The OAS and the Crises in Bolivia and Chile: Power Politics and Inconsistencies

By Stefano Palestini Céspedes*

Protests in Chile, October 2019

Protests in Chile, October 2019/ Carlos Figueroa/ Wikimedia Commons/ https://es.wikipedia.org/wiki/Archivo:Protestas_en_Chile_20191022_07.jpg

As political crises emerge one after the other in Latin America, the Organization of American States (OAS) is showing inconsistent behavior based on ideological rifts and power politics. This inconsistency – evidenced by the OAS’s role in the ongoing crises in Bolivia and Chile – undermines its mandate to protect human rights and democracy throughout the hemisphere.

In Bolivia, violence spread in the streets of various states after the opposition accused incumbent President Morales of manipulating the results of the October 20 elections. The OAS Electoral Mission reported possible irregularities, and both the Permanent Council and the Secretary General pressed the government to authorize an audit of the electoral procedures and a vote recount. Morales consented to both requests.

  • The same accusations of electoral irregularities were made two years ago in the Honduran presidential election, but a coalition of states headed by the United States swiftly recognized President Hernández – delegitimizing the OAS electoral mission and the Secretary General’s call for new elections. Those same countries have now pressed Morales, first for a recount of votes and later for new elections. When the OAS Electoral Mission confirmed the existence of electoral irregularities on November 10, the Bolivian military withdrew support for the government, prompting Morales’s resignation – an outcome radically different from that in Honduras.
  • Despite political violence and recurrent accusations by Morales of unconstitutional alterations to the constitutional order voiced by the Bolivian foreign minister at the OAS headquarters, neither the Secretary General nor OAS member states invoked the Inter-American Democratic Charter. President Morales did not explicitly invoke the Charter, thinking that the crisis would follow the same course as in Honduras, or that the military remained supportive. Either way, he was wrong.

In Chile, in contrast, the police have engaged in systematic violations of human rights since an unprecedented social uprising that started on October 18. Twenty-three people have been killed, 1,950 have been injured, and 180 have suffered eye injuries from rubber bullets fired upon protesters by police – many losing their sight. The Inter- American Commission on Human Rights issued a declaration regarding the violations of human rights during the State of Emergency imposed by President Sebastián Piñera in the aftermath of the uprising. But the OAS political bodies have remained silent.

  • Neither Secretary General Almagro nor the Permanent Council have issued a single declaration of concern or condemnation regarding the situation in Chile. Almagro has refrained from convening the Permanent Council or the General Assembly, but he has loudly claimed the existence of destabilization attempts organized by Cuba and Venezuela (which he called “Bolivarian breezes”). To be sure, issuing such a statement without providing evidence or convening the political bodies of the organization jeopardizes the credibility of the OAS and breeds conspiracy theories. In a recent interview, President Piñera also subscribed to the thesis of foreign intervention in Chile’s protests without providing any evidence. The Chilean Attorney General confirmed that the government has not provided any information about the action of foreign groups.

The inconsistency displayed by the OAS in the handling of the political crises in the region suggests that the OAS applies different standards to similar situations. In fact, the organization is split into two coalitions: a larger and stronger one composed of right-wing governments that embrace or accept the foreign policy of U.S. President Donald Trump based on a revival of the Monroe Doctrine; and a smaller, weaker one composed of states with leftist and centrist governments with an anti-imperialist or a non-interventionist rhetoric.

  • Breaches of democracy and human rights violations exist on both sides of the rift, but the OAS political bodies seem to focus only on the side that happens to be weaker. This is bad news for those that would like to see in the OAS an honest broker and mediator in political crises, no matter the ideological color or the power of the concerned state. If this trend continues, it is also bad news for the protection of human rights and democracy and for multilateralism in the region.

November 11, 2019

* Stefano Palestini Céspedes is an assistant professor at the Institute of Political Science, Catholic University of Chile.

Latin America: Total Chaos?

By Carlos Malamud*

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South American Presidents waving to the cameras in Santiago, Chile / Flickr / Creative Commons

Democracy and democratic values are in crisis throughout South and Central America, but the causes – and solutions – vary across the region, with rays of hope that at least some countries will find their way forward. The Bolivian elections, plagued by suspicions of fraud, reflect some of the problems that affect all of Latin America. The previously unbeaten President Evo Morales, in government since 2006, has now shown his limits and, even if his election is confirmed, will govern without the parliamentary majorities he enjoyed in the past.

