Malvinas Argentinas, but...

One of the open wounds in Latin American history has been since the mid 1800s the British occupation of the relatively small but strategic Archipelago of Malvinas, or Falkland as the British cynical stubbornness insist in calling them. The Archipelago became in the early 1980s the source of an armed conflict that unexpectedly ended the Military Junta rule in Argentina.

Unexpectedly, because the military assumed that by waging war against Britain, the people in Argentina (energized after the victory in the 1978 Football World Cup), would be willing to forget the many human rights abuses. After all, nothing suits better the needs of a weak government, than a patriotic war, as many of George Bush’s decisions attest.

Moreover, the gorillas in charge in Buenos Aires assumed that the political cleansing carried out in Argentina itself against the guerrillas, and the help they provided to the U.S. in Central America by training the counter-insurgency in Central America, were enough to guarantee that the U.S. was going to step aside in the event of a war against Britain. Not only that, the Argentine military assumed that the agreements with the then ruling military elites of other South American countries were enough to secure their support against Britain.

As it usually happens with grandiose projects, they were dead wrong. The U.S. would rather die than breaking away from their alliance with Britain (after all the Cold War was quite hot at that time), Pinochet had too much in common with Margaret Thatcher, and the Central American governments were too deep in their own problems to provide any help to Argentina.

Only Brazil assisted to Argentina during the war, and it was mostly marginal help in the form of information on the movements of the British Navy, and in the form of fuel for Argentine vessels and planes guarding-off the Argentine North-East shore.

Hugo Chávez, the Venezuelan president reopened the Malvinas’ wound by throwing his darts at Tony Blair’s face after the British Prime Minister criticized the close relations between Venezuela and Iran.

I certainly believe that the Malvinas Archipelago is rightfully Argentine territory and, eventually, the British must leave the islands. However, the question is if in actuality throwing the Malvinas issue to the mix of the Iranian conflict, as Mr. Chávez did, is the best path to secure the return of Malvinas to Argentine sovereignty, especially when one takes into consideration the role that the Venezuelan leader has played in providing some sort of legitimacy to Iran’s nuclear program.

I do not think so. Not only it is absurd to use once again the issue of Malvinas to polarize popular support (whether in Argentina or in Latin America at large) against a real or fictional threat, it is even more when one is doing it by connecting that legitimate claim of Argentina with the ongoing conflict between Teheran and Washington.

Moreover, Mr. Chávez attack on Mr. Blair (who is certainly a puppet of U.S. interests as any other British government would be) comes together with the decision of the Venezuelan Treasury to buy, at the request of its Argentine counterpart, bonds issued for 308 million USD. In doing so, Venezuela has become a key financier of Mr. Kirchner’s government buying since May 2005 2,300 million USD in bonds issued by the Argentine Treasury.

Paradoxically enough, as the Argentine newspaper La Nación reports, the Argentine bonds are in high demand in the Venezuelan market because it is one way that Venezuelan investors have to bypass the tight exchange controls in their own country:

La compra de bonos locales le genera un buen negocio al gobierno de Venezuela, que ya revendió más de US$ 600 millones a bancos de su país que los colocaron entre clientes deseosos de contar con un vehículo de inversión que les permita fugar dólares y evitar los férreos controles cambiarios. Tal vez por este motivo, el ministro de Finanzas de Venezuela, Nelson Merentes, afirmó recientemente que su país compraría bonos argentinos cada vez que desde aquí se lo pidan.

It is noteworthy that the Argentine media did not highlight Mr. Chávez’s request to the British government. La Nación published a brief note on this Friday February 10^th edition (page 3) with a picture of Mr. Chávez rallying in Venezuela. Clarín omitted any reference to Mr.Chávez’s cry. Even the leftist and pro-Kirchner Página 12 buried Mr. Chávez’s reference down in its page 17, publishing merely two paragraphs with a small picture of the Venezuelan leader.

Apparently, the Argentine media know better how to deal with the Malvinas issue. This is more relevant when one takes into consideration how painful is this issue. Not only there are, as with many other wars, many veterans affected by the loss of limbs wandering in the streets of Buenos Aires, seeking a coin or two as a way to deal with their needs, but also Argentina is starting to acknowledge the magnitude of the hoax posed by the military Junta. It is as a part of such process, that Iluminados por el fuego, a film on the war in Malvinas, received the Goya a few days ago, the equivalent of the Oscar in Spain to the best foreign film.

To my mind, Mr. Chávez’s attitudes provide little or no fope for a solution to the Malvinas issue. More so now that he has decided to tie this issue with the larger and broader conflict between the Islamic Republic of Iran and the U.S. government. It is not that I believe in Mr. Bush’s claims about Iran, especially when one takes into consideration how the U.S.“intelligence” services faked information on Iraq, but because the path of conflict and confrontation that Mr. Chávez follows is very dangerous not only for Venezuela but for the entire region.

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Technorati Tags: América Latina, Latin America, Hugo Chávez, Malvinas, Argentina, Tony Blair, Venezuela, Rodolfo Soriano, Latin America: Economy and Society, Social Change in Latin America

Inflation's Intimidating Return in South America

In the last two weeks newspapers and magazines in Argentina and Brazil have been commenting on the growing rate of inflation in both countries. Moreover, in Argentina, Ernesto Kirchner's government attempted to establish some mechanism to prevent sudden changes in the prices of key products.

Kirchner's efforts, however, confronted an unwilling Sociedad Rural Argentina, a powerful association of meat and grains producers that has a long history of confrontations with the current president that reached a peak when in the (austral) winter of 2004 the President decided not to assist to the yearly expo and convention of "la Rural," as the association is popularly known.

With La Rural other two major groups (the Confederaciones Rurales Argentinas and the Centro de Consignatarios de Hacienda) representing most of the 190 thousand meat producers in Argentina rejected the agreement proposed by Felisa Miceli, the Economics Minister. Soon after La Rural's rejection, Aníbal Fernández, the Interior Minister announced that the Argentine government will not hesitate to increase the taxes that the Argentine national government imposes on meat's exports.

How rejecting an agreement to limit increases on the price of the meat connects with the need to raise taxes is--at least to my mind--impossible. Taxes should never be tools to punish unwilling political or social actors, much less economic agents and yet--in its desperation to prevent increases in the rate of inflation--the Argentine government seems to be willing to go down a road that will only increase the level of conflict and distrust in its ability to conduct the economy, which ultimately will lead to more tension, distrust, and yes, more inflation.

Despite the partial failure with the foodstuffs producers, Kirchner's ministers have been able to sign agreements with U.S. based Procter & Gamble and with the Molinos firm, that produces and distributes all sorts of foods, breads, and groceries in Argentina. Procter & Gamble will freeze the prices of 31 of its products and Molinos will do it with 9 key products (oil, rice, bread, and pasta).

In Brazil things are not easier for the government of former labor leader Luiz Lula da Silva. On the one hand, the prices of fuel keep growing despite the efforts of the Brazilian government to reach an agreement with the producers along the lines of the one negotiated with the meat producers in Argentina. The key price of the hydrated alcohol went from R$ 1.724 on January 14, to R$ 1.735 on January 21, as a sign of the weakness of an agreement that included this critical type of fuel for the Brazilian market.

As a consequence, the Brazilian equivalent of the Federal Reserve Bank, the Banco Central do Brasil issued a less than optimistic forecast for the Consumer Prices' Index. Two weeks ago, the Banco Central forecasted a 4.58 yearly for 2006. One week later, the Index had gone to 4.61 yearly for 2006, with a rate of growth for the year of 3.5. It is important to notice, however, that for the twelve months going from November 2004 to November 2005, the Banco Central set an inflation rate of 6.22 per cent.

