Mexico: from national-developmentalism to a neoliberal turn (from Cardenas to Miguel de la Madrid)

Starting in the 1930s, in the government of Lazaro Cardenas (1934-1940), Mexico begins a process of modernization of its economy and society. Cardenas, who in 1913 adhered to the Mexican Revolution, in 1928 became governor in the state of Michoacan, in 1931 moved on to be the president of the National Revolutionary Party (“PRN” in the Spanish language acronym), that positioned itself as the heir to the 1910 Revolution.

                One of the demands met by Cardenas was an ample land reform, which distributed lands to the peasants (in a communal way, with intents to strengthen their bonds). The worker movement in this period saw the government encourage the creation of unions and, from that point on, the Confederation of Mexican Workers (“CTM” in Spanish) came to be. Worker and social rights were guaranteed to the workers. Cardenas, with the argument that British and North-American companies imposed working conditions and wages that are very bad to the Mexican worker, nationalized the underground wealth in the country, handing to the State the control of exploration and production of oil through Petroleos Mexicanos (PEMEX). In spite of the opposition of the USA and the UK, the context of World War II and the need to supply energy to the allied troops reduced questioning over this Mexican nationalist policy. The scenario was favorable to Mexico, and it knew how to make the most of it.

                The Mexican president acted to centralize power and ascribe to the State the management of the national capitalist development. Perhaps it might have been the first experience, in actual terms, of a national-developmentalist government in Latin America. Between the decades of 1970 and 1980, redemocratization and neoliberalism started to lead the way in politics and the economy in the subcontinent. The PRN was transformed into the Mexican Revolutionary Party (“PRM” in Spanish), with aims to bring the masses closer to the party, what would be the embryo for the future single party. Even though Cardenas believed in the existence of class struggle and took the side of the workers, the centralization of the State and the management of social interests done by it put Cardenas’ actions close to the corporativist model developed initially by the fascist European governments.

                As in other developmentalist experiences in Latin America, among which the best success story is Brazil, the period that goes from 1929 to 1979 was of huge economic growth for the economy in Mexico. This period came to be between the stock market crash in New York in 1929, which represented the end of the expansion cycle founded upon enormous financial speculation. The following fifty years watched the consolidation and dominance of the Keynesian paradigm and, in the Latin American case, starting in the 50’s, of the structuralism based on ideas developed at the UN’s agency, CEPAL (“United Nations Economic Comission for Latin America and the Caribbean” translated to the Spanish and Portuguese acronym). Besides the proposals of governmental intervention advocated by Keynes, the structuralism of authors as Raul Prebisch and Celso Furtado highlighted the “center-periphery” dynamics, in which the center represents advanced capitalist countries (the USA, Western Europe and Japan) and the periphery the biggest (in territory and population) and most late part of the world. The center holds the capitals, the entrepreneurial and public organization, and the technology the periphery does not have. The State, therefore, should be the main actor in overcoming the economic gap.

                The economist Wilson Cano, professor in the Economics Institute of the Brazilian university called State University of Campinas (UNICAMP) has done a very relevant analysis of the Mexican economy history of evolution in the book “Sovereignty and Political Economy in Latin America” (“Soberania e Política Econômica na América Latina” in Portuguese), as well as analyses of other cases, just like the title points out, of other Latin-American nations. We will make use of Professor Cano’s work to support the synthesis of this article. According to him, the period of 1929- 1979 can be split in three: “1) the one going from the 1929 crisis to “Cardenismo”; 2) the one that covers 1939-1970, that is, from the intense period of imports substitutions; 3) the period of 1970-1979, in which the course of the political economy suffers a decisive turn”. In regards to the first period, still according to the same author “The great depression, for Mexico, had already started in 1927, given the slowing down of the North-American economy. In the period the highest point reached in GDP was in 1926 and the lowest in 1931: between both points the accumulated fall in GDP was of 36%, maybe the steepest in the region, and that’s because 75% of Mexican exports were mineral ores, dramatically affected by the crisis and, in particular, by the doubled protectionism of the USA during the depression” (CANO, p. 400.) With the election of Cardenas, Mexico lives the beginning of a new period. Cano says that “the results for the period of 1933-1939 were exceptional: the mean rate of GDP growth was of 5,4% and in the manufacturing industry of 8,7%, increasing its participation in GDP to 16%” (CANO, p. 403).

