What Guides U.S. Latin America Policy

Last month, Defense Secretary Robert Gates embarked on a five-nation tour of Latin America. His stops included five Bush administration allies with poor human rights records: El Salvador, Colombia, Suriname, Peru and Chile. Gates, unsurprisingly, used his scheduled press conferences to take a few jabs at Hugo Chavez and Fidel Castro. From Agence-France-Press:

At a joint news conference with Salvadoran President Antonio Saca, Gates called El Salvador "one of the most faithful coalition partners" and praised its "important role in humanitarian and peacekeeping operations worldwide." Gates then warned that Venezuelan President Hugo Chavez's leftist government was a threat mainly "to the freedom and economic prosperity of the people of Venezuela." Chavez "has been very generous in offering(Venezuela's) resources to people around the world, when perhaps these resources could be better used to alleviate some of the economic problems facing the people of Venezuela," Gates said. Analysts said the goal of Gates's Latin American trip is both to bolster US allies and to counter Chavez's influence in Latin America.

Gates also criticized Venezuela’s arms purchases, but neglected to mention that Chile—his third stop on the trip, where he met with military officials—is undertaking the largest military build-up in Latin America at the moment. Chile has spent $2.8 billion on fighter jets, submarines, tanks and other weaponry since 2000. Although Chile has made the transition from military dictatorship to democracy since the 1980s, the disproportionate budgetary and political power of the military persist. Gates also touted the delivery of aid packages in rural Surinam by U.S. navy personnel, a competitive gesture vis-à-vis the delegations of Cuban and Venezuelan doctors currently working in Surinam.

All of this competition for influence invites a comparison of U.S. allies in the region with Washington’s tropical Axis of Evil: Castro, Chavez, Morales and perhaps Correa. If we undertake such a comparison (even using State Department human rights reports, let alone radical sources), it is obvious that human rights enter policy calculations mainly as public relations tools, and economic and strategic interests are primary. Because it is not merely that economic and strategic interests determine who is and is not supported by the U.S. government and major media outlets; they determine who is not scrutinized for human rights violations. The near-exclusive focus of U.S. government and media criticism on Castro, Chavez and Morales would be inexplicable if this were not the case, because those criticisms apply far more easily (measured by body counts, police/military brutality, corruption scandals) to U.S. allies like Alvaro Uribe, Elias Antonio Saca, Martin Torrijos, Oscar Berger, Alan Garcia, Manuel Zelaya and Nicanor Duarte.

If we rarely see criticisms (or indeed mentions) of these leaders in the U.S. media, this is not a reflection of their superior record, but of their acquiescence to demands from the U.S. and U.S firms and financial institutions.

Below, I will sketch the state of “human rights, democracy and corruption” in the countries of these rarely criticized U.S. allies, and discuss their economic policies. Then, I will compare them with Cuba under Castro, Venezuela under Chavez, and Bolivia under Morales, and consider the validity of criticisms of those leaders in the U.S. media.

El Salvador under Elias Antonio Saca
Elias Antonio Saca is a right-wing media mogul and member of the ARENA party, which “was linked to death-squad killings in the 1980's,” the New York Times notes. The founder of ARENA, Eduardo D’Aubuisson, was found by a United Nations commission to have orchestrated the killing of El Salvador’s Roman Catholic primate, Archbishop Óscar Arnulfo Romero, in 1980. Romero was guilty of denouncing the violent repression of the military government during his weekly radio sermons.

ARENA, whose colors are red, white and blue, has abandoned the national currency, the colon, and replaced it with the U.S. dollar. There is no property tax in El Salvador, but the sales tax is 13%, and banks take a large cut of the $3 billion in remittances sent home by the 2.5 million Salvadorans living in the United States. Poor Salvadorans and their relatives (mostly indigenous and mestizo) working as landscapers, janitors and dishwashers in the U.S. thus subsidize the primarily white elite in El Salvador with their purchases and remittances. 43% of Salvadorans live below the poverty line, while 1% of landowners control 40% of the arable land. Measures for democratization and redistribution are hampered by official corruption. According to a 2005 report by the University of Central America,

Salvadoran public administration is not transparent and has never tried to be, as proved by the deep-rooted nature of the most pernicious forms of corruption. The successive ARENA governments have tolerated this corruption, largely because the very structure of these governments is conceived to allow its proliferation.

This corruption, moreover, is not simply a matter of low-level graft. Links between ARENA, death squads and organized crime persist. According to Jaime Martinez of the Institute of Comparative Studies in Criminal and Social Science (INECIP), death squads in El Salvador today “are the visible face of organised crime,” and “criminal groups are embedded” in the government security forces. 622 possible cases of death squad killings were documented between January 2001 and August 2005 alone.

According to Human Rights Watch, the Salvadoran government also ignores widespread labor abuses. Abuses are particularly notorious on plantations and in factories that supply U.S. firms like Del Monte, Wal-Mart, J.C. Penney and Liz Claiborne, HRW notes.

But none of this is sufficient to warrant criticism of Saca by either U.S. officials or the U.S. media, because Saca has passed CAFTA, the southward extension of NAFTA; privatized water utilities; and provided a stable investment climate for mining and fruit companies, textile manufacturers, and commercial loggers. As in Guatemala and Honduras, CAFTA has produced a trade deficit with the U.S., as U.S. corn, beans and myriad manufactured goods imports have flooded the Salvadoran market, while Salvadoran exports to the U.S. have fallen. As CISPES reports:

According to the U.S. Food and Drug Administration, Salvadoran agricultural exports to the U.S. fell 3.7% in 2006, and U.S. exports to El Salvador grew by 17%, the greatest rate of growth since 1970.

All of this was predicted by Salvadoran activists, who had already seen the results of NAFTA in Mexico. They organized widespread protests against CAFTA, which were broken up by riot police.

Colombia under Alvaro Uribe

Washington’s closest military and political ally in Latin America is Alvaro Uribe Velez. While Uribe is billed in the U.S. press as a Drug Warrior par excellence, U.S. intelligence documents tell a somewhat different story. A 1991 report by U.S. Defense Intelligence Agency officials in Colombia described Uribe in the following terms:

ALVARO URIBE VELEZ - A COLOMBIAN POLITICIAN AND SENATOR DEDICATED TO COLLABORATION WITH THE MEDILLIN CARTEL AT HIGH GOVERNMENT LEVELS. URIBE WAS LINKED TO A BUSINESS INVOLVED IN NARCOTICS ACTIVITIES IN THE US. HIS FATHER WAS MURDERED FOR HIS CONNECTION WITH THE NARCOTIC TRAFFICKERS. URIBE HAS WORKED FOR MEDELLIN CARTEL AND IS A CLOSE PERSONAL FRIEND OF PABLO ESCOBAR GAVIRIA. HE HAS PARTICIPATED IN ESCOBAR'S POLITICAL CAMPAIGN TO WIN THE POSITION OF ASSISTANT PARLIAMENTARIAN TO JORGE ((ORTEGA)). URIBE HAS BEEN ONE OF THE POLITICANS, FROM THE SENATE, WHO HAS ATTACKED ALL FORMS OF THE EXTRADITION TREATY.