  • Latin America witnessed violent protests almost simultaneously in Ecuador and Chile; Mexico blinked during a confrontation with the son of narcotics kingpin Chapo Guzmán; the Congress was dissolved in Peru; an ex-President in the Dominican Republic denounced as fraudulent the primary election he lost and joined another party to be its candidate; and a massive exodus continued pouring out of Venezuela, whose crisis is terminal but without an expiration date.
  • The Argentine and Uruguayan elections on October 27 marked the end of a three-year cycle of elections during which 14 countries voted to elect or re-elect their presidents. Speculation was originally that a swing to the right would counteract the Bolivarianism of the previous swing to the left. That shift never happened. In its place, a more heterogeneous and divided Latin America emerged, reflected in the outcome of the Argentine and Uruguayan elections, and in the not-insignificant fact that Mexico is governed by Andrés Manuel López Obrador while Brazil, the other regional power, has Jair Bolsonaro.

The causes of this wave of divisiveness are the subject of different theories. Many observers speak of a Castro-Chavista conspiracy, orchestrated by Venezuelan President Nicolás Maduro and the leftist São Paulo Forum. Others think it’s a popular reaction to the drastic adjustment programs of the IMF. Yet others argue about a contagion factor and the impact of social networks, which enable real-time communication and the transfer of vivid images of events. Nonetheless, any theory that tries to harness all of these theories will be flawed because each national reality is responding to different logic and dynamics.

  • All of the countries of the region are experiencing inequality, poverty, corruption, violence and narco-trafficking, unhappiness with democracy and its institutions, rejection of politicians, and the impact of the “new politics” of social media and fake news. But they are not present to the same proportions.
  • Neoliberal, Bolivarian, and populist governments are all suffering from rebellions. The Chilean protests over transportation fees under neoliberal President Piñera were preceded by protests in Brazil in 2013 under progressive President Dilma Rousseff. If Piñera resorts to military force to stop the protests, Nicaraguan President Daniel Ortega did something similar in 2018, killing more than 300. The IMF might have been behind the reduction of fuel subsidies in Ecuador, but it had no role in Chile. While elections went as normal in Argentina and Uruguay, in Bolivia, like in Venezuela, the allegations of fraud have been constant.

The solutions to each country’s challenges will have to be as different as their causes. While one country needs deeper economic adjustment, another needs to fix its political institutions. Each is going to have to find its way through the crises. Latin America will find little solace, moreover, in the fact that this high level of conflict is not exclusive to its region. From Hong Kong to Cataluña, or in Libya and Lebanon, similar challenges are disrupting national life.

  • Amid the many indications that representative or liberal democracy is under direct attack – that we may be facing the end of an era with potentially dire implications – some positive notes are visible in Latin America. In addition to the orderly contests in Argentina and Uruguay, the local and regional elections in Colombia in late October were an effective exercise in democracy – won by the center and lost by the extremes. Uribismo on the right and Gustavo Petro on the left were the big losers. The emerging symbol was Claudia López, the first woman elected mayor of Bogotá, who is also a lesbian, environmentalist, and leader against corruption. The path ahead is certainly not going to be easy for Latin America, but there is evidence that, with a big dose of tolerance and respect for each other’s reality, Latin Americans can do a lot better.

November 5, 2019

* Carlos Malamud is Senior Analyst for Latin America at the Elcano Royal Institute and Professor of Latin American History at the Universidad Nacional de Educación a Distancia (UNED), Madrid. A version of this article originally was published as Turbulencias latinoamericanas in El Clarín of Buenos Aires.

 

Latin America: Grappling with Environmental Displacement

The Honduran refugee caravan crowds a bridge in October 2018

Honduran Refugee Caravan/ October 21, 2018/ Flickr/ Creative Commons/ https://www.flickr.com/photos/boyitchy/31600503428/

By Robert Albro*

Latin America and its faith-based organizations, seeking to expand the definition of refugee beyond just people forced to leave their countries in the face of political persecution, are making slow but steady progress promoting policies that deal with the increasingly serious issue of human displacement as a consequence of environmental change.

  • Since 1951, a large majority of Latin American countries have enshrined the right to asylum in their national constitutions, and the region emerged in the 1980s as a leader in efforts to broaden international standards for refugees and migrants. In 1984, the Cartagena Declaration on Refugees, for example, enlarged the concept of refugees to include people “who have fled their country because their lives, safety, or freedom have been threatened by generalized violence.” A series of conferences organized by the UN High Commissioner for Refugees (UNHCR) produced further breakthroughs during conferences in San José and San Salvador, including rights-based criteria involving, for example, gender and indigenous identity.