The inflation rates in both Argentina and Brazil still far from the rates reached by the mid and late 1980s that forced the shock plans, but they prove that there is something wrong in the economies of both countries and that the work of the political leaders is not enough to induce the trust to help prevent any new growth of the inflation. Both countries and Latin America at large are aware of the consequences that inflation had for the markets in the 1970s and 1980s and yet, trapped in the labyrinth of populist politics á la Chávez, the political leaders leaders of the region seem to be unable to find the right combination to secure growth and to avoid inflation.

If you are interested on the issue of inflation you can also read from the Archives of this website:

Latin America before the Neo-Liberal Wave

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Technorati Tags: América Latina, Latin America, inflation, Ernesto Kirchner, Lula da Silva, Brazil, Argentina, Rodolfo Soriano, Social Change in Latin America

Parallel Presidencies?

This weekend, two issues overwhelmed Latin American news services. On the one hand, the public relations blitzkrieg launched from La Paz, Bolivia, by former coca-growers’ leader and new President Evo Morales. Hurricane Evo visited four continents in the short period between his election and his inauguration. In some cases, he brought relief, as in Brazil, as Morales seems to have changed his mind about expropriating several oil refineries of Brazilian capital, and in some others, as in Mexico, heightened concerns about the future of Bolivia and its role in the Latin American relations, as Morales hinted the possibility of limiting the exports of gas to Mexico.

On the other hand, in Chile it was all about good news. Michelle Bachelet not only confirmed her success in the presidential election, as hinted in the first round of the elections, but she was able to increase the margin of support for the Concertación, expanding the base of social support for the coalition that Christian-Democrats and Socialists have maintained in Chile for almost 20 years now.

Both electoral stories provide interesting hints about the possible future of the rest of the region. On the one hand, Morales faces challenges that seem to overwhelm him. Not only he already is backing away (for good) from offers made during his presidential campaign, but he has decided to ignite other conflicts in the region with a rhetoric that seems carbon copied from, and in some cases more radical, than Hugo Chávez’s. The difference is that Venezuela never actually confronted a major process of structural reform, while Bolivia confronted the exact opposite situation.

It should not come as a surprise that in one interview with Argentine newspaper Página 12, Morales expressed nothing but rejection for the policies sponsored by the International Monetary Fund. It is important to stress, however, that the tragedy of Bolivia during the 1990s was co-written by the IMF and local politicians as Gonzalo Sánchez de Lozada. Moreover, it is necessary to stress—once again—that in the 1980s and 1990s the IMF sponsored many different policies in Latin America and elsewhere.

The radical policies pursued by Sánchez de Lozada may appear as similar to those sponsored by the Concertación in Chile or by Carlos Menem in Argentina or by Carlos Salinas in Mexico, but there were key differences that is necessary to keep in mind for a meaningful analysis of contemporary Latin America. For starters, neither Mexico nor Chile denationalized key industries such as the oil or copper, while in Argentina and Bolivia, the political elites carried away what in the 1990s were called “Garage sales” of pretty much all within their reach, so to assume that it was only the IMF’s fault is, to say the least, absurd.

Moreover, in Morales's interview with Página 12, Bolivia's new president emphasizes how there are not going to be anymore "imported models," just to talk immediately about the micro-credits program that he will launch. And of course, any person that has read a little bit the programs of micro-lending sponsored by the World Bank, the sister institution of the International Monetary Fund, cannot but smile at Morales's naïve attitude, because even on that policy, he will be following a program brought from outside, revealing once again the pattern of lies that constitute the backbone of the recent wave of Latin American populists. Read here, by the way, a critique authored by Aminur Rahman of such microlending programs in Bangladesh, following a rationale developed by Indian economist Amartya Sen.

Sadly enough, the excesses of liberal (conservative in the U.S.) president Sánchez de Lozada, combined with the structural failure of Latin American presidentialism (and particularly with the Bolivian version of it) had created all the necessary conditions for the emergence of these kinds of nationalist and nativist approaches emobodied by Morales. These nativist approaches assume that only what has been thought in Latin America or more specifically in their own countries is good to deal with delicate issues. Such approach seems out of line, because as rich as the Aymara tradition is it would be ludicrous to assume that a mere return to such roots will guarantee the solution of Bolivia's problems.

Morales will help himself by turning his head to Lima, the capital of Peru, to see the troubled presidency of the other Aymara president in contemporary Latin America, Alejandro Toledo, who assumed the presidency of Peru under similar circumstances to find himself, 4 years, later pretty much unable to do anything with a political leadership that appears exhausted and confronting a disillusioned public opinion.

Here it is important to stress how in Bolivia all the market-centered fallacies of the liberalism (or conservatism in the United States) were applied. The all-encompassing privatization carried by President Sánchez de Lozada left thousands of persons without access to water and other public goods and services, triggering a popular movement to resist any form of market-inspired solution to the issues affecting the Andean country. It should not come as a surprise that the privatization launched in Bolivia has now, as one of its unexpected consequences, the emergence of Morales's charismatic leadership, with all its contradictions and risks not only for Bolivia itself but also for the entire region.

Interestingly enough, on the other side of the Andes, in Chile, Michelle Bachelet—the first female to be president in Chile—appeared with a fresh and conciliatory message in her discourse, and more important without any pretension to have all the answers in the backpack of Chilean or Latin American “culture.”

Quite the opposite, President Bachelet appears willing to embrace more intensely than ever the Chilean vocation to open markets with a very active and very responsible public sector willing to intervene whenever such interventions seems necessary, while acknowledging the role that markets should play in allocating scarce resources.

This is more relevant when one takes into consideration key aspects of her biography. She and her family suffered the excesses of César Augusto Pinochet’s brutal dictatorship. Bachelet’s presidency will be more important because she is the only true socialist in a continent where many populist leaders, as Hugo Chávez or Ernesto Kirchner, disguise themselves as leftists, whithout having gone through the painful experience that represented for the Chilean Socialist Party acknowledging its own mistakes in pursuing its policy goals without paying attention to the delicate mechanisms of the market.

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Technorati Tags: América Latina, Latin America, Evo Morales, Michelle Bachelet, Alejandro Toledo, Carlos Salinas, Bolivia, Chile, Hugo Chávez, microlending, Rodolfo Soriano, Social Change in Latin America

Peruvian Shadows

This Tuesday January 11, the Board of Elections in Peru decided to refuse former President Alberto Fujimori a chance to seek what would have been his third Presidency. The decision hardly surprises anybody, but it provides an excellent chance to see at the painful state of contemporary Peruvian politics.

As with other countries that I have considered in this blog before, I do not think that we should assume that what is happening nowadays in Peru will happen later in Argentina or Mexico. The intricacies of Peruvian politics prevent from any possible contagion, and yet it is possible to see in Fujimori's biography some glimpses of the kinds of things that are wrong region wide in Latin America.

First it is necessary to acknowledge that as repulsive as Fujimori may be for some in Latin America he was able to address critical issues in Peruvian politics that many others before him were unable or unwilling to address. The problem, of course, exists in the kind of means that he used to pursue his goals. For one, we have the case of Vladimiro Montesinos, the former chief of the political police in Peru who gained fame as one of the bloodiest torturers in a region full of them.