                Cano also explains that, after Cardenas’ period (that ended in 1940) “Mexican politics moved off of the revolutionary and more radical positions, returning to more conservative positions. If it could well maintain a great deal of continuity in the steering of the economic policies, and certain efficiency, it made society pay the price of authoritarianism, with the rise in the State’s discretionary power, party officialism and increasing corruption. A difference, at least when it comes to the more heightened use of national sovereignty, is seen in the 1964-1976 period, in the governments of Diaz Ordaz and Echeverria, in which Mexico restates stronger stances in foreign policy (for instance, not breaking relations with Cuba in 1964) and in economic policy with a policy of mexicanization of the economy starting in the late 1960’s. At the same time, however, internal repression rose” (CANO, p. 403-404).

                A relevant issue was the role of control and arbitration of social interests played by the Revolutionary Institutional Party: “until then PRI was the instrument of negotiation and representation of interests for the many social classes, source for the recruitment of professional politics personnel, manager of social demands – through a client-like mediation –, and a device for the electoral legitimation of the government. Its national political network would blend in with the public services one, at federal, state and municpal levels, and the increasing action of the State in the economy allowed – besides the visible advance of industrialization – the economic and social reproduction of its elites, mainly the industrial and financial ones. Industrialization and urbanization produced growth in the cities, growth of a new middle class and of a mass of informal employment. On the other hand, the modernization of public services and its continued decentralization shrank the role of the client-like mediation. Both phenomena harmed part of PRI’s control in the service of social demands, and most importantly in the control of elections. Consequently, if in the federal elections of 1968 PRI got 86% of the vote, in 1979 it rolled in 70%, losing the election in many urban disctricts” (CANO, p. 407-408).

                President Echeverria (1970-1976) gave continuity to the economic nationalism and sought after trade agreements with other agents outside the orbit of the USA. It was the last period in which industrialization was the steering axis for economic policy, even if petroleum had already started to have a bigger economic importance. An important change was that the driving powers in the economy ceased to be political, but rather young economists, generally post-graduated in the USA and followers of economic conservatism. This became the technocracy of the Central Bank (“Banco do Mexico”) and of the Office for the Treasury. In the Office for Heritage and in the Nacional Financiera (the development bank) the bulk was of Keynesian-CEPALian personnel, developmentalists (CANO, p. 408).

                The government that marks the watershed for the neoliberalism turn and divorce with PRI as a party was that of Lopez Portillo (1976-1982). His government was a transitional one between a more nationalist policy to one more tied to the USA, more conservative, with agreements with the International Monetary Fund and placing as the main axis for economic policy the option for petroleum, with a huge external debt in the endeavor. It was the end of the process of replacing imports and the beginning of a liberalizing policy (CANO, p. 408-409). One may say that it was the moment when Mexico renounced to an active industrial policy and coordination and state incentives for the constitution of a diversified industrial complex to accept the role of producer of raw materials for exportation (mainly oil) and, with the signing of NAFTA in 1994, consolidated the option for the maquiladora industry, in which the USA industry, mainly, takes advantage of the workforce differential to, basically, assemble parts coming from the USA to re-export them to the rich neighbor in the north. The maquiladora industry started in 1966 from the USA tax concessions to Central America and to Mexico,and modifications in the Mexican legislation (CANO, p. 413-414).

                The 1980s, just as it was for the rest of Latin America, was a period of economic crisis with GDP suffering an expressive downfall and only returning to the levels of 1981 in 1988; high inflation, currency devaluation and problems with the debt ran up by the country (that, like the other Latin American countries, goes through a big surge in face of the North-American interest rate shock promoted by the Federal Reserve chairman at the time, Paul Volcker). The government of Miguel de la Madrid, which took office in November 1982, reinforced the turn to the right in the PRI. That has important political effects, making of PRI a party representative only of the economic elites in the country. Once again, in the words of Cano, “The prolonged economic crisis deteriorated even more the political situation in the country, and the persistence of PRI’s political stance promoted a strong internal divide and the launching, in 1987, of its democratic current, led by Cuahtemoc Cardenas (son of former president Cardenas). The PRI moved farther and farther of its peasant and worker origins, dedicating itself to the elite, representatives of companies and the financial system. Therefore, economic policy, after some heterodox rehearsals, would take directions of orthodoxy and neoliberalism. Still, political difficulties forced the execution of a political reform in 1986, which would crack a small opening for the political life of the remaining parties” (CANO, p. 415-416).