Over this decade, the coincidence of surges in migration from the “Northern Triangle” of Central America and international action on the environment – including Pope Francis’s 2015 encyclical on climate change, Laudato Si – have encouraged reassessment of the traditional distinction between “refugee” and “migrant.” Among similar initiatives in the Andean region, in 2014 Bolivia’s migration law introduced legal protections for “groups of people displaced from one country to another for climate reasons, when there exists a risk to life, as a result of nature, environmental, nuclear or chemical disaster, or famine.” What to do about people displaced across international borders as a result of life-threatening rapid-onset natural disasters has become an increasing focus of attention.

  • Discussions in conjunction with the Framework Convention on Climate Change (UNFCCC) – a major component of the 2016 Paris Accord – have given new momentum to addressing environmental migration. Participants called for greater understanding of “climate change induced displacement, migration, and planned relocation,” even though emphasis in multilateral deliberations has shifted to “disasters” and away from “climate change.” 
  • Observers have credited Latin American church groups – as “specialists in the language of ethics” and “sources of moral authority” – with playing an important role in normative deliberations during the UNFCCC processes. A hemispheric dialogue led by the Organization of American States, called the “Protecting Our Home” initiative, was jointly launched with the Holy See after the Pope’s encyclical.

Faith-based responses both to environmental conflict and to the plight of migrants have been significant. Religion’s impact upon international deliberations regarding environmental migration is likely to continue growing as long as religious values are translatable to secular humanitarian efforts. Even when members of religious communities are lumped in with the rest of “civil society,” their emphasis on moral values, their ability to intervene on behalf of affected populations, and their role as service providers serve them well as proponents of efforts to include victims of environmental disaster and climate change as deserving recognition and support from governments and the international community. The “moral authority of faith leaders” is also less about the introduction of alternative moral valuations than a strategic advantage in efforts to gain access to and build trust with victims of humanitarian emergencies. 

  • There is, however, an additional role that faith-based actors have yet to embrace as the international response to increasing numbers of environmental migrants evolves. As multilateral deliberations increasingly consider “loss and damage” as a result of environmental disasters, including climate change, they are unsurprisingly limited to accounting for the loss of livelihoods and material assets, such as farms or homes. To date, little attention has been given to the consequences of non-economic or intangible loss, including loss of community identity, social cohesion, and traditional knowledge. Religion’s focus on moral and cultural questions of meaning and value make it a potential resource in coming to terms with the consequences of intangible loss. 

November 1, 2019

* Robert Albro is the Research Associate Professor at CLALS.

Bolivia: The Exceptional Case of the MAS

By Santiago Anria*

MAS rally in Bolivia

A rally celebrating the nineteenth anniversary of the MAS in Bolivia. / Tercera Información / Wikimedia Commons

Bolivia’s Movement Toward Socialism (MAS) is one of the most important and electorally successful new parties in Latin America because it has succeeded in achieving and maintaining high levels of internal grassroots participation and bottom-up influence, even after assuming national power.  Unlike the ad hoc electoral vehicles created to sustain the support of a single charismatic leader like Hugo Chávez in Venezuela or Rafael Correa in Ecuador, the MAS has maintained autonomous forms of social mobilization by popular constituencies that have contributed to keeping party vibrancy and served as a check on concentrated executive power.

  • A “party of movements,” the MAS began as a largely indigenous coca growers’ union, but after 20 years of existence and more than a decade in power, it still deviates from the conventional wisdom that such parties inevitably become oligarchic in their operation. Compared to most other movement-based parties, the MAS remains responsive to the interests, demands, and preferences of its social bases – propelling its leader, Evo Morales, to the presidency but also, at times, limiting his authoritarian tendencies.  My research, recently published in a book entitled When Movements Become Parties, reveals that Bolivia is a rare example in which a party’s social movement origin not only facilitated party-building but also enabled the party to preserve high levels of grassroots participation in the selection of candidates and the crafting of public policies, with “bottom-up” correctives to hierarchy and concentrated executive authority.
  • While institutional checks and balances can be (and have been) weakened by an ambitious leader like Morales, governing parties more open to bottom-up input preserve opportunities to establish checks on decisions and constrain strategic behavior and hierarchical control. Channels to exert “voice” provide incentives for the social bases to shape important decisions, as these bases become de facto veto actors within the organization.  At the broader regime level, when a governing party establishes and upholds well-developed opportunities for bottom-up grass-roots participation, instances of bait-and-switch policy-making are less likely – a condition conducive to policy stability and ensuring the “continued responsiveness” that is central to democratic representation in between election cycles.  Finally, when governing parties are more open, they may generate opportunities and incentives for the political empowerment of traditionally marginalized groups by boosting the input that those groups have in the political power game.