In addition, one can think of Fujimori's decision to dissolve the Peruvian Congress and Supreme Court. The "auto-golpe" or "self-coup" as it came to be known in the early 1990s was with his aggressive counter-terrorist tactics and his economic shock plan, the features that gained "El Chino" (The Chinese), as he came to be known, world fame. By the way, if you are interested in Peruvian politics and you like movies, watch The Dancer Upstairs, an excellent movie directed by John Malkovich dealing precisely with aspects of the counter-terrorist tactics used by Fujimori and Montesinos.

These aspects of Fujimori's biography have been the subject of many commentaries and criticism, some of them accurate and fair, some of them exaggerated by Fujimori's foes. What is more relevant, however, is to ask how a former professor in a technical university (Universidad Nacional Agraria La Molina), ended up walking the path Fujimori walked.

To my mind, Peru and Fujimori provide a text-book case to understand what is wrong with presidential regimes and the kind of contradictions that constitute the core of such regimes. I cannot think that a guy such a Fujimori, a college professor in Agronomy, was since his early youth the corrupted and mischievous politician that was forced out of his country to seek refuge in his unique condition as both former President of Peru and Japanese citizen.

Quite the contrary, people who knew the early Fujimori, the one who came to be the president of his Alma Mater, have expressed over and over their surprise with the kind of policies, and more specifically with the decisionmaking processes used by Fujimori as President of Peru.

First, of course his decision to shutdown the Peruvian congress and Supreme Court. He did so after it was clear that his government had no chance to overcome the grip that before him had affected former presidents Fernando Belaúnde Terry and Alán García during their terms. Belaúnde ended up being ousted by a coup back in the 1960s, and García avoided any further confrontarion with the Congress by becoming more radical than the Congress and the leaders of APRA itself.

No wonder, by the end of his term Peru was deep into the worst crisis of its history confronting two choices, Alberto Fujimori as the rather surprising candidate of Cambio 90, and Mario Vargas Llosa, the novelist turned into politician who was unable to defeat Fujimori when El Chino was able to gather the support of García and other leaders of APRA who expected to be able to control his presidency.

Fujimori himself contributed to such perception as his first presidential campaign was based on a bold rejection of the structural reform policies that Vargas Llosa openly proposed to the Peruvian electors. However, Fujimori proved to be a resourceful politician gathering the support of the Armed Forces to launch, rather late when compared with other Latin American countries, an ambitious reform program. The program included not only the usual shock policies to freeze the mounting inflation rate, but also a broad diplomatic effort to recast Peru's relation with the International Monetary Fund, the World Bank, and the U.S. Department of the Treasury.

Fifteen years later, Fujimori is nothing but a shadow of his old self, and sadly, Peru is in no better shape. After Fujimori's exile in Japan, the administration of Alejandro Toledo faced, as his predecessors did, the negative consequences of presidential regimes, making the very process of government almost impossible.

Despite the decision of the Peruvian electoral board it is important to stress that the Fujimoris are coming. Keiko, the former president's daughter and Santiago, the former president's brother are already registered as candidates. It is not clear, however, who will takeover as Santiago running mate, now that it is clear that Alberto will not be able to run as presidential candidate to compete with Ollanta Humala and another shadow from the past, former President Alán García who expects to become the newest of Hugo Chávez's partners in Latin American politics.

The problem, however, is in the institutional designs and more specifically in presidentialism. That is why politicians with different approaches to politics such as Belaúnde, García, Fujimori, and Toledo share all similar fates, similar flaws. It is not in the Peruvian or in the Latin American "culture," but in the rules of a perverse game that we are unable to stop.

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Technorati Tags: América Latina, Latin America, Peru, Alberto Fujimori, Alejandro Toledo, Ollanta Humala, Alán García, Populist Politics, Rodolfo Soriano, Social Change in Latin America

Kirchner's Full Payment

Today January 2, 2006, the media in Buenos Aires and elsewhere in Latin America and the United States, call attention on the decision of the Argentine government to pay in full the country's debt with the International Monetary Fund.

The IMF was informed of President Ernesto Kirchner's decision to pay in full in mid December. At that time, the IMF released a brief statement on the issue with little or no comment on the reasons and the consequences of the decision, which is, by itself, a good sign of the ability of the Argentine economy to recover .

In Argentina, the decision has polarized the opinions of economists, politicians, and journalists who have expressed in some cases satisfaction and in some others caution with a decision that leaves the Argentine Treasury with little more than 18 thousand 500 million U.S. dollars in reserves after paying little more than 9 thousand 500 million to the IMF.

To my mind there are two issues that one needs to pay attention to try to understand the reach of this decision and its possible consequences in Argentina and elsewhere in Latin America. More so, because Mr. Kirchner and his ministers have emphasized the idea, rather ludicrous, that they have decided to pay in full as a way to have more "freedom" to pursue their own economic policies.

First, it is necessary to take into consideration that those 9,500 million are only little more than 10 percent of the overall Argentine debt, which—as with most of the Latin American countries—comes from credits with private banks, and not with multinational institutions as the IMF or the Inter-American Development Bank . This is relevant because, actually, the credits with the IMF usually are less abusive than those with the private banks. That is something that has remained absent in most of Kirchner's statements on the issue.

To my mind, if one really wants to achieve more freedom in the design of the economic policy, what is really important is to repay the debt with the private banks and not to seek the easy applause that comes out of slapping the IMF's face. More so, when it is clear that the measure appears as designed to achieve two goals. On the one hand, to fascinate certain leftist media in Argentina and Latin America (one only needs to pay attention to Página 12's take on the issue to understand it) than to pursue a major goal and, on the other, to insist in the rather ludicrous idea that the crises that Argentina and other countries in the region confront are the consequence of the "tight" controls that the IMF impose on the countries.

The fact, however, is that such controls have been rather loose and that is why it has been possible to witness the abuses as that of former President Menem and his one-peso-to-one -dollar policy of the 1990s. One only needs to go over the files of the IMF and other multilateral financial institutions to see how even if at one point the IMF praised the fixed-parity as a way to address the hyper-inflation of the 1980s (5000 percent yearly in 1988-9), there were many warnings about the negative consequences of the policy.

Moreover, many in Argentina and elsewhere insisted in the need to change the monetary policy, but Menem was unwilling to do so out of fear of the possible consequences. Something similar can be said of the rather dumb decision of the Mexican government to pursue a semi-fixed parity in the early 1990s while reducing the fiscal revenue by lowering the VAT rate from 15 to 10 percent in the last two years of the Salinas administration. Neither Menem’s nor Salinas’s policies were imposed by the IMF.

The same can be said of the unwillingness of many governments in Latin America to pursue sound fiscal policies during the 1980s and 1990s. Otherwise, all the countries in region would be either disasters as Bolivia or buoyant economies as Chile. In actuality, however, there are variations that go from the performance of Chile and Mexico to the failure of Argentina, Bolivia, and Ecuador.

However, in contemporary Latin American blaming the IMF for all the wrongdoings of irresponsible politicians is the best way to secure an ovation.

In any case, the question now is what Argentina will do with the “freedom” that— if one accepts Kirchner’s hypothesis—comes after the decision to pay in full the debt with the IMF.

One discouraging sign can be found in the decision of the Venezuelan government to increase its role as financier of Kirchner. Because that is the aspect of Kirchner’s move that has not been really taken into consideration in the analysis. Only during the last three months of 2005, Venezuela bought 1,500 million dollars of Argentine bonds and the expectation is that Caracas will lend more money to Buenos Aires. It will be naïve—to say the least—to think that Hugo Chávez’s government will do it without seeking to impose its own economic agenda on Argentina.