                Mexico, since the 19th century, has had its economy strongly linked to the economy in the USA, country against which Mexico waged war and to whom it lost part of its territory. The “westward expansion” by the United States imposed that loss, but also integrated the territory of both countries by means of railroads. The growth in foreign investments in mining also benefitted the Mexican economy of this period. The transition discussed in this article, between the 1930’s and 1980’s, took Mexico to, in the almost thirty years gone by after this period, to strictly apply the neoliberal prescriptions. The PRD, which substituted the PRI in the years of 2000, did not change economic policy. The result has been low rates of economic growth and mounting violence, especially the one perpetrated by drug cartels. The victory, this year, of the leftist Andres Manuel Lopez Obrador (AMLO) brings hope to the Mexican people, hope for a reorientation of policies after decades of neoliberalism. The relation with the USA, where millions of Mexicans live and where three fourths of exports are sent to is very sensistive. AMLO, before taking office, was have to deal with the renegotiation of NAFTA defended by Donald Trump. The assymetry of power with the neighbor to the north is a strategic problem to Mexico and certainly limits its options, but still, the full adhesion of its elites to economic conservatism and the abandonment of any idea of national project (as it has happened and has been described in the present article, between the decades of 1930 and the second half of the decade of 1970) with the fostering of an effectively local industry (and not only assembler of parts produced abroad) and socially inclusive policies took the country to the difficult social and economic situation in which it stands. Lopez Obrador, in a very different scenario than that of Cardenas, will have to propose and execute new policies for the development of Mexico.

Reference: CANO, Wilson. Soberania e Política Econômica na América Latina. São Paulo: Editora Unesp, 1999

All translations of citations in Portuguese into English were done by this Blog.

Argentinian foreign policy: from the military dictatorship to current days

As it happens to other Latin American countries, Argentina, in its country’s history of peripheral capitalism, has watched the clash between internal forces of two types. First, the ones favorable to an insertion in the free market and in the comparative advantages (in Argentina’s case, agricultural products), politically and economically inserted in the “Western” Euro-American world order. But, on the opposite end, autonomist forces that understand that economic development has to be brought in by a national strategy, that industry has an important role in the economy and thus must be fostered by the State and that, in the last few decades, put emphasis in South American integration, where resides the fundamental alliance with Brazil.

The Argentinian military dictatorship had two periods, between 1966-1973 and between 1976-1983. Similarly to what happened in Brazil, there were ideological matters involved, that is, the contention with the “communist threat”. However, after a certain moment, there prevailed the pragmatism of external affairs, and relations to the Soviet Union and the socialist block. Argentina kept itself in the group of the non-aligned and, for most part, preferred to have a wider range of foreign relations, without any automatic adhrence to USA policy. In the second period of Argentinian military dictatorship, however, under the command of General Videla, there was an attempt at getting closer to Jimmy Carter’s government, which didn’t correspond to subservience with benefits to the country. Argentina was traditionally a great exporter of agricultural commodities, and had important ties to the Soviet Union in this respect with whom it had an expressive trade surplus. They did not frown on the Soviet Union for its invasion of Afghanistan in 1979.

Starting in the Ronald Reagan government in 1981, Reagan’s realism-inclined policy centered in the national interest would come to suspend sanctions (the previous government’s emphasis on human rights made Argentina suffer sanctions, as in the ceasing of weapon sale to the country), again leading Argentinians to seek proximity with the USA. Argentina contributed actively with the North American policies to sabotage Central America in the 1980’s by means of its intelligence agents working in El Salvador and against the Nicaragua’s sandinista government.

