in three major blocs aimed at regional integration, reversing moves by the previous “interim” government to withdraw from these left leaning organizations, which are: the Community of Latin American and Caribbean States (known by its Spanish acronym CELAC), the Union of South American Nations (UNASUR) and the Bolivarian Alliance for the Peoples of Our America (ALBA). All these seek to promote political and economic cooperation between members. UNASUR has shed most of its original twelve members amid disputes over its leadership and direction, particularly with reference to Venezuela and the US-backed Lima Group. With Arce in power, the group now comprises only four members: Bolivia, Guyana, Suriname and Venezuela. CELAC is made up of 32 Latin American nations and is seen by some members as an alternative to the US-founded and headquartered Organization of American States (OAS). Bolsonaro took Brazil out of CELAC. ALBA aims to eliminate trade barriers and foster economic unity between Latin American nations. Its ten member countries are Antigua and Barbuda, Bolivia, Cuba, Dominica, Grenada, Nicaragua, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines and Venezuela
A Bolivia-Peru Alliance
In building regional networks that can both sustain and help protect Bolivia, Arce might do well to consider the advantages of an ancient twin and ally, Peru, now that Peru is under the supervision of Pedro Castillo’s Perú Libre neo-socialist administration. The potential for such a link is deeply inscribed in the history and cultures of both countries.
During colonial times, the territory of Audiencia de Charcas, also known as Alto Perú, now Bolivia, was an integral territory of the Spanish Viceroyalty of Peru from its creation. But in 1776, it was administratively severed and became a province of the newly created Viceroyalty of the Río de la Plata. Yet for geographical and historical reasons, this remained closer to Lima than to its administrative capital, Buenos Aires. The territory achieved independence in 1825 at a time when union with Peru was widely supported. The new Republic of Bolivia (named in honor of Simón Bolívar – whose full name was Simón José Antonio de la Santísima Trinidad Bolívar y Ponte Palacios y Blanco, also colloquially called El Libertador) was born, with Bolívar as its first president. An armed uprising in Chuquisaca was used by Peru as an excuse to invade Bolivia. The Peruvian army entered La Paz, Bolivia, on May 28, 1828.
The Bolivia-Peru Confederation and Bolívar’s Gran-Colombia Bolivar
A plan for a federation, or at least a confederation, was accepted by the legislative branches of both countries, although there were disagreements as to how much autonomy Bolivia should enjoy. The idea of a federation conflicted with Bolívar’s ambition to create a political umbrella for all of the former Spanish possessions in South America. His preferred structure would have consisted of present-day Colombia, Venezuela, Ecuador, Panama, northern Peru, western Guyana, and northwest Brazil, known as Gran-Colombia Bolivar.
Bolívar’s plan to invade Peru was failing in 1828-1829 and stalled indefinitely upon his death in 1830. A few years later, it was Bolivia’s turn to invade Peru and a confederation of the two nations, the Peru-Bolivian Confederation, was formed, comprising a Republic of North Peru, a Republic of South Peru, and the Republic of Bolivia, all under the presidency of Marshal Andrés de Santa Cruz, 1836-1839.
The union attempted to restore ancient commercial routes and promote a policy of open markets. But the confederation was opposed by the elite of Lima on the grounds that it interfered with Lima’s good relations with Venezuela. Neighboring countries such as Argentina and Chile were alarmed by the size and economic strength of the confederation. Chile began to regard the confederation as an enemy and went to war with it in 1836. Argentina followed suit in 1837. On August 25, 1839, General Agustín Gamarra became president and officially declared the dissolution of the confederation, bringing South and North Peru together as one country (Peru), separate from Bolivia.
Allies in the War of the Pacific
Bolivia and Peru were to ally again a few decades later in their war against Chile (War of the Pacific), 1879 to 1884. Bolivia and Peru had already signed The Treaty of Defensive Alliance in 1873 to contain Chile’s expansionist tendencies over several fronts, including claims on the nitrate-rich coastal Bolivian territory in the Atacama Desert. On February 14, 1879, Chile’s armed forces occupied the Bolivian port city of Antofagasta. War between Bolivia and Chile was declared on March 1, 1879, followed by declarations of war between Chile and Peru on April 5, 1879.
