Latin America is going through a moment of perpetuation of power, but this cannot by any means be seen as something new. We have had examples, such as Pinochet in Chile, Perón in Argentina and Bordaberry in Uruguay, among others. However, these dictators and “eternal presidents” lived in an era when democracy was not developed as it is today. Obviously we cannot consider some Latin-American countries as developed democracies, but we must recognize that they are more advanced that they were in previous years.

 

Based on a government vision that he ambiguously defines as “Bolivarian Revolution”, Hugo Chávez, the President of Venezuela, implemented a contemporary version of perpetuation of power in Latin America. Advancing a country project with no expiry date and no intensity in actions, Chávez manages to convince a poorly educated population that his perpetuation in power is vital and democratic. Naturally and understandably, with a population who is helped by the government through punctual government actions, coupled to the need many Latin Americans have of a patriarchal figure, Chávez has done pretty well with his perpetuation strategy.

 

Although many disagree with Chávez’s government, which includes countless failures and a few successes, one cannot deny that “El Comandante” really believes the project he follows. It is not about misleading the people. Chávez deeply believes that the “Bolivarian Revolution” or the “21st Century Socialism” is the best way to lead a country. However, this project does not assume leaders are chosen and power alternation after a predetermined time interval. Chávez, who considers himself to be a chosen leader, knows and believes that there is no other leader for the country and, thus, through legal mischief, populism and referenda, manages to remain in power in order to carry out something that will hardly ever bring about lasting benefits.

 

As in Latin America there is great similarity among peoples of different countries, a leader’s deeds easily flow through the borders with other nations in the region. Thus, it is perfectly natural that the neighboring country’s success is a good indication that changes will take place in one’s own country as well. Another important factor is the pervasive poverty in the continent. Even though the situation has improved considerably compared to the past, most of the continent’s countries are still poor and financially unable of performing the necessary reforms.

 

For such reasons, the perpetuation policy intended by Chávez was easily transferred to other countries in the region – as well as the model to secure perpetuation through democratic ways. The constitutional referendum conceived by the Venezuelan government, which was rejected by a minimum percentage in 2007, served as an example so that Evo Morales, in Bolivia, and Rafael Correa, in Equator, could follow the same path. Legitimization of the process is, for these political leaders, as or more important that the result itself. Legitimization serves as a shield to counter more abrupt and possibly violent actions by an opposition that does not have access to the government machine and consequently to a list of benefits that could be given to the people.

 

Although Chávez lost the referendum in 2007, because it was a democratic process (in spite of countless suspicions) it prevented more severe actions from the opposition and more negative feedback by the international community.

 

In fact, this is a major change between the leaders of the past and the leaders today in terms of perpetuation in power. In the past, guns or decrees did what today is done through popular participation. We will not discuss here whether such popular participation is the result of populist manipulation, but it serves as a shield against the arguments of those who accuse the government of being antidemocratic.

 

Up to now, Evo Morales has been more successful with this strategy than Hugo Chávez. Not because he conceived means to remain in power, but because he managed to approve a deep constitutional reform, which, among other things, included the ability to run for re-election. On the other hand, Chávez managed to remain in power through popular approvals of his administration. His most daring attempt to search for unlimited re-election was banned by scarce 1.1% of the Venezuelans. I believe that in his new attempt, the Venezuelan President will be successful, because he will do whatever it takes to pass this particular amendment. In Equator, Rafael Correa took advantage of the situation involving his two counterparts in the continent and obtained an extension of his administration. Historically speaking, politics in Equator has been more complex than Bolivian or Venezuelan politics. Right now, however, Correa enjoys a more peaceful political situation than that of the other two South American countries.

 

It won’t be too long until we see something similar in the Paraguay of President Fernando Lugo. Incredibly, Paraguay is more politically disorganized than Equator or Venezuela.

 

Unfortunately, corruption in this country is so intertwined with the government that one can easily be confused trying to distinguish what is legitimate and what is not. The institutionalization of corruption will make it much easier for re-election amendments to be presented and passed in the country. As this is a political and, most of the times, customized negotiation in Paraguay, once this idea arises soon there will be conditions to approve it. Once again, the low educational level found among the Paraguayan population and the almost absolute lack of an intellectual elite in the political arena of that country will play a vital role so that Lugo, if he wants so, remains in power.