The Harvard- and Oxford-educated Uribe is the son of wealthy cattle rancher Alberto Uribe, who was connected by marriage to the Ochoa family of the Medellin drug cartel. The elder Uribe was a personal friend of Pablo Escobar, and was wanted by the U.S. government for drug trafficking charges when he was killed in a kidnapping attempt by the FARC in 1983. Santiago Uribe, President Uribe’s brother, was investigated for organizing paramilitary death squads from the family hacienda.

Uribe’s campaign manager and “right hand man,” Pedro Juan Moreno Villa, is the owner of a company called GMP Products Quimicas. In 1997, a large shipment of potassium permanganate, purchased by GMP, was confiscated by the U.S. Customs Service. Potassium permanganate is a “precursor chemical” essential to the manufacture of cocaine. The DEA conducted an investigation of GMP which found, according to former U.S. DEA Chief Donnie Marshall, that "Between 1994 and 1998, GMP was the largest importer of potassium permanganate into Colombia." Given the domestic competition, it is quite impressive that Moreno’s company was the largest importer of this product!

Moreno was also Uribe’s Chief of Staff when he was governor of the state of Antioquia in the 1990s. Uribe’s policies as governor are interesting to examine. Business Week (hardly a critic of the Latin American right) reported during Uribe’s 2001 presidential campaign:

Uribe Velez claims that if elected President, he will take a firmer line with the rebels. That's just what he did between 1995 and 1997 when he was governor of Antioquia, Colombia's second-largest province and onetime home to the infamous Medellin drug cartel. There, Uribe Velez promoted the creation of the controversial Convivirs. Styled as self-defense patrols, these armed militias supplied intelligence to the armed forces and helped police combat crime. "It wasn't long before some of the local militias, which eventually numbered 67 in Antioquia and 400 nationwide, morphed into deadly paramilitary squads that targeted not only guerrillas but also suspected civilian sympathizers. That led the Colombian government to strip the Convivirs of most of their power in 1997.

Before being outlawed, the Convivirs displaced some 200,000 campesinos, mostly from the Uraba region.

The Uribe presidency has seen the links between drug traffickers, the military and the paramilitaries become tighter than ever. The Financial Times reports that the Colombian Defense Minister, Juan Manual Santos, has admitted that paramilitaries and drug traffickers have infiltrated the Colombian military “at the highest level.” Earlier this year, leaked CIA intelligence reports linked the chief of the Colombia military to paramilitary death squads. The director of Colombia’s intelligence service, Jorge Noguera, has been arrested for providing hit lists to the AUC, one of the main paramilitaries groups in the country. The AUC recieves at least 70% of its funds from drug trafficking.

Colombia has been in a state of off-an-on civil war for most of its post-independence history. In the most recent phase, since the 1960s, it created an estimated 2.9 million internally displaced persons, the third largest number of any country in the world. The four main combatants are the state security forces, right-wing paramilitaries, left-wing guerillas, and drug traffickers. This division is misleading, however, as there are overlaps between and rival groups within all four categories, and all four are tied the drug trade. But the paramilitaries, which originated as death squads for the Colombian drug lords, also have (unlike the guerillas) ties to the military, large landowners and the political class. Aside from their role in battling the FARC and ELN, they have served the Colombian oligarchy by murdering trade unionists, journalists, indigenous leaders and Afro-Colombians occupying coveted lands. According to Amnesty International:

Over the last few decades, paramilitaries have been held responsible for most killings and "disappearances" of civilians. […] The policies of the present government are reversing limited attempts by previous administrations to dismantle mechanisms of impunity ensuring that members of the security forces and their paramilitary allies can continue to perpetrate human rights violations with little possibility of being prosecuted. The introduction of these policies have coincided with the declaration of a self-declared "truce" by the main paramilitary umbrella group, the Autodefensas Unidas de Colombia (AUC), United Self-Defence Forces of Colombia, on 1 December 2002.

This “truce” gives the lie to the assertion that the civil war is primarily a “drug war,” given the fact that the AUC receives at least 70% of its funds from the drug trade (as its leader, Carlos Castaño, admitted in a 2000 interview).

Expropriation remains a practice of the "demobilized" paramilitaries, as lands belonging to campesinos, indigenous peoples and Afro-Colombians are taken by force for oil exploration, mining, palm oil plantations and logging. On the Pacific coast, where Afro-Colombians make up a majority of the population, they are being uprooted by paramilitaries in the pay of plantation companies looking to expand their acreage for palm oil cultivation. Colombian palm planters already sell 35% of their products as biofuels, benefiting from the increasing demand for petroleum alternatives in the U.S. But expanded production has been made possible by land theft, much of it done under the aegis of “resettling” the paramilitaries, for which the U.S. Congress has granted the Uribe government $21 million. In 1998, Afro-Colombian leader Francisco Hurtado was assassinated by the paras for protesting for land rights, and thousands of Afro-Colombians have been pushed into the slums of Colombian cities since then.

The links between the Colombian military, the paramilitaries and the drug traffic make it a bit hard to swallow the argument that Plan Colombia (the $7.5 billion dollar U.S. military aid package to Colombia) is primarily about drugs. Some of the biggest supporters of Plan Colombia are U.S. multinationals with ties to paramilitaries, like Chiquita (which has provided arms and funding to the AUC) and Occidental Petroleum. Concerning the latter, Amnesty International notes:

Several oil companies played an important role in lobbying the US Congress for military aid to Colombia despite the Colombian army’s poor human rights record. In 1996, the Colombia Business Partnership was created by BP Amoco and Occidental Petroleum, among others, to lobby for military aid to Colombia. On 15 February 2000, Lawrence Meriage, Vice President, Executive Services and Public Affairs of the Occidental Oil and Gas Corporation, addressed the US Congress’ House Government Reform Subcommittee on Criminal Justice, Drug Policy and Human Resources: "the counter-narcotics battle simply cannot be won without a stronger, better equipped and highly disciplined military force". He urged Congress members "to ensure that whatever aid package emerges ensures a careful balance of support between the CNP [Colombia National Police] and the military". Lawrence Meriage urged Congress "to consider support of counter-narcotics operations in the northern regions as well as the south. This will help augment security for oil development projects. In July 2002, the US Congress passed an emergency supplemental spending bill that lifted a previous provision limiting US assistance to counter-narcotics efforts. Under the new rules, US security assistance can be used against "organizations designated as terrorist organizations..." The new US strategy makes US assistance to Colombia available for counter-insurgency activities for the first time, including direct action against armed groups. The US is now providing military aid for direct use in counter-insurgency operations specifically to protect US operated oil installations, such as Caño Limón. In August 2002, the US administration once again waived human rights certification requirements.