In any case, questions about the future of the Argentine economy remain open. Hopefully, for the sake of the millions and millions of Argentines who have survived the economic catastrophe co-authored by Menem and De La Rúa, Kirchner will pursue sound policies to guarantee a better distribution of the wealth in that country.

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Technorati Tags: América Latina, Latin America, Argentina, International Monetary Fund, World Bank, Ernesto Kirchner, Carlos Menem, Rodolfo Soriano, Social Change in Latin America

Evo Morales president

This Sunday, Evo Morales, leader of the leftist Movimiento al Socialismo, won the presidential election in Bolivia. He did it with an astounding 50% of the vote, leaving behind one of Bolivia’s recurring nightmares (that of the so-called ballotage) and more important, giving the new president the hope of a more stable Presidency than Morales’s predecessors. If that is the case, Morales’s presidency will be an immediate paradox as he played a key role in forcing-out of the Presidency both Gonzalo Sánchez de Lozada and Carlos Mesa.

Morales played a key role in the mobilizations that swept Bolivia at the beginning of 2005, and—as such—he can be blamed of pretty much the same misdemeanors or Hugo Chávez, the Venezuelan president who actively supporter Morales in his quest for the Presidency.

However, to the so-called “pundits” that immediately want to draw inaccurate comparisons between Bolivia and Venezuela it is important to remind them that the similarities that actually exist are more the function of similar institutional designs than the product of similar “cultures”. Both Bolivia and Venezuela were for many years Centralist republics, a feature that made both countries, as others in South America, prone to instability, that on top of the instability that is inherent to presidential regimes.

The fact that both Bolivia and Venezuela have been commodities exporting economies, with little or no ability to industrialize, just compounds the overall weaknesses of the presidential regime institutional design. To make matters worse, as far as the institutional design is concerned, Bolivia’s reliance on the ballotage system, a political pipe-dream cooked and long-time ago dropped by the French, put Bolivia—over and over—in extremely fragile situations since 1982.

One key difference that is necessary to keep in mind has to do with the processes of structural adjustment of the late 1980s are early 1990s. While Bolivia followed a rather brutal path of “neo-liberal” (neo-conservative in the U.S.) adjustment, in Venezuela nothing like that has ever happened, despite the whining and crying of Chávez and his Bolivarian Movement Fifth Republic.

Morales reaches the Presidency of his country facing mounting pressure to address the many problems inherited by the draconian economic policies pursued, with little or no success (besides cooling down the mammoth inflation rate) during the 1980s . His warning about changes in his dealings with the firms that invested in the exploration and exploitation of the vast gas fields in his nation already had a negative effect pushing up the prices of the product in the World markets.

He is already assuming that his presidency will have the kinds of cash flows that have allowed Chávez to become the leading voice of those who criticize the International Monetary Fund and the World Bank as the main culprit for what often times is presented as a dark conspiracy, however they should know better. If—as they say—all the suffering is the IMF’s and WB’s fault, then we should see the exact same outcomes in all the countries when structural adjustment policies were pursued; the fact, however, is that there are important differences from country to country, and those differences are closely related to the specific policies pursued by the political leaders.

That is, however something that we will never hear from Morales and much less from Chávez who is the main beneficiary of the Bolivian election. Not only now he has a reliable partner, willing to reproduce and amplify Chavez’s anti U.S., and anti IMF, discourse. Moreales will do it with two features that Chávez neve has had. On the one hand, Morales brings an ethnic base that can resonate with the rest of Latin America that Chávez never had before. Second, unlike Lula in Brazil or Kirchner in Argentina, Morales will command a clear majority in a government that, with the gas revenue, can be rich as Venezuela’s.

For the U.S., Morales represents a challenge like never before. Not only he is close to Chávez, but he is also close to Castro. Cuba will then has a chance to expand its now narrow trade and, as such, will contribute to facilitate Morales’s decision to denounce or breach the contracts with the forms involved in the exploitation of gas, as such firms will be forced to choose between being at odds with the absurd trade embargo imposed on Cuba and those doing business with Cuba, or fighting a legal battle that is doomed in the Bolivian courts.

Morales will not have, despite the gas related income, an easy ride. On the contrary, the “rebel” province of Santa Cruz still seeks its independence from the rest of Bolivia and it is there where the bulk of the gas is, setting the stage for what will be an epic battle. Also, it is important to keep in mind, despite the current buzz about Morales's ethnic origin, that Alejandro Toledo, the Peruvian president, is also a pure Aymara, and that heritage provided little or no advantage to his troubled presidency.

Elections in South America, Truce in Mexico

After six months of involuntary but unavoidable absence, I am writing in this corner of the web. I finished the dissertation, so I am free again to write about Mexico and Latin America.

While in Mexico a truce in the electoral campaigns during the Holiday season (Dec. 12-Jan. 12) was engineered by the Federal Electoral Institute, in Santiago de Chile, socialist presidential hopeful Michelle Bachelet reached the second round of the presidential election.

Bachelet's partial victory allows seeing deep changes among the Chilean voters that, for the first time since the end of Augusto Pinochet's dictatorship, decided not to give the candidates of the Christian Democrat and Socialist coalition a win in the first round of the presidential contest.
Moreover, the Chilean voters gave the center-to-right and right opposition of President Ricardo Lagos more votes than those gathered by Bachelet, although almost all pollsters assume that Bachelet, a former Health and Defense minister in Lagos's cabinet, will win in the second round to happen on January 2006. If Bachelet wins, the Christian democrat-Socialist coalition will extend their control of Chilean politics for 20 years.

During the last 15 years, the coalition has not affected the institutional design of Pinochet's dictatorship on financial, economic, and trade matters, but it has deepen the logic and the direction of the reforms originally launched by the military government at the beginning of the 1980s. Here it is important to stress that until the arrival of the so-called Chicago boys to the Chilean government, Pinochet's dictatorship was not only as brutal, but also as inefficient as the Argentine Military Junta.

However, what is more relevant to consider at this point is that the willingness of the Socialist government led by Lagos in Chile to preserve Pinochet's institutional design, stands in sharp contrast with the policies pursued by "leftist" governments in other countries of Latin America, and more important in sharper contrast with the propositions made many of the presidential candidates in other countries of the region. This difference is often times overlooked as the recent, rather poor reports of Juan Forero and Larry Rother of The New York Times exemplify.

To think, as an example, that Bachelet is closer to Andrés Manuel López Obrador than to Carlos Salinas de Gortari would imply a naivety the size of the Andes. Not only Bachelet, but Lagos and the representatives and senators elected under the banner of the Chilean Socialist Party have been wise enough to build a healthy and cooperative relation with their colleagues of the Christian Democrat Party, they have been unwilling to relinquish the political leadership of their country as that would favor the parties closer to Pinochet.

They have not done so, unlike the conspiracy theories of López Obrador and the insults of Felipe Calderón. Bachelet, Lagos, Zaldívar and other Chilean politicians of the Christian democrat-Socialist coalition have been able to conduct themselves with a maturity that is unseen in these days in Latin America. The same can be said of any comparison between Bachelet and Ernesto Kirchner, Bachelet and Hugo Chávez, or Bachelet and who appears to be the next president of Bolivia, the former leader of the coca producers Evo Morales.

