Transcript Alternate Development Paths in Latin America, Arne Ruckert

Alternate
Development Paths
in Latin America
Society for International Development
12.11.2008
Arne Ruckert, Centre for
International Policy Studies (CIPS)
Towards a Post-Neoliberal Development Path
in Latin America?
• Introduction
• The multiple failures of neoliberalism in LA
• The emergence of post-neoliberal development
strategies (ideal-type)
• Contradictions of and challenges to the postneoliberal turn
• Conclusion
Introduction
• Latin America laboratory for neoliberal development model
• Neoliberalism initially implemented by authoritarian regimes
(e.g. Chile) and with elements of coercion (union busting and
disappearance of union leaders)
• Because of its deep transformation, LA first continent to (as a
whole) move beyond the neoliberal era (more left governments
in power than ever before in its history)
• Countries with largest degree of neoliberalization more likely to
remain wedded to neoliberal model (cultural entrenchment of
neoliberalism and institutional path dependency)
• But post-neoliberal turn (to varying degrees) visible in almost all
countries
Economic Performance of LA under
Neoliberal Policy Regime
Latin America's Per Capita GDP Growth
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
-0.5
Latin America
1960s
1970s
1980s
1990s
Social Failure of Neoliberalism
Latin America's Poverty Rate as % of National
Population (World Bank 2006)
60
50
48.3
42.5
40.5
39.8
40
30
Latin America
20
10
0
1980
1990
2000
2005
Growing Inequality in LA under Neoliberalism
Inequality in Latin America as Measured by
GiNI coefficient
0.57
0.56
0.55
0.54
0.53
0.52
0.51
0.5
0.49
1980
1985
1990
1995
2000
The Emergence of Post-Neoliberal Policy
Alternatives
• While there are significant divergences between various New
Left governments in Latin America, I propose the term postneoliberalism to conceptually grasp the changes currently
underway in the hemisphere (co-edited book: PostNeoliberalism in the Americas, Palgrave/Macmillan)
• Post-neoliberalism should not be understood as the temporal
transcendence of neoliberalism but rather signifies an
experimentation with heterodox development policies,
representing both significant continuity and discontinuity with the
neoliberal era
• Post-neoliberalism a search for policy alternatives that is ongoing and dynamic (no clearly identifiable model available yet)
Continuity with Neoliberal Era
• Application of ‘sound macroeconomic policies’ in
most Latin American countries
• Amassing of huge budget surpluses by some New
Left governments (e.g. Bolivia)
• Improvements in external reserve positions
• Markets acknowledged as most important resource
allocation devices (with the exception of Cuba and
Venezuela)
• But, at the same time:
Discontinuities and Progressive Policy
Alternatives
• Willingness to use state power to stimulate the economy and
correct for wide-spread market failures (market limitations)
• Use of state institutions to reduce social inequalities through
redistributive measures and address poverty through
consumption subsidies to the poor (Oportunidades and Bolsa
Familia)
• Re-nationalization of parts of the economy, especially in the
energy, minerals and service sectors (Venezuela, Bolivia, and
Argentina)
• Commitment to substantially deepen democracy through
engaging citizens more directly
Discontinuities…
• Trade agreements that reflect a neostructuralist understanding
of the economy and are critical of ‘free trade’ with developed
countries (ALBA, Unasur = Mercosur+Andean Trade Pact) [but
also simultaneous signing of BFTAs]
• Higher inflation rates tolerated if accompanied by higher
economic growth (Argentina, Venezuela, Brazil)
• Achieve independence from international financial institutions
(IFIs) by re-paying public foreign debt and installing the Bank of
the South (Banco del Sur)
• Endogenous growth preferred over export-driven growth
(backward linkages to economy if export driven development)
Conclusions: Challenges and Contradictions
of Post-Neoliberal Turn
• Decline in commodity prices and global financial crisis
• US empire strikes back (Venezuelan coup attempt, US support
for secessionist right in Bolivia)
• Democrats more likely to tolerate post-neoliberal policies in LA
• Conflicts amongst New Left leaders (e.g. Brazil versus
Venezuela)
• No new development model yet available (trial and error)
What Should Post-Neoliberal Development
Model for LA Look Like?
•
•
•
•
•
•
•
•
Acknowledge idiosyncrasies of each country, no mono-economics a la
Washington Consensus
Allow state to play greater role in economy (infrastructure, education,
resource sector, etc)
Decommodify social services (stimulate human capital and reduce
inequality)
Avoid regressive taxation regimes
Protect industries that are not competitive yet but have potential to
become “winners” (infant industry argument)
Promote solidaristic South-South trade (free trade amongst equals not
necessarily bad)
Simultaneously integrate into and disassociate from world markets
(historically most successful development strategy)
Focus on demand-side of the economy (see workers as consumers not
just as a production cost, wage increases required)