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Think there's no alternative? Latin America has a few


lies

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It's funny, until recently when considering Naomi Klein's controversial best seller, "Shock doctrine" we in the "first world" have only been in the positron to speculate whether or not sharp austerity/outside bailouts/economic policy intervention is worth the toll is requires a countries citizenry to pay; that's all changed. It's somewhat ironic that some in the West are now looking at the post-shocked economies to see what alternatives the people themselves came up with to right their economies - once they decided to reject the "first world solutions".

Most of this is probably too radical for Ireland, which is as much East-Yank as West-Brit, but still... worth a read.

That is what has been happening in Latin America for a decade. The latest political leader to underline the trend is the radical economist Rafael Correa, re-elected as president of Ecuador at the weekend with an increased 57% share of the vote, while Correa's party won an outright majority in parliament.

But Ecuador is now part of a well-established pattern. Last October the much reviled but hugely popular Hugo Chávez, who returned home on Monday after two months of cancer treatment in Cuba, was re-elected president of Venezuela with 55% of the vote after 14 years in power in a ballot far more fraud-proof than those in Britain or the US. That followed the re-election of Bolivia's Evo Morales, Latin America's first indigenous president, in 2009; the election of Lula's nominated successor Dilma Rousseff in Brazil in 2010; and of Cristina Fernandez in Argentina in 2011.

Despite their differences, it's not hard to see why. Latin America was the first to experience the disastrous impact of neoliberal dogma and the first to revolt against it. Correa was originally elected in the wake of an economic collapse so devastating that one in 10 left the country. Since then his "citizen's revolution" has cut poverty by nearly a third and extreme poverty by 45%. Unemployment has been slashed, while social security, free health and education have been rapidly expanded – including free higher education, now a constitutional right – while outsourcing has been outlawed.

And that has been achieved not only by using Ecuador's limited oil wealth to benefit the majority, but by making corporations and the well-off pay their taxes (receipts have almost tripled in six years), raising public investment to 15% of national income, extending public ownership, tough renegotiation of oil contracts and re-regulating the banking system to support development.

Many of the things, in fact, that conventional "free market" orthodoxy insists will lead to ruin, but have instead delivered rapid growth and social progress. Correa's government has also closed the US military base at Manta (he'd reconsider, he said, if the US "let us put a military base in Miami"), expanded gay, disability and indigenous rights and adopted some of the most radical environmental policies in the world. Those include the Yasuni initiative, under which Ecuador waives its right to exploit oil in a uniquely biodiverse part of the Amazon in return for international contributions to renewable energy projects.
Think there's no alternative? Latin America has a few | Seumas Milne | Comment is free | The Guardian
 
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stopdoingstuff

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There is always an alternative if you have natural resources......for now.
 

curiousorange

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Massive oil money makes any political system work. Look at Russia. Look at Saudia Arabia.
 

Mad as Fish

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There has always been an alternative - Friedrich List - Wikipedia, the free encyclopedia

It's who the Germans look to and as Wikipedia states -

He was a forefather of the German historical school of economics, and considered the original European unity theorist, whose ideas were the basis for the European Economic Community.
 

Clanrickard

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It's funny, until recently when considering Naomi Klein's controversial best seller, "Shock doctrine" we in the "first world" have only been in the positron to speculate whether or not sharp austerity/outside bailouts/economic policy intervention is worth the toll is requires a countries citizenry to pay; that's all changed. It's somewhat ironic that some in the West are now looking at the post-shocked economies to see what alternatives the people themselves came up with to right their economies - once they decided to reject the "first world solutions".

Most of this is probably too radical for Ireland, which is as much East-Yank as West-Brit, but still... worth a read.

Think there's no alternative? Latin America has a few | Seumas Milne | Comment is free | The Guardian
Neo-liberal doctrine..............zzzzzzzzzzzzzzzzzzzzz
 

Analyzer

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The richest country per capita is Chile. Now...that is throwing the cat amongst the pigeons.
 

Clanrickard

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seabhcan

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No. Sensible economic policies. Those dreaded neo-liberal ideas the luvvies at the Guardian so hate.
50% of Chile's total exports by value are Copper produced by the state owned copper mines.

"The state-owned firm CODELCO is the world's largest copper-producing company, with recorded copper reserves of 200 years."

Chile produces 30% of the world copper, and copper prices are sky high.

 

feargach

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There is always an alternative if you have natural resources......for now.
Neither Bolivia nor Ecuador have very significant natural resources. None of them are anywhere near Brazil's ballpark, let alone Saudi Arabia.
 

feargach

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Neo-liberal doctrine..............zzzzzzzzzzzzzzzzzzzzz
Er, that's the doctrine of all of Ireland's governments for the past 25 years, and it's the current doctrine of the ECB and Germany.

