Neoliberalism. Part 2

Neoliberalism in Latin America began in the 1980’s, with the debt crisis that was being suffered in the developing world. Furthermore international lending agencies were willing to give out loans to nations in order to repay debt. However these loans had conditions attached to them, essentially that developing nations must reform their economic structure for the benefit of the great powers of the world (mainly US). These reforms opened up many Latin American nations to foreign companies and multinationals for the purpose of exploiting there comparatively cheap labour or to simply extract their resources. The institutional structure of many governments was shifted from import substitution, under populist nationalism to export oriented manufacturing and agriculture under technocratic democracy. However the idea of democracy during neoliberal reform is not the classical understanding of democracy, instead it was a carefully orchestrated public relations manoeuvre meaning free elections, except the candidate represented mainly elite interest in consensus over the need for a neoliberal model. In other words you are free to elect which neoliberal president you want, and the working class cannot elect someone from their own ranks.

Important audio clip on the history of Cuba US relations. Noam Chomsky

Debut Blog on Activism and Development: Neoliberalism in Latin America.

Since the 1980’s neoliberal reforms across Latin America have fundamentally rearranged the political, social and economic structure of the region. Populist nationalist states with state ownership of recourses and services have been transformed into to weak states that have sold off their previously state owned industry, services and natural resources. However this takeover by private and many times foreign capital was done with a well planned political cover (Harvey, 2005). This combination of privatization and deregularization under political cover is the trademark of neoliberalism in Latin America. Neoliberalism in Latin America has become hegemonic and has taken status as common sense, “the only way”, while alternatives to this have been met with marginalization and force. The first neoliberal reforms in Latin America occurred under the military dictatorship of Pinochet in Chile, he began selling off state owned resources and land to foreign companies in order to expand the private sector. Following the end of dictatorships in Latin America, in order to address the debt issue, further reforms in government led to further privatization and unregulated exploitation of natural resources. This new wave of standardized reforms planned by western thinkers from the IMF, World Bank and the United States government became known as the “Washington Consensus” (Harvey, 2005). These reforms were sold to the public as “good governance”, meant to differentiate itself from the supposedly corrupt corporatists states of the past, i.e 60's Mexico and Brazil. The key to the neoliberal model achieving hegemony was to present itself as rational, efficient, modern and democratic, democratic since neoliberal political parties where the first (and many times only) to emerge after the dictatorship era.

This Neoliberal structure continues to be the main obstacle to democracy and development in Latin America.

Part 2 coming soon.