The MAS has avoided extreme forms of professionalism and “top-down” control.  While the party as a bureaucratic organization remains weak after 20 years, that reality has allowed the social bases to act autonomously and continue to influence, constrain, and hold the party’s leadership accountable.  This has enabled the party to maintain unusually strong ties with the country’s major popular movements, which still provide a formidable mass base and coalition of support.  Today, 12 years after it gained power for the first time, the MAS remains the only truly national party in Bolivia and is that country’s dominant party.  The ongoing strength and relative autonomy of social mobilization in Bolivia not only explains much of the MAS’s continued success but also sets the Bolivian case apart from the Brazilian PT, where social mobilization withered, and from Venezuela under Chávez and Nicolás Maduro, where mobilization is strong but largely controlled from above.

The system is far from perfect.  Poised to seek a fourth term in 2019 after a legally dubious maneuver, polls show that Morales may not be unbeatable.  The party lacks a viable successor, and another reelection can open the door to further abuses and greater personalization of power – all of which can undermine the development of the democratic regime.  This could also atrophy the links between the party and segments of its movement base, a process already under way.  Power is already concentrated in an executive administration that too often treats opponents and the press with raw hostility.  Institutions are inefficient, liberal rights are poorly safeguarded, and courts are feeble and politicized.  Even if checks and balances on presidential authority have weakened, however, autonomous grassroots participation, inclusion, and accountability are highly robust.  Inclusion has created a “new normal” in the Bolivian political arena, with larger numbers of Bolivians enjoying rights of citizenship and greater input into political decision-making and into determining who gets what, when, and how – with the MAS at the center.  Seen from the long arc of Bolivian history, this is an exceptional change in a society characterized by social and political exclusion.

November 14, 2018

*Santiago Anria is Assistant Professor of Political Science and Latin American Studies at Dickinson College.  His new book, When Movements Become Parties: The Bolivian MAS in Comparative Perspective (Cambridge Studies in Comparative Politics, 2018), studies the internal politics of Latin America’s three most innovative leftist parties: Bolivia’s MAS, Brazil’s PT, and Uruguay’s FA.

Bolivia: Locked in Its Past

By Carlos Malamud*

The International Court of Justice

The International Court of Justice in The Hague. / International Court of Justice / Wikimedia

The International Court of Justice (ICJ)’s rejection of Bolivia’s case against Chile over access to the Pacific Ocean shocked Bolivian public opinion – and was a significant blow to President Evo Morales.  The ICJ judgment, issued on October 1, countered the beliefs of practically every Bolivian, educated since childhood that the Chilean port of Antofagasta was theirs.  In the Bolivians’ calculus, the complaint they brought to The Hague was already a compromise: they didn’t demand new borders or sovereignty, but rather argued that Chile had an obligation to negotiate a settlement.

  • The ICJ’s decision – by a vote of 12 to three – that Chile had no obligation to negotiate underscored, once again, that the Morales government had stirred up unrealistic expectations. While Morales, who was in The Hague for the announcement, declared that “Bolivia will never give up,” his Chilean counterpart, Sebastián Piñera, lamented that the ICJ case “made us waste five years which could have been spent building a healthy relationship between the two countries.”  Nationalism permeated both sides’ positions, but the Chilean government showed greater restraint, even if demonstrators in Antofagasta did show certain triumphalism after the verdict was announced.
  • In terms of politics, Morales was more ambitious preceding the Court’s decision than Piñera. The Bolivian president’s lawsuit wasn’t just about territory; he had the clear political objective of keeping himself in power indefinitely.  Had he won the case in The Hague, his ability to remain in office would have been practically guaranteed – as a national hero and savior for having regained Bolivia’s access to the Pacific Ocean.

The Bolivian government’s rhetoric has hurt its image.  In the week before the verdict was announced, Morales’s vice president, Álvaro García Linera, in his well-established role as mobilizer and opportunist, spoke of “Chilean aggression” and predicted a “major defeat” for Chilean diplomacy at the ICJ.  In his customary paternalistic style, he called for full compliance with the Court’s decision (although he himself did not do so later).  After the decision, Morales acknowledged that the Court said Chile was not obligated to negotiate, but – instead of clearing the way for better relations in the future – renewed his call for negotiations.  The Chilean government is not about to talk about anything unless Bolivia demonstrates that it is serious.  One important move would be for Bolivia to rescind, unilaterally and immediately, the suspension of diplomatic relations with Chile in 1978.

Bolivia’s defeat has already had serious political consequences.  It is a serious blow to the re-election aspirations of Evo Morales in 2019, which he was pursuing despite its unconstitutionality as reinforced by the defeat of a constitutional amendment allowing a third consecutive term in a referendum on February 21, 2016.  It also prompted ex-President Carlos Mesa – a rival with good chances of success – to announce his candidacy in elections next year.  Morales has already lashed out at Mesa, linking him to the “Chilean oligarchy” and speaking of his “betrayal of the fatherland.”

