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Great for Investors; Not So Good for People


“Our model [neo-liberal economic model] is very good for Brazil, but not so good for Brazilians.”

— President Emilio Medici, 1971

According to comedian Chris Rock, democracy doesn’t deliver equality. For example “a black C student can’t even be the manager of Burger King. Meanwhile, a white C student just happens to be the president of the United States of America.”

I told this to a Tijuana cab driver. He laughed.

So, I said, with the election of Vicente Fox in 2000, Mexico now has democracy.

“And I can walk on water,” he replied.

Well, at least democratic elections. Tell me, has this changed your life in any way?

“You mean did I get a beautiful new girlfriend, or a new house with a swimming pool?”

No, I said. Has democracy improved your situation? You see, the UN Development Program recently took a poll in Latin America and found that while democratic institutions had spread throughout the region, most people did not think they had benefited from them.

“Polls?” the driver retorted. “Some pollsters found that the majority of adults know people who go to work drunk or stoned on drugs. The minority used the survey as rolling paper.”

I laughed.

“What’s democracy got to do with poverty,” he asked, turning suddenly serious. “I voted for Fox because the PRI [the Institutionalized Revolutionary Party that governed Mexico for seven decades] was a bunch of thieves. But Fox didn’t ask his billionaire friends to share their fortunes with working people. Those who stole vast sums from the public, thanks to their political cronies, have gotten richer. Am I poorer or richer in the last four years? Who has time to count?

“Listen, in Mexico, poor people expect nothing. That way they can’t get too disappointed. I imagine most of Latin America feels the same way. Politicians say democracy as if it would produce magic, like they did with NAFTA. They swore life would change for the better. But it hasn’t. Sure, NAFTA made new jobs, but at the same time the government devalued the currency. If I had 50 thousand pesos in the bank before devaluation, they were worth a third of that afterwards. Patriots like me deposited savings in Mexican banks instead of the ones in San Diego. I was a fool,” said the cab driver.

Some multi national corporations that had built plants in the Otay Mesa area have recently moved to China because they paid lower wages there. Had this changed life in this buzzing border city?

“Tijuana has more people now. Maybe 2 million? Who really knows? They come from rural Mexico or other places where there’s no work. More people are employed than say, ten years ago. And more are unemployed as well. Tijuana has more money, more crime, more consumer goods and more drugs. In the old days, whores worked at bars that watered down drinks and offered sex shows to sailors and marines from California. The farmacias still sell cheap drugs to retired Americans. But now, Tijuana lives off maquilas. The new whores sell themselves to the young men who come from the farms. Disease, divorce, more passion crimes. Well, that’s evolution,” he concluded.

“It’s like democracy. You get an honest election, but not necessarily honest politicians who win them.”

I paid my fare. Did this cab driver represent Latin American public opinion?

The UN researchers, directed by former Argentine Foreign Minister Dante Caputo, interviewed 20,000 people in 18 countries (excluding Cuba) and concluded that like the Tijuana cabby, the majority have become disillusioned with democracy because it hasn’t touched inequality. By failing to deal with the consequences of extreme poverty, the researchers conclude, the current system could lead “to the slow death of democracy” and the reemergence of military dictatorships.

One doesn’t need to conduct a survey to discover that since 2000, four elected presidents have left office before the end of their terms. Last October, prolonged economic stagnation provoked rage among Bolivians who forced President Gonzalo Sanchez de Lozada to flee to Miami in fear. In Argentina and Ecuador, elected presidents also recently left office because their economic policies produced political hatred. Aristide’s departure had more complex reasons, but certainly the failure of the free market model loomed large in Haiti.

And in Peru, Alejandro Toledo, who won wide appeal by trumpeting democracy in his campaign, has watched his approval rating dip to 7 percent. He had promised voters that he not only meant free speech and politics, but the creation of jobs to address Peru’s super high unemployment rate. Now Peruvians know that democracy means US-backed “free market” economics.