Now that everything seems to indicate a new defeat of the PRI in the July 2006 elections in Mexico, the concern that I have is how many years would the political watch go back with mister López as President? Would he be willing to risk the last of Mexican oil reserves in a desperate attempt to be more like his chief financial officer, Mr. Hugo Chávez?

These kinds of questions are more pressing when one considers how López has started already a personal war against the Banco de México chairman Guillermo Ortiz Martínez, and has already challenged any reform to the financial system because in his conspiratorial mind any reform is aimed at tying his hands.

In any case, I cannot but express my happiness for the outcome of the Chilean election, and more specifically for the success of the coalition. As far as Mexico is concerned, all I can do is to get ready to swim deep into six years of populism, irresponsibility and paranoia starting on July 2006.

Religion, Politics, and Football

While the football (soccer) national teams of Mexico and Argentina were playing a delightful semifinal of the Confederations Cup at Hanover, Germany, the newspapers of both countries were reporting, among many other things, of a couple of messages released by the Catholic bishops of both countries.

Both messages deal with politics in their countries and, more important, both put forward severe critiques of the performance of the political parties in both Argentina and Mexico.

In Argentina, Jorge Cardinal Bergoglio, the archbishop-cardinal of Buenos Aires, one of the few Latin American members of the Society of Jesus, the Jesuitas, promoted by John Paul II to become bishops and, even more, to become archbishop and cardinal during his long pontificate, issued a lengthy message (28 pages) in which he criticizes the performance of political leaders in his country stressing the negative role that political struggles have had for the development of democracy in Argentina.

The cardinal stresses the negative role of political struggles within the context of the forthcoming primary elections in Argentina. La Nación, a distant equivalent of The New York Times in Argentine journalism, endorsed Bergoglio’s critique of the politicos’ performance with extensive front page coverage. Moreover, La Nación quotes Bergoglio’s as saying that “political struggles are the great illness of Argentina.”

The second paragraph of La Nación’s note is a full quote of Bergoglio’s message stressing how: “while various interests play their game, afar from the needs of all, it is possible to see in the horizon the shadow of a cloud of social disarray.”

However, and this is relevant to understand the role and the aims of the Church in Latin American countries, Bergoglio’s document displays a broad and sound diagnosis of the situation in contemporary Argentina, the sources of the conflicts, and—more important—it offers a enlightening interpretation of the parable of the good Samaritan as an image to try build a solution for the conundrum of contemporary Argentinean politics.

Interestingly enough, La Nación—a newspaper that can hardly be identified as Catholic—provides a link to download the full message from Cardinal Bergoglio.

As far as Mexico is concerned, Terra, a pan-Latin American web-based service quotes the auxiliary bishop of Mexico City Felipe Tejeda who criticized the primary elections of the presidential candidates saying that the “expenses associated (with such elections) are scandalous and useless.” Here is necessary to stress that the ruling National Action Party (Christian democrat right-to-center) alone has authorized expenses of 350 million pesos (34 million U.S. dollars) for each of its four presidential hopefuls. It is not clear yet how much will the Revolutionary Institutional Party (PRI, social democrat) will authorize its pre-candidates to spend.

The “leftist” Democratic Revolutionary Party (PRD) has not set a limit, but one of its most likely candidates, Mexico City’s mayor Andrés Manuel López Obrador benefits from the huge budgets of the public relations and media areas of the City’s local government.

Moreover, once the candidates are nominated by the parties, the Electoral Federal Institute (IFE) will allocate federal public monies, plus time in the national, and regional TV and radio networks, plus the monies that the parties will get from the local governments in states (like Nuevo León or the Federal District) where on top of the federal election, local elections happen simultaneously, plus marginal private contributions that the parties and candidates could raise for up to a ten percent of the total public contributions to their campaigns.

These sums will be pre-set by the IFE by September 2005. Then the Secretary of the Treasury (Hacienda) will incorporate such request in the National Budgets that will present some time between the end of September and the end of October 2006, waiting for approval by Mexico’s lower chamber (Cámara de Diputados).

The Church is not the first, and will hardly be the last to criticize how much money the Mexican parties get from the Treasury. In Argentina, the Church’s criticism of the politicos’ behavior is a concern shared by many other political actors in that country. What is relevant, however, is the fact that the Church enjoys in both countries and all over Latin America great levels of trust and public support. However, it is not clear what will the Church make out of such trust when confronting increasingly complex, impoverished, and fractured societies.

Criticizing the expenditure in political struggles is a rather easy task. What is necessary now is to confront the challenge to become an efficient political actor to promote agreements and reforms in countries in great need of them. It could be possible for the Church to perform that important role, although it is clear that it will be necessary to improve its ability to facilitate the dialogue without seeking to push forward its own institutional agenda.

That is easier in Mexico, where the Church does not receive and is not asking for public subsidies. In Argentina, because of the agreements signed during the 1960s (civil governments), ratified by the military rulers of the 1970s and Mr. Menem's democratically elected governments is harder. Mostly, because for the Church there is always the risk of opening a debate that could make them loose more than they could get, especially in the topic of religious education.

The Church: Silence and Expectations

A constant in different polls carried all over Latin America is the great level of trust (confianza) that the Catholic Church enjoys. Latinobarómetro, Consulta Mitofsky, and many other pollsters regularly register trust levels for the Catholic Church well into the 70 and even 80 percent.

This perception (which is nothing but that) is the source of great tension and debates inside and outside the Church. Do such measures represent an unrestrained ability of the Church to set the public agenda in the countries of the region, in ways similar to those of Italy? Hardly.

Is the Catholic Church falling in patterns similar to those of Europe? Hardly. Is competition with other Christian (Baptists, Evangelicals, Pentecostals) or non-Christian (Jehovah’s Witnesses) or para-Christian (Mormons) denominations shaping the Latin American landscape in similar ways to those observed since the mid 18^th century in what is nowadays the United States? I do not think so.

The evolution of Catholic Church, and religion at large, in the region follows historically situated patterns. There are some similarities with processes going on in different countries of Europe, and some with processes occurring in the United States, but for the most part, Latin America poses a key challenge to the future of Catholicism.

I think that even the Vatican itself is having a hard time figuring out how to address the religious conundrum posed by Latin America. A way to measure the problems that the Vatican is having trying to develop pastoral policies for the region is to observe the silence of the newly elected Pope Benedict XVI. So far, there has been no specific statement on Latin America as a region. The pope expressed his concern with the evolution of the conflict in Bolivia, but that has been it, with the dubius addition of a brief prayer in Spanish before an image of the Virgion of Guadalupe a few days after his election.

However, the clock is ticking and some definitions will come in the coming days. Such possibility is stressed by the fact that it is expected that the pope will attend, as his predecessors did, the General Conference of the Latin American Episcopal Council (CELAM, for its initials in Spanish). It is not clear yet if what will be the Fifth of such conferences will happen either in Argentina or in Chile.

What is clear is that, after a statement of Msgr. Carlos Aguiar Retes, first vice-president of the CELAM, on the possibility of such trip a wave of expectation swept both Argentina and Chile.

Benedict XVI’s silence about Latin America is more compelling when one considers that the region is the global stronghold of Roman Catholicism, and that Brazil, Mexico, and the United States (with a large Hispanic population) are the three countries with the largest Catholic populations worldwide.

The pope, so far, has been trying to smooth the relations with the Greek and Russian Orthodox churches. The move makes sense from an European perspective when one considers the challenges that Catholics, Orthodox, and Lutheran churches face there, and the fact that it is far easier to find a solution to the dispute with the Orthodox churches than to find it with the Lutheran or Anglican churches, mostly because of the issue of the female priesthood.

