John Pilger on Latin America: the attack on democracy

An unreported war is being waged by the US to restore power to the privileged.

Beyond the sound and fury of its conquest of Iraq and campaign against Iran, the world's dominant power is waging a largely unreported war on another continent - Latin America. Using proxies, Washington aims to restore and reinforce the political control of a privileged group calling itself middle-class, to shift the responsibility for massacres and drug trafficking away from the psychotic regime in Colombia and its mafiosi, and to extinguish hopes raised among Latin America's impoverished majority by the reform governments of Venezuela, Ecuador and Bolivia.

In Colombia, the main battleground, the class nature of the war is distorted by the guerrillas of the Revolutionary Armed Forces of Colombia, known as the Farc, whose own resort to kidnapping and the drugs trade has provided an instrument with which to smear those who have distinguished Latin America's epic history of rebellion by opposing the proto-fascism of George W Bush's regime. "You don't fight terror with terror," said President Hugo Chávez as US warplanes bombed to death thousands of civilians in Afghanistan following the 11 September 2001 attacks. Thereafter, he was a marked man. Yet, as every poll has shown, he spoke for the great majority of human beings who have grasped that the "war on terror" is a crusade of domination. Almost alone among national leaders standing up to Bush, Chávez was declared an enemy and his plans for a functioning social democracy independent of the United States a threat to Washington's grip on Latin America. "Even worse," wrote the Latin America specialist James Petras, "Chávez's nationalist policies represented an alternative in Latin America at a time (2000-2003) when mass insurrections, popular uprisings and the collapse of pro-US client rulers (Argentina, Ecuador and Bolivia) were constant front-page news."

It is impossible to underestimate the threat of this alternative as perceived by the "middle classes" in countries which have an abundance of privilege and poverty. In Venezuela, their "grotesque fantasies of being ruled by a 'brutal communist dictator'", to quote Petras, are reminiscent of the paranoia of the white population that backed South Africa's apartheid regime. Like in South Africa, racism in Venezuela is rampant, with the poor ignored, despised or patronised, and a Caracas shock jock allowed casually to dismiss Chávez, who is of mixed race, as a "monkey". This fatuous venom has come not only from the super-rich behind their walls in suburbs called Country Club, but from the pretenders to their ranks in middle-level management, journalism, public relations, the arts, education and the other professions, who identify vicariously with all things American. Journalists in broadcasting and the press have played a crucial role - acknowledged by one of the generals and bankers who tried unsuccessfully to overthrow Chávez in 2002. "We couldn't have done it without them," he said. "The media were our secret weapon."

Many of these people regard themselves as liberals, and have the ear of foreign journalists who like to describe themselves as being "on the left". This is not surprising. When Chávez was first elected in 1998, Venezuela was not an archetypical Latin American tyranny, but a liberal democracy with certain freedoms, run by and for its elite, which had plundered the oil revenue and let crumbs fall to the invisible millions in the barrios. A pact between the two main parties, known as puntofijismo, resembled the convergence of new Labour and the Tories in Britain and Republicans and Democrats in the US. For them, the idea of popular sovereignty was anathema, and still is.

Take higher education. At the taxpayer-funded elite "public" Venezuelan Central University, more than 90 per cent of the students come from the upper and "middle" classes. These and other elite students have been infiltrated by CIA-linked groups and, in defending their privilege, have been lauded by foreign liberals.

With Colombia as its front line, the war on democracy in Latin America has Chávez as its main target. It is not difficult to understand why. One of Chávez's first acts was to revitalise the oil producers' organisation Opec and force the oil price to record levels. At the same time he reduced the price of oil for the poorest countries in the Caribbean region and central America, and used Venezuela's new wealth to pay off debt, notably Argentina's, and, in effect, expelled the International Monetary Fund from a continent over which it once ruled. He has cut poverty by half - while GDP has risen dramatically. Above all, he gave poor people the confidence to believe that their lives would improve.