Finally, the Uribe government has enthusiastically followed the Washington Consensus recipe of privatization, most recently by selling off a slice of state-owned Ecopetrol to foreign investors. If the proposed Colombian-U.S. free trade agreement is passed, David Bacon of Dollars & Sense estimates that 80,000 small farmers will be forced off the land by competition with U.S. agribusiness. Their likely destination? The slums of Medellin, Cali, Bogota, and myriad smaller cities and towns.

Guatemala under Oscar Berger (outgoing)

Guatemala has the second-highest murder rate in Latin America, after Colombia. According to the New York Times:

This small country of 12.3 million people has more than 5,000 homicides a year, many of them vigilante killings or gangland murders, human rights advocates say. Arrests are made in only 2 percent of the cases.

This violence pales in comparison to Guatemala’s history of state violence against the indigenous population, stretching from the colonial era to the present. As the NY Times also notes,
Some 200,000 people were killed or went missing in Guatemala from 1960 to 1996, mostly Mayan Indian civilians. A United Nations-backed truth commission found that 90 percent of those deaths were caused by the military.

The U.S. was forced to officially suspend arms sales to the Guatemalan military in 1990, when “it was learned that soldiers were involved in the killing of an American named Michael Devine.” 1 American death was evidently worse for public-relations purposes than 200,000 Guatemalan ones, even if they were “mostly Maya Indian civilians.” According to the Arms Sales Monitoring Project of the Federation of American Scientists, the CIA continued to provide Guatemala with $5-7 million annually after 1990. Then, despite ongoing allegations of violence by security forces, the U.S. officially lifted its ban on military aid to Guatemala in 2005.

Adriana Beltrán, an expert on Guatemala with the Washington Office on Latin America, a research institution, said Mr. Berger's government had done very little to stop private groups of gunmen from intimidating and killing people who were working to uncover past and present human rights abuses in Guatemala. Rewarding the government with arms sends the wrong message, she said.

Guatemala is also one of the poorest countries in Latin America. Over 57% of Guatemalans live below the poverty line, and 3.2 million of the 8.2 million people in Guatemala of working age are unemployed. The richest fifth of the population receives 60% of the GNP, and the richest 10% possess about 46% of the wealth. The distribution of land in Guatemala is, also, staggeringly unequal. In 1998, .15% (yes, that’s 1.5%, not 15%!) of landowners had 70% of the arable land, while 96% of landowners had 20%. The distribution is similar to that in South Africa: the land is overwhelmingly concentrated in the hands of a white elite, while indigenous smallholders are relegated to marginal, inferior lands. The maintenance of this essentially colonial structure has, inevitably, led many smallholders to take matters into their own hands by squatting on landowners’ property. In 2004, when the businessman and landowner Oscar Berger came to power, he predictably entered the conflict on the side of landowners, using security forces to evict squatters by whatever means necessary, including the burning of homes. According to the UN Commission for Guatemala:

The change in Administrations [with the election of Berger] also brought with it a troubling increase in forced, sometimes violent, evictions of squatters, a trend that gave the impression of undue deference by the Government to the demands of landowners. Peasant groups mounted nationwide demonstrations and road blockades in June 2004 to demand land and rural development policies and to protest the evictions, which created a serious humanitarian problem for peasant families thrown off properties.

Berger, a wealthy landowner himself, further demonstrated his loyalties by using the military to crush protests against a World Bank mining project in Guatemala city. Troops killed one protestor and injured dozens more. According to the Vox Latina institute, 95% of the people surveyed in the northern towns of San Miguel Ixtahuacán and Sipacapa (which will be most affected by the mine) oppose the project, believing it will damage the local environment. The following video is worth watching in this regard.

Oscar Berger also signed the CAFTA agreement into law in 2005, despite over a week of protests throughout the country. Small corn producers, who make up 38% of employment in Guatemala, will now have to compete with subsidized corn imports from Cargill and Archer Daniel’s Midland. Owners of assembly plants and plantations will benefit from increased access to U.S. markets, given their comparative advantage of below-subsistence wages and a tropical climate. As always, a small, rich constituency has more influence than a large, poor one.

The September 9th, 2007 elections in Guatemala resulted in a close call between Otto Perez Molina and Alvaro Colom, with Colom leading. A run-off is scheduled for November 4th. Otto Perez Molina is a graduate of the School of the Americas, and was once on the CIA payroll. Alvaro Colom is a wealthy industrialist who has been accused of receiving illegal campaign contributions in the 2003 elections, which he lost to Oscar Berger. As Cyril Mychalejko observes,
What voters are left with for the Nov. 4 runoff is the tired choice between a military strongman and an oligarch, representing two segments of the population largely responsible for the continued destruction of the country.

As it happens, the "lesser of two evils," the oligarch Colom won. Guatemalans have little reason to expect much change for the better during his administration.

Honduras under Manuel Zelaya
Honduras is one of the poorest countries in the hemisphere, with 65% of the population living on less than $2 a day. Even according to the Honduran government, 46% of Hondurans are “extremely poor.” Nevertheless, the Zelaya administration has cut the minimum wage in the south of Honduras (where most of the “free trade zones” are located) from 74 cents an hour to 57 cents an hour. The justification given has been competition with China, where workers in many export industries are making even less. As always, pursuing “comparative advantage” means racing to the bottom.

In its 2006 Country Reports on Human Rights Practices, the State Department (not known for muckraking where U.S. allies are concerned) described the situation in Honduras in the following terms:

Despite some positive steps, government corruption, impunity for violators of the law, and virulent gang violence exacerbated serious human rights problems in the country. The following human rights problems were reported: unlawful killings by members of the police, arbitrary and summary executions committed by vigilantes and former members of the security forces, the disappearance of a former dissident, beatings and other abuse of detainees by security forces, harsh prison conditions, failure to provide due process of law, lengthy pretrial detention, political interference in the judicial system, judicial corruption and institutional weakness, illegal searches, erosion of press freedom, violence and discrimination against women, child prostitution and abuse, trafficking in persons, discrimination against indigenous people, discrimination against persons based on sexual orientation, ineffective enforcement of labor laws, and child labor.

Meanwhile, the Financial Post of Canada reports that some 5,000 street children have been killed by death squads in Honduras since the late 1990s:

Jose Daniel Villed, a senior editor at the leading national daily newspaper La Tribuna, figures police are involved in as many as 40% of the murders. At least 10 officers have been convicted of killing youths in recent years, but Jose Roberto Romero Luna, the national police director, dismisses any suggestions police routinely act as vigilantes. There appear to be several paramilitary units unofficially dedicated to killing gang members and organized crime figures, who control a thriving drug trade that has seen this nation of 7.3 million people become a key transit point for Colombian cocaine en route to North America and Europe. […] Corruption is rampant, more than half [the country’s] people live in poverty and the new government of Manuel Zelaya Rosales is wrestling with massive unemployment -- 28% last year.

Press freedom is a problem in Honduras as well. A small number of business magnates control the nation’s media, and earlier this year Zelaya ordered all radio and television stations to broadcast two hours of government propaganda a day.

