Iraq Is Not Arabic for Latin America
excerpted from the book
Latin America, the United States,
and the Rise of the New Imperialism
by Greg Grandin
Metropolitan/Owl, 2006, paper
Even before the attacks on the World Trade Center and the Pentagon
had fulfilled the wishes of the neocons, who just a year earlier
had dreamed of a "catastrophic and catalyzing event,"
a "new Pearl Harbor" that would galvanize American values,
all of the ideas that would justify Bush's march on Baghdad had
come to prevail and not just, it should be added, in the Republican
Party but broadly throughout the bipartisan foreign policy establishment.
What Bush did in the wake of 9/11 was to harness the force of
American revanchism, accelerated by the anger generated by the
attacks, and to link it to the "messianic idealism"
that had long played a role in propelling America outward.' "I
was lifted up by a wave of vengeance and testosterone and anger,
I could feel it," is how George W. Bush described the passions
that after 9/11 raised him from a candidate promising a "humble"
foreign policy to a president who wanted to "rid the world
of evil" and build "free and open societies on every
At the beginning of the twenty-first century, wealth inequality
in Latin America was at an all-time high, with three decades of
IMF diktats doing little to provide better health care, education,
or nutrition. In fact, stacked up against the previous developmental
model, the new economic regime heralded by Milton Friedman and
his colleagues and imposed by Reagan and his successors failed
miserably. Taking Latin America as a whole, between 1947 and 1973-the
heyday of state developmentalism-per capita income rose 73 percent
in real wages. In contrast, between 1980 and l998-the heyday of
free-market fundamentalism-median per capita income stagnated
at 0 percent.' By the end of the 1960s, 11 percent of Latin Americans
were destitute, defined as those who live on today's equivalent
of two dollars a day. By 1996, the total number of destitute grew
to a full third of the population. That's 165 million people.'
As of 2005, 221 million lived below the poverty level, an increase
of over 20 million in just a decade. Additional burdens were placed
on the poor as governments, starting in the 1980s, shifted their
revenue base from progressive income tax on wealth and profit
to either sales or the equivalent of payroll taxes.
In terms of specific countries, Argentina
and Mexico both followed IMF and U.S. Treasury Department guidelines
nearly to the letter, lowering inflation, reducing the gap between
spending and income, deregulating the financial sector, privatizing
state industries and services, and liberalizing trade. And both
went to great pains to ensure a stable fiscal environment to attract
investment. In 1991, Argentina took monetary policy out of the
hands of politicians, setting up a currency board that all but
replaced the peso with the dollar and ceded financial sovereignty
to Alan Greenspan, Paul Volcker's successor at the Federal Reserve.
In 1988, Mexico began to dismantle the large public sector that
had emerged out of the Mexican Revolution. It once again tethered
its fortunes to the United States through trade negotiations that
would eventually yield the 1992 NAFTA accord.'°
As expected, shock therapy produced prolonged
recessions, wrenchingly high unemployment, and dramatic reductions
in social services. In Argentina, the industrial labor force contracted
by a third. Poverty increased, made worse by the shredding of
what was one of Latin America's most reliable social safety nets."
But shock therapy also eventually led to lower inflation rates
and to economic growth that made it seem, to some, that the pain
was worth it. The early 1990s were boom years, and Argentina and
Mexico's economies expanded at a steady clip. Billions poured
into the two nations, either in the form of new loans (to cover
persistent trade deficits) or as private capital to take advantage
of the opportunities offered by financial deregulation and privatization.
Mexico loosened environmental and labor laws along its northern
border to turn the region into a vast assembly zone for medium-
to high-technology products, where workers pieced together parts
manufactured elsewhere for export to the U.S. market. Maquiladoras,
as these reprocessing plants are called, today employ over a million
Mexicans and bring in more than $10 billion in foreign exchange.
For its part, Argentina sold much of its industrial plant and
nearly 100 percent of its banks to foreign corporations.