It is clear that if the Catholic and Orthodox churches expect to have a future in Europe they need to learn to coexist. Moreover, they need to learn to share resources and to face together the challenges of the double process of de-Christianization of Europe: on the one hand, the pressure created by the Islam, and on the other hand, the changes brought by the secularization process in Europe (although such process is far from being universal).

However, it would be a huge mistake if the Vatican forgets Latin America. In Latin America, the Church faces equally important challenges that require not only resources, but above all the imagination and compromise of the church’s grassroots organizations, hierarchies, and the laypersons. Moreover, unlike Europe, where it is forced to seek collaboration and support from the Orthodox churches, in Latin America the Church goes by itself.

New President, New Hopes?

Carlos Mesa's presidency in Bolivia finally ended when the Congress decided to accept his resignation. Mesa’s, the most recent “interrupted presidency” in the long lineage of “interrupted presidencies” in the poorest country in South America, was an actor of a process that put the country at the brink of civil war and, eventually, of its disintegration.

The independent movement based in Santa Cruz, the wealthiest province in Bolivia, has achieved an unexpected level of support that has created expectations about a possible quick, easy solution to the longstanding problems or poverty and marginalization that have plagued the country since its very origins.

So far, it is not clear if the recently appointed president, Eduardo Rodríguez Veltzé, the former Chief Justice of Bolivia’s Supreme Court, will be able to carry the reforms he has sketched so far. What is necessary to keep in mind is that there is no easy way out to Bolivia’s legacy of poverty and institutional conflict. In addition, at least in the coming days, Rodríguez Veltzé will be forced to perform his duties as president under the same rules and with the same institutional design that damaged Gonzalo Sánchez de Lozada’s and Carlos Mesa’s presidencies.

Moreover, that institutional design has been behind the long chain of “interrupted presidencies,” coups, and political instability that has plagued Bolivia’s history in the twentieth century.

So far, his main proposal implies a significant change in the institutional design: moving the country from a central presidential design, into something similar to a federal presidential system although interestingly enough I have not been able to find specific references to a reform aimed to move Bolivia from its status as a centralist regime into a federalist one.

It is important to stress that he has been appointed for a very short, six-month term, which will give him little or no effective power to carry away the kind of deep reforms that Bolivia needs at this point. The risk, of course is that his presidency could end up becoming some sort of lame duck and that the truce he requested will be actually granted just as a way to set the stage for the new presidential election. And here a painful remainder, such election will be affected (unless an overhaul of the electoral system is achieved before Christmas), once again, by the institutional design flaws (ballotage, as an example) that explain Bolivia’s never ending crisis.

Mexico's Electoral Labyrinth

In July, Mexico's most populated state, the State of Mexico (hehe, we had some problems figuring out new names for the states) will held its gubernatorial election.

Traditionally, since the late 1970s that race has been seen as the key match of the electoral calendar of the year, but mostly it has been seen as a general rehearsal for the general elections that are usually held one year after. This year, however, the situation will not be like that. The numbers in the state race will hardly match the expected numbers in the presidential election.

As far as the state election is concerned, the candidate of the Institutional Revolutionary Party, the old PRI, Enrique Peña Nieto, has a relatively easy advantage on most polls and will be, if nothing changes, the winner of the election, however such win will mean little or nothing for the outcome of the presidential election in 2006.

The “leftist” candidate (and I use such term as loosely as possible) of the Democratic Revolutionary Party (PRD) Yeidckol Polevensky Gurvitz has a dark history of name changes (she is not Polish as her name will hint), family conflicts and lies that have been haunting her electoral bid. Fortunately, she is far behind in the race with little or no chances of a come back.

Rubén Mendoza Ayala, the candidate of the National Action Party (PAN) started the race with some advantage, however poor decision-making, and the lack any relevant ideas has put him in an increasingly weak position. During the weekend, he starred one of Mexico’s worst displays of electoral behavior. While heading a rally with sympathizers in a small town, he charged against the owner of a pick-up truck filled with balls marked with propaganda of the PRI’s candidate, Enrique Peña Nieto. Moreover, he instigated the crowd to take over the balls and to hit the owner of the truck.

As of yesterday, the candidate had repaid the balls, and did a tour of some of Mexico’s news outlets claiming that was the victim of a conspiracy. Fortunately, someone in the crowd had a video camera on, so his speech instigating the crowd, insulting the PRI’s candidate and charging against the owner of the pick-up were all recorded in vivid colors and displayed by Mexico’s newscasts. In the video, it is possible to see Mendoza Ayala calling himself “ugly as all other Mexicans” and yet, claiming that the electoral race is not a beauty contest. Mendoza’s rant and rave came very close to mutiny.

As usual in contemporary Mexico, Mendoza has been talking of a media conspiracy instead of acknowledging his responsibility in the violent behavior of his sympathizers, while making all sorts of sexual innuendos with references to the balls, his alleged ugliness, and—to fully integrate the picture—with sexual insults that involve the mother of the candidate of the PRI.

What a shame.

In any case, I expect a close call in the election in the state of Mexico, with Enrique Peña Nieto as the winner, but with all sorts of pressure from the “leftist” PRD’s candidate who is running with the support of Mexico City’s mayor and future presidential candidate Andrés Manuel López Obrador. The candidate of the PAN, the party of Vicente Fox, the President of the country, will continue with his allegations of conspiracy and perhaps electoral fraud, which ultimately will be dismissed by his own party.

Perhaps the only good thing that will come out of this is the realization among the PRI leaders that they cannot waste time or effort in more internal conflicts. If so, they will be able to concentrate their efforts in the election of 2006, which will be—by all accounts—the toughest in Mexico’s history, a new and more painful labyrinth for which the old easy recipes of democratization and dismissal of the old authoritarian regime will not work any more.

Bolivia or the eternal crisis

A few hours after Carlos Mesa's new attempt to step down as president of Bolivia (his most recent attempt happened in March of this year), the Congress has been unable to reach an agreement to hold the joint session that will analyze if they accept or not (as it happened in March) the president's decision to resign. Unfortunately, the solution to this conflict will hardly come that easy.

When Mesa first tried to resign, he proposed a series of reforms that included the disolution of the Congress in order to build a new representation of the Congress. A new Congress able to better represent Bolivia. That, as many other propositions, was rejected by the Congress. All his other propositions to push forward a political and a fiscal reform were rejected too.

What is left now is a country sunk in the worst crisis of its history, with little or no hope for a solution. Again, the answer to many of its troubles lie deep in the very configuration of its institutions. It is not out of chance that Bolivia has been one of the most unstable and poor countries of the region. It is because its institutions are designed to perpetuate chaos and instability by over-emphasizing a separation of powers that is so perfect that prevents any collaboration.

Bolivia, Once Again

Tonight, as I was doing my last tour of the day over the Internet, I found the information of Carlos Mesa's resignation as president of Bolivia.

What a shame, and what a waste.

Mesa has been trying to find a solution to Bolivia's catastrophe, to Bolivia's labyrinth since the end of 2004 with little or no success A few weeks ago, he tried to find a solution to this conflict by resigning his post. The congress, immersed as it has been in the kinds of power struggles that are the trademark of presidential regimes and lie at the very core of Bolivia's longstanding history of instability, conflict, and poverty, will have, one more time a chance to try to find some sort of solution to its own riddle.

