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January 14, 2006

La Paz Effect: Latin Tremors

The ripple effects of Evo Morales’ election as President of Bolivia are continuing to be felt throughout Latin America—most poignantly in the ongoing dissection of the economic reform model known as the ‘Washington consensus’ that was one of Morales’ favorite targets.

Bolivia was supposed to be a laboratory for the ‘consensus’ economic reform model of tight social spending and export-oriented growth. But it was those who perceived themselves as 'disenfranchised' from those policies--millions of small farmers, urban poor and the country’s large indigenous population--who put Morales into the presidential palace in La Paz, and toppled whatever remaining legitimacy for the ‘consensus’ remained within the continent. Shortly after Morales’ election, Argentine president Nestor Kirchner announced that he would pay off the country’s outstanding $9.8 billion debt to the International Monetary Fund, thus unhinging the country from IMF/World Bank constraints; a left candidate for the Peruvian presidency, Ollanta Humalla, surged into second place in the polls; and the Zapatistas, in Mexico over new years, launched “the other campaign” in parallel to that country’s presidential race to highlight issues of indigenous rights--an effort widely perceived as having received a considerable boost from the election results in Bolivia. By January 14, the Colombian newspaper El Tiempo featured a debate between John Williamson, the U.S. economist, affiliated with the Institute for International Economics in Washington, DC, considered to be one of the primary architects of what’s become known as the Washington Consensus; and José Luis Machinea, Secretary General of the Economic Commission for Latin America and the Caribbean at the United Nations, over what, if anything, remains of the “Consensus’.

The changes in Latin America—long in the works, but also intensified by Morales’ election—are not merely ones of rhetoric. Even John Williamson admitted that the World Bank made mistakes in not paying enough attention to the ‘social factors” involved in economic reform. The “Washington consensus,” a complex set of policies so tied to the United States that they bear the name of our nation’s capital, is unraveling just as quickly as a new term is being introduced to suggest a somewhat more welcome economic power in Latin Power: “Chindia,” the combined economic might of India and China. The turn of many Latin countries east—toward Asia as well as toward the European Union—has gone largely un-reported in the United States. But, El Tiempo suggests, such new trading partners offer not only growing and increasingly affluent markets, but none of the political baggage associated with the long history of U.S. intervention in the region:
“Since the end of the communist system in the USSR, the United States has been dreaming of a world dominated by one superpower: the U.S. That is not coming to pass.
The rapid transformation of China into an economic power, with India following in its footprints, signifies that the U.S. better prepare for a different future, one in which it will have to understand how to share power among others like never before. It’s a change that will not be easy.”

Posted January 14, 2006 06:32 PM

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