  •  Beyond the ICJ judgment, Bolivia will eventually have to free itself of the isolation – mental as well as geographic – that prevents it from finding better ways of promoting its interests. Bolivia has means – in Peru and Chile toward the Pacific, and in Santa Cruz toward the Atlantic – with which to find solutions and reinforce its potential for growth.  But that entails lowering the flag of nationalism, something that is still unclear they’re prepared to do.

October 10, 2018

*Carlos Malamud is Senior Analyst for Latin America at the Elcano Royal Institute, and Professor of Latin American History at the Universidad Nacional de Educación a Distancia (UNED), Madrid.  A version of this article was originally published in El Heraldo de México.

Peru’s “New” Drug Strategy: Déjà Vu?

By Paul Gootenberg*

Eradicacion de la coca

“Peru’s national drug control agency just released a four-year counter-drug strategy in April that warns of the urgency to reverse the ongoing surge in cocaine production.” / Editora Perú / Creative Commons

Peru, with a capacity to produce about 350-450 tons of cocaine a year, has been approaching Colombia as the world’s top exporter since around 2011, but its new drug strategy is not likely to reverse that trend.  Most Peruvian coca now comes from the Valle de los Ríos Apurímac, Ene y Mantaro (VRAEM), and most cocaine flows towards Brazil not the United States.  Peru’s national drug control agency, DEVIDA (National Commission for Development and Life Without Drugs), just released a four-year counter-drug strategy in April that warns – again – of the urgency to reverse the ongoing surge in cocaine production but offers few compelling or new ideas on what to do.  The report notes the “high risk for Peru that our country will repeat the cases of Colombia and Mexico” in violence, corruption, and other costs of a massive illicit narcotics trade.  The strategy has some serious flaws, however.

  • Although the report touts itself as a “Plan Integral,” military spending and eradication far outstrip “alternative development.” Coca “supply control” is the core of the program, though development efforts (mainly with cacao) are offered. Peru’s plan is mechanically sequenced – Pacification, Eradication, Services, and Development – and its rigid militaristic strategy draws criticism.  The latter seems basically directly against VRAEM peasants.  In 2014, a similar plan was announced to eradicate “50 percent” of the VRAEM coca in just one year, but nothing occurred because of the risky security environment.
  • The sources of some key data are unclear. The report cites UN information but apparently without taking into account the substantial flow of cocaleros and cocaine traffickers deeper into Amazonia, near the Brazilian and Colombian borders.  It generally treats the VRAEM, Peru’s main producing area, as an isolated containable “world apart” – poised for national “recuperation.”  Security threats in the area, including guerrillas, actually made holding off eradication since 2014 a wise move – it would have pushed cocaleros into the arms of guerrillas – but the new report fails to consider any blowback from its plan.
  • It glosses over the shortcomings of Peru’s security services to carry out what remains a heavily security-based strategy. It makes the startling admission that only 1.5-2.0 percent of VRAEM cocaine and 3-8 percent of cocaine nationally is seized – one of the lowest interdiction rates in the world.  (Colombia’s improved intelligence enables it to grab about half of cocaine in-country, and even weak Bolivia does better policing illicit cocaine.)  The ease of smuggling in Peru is directly related to the open corruptibility of Peru’s police, military, and politicians.  But except for money laundering, DEVIDA’s report barely addresses the corruption problem.
  • Peru, unlike Colombia and Bolivia, has never questioned the UN/U.S. international drug regime, nor does this report. But Peru should expect little overseas eradication aid in the Trump era, raising big doubts about the sustainability of a long-term program.

As Colombians learned after decades of drug war against coca growers, including Plan Colombia, forced eradication is one of the most inefficient and futile ways to combat drugs. Studies by Colombian economist Daniel Mejía show that the marginal cost of eliminating a kilo of cocaine from markets by aerial spraying is a whopping $247,000 – far more than a kilo’s price on the street.  Eradication also provokes violent conflict and propels growers to new areas, and Peru has many tropical basins ripe for raising coca.  Effective intelligence to hit labs and intermediary layers of cocaine trades pays bigger dividends.  So does enlisting cocalero unions on the side of the state – to self-police as in Bolivia (now with the region’s least illicit cocaine) and Colombia (where the 2017 peace accord now recognizes cocalero rights).  Peru marginalizes cocaleros, precluding the sort of socio-political strategy needed for success.  All in all, DEVIDA’s strategy makes it interesting to see whose plan will produce the best results by 2021 – Peru’s, Colombia’s, or Bolivia’s?