Unfortunately, I am skeptic about a possible solution in the short run. On the contrary, I think that the contradictions that have affected Bolivia in the last 15 years are for from solved. That is the case of the debate about the nationalization of the oil industry, a measure that will prompt the immediate rejection of the United States, its oil industry, and the I International Monetary Fund.

Again in the Times

This Monday, The New York Times published a brief piece about an angry Condolezza Rice criticizing the major Latin American countries (Mexico, Argentina, Brazil) for being unwilling to support the latest pipe dream of George Bush as far as Latin America is concerned.

Mr. Bush wants the Organization of American States to develop "a process to assess, as appropriate, situations that may affect the development of a member state's democratic political institutional process or the legitimate exercise of power."

Wisely enough, the ambassadors of the aforementioned countries plus Chile, Peru, Uruguay, and Venezuela, let Mrs. Rice know in advance that they were going to oppose the creation of such "process," signaling the death of this veiled intervention sponsored by the White House on the internal affairs of the countries of the region.

The piece published by the Times emphasizes the fact that Venezuela was the undisclosed destinatary of the so-called "process," while stressing also how hard it was for Mrs. Rice to digest this new defeat for the Bush administration and their aim to become the benchmark of democratic practices all over the world.

And of course, hehe, the irony of it all is that when one compares the U.S. democracy, its standards, its abuses, the gerrymandering with other democracies of the world, there is no way to think that mr. Bush could go around lecturing on (and, what is worse, sanctioning) democratic practices.

Bolivia: Back in the Times

Sadly, Bolivia is once again in the pages of The New York Times. Sadly, because unlike what happens with China, Japan, or Europe, Latin American countries reach the pages of The Times only when tragedies have happened or are about to happen. Bolivia is actually a special case among the sea of tragedies that happen on a regular basis in the region. So many, that the very definition of tragedy has gone through an overhaul when one needs to address whatever happens in that country.

With the patronizing tone that erases from his name and skin the sin of being a "Latino ," Juan Forero, the Times correspondent in Santa Fe de Bogota, offers a sketchy account of Bolivia's recent crisis, with little or no context to understand it. In any case, English speaking audiences have now a glimpse to one of South America's sadest stories ever, even if they get it from Colombia, which is as absurd a if I was writing a a journalist from New York about stories happening in Toronto or Montreal, Canada.

They do so, but unfortunately little or no change can be expected as a consequence of the sudden notoriety of that country's crisis. In the short term, little or nothing will change, mostly because the country is deep in a political deadlock hard to break, and whose consequences are even harder to foresee. The fact that Bolivia is the poorest country in South America makes the whole situation even worse, because it will always be possible to keep large sectors of Bolivia's poor mobilized and as radicalized as possible, preventing any solution to the many issues that affect that country.

The Organization of American States has been traditionally unable to address crises like this, and the fact that OAS has now a Chilean general-secretary, former Interior minister Luis Miguel Insulza, will make any intervention of the regional organization harder, since Bolivia and Chile have no diplomatic relations, because of Chile's military aggression that locked out Bolivia in the 19th century.

Bolivian President Carlos Mesa has been trying to reach an agreement with Evo Morales, the leader of the coca growers and the radical voice of the opposition, pretty much since his inauguration, with no success at all. Moreover,the fact that the country is a centralized presidential republic, with a very unfair income distribution, and a very unstable political system, only makes harder to achieve the kinds of agreements that the country needs, mostly because as soon as a new president is inaugurated the cycle comes to life again.

Mesa is offering a broad overhauling of the country's institutional design, mainly he is offering more autonomy to Bolivia's deportments, but so far no word on a possible change from the current presidential regime to a parliamentary one.

The Dutch No to Europe

As I was teaching today it came to me. Of course, the happiest guy in the World now that Europe has imploded is George Bush.

The French and Dutch have decided to blow away a great political and economic experiment that would have been the only rational counterweight, the check-and-balance, to the military and market led globalization heralded by the U.S. Now, the only possibiity to overcome George Bush's unipolar pipe dream is China.

The fear of the Polish plumber and the Turkish laborer was more powerful than the hope of a better, more humane form of globlization. So much for the French crap when criticizing the U.S. voters for choosing Bush on the grounds of fear. Both French and Dutch voters decided on similar grounds with the same outcome: giving Bush more power to do whatever he wants worldwide.

The European Constitution: A View From Latin America

The defeat of the European Constitution in its French referendum has many implications for Latin America. One of them is that it means bad news for the processes of globalization and regionalization that are not driven by the market.

One of the beauties of the European Union process was, up until this last weekend of May, that it represented a chance for a politically driven process of globalization and regionalization. It was more relevant because it dwarfed other processes that exist in other regions of the world, mainly in the NAFTA-CAFTA region (Canada, United States, Mexico, Chile, and Central America), and the Mercosur region (Brazil, Argentina, Uruguay, Paraguay). It was an exercise of political imagination with no parallel in the history of the world: countries willing to peacefully give up their sovereignty in order to create larger markets paying consideration to social issues.

Not only that, the configuration of the European Union as a single political unit played a key role in shaping, as one of many possible examples, some of the political changes in countries like Mexico. In 1995-6, as an example, the Mexican government was forced to broaden and to institutionalize some of the changes that allowed the final drive to democratize the country in the elections of 1997 and 2000.

Without the "democratic clause" that the European Union required as a requisite of its trade agreement with Mexico, such agreement would have never been possible. Notice that the U.S. or Canada required nothing like that in 1992-3 during the NAFTA talks. Moreover, in recent years the European Union played a key role in promoting socially responsible business practices in Central America.

Furthermore, the effort carried until this weekend by the European Union was a frequent example of a different kind of globalization-regionalization frequently used in Latin American circles as a counterfactual to the kind of insensitive practices that dominate the relation between the "partners" of the NAFTA region, and by those who oppose the Central American Free Trade Agreement.

The worst aspect of the defeat of the European constitution in France is the fact that it was driven by the fear to the "Polish plumber," which is the same fear to the Mexican or Central American immigrant here in the United States. It is a fear based in the unwillingness of the relatively wealthy populations of France, Britain, Holland, and the United States to share some of the privileges that they have had for 100 or 150 years.

Finally, such defeat opens up a series of questions regarding the possible future role of China in Latin America in moments when it is clear that the U.S. economy is unable to assume a leading role in the region. Unfortunately, it is clear for me that the kind of capitalism that China develops is far more aggressive and disrespectful of social, human, and environmental considerations than those practiced by the United States or the, now fragmented, European Union.

Chilean lessons

This year we are living the 20^th anniversary of the beginning of the wave of democratization that swept Latin America. It seems to me that is a good moment to see behind, to see around and to try look forward.

These two decades were marked not only but the change in the leadership of the countries in the region. They were marked, above all, by a rather naive desire to bring to life democracy in the region. We have tried to do it so however, without the kind of changes that were required to make democracy not only a desirable goal, which it is but-above all- without the support that would have made our democracies viable.

Of course, the exception to the rule is Chile and, up to a certain extent, Mexico. Both countries used some of the features of their authoritarian regimes to carry away economic reform programs that have provided, up until now, the stability that distinguishes both countries when one compares then with the rest of the region. The fact, however is that Mexico has lost for the most part its stability. All that has been left behind is an empty shell that is about to collapse.

As far as Chile is concerned, the country seems to be on its way to preserve its stability and, above all, on its way to keep growth at rates higher than the rest of the region, but also with the benefit of social and political stability.