The Forever Issue of Coastal Access
Chile gained significant resource-rich territory from Peru and Bolivia as proceeds of a war from which it emerged overwhelmingly victorious. Chile and Peru signed the Treaty of Ancón on October 20, 1883. Bolivia signed a truce with Chile in 1884. Chile acquired the Peruvian territory of Tarapacá, the disputed Bolivian department of Litoral. This turned Bolivia back into being a landlocked country.
To gain access to the main routes of transoceanic trade, Bolivia had previously ceded more than 100,000 square kilometers of territory to Brazil in 1867 in exchange for riverine access to the Atlantic Ocean. In the War of the Pacific Chile had demonstrated technological superiority and better coordinated military strategy. Peru and Bolivia were hindered by domestic fragmentation, both economic and institutional. Bolivia lost immediate access to the Pacific. Peru was humiliated by the occupation of Lima by Chilean troops for more than three years. Bolivia has subsequently continued to pursue its dream of access to the Pacific coast, a lack that has been estimated to cost it 1.5 percent of its annual GDP, despite port collaboration with Chile in Arica and Antofagasta.
From 1880 to the 1920s, Bolivia recovered from its defeat while benefitting from the rebirth of silver mining and the growth of the tin industry. Politically, the Conservative Party dominated national politics until its overthrow by the Liberal Party in the “Federal Revolution” of 1899. A new political force, the Republican Party, came to power through a bloodless coup in 1920, but the Great Depression of the early 1930s cut short Bolivia’s economic recovery.
In addition to many common indigenous roots in cultural and linguistic groups such as the Quechua and Aymara, and their common subjugation to Inca and Spanish conquests, Bolivia and Peru share many other strong historical parallels. Both have experienced long periods of military rule (Bolivia rather more than Peru), which occasionally have exhibited left-wing or progressive tendencies.
The Startling Era of Left-Wing Military Dictatorships
The most notorious Peruvian and Bolivian dictators have been conservative tyrants: e.g., Hugo Banzer in Bolivia (1971 to 1978) and Alberto Fujimori in Peru, 1990-2000. Whereas Banzer later became a constitutional president (1997-2001), Fujimori transitioned the other way from constitutional president to dictator (1982-1990). Both presidents excused their dictatorships as necessary reactions to what they claimed were the excesses of earlier, military, and revolutionary presidents (Juan Velsasco Alvarado in Peru, Juan José Torres in Bolivia).
These earlier revolutionaries, whatever their faults, constitute an important reminder of the long history of radicalism in these countries and those of their neighbors, and a warning that the hopes that fresh progressive faces inspire one day can be quickly dashed the next by reactionary revengeful successors like Jeanine Áñez. In the case of Peru I have recently examined the interesting legacy of Velasco. Velasco’s presidency (1968-1975) lasted a few years’ longer than that of Torres in Bolivia (1970-71) but it is more than coincidence that they overlapped not only with one another but also with the presidency of Salvador Allende (1970-1973) in Chile and with the reign of the left-wing dictator of Panama, Omar Torrijos, 1968-1978 (predecessor to Manuel Noriega). All came to a sorry end, with the backing of the USA, and all were succeeded by right-wing dictatorships. While this period further coincided with the democratic liberal regime of Rafael Caldera in Venezuala it also recalls the US-backed military coup d’etat in Brazil which overthrew President João Belchior Marques Goulart in 1964. Goulart was considered the last left-wing president of Brazil until Lula da Silva took office in 2003.