The irony is that, unlike Fidel Castro in Cuba, he presented no real threat to the well-off, who have grown richer under his presidency. What he has demonstrated is that a social democracy can prosper and reach out to its poor with genuine welfare, and without the extremes of "neo liberalism" - a decidedly unradical notion once embraced by the British Labour Party. Those ordinary Vene zuelans who abstained during last year's constitutional referendum were protesting that a "moderate" social democracy was not enough while the bureaucrats remained corrupt and the sewers overflowed.

Across the border in Colombia, the US has made Venezuela's neighbour the Israel of Latin America. Under "Plan Colombia", more than $6bn in arms, planes, special forces, mercenaries and logistics have been showered on some of the most murderous people on earth: the inheritors of Pinochet's Chile and the other juntas that terrorised Latin America for a generation, their various gestapos trained at the School of the Americas in Georgia. "We not only taught them how to torture," a former American trainer told me, "we taught them how to kill, murder, eliminate." That remains true of Colombia, where government-inspired mass terror has been documented by Amnesty, Human Rights Watch and many others. In a study of 31,656 extrajudicial killings and forced disappearances between 1996 and 2006, the Colombian Commission of Jurists found that 46 per cent had been murdered by right-wing death squads and 14 per cent by Farc guerrillas. The para militaries were responsible for most of the three million victims of internal displacement. This misery is a product of Plan Colombia's pseudo "war on drugs", whose real purpose has been to eliminate the Farc. To that goal has now been added a war of attrition on the new popular democracies, especially Venezuela.

US special forces "advise" the Colombian military to cross the border into Venezuela and murder and kidnap its citizens and infiltrate paramilitaries, and so test the loyalty of the Venezuelan armed forces. The model is the CIA-run Contra campaign in Honduras in the 1980s that brought down the reformist government in Nicaragua. The defeat of the Farc is now seen as a prelude to an all-out attack on Venezuela if the Vene zuelan elite - reinvigorated by its narrow referendum victory last year - broadens its base in state and local government elections in November.

America's man and Colombia's Pinochet is President Álvaro Uribe. In 1991, a declassified report by the US Defence Intelligence Agency revealed the then Senator Uribe as having "worked for the Medellín Cartel" as a "close personal friend" of the cartel's drugs baron, Pablo Escobar. To date, 62 of his political allies have been investigated for close collaboration with paramilitaries. A feature of his rule has been the fate of journalists who have illuminated his shadows. Last year, four leading journalists received death threats after criticising Uribe. Since 2002, at least 31 journalists have been assassinated in Colombia. Uribe's other habit is smearing trade unions and human rights workers as "collaborators with the Farc". This marks them. Colombia's death squads, wrote Jenny Pearce, author of the acclaimed Under the Eagle: US Intervention in Central America and the Caribbean (1982), "are increasingly active, confident that the president has been so successful in rallying the country against the Farc that little attention will shift to their atrocities".

Uribe was personally championed by Tony Blair, reflecting Britain's long-standing, mostly secret role in Latin America. "Counter-insurgency assistance" to the Colombian military, up to its neck in death-squad alliances, includes training by the SAS of units such as the High Mountain Battalions, condemned repeatedly for atrocities. On 8 March, Colombian officers were invited by the Foreign Office to a "counter-insurgency seminar" at the Wilton Park conference centre in southern England. Rarely has the Foreign Office so brazenly paraded the killers it mentors.

The western media's role follows earlier models, such as the campaigns that cleared the way for the dismemberment of Yugoslavia and the credibility given to lies about Iraq's weapons of mass destruction. The softening-up for an attack on Venezuela is well under way, with the repetition of similar lies and smears.

 

Cocaine trail

 

On 3 February, the Observer devoted two pages to claims that Chávez was colluding in the Colombian drugs trade. Similarly to the paper's notorious bogus scares linking Saddam Hussein to al-Qaeda, the Observer's headline read, "Revealed: Chávez role in cocaine trail to Europe". Allegations were unsubstantiated; hearsay uncorroborated. No source was identified. Indeed, the reporter, clearly trying to cover himself, wrote: "No source I spoke to accused Chávez himself of having a direct role in Colombia's giant drug trafficking business."

In fact, the UN Office on Drugs and Crime has reported that Venezuela is fully participating in international anti-drugs programmes and in 2005 seized the third-highest amount of cocaine in the world. Even the Foreign Office minister Kim Howells has referred to "Venezuela's tre mendous co-operation".

