In the National Interest
Dore, Elizabeth
Three decades ago, Latin America was nationalizing, not privatizing. Leaders opposed foreign intervention and invoked allegiance to la patria to back up the nationalizations. Mexican oil...
...The generals pursued aspects of the nationalist economic strategy they inherited, with steel, energy and raw material production remaining in the state sector...
...From its inception following the Second World War, the UN's stripes took o Economic Commission on Latin thought to h America widely recommended a policy package to promote national development and industrialization that was contrary to the formula currently imposed by the International Monetary Fund throughout Latin America...
...tions, the state subsidized the expansion of vast private In Venezuela, Hugo Chdvez is a populist-nationalist cattle ranches that prospered by selling cheap beef to whose politics are classically contradictory...
...At the same time, the government began selling off some of the most profitable economic ventures to foreign firms, including parts of the pharmaceutical, chemical, automobile, electronics, plastics and mining industries...
...Brazil experienced rapid economic expansion from the 1960s to 1980s: the longest period of robust growth of any Latin American country...
...Second, in Amazonia the state massively movement that represents a viable alternative to the subsidized the largest land privatization in history...
...Latin American leaders rejected the nationalist economic strategies that had prevailed across the region for the better part of the twentieth century...
...Citing Cerro's tax evasion, soaring profit remittances in violation of national law and collusion with corrupt Vol XXXVI, No 4 JANUARY/FEBRUARY 2003 21 Vol XXXVI, No 4 JANUARY/FEBRUARY 2003 21PRIVATIZATION IN THE AMERICAS officials, the Peruvian government expropriated the company in 1974 and created CENTROMIN, a stateowned firm...
...Because Bolivia's miners were organized, militant and active in the revolution, their trade union successfully pressured the government to nationalize large-scale mining and create a state company, Corporaci6n Minera de Bolivia (COMIBOL) to mine, process and export tin...
...Whatever McDonald's world-wide...
...Arguably, the most ambitious state-led project ever pursued in Latin America was in the Amazonia region of Brazil...
...Additionally, the does-the overthrow of Chivez's government would "Brazilian Miracle" was accomplished in part by represent a defeat for anti-neoliberal forces in Latin repressing trade unions, violating workers' rights, and America...
...Therefore, the show-down in tion of state-led development and private enterprise...
...1971...
...the other part was nationalization of foreign-and sometimes domestic-firms...
...The contradictions of nationalist economics were no where more visible than in Brazil...
...In keeping with the quiet approach, governments and companies generally negotiated the terms of compensation and reached settlements acceptable to both parties...
...Governments of all political stripes, from left to right, took over companies widely believed to have damaged their country's national interests...
...Nationalist economics characteristically combined state ownership of key sectors with policies to promote the development of national indus- Mexico pave tries, sometimes called importsubstitution-industrialization, or governments ISI...
...In some cases, the mines' ed mines, bleak prospects were aggravated Iht-wing by U.S...
...In a radio speech to the nation, Cirdenas accused the companies of having engaged in "persistent and improper intervention in [the country's] foreign affairs" and of C v a i "immorally refusing to give anything back [to Mexico] in exchange for the wealth they appropriated...
...Immediately, world cop- per prices plunged and instead of producing profits, Chile's newly nationalized mines registered record losses...
...Instead, the companies joined the propaganda war orchestrated from Washington to justify a coup against Allende...
...Most Argentines justice...
...government dumped its huge stockpile of copper in Iel...
...In part because President Richard Nixon and his secretary of state, Henry Kissinger, were working to overthrow Allende-a democratically-elected PresidentAnaconda and Kennecott refused to accept the settlement offered by the Chilean government...
...The rest were abandoned or turned over to workers' cooperatives...
...Economic growth and some capitalist class joined the working classes in rejecting redistribution of income generally prevailed when the neoliberal model of the last decade...
...ECLA advised governments to deploy taxes, tariffs and exchange rate policies to fortify local industries until they could compete effectively with large foreign firms...
...rights, closed down civilian institutions, and ruthlessly For what Chdvez symbolizes-more than for what he tortured and killed opponents...
...Nationalist ideologies took different forms and served diverse ends, but invariably they centered on the need for independence...
...Overall, ECLA's policy package was widely successful in stimulating growth...
...In the name of nationalism, Latin American leaders of different ideological stripes opposed political and economic intervention-in words if not in deeds...