Mexico was the first to give, buckling
under the weight of one too many high-interest, short-term dollar-denominated
bonds issued to cover a trade deficit that was spiraling out of
control and to prop up an overvalued peso. On December 18, 1994,
after well-connected Mexicans converted billions of pesos into
dollars, the government devalued, and then devalued again. The
banking system began to melt down as capital fled. It was saved
from complete collapse by a last-minute $50 billion loan brokered
by Clinton and Greenspan that, according to conservative economist
Lawrence Kudlow, was in effect a "bailout of U.S. banks,
brokerage firms, pension funds and insurance companies" that
had heavily invested in Mexico." Clinton could have saved
on transaction fees and deposited the money directly into Wall
'Washington's rescue stabilized the peso
and allowed the economy to recover, yet structural problems remained,
including high rates of nonproductive speculative investment,
declining wages in proportion to growth, and staggering levels
of poverty. Most disruptive, the importation of cheap goods decimated
domestic manufacturing and small-scale farming, which could not
compete with U.S. agro-industry. Half a million peasants were
driven off their land, as cheap corn flooded the market."
And since NAFTA compelled the state to slash food subsidies, "free
trade" actually increased the cost of meeting basic nutritional
requirements. While Mexican officials insisted that the peasant
sector was doomed anyway-a self-fulfilling prophecy since the
state directed meager resources to sustain it-the NAFTA model
provided no mechanisms to incorporate displaced peasants into
the new global economy, except pushing them to travel north to
supply cheap labor to service the American economy.
Then it was Argentina's turn. For those
who insisted on blaming the disappointment of neoliberalism not
on the theory itself but on the failure of Latin American politicians
to implement it correctly, Argentina, as old Committee of Santa
Fe hand Roger Fontaine put it in 1996, provided "a clear
example of how it can be accomplished.
And what an example it was, ushering in,
according to one observer, the "worst peacetime economic
collapse in recorded history." Since the Argentine peso was
pegged to the dollar, deficit spending to expand the economy was
off limits. The only way to grow was to bring in foreign currency,
through privatization, investments, loans, or trade earnings.
But by the mid-1990s, there was very little left to privatize,
foreign investment was mostly short-term speculation, while an
overvalued dollar worsened balance-of-trade accounts. That left
borrowing and more borrowing. But with the country in recession
since 1998, Argentina, despite ever more draconian cuts in social
services, found it impossible to pay its debt. In 2002, the country
defaulted, scrapped its currency board, and devalued the peso.
The number of those living below the poverty line rose to 58 percent
of the population-twenty-one million people, ten million of whom
were totally destitute.
For its part, Brazil, comprising a third
of Latin America's population and generating a third of the continent's
GDP, escaped some of the harshest experiences of its neighbors.
Brazil's economic might was largely due to the success of the
state-developmentalist model the free-market program was intent
on dismantling, which despite generating chronic inflation and
high external debt greatly expanded the country's industrial base.
Consequently, Brazil proved more reluctant to dance to the IMF's
tune. Notwithstanding significant privatization, the state remained
heavily involved in the economy, retaining control of 40 percent
of its financial sector. And despite years of dictatorship followed
by civilian presidents implementing neoliberal prescriptions,
the country never launched an all-out assault on the power of
organized labor as did Chile and Argentina. Financial crisis hit
in 1998, precipitated by the Asian meltdown, yet it was nowhere
near as brutal as what occurred elsewhere in Latin America. Because
it retained considerable financial autonomy from the U.S. Treasury-Brazil
was not "dollarized" to the degree Argentina and Mexico
were-it had more latitude to devalue without provoking a run on
And what of desperately poor Bolivia?
By 1985, with inflation spiraling out of control at an annual
percentage rate of 23,000, the country, unable to meet the interest
on its debt, prostrated itself before the IMF. In exchange for
divesting from the public sector and for submitting to shock therapy,
the government was allowed to reschedule its debt payments and
take out new loans. Inflation fell and the economy stabilized
and even grew, but poverty rose to inhumane levels, engulfing
97 percent of the rural countryside. Cheap imported food hammered
the peasantry, which began to suffer from high levels of malnutrition
and infectious diseases, while low-priced manufactures led to
the shuttering of over a hundred factories. Unions were busted
and labor protections eviscerated, contributing to rising unemployment
and longer work weeks for those lucky enough to hold on to their
After a decade of celebrated growth, in 2002 three million Chileans-one
in five-were living in poverty, with 83 percent of the population
reporting that their lot had not improved under democratic rule.