 

There are other examples in the region. In Argentina, there is a family perpetuation. Nestor Kirchner’s two mandates were followed by that of his wife Cristina. Today, it seems really hard that Cristina will manage to get re-elected by 2011. Nevertheless, major changes might happen for those who control the power machine. In the worst case scenario, Nestor may run for presidency again. In the Argentinean case, politics takes place inside the peronist party (Justicialist Party), which hinders the emergence of new scenarios that are not contaminated by the governing practices of the main and largest (and virtually the only one) Argentinean party.

 

The temptation to remain in power is not a privilege shared only by the current Latin-American “left” wing. Competent Colombian President Álvaro Uribe day after day copes with the temptation of going for another mandate. His approval rate, which is nearly 80%, turned him into a political phenomenon able to promise and deliver results. Under his administration, Colombia has become a safer and more peaceful country, placing Bogotá among the safest capital cities in the continent. With Uribe, Colombia has taken Argentina’s historical position as “number two” in South America.

 

However, are all these positive results enough to blow away the democratic spirit? Based on success and huge popular volition, can a president change laws in order to remain in office for yet another mandate? It is not up to me to comment on that, but for a continent that struggles with great difficulty to become a truly democratic continent, the example must come even from who had absolute success and delivered a good administration to voters.

 

In Brazil, the possibility of a third mandate has been considered. However, as we are light years ahead of our neighbors when it comes to institutional development (perhaps second to Chile) this idea soon vanished. The mere fact that it has been uttered indicates the true political colors of whoever had such idea. It does not matter whether it came from a right or left party, democracy must always be respected. We should not perpetuate leaders, but the good ideas and concepts these leaders implemented. Concepts are stronger than the people who created them. In Venezuela, Bolivarianism may last a thousand years if this is the will of the people, but Chávez cannot proclaim himself as the father of a country and become its supreme leader if his role model, Simon Bolívar, had hated the idea of perpetuation of power, an example set by the Spanish and Portuguese crowns.

A major political scandal hit president Alan García’s administration beginning last week.

 

A footage broadcasted by América Televisión’s program “Cuarto Poder” shows Rómulo León and Alberto Quimper discussing kickbacks to be paid for aiding Norwegian oil company Discover Petroleum in a bidding for oil exploration blocks. León is a former minister linked to the Aprista Party’s, while Quimper is a high-ranking officer of Petroperú, the country’s agency for promoting and negotiation hydrocarbon contracts.

 

The oil company, which eventually won the bidding, denies any form of illicit facilitation. However, another recording was disclosed in which León discusses a purported benefit for Jorge del Castillo, head of the Council of Ministers, with a representative of Discover Petroleum.

 

Since disclosure of the scandal the Minister of Energy, Juan Valdivia, and the president of Petroperu, César Gutierrez, have been removed from their offices. This is undoubtedly the biggest political crisis in Alan García’s administration so far. This situation is likely to develop further into a predicament for president García because of his close ties with the persons involved in the scandal.

 

The population’s confidence in his administration is very low as of now. According to the latest surveys, only 19% of Peruvians approve his administration. The crisis is likely also to have negative effects on the Peruvian Aprista Party (Apra) on account of the involvement of persons having close ties with the president’s party.  

Meetings held at the Casa Rosada to discuss the implications of the financial crisis upon the domestic economy have fuelled rumors that an economic package is in the making. Measures being considered to fight off the crisis include a competitive exchange rate and the improvement of the trade surplus.

 

Building on these two premises, the Executive Branch will seek greater coordination and control of the State’s neconomic institutions. A reduction in subsidies through increased utility prices is also being entertained. Sources say that president Cristina Kirchner has determined her cabinet chairman, Sérgio Massa, to call for a round table to enter negotiations with those in charge of payment, collection, supervision and control bureaus.

 

These are to be in charge of monitoring the international crisis. Another issue that has brought concern to the Argentinean government, newspaper La Nación has said, are the effects that the depreciation of Real (the Brazilian currency) against the U.S. dollar may have upon the domestic industry, the main actor behind consecutive months of economic growth since 2003.

 

It is never too late to remember that Cristina managed to elect herself president and continue with the agenda of her husband, Néstor Kirchner, because of this economic growth. Her campaigning did not present electors with new promises for the future but rather kept on defending the agenda initiated in 2003.