Two of these died naturally (Velasco, Caldera), another was assassinated (Torres, possibly and indirectly at the hands of his successor Banzer, as part of an Operation Condor project) and another committed suicide as the forces of Augusto Pinochet surrounded Chile’s presidential palace (Allende), and yet another died in an air crash (Torrijos) which some suspect was the work of the CIA. One (Goulart) died of a heart attack that was never officially confirmed.
Torres, who had climbed from birth to a poor Aymara-mestizo family to serve as 50th President of Bolivia from 1970 to 1971 had been the reform-minded right-hand and commander-in-chief under President Alfredo Ovando Candía. Ovanda had led the Armed Forces of Bolivia in the aftermath of the 1952 Revolution that installed in power the reformist Revolutionary Nationalist Movement party (MNR).
Torres urged Ovando to enact more far-reaching reforms and to stand up to the more conservative officers. He denounced capitalism on the grounds that it fostered underdevelopment and encouraged dependence on foreign countries. In 1969, Torres had been one of the main protagonists in the nationalization of Gulf Oil and had participated in the occupation of the company’s headquarters in La Paz. Ovanda’s rule was threatened by a right-wing military coup attempt in October 1970. But leftist military forces under Torres triumphed. Ovanda then stood down from the presidency in favor of Torres. Torres called together an Asamblea del Pueblo in comprised of representatives of specific “proletarian” sectors of society (miners, unionized teachers, students, peasants). It was granted the powers of a working legislature. Torres proposed to rebuild society on the four pillars of workers, academics, peasants, and the military. He aspired to defend Bolivia’s natural resources, expropriate the sugar industry, and negotiate with the Chilean government of Salvador Allende for Bolivian access to the sea. He proposed amnesty for former rebels, increases in the university budget, and closure of the United States Strategic Communications Center. His government was undermined by US Ambassador Ernest Siracusa (who had participated in the coup d’état against Jacobo Arbenz in Guatemala in 1954, and was expelled from Peru in 1968, accused of being CIA). The World Bank and the Inter-American Development Bank refused loans. After only ten months, Torres was overthrown in a coup led by colonel Hugo Banzer with the support of the Brazilian military regime and the USA.
Other Parallels
The politics of both Peru and Bolivia since the second half of the nineteenth century have otherwise largely constituted a struggle between conservatives (or later, in the case of Bolivia, republicans) and liberals. Both countries have comprised primarily indigenous, or mestizo populations governed by mainly white, Hispanic ruling classes. The wealth of both countries has depended significantly on metals (different metals at different times), oil, and agriculture, as has their vulnerability to fluctuations in international demand and the consequent wild impacts on prices. This in turn has been a controlling constraint on the extent of any significant redistribution of wealth. Until the late 20th century the export of metals dominated Bolivia’s trade but, with the collapse of the world market in tin in the 1980s, natural gas became a leading export. Metals, petroleum, and natural gas account for most of Bolivia’s legitimate export trade. Soybeans are the principal agricultural export. Bolivia’s primary trading partners include Brazil, Argentina, China, the United States, South Korea, Japan, and Peru. Illegal trade in cocaine continues to have a significant but decreasing impact on the Bolivian economy.
Working Socialism in South America
Recent socialist administrations have been good for Bolivia, Ecuador, and Peru. The overarching pattern in each of these countries has been one of economic growth and better social conditions in the early 2000s, levelling off at the end of the commodities boom of 2014, and then partially reversed as a result of Covid in 2020. Much the same was true of the Venezuelan economy of Hugo Chavez (1998-2013) and of the economy of Brazil under President Luiz Inacio Lula da Silva (2003-2011).
Brazil under Lula
Brazil is by far South America’s largest and most populated ( 214 million in 2020) country. Lula was born in poverty in 1945 in the northeastern state of Pernambuco and migrated with his family at the age of seven to São Paulo, then Brazil’s booming industrial city. He never went beyond the fourth grade in school. In the 1970s he became leader of a labor-based movement of opposition to the military dictatorship. This gave rise to the Workers’ Party (PT) which came to power in 2002.
