Down, But Not Out

The Latin American left was on life-support in 1990. A decade later, it was in power.

Cyclical Nature of Pink Tide

Illustration by Atolón de Mororoa

The Latin American left reached its lowest point in living memory in the early 1990s. At that time, it would have been difficult to foresee that in less than a decade, the region would transform itself into the leading edge of anti-neoliberal resistance.

Large swathes of the Left and its associated organizations had been eliminated by force in the preceding years. In Brazil and the Southern Cone of South America — Argentina, Chile, Paraguay, and Uruguay — a series of right-wing military dictatorships targeted human rights organizations and rank-and-file activists in socialist, trade union, and peasant movements. These regimes left a trail of death and sociopolitical, not to mention psychological, destruction in their wake, ensuring that the future re-articulation of the Left would be halting and hesitant.

In Central America, a similar military attack was launched in the 1970s and 1980s, this time in the form of counter-revolutionary authoritarian regimes facing off against mass guerrilla organizations such as the Frente Farabundo Martí para la Liberación Nacional (FMLN) in El Salvador and the Unidad Revolucionaria Nacional Guatemalteca (URNG) in Guatemala. The peace processes and accords that closed those civil wars in the 1990s were hardly a compromise between two equal sides. Rather, they left behind them hundreds of thousands killed at the hands of military and paramilitary forces, and radical forces utterly routed.

Both the military dictatorships of the Southern Cone and the right-wing regimes and death squads of Central America were systematically supported by the United States. The sheer violence of the domestic ruling classes and the US imperialist state was central to the subsequent rolling out of neoliberal economic restructuring in the 1980s and 1990s. In order for that political project to come to fruition, the organized capacities of the oppressed first had to be defeated.

Neoliberal Ascent

If that was the political and military balance of forces in the early 1990s, the ideological scene likewise showed little remorse to the Left. The Soviet Union and its client states in Eastern Europe had collapsed. Cuba’s government, so inextricably bound up in the bipolarity of the Cold War, entered into immediate economic crisis as its sugar exports to the Soviet Union plummeted while the economic embargo from the United States continued in place. A “special period” of austerity was introduced on the island at the same time the rest of the region was moving toward a full embrace of the market. The Nicaraguan revolutionary administration of the Frente Sandinista de Liberación Nacional (FSLN), first established in 1979, was defeated in the 1990 elections by a conservative candidate after a decade of violent destabilization on the part of the Contras, a right-wing paramilitary force backed by the United States.

Even for those sections of the Latin American left that had never been enamored with its authoritarian model, the collapse of the Soviet Union marked a turning point after which great confusion and fatalism reigned. Left and center-left parties moved dramatically to the right, as the whole political spectrum narrowed. Electoral debates between the mainstream political parties in the 1990s turned on technical issues regarding how fast to roll out austerity, privatization, and liberalization, with few calling into question the logic of neoliberal accumulation.

Meanwhile, social movements retreated to localized, community-based projects, where their reliance on internationally financed non-governmental organizations tended to increase — a context that fed into their already accelerating depoliticization. Strategic aims of state power began to recede from the Left’s purview. Reformists turned to municipal politics, while some revolutionaries — most famously the Zapatistas — transformed the practical necessity of defensive localism into a strategic virtue of anti-power.

Economically, this was the season of neoliberal ascent. Behind the ideological guise of the free market, strong and coercive states throughout the region rammed through policy agendas of free trade, austerity, financial liberalization, privatization, and the retrenchment of welfare and developmental programs.

The ascent was a long time in coming. Early signs of stress in the import-substitution industrialization development model were evident by the mid-1960s, but it entered into chaos during the 1980s debt crisis — financial implosion, capital flight, stagnation, and hyperinflation were the watchwords of that catastrophic decade. In 1972, the total foreign debt of Latin America was $31.3 billion; by the late 1980s, the figure had risen to $430 billion, and spiking international interest rates made repayment ever more punishing.