Brazil was slow in reacting to the worsening of the North American crisis. Not with regards to decisions, but in gestures and declarations, in other words “vocal administration”. Brazil, as the rest of the world, expected things to improve following the approval of the North American rescue package. However, what followed was a panic reaction and the Brazilian currency was attacked. Curiously, while the dollar skyrocketed, between September 1 and October 6, Brazil accumulated an ingress of dollars with a net positive balance of over 3 billion.

 

Only after the two meltdowns of the Stock exchange on Monday, Mantega and Meirelles appeared together to come the markets down. The episode opened up a margin for various interpretations. Henrique Meirelles, as president of the Central Bank, has a delimited margin of public action. He cannot speak about expenditure cutbacks or anticipate monetary or exchange-rate policy decisions.

 

When he was president of the American Chamber of Commerce in São Paulo, Meirelles heard Pedro Malan, who at the time was FHC’s minister, state that one doesn’t ask a political person about exchange policy. His attitudes are motive for action and not for public discussion.

 

With Meirelles taking care of the “back-office”, it is up to Guido Mantega take action to calm the market down in relation to economic issues: revenue collection, expenditure, growth, etc. Mantega did not act, as the Castilians say, with “protagonism”.  For some, he lacks the necessary charisma to be a Minister in times of crisis. Lula’s candidate Dilma Rousseff also disappeared.  She had nothing to say.  She probably felt it better not to commit herself to anything. Focusing her attention on the consolidation of her candidacy, she acted aloof up to the weekend, when she said what she really didn’t have to say about help for companies that suffered losses due to the skyrocketing dollar. “The government has no intention of socializing any losses and has not been approached by any company in this sense”, she stated.

 

The spokesperson role was left to Lula. Firstly, he stated that the crisis would not cross the Atlantic. Then, that it was global. Further ahead, that we may have to make cutbacks. Without a qualified spokesperson to address the market and society, now and then, the President transforms himself into a “Minister of Finance”.

 

It’s clear that the government lacks a figure like Antonio Palocci, who transmits security to the market, companies and economic agents.  In fair weather sailing, it’s easy to be the Minister of Finance of a country that is raking it in, has abundant reserves, a healthy financial system, plenty of credit from BNDES (and other public and private institutions), food and energy self-sufficiency and a president with enormous popularity and support from labor union and business leaderships, amongst other advantages. Most importantly, in a world that was doing very well.

 

With the crisis, besides the technical competence of the team, there is a psychological component that moves market decisions. Thus, the currency was attacked at a moment in which reserves were extremely high, the foreign exchange balance positive and also the capability of raising some US$ 50 billion from the IMF. When the situation gets complicated, the minister’s “protagonism” becomes fundamental. Not only as far as decisions are concerned, but most importantly, as far as attitudes and dialogue with society and the market are concerned.

The President of the Congress, Javer Velázquez Quesquén, has denounced that Venezuelan President Hugo Chávez is trying to intervene in Peru’s domestic issues through his operators. He said that such interference is occurring by means of disguised moves, such as the so-called Bolivarian Alternative to the Americas (ALBA, in the Spanish acronym) houses.

 

Ever since these centres appeared in the south of the country, the government of Alan Garcia has been observing Chávez supporters in Peru. The ALBA houses are located in the Puno region, near the Bolivian border. The government was warned after similar houses started appearing in other localities.

 

Despite such reports, Hugo Chávez denies that he’s been sponsoring these centres. A congressional committee has conducted investigations, but no evidence of any Venezuelan participation has been found. Suspicions of interference in Peru have existed since the latest presidential election, when nationalist leader Ollanta Humala was publicly supported by Chávez.  

The governors of Santa Cruz, Tarija, Beni and Chuquiasca decided to “temporarily” suspend dialogue with the government. They accused Evo Morales’ allies of not committing to the foundations of the negotiation process and of “hunting” citizens and leaders in their departments.

 

The announcement was made by the governor of Tarija, Mario Cossío. He demanded that Morales intervene and said that the future of the negotiations is “in his hands”. The opposition reacted because of the arrest of a citizen in Tarija. He was accused of taking part in attacks against pipelines and refineries.

 

The opposition believes that the arrest made by the Government Ministry represents a violation of constitutional rights. Cossío also mentioned that the government has not halted the blockades to Santa Cruz and has kept a media campaign in favour of the new Constitution.

 

This new impasse is not really new. As the conflict between government and opposition has very deep historical roots, the institutional crisis tends to continue. Up until now, because of the radical attitude by social movements supporting the Bolivian president, the Executive is unable to conduct the negotiations.