One indication that the Chilean model was coming up short was
that its privatized pension plan not only failed to provide dignified
pensions for many retirees but, as the New York Times recently
reported, was unable to match the annuities Chileans would have
received if the system had remained in government hands.
Much of the success Chile did enjoy actually
stemmed from breaking with free-market dogma. After the economic
collapse of 1983, Pinochet opted for a more pragmatic economic
strategy, one that assertively used the state to promote exports
and made liberal use of regulatory laws still on the books, including
some enacted by the vilified Allende government. Chile imposed
a number of restrictions, including financial penalties, on the
currency market, buffering its economy from the market panics
that plagued its neighbors."
Washington spent roughly ten billion dollars in Nicaragua and
El Salvador throughout the wars of the 1980s yet refused to take
responsibility for postwar reconstruction. Instead, it delegated
the jobs of demobilizing combatants and enacting political and
judicial reform to the United Nations. 'While the United States
financed some of these efforts, it quickly turned its attentions
elsewhere, mostly to Colombia and the war on drugs. To this day,
Washington's involvement in Central America has remained largely
limited to issues of illegal immigration and drug trafficking,
with few steps taken to fulfill Reagan's thunderous pledges of
democracy and development other than the promotion of a Central
American Free Trade Agreement.
What has become of the region now that
Washington has moved on? Political terror has certainly abated.
Nicaragua, Guatemala, and El Salvador are all nominally constitutional
regularly scheduled elections. Yet the devastation that began
a quarter century ago has actually accelerated.
... 60 percent of the inhabitants of Nicaragua, Guatemala, Honduras,
and El Salvador-roughly 20,000,000 people-live below the poverty
level, a situation that has grown worse since the wars ended.
In Guatemala, almost six million people survive on less than two
dollars a day. After Haiti, Nicaragua is the poorest country in
the hemisphere. In Guatemala, there are thirty-eight deaths for
every thousand live births-a rate more than five times greater
than that of the United States. At the same time, wealth inequality
is at an all time high. Privileged elites live in garrison communities,
with private heavily armed security guards protecting them from
the constant threat of kidnapping for ransom. In the countryside,
hunger, infectious disease, and malnutrition are endemic and starvation
has become common. Environmental degradation-deforestation, soil
erosion, poisoned water, and polluted air-has reached crisis proportions.
Panama fares no better, plagued as it is by corruption, violence,
high unemployment, and severe malnutrition. The country, has the
"fourth-worst distribution of wealth in the world,"
with the "average poor Panamanian mak[ingl 40 times less
than the average rich Panamanian."
UNICEF estimates that thirteen children die every minute in the
third world as a result of moneys being siphoned off from social
services to finance debt.
... it is Colombia that lies at the heart of the crisis in the
Andes. The country annually produces an estimated six hundred
tons of cocaine and heroin for the U.S. market, while its four-decade-long
stalemated civil war kills as many as eight thousand people a
year. With taxes collected from coca producers, the Marxist Revolutionary
Armed Forces of Colombia fields tens of thousands of foot soldiers;
right-wing paramilitary armies, funded by wealthy planters and
large drug traffickers and closely tied to the military, operate
with near impunity. Reform politicians and political activists
not directly involved in the war are executed with brutal regularity.
Over four thousand unionists have been assassinated since the
late 1980s. Added to these figures are over eighty daily killings
related to common crime, giving Colombia the world's highest murder
rate. The country also has the world's third-highest internally
displaced population, as rural violence drives hundreds of thousands
of migrants into contested territory, urban shantytowns, or adjacent
... Since 1989, when George H. W. Bush
first militarized the on drugs," U.S. troops have steadily
expanded their presence in the Andes, establishing airfields and
training centers to work with Colombian, Bolivian, Ecuadorian,
and Peruvian security forces on fumigation and interdiction maneuvers.
Southcom provides radar and intelligence assistance to Andean
militaries, while U.S. agents instruct national police forces
and intelligence agencies in counternarcotics operations.