The PT was committed to socialism in the form of agrarian reform, participatory democracy, redistribution of wealth, independence from the North American superpower, and regional solidarity within Latin America. When Lula became president, Brazil had been one of the world’s top 10 industrial economies for some years. Lula’s predecessor, Fernando Henrique Cardoso, had opened the economy to an unprecedented influx of foreign capital.
Lula reassured foreign investors that he would not attack the position of capital nor withdraw from any international agreements. He proved to be more fiscally conservative than Cardoso, who had run up a substantial public debt, and instead ran a high budget surplus and paid the debt to the IMF in full. Brazil found new markets for its products, for which there was elevated demand, helping the country achieve relative prosperity through the 2000s. Brazil particularly tightened its relationship with China, which is now its most important trading partner.
Brazil suffered less from the economic crisis of 2008 than most countries, with growth resuming by the end of 2009 and achieving a growth rate for 2010 of 7.5%. The Bolsa Família and other Brazilian cash-transfer programs were extended by Lulu to include all the country’s poor. They included credit to small farmers for food production and pensions for workers in the country’s informal sector. Recipients were obligated to keep their children in school and see that they received regular medical attention. According to the World Bank, the poverty rate fell from 22% to 7% between 2003 and 2009. But government benefits to small-scale agriculturalists were limited to a family farm credit, the legalization of squatters’ possessions, and the colonization of new land in the Amazon region. There was little challenge to the latifundio or redistribution of land from absentee owners to those who work it. Affirmative action programs for higher education expanded dramatically.
Venezuela under Chavez
Venezuela had a population of almost 29 million in 2019. Hugo Chavez was born in 1958 to schoolteachers. He attended the Venezuelan Academy of Military Sciences, where he graduated in 1975 with a degree in military arts and science. He went on to serve as an officer in an army paratrooper unit. Chávez was leader of the Fifth Republic Movement political party from its foundation in 1997 until 2007, when it merged with several other parties to form the United Socialist Party of Venezuela (PSUV), which Chavez. led until 2012.
Using the rise of oil prices in the early 2000s to consolidate State power over the economy and the country’s natural resources, Chávez created “Bolivarian missions”, aimed at providing public services to improve economic, cultural, and social conditions. His policies aimed for redistribution of wealth, land reform, and democratization of economic activity via workplace self-management and creation of worker-owned cooperatives. He achieved greater autonomy from USA and European governments and used oil funds to promote economic and political integration with other Latin American nations. Venezuela’s economy improved dramatically during much of the Chávez presidency. From 1999 through 2013, inflation dropped to its lowest levels in the country since the late 1980s; unemployment fell drastically from 14.5% in 1998 to 7.8% in 2011. Poverty also declined significantly, falling by nearly 50 percent since the oil strike, with extreme poverty dropping by over 70 percent. The narrative beyond Chavez to Maduro of course, has been a great deal more problematic, not least because of intensifying US economic warfare and destabilization against Venezuela, and more challenging economic circumstances.
Bolivia under Evo Morales
Bolivia had a population of 11.6 million in 2020. In Bolivia, poverty lowered from 66 percent in 2000 to 35 percent in 2018 in the wake of direct action, especially under Evo Morales, to develop the economy, reduce poverty and income inequality, and increase foreign investment. The extreme poverty rate fell to 15.2 percent (down from 37.7 percent ) in this period. Bolivia’s GDP growth hovered around 4 percent from the early 2000s to 2014. From 2000 to 2012, Bolivia increased its exports, especially of minerals and hydrocarbons which accounted for only 18% of GDP in 2000, but 47% in 2012. Just over 50% of the country’s GDP is earned by services. Bolivia’s decision to focus on exports helped grow its economy, add jobs, and reduce income inequality. Economic growth led to wage increases for many Bolivians. Salaries increased after the government became directly involved in efforts to reduce income inequality. The real minimum wage increased by 122 percent in the years 2000-2015. Average labor income rose by 36 percent during 2000-2013.