Part of Chile's story of success is related to long-standing agreements among the country's elites that go all the way back to the 19^th century. Such agreements explain, as an example, their ability to defeat Peru and Bolivia in the wars that they have fought against each other but also in their ability to manipulate in their favor the relation they had in the 19^th century with Britain.

Such agreements explain also the stability of the Chilean democracy up until the 1960s and, paradoxically enough, Salvador Allende's presidential bid and the coup d'Etat that defrocked him in 1973. Moreover, such ability to strike deals and to build coalitions was used by Augusto Pinochet himself to gain the support of the Christian Democrats, who later decided to switch their loyalty and to become the head of the coalition that rules Chile since the late 1980s.

Now, when conflict ravages all the region, Chile stands not only as the less “democratic” of all the countries in the region (see the Electoral Democracy Index built by the United Nations Development Programme) but also as the only one that has been able to effectively reduce poverty and to develop a truly progressive tax regime.

At the core of such paradoxical success, it is possible to find political elites willing and able to reach compromises. The most important of such compromises, however, has hot been with other groups or parties, but above all with the country’s conflicting authoritarian legacy. Even the socialist President Ricardo Lagos, a political refugee during Pinochet's regime, has been willing to preserve, untouched, the market reforms carried by Pinochet.

Such ability puts the Chilean politicians well beyond their peers from other countries.

Overhauling Social Change in Contemporary Latin America

Social Change in Contemporary Latin America changes. The website originally designed as a tool to my students at Fordham University changes to become a Website to foster commentary on contemporary Latin America in English and Spanish.

Each week I will try to provide some contextualized commentary on topics relevant for the region. I hope that the Website will foster a more nuanced understanding of contemporary Latin America and, above all, I hope that it will help to address some of the region's more pressing issues.

Presidential and Parliamentary regimes (again!)

I would like to present here an edited version of an e-mail I sent to Christina Domínguez about our discussion on presidential and parliamentary regimes:

My concern with Presidential regimes comes not only out of the readings we have considered in the course. It comes out of my own experience in Mexico, dealing precisely with the effects of presidential regime, out of the consideration of the Argentinean and Venezuelan experiences, but also out of the consideration of other readings dealing with the issue of the negative consequences of presidential regimes, even if we forget about a possible comparison with parliamentary regimes.

It is not that I am obsessed with stability. I am not. I am very much concerned and committed with social change. I cannot stand poverty in Mexico or elsewhere in Latin America. I cannot stand corruption. I hate the irresponsible power games in which Mexican, Argentinean, or Bolivian politicians engage themselves paying little or no consideration to the consequences of their behavior.

However, I believe that as long as the market economy exists the way it exists nowadays, the chances to promote social change outside of the extremely tight limits of the market economy are rather slim. Even Cuba has been forced to develop forms of market economy or at least to insert itself into such economy.

In other countries of the region, the pressures are even harder. Mexico, as an example, because of the closeness with the U.S. and because of the existence of a very powerful bourgeoisie, is pretty much unable to attempt any form of social change that goes against it. You can say, well the EZLN is there as an example of the opposite, and I would agree with you. Unfortunately, I do not think that their chances to induce change in the long run are that good.

Therefore, we need to find a way to facilitate social change (for the better, of course) without disrupting the kinds of equilibriums that a market economy requires. That is where the parliamentary regimes come to my mind and the minds of others area specialists as one specific solution to one specific set of problems.

I do not think that the shift from presidential to parliamentary regimes will be enough to address all the problems in many of the countries of the region. I do believe, however, that some of the Latin American countries will benefit themselves from such change. Mostly, because parliamentary regimes deal with social and political conflict in better ways than presidential regimes.

It would be impossible for me to go over the entire literature on parliamentary regimes to explain why they have proved to be better suited to deal with social and political conflict than presidential regimes. What I can say at this point is to suggest you to keep your options for political analysis open.

Betting, as is often done in Latin America and in many Latin American studies centres here in the United States on the possibilities of social mobilization and social movements denies, on the one hand, the ability to consider the negative impacts that cycles of political instability have on Latin American polities and economies. I understand that approach: it is good, it is healthy to get rid of bad politicians, and I agree with it, the problem is that to do so in a presidential regime is much harder than to do it in a parliamentary one.

Why? Mostly because of the time and effort that you need to defrock a president. I am not thinking about creating conflict-free environments or polities. On the contrary, I think we need healthy ways to process conflict, because conflict is unavoidable, more so in contexts of deep inequality as the ones that exist in Latin America. I believe, in this sense, that parliamentary regimes provide a better set up to get rid of bad politicians, and that presidential regimes are not good for that.

Other source of concern about the presidential regimes is connected with the potential they have for widespread conflict and cycles of violence, that getting rid of a bad ruler creates. Think of La Violencia in Colombia. Nobody thought that it was going to turn out the way it did. Because as much as it happens with wars, with cycles of violence is easy to know when they start, but very hard to end them.

A third source of concern about the ways in which presidential regimes get rid of bad rulers, is connected with the negative consequences that instability has for the poor and middle classes in countries that already have very fragile economies. If you are already poor, and you depend on the government for your income or to have access to goods and/or services (publicly or privately run), these cycles of instability are nothing but bad news. Prices soar, distrust in economic exchanges grows, and uncertainty takes over as the key feature of political, social, and economic interactions, and because of that it is increasingly harder to attract investment (national or foreign). Instability provides the perfect foundation for the reproduction and entrenchment of poverty, it is a recipe for disaster.

Not only that, but since you have a long standing tradition of clientelism in the region, there are questions about the nature and origins of social movements aiming to defrock presidents.

Moreover, following other more qualified analysts of Latin American politics (as Juan José Linz) I am mostly concerned with the pervasive effects that these cycles of instability have for the overall performance of the economy and for the possibilities of economic development. Think, as an example, how much a country loses (in terms of time and money but especially in terms of trust) every time you get into a cycle of instability.

Rich people with bank accounts in Miami will not suffer from them; moreover, in some cases they are able to profit from them, because they have the connections and the expertise to do it. However, you can be sure that the poor and the middle classes will suffer from these cycles: they will loose income, they will have problems to access basic public services, schools often times will close, and the roots of inequality will grow deeper.

The discussion goes well beyond the defense of Lucio Gutiérrez or Abdalá Buccaram in Ecuador, or Fernando de la Rúa in Argentina. In other words, is not that I am defending Lucio Gutiérrez. I am sure he made mistakes; the problem is that within the context of presidential polities, it is harder to find a way out of such mistakes. Allegations of corruption, mismanagement, or dereliction of duty are commonplace in the exchanges among politicians (think of Clinton again). You can charge any politician, anywhere in the world with them. The problem is that in the context of the institutions of presidential politics it becomes very hard to prove them and to force a president out of power.

In parliamentary regimes, all you need to do is to present a vote of confidence in the floor and if you win it, then the government is over. Again, Italy is a perfect example of a very conflictive polity that has been able to process the dissolution of governments very easily, thanks to the framework provided by the parliamentary regime.

Finally, as I mentioned in class, the main problem for me is that if defrocking presidents were good for a polity, then Ecuador should be by now, after several “interrupted presidencies” a paradise, the best country in Latin America. Sadly, it is not.

Ultimately, all I am asking, as I said in class, is to keep your options open. To allow for the consideration of a different institutional arrangement to process social differences, because I am certain that presidential regimes make extremely hard for those polities to process such differences, and actually are responsible of increasing many of the problems that the region confronts.