Reversing Course : A New Economic Agenda for Latin America

...policy in the past have been instrumental in reducing the vul­nerability to international financial crises...

...trade, either because they depend more on domestic demand, as is the case with larger economies like Argentina, or because they have a more diversified trade structure, like Brazil, would depend somewhat less on a U.S...

...More significantly, they preclude the use in Latin America of growth-inducing commercial and industrial policies that have been used in the past by developed countries...

...Finally, investment treaties ban limitations on capital flows, which SérgiO BernArDO JANUARY/FEBRUARY 2009 report : u.s...

...NACLA REPORT ON THE AMERICAS report: u.s...

...They have benefited most Latin American economies, but their positive effect has been much greater, for the most part, in those economies that were not favorably affected by the commodity boom, mostly the Central American economies, which do ex­port commodities, but at much lower levels...

...These include Mexico, a signatory to the North American Free Trade Agreement (NAFTA), and the Central American countries—Guatemala, El Salvador, Honduras, Nicaragua, and Costa Rica, along with the Dominican Republic—that have signed on to the Cen­tral American Free Trade Agreement (CAFTA...

...Countries less reliant on U.S...

...In the recent past, and to some extent even now, the neoliberal policies promoted by the IMF have limited the ability of Latin American economies to pursue counter-cyclical fis­cal and monetary policies—i.e., to engage in deficit spending to stimulate depressed economies...

...To a lesser extent trade with the United States is also relevant for oil exporters like Ecuador and Venezuela, and a U.S...

...this grassroots campaign will continue past the presidential election in march 2009 and on through the possible run-off and certain right-wing backlash should the leftist fmln party win...

...The poor and unemployed will be the most vulnerable...

...Over the past decade or so, the free-trade-oriented Washington Consensus has been widely recognized as a failed policy agenda, and in several countries, many of the pro-corporate, market-friendly policies of the 1980s and 1990s have been reversed...

...Bolsa Família is the largest, transferring small amounts of income to 11 million families, and stimulat­ing school attendance...

...policy Reversing Course: A New Economic Agenda for Latin America rosilene da Silva and her children, who live in a small town in the brazilian state of Pernambuco, receive aid from bolsa família, a government social welfare program...

...Only to the extent that these institutions put creating jobs and reducing poverty at the center of the agenda should Latin American countries rely on them...

...If these declines continue, the only “market solution” will be an economic contraction to reduce the demand for imports...

...policy is the only one that tries to promote the generation of employment, by training workers in various fields...

...government representatives about the negative impact on re­mittances, immigration status, and the continued relationship between the governments of the u.s...

...While such programs are important, they should not be seen as alternatives to development strategies...

...The poor and unemployed (and those employed in informal activities) will be the most vulnerable to an economic contraction in the region...

...cispes.org/pledge2009...

...NACLA REPORT ON THE AMERICAS report: u.s...

...But unless the conditionality of the international multilateral organizations is sig­nificantly changed, the current policies of the region’s left-of-center governments that focus on eliminating their dependence on credit from these institutions is certainly the most prudent path to follow...

...However, in the countries that might be more vulnerable to a U.S...

...for info about attending the march delegation, contact elizabeth@cispes.org or call (202) 521-2510...

...The treaties usu­ally include provisions allowing foreign firms to bypass domestic courts and sue in interna­tional forums like the International Center for the Settlement of Investment Disputes (ICSID), which is part of the World Bank Group and has an overwhelming record of favoring private cor­porations...

...Cispes will be presente in el salvador with large grassroots delegations during the elections of January 18 and march 15, to act as international observers, denounce the dirty tricks of u.s...

...It is also important to note that a relatively quick U.S...

...Remittances, funds sent back to migrants’ home countries, have boomed as a result of the significant increase in migration from Latin America to the rest of the world, mostly to the United States and secondarily to Spain...

...The Plan Jefes CISPES Campaign for REAL Democracy in El Salvador About the campaign: through a “people’s pledge,” congressional lobby­ing, forming a national coalition, and preparing two huge delegations to el salvador, Cispes has em­barked on a campaign in support of real democ­racy in el salvador, responding to any attempt of in­tervention by u.s...

...Commodity prices the United States has long enjoyed disproportionate power, should direct credit for balance-of-payments adjustment needs, for infrastructure investment, and for poverty-reduction programs to virtually all Latin American economies...

...by Matías vernengo T he most important item in a progressive U.S...

...recovery...

...Economic development, the key to the well-being of the Global South, seldom results from external forces...

...Indeed, rather than “free trade” agreements, these treaties should be characterized as investment­protection arrangements...

...Cispes has worked to initiate the Coalition for free and fair elections in el salvador, which has sent an open letter to the obama administration about u.s...

...An additional explanatory factor is the significant in­crease in remittance flows...