According to the Social Forum on External Debt and Development in Honduras (FOSDEH), Honduras loses the equivalent of $2 million a day to corruption. IPS reports:

Since taking office on Jan. 27, 2006, Zelaya's government has been the target of more than 10 allegations of corruption, including theft of electrical energy by high administration officials, irregularities in tenders for health supplies, the hiring of advisers for nonexistent jobs, waste of resources in the telephone company, influence peddling and the abuse of power in handing out road building and energy generation contracts. The latest scandal broke out in July, when an investigative commission appointed by the president confirmed irregularities in contracts approved by the head of the Road Fund, Ramiro Chaccentsn. But once the commission had reported its findings, Zelaya rewarded Chaccentsn by offering him the post of vice minister in the Secretariat of Public Works, Housing and Transport.

The Honduran Congress passed CAFTA in 2005. The lobbyist website freetradehonduras.org writes enthusiastically:

CAFTA offers important new benefits to U.S. companies: • tariffs on U.S exports to the region are eliminated, phased out, or substantially lowered • legal protections to protect investors and traders are significantly strengthened • customs procedures are more transparent and streamlined • intellectual property rights enjoy significant new protections Together these changes mean U.S. companies will increase substantially their investment and trade with the region.

CAFTA is further harming the agricultural sector of Honduras, which was devastated by Hurricane Mitch.

Panama under Martin Torrijos

Martin Torrijos is the son of Omar Torrijos, a right-wing military strongman who came to power in a coup in 1968 and ruled Panama until his death in a mysterious plane crash in 1981. Torrijos was notorious for his harsh repression of dissidents, which included methods like having them thrown from helicopters into the sea. His son, Martin, was educated at Texas A&M University and St. John’s Military Academy in Belafield, Wisconsin, and once worked for a McDonald’s franchise in Chicago. Since winning the 2004 elections, he has overseen the $1.8 billion takeover of Central America’s largest bank, Banistmo, by HSBC, and the privatization of Panama’s water utilities. Under Torrijos, Panama is reinventing itself as a tourist and retirement haven for gringos. Foreign investment is “pouring in” to the country, according to the Financial Times:

The most striking physical manifestation is a real estate boom that is transforming the skyline of Panama City, where apartments are being built at twice the rate of those in Miami – to house foreign executives but also with an eye on the growing market of US baby boomers seeking a retirement home in the sun.

Meanwhile, 40% of Panamanians live below the (low) poverty line, and per capita income is $5,000. Wealth is overwhelmingly concentrated in the hands of a small, white elite. Torrijos approved CAFTA, which will force Panamanian farmers to compete with ADM, Tyson and Conagra. The beef and poultry sector, which is very important in Panama, will be particularly vulnerable to U.S. meat imports.

A few quotes from a report on Panama by the U.S. government-sponsored organization Freedom House: On the judicial system:

The judicial system, headed by the Supreme Court, was revamped in 1990. However, it remains overburdened and its administration is inefficient, politicized, and prone to corruption.

On the police:

The Panamanian Public Forces that replaced the PDF, while accountable to civilian authorities through a publicly disclosed budget, are poorly disciplined and corrupt. […] Like the country’s prison guards, police officers frequently use excessive force, and in 2005, several high-ranking officers were accused of sexually abusing minors.

On prisons:

The penal system is marked by violent disturbances in decrepit facilities that are severely overcrowded.

On racism:

Discrimination against darker-skinned Panamanians is widespread. […] The living standards of indigenous people, who often do not speak Spanish, are significantly lower than those of the general population. Some 90 percent of the indigenous population in Panama live in extreme poverty, and along with other minority groups, they face significant discrimination in employment.

Mexico under Felipe Calderon
In a trip to Mexico August 2007, Amnesty International Secretary General Irene Khan criticized Felipe Calderon’s human rights record. She told a press conference:

The flaws in the public security and criminal justice system in Mexico currently allow for arbitrary detention, torture, ill-treatment, denial of due process, unfair trials, political interference in the administration of justice, and widespread impunity. The poorest and most vulnerable are often victims of these abuses. […] A lottery of human rights is unacceptable. Oaxaca is a prime example. Following a year of monitoring, extensive field visits to Oaxaca and meetings with officials at state and federal level, survivors of human rights violations and civil society, Amnesty International's report Oaxaca: clamour for justice documents a pattern of police abuse (including, arbitrary arrest, torture and ill-treatment and harassment) committed by state as well as federal officials.

In March 2007, Mexico’s National Human Rights Commission documented 1,600 cases of human rights abuse during the police and military repression of the seven-month-long teacher’s protest in Oaxaca. The pattern was repeated during protests in July. According to Amnesty International:

The clashes between police and demonstrators on 16 July 2007-- which left many people injured, including two protesters struggling for their lives -- once again showed that addressing social tensions through police abuse and long-standing impunity for human rights violations committed during the crisis have not yielded results.

Earlier this year, President Calderon showed his attitude toward the PRI’s “dirty war” by closing the office of the special prosecutor charged with investigating the Tlatelolco Plaza Massacre, in which the Mexican army killed hundreds of striking university students in Mexico City in 1968. Former president Luis Echevarria, who ordered the massacre, was placed under house arrest by a Mexican judge in 2006. Public demands that Calderon re-open the investigation continue to grow in the wake of architect Rosa María Alvarado Martínez’ recent revelation that she exhumed the remains of three victims of the massacre from a hospital garden in Mexico city in 1981.

During the campaign, Calderon, who was Vicente Fox’s Energy, received financial backing from PEMEX’s biggest subcontractor, Halliburton, Wal-Mart and other other U.S. firms with major investments in Mexico. The U.S. Chamber of Commerce announced it was backing Calderon in the run-up to the election. Key to this support was Calderon’s repeated expression of interest in privatizing PEMEX, Mexico’s state-run oil-company. It had originally been controlled by Anglo-American entrepreneurs, but was nationalized in 1938. Public ownership of PEMEX has been a Mexican nationalist issue for decades. After Calderon’s disputed and razor-thin electoral victory in 2006, Lopez Obrador threatened civil unrest in the event of a PEMEX privatization. Calderon’s Energy Secretary denied that PEMEX will be sold off to the highest bidder, but Calderon (aware of the powder keg that full-scale privatization would amount to) spoke cautiously of joint agreements and public-private-sector partnerships. President Bush has urged Calderon to privatize: in May 2007, he told Mexican reporters at a White House press conference,

“As we well know, as Mexico expands its oil production into deeper waters in the Gulf of Mexico, it will require even more capital" [...]"As long as the [Mexican] government feels confident in seeking for funding sources outside its budget spending, for me that is something that President Calderon should consider.”

Calderon evidently took Bush’s advice. In August, PEMEX announced the sale of a portion of its southern pipeline to a consortium of 13 private companies, and more phased privatizations are on the way. This comes at a time when hurricanes, a renewed wave of rebel pipeline bombings and depletion of reserves have exposed the weakness of PEMEX, which supplies some 40% of Mexican state revenues. This cash cow may be milked dry within a decade, whether or not the privatization is completed.