The drugs smear has recently been reinforced with reports that Chávez has an "increasingly public alliance [with] the Farc" (see "Dangerous liaisons", New Statesman, 14 April). Again, there is "no evidence", says the secretary general of the Organisation of American States. At Uribe's request, and backed by the French government, Chávez played a mediating role in seeking the release of hostages held by the Farc. On 1 March, the negotiations were betrayed by Uribe who, with US logistical assistance, fired missiles at a camp in Ecuador, killing Raú Reyes, the Farc's highest-level negotiator. An "email" recovered from Reyes's laptop is said by the Colombian military to show that the Farc has received $300m from Chávez. The allegation is fake. The actual document refers only to Chávez in relation to the hostage exchange. And on 14 April, Chávez angrily criticised the Farc. "If I were a guerrilla," he said, "I wouldn't have the need to hold a woman, a man who aren't soldiers. Free the civilians!"

However, these fantasies have lethal purpose. On 10 March, the Bush administration announced that it had begun the process of placing Venezuela's popular democracy on a list of "terrorist states", along with North Korea, Syria, Cuba, Sudan and Iran, the last of which is currently awaiting attack by the world's leading terrorist state.

http://www.johnpilger.com

John Pilger, renowned investigative journalist and documentary film-maker, is one of only two to have twice won British journalism's top award; his documentaries have won academy awards in both the UK and the US. In a New Statesman survey of the 50 heroes of our time, Pilger came fourth behind Aung San Suu Kyi and Nelson Mandela. "John Pilger," wrote Harold Pinter, "unearths, with steely attention facts, the filthy truth. I salute him."

This article first appeared in the 28 April 2008 issue of the New Statesman, Everybody out!

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Breaking the consensus

Even IMF researchers are calling time on free market dogma and the neoliberal orthodoxies of the past 30 years.

What has come over the International Monetary Fund? Not content with playing the good cop to Europe’s bad in the ongoing Greek crisis – in which it has been arguing for debt relief and less austerity – the fund has just published an article in its in-house magazine by three of its leading researchers entitled “Neoliberalism: Oversold?”. Their answer is “yes”.

The article takes aim at two of the most important aspects of the neoliberal economic agenda that has been so influential since the early 1980s. The first is the removal of restrictions on the movement of capital across international borders – so-called capital account liberalisation. Readers of a certain age will recall that 40 years ago there were strict limits on the amount of foreign currency one could buy before going abroad on holiday and companies had to show evidence of the need to import supplies to gain access to the foreign exchange market. Such restrictions were even harsher for international investment – making it almost impossible for institutions in one country to invest in the equity and bond markets of another.

Neoliberal theorists decried this situation as absurd. Rich countries have abundant capital, so the rate of return on it is relatively low, they argued. Poor ones are capital-scarce, so the returns on investment are high. Erecting artificial barriers preventing capital from flowing from rich countries to poor ones was therefore like stopping water from flowing downhill: an unhelpful intervention in the natural order of things, with detrimental consequences for all. During the 1980s and 1990s, international capital controls were thus dismantled worldwide – and often as a precondition for IMF assistance. The scale of private cross-border capital flows rocketed and soon eclipsed those of public-sector lenders, such as the World Bank and the IMF itself. 

But while these private capital flows were large, it quickly became obvious that they could also be extremely erratic. Throughout the 1990s, a succession of big developing countries enjoyed huge inflows of money  to be used for financing government spending and infrastructure development. But in each case, the new sources of funding turned out to be fickle, as private investors proved far less tolerant of heterodox economic policy than official funders had been. The result was a succession of crises – in Mexico in 1994, in east Asia in 1997, in Russia in 1998, in Argentina in 2001 – as the newly discovered rivers of capital suddenly began flowing the other way.

The IMF became well known at the time for insisting that these occasional stunning crashes should not derail liberalisation: they were just the price of reforms not fully complete. The new IMF article, in the June edition of Finance & Development magazine, disagrees. After nearly 30 years, it argues, the growing pains have not stopped. Open capital accounts have indeed increased developing countries’ access to capital for development but, strikingly, there is little evidence that this has raised growth rates. And there is no question that it has exaggerated the boom-bust business cycle, increased inequality and raised the odds of periodic financial crises.