Like it or loathe it, neo-liberalism is the undisputed boss of economic life in Europe. The question is whether it should continue to be. I'd point to Europe's disastrous course over the last 6 years and say, "the neoliberals have had enough time at the wheel, time for a change".
 

feargach

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When you're broke, there usually isn't an alternative to not spending money.

When you have oil, your usually not broke.

Sad, but unavoidable.
H. L. Mencken said: For every complex problem there is an answer that is clear, simple, and wrong.

The above is the clear, simple, and wrong response to the complex problem of the present depression.

The correct response can take many forms, but it involves re-defining the terms by which you are "broke". In 1999, Argentina was in a crushing depression. Argentina's currency was the US dollar, and they were broke. They took the wrong, pointless path of spending less money and trying to pay off a growing pile of US dollar debt with a shrinking pile of US dollars.

The crisis got worse and worse until they finally saw the truth that paying an infinite debt with finite resources was pointless.

They changed the terms of the game. They devalued the currency so that one unit of Argentine money was equal to one third of a dollar.

By devaluing, they were able to spend more in subsequent years.

There were both positive and negative direct results: as a negative, their lenders stamped their feet and gnashed their teeth. As a positive, poverty shrank to a tiny fraction of its previous level.
 

Mad as Fish

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H. L. Mencken said: For every complex problem there is an answer that is clear, simple, and wrong.

The above is the clear, simple, and wrong response to the complex problem of the present depression.

The correct response can take many forms, but it involves re-defining the terms by which you are "broke". In 1999, Argentina was in a crushing depression. Argentina's currency was the US dollar, and they were broke. They took the wrong, pointless path of spending less money and trying to pay off a growing pile of US dollar debt with a shrinking pile of US dollars.

The crisis got worse and worse until they finally saw the truth that paying an infinite debt with finite resources was pointless.

They changed the terms of the game. They devalued the currency so that one unit of Argentine money was equal to one third of a dollar.

By devaluing, they were able to spend more in subsequent years.

There were both positive and negative direct results: as a negative, their lenders stamped their feet and gnashed their teeth. As a positive, poverty shrank to a tiny fraction of its previous level.
Yep, as far as Ireland is concerned the Euro is overvalued, as far as Germany is concerned it is undervalued. But guess who calls the shots?
 

kvran

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I think these countries are just going through the same development cycle that developed countries went through in the 19th century.

Natural resources are exploited and the funds used to expand government programmes including social welfare. The government also champions indigenous industry etc.

Good for them but European and US couldn't imitate this growth, we've gone through it already and have the social democratic states. to show for it, It's very easy to grow substantially when the country is under developed.
 
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Honecker

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I think these countries are just going through the same development cycle that developed countries went through in the 19th century.

Natural resources are exploited and the funds used to expand government programmes including social welfare. The government also champions indigenous industry etc.

Good for them but European and US couldn't imitate this growth, we've gone through it already and have the social democratic states. to show for it, It's very easy to grow substantially when the country is under developed.

It's europe that has gone back to 19th century liberal economics while Latin America has adopted social democracy.
 

kvran

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It's europe that has gone back to 19th century liberal economics while Latin America has adopted social democracy.
You can't generalise like that. There has been reform in Scandinavia and Germany but they are still social democracies. Yes some neo-liberal policies have been adopted but nothing like the stuff that went on in Chile or the UK in the 80s. Scandinavia and Germany have shown the European social democratic models doesn't need to be dismantled just reformed.

Neo-liberalism is a terrible model for developing countries that have no industrial base, infrastructure or a sizeable middle class. But as long as a developing country are dependent on the world bank and IMF for loans they're going to have to implement neo-liberal policies. While not totally trusting of Chavez and Morales et al they have a better chance of bringing their countries out of poverty than most other under developed states.
 

Trainwreck

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The richest country per capita is Chile. Now...that is throwing the cat amongst the pigeons.
What data do you have to back that up.

GDP per capita is 2-3 times higher in most western countries. Even Ireland has higher income per capita
 

stopdoingstuff

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Neither Bolivia nor Ecuador have very significant natural resources. None of them are anywhere near Brazil's ballpark, let alone Saudi Arabia.
And hence they are poorer than Brazil or Saudi Arabia. What matters is not the absolute size of the resource base but its contribution to economic activity. In the case of Bolivia commodities make up over three quarters three quarters of their exports and almost 40% of fiscal revenue.
Bolivia | Extractive Industries | Revenue Watch Institute
In Eucador it is a quarter of all revenue and over half of exports, and prices have only risen since that report.
Ecuador | Revenue Watch Institute
 
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