 

In addition, the opposition is accumulating more and more power, as it is concentrated in the richest departments. Also, the Bolivian Confederation of Private Entrepreneurs (CEPB), the nation’s biggest entrepreneurial organization, has spoken in public against the new Magna Carta. 

In the last three years, the Venezuelan government has spent more than $6.7 billion to buy weapons from countries such as Russia, Belarus, China and Spain. In Latin America, Venezuela is the main buyer of Russian weapons. In 2005 alone, 12 contracts were signed to buy weapons from Moscow.

 

Venezuela is the main customer of Russian weapons in Latin America. Since 2005, it has signed 12 contracts to purchase weapons from Moscow, estimated at $4.4 billion. In the latest years, Chávez bought 24 Sukhoi-30 MK2 fighter-bombers, 50 different helicopters and 100,000 Kalashnikov AK-103 rifles.

 

And there is more to the relationship between the two nations. This week, Chávez confirmed that Russia will help Venezuela develop a nuclear energy programme. The agreement may elevate US worries about the ever closer collaboration between the two nations.

 

According to Chávez, Venezuela will receive assistance to build an atomic reactor. He claims that the US and the European Union have no right to prohibit developing countries from seeking nuclear technology.

 

In a clear attempt to challenge the US, Hugo Chávez is also defending Iran’s uranium enrichment programme. Thus, the Venezuelan Chief of State is flirting with nations that, like him, are regarded as US enemies. This is important for Venezuela not to become isolated, and for nations such as Russia and Iran on their continents. 

The US financial crisis is being used as an excuse by Argentine President Cristina Kirchner to justify the economic policy implemented by former president Néstor Kirchner and heavily criticized by analysts and opponents. In a defiant tone, Cristina said that the world’s financial situation has proven that the State plays an irreplaceable role in the economy in any global scenario.

 

To her, the moment has come for “old theories to be put aside”. In her opinion, Argentina is on the right track given that the State is present.

 

Despite the President’s optimistic rhetoric, independent economic analysts are not so certain of this alleged “solidity”. The general assessment by financial experts is that, in a globalized world, it is difficult to say that a given nation is immune from the effects of the current crisis. Therefore, it is too early to predict how the current crisis will affect Argentina.

 

Another controversial issue is the debt with the Paris Club. Even though the government’s commitment to pay it off has been welcomed by international agencies, some argue that the payment should be revised.

 

Theoretically, paying off the debt means easier financing for infrastructure works. However, given the adverse global scenario, it is believed that hardly anybody would lend money under the current situation. 

The political presence of the French in Latin America is increasing considerably in the past years. Besides acting strongly in Brazil, where the French tries to sell jet fighters, submarines and helicopters (though possibly only the submarines and helicopters will be successful), they are now increasing the approximation with Venezuela.

 

Last week, the Minister of Foreign Affairs of both countries (Bernard Kouchner for France and Nicolas Maduro for Venezuela) signed ten cooperation treaties. The focus areas are, as expected, energy, technology, military, industrial, telecommunications and combating narcotics.

 

As part of the deal, the French will invest in the oil, gas and infrastructure sectors. As announced weeks before the visit, nuclear technology will be shared between the two nations. 

 

The Mexican budget for 2009 will be re-evaluated due to the financial crisis in the US. The main reason is the review of the economic growth for next year, which will be less than expected.

 

The reductions on the budget will vary between 4% and 5%, though the government has not yet analyzed the sectors that will suffer cuts. Defense is among the first on the list.  

 

The cut in the budget was expected since the oil prices will not close the year as expected by the Ministry of Economy. The increase in budget expenditure was US$ 270 billion before the financial crisis.

 

The Mexican President, Felipe Calderon, will have more reasons to complain with the cuts imposed by the Parliament. Aiming at re organizing Pemex, and opening its capital for private investors, the financial crisis and the necessity to review oil consumption and exportation, Calderon will see the opposition to his plan increase considerably.

 
Welcome! Latin America is becoming consistently more important for the world. As the region becomes more stable, the world sees Latin America as a potential business area. In order to understand te potential Latin America has to offer, the world must understand the unique dynamics that the local politics function. This blog already exists in Portuguese since 2005 and is widely read. I believe it can be an important instrument to understand this amazing region. Suggestions, criticisms and opinions are welcome. + learn more

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