June 13, 2017

* Paul Gootenberg is Chair of the Department of History at Stony Brook University and author of Andean Cocaine: The Making of a Global Drug (University of North Carolina Press, 2008).

Who Really Benefited from the Commodities Supercycle – and Who Loses with Its End?

By Carlos Monge*

2017-05-13 AULABLOG_Carlos_Monge_graphic

Latin American governments and business associations have tended to overstate the benefits of extractive industries during the commodities supercycle that ended in 2014-15.  Resource-rich Latin American countries did experience high rates of economic growth and diminished poverty and inequality during the boom years.  On the surface, this would appear to strengthen arguments that – despite their negative environmental impact – extractive industries are the key to progress, especially in resource-rich areas.  Nevertheless, a closer look at data from household surveys in Bolivia, Chile, Colombia, Ecuador, and Peru shows that things are a bit more complicated.

  • The inequality gap between individuals, as measured on the GINI Index, has narrowed, but the gaps between groups of the population have not evolved evenly. For example, the National Resource Governance Institute (of which I’m regional director) recently completed a study of the performance of social indicators during the supercycle that concluded that the poverty gap between urban and rural populations has increased in all countries.  (The report is available in English and Spanish.)  In Peru and Chile, the gap increased more in territories where extractive territories are located, while in Colombia, Bolivia, and Ecuador less so.  The gap between indigenous and non-indigenous populations increased only in extractive territories in Ecuador, decreasing in both extractive and non-extractive settings in the rest of the countries considered.  Regarding gender, in all five countries the gap between men and women increased slightly in non-extractive territories and decreased a bit more in extractive ones.

This report establishes correlations between the increase in extractive activities, the availability of extractive rents, and patterns of inequality reflected in social indicators, but it does not establish a causal relation between such variables.  For example, the data show that urban populations in Peru’s extractive regions have benefited more than rural ones – which some very preliminary research shows is probably because urban centers provide extractive projects with the goods and services they need, while less sophisticated rural areas do not.  At the same time, rural populations have to compete with the extractive projects for those same urban goods and services, and with local governments for the labor force that the public sector contracts to develop infrastructure projects that are paid for through increased revenues delivered by the extractive sector.  This is what we have called the “Cholo Disease.”  A variation of the “Dutch Disease,” it reflects a loss of competitiveness resulting not from large exports of raw materials causing the currency to appreciate, but rather from increases in the cost of labor and of urban goods and services consumed by campesinos.  However, a more definitive explanation regarding exactly how this happens in Peru and in other countries certainly needs further research.

While our data clearly show the impact of mining and hydrocarbons extraction and the resulting expenditure of extractive rents on the poverty gaps between urban and rural populations, men and women, and indigenous and non-indigenous populations, further investigation into the causes and consequences is needed.  The end of the supercycle has already meant a fall in growth rates and extractive revenues, leading to a worrisome rebound in poverty rates.  We are still unable to answer, however, the question of how broadly it will impact the substantial segments of Latin America’s population that emerged from poverty but remains in a vulnerable position – and how it will aggravate poverty gaps among individuals and between groups in extractive and non-extractive territories.

May 16, 2017

* Carlos Monge is Latin America Director at the Natural Resource Governance Institute in Lima.

Latin America: End of “Supercycle” Threatens Reversal of Institutional Reforms

By Carlos Monge*

Monge graphic

By Eduardo Ballón and Raúl Molina (consultores) and Claudia Viale and Carlos Monge (National Resource Governance Institute, América Latina), from Minería y marcos institucionales en la región andina. El superciclo y su legado, o las difíciles relaciones entre políticas de promoción de la inversión minero-hidrocarburífera y las reformas institucionales, Reporte de Investigación preparado por NRGI con colaboración de la GIZ, Lima, Marzo del 2017. See blog text for high-resolution graphic

Policies adopted in response to the end of the “supercycle” have slowed and, in some cases, reversed the reforms that moved the region toward greater decentralization, citizen participation, and environmental protection over the past decade.  Latin American governments of the left and right used the commodities supercycle to drive growth and poverty reduction at an unprecedented pace.  They also undertook institutional reforms aimed at improving governance at large.

  • Even before demand and prices for Latin American energy and minerals began to rise in the early 2000s, some Latin American countries launched processes of decentralization (Colombia and Bolivia); started to institutionalize mechanisms for citizens’ participation in decision making (Colombia and Bolivia); and built progressively stronger environmental management frameworks (Colombia and Ecuador). Peru pressed ahead with decentralization and participation at the start of the supercycle, and when it was in full swing, created a Ministry of the Environment.
  • Implementation of the reforms was subordinated by governments’ overarching goal of fostering investments in the extractive sector. Indigenous consultation rights in Peru, for example, were approved in the second half of 2011, but implementation was delayed a year and limited only to indigenous peoples in the Amazon Basin.  President Ollanta Humala, giving in to the mining lobby, claimed there were no indigenous peoples in the Andes and that no consultations were needed around mining projects.  Local pressure forced a reversal, and by early 2015 four consultation projects on mid-size mining projects were launched.