...The government of President Juan Velasco Alvarado (1968-1975) offered compensation at a rate determined by a team of international specialists...
...They invoked patriotism-alleNACIA REPORT ON THE AMERICAS Elizabeth Dore teaches Latin American history and in the post- graduate program, Transnational Studies in Language, Culture and Society at the University of Southampton, UK, 20PRIVATIZATION IN THE AMERICAS giance to la patria-and proclaimed that the bonds of nationhood overcame class, race and ethnic differences...
...In Chile, the centrist and U.S.-friendly Christian Democratic government of President Eduardo Frei (1965-1971) campaigned to "Chileanize," or partially nationalize, two giant U.S...
...The Brazilian generals combined an ambiguous and inconsistent form of nationalist economics with ferociously anti-democratic politics...
...For their nationalve damaged ism, as well as for their advocacy of government-sponsored trade nterests...
...In Amazonia, the rape of the his merits and demerits, Chdvez has come to stand for rainforest has been accomplished through a combina- anti-neoliberalism...
...Mexican oil workers' 1946 poster protesting unsolved problems in the nationalized oil industry...
...corporations...
...Proclaiming that his government was neither capitalist nor communist, President Velasco nationalized six large U.S...
...and Peruvian negotiators worked out a compensation package that covered a number of U.S...
...BY ELIZABETH DORE Neoliberalism has not always ruled the world...
...Thirty years ago Latin American governments were nationalizing, not priva- tizing, key economic sectors...
...Rather the wane in Latin America...
...In Argentina, Latin American governments pursued nationalist the government's longstanding subservience to the strategies...
...unionism, both Vargas and Per6n had fervent popular followings...
...In what has been called "the Second Conquest of Mexico," beginning in the 1980s successive governments sold off almost all state-owned enterprises to foreign companies at bargain-basement prices, including 70 percent of the petrochemical industry...
...Brazil had an atypical and highly contradictory form of nationalist economics...
...After other Latin American governments had-more or less willingly-abandoned stateled growth strategies, Brazil's military governments maintained a selection of state-run industries, encouraged import substitution and intervened in the interests of nationalized sectors...
...COMIBOL was all but disbanded in the 1990s...
...and British companies that dominated the country's oil industry...
...Unusually for Latin America, the major mining companies were owned by Boliviansdubbed the tin barons-not foreigners...
...Echoing military gov nationalist discourses that rever- a nationali berated across the region, Velasco declared that the coun- mc try-as-a-whole had been impoverished by foreign firms...
...believe adherence to neoliberal economics caused the First, the Brazilian government largely financed the crisis, and blame politicians for the country's social Panamazonian Highway, which opened up the region and economic devastation...
...In Brazil, the buoyant elec- than calling for a return to nationalism, the challenge is toral victory of Lula in November 2002 demonstrated to learn from the successes and failures of nationalist that broad sectors of the middle class and parts of the politics and economics...
...In 1964, after a right-wing military regime overthrew a progressive civilian government, successive generals ruled the country until 1985...
...Part of the NACIA REPORT ON THE AMERICAS 22PRIVATIZATION IN THE AMERICAS reason the economy grew was that Brazil's capitalists and right-wing generals rebuffed policies that clashed with what they viewed as "the national interest...
...Taking the region as a whole, 1910 up to the 1980s was an epoch of nationalism...
...Consequently, Lula dispatched petroleum to driving down wages...
...Nationalization of foreign firms was not necessarily a mark of left-wing leanings...
...However, some nationalizations were carried out less publicly in Peru and elsewhere...
...In the absence of a political for business...
...Giving workers control of clapped out mines was a cynical--even criminalmove...
...In Latin America the wholesale privatization of state companies, from water supplies to elec- tricity grids, from manufacturing to telecommunica- tions, is of recent origin...
...In the midst of the Revolution of 1952, the Bolivian government expropriated the tin barons, who together had produced almost 80 percent of the country's exports...
...The end of the cold war brought the era of nationalism to a close-at least temporarily...
...As part of the coordinated strategy to bring rnment had about "regime" change in Chile, economic the U.S...
...Other than Cuba's Fidel Castro, Venezuela's Hugo Chivez and Brazil's Luiz Indcio Lula da Silva-the exceptions that proved the rule-politicians of the 1990s espoused globalization, which in the Latin American context is synonymous with anti-nationalism...
...Governments regularly sought to legitimate their brand of politics and eco- nomics not-as they do now-by promising to serve the interests of international banks and corporations, but by pledging to defend the nation and its sovereignty...