Growth was dormant, real wages collapsed, and inflation ate up the value of whatever money remained in the hands of workers. Domestic ruling classes, backed by the United States, the International Monetary Fund, the World Bank, and the Inter-American Development Bank, seized this moment to usher in the neoliberal counter-revolution.

Resistance was weak as disarticulated organizations of the Left proved unable to mount much of a defensive struggle. In the early 1990s, the major exceptions to these trends were the Landless Rural Workers Movement (MST) in Brazil, the Zapatistas in southern Mexico, and the indigenous movement in Ecuador.

The uneven international process of neoliberalization led to a series of worsening social conditions in Latin America and a difficult terrain for the Left’s recomposition. The old organizations and associational forms of urban working classes were decomposing as trade union power declined. In most countries, there was a dramatic informalization of work, with insecure environments and no contracts. In the countryside, peasants and indigenous communities were dispossessed of their land through liberalization processes. Their numbers swelled the ranks of the urban informal proletariat now populating the shantytowns on the edges of major cities.

Growing social inequality and poverty marked the region as a whole by the end of the 1990s, after the two-decade experiment with orthodox neoliberalism. Pauperization and inequality were bound together with cultural atomization and alienation. Ecological devastation accelerated alongside rising crime, insecurity, and mass emigration. While the military hand of US imperialism in the region was perhaps less evident in the 1990s than it had been in previous decades, its economic might was exercised without precedent through the mediating channels of the World Bank, IMF, and Inter-American Development Bank. Latin American ruling layers were convinced that neoliberal globalization could reboot growth and profitability, while preserving the base of social and economic exclusion from which they had long benefited.

As it turns out, neoliberalism could not overcome the structural failings of ISI, nor even match its record of growth — economic instability would soon be followed by a string of political crises.

Neoliberal Crisis

The ideological promise of neoliberal advocates in Latin America, as elsewhere, hinged on the promise that a rising tide that would lift all boats. The pain of austerity in the short term would be transcended over the medium and long run, as private investment flooded the market and sparked job growth, and as bloated state-owned enterprises were replaced with free competition and market dynamism. Rising employment would also decrease poverty, even as the system allowed the rich to get richer as an incentive mechanism. By the close of the 1990s, however, it was all too evident that even this minimal justification for the immediate social devastation of neoliberal structural adjustment could not hold up under scrutiny.

Economic growth over the course of the 1980s and 1990s — the core neoliberal epoch of Latin America’s “silent revolution” — included a modest boom (1991–97) positioned between the “lost decade” of the 1980s and the “lost half-decade” between 1997 and 2002. The neoliberal era in Latin America progressed through the “deep recession” of 1982–83, the “false dawn” of meager recovery from 1984 to 1987, the increasing depth and breadth of neoliberal policy implementation between 1988 and 1991, and a thorough attempt to consolidate the model throughout the 1990s and early 2000s amid increasing contradictions: the Mexican Peso Crisis in 1994, Brazil’s financial breakdown in 1998 in the wake of the Asian and Russian crises, and most dramatically, the Argentine collapse, which reached its apogee in December 2001.

Following twenty years of debt rescheduling, the region’s total debt was approximately $725 billion by 2002, twice the figure at the onset of the early 1980s debt crisis. Poverty rates between 1980 and 2002 increased from 40.5 percent in 1980 to 44 percent in 2002. In absolute figures, this translated into an increase of 84 million poor people across the region, from 136 million in 1980 to 220 million in 2002. Latin America continued to be the most unequal part of the world, such that in 2003, the top 10 percent of the population earned 48 percent of all income.

As political economist Alfredo Saad-Filho has observed, total foreign financial resources flowing into the region between 1990 and 2001 — including net debt flows, foreign direct investment, bonds, and equity capital — amounted to $1 trillion; but outflows — encompassing profit remittances, debt service, and interest payments — rose simultaneously, and reduced net inflows to merely $108.3 billion. Such inflows failed to match the rate of diminution of government investment and the savings rate, leading to a fall in total investment and a contraction in growth.

