Under popular president Ricardo Lagos, Chile is the only country in the region with a diminishing poverty rate, and, based largely on the strength of its chief export, copper, economic forecasts look positive. But the fastest-growing economy in the region has also created enmity among neighbours by signing bilateral trade deals with the United States, Canada, Mexico, South Korea, and, in November 2004, China. Essentially, Chile has obviated the need for an ftaa or smaller regional trade pacts by going it alone.
Mexico, meanwhile, is an outlier of a more dramatic sort. Vicente Fox’s dogged support for the ftaa led Chávez to refer to him as “cachorro del imperio” (the empire’s puppy) on his weekly television broadcast Alo, Presidente. So, while the drive toward unity picks up steam, if it fails a continent divided against itself might be the result.
On January 1, 2003, before 200,000 well-wishers who had squeezed into Brasília’s streets, Lula was sworn in as president. For days on end, the celebrations continued, with people chanting, waving red flags, and dancing through the avenues and boulevards of the nation’s capital. It was a groundswell of support, but the euphoria ran deepest in the slums of Rio de Janeiro and São Paolo. After all, Lula is one of their own. Born into an illiterate farming family that moved to São Paolo, he quit school at age twelve to shine shoes. Rising from the humblest of beginnings, he found work at a steel-processing factory and then began his long climb to the top of Brazil’s union movement. The stocky, bearded agitator squared off against the country’s military dictatorship, founded the Workers Party (PT), and made three runs at the presidency before his historic win three years ago.
Once in office however, the politics of symbolism, of rhetorical flourishes about giving Brazil back to the people, quickly gave way to the harsh realities of governing a country so large and so full of social and economic dilemmas . Despite Lula’s early bombast — he once threatened to cut off the fingers of Brazil’s financial elite if they refused to part with their rings — within a year he was looking more and more like an accommodationist. As part of a restructuring program, he named an orthodox economic team, slashed the budget of his Zero Hunger program, accepted not only the terms of the current imf agreement, but even tighter restrictions for the next one, and raised the ire of unionists and social-justice activists. Three years on, Lula presides over a soaring stock exchange and record-breaking bond rates, but he has also gutted his promised land-reform program, watched the average Brazilian’s wages drop by 15 percent, and seen his government all but incapacitated by a series of damning and colourful corruption scandals. In the shantytowns of Rio and São Paolo there is an ominous rumble, a disquiet that is bubbling to the surface.
Brazil’s poverty is a thing of legend. Nearly one-third of the population, some fifty-eight million people, live on less than $1 a day, and the poor and landless continue to spill into the urban favelas where crime, gangs, and hunger await. It is this poverty, as well as the staggering level of inequality — the hyper-rich living cheek by jowl with the frustrated poor — that Lula promised to eradicate by 2007. Insisting that his austerity initiatives were necessary for economic renewal, Lula is now attempting to make up for lost time and deliver on his promises. But many of the people who put him in office are not buying. Tens of thousands of mostly indigenous landless peasants have taken to the streets, two of his coalition partners have left his government, and his own party has had to expel a handful of elected members for being too persistent in their criticisms.
Lula’s troubles stand in sharp contrast to the situation in Argentina, where Néstor Kirchner, an unknown former provincial governor, has benefited from comparatively low expectations. An unlikely leader in a continent that cleaves strongly to cults of personality, Kirchner assumed office five short months after Lula to a far more subdued welcoming committee.
Argentina’s previous five presidents had been run out of office in the wake of the currency collapse in 2001, which caused the country’s worst economic crisis in decades. Unemployment stood at 18 percent, the government was looking down the barrel of $132 billion (US) in foreign debt, and the imf was tightening the leash. No Latin American country stepped forward to help. The reasons for this are manifold, but among them is a simple truth: when Argentina suffers, there is at least as much glee as sorrow felt across Latin America. Argentines are widely reviled for their haughty Peronist ways and their European sense of superiority, especially over countries with large aboriginal and black populations (namely Brazil). From the northern tip of the continent, Hugo Chávez can preach unity and rage against the imperial overlords, but in the settlements surrounding La Paz, in the favelas of Brazil, and in the hilltop enclaves of Chile, Argentina has served for time immemorial as the hated other.
Fearing the fate of his predecessors and knowing that he must go it alone, Kirchner acted quickly and with surprising resolve. Just four months into his presidency, he bluntly informed Europe’s private lenders that they would have to settle for just a quarter of what Argentina owed them. He threatened to stage the largest loan default in the history of the imf, and then, incredibly, demanded that the Fund provide an additional $13.5 billion — on his terms — to prevent the default and another currency collapse. It worked. Kirchner got his loan, and while international financiers wondered how they had been so thoroughly fleeced, Argentines across class lines began to admire the panache and pragmatism of a president who took office with only 22 percent of the popular vote.
Comments