The main locus of resistance to neoliberalism over the past decade has been in Latin America. The Zapatistas’ call to arms was sounded in 1994, as nafta came into force. Since then, the continent has witnessed a series of left or centre-left victories—Chávez in Venezuela, Kirchner in Argentina, Lula in Brazil, the overthrow of Sánchez de Losada and Mesa in Bolivia and of Lucio Gutiérrez in Ecuador—and a resurgence of social movements, often led by peasants and indigenous peoples, from Chiapas and El Alto to the piqueteros of Argentina and Sem Terra farmers of Brazil. Eleven Latin American presidents have been ejected before the end of their mandates over the last fifteen years—not by the traditional process of us-backed military coup but through the action of popular movements against the neoliberal policies of their governments. The one old-style coup attempt of the period, against Chávez in 2002, was defeated. Chávez’s government has proved the most important—and unexpected—development on the continental left, moving rapidly from democratic and national platforms to embryonic anti-capitalist positions, in strategic alliance with Cuba. The latter has managed to overcome the appalling hardships of the Special Period after the fall of the ussr in 1991, and its economy is once again on an upward trajectory.
One reason for this wave of rebellions is the extremity of the economic restructuring that the continent has undergone since the 1980s. Latin America was a favoured laboratory for neoliberal experimentation: Pinochet had applied the formulas of the Chicago School in Chile years before they were taken up as a global banner by Reagan and Thatcher; Jeffrey Sachs’ shock therapy was tested out by the former nationalist Paz Estensoro in Bolivia well before its implementation in the former Soviet bloc. Introduced by the right, the neoliberal format was subsequently adopted by traditionally nationalist forces (Peronism in Argentina, the pri in Mexico) and then by the Centre Left: Chile, with the Socialist–Christian Democratic alliance, and now under Ricardo Lagos; Venezuela under Carlos Andrés Pérez; Brazil under Fernando Henrique Cardoso.
The continent became a model for the application of Washington Consensus policies: development would be led by foreign capital, attracted by the privatization of industry and natural resources, import liberalization, high interest rates, fiscal austerity and, in many cases, pegged currencies. Predictably, after an initial period of euphoria in the late 80s and early 90s, crises ensued. Imports surged as tariffs were cut; overvalued currencies stymied exports; current-account deficits and foreign-debt payments rose; high interest rates choked off domestic investment and consumer demand, leading to recession, unemployment and worsening inequality. By the mid-90s, rising us interest rates made foreign debt burdens unbearable, bringing about currency collapse: Mexico in 1994, Brazil in 1999, Argentina in 2001.
But—unlike in Southeast Asia or West Africa—in Latin America the visible crisis of the neoliberal model intersected with longstanding traditions of radical mass movements and political upheavals. Over the past half century the continent has experienced three major cycles of popular mobilizations and revolts by the Left. In the first, nationalist currents were usually hegemonic, with the communist parties often playing a central role: the regimes of Getúlio Vargas in Brazil (1930–45 and 1950–54), Perón in Argentina (1945–55), the Bolivian revolution of 1952 and the governments of Juan José Arévalo and Jacobo Arbenz in Guatemala dominated the 1950s, often ushering in a phase of intensive industrial development. The victory of the Cuban revolution in 1959 inaugurated a new period, which lasted through the 1960s and 1970s: socialism and armed struggle against the dictatorships became the order of the day, in the form of rural and then urban guerrilla warfare. The end of the dictatorships of the Southern Cone by the 1980s, followed by the West’s victory in the Cold War, saw an unprecedented extension of representative democracies on the continent. This is the context for the third—still ongoing—cycle for the Latin American Left, one marked both by institutional practice and social resistance, within the framework of global liberal hegemony.
In some respects, the victory of the Partido dos Trabalhadores’s Luiz Inacio Lula da Silva in Brazil’s 2002 presidential elections has marked the high point of this process. Brazil’s 177 million people make up nearly half Latin America’s total population. The pt is generally judged the largest left party in the capitalist world, and the Movimento dos Sem Terra one of its most vital social movements. At city level, pt administrations had already introduced path-breaking participatory budgets and hosted the Porto Alegre World Social Forum, a meeting place for the ‘movement of movements’ of the globalized era. The direction taken by the Lula government would inevitably have a significant impact on the dynamics of Latin American politics. Brazil’s weight could add critical mass to a continental programme for socially redistributive policies, similar to those undertaken by Chávez in Venezuela. Or the economic model of Cardoso could be maintained, whether due to the global influence of liberalism, to the Left’s inability to articulate strategies for a rupture with Washington Consensus programmes, or to the lack of sufficient strength—social, political and ideological—to carry that rupture through.
Any assessment of Lula’s record in power must start from an analysis of the origins and context of the Partido dos Trabalhadores’s formation. Until a few decades ago, Brazil’s left forces were relatively weak in comparison to those of other countries in the region. Their special place on the present world stage is due to a combination of factors which have given the country what Trotsky called the ‘privilege of backwardness’. This trajectory is essential to any understanding of the significance of the pt’s rise to power, as well as of its limits and contradictions.
Brazil’s military coup of 1964 took place earlier than those of Latin American countries where the left was stronger, such as Chile, Argentina or Uruguay. Here the fragility of popular opposition, combined with firm support for the Army from the us—with strategic interests in Brazil’s oil and other natural resources—meant that the generals were able to topple the government of João Goulart with a lesser degree of repression than was later required in the Southern Cone. The judiciary and Congress were untouched by the dictatorship, but the unions were closed down and the left hit hard—making plain the class character of the coup. The final years of the long postwar boom, and an influx of Eurodollars, enabled the military regime to preside over an economic expansion from 1967 to 1973, with growth rates of over 10 per cent per year; thanks to a rigid wage policy and foreign capital, growth continued at 7 per cent even after the world economy entered recession. But overseas capital increasingly came to Brazil not as investment, but in the form of loans at fluctuating rates of interest—a time bomb that was to explode after 1979 with the global rise in interest rates.