... none of the 3.3 billion dollars earmarked for Colombia is
supposed to go to the country infamous death squads. But as in
Central America in the 1980s, the distinction between the official
armed forces and paramilitary vigilantes is nominal. Death squads
are organized and funded by drug traffickers and large landowners
who enjoy close relations with military officers. And just as
the United States first urged the Colombian military in the 1960s
to create shadowy paramilitary groups that could operate outside
of an established chain of military command, the Pentagon in the
early 1990s again advised the Colombian armed forces to create
a "more efficient and effective" intelligence network
by keeping their operations "covert" and "compartmentalized"
and by not putting orders "in writing. One such intelligence
unit has been accused of killing labor activists, community leaders,
and journalists. And evoking memories of the clandestine operation
that illegally supplied arms to the Contras, two U.S. Special
Forces officers were arrested by Colombian police in Bogota in
2005 for supplying over thirty-six thousand rounds of ammunition
to a paramilitary group.
The war on drugs has not decreased narcotic
production and trafficking, any more than the global war on terror
has decreased global terror. But it has served to quietly project
the United States' military presence beyond Central America and
the Caribbean into South America at a time when new political
movements are openly challenging Washington's authority and contesting
U.S. corporate control of the continent's natural resources.
Over the course of nearly two hundred years, o broad arcs of hostility
have defined U.S.-Latin American relations. One began in the early
nineteenth century, with the first stirrings of the American empire.
Marked by decades of nearly continuous warfare, this bout of conflict
finally came to an end in the early 1930s, when Washington renounced
the right to engage in unilateral armed intervention. The second
round began in full with the CIA's 1954 Guatemalan coup and was
characterized by dirty wars, death squads' covert operations,
and political disappearances-all carried out in supposed defense
of liberal democracy against Communist tyranny. This round ended
when the Cold War ended, as Latin American nationalists and democrats,
spent from the bloodletting, accommodated themselves to the free-trade
order promoted by Washington.
Today, the United States and Latin America
stand at the threshold of a third period of conflict, as Washington
promotes an economic model that produces not development and stability
but desolation and crisis. As such, the United States is once
again relying on hard power to protect its interests and guard
against the resurgence of a new, continent-wide democratic left.
... Elliott Abrams-the man who in the 1980s so twisted the concept
of human rights that it could justify the homicidal activities
of the Contras and the Salvadoran military - being appointed by
Bush to lead a global crusade for democracy. There was Dick Cheney
in the vice presidential debate telling the electorate that El
Salvador, with 50 percent of its population below the poverty
level, was a model for what his administration hoped to achieve
in Iraq. 'William Kristol, editor of the conservative Weekly Standard,
showed up on TV to hail Central America as an "amazing success
story." Responding to accusations that John Negroponte involvement
in the cover-up of hundreds of executions while he was ambassador
to Honduras made him unfit to serve as intelligence czar, the
National Review praised Reagan policy in Central and South America
as a "spectacularly successful fight to introduce and sustain
Western political norms in the region."
"Military conquest has often proved to be an effective means
of implanting democracy.
"The best democracy program ever invented is the U.S. Army."'
... Reagan's wars in Central America created an affinity between
neoconservatives and Christian evangelicals: both came to share
a crisis-ridden view of the world and a sense that America was
in decline. But they also shared a belief that decline could be
reversed through a restoration of moral clarity and authority
and a recognition that evil existed in the world. Along with militarists
and conservative intellectuals, the religious right has long nurtured
a suspicion of America's ruling elites and the multilateral institutions
that trespass on national sovereignty. Yet their experience in
the 1980s has drawn them nearer to the strange optimism of the
neocons regarding the capacity of American power to mend the world.
For some the lodestar may be Winston Churchill, for others Jesus
Christ, but today a broad consensus prevails among the most passionate
constituents of the conservative movement as to the righteousness
of American power and its place in the unfolding of history. Thus,
when Pat Robertson suggested in the summer of 2005 that Washington
preemptively assassinate Hugo Chavez before U.S. relations with
Venezuela worsened, he was merely taking to a logical conclusion
the principles elaborated in Bush's 2002 National Security Strategy.
... America's privileged position within the world's global financial
system-dependent as it is on the maintenance of political primacy
in order to continue to prop up a deeply indebted economy-demands
an aggressive foreign policy. On this fact, neither major political
party disagrees. But the need for the New Right to maintain a
constant level of mobilization to hold its coalition together-especially
since the domestic goals of many of its constituencies are unattainable-could
push this aggression to an even more dangerous extreme.