Paraguay under Nicanor Duarte Frutos
President Duarte is a member of the right-wing Colorado or Red Party, which has ruled Paraguay since 1947. Although the Colorado Party was originally moderate-liberal, it was driven to the extreme right by dictator Alfredo Stroessner, who ruled from 1954 until his removal in a 1989 military coup. Stroessner ordered the deaths of over 900 dissidents and the torture of thousands. His successor, Andres Rodriguez Pedotti, was accused of heroin trafficking; Pedotti’s successor, Juan Carlos Wasmosy, was in turn charged with fraud and sentenced to 4 years in prison. In 2006, when President Duarte announced his plans to alter the Paraguayan constitution in order to run for re-election, 40,000 people protested in the streets of the capital, Asunción.

Soy accounts for about 50% of Paraguayan exports and 10% of GDP. The most recent agricultural census, taken by the Agriculture and Livestock Ministry fifteen years ago, found that 1% of farms (those over 1,000 hectares) comprised 77% of the arable land, while 80% of farmers were smallholders. Little has changed since then. According to Latin America Press:
Just 351 Paraguayan landowners possess 9.7 million hectares (24 million acres), while, according to civil society organizations, there are 350,000 campesina families with little land, or without land altogether. This situation is one of the central causes of starvation and malnutrition in the Paraguayan countryside, where 22.8 percent of the rural population lives in extreme poverty. These families’ average incomes only cover just over 58 percent of the average daily bread basket costs.

Paraguay has, meanwhile, become the largest U.S. military platform in Latin America. There is evidence that U.S. troops have been advising paramilitaries used by soy planters to crush campesino protests.

According to Freedom House:

Paraguay appeared near paralysis in 2004 in the face of an increase in public insecurity, a long-running economic recession, endemic public corruption, and a poverty rate of more than 60 percent. The country was shaken by a crime wave whose magnitude was symbolized by the seeming impunity with which criminals abducted the daughter of a former Paraguayan president in a blaze of gunfire. Sometimes violent land seizures by armies of homeless people in and around the capital city, Asuncion, contributed to a growing debate about the distribution of wealth in the country.

Peru under Alan Garcia
Alan Garcia’s re-entry into Peruvian politics is a bit remarkable, given the fact that he fled the country on corruption charges before the end of his first term in 1985-1990. He was accused of embezzling millions of dollars from the state. According to Human Rights Watch, under Garcia’s first term Peru had the largest number of forced disappearances of any country in the world. Considering the competition at the time, in Latin America alone, this was quite a grisly accomplishment.

Garcia won the 2006 elections on the strength of not being Ollanta Humala, a perceived Chavista and “loose cannon.” Garcia’s support of an FTA with the United States, moreover, has won him some powerful friends north of the Rio Grande. The trade lobbyist website “Business Roundtable” contains a promotional “issue brief” on the U.S.-Peru Trade Promotion Agreement (PTPA). Business Roundtable argues (how thoughtful of them!) that the PTPA will "level the playing field" for U.S. agribusiness in competition with Peruvian peasants:

The PTPA will level the playing field for U.S. exports to Peru by rapidly removing barriers on a significant percentage of U.S. exports.” […] “More than two-thirds of U.S. farm exports to Peru become duty-free upon implementation of the agreement, [and] most additional tariffs will be removed within 15 years. Key U.S. agricultural exports, such as cotton, wheat, soybeans, apples, pears, peaches and almonds, are included in the list of products receiving immediate duty free treatment. Immediate removal of duties will also apply to U.S. exports of significant processed food products.

In the case of U.S. cotton exports to Peru (although this could be generalized to most products affected by the PTPA), Oxfam shows that “free trade” in the context of massive subsidies is a fraud, a rhetorical fig leaf for one-way market penetration:

In the USA, 25,000 cotton producers receive approximately $3.5 billion per year in subsidies. Of this amount, 80 per cent goes to 10 per cent of the farmers who receive subsidies. Production costs vary from $0.68 to $0.72 per pound. The 28,000 cotton producers of Peru receive no subsidies, but they have a tariff of 12 per cent as protection against sudden drops in international prices. The FTA would eliminate this tariff immediately (zero tariff), causing devastation to production and the livelihoods of farmers. The USA is currently the CAN’s main cotton supplier. Under the trade preference system (currently the ATPDEA), it allowed imports of Peruvian textiles to US markets provided they were manufactured using mainly US cotton. This meant that cotton imports to Peru increased significantly: 45,000 tonnes of subsidised US cotton were imported into the country in 2005 alone. This has led to a radical reduction in cotton production in Peru: 260,000 hectares of cotton were grown in Peru in 1960; in 2004 the figure was barely 89,000 hectares.

So “reciprocal access to U.S. markets” requires the importation of raw or semi-finished U.S. cotton, rather than Peruvian cotton, but U.S. textile producers are not required to import cotton from non-subsidized Peruvian producers. The class of Peruvian investors who Garcia represents, however, will benefit from domestic manufacturers using cheaper U.S. cotton. They don’t care what happens to Indios in the southern highlands.

Cuba under Castro

Just over a week ago, the UN General Assembly held a vote on whether the U.S. embargo on Cuba should be continued. There was more opposition than ever before: of 192 members, 184 voted to end the embargo. The U.S., along with Israel, the Marshall Islands and Palau voted in favor. If there was ever conclusive proof that the world is against the U.S. on this one, this was it.

How are things in Cuba, then? Examination of the historical record of the Castro government through the prism of human rights reveals a combination of progressive accomplishments and authoritarianism--stimulated by the draconian U.S. embargo. If it is evaluated in terms of health, education and social services, Cuba is far ahead of its Latin American neighbors. Even a source as anti-Castro as the CIA World Factbook reports that the infant mortality rate in Cuba is lower than in the U.S.; life expectancy is 79.85 years for women and 75.11 years per men (roughly equivalent to the U.S. and far higher than Cuba’s neighbors); literacy is 97.2% for men and 96.9% for women; and the ratio of doctors to citizens is one to 231, one of the highest in the world. This explains why Cuba also has the lowest reported incidence of HIV in the hemisphere (although detractors will argue that “not reported” does not mean “not infected”). This being said, the collapse of the Soviet Union and the ongoing U.S. trade embargo have taken their toll on the Cuban health care system. It was reported in 1995 that patients checking into Cuban hospitals had to bring their own toilet paper, sheets and soap. Blackouts, lack of running water and certain medical supplies are frequent problems.

On the other hand, Cuba is indeed the last remaining official one-party state in the western hemisphere (although Paraguay and El Salvador are de facto one-party states). Human rights activists charge the Castro government with repression of dissidents (including surveillance, phone tapping and unjust incarceration), refusal to allow opposition political parties or to hold elections. But the U.S. plays a major role in preventing an organic process of reform in Cuba, as Amnesty International observes:

The four decades-old embargo against Cuba by the USA continues to contribute to a climate in which fundamental rights are denied. On 19 April 2002, the UN Commission on Human Rights passed by 23 votes to 21 a resolution inviting Cuba to allow its citizens greater enjoyment of their civil and political rights. A resolution on human rights in Cuba has been passed annually since 1992, with the exception of 1998. Like the 2001 text, the 2002 resolution was more conciliatory towards Cuba than in earlier years; while stopping short of condemnation of the US embargo, the resolution recognized Cuba's efforts to give effect to its people's social rights, ''despite an adverse international environment."