...Nationalization sometimes had perverse outcomes...
...government imposed retaliatory measures as a warning to other Latin American governments that might be considering confiscation of properties owned by U.S...
...Even the celebrated case of the Cerro Corporation was resolved more or less amicably in the end...
...status quo, Argentines broadly support the nihilist Third, through tax exemptions and financial regula- demand, "que se vayan todos" ("throw them all out...
...But by 1968, even voices within the armed forces opposed the fire sale of Brazil's most profitable properties...
...The companies had monopolized the country's copper industry since the early twentieth century and the Chilean government's case against them was substantially the same as against the Cerro Corporation in neighboring Peru...
...They called for a return to the nationalist model of economic development pursued on and off by previous Brazilian governments...
...imperialism...
...companies and an equal number of smaller Peruvian-owned firms across the petroleum, banking, mining, Nationaliza sugar and fishmeal sectors...
...Venezuela between pro and anti- government forces Brazil's military government suspended democratic has an importance far beyond the country's borders...
...mining company that had dominated the country's underground copper-leadzinc mining since the turn of the twentieth century...
...Following the takeover of large mining operations, the governments of Bolivia, Peru and Chile found themselves owners of exhausted mines...
...Proclaiming the oil reserves represented "the wealth of the nation," the CSrdenas administration "Mexicanized" the oil industry by creating Petroleos de M6xico (PEMEX), a state-owned company...
...The succeeding government of ti i, Z ic le s d President Salvador Allende ratified nationalization of the mining companies with unanimous cross-party congressional approval in 1971...
...In hindsight it is clear that the nationalist epoch was The golden age of neoliberal economics may be on a generally progressive era in Latin America...
...firms whose assets had been nationalized by the Velasco government...
...The few mines that remained profitable were sold off to private companies...
...Yet nationalism frequently was inconsistent IMF and international financiers resulted in a crisis of with the class, race and gender politics of social catastrophic proportions in 2001...
...skewed over the course of the growth years...
...Government's insurance company of last resort, created to protect the profits of companies operating abroad...
...Over the past 40 years, the development of Amazonia has been carried out directly and indirectly by the state...
...March 18, the day the oil industry was nationalized, used to be a national holiday in Mexico: It commemorated the country's declaration of economic independence...
...Brazil's infamously unequal dis- Venezuela to counter the opposition's attempt to bring tribution of income and wealth became even more down the government by blocking fuel deliveries...
...Following the Mexican Revolution, in 1938 President LLzaro Cdrdenas expropriated the U.S...
...At first Cerro rejected the offer, preferring to take its case to the U.S...
...A on was not combination of depleted ores, by leftists...
...Export-Import Bank, in effect the U.S...
...Notwithstanding the corporations' violation of Mexican laws, Ctrdenas' government compensated the firms for their assets...
...The economies of most Latin American countries expanded steadily in the 1960s and 1970s...
...ECLA also recommended a limited redistribution of income and wealth, in order to develop the countries' internal markets for consumer and producer goods...
...out-dated technology and antique machinery meant that a centrist, older mines no longer were profitable...
...In the done onlI cases of the Cerro Corporation and the International Petroleum Chile's Fre Company, owned by Standard Oil of New Jersey, the Peruvian national government deployed anti-impe- Brazil's r rialist arguments to campaign against the companies...
...The "Brazilian Economic Miracle" was not accomplished by indiscriminately applying neoliberal policies...
...In the 1 9 40s and 1950s, Gettlio Sthe way as Vargas in Brazil and Juan Per6n in Argentina nationalized leading )f all political sectors of their economies with strong support from their respecer companies tive militaries...
...Bolivian miners march in 1992 to protest the privatization and closure of mines...
...mining companies, Anaconda and Kennecott...
...In these and other high-profile cases, the U.S...
...Industrial development and import substitution were part of the prevailing economic strategy in Latin America...
...Some twenty years after the Bolivian Revolution, a populist military government in Peru nationalized the Cerro Corporation, a large U.S...
...Without machinery or financial support, in fact with little more than picks and shovels, thousands of families struggle to eke out a living from exhausted mines dotted across the Bolivian highlands and altiplano...
...Mexicans no longer celebrate their economic independence...
...Tin mining dominated Bolivia's economy throughout most of the twentieth century...
...Mexico paved the way...
Vol. 36 • January 2003 • No. 4