These reformist policies have suffered setbacks since the decrease in Asia’s and particularly China’s appetite for Latin American energy and minerals has caused prices to fall – and the value of exports, taxes, and royalties, and public incomes along with them.  The latest ECLAC data show a decline in economic growth and a rebound of poverty both in absolute and relative figures.  The gradual fall in the price of minerals starting in 2013 and the abrupt collapse in oil prices by the end of 2015 reversed this generally favorable trend.

The response of the governments of resource-dependent countries has been “race to the bottom” policies, which included steps backward in fiscal, social, and environmental policies.  Governments’ bigger concern has been to foster investments in the new and more adverse circumstances.  In this new scenario, the processes of decentralization, participation, and environmental management have been negatively impacted as local authorities and citizens’ participation – as well as environmental standards and protocols – are perceived by companies and rent-seeking public officials as obstacles to investments.

  • Peru’s Law 30230 in 2014, for example, reduced income tax rates, weakened the oversight capacity of the Ministry of the Environment, and weakened indigenous peoples’ claim public lands.

The correlation between the supercycle years and the progress and regressions in reforms is clear. (click here for high-resolution graphic).  During the supercycle – when huge amounts of money were to be made – companies and government were willing to incorporate the cost of citizen participation, decentralization and environmental standards and protocols.  But now, governments are desperate for new investments to overcome the fall in economic growth and extractive rents, and extractive companies are not willing any more to assume these additional costs.  Those who oppose the “race to the bottom strategy” are fighting hard to restore the reforms and to move ahead with decentralization, increased participation, and enhanced environmental management, to achieve a new democratic governance of the territories and the natural resources they contain.

April 7, 2017

* Carlos Monge is Latin America Director at the Natural Resource Governance Institute in Lima.

Bolivia’s Remarkable Political Stability

By Miguel Centellas*

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Political slogans in support of Bolivian President Evo Morales and his MAS party (Movement for Socialism), calling for “500 more years” of their rule. / Francoise Gaujour / Flickr / Creative Commons

In the 11 years since he was first elected president of Bolivia, Evo Morales has delivered remarkable stability and progress even though his drive for power still concerns many opponents.  Along with Venezuela’s Hugo Chávez and Ecuador’s Rafael Correa, he was labelled by some observers as part of the “irresponsible” or “populist” left – in contrast to more “social democratic” leftists like Brazil’s Lula da Silva or Chile’s Michelle Bachelet.  The “populists” were also widely criticized for weakening and playing loose with democratic institutions and for authoritarian practices associated with the region’s caudillo legacy.  But Morales’ course has neither followed Venezuela’s, whose populist regime lies in ruins with no clear exit strategy; nor Ecuador’s, which looks set to accept a peaceful transition of power to the opposition later this year.  Bolivia appears to have reached a sort of political equilibrium.

  • Despite charged economic rhetoric and his championing of leftist socioeconomic policies, Morales has pursued prudent, conservative macroeconomic policies. Bolivia has carefully increased its reserves from a little over $3 billion in 2006 to more than $15 billion by 2014.  As of 2015 reserves amounted to 40 percent of GDP.  At the same time, the GDP has grown from just over $8 billion in 2000 to nearly $33 billion by 2015, with GDP per capita (PPP) nearly doubling from $3,497 to $6,954 in the same time span.
  • Morales’s signature socioeconomic reforms borrow from the “responsible” leftist models, rather than the vertical chavista model. He has created cash transfer programs similar to those used successfully in Mexico and Brazil.  These bonos, including some created by Gonzalo Sánchez de Lozada, provide unconditional cash for pensions, pre- and post-natal care, and education.  While this spending pales in comparison to “megaprojects” such as highways and soccer stadiums, it goes directly to Bolivian households – with obvious political benefit for the Morales government and clear, direct benefits to average Bolivians.
  • The new constitution adopted in 2009 – a product of compromise between Morales and the regionalist opposition – radically decentralized state structure, satisfying opponents’ desire for significant space at the local level. The eastern lowland regionalist opposition can regularly count on winning governorships in Santa Cruz, Beni, and Tarija, while middle-class, liberal opponents win in the major cities of La Paz, Cochabamba, Potosí, and now even El Alto.  This diffuses political conflicts and prevents the consolidation of unified opposition.  Conflict between the central state and regionalists continues, but it has become routinized and therefore has stabilized.
  • The electoral court, elevated to be a “branch” of government in the 2009 constitution, has remained largely impartial, maintained its political independence, and significantly improved its capabilities – increasing Bolivians’ trust in the legitimacy of elections. A referendum last year, rejecting a constitutional reform that would allow Morales to run for another term in 2019, was managed competently and (for the most part) fairly.