A 2019 report by the Washington-based Center for Economic and Policy Research observed that for most of 13 years Bolivia had enjoyed balance of payments surpluses. The country’s solid economic growth contributed substantially to the reduction of poverty and extreme poverty. Facilitating factors included a new constitution with significant economic mandates; nationalization and public ownership of natural resources and of some strategic sectors of the economy; redistributive public investment and wage policies; policy coordination between the Central Bank and the Finance Ministry; and monetary and exchange rate policies directed toward de-dollarizing the Bolivian financial system. The renationalization of hydrocarbons in 2006 was vital to Bolivia’s subsequent economic and social progress. In the first eight years of the Morales administration, national government revenue from hydrocarbons increased nearly sevenfold from $731 million to $4.95 billion.
The CEPR report concluded that the importance of the government’s nationalization of hydrocarbons to Bolivia’s economic progress over the past 13 years could not be overemphasized. These revenues accounted for macroeconomic stability and financed social spending. This advance could only have come about after breaking free from the constraints of IMF agreements. When Evo Morales took office in 2006, Bolivia had been operating under IMF loan agreements for 20 years, and its GDP per capita was lower than it had been in 1980. The IMF had opposed any kind of nationalization or even lesser attempts at increasing government control over the hydrocarbon sector.
Ecuador under Correa
Ecuador had a population of 18m million in 2021. In Ecuador, things were beginning to improve following dollarization of the economy in the 2000s, and further improved under Correa. GDP grew steadily from $US8.3bn in 2000 to $US108.1 in 2019, since when it fell back to $US98.8 in 2020. Correa was helped by resurgence in oil prices. Oil had been the largest contributor to Ecuador’s economy since the 1970s, but non-oil commodities subsequently became more significant. Tourism, bananas, shrimp, coffee and gold are today among other top contributors to export earnings. There has also been an influx of foreign investors, most notably China. Poverty dropped from 45 percent to under 22.5 percent under Correa and has stayed fairly steady at around 24% for much of the period 2015-2018. Share of population living on less than 3.20 U.S. dollars per day in Ecuador in the period 2010 to 2018 fell from 14.7% in 2010 to 8.6% in 2013 and then climbed up to 9.7% in 2018. Because of Covid it grew 8 percentage points to affect 1.3 million people in 2020, and the inequality gap widened. Since 2000, Ecuador has experienced an average of four percent annual economic growth, and since the beginning of Correa’s presidency, unemployment decreased to less than five percent. Because Correa defaulted on Ecuador’s 3.2 billion dollars of sovereign debt, the debt had amounted to nearly five billion dollars by 2014 and nine and a half billion by 2021.
Peru from Fujimori to Castillo
Peru had a total population of 32m in 2019, with a per capita GDP of approx. $7,000 and an overall GDP of over $230 billion. Peru is the seventh largest economy in Latin America. Its services sector accounts for 60% of GDP, within which telecommunications and financial services alone account for nearly 40% of GDP. Industry represents 35% of GDP. Peru’s ores and mineral exports make up over 50% of total exports, food accounts for 21% and mineral fuels account for 12%, activity that is very vulnerable to shifts in terms of trade. In a financially dollarized economy, consumers and firms might borrow in USD but buy and sell products in local currency, so any fluctuation of the foreign exchange can lead to distortions in both production and consumption decisions.
For two decades in the twenty-first century, Peru’s economy appeared robust, among the best-performing Latin American economies, with annual real GDP growth averaging 5.4%, 2005-2020. But economic inequality had been intensifying since 2014, when a 12-year run of sustained growth in the national GDP, driven by a mining boom, came to an end.
Poverty had been the fate of 50% of the population in 1970, even increasingly slightly to 54.1% in 2000. It then declined a little, to 49.1%, in 2006, but went down a whole lot further, to 20%, by 2019. But the 2020 pandemic has pushed it back up to 30%. In 2019 the top 1% and 10% of income earners got 29.6% and 56.6% of GDP, respectively; 40% of middle-income earners got 35.8% , whilst 50% of low-income earners only received 9.4%. About 45% of Peru’s total population is indigenous and 52% of those who live below the extreme poverty line are indigenous.