...Also, these FTAs normally require that governments treat foreign investors at least as favorably as domestic investors, an idea that is peddled as a basic principle of justice but in reality strips the power of governments to pur­sue national development strategies used in the past by nearly every successful economy...

...A domestic rescue plan that promotes a rapid recov­ ment strategies pursued by progressive gov­ernments and movements in Latin America...

...intervention, repression, and possible fraud leading up to the 2009 elections...

...recov­ery would have a positive impact on their economies as well...

...They have also failed to cre­ate jobs and weakened workers in both regions...

...in­terventionism, and show solidarity to our social movement allies...

...recovery from its current deep recession would benefit the entire region, particularly those countries that have signed FTAs...

...Even if a swift economic recovery comes to the United States, the countries that have tied their economic destinies to FTAs would benefit from a revision of those treaties...

...While these programs are important, and should be supported by progressives, they should not be seen as alternatives to development strategies that promote good-quality employment and higher wages...

...economic agenda for Latin America would be reversing the corporate bias of the free trade agreements (FTAs) that have been signed over the past decade and a half...

...It would also reduce the need for large rescue packages for Latin America...

...While the neoliberal policies insisted upon by the United States and implemented by local elites over the past few decades have hindered development, progressives should try to promote economic growth along with alternatives for more equitable and just soci­eties in the region...

...FTAs allow corpora­tions to blackmail workers with the threat of moving production to low-cost countries and allow those corporations to extract advantages from developing countries by upholding “inves­tor-to-state” dispute-resolution processes that favor corporations...

...and el salvador in the event of an fmln victory...

...ery in the United States, reactivates global eco­nomic activity in a relatively short period, and promotes employment creation would help maintain the demand for Latin American ex­ports and the flows of remittances to the re­gion...

...Beyond this agenda, which would be warmly welcomed by the region’s left-of-center governments, a progressive U.S...

...These plans have expanded social spending, even though levels remain low by the standards of developed countries...

...slowdown, fun­damentally those in Central America and the Caribbean, the level of support that would be needed in the case of a balance-of-payments problem is relatively small...

...For that reason, the policies suggested here would have, at best, a complementary effect on the national-develop­have already fallen significantly, remittance flows have slowed down, and many countries in the region are al­ready facing large deficits in their current accounts that, as a result of the credit squeeze, they will not be able to finance...

...policy agenda toward Latin America should express support of and solidarity with the region’s left-of-center governments themselves...

...Finally, the International Monetary Fund (IMF), the World Bank, and the Inter-Amer­ican Development Bank (IDB), in which Asian countries, especially China—benefiting the subset of Latin American countries that specialize in exporting primary goods...

...In any case the domestic cost of the recovery programs in the United States will leave little margin for ex­pensive bailout plans for Latin American econ­omies, no matter how much those rescues are needed...

...our congressional work will also bring to light the worsening human rights situation and the increas­ing political violence in el salvador, especially the violence against leaders of the country’s social movements and the fmln...

...Furthermore, government-procurement rules are restricted by the FTAs, and domestic author­ities must agree not to require foreign investors to use a certain percentage of local inputs in production, transfer technology to local plants, or impose conditions that might be used to pro­mote local development...

...Indeed, the last few years have seen vigor­ous growth in much of the region, as national economies—particularly in South America— recovered from their dismal performances of the 1980s (the so-called lost decade) and the second half of the 1990s...

...officials in the electoral process of 2009...

...Meanwhile, new institutions and sources of funds, like the Bank of the South, will have to be developed...

...The Bolivarian missions go beyond cash transfers and try to improve the well-being of the poor, for example by introducing 18,000 Cuban physi­cians working directly in the communities...

...Na­tionalizing key sectors, from oil and natural gas in Bolivia and Venezuela to the pension system in Argentina, and the expansion of social transfers, particularly programs targeted to the poor and unemployed like the Plan Jefes y Jefas de Hogar in Argentina and the Bolsa Família in Bra­zil, or the more encompassing misiones bolivarianas (Bo­livarian missions) in Venezuela, have led to an improve­ment in economic conditions of the poorest segments of the population, even if levels of inequality remain high...

...Worsening terms of trade, a reduction of remittances, and a contrac­tion of credit, both domestic and external, have been the major reverberating effects of the current financial quake that had its origins on Wall Street...

...In other words, FTAs safeguard the property rights of corporations to the detriment of state sovereignty and workers’ rights...

...For more information and to get involved: take the “people’s pledge” by going to www...

...This vigorous economic growth has been very sensi­tive to the slowdown of the global economy...

...in Con­gress, we have focused on denouncing past and future threats made by other u.s...

...We can attribute the improvement in economic conditions not only to the change in economic policies, but also to the commodity price boom that took place between 2002 and 2007—triggered by increased demand for raw materials from If the crisis continues, the only “market solution” will be an economic contraction to reduce the demand for imports...