In regards to the country’s relations to Brazil, whom had always been a competitor, it was during the Videla government in 1977 that an agreement was struck to build Itaipu power plant by Brazilian hands (something that had always made Argentina feel suspicious because of the dam’s immense volume of water, so big that it was the biggest in the world for years, until China’s Three Gorges Dam surpassed it, and becuase of the risk Itaipu presented as means to flood the capital’s, Bueno Aires’, area), and, in 1980, another deal was brokered, this time for the peaceful use of nuclear energy. One can argue, looking at such gestures, although there wasn’t this intention at the moment, that this was the beginning of the political cooperation that would take these countries to the Mercosul agreements in early 1990’s. The military regimes of Brazil and Argentina had always suspected one another as they could develop military power from their nuclear program. Both countries also faced external pressures related to their nuclear programs. Moreover, according to Dias Barbosa and Portilho: “The alliance in the agreement regarding the Río de la Plata Basin would also reflect in another sensitive point in the bilateral relation which was connected to the nuclear research and development in both countries. The negotiations over this issue would culminate in the signing of the agreement for cooperation and application of nuclear energy for peaceful use in May 17th 1980. […] both countries sought efforts to increase military cooperation, including the manufacture of planes and missiles. Besides cooperation in research, Brazil commited to providing thorium and other nuclear fuels for the Argentinian nuclear reactor still under development. The nuclear cooperation with Argentina was […] the best way out that the diplomacy and the military summit could find not to abandon the country’s research program in the area, since there was great external pressure for the country to give up on it and sign the Non-proliferation Treaty. The same situation was lived by Argentina regarding their nuclear program” (BARBOSA; PORTILHO, 2016, p. 114).

The model of imports substitution that was in effect in Latin America gave signs of breakdown and the elites in the region were inclined to support liberal reforms in an effort to include their countries in the globalization led by the USA. The 1980’s was also the period of debt crisis around the region (crisis started with the drastic increase in the interest rate in the USA in 1979, following the plan to curb the persistent inflation in the country and restore the dollar’s hegemony in the international monetary-finance system since it had been questioned in the 1970’s), high inflation and economic stagnation. Differently from the East Asian countries, which undertook their own national strategies to enter the new liberal North American order, Latin Americans preferred to take up the instructions of ouverture, deregulamentarization and privatization emanated from the USA and international institutions controlled by the USA, as the World Bank and the International Monetary Fund. Argentina still in its military period tries a hand at economic opening (Brazil would try that only in 1990 and onwards).

To appease internal discontent regarding social and economic problems, Argentina decides to take the territory occupied by Great Britain, the islands called Malvinas by the Argentinians and Falkland by the British. This war, in which the Argentinians are dramatically defeated, exhausted the Argentinian military dictatorship even more and was decisive for its end.

The post-dictatorship government of Raúl Alfonsín uses this difficult defeat for the Argentinian society as an argument to consolidate democracy in the country.

The external factors which the Raul Alfonsin government had to deal with when holding office: the last stage in the East-West conflict, the Latin American debt crisis, the war in Central America and the existence of many military dictatoships in the neighboring countries: Brazil, Chile, Paraguay and Uruguay. From a strictly ideological point of view, this government overlaps two key moments in the 20th century. On one hand, the beginning of the Soviet Union’s political and economic opening since 1985; on the other hand, the dominance of a neo-conservative or neoliberal vision in two key countries in the West: the USA led by Reagan and the UK under Margaret Thatcher’s government. Both leaders were profoundly anti-communists. These countries had influences over sensitive government matters, most notably external debts and the need for external loans. The USA, with its key influence in the International Monetary Fund and the World Bank; and the UK with its influnce in Europe, were both essential links, especially the USA, to find channels in economic-commercial issues. Structural fiscal imbalance, external vulnerability and the existence of an unpayable debt, added on top of an economic structure with serious difficulties, conditioned the access to international credit and lowered reliability in the Argentinian economic policy in the main finance centers in the world. At the regional level the difficulties were especially the suspicion about the military governments in neighboring countries, something understood as negative for the new Argentinian democracy; on another front, there was the persistence of hypothesis about a conflict with Chile, especially after the rejection of the arbitration award relative to the Beagle Strait in the extreme south of both countries in 1978. International isolation (the Malvines war and the international image of the country as a violator of Human Rights), external debt, change in international regime (the transition to a world different from the bipolar one, still not very clear in its characteristics in those years) and a new dominant ideology in both discourse and practice in international politics and economy (neoliberalism), will be the scenario, not a benevolent one by the way, where the Raul Alfonsin governemnt diplomacy will have to run (JIMÉNEZ, 2010).

The Argentinian head of government sought to soothe relations with neighbors, mainly Chile and Brazil. Regarding Brazil, getting closer to the Brazilian president (who was also the first civil president after the dictatorship period), Jose Sarney, alleviated mutual suspicions and allowed for the countries’ approximation move forward (which had already taken a couple of steps after the end of both dictatorhips, as it has been already cleared in this text). There was, as previously highlighted, at the time, mutual suspicion when it came to the nuclear programs of both countries and a history of official complaints about the construction