According to the Instituto Nacional de Estadistica y Informatica (INEI), people who earn less than 338 soles, or US$150 dollars, per month live in poverty, and those who earn less than 183 soles or US$80 a month are in extreme poverty. The minimum living wage has been established at 930 soles, orUS$ 415 dollars, per month. In 2017, poverty in urban areas impacted 15% of the population, but poverty in rural areas was 44%. 70% of the rural poor did not have titles to their property, 42% lived in adobe houses, and 58% lived on dirt floors. 73% of the rural poor had no access to a public water source, and 50% had only reached a primary school level of education. More than 80% did not have health insurance, and 53% worked in agriculture. Decades of neoliberal meanness in the matter of social and welfare benefits have cast millions into precariousness and hardship, enhancing their vulnerability to pandemics such as Covid-19. Peru has experienced one of the highest Covid-related mortality rates.
By 2021 a total of US$17 billion had been transferred abroad in fear of Pedro Castillo’s presidency. Consumer prices jumped 3.2 percent 2020-2021, a rise concentrated in products of the “basic food basket” impacting mainly the poor. Peru produces only 9.5 percent of the wheat it consumes—the rest is imported from Canada, the USA, Argentina, and Russia. By 2020 the number of families declared poor (earning US$2,520 or less annually) in Peru had risen from 20 percent to 30 percent of the population, wiping out the poverty reduction achieved over the past decade. More than 10,000 families have been evicted from informal settlements. Yet foreign investment in Peru’s mining sector was expected to total US$34 billion over the next decade. Although the international price of copper rose by 94 percent from May 2020 to May 2021, mining employed fewer personnel due to increasing automation.
Conclusion
From this survey we can conclude that quite suddenly the prospects for progressive governance in South America have improved. At their heart is the scope for productive ideological harmonization and practical political collaboration between left-leaning parties in both Peru and Bolivia. This opportunity should be placed in a broader context of the current electoral dominance of the left in Argentina and Venezuela and, more particularly, the prospects for progressive victories in upcoming (2021-2022) elections in Chile and Brazil.
We should also take wary notice that leftwing radicalism in South America is hardly new, and that today, just as in the past, its prospects are highly vulnerable to the play of imperial power from the USA and NATO, in particular, but also to the continuing cultural and political impacts of former empires, notably those of Spain and Portugal. These are manifest broadly and deeply in most areas of life in South America: the tedious dance of liberal and conservative wings of the ruling classes that only occasionally opens up chances for integration of the indigenous and mestizo populations into the mainstream of economic prosperity; the continuing and largely still reactionary influence of the Roman Catholic Church as well as of evangelical Protestantism; the inclination to usually reactionary military force as a quick response to significant threats to ruling class interests; economic dependence of agricultural, mineral and hydrocarbon products on international market demand and investment by exploitative multinational corporations; steep social and economic inequality that has strong ethnic or racist overtones between – whites, mestizos and indigenous, populations in those areas that are naturally well-endowed with resources and those that are not, rural and urban, traditional social classes (bourgeois, professional, worker and peasant); and, not least, men and women.
Oliver Boyd-Barrett is Professor Emeritus, Bowling Green State University, Ohio and of California State Polytechnic University, Pomona. He currently teaches at California State University, Channel Islands. He has also taught at the Chinese University in Hong Kong and at the Higher School of Economics in Moscow. His most recent books include RussiaGate and Propaganda (Routledge); Media Imperialism: Continuity and Change (edited with Tanner Mirrlees)(Rowman and Littlefield); Media Imperialism (Sage) and Western Mainstream Media and the Ukraine Crisis (Routledge).
Featured image: President elect of Peru, Pedro Castillo. File photo.
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