Latin American poor choking on easy optimism

In Gabriel Garcia Marquez's famous novel One Hundred Years of Solitude, the Colombian writer described how the people of a fictitious…

In Gabriel Garcia Marquez's famous novel One Hundred Years of Solitude, the Colombian writer described how the people of a fictitious town suffered a bout of collective amnesia, forcing them to label everyday things before the words were lost and, with them, their capacity to safeguard historic memory.

In Latin America today, the same phenomenon seems to occur every four years at election time, when politicians outline their dazzling plans for raising living standards, ending corruption and generally dignifying human existence. There is a flurry of optimism when the new leader takes office until reality bites and hope gives way to an emergency loan from the International Monetary Fund (IMF) with a raft of conditions attached.

The influential Economist magazine remains upbeat however. Its annual survey, "Latin America Gets A Taste for Wealth", anticipates a year of steady economic growth. Just like last year and the year before.

The reality of life for the majority of Latin American citizens is somewhat less uplifting, as living standards have declined to 1950s levels even as a handful of individuals acquire "a taste for wealth", amassing billions of dollars that are safely tucked away outside the country.

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The current mantra at election time is micro-credit for the poor, a firm hand against corruption, a balanced budget to attract investment, increased investment to create jobs and more jobs to reduce poverty. This free-market recipe has been elevated to the status of scientific certainty, regardless of the evidence at hand. Latin America's failed economic model is duly recycled, allowing another clique of politicians to promise success by applying the same medicine with a little more efficiency, while state security forces take care of incorrigible heretics.

The new kid on the block is Mexican President Vicente Fox, an opposition leader who scored a historic victory over the ruling Institutional Revolutionary Party (PRI), ending 71 years of one-party rule. President Fox's cabinet promises change but reeks of the past - a clique of corporations and banks disguised as human beings (Union Carbide, Dupont, Gillette, Visa, to name just a few).

Increasingly, Latin American governments are being run like private companies, which, if past performance is anything to go by, means enormous profits for the company directors and stiff losses for the shareholders. It took a handful of bankers to run up a bill of US$100 billion (£88.8 billion) in Mexico during the previous government - the result of a botched privatisation effort. That debt has since been recycled into a bank bailout scheme distributed evenly among all Mexicans.

In the coming year, Mr Fox will face the greatest challenge of any Latin American leader, attempting to balance the books, create one million jobs, tackle crime and live up to the reputation of a national saviour. He has picked a wise place to begin, offering to legalise the Zapatista movement's 32 autonomous rebel districts.

Over the past six years, the Zapatista rebels have created autonomous villages, growing subsistence crops, while non-governmental organisations finance health clinics and alternative export schemes. Observers with a more cynical mindset than my own would also point to secret reports by Mexico oil giant PEMEX, which has documented huge oil deposits in rebel territory, making peace a profitable enterprise.

President Fox plans to modify the North America Free Trade Agreement (NAFTA) by demanding open borders with the US, a bold move that has won massive domestic support.

This time last year, Argentina welcomed President Fernando De La Rua into power, as Carlos Menem bowed out after 10 years, leaving the country with record unemployment and the highest per capita external debt in the world.

President De La Rua promised fiscal austerity, job creation and an end to corruption. A year later, his popularity has plummeted, as unemployment stubbornly remains at 16 per cent and a bribery scandal has discredited the nation's three main political parties, forcing the vice-president to resign.

The political scandal involved a dozen senators accused of taking bribes to approve laws that would roll back labour legislation. There was something particularly ugly about the prospect of well-paid politicians with five-figure pensions receiving cash rewards for removing job security and weakening union power for the working population.

Earlier this month, the IMF announced a rescue package to prevent a default on Argentina's external debt repayments. The prospects for the country are increased social unrest and a parallel rise in state repression, raising the sinister spectre of past military rule.

The truth behind IMF largesse in Latin America was revealed last September in a leaked report that outlined 167 conditions attached to a loan to Ecuador, a country devastated by state corruption and a failed coup attempt last January. The report instructed the government to raise the price of cooking gas by 80 per cent, cut wages by 50 per cent, transfer ownership of the nation's biggest water system to foreign operators by July 2001, and grant BP's Arco subsidiary the right to build and own an oil pipeline over the Andes.

The rescue package looked more like a financial coup d'etat than an assistance plan.

Some might shrug their shoulders and say, well at least there is a return to democracy, so workers can let off steam and pressure for change from within the system. Here, too, the myth has been exposed, as documented by the International Confederation of Free Trade Unions, (ICFTU), which monitors labour freedom in the Americas.

The ICFTU's annual report this year said that Latin America remains the most dangerous region in the world for trade unionists. Colombia is the capital of antiunion terror with 1,336 killed since 1991, followed by Guatemala, Nicaragua, Brazil, Argentina and Ecuador.

One initiative that will be attempted again next year is the move by Brazil's congress to curb speculative investment by approving a 0.5 per cent tax on such transactions. When it was introduced earlier this year, the international financial community responded with a growl and the initiative was scrapped.

The best kept secret in Latin America this year was the Cochabamba water rebellion, ignored by the world press, when citizens of Bolivia's second city rejected a price hike in water charges, building barricades around the city to get their point across. Within a week, the water privatisation bill had been cancelled - the first time such a measure has been reversed in the region. Six unarmed protesters died to achieve that goal.

The darkest drama of 2001 is certain to take place in Colombia, where a vicious US-backed political elite, locked in combat with an equally ruthless guerrilla force, is gearing up for a second Vietnam, complete with civilian bombing and, perhaps, even ground troops. The US government approved Plan Colombia this year, a $1.3 billion aid package aimed at eliminating drug plants and left-wing rebels, even as the government engages in dialogue with the insurgents.

The escalating US role in the region has forced Colombia's neighbours to militarise their borders, in a dispute that is more about control of hemispheric trade than the safeguarding of democratic institutions.

Meanwhile, the future of Latin America may lie in recycling the developed world's waste, a process that began this year in south-east Mexico. The scheme forms part of the expanding global trade in carbon emissions, whereby a group of indigenous farmers have abandoned corn to manage a plantation of pine trees to soak up carbon dioxide. The business plan brings local farmers into partnership with a French company anxious to offset carbon emissions from Formula One racing in Europe.

In a curious stroke of fate, Latin America's future may be narrowed down to two opposing visions in a forgotten corner of Mexico. On one side, the treeplanting entrepreneurs, who have gambled their future on a cash income, while a nearby group of farmers embraces the self-sufficient vision of the Zapatista movement, planting corn to honour the link between past, present and future.