Looking solely at the large economies of Brazil and Mexico, average annual growth rates between 1933 and 1980 were 6.3 and 6.4 respectively, compared to just 2.1 and 2.7 between 1981 and 2000. Financial instability and outright shocks were also tethered to these dismal patterns of growth.

The recession between 1998 and 2002 was the worst to strike Latin America since the early years of the debt crisis. Poverty and inequality shot up across the region, after two decades of declining social conditions and empty promises. The chasm between the ideology of neoliberalism and the material reality facing the rural and urban popular classes became unsustainable.

Yet the answer from the bulk of conservative regimes in power at that moment was simply an acceleration of neoliberal policies. The problem was not neoliberalism, but rather the widespread bureaucratic failure to fully implement structural adjustment programs. But if this agenda had been possible to sell to significant parts of the Latin American public at the outset of the debt crisis — after two decades of failed experimentation, in a period of left defeat and hyperinflation panic, ending in a massive recession — the bitter pill now became increasingly difficult to swallow.

Out of the Wasteland, A New Left

A recomposition of the Left emerged in this environment. Its first expression was seemingly the 1998 election of Hugo Chávez on a moderately left ticket in Venezuela. But the larger part of this story in the early twenty-first century was an explosion of extra-parliamentary forms of social struggle — road blockades, strikes, land occupations, worker takeovers of abandoned factories, protests, and even quasi-insurrectionary waves of mass action that toppled neoliberal governments in Argentina, Bolivia, and Ecuador.

A host of agents led these popular movements, with unemployed workers leading unrest in Argentina, indigenous urban informal proletarians and peasants at the helm in Bolivia, and the Confederation of Indigenous Nationalities of Ecuador (CONAIE) playing at the vanguard in Ecuador.

The demands of these movements between 2000 and 2003 shifted in some cases from defensive struggles against neoliberal continuation in the context of recession toward offensive anticapitalist struggles that sought a strategy of socialist transition in the novel setting of the twenty-first century. However, a recovery in growth levels across South America by 2003, and a concomitant turn away from extra-parliamentary revolt and toward electoral politics, witnessed a moderation of strategic horizons and the rise to office of left and center-left governments throughout most of South America and parts of Central America in the mid-to-late 2000s. If these areas had been controlled almost exclusively by parties committed to neoliberal orthodoxy in the 1980s and 1990s, it was by the mid-2000s impossible to run openly on a neoliberal ticket and succeed in electoral politics in most of Latin America.

The ideological sea change ushered forth by the recession of 1998–2002 and the re-articulation of the militant social left in the early years of the century was remarkable. Argentina, Bolivia, Brazil, Chile, Ecuador, El Salvador, Guatemala, Nicaragua, Paraguay, Peru, Uruguay, and Venezuela were among the countries in the region that witnessed electoral victories of left or center-left parties in the first decade of the twenty-first century.

This political reorientation of Latin America was occurring, of course, alongside shifts in the region’s political economy and its relationship to the world market. Commodity prices stalled in 2011 and then began a precipitous decline. A modest recovery in oil in recent months has not reversed the general trajectory. This has been the principal mechanism through which the global economic crisis has made its delayed impact on Latin America.

Progressive governments in South America have suffered the political brunt of these dynamics, declining in popularity as they rule over economies in descent. The Right has a new lease on life in the region, even if it is too early to declare unequivocally the end of the current cycle of Latin American left politics. Austerity and retrenchment are on the agenda, but the new right will find it difficult to return to the orthodox neoliberalism of earlier decades. Already, Temer’s support in Brazil has reached single digits and the first general strike in that country in decades has been scheduled. Likewise, Macri’s austerity decrees in Argentina have been met with ferocious responses in the streets of Buenos Aires. Left hegemony has receded, but the Right has inherited a crisis to which it has no answer.