The component elements of the new revolutionary
imperialism reinforce each other, creating ever more crises that
call for ever more intervention. America's imposition of free-trade
absolutism produces throughout the world perpetual instability
- thus justifying the need for an imperial power to impose order.
"Hard Wilsonianism"-that odd mix of unapologetic violence
and blinding idealism (that) motivates neocons ...
... Such violence will generate more anger,
more "extremism," which, sooner or later, will need
to be met with more repression. At home, the refusal of either
major political party to develop an alternative to unbridled free
trade, along with the success of the Republican Party in redistributing
wealth upward through tax cuts and the gutting of social entitlements,
propels economic insecurity, leading to domestic discontent that
can only be contained through constant mobilization against a
shapeless, and thus perpetual, enemy.
a Bush staffer
"We're an empire now, and when we act, we create our own
The resurgence of the Latin American left described in Empire
c Workshop has continued apace. Since its publication, Brazilians
reelected Luiz Inácio Lula da Silva by a large margin,
as Venezuelans did Hugo Chavez. Michelle Bachelet, a single mother
and socialist, won a third term for Chile's center-left Concertación
coalition. In Ecuador, Rafael Correa, an economist and close ally
of Hugo Chavez who ran on a pledge to renegotiate, and possibly
even default on, his country's "illegitimate debt" became
president. We've even seen the return of Sandinista Daniel Ortega
as leader of Nicaragua. Though Ortega has declared himself a free-trade
Christian, there are still worthy grassroots social movements
within the Sandinista coalition, and its victory could begin to
thaw Washington's glacial grip on Central America. Elsewhere in
countries ruled by governments more closely aligned with the U.S.,
like Mexico, Peru, and Colombia, militant social movements are
fighting for land reform, indigenous rights, local control of
resources, and humane development, continuing Latin America's
role as the vanguard of the global anti-corporate social justice
Despite differences in manner, Latin American governments have
committed themselves to a common agenda of economic diversification,
regional integration, and development policies that spur not just
growth but equality. Earlier this year, the Montevideo-based Latin
American Integration Association reported that trade among its
twelve member nations had grown 110 percent since 2003, a much
faster pace than had been predicted. Added to this is rapidly
expanding trade with Europe and Asia, particularly China, which
has helped the region gain considerable autonomy from U.S. markets.
The same Asian investment that allowed Argentina's Nestor Kirchner
to broker his 30-cents-on-the-dollar refinancing of his country'
foreign debt has also helped Bolivia and Venezuela renegotiate
favorable contracts with multinational energy companies.
With financial independence comes political
freedom. Over the last couple of years, governments from across
the political spectrum have demonstrated a steadfast unwillingness
to enlist in Washington's "war on terror." They have
rejected Pentagon efforts to subordinate their militaries to U.S.
command; opposed the invasion of Iraq; refused to elect the U.S.-backed
candidate to the OAS; declined to pass a law which would have
exempted the U.S. from the International Criminal Court; and rebuffed
calls to isolate Venezuela. This kind of dissent was unthinkable
Over the last year, Washington has had
some success in preventing leftists and nationalists from coming
to power, in Peru, for instance, and in Mexico. But notwithstanding
the outcome of specific votes, and despite the very real conflicts
of interest among Latin American nations, the centrifugal forces
pushing the region out of Lie U.S.'s orbit will continue.
Unlike after WWII, when a confident corporate class threw its
backing behind New Deal political liberalism at home and at least
some reform capitalism abroad, the financiers of today's Democratic
Party are too deeply invested in war production and speculative
capital and too intensely committed to keeping the third world
open. They will not brook any sustained attempt to restructure
the global economy in a more equitable direction.
Across the continent, political movements have emerged from decades
of unrelenting state terror underwritten by imperial patronage
to creatively and effectively oppose first corporate-driven neoliberalism
and then a renewed U.S. militarism. Through exemplary courage,
perseverance, and organizational skill, Latin American activists
have provided a beacon of hope on an otherwise bleak global landscape.
They have multiple agendas and objectives, yet they share a common
set of values: human dignity, local autonomy, a vision of individual
freedom rooted in collective solidarity, and a notion of democracy
defined not simply by proceduralism or individual rights but by
economic equity. It is they who are the world's true "democracy
promoters" and who are fighting the real war on terror, and
offering lessons to us all.