As Amnesty International points out, part of the official rationale for the U.S. trade embargo on Cuba (like the U.S.-Euro sanctions on Iraq in the 1990s) is that it will increase state repression and, as a result, the likelihood of popular upheaval. As in Iraq, the effect in practice is to punish the population for the refusal of their government to revert to U.S. client status.

Judging Castro and judging U.S. policy toward his government are two different things. Even his critics must concede that, in and of themselves, Castro’s autocratic measures cannot explain U.S. state policy toward Cuba, if the same time the U.S. has been arming incomparably harsher autocrats from the Southern Cone to the Caribbean. Castro’s first crime, from U.S. planners' perspective, was his nationalization of foreign assets, particularly the massive U.S.-owned sugar latifundia that had been created between 1898 and 1958.

In 1958, Cuba was a de facto U.S. colony, with U.S. capital controlling about 75% of the arable land on the island. Sugar accounted for 90% of Cuban exports, about 60% of which went to the U.S. From military bases to racially segregated luxury hotels, the presence of U.S. power and money was a dominating factor in Cuba on the eve of the revolution. After the passage of Castro’s first agrarian reform law in 1959, calling for the redistribution of landholdings over 74 acres to Cuban smallholders, U.S. companies demanded full cash payment for the 1,666,000 acres they controlled. The Castro government offered 20-year bonds at a 4.5% interest rate, but this was rejected. Further nationalizations led to the institution of the U.S. embargo on Cuba in February 1962. Coming on the heels of the 1961 Bay of Pigs debacle, the embargo arguably was a major factor in the Cuban Missile Crisis in the fall of that year.

Over the next three decades, the Cuban economy was able to diversify away from sugar monoculture somewhat, albeit in a context of dependency on COMECON. The collapse of COMECON, along with the maintenance of the U.S. embargo, has increased pressure against the Castro government from within and without, by most accounts increasing repression. On the other hand, statistics on education, health care, and gender representation in the workforce testify to the success of the Cuban state in maintaining a greater degree of egalitarianism than its capitalist neighbors. How do Cubans feel about Castro’s government today?

While there is no shortage of speculation from diehard supporters and rabid opponents of the Cuban state, a 2006 Gallup Poll surveying 1,000 adults in Havana and Santiago provides some concrete evidence. The responses reflect the mixed blessings of socialism in relation to capitalism: respondents express gratitude for Cuba’s egalitarianism and social services, but also resentment at the lack of economic mobility and political freedom. Some highlights:

On perceptions of Cuba:

Having been born in Castro’s era, the majority of respondents see themselves as children of the revolution. Asked whether a series of adjectives describe the Cuban people, respondents were much more likely to say Cubans are “fair” (78%) and “equalitarian” (69%) than they were to say they are “democratic” (47%).

On the Cuban state:

When asked about the country’s current leadership, respondents split fairly evenly: 49% said they approve of Cuba’s leadership, while 39% disapproved, and 13% did not offer a response.

On the embargo:

One area in which Cubans appear particularly likely to support change is that of trade with the United States. Respondents were asked, “If Cuba wanted to increase its commercial relations with one other country, which country would be the ideal partner for Cuba?” The United States was the country most commonly mentioned, by 44% of respondents. China (17%) and Venezuela (15%) were distant runners-up.

On healthcare:

The Cuban government has attached great importance to ensuring that all Cubans are provided with basic healthcare services. Cuba currently has more physicians per capita even than the United States. That emphasis is evident in these poll results. Almost all respondents (96%) say they think healthcare is accessible to anyone regardless of his or her economic situation, versus just 42% overall across urban Latin America. Three in four respondents (74%) say they have confidence in Cuba’s healthcare system. On the other hand, respondents in the Cuban study were slightly less likely than urbanites across Latin America to say they are satisfied with their personal health — 76% vs. 85%, respectively.

On education:

Respondents were also extremely positive about the country’s schools, reflecting the success of a concerted effort by the state beginning in 2002 to make education a higher priority. In 2004, education spending represented more than 11% of GDP, compared with 6.3% in 1998. As they did regarding healthcare services, almost all respondents (98%) agreed that all Cubans, regardless of economic status, have access to education. A high 78% say they are satisfied with the schools in their communities. Perhaps most impressively, more than half of the Cuban respondents (60%) say the quality of the education students receive from Cuba’s colleges is superior to that in other countries, more than twice the regional percentage for urban Latin America (25%).

On child development:

The vast majority of respondents also perceive Cuban society as a good environment for child development. A full 96% say they think most children have the opportunity to learn and grow every day, head and shoulders above the 46% regional figure for Latin America. Nearly as many Cuban respondents, 93%, say they think the country’s children are treated with dignity and respect, compared with just one-third (34%) of respondents across Latin America.

On the lack of economic mobility:

Somewhere along the way, the potential generated by Cuba’s well-developed education system gets truncated. State control of prices gives workers little control over their earning potential, robbing them of motivation to work hard. Also contributing to the poor use of human resources is that underemployed workers are often kept in their existing workplaces to improve official employment statistics. Just 42% of Cuban respondents say people in their country can get ahead by working hard; the regional figure for urban Latin America is almost twice as high (77%).

Attitudes toward work:

Among Cuban respondents who say they have jobs, about two-thirds (68%) say they are satisfied with them. Sixty percent say their jobs give them the opportunity to do what they do best every day. Both figures are somewhat below the overall results for Latin American urbanites (83% and 84%, respectively).

Attitudes toward entrepreneurialism:

Lack of a sense of control may also curb entrepreneurial impulses in Cuban society: Although 94% of respondents say they would describe the Cuban people as “entrepreneurial,” less than one-third (32%) say they currently have a plan, idea, or invention in mind to improve their standard of living, compared with an average of 45% of urban Latin Americans.

On lack of freedom:

Cuban respondents were the least likely worldwide to say they are satisfied with the freedom they have to choose what to do with their lives. Just one in four (26%) respondents expressed satisfaction, dramatically lower than the regional figure of 80% for urban Latin America. Asked more specifically about their freedom to choose how they spent their time the day prior to the survey, 55% of Cubans interviewed said they were satisfied, also significantly lower than the regional finding of 75% for urban Latin America.

Venezuela under Chavez
The most serious human rights violations in Venezuela under Chavez have been committed by rogue elements of the military and police, and contract killers in the pay of large landowners. Human Rights Watch reports that "In April 2006 Attorney General Isaías Rodríguez reported that 6,110 officials were implicated in alleged killings between 2000 and 2005, yet only 760 had been charged, and only 113 convicted." This negligence may be related to the tenuous hold of the Chavez government on the police and military, which contain substantial anti-Chavez elements which supported the 2002 coup attempt, and have clashed with government supporters in street battles on several occasions. In 2005, known arms and drug trafficker Oliver North fumed in an article at the right-wing website Freedom Alliance:

Last week, Mr. Chavez ousted the last five U.S. military advisors from a program that had been in place for 35 years – claiming that the Americans were “waging a campaign in the Venezuelan military…criticizing the president.”