Not all is well, however.  Despite losing the referendum, Morales and his MAS party made clear that he intends to find a way to run for reelection yet again in 2019.  The opposition’s concerns about his authoritarian tendencies are not wholly exaggerated.  Indeed, the government frequently lashes out at its perceived enemies in ways that go well beyond the niceties of democratic adversarial politics.  Likewise, there are clear signs that corruption remains deeply rooted within the government.  But none of this contradicts what seems obvious: The MAS government has brought relative prosperity and stability – even fueling optimism that if (or when) it steps down, its transition may be more like the one that Ecuador appears likely to experience later this year than the meltdown that is tearing apart Venezuela.

March 23, 2017

* Miguel Centellas teaches political sociology at the University of Mississippi’s Croft Institute for International Studies and has written extensively on Bolivian electoral and subnational politics.  He also co-directs an interdisciplinary summer field school based in La Paz.

Intense Electoral Year in Latin America

By Carlos Malamud*

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Chilean President Michelle Bachelet with the leaders of her coalition, Nueva Mayoría. The Chilean presidential election of 2017 will determine the legacy of the Nueva Mayoría. / Gobierno de Chile / Flickr / Creative Commons

The new year will be an intense one for Latin American elections.  Although perhaps not as important as those taking place in 2018, this year’s elections will have a significant impact on the countries holding them and, in some cases, the region as a whole.

  • In Ecuador’s presidential and legislative elections on February 19, the PAIS Alliance will run a slate of nominees for the first time without Rafael Correa heading its slate. The President said he’s stepping down for family reasons, but Ecuador’s economic problems, aggravated by the decline in oil prices, apparently convinced him to seal his legacy on a high note now rather than end his time in office in defeat.  The party’s presidential candidate, former Vice President Lenin Moreno, has a 10-point lead in polls over his closest competitor and has the advantage of facing an opposition divided among seven candidates, but his leadership remains uncertain.
  • In Mexico, the state governors of México, Nayarit, and Coahuila and mayor of Veracruz are up for election on June 4. The race in México state will measure the popular backing of the four parties in contention – PRI, PAN, PRD, and López Obrador’s new Movimiento Regeneración Nacional (Morena) – in the 2018 presidential election.  The older parties will begin to weed out the weaker pre-candidates.
  • Elections for half of the Argentine Congress and a third of its Senate in October will define the second half of President Mauricio Macri’s presidency. The government is confident that economic recovery will strengthen its election prospects.  A weak showing will strengthen the Peronista opposition and complicate Macri’s agenda.  The Peronistas are currently divided into three big factions – that of Sergio Massa; the “orthodox” wing headed by some provincial governors, and corruption-plagued Kircherismo grouping headed by former President Cristina Fernández.  Open, simultaneous, and obligatory primaries (known by the Spanish acronym PASO) in August will be an important test for all.
  • Chile will elect a successor to President Michelle Bachelet on November 19. Primaries in July will reveal whether the country’s two big coalitions – the center-left (including the President’s Nueva Mayoría) and the center-right – are holding, as well as the presidential candidates’ identity.  The names of former Presidents Sebastián Piñera and Ricardo Lagos are in the air, but it’s too early to know how things will play out in the environment of growing popular disaffection with politics and politicians.
  • Honduras will hold elections on November 26. Due to a Supreme Court decision permitting reelection, incumbent President Juan Orlando Hernández could face a challenge from ex-President Manuel “Mel” Zelaya, who was removed from office by the Army in June 2009, running as head of the Libertad y Refundación (Libre) Party.
  • Also in November, Bolivia will elect members of various high courts, including the Constitutional, Supreme, and Agro-Environmental Tribunals and the Magistracy Council. These elections will reveal the support President Evo Morales will have as he tries to reform the Constitution to allow himself to run for yet another term in office.

These elections in 2017 have a heavy national component but will shed light on the region’s future direction.  The success or failure of the populist projects in Ecuador and Honduras, or of President Bachelet’s Nueva Mayoría in Chile, will tell us where we are and, above all, help us discern where we’re headed.

January 17, 2017

*Carlos Malamud is Senior Analyst for Latin America at the Elcano Royal Institute, and Professor of Latin American History at the Universidad Nacional de Educación a Distancia (UNED), Madrid.  This article was originally published in Infolatam.