The UN study doesn’t ask those interviewed what they mean by democracy. Nor does it ask the State Department, which has reserved its blessings for governments that adopt free market policies. And no wonder! The balance of trade falls favorably on the U.S. side. The investments receive protection, the World Bank and IMF hand out loans at substantial interest rates of course and the elected governments then take the heat, as they should.

In 1989, Venezuelan Social Democratic President Carlos Andres Perez ordered troops to quell an anti-IMF riot in Caracas. Estimates of those killed by their own army ran as high as 2,000. Then, when the Social Democrats lost the next election, the Christian Democrats replaced them and followed the same failed economic policy. When anti-free market Hugo Chavez won in 1998, Washington withdrew its approval.

Yes, democracy in Latin America is preferable to dictatorship. Thousands of people no longer “disappear” in Argentina, Chile and Uruguay as they did in the 1970s and 80s; tens of thousands don’t experience torture and hundreds of thousands need not flee into exile. Organized constituencies occasionally even win some gains on the economic and cultural fronts.

But they prove short lived. The neo-liberal model has actually reduced living standards in several countries, meaning that the right to vote does not necessarily mean making a living wage, getting an education or access to medical care.

A 2003 report by the Inter-American Development Bank indicates that Latin American unemployment rates have reached all time highs, and poverty has spiraled out of control. As a result, the majority apparently reject democracy, which many see as the free market model and demand instead that governments make social issues a priority.

The antipathy towards democracy revealed in the poll means that voters understand the word as voting for one of a choice of candidates, all of whom support free market economics. Freedom in practice means foreign investors get favors and workers get screwed; rule of law covers multinational corporate investments. When George W. Bush repeats “free Iraq” or lauds democracy in Latin America as he browbeats Latin Americans into supporting the FTAA (Free Trade Agreement of the Americas), he doesn’t envision freedom as the majority exercising its will to uplift their economic conditions.

The April 26 NY Times editorial assumes that democracy has truly spread, but warns that “it’s easy to take the triumph for granted… to lose sight of just how anomalous it is for the bulk of Latin America to be governed by democratic rule, given the region’s authoritarian tradition and trends in other developing parts of the world.”

Please, the United States has a tradition of slavery and apartheid. The reason democracy as practiced has little meaning relates to the fact that successive governments refuse to deal with redistribution of wealth and, when one does, as with Castro in Cuba or Chavez in Venezuela, the United States targets it with violence, propaganda and economic sanctions.

It’s easy and boring to relegate the issue to “chronic official corruption,” when in fact US policies reward such behavior: US policy not only tolerated but supported the most corrupt regimes in the Hemisphere, including the Somoza and Duvalier family dictatorships in Nicaragua and Haiti from the 1930s through the 1980s. U.S. policy overthrew elected governments that tried to address poverty and corruption in Guatemala (1954), Brazil (1964) and Chile (1973).

When the NY Times preaches that “democracy is about more than elections and market-opening economic reforms the twin obsessions of United States policy makers and multilateral financial organizations” you know the elite has begun to worry. But reviving old saws like “bolstering the rule of law” and “development of independent judiciaries” does not touch the redistribution of wealth. Such a path would call for the United States to begin to return some of the fortune it has stolen from the people of Latin America just doing business over the past century. Don’t hold you breath. Latin Americans, even if they resort to rule of law and honest courts, will have to do this without support from Washington or the NY Times.

On my way back to the U.S. border I asked another cab driver, less vocal than the one who brought me, if he felt optimistic about democracy in Mexico. He shrugged his shoulders. “Someone said that an optimist is simply a poorly informed pessimist. I try not to think about such things. It clouds my mind.”

SAUL LANDAU is a fellow of the Institute for Policy Studies. He teaches at Cal Poly Pomona University. For Landau’s writing in Spanish visit: His new book, PRE-EMPTIVE EMPIRE: A GUIDE TO BUSH S KINGDOM, has just been published by Pluto Press. His new film is Syria: Between Iraq and a Hard Place, now available from the Cinema Guild. He can be reached at:

SAUL LANDAU’s A BUSH AND BOTOX WORLD was published by CounterPunch / AK Press.

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