Conversely, the Venezuelan opposition has accused pro-Chavez security forces of violating the rights of anti-government protestors. Reviewing the charges, Amnesty International concludes:
While many opposition supporters took part in legitimate peaceful demonstrations, a significant number of these protests were violent with the use of barricades, stones, Molotov cocktails, and fireworks and, in some cases, firearms. It is the duty of the state to guarantee public order, respecting the rule of law in accordance with international standards. However, the response of the Guardia Nacional and other branches of the security forces frequently involved excessive use of force, apparently contributing to spiralling violence rather than preventing or controlling it.

It might be noted that anti-government protestors using “barricades, stones, Molotov cocktails, and fireworks and, in some cases, firearms” in the streets of Colombia, El Salvador, Guatemala or Paraguay (etc.) would probably be shot dead by security forces on the spot. Still, no one doubts that the Venezuelan police and military continue to commit human rights abuses, largely because they retain a degree of vigalantist autonomy from the administration. Poor barrio residents and peasants are far more vulnerable to their depredations than middle-class anti-Chavistas.

HRW also reports that 54 peasants were killed and 21 wounded between 1999 and 2006 during the implementation of Chavez’s land reform initiative. “According to the ombudsman, contract killers hired by landowners appear to have been responsible for most of the killings.” When Chavez came to power, 5% of landowners had 80% of the arable land in the country, and they have fought to keep it that way. The Chavez government has claimed 4 million hectares of land for redistribution in the form of land titles for small farming households and cooperatives. Against the opposition of the landowners, and despite their use of contract killers to intimidate peasants, 2 million hectares have so far been distributed to over 10,000 families.

According to the CIA World Factbook, the Venezuelan infant mortality rate fell by 18.2% between 1998 and 2006. And the Center for Economic Policy Research reports that the Venezuelan poverty rate has fallen by 31% under Chavez. This has been driven by increased social spending on health care, education and subsidized food. In the case of health care, CEPR reports:

In 1998 there were 1,628 primary care physicians for a population of 23.4 million. Today, there are 19,571 for a population of 27 million. […] In 1999, there were 335 HIV patients receiving antiretroviral treatment from the government, compared to 18,538 in 2006.

The programs are precarious, of course, to the extent that they depend on oil revenues. Overall, the state of human rights and social welfare in Venezuela remains imperfect, but better than in its profoundly unequal, violent next-door neighbors Brazil, Guyana and Colombia. The hostility of the United States to Chavez cannot be explained by either index. It is obviously driven—as in the case of Arbenz’s Guatemala, Castro’s Cuba, Goulart’s Brazil, Allende’s Chile and Ortega’s Nicaragua—by his policies of nationalization and land reform. Like the five leaders mentioned above, the U.S. has tried to overthrow Chavez by supporting a coup attempt in 2002. While the U.S. is in a weaker position in Latin America than it was during the Cold War, Venezuelan oil is far more important to U.S. investors than Guatemalan fruit, Cuban sugar, Brazilian power companies or Chilean copper ever were.

To understand Chavez’s nationalization policy, we need to briefly look at the history of nationalization and privatization in Venezuela. The history of Venezuela, like that of many Latin American countries, reflects a post-independence cycle of nationalizations and privatizations, with the alternation reflecting the shifting balance of political and economic forces inside and outside the country. In 1929, when Venezuela was the largest oil producer in the world (accounting for 10% of world oil production), American and European big oil held the spigot: 54.8% of Venezuelan production was controlled by Standard Oil of California and Gulf, and the remaining 45% by Shell. Initially, the dictator Juan Vicente Gomez granted the oil companies some of the most generous concessions in Latin America, but during WWII they were forced to sign a 50-50 profit-sharing agreement with the state. By the 1950s, under the rule of another dictator favored by Washington, Pérez Jiménez, the oil companies were making huge profits again. About half of the total profits of Standard Oil of New Jersey (later Exxon) at this time were from its Venezuelan subsidiary. Prior to the nationalization of Venezuelan oil in 1976, the foreign share in Venezuelan oil was near-total. The so-called ‘seven sisters’ controlled 95% of refining capacity and 88% of production in Venezuela; of the latter figure, 80% was controlled by Exxon, Shell and Gulf Oil. Among foreign investors, those from the U.S. were the most prominent, controlling 100 % of investments in mining, 68% in industry and commerce, and 73 % in banking.

In the 1980s, falling oil prices led the Venezuelan government to borrow heavily from international banks, drawing it into the Third World debt crisis that wrought havoc on three continents. In 1982, capital flight amounted to $8 billion U.S. Currency devaluation compounded Venezuela’s debt, and the general corruption of the Hampins administration did not help. In 1988, Carlos Andres Perez was elected with the backing of the IMF. His rigid adherence to the IMF structural adjustment program, which included the usual ingredients—cuts in public spending, privatization of banks, television stations and oil fields (rolling back the nationalizations of his own first term), and deregulation of foreign investment—earned him widespread enmity. The privatizations brought billions of dollars into the Venezuelan treasury, but poverty shot up rapidly, from 43.9% in 1988 to 66.5% of the population in 1989. Workers’ buying power fell by 60% in 3 years. The New York Times reported that, by 1992, real wages In Caracas were 44% of the 1987 level. The result was massive social unrest. 300 people were killed by security forces during protests in Caracas in February 1989.

This was the backdrop for the 1992 coup attempt by Chavez. In a February 5th, 1992 article entitled “Uneven share of riches fuelled Caracas revolt,” The Financial Times reported:

The coup attempt caps a crescendo of anger and frustration over the economic reforms that have written such a macroeconomic success story but have failed to benefit the lives of most Venezuelans and have embittered many. The rebel troops who for several hours seized the Miraflores government palace and the La Casona presidential residence early yesterday were apparently seeking to take advantage of mounting unrest over price rises and poor public services. The rebels were no doubt emboldened by a poll published last week suggesting 81 per cent of Venezuelans had little or no confidence left in 69-year-old President Carlos Andres Perez.

Although the coup was unsuccessful, Perez was suspended from office in 1993 after being indicted for the misappropriation of $17.2 million. His successor, Rafael Calfera, was elected on an anti-neoliberal platform, but nonetheless followed in Perez’s footsteps. In 1997, Caldera agreed to an IMF agreement to cut federal spending, deregulate the entry of foreign capital, and privatize more public assets. A massive strike was carried out to protest the policies. Deutsche Press-Agentur reported on November 20th, 1997:

More than 1 million state employees went on strike in Venezuela Wednesday to demand back pay, wage increases and an end to the government's privatization policy. Police in the capital Caracas fired shotguns at 4,000 protesting justice workers as they marched on government buildings. No one was hurt, reports said.