Couched as it is in the equivocal language of cost-benefit analysis, this change of tune might sound inconsequential. It is not. Twenty years ago, Malaysia’s prime minister, Mahathir Mohamad, was branded an international pariah for reimposing capital controls to insulate his country from the east Asian financial crisis. The new IMF article concludes that such measures are “a viable, and sometimes the only, option”.

The second plank of the neoliberal agenda at which the IMF article takes aim will be even more familiar to UK readers: curbing the size of the state. In the 1980s and 1990s, the main emphasis on this front was on privatisation. As that agenda began to run its course, emphasis shifted to methods of constraining governments’ abilities to run excessive deficits of spending over revenues – and rules to avoid the accumulation of too much public debt. The Maastricht rules introduced by the eurozone countries in 1993, which mandated annual deficits of no more than 3 per cent of GDP and public debt of no more than 60 per cent, were perhaps the most prominent example.

For most of the 2000s, such self-denying ordinances seemed to be costless virtues.  Then, in 2007, the global economic crisis hit. After a brief flirtation with increased state spending when confronted with the steep recessions of 2008-09, the governments of the eurozone and the UK were converted again to the crucial importance of shrinking public debt and cutting spending. The notion that cutting spending can (or even is necessary to) boost growth – of “expansionary fiscal contraction” – came roaring back into fashion.

***

The IMF broached its dissent early in the post-crisis period, with its economists expressing scepticism over the pace and timing of austerity in Europe. Christine Lagarde, the fund’s managing director, and Olivier Blanchard, its chief economist, argued for relaxing spending constraints and turning a blind eye to debt burdens until depressed economies were solidly recovering. 

Gossip-mongers at the World Economic Forum in Davos put it down to the fact that they are both French and therefore constitutional backsliders on matters of fiscal prudence; and policymakers preferred to pick up on pseudo-scientific economic sound bites such as the idea of a public debt tipping-point at 90 per cent of GDP. In reality, however, the IMF was merely stating the clear conclusions of conventional economic models – models that the vast difference since 2009 in the recovery of the US, which did not opt for austerity, and Europe, which did, appears to have proved largely correct.

The new IMF article drives home the point. The “short-run costs of lower output and welfare and higher unemployment”, it concludes, “have been underplayed, and the desirability . . . of simply living with high debt and allowing debt ratios to decline organically through growth is underappreciated”. Austerity is often self-defeating and debt limits by themselves are meaningless.

Is this two-part mea culpa on both capital flows and the size of the state a major landmark in the evolution of the IMF’s thinking – and could this be important in practice, given the intellectual heft that the Washington institutions bring to the international policy debate? It is, and it could.

Will it rehabilitate the IMF as an institution among the populations of the countries it is meant to serve? Here I am more sceptical. There is no question that there was disagreement on policy in east Asia in 1997, for example. But the real problem with the IMF’s intervention had to do not with the correctness of its prescriptions but their legitimacy. The single most enduring image of that painful period was the photo of the then managing director of the IMF, Michel Camdessus, arms folded and frowning like a schoolmaster giving detention, watching over President Suharto of Indonesia as, humiliatingly, Suharto bowed to the inevitable and signed up to the fund’s financing plan.

In many developing countries, memories of unjust colonial domination are raw and if the IMF is to help resolve the growing dissatisfaction of populations with policymaking elites, it will need to do more than just make improvements to its advice – no matter how sincere and welcome such improvements may be. The reality that, in effect, power over its assistance belongs exclusively to a handful of rich economies will have to change. Reforming its governance to give developing countries more control is the place to start.

In the UK, meanwhile, we can have no such complaints. We have no one to blame for taking neoliberalism’s crazier ideas too seriously but ourselves.

Felix Martin is the author of “Money: the Unauthorised Biography” (Vintage)

Macroeconomist, bond trader and author of Money

This article first appeared in the 02 June 2016 issue of the New Statesman, How men got left behind