A delegation of five strikers later met with government representatives. The justice workers are demanding 13 million U.S. dollars worth of back pay. In eastern Venezuela employees at state-owned iron and aluminium works protested plans to privatize their companies.

Further privatizations of utilities, telecommunications and oil contributed to increasing unrest. The outcome of all of this was the election of Chavez in 1998.

Beginning in 2004, Chavez increased corporate income tax on foreign oil companies 30-50%, and increased the royalties owed by those companies to the state from 1% to 33%. In 2005, the government gave foreign companies 1 year to convert their service contracts to “joint venture agreements” with PDVSA, in which PDVSA would have a minimum 60% stake. Some companies, including Total SA and ENI SPA, balked, leading the government to sieze their oil fields. ExxonMobil handed over one of its four Orinoco basin heavy oil projects to PDVSA after the announcement of the mandatory 60% stake for the state oil company. Verizon sold its stake in CANTV to the Venezuelan government for $572 million, and AES sold its stake in EDC to the state for $840 million.

Bolivia under Morales
U.S. critics of Morales have not yet been able to find human rights violations committed by his government. They have focussed on his status as an advocate for cocaleros (conflating, falsely, coca growing with cocaine production), and nationalization. It goes without saying that the latter is the issue that matters to the Wall Street Journal.

Like Chavez, Morales has nationalized assets that formerly belonged to the state. Bolivian natural gas had been nationalized in the 1920s, and was only privatized in 1996 by President Gonzalo Sanchez de Lozada. Under the privatization (which Lozada had pursued on the recommendation of the IMF and World Bank), royalties owed by oil multinationals to the state were reduced from 50% to 18%. The loss was made particularly significant by a pending deal with Brazil. Prior to the privatization, writes Benjamin Kohl, the Bolivian state oil company (Yacimientos Petrolíferos Fiscales de Bolivia, or YPFB) was “on the verge of completing a contract to build a pipeline to connect Bolivian gasfields to Brazilian markets,” which would have increased profits “by at least $50 million a year for 40 years. These earnings, instead, were largely transferred to private firms that borrowed capital from the same international institutions that had previously offered loans to YPFB.” This amounted to “a giveaway that could cost the nation hundreds of millions, if not billions, of dollars over the next 40 years.”

Another unpopular move by Lozada was to privatize the water utilities of La Paz and El Alto, which he sold off to the French multinational Suez. Opposition to the privatization escalated through the next two administrations. Lozada’s successor, Hugo Banzer (1997-2001), sold the water utilities of Cochabamba to the San Francisco company Bechtel in 1999. The deal resulted in a hike in users’ water tariffs. It also included provisions which outlawed the drilling of wells, which were used by “water committees” serving some 15-20% of the city’s residents. This led to the “water war” of 2000, in which some 100,000 people protested on the streets of Cochabamba, blockading roads and virtually shutting down the city. In the end, the government was forced to rescind the contract with Bechtel. Attempts at water privatization continued elsewhere in Bolivia, however, producing another “water war” in El Alto in 2005, which ended in the government rescinding its contract with theconsortium Aguas del Illamani.

Lozada also began but did not complete talks on a natural gas deal (which would involve newly privatized fields) with the Spanish-British consortium Pacific LNG. When Sanchez de Lozada assumed the presidency in 2002, his attempt to close that deal was met with huge protests. In fall 2003, Aymara peasants blockaded roads in the altiplano and Lake Titicaca region, and miners and shantytown dwellers in El Alto clashed with security forces, producing 80 deaths and hundreds of bullet wounds. Anger at the security forces swelled the protests, leading an estimated 500,000 people to take to the streets of La Paz, forcing President Lozada to flee the country for exile in the U.S. Vice President Carlos Mesa took over, and was met with a series of demonstrations and road blockades, which by Spring 2005 were on the scale of those in 2003. The crisis culminated in Mesa’s announcement of his resignation before Congress in March 2005. Presidential elections were moved up from December 2007 to December 2005, and Movimiento al Socialismo candidate Evo Morales won 53.8% of the vote. Morales is the first indigenous head of state in Bolivia in nearly 500 years.

On May 1st, 2006, Evo Morales announced two things: an increase in the minimum wage by 50%, and the nationalization of Bolivia’s natural gas reserves, giving foreign companies 180 days to sign new contracts with the state. This did not involve any actual expropriation of private assets, but rather a tax increase. Morales increased taxes from 50% to 82% for the largest gas fields, and to 60% for the smaller fields. 53 installations owned by Exxon, BP, Total, Petrobras and other foreign multinationals were affected. In some cases, the terms were barely improved. As James Petras notes,

[...] the price of gas of $5 usd per million cubic feet to Argentina was 40% below the world price –and Brazil’s payment, one year after ‘nationalization’ was still the same $4 dollar—in some instances as low as 1.9 usd—as during the Sanchez de Losado-Mesa period.

Then, in February 2007, Morales announced the re-nationalization of a mineral processing plant owned by the Swiss company Glencore International AG. An Associated Press article at the time noted:

The Vinto plant - which refines ore containing tin, lead and silver - has a strong symbolic value in Bolivia. After its 1996 privatization, the plant was bought by Comsur, a private mining company whose largest stockholder at the time was former Bolivian President Gonzalo Sanchez de Lozada. Lozada fled Bolivia in October 2003 during riots against his administration, and is still sought by the Bolivian authorities in connection with a crackdown on the protests that left more than 60 Bolivians dead. Glencore bought the plant from Comsur in 2004.

At the same time, Morales has accepted tight budgetary policies, modest social spending and new joint agreements with foreign multinationals in banking, agribusiness, mining and natural gas. In other words, while his speeches have been radical, his policies have been center-left. As a result, he is being criticized from the left as a closet neoliberal and from the right as a puppet of Chavez.

Conclusion

The economic and strategic determinants of U.S. support for Latin American leaders can be summed up in the following terms. In the economic realm, U.S. allies have generally signed bilateral trade agreements favored by U.S. investors and a minority of exporters and retailers in their own countries; privatized state telecommunications, utilities, oil and other companies; granted tax holidays and other exemptions to U.S. firms; and pursued macroeconomic policies favored by U.S. and EU financiers and bankers. Most importantly, they have not nationalized foreign assets. In the strategic realm, many of them have agreed to a continuing U.S. military presence in their countries (there are U.S. bases or military installations in Colombia, El Salvador, Honduras, Paraguay, and Peru; until 1999 the U.S. also had bases in Panama). Case after case illustrates that maintenace of a "sound investment climate" guarantees U.S. support, not matter how rotten the human rights records; and attempts at wealth redistribution through land reform or nationalization guarantee U.S. subversion, even if indices of public health and equality are increasing. This has been U.S. policy since the 19th century, and while the pretexts have changed—from the Monroe Doctrine to Dollar Diplomacy to Wilsonian Idealism to the Cold War to the Drug War to the War on Terror—the policies have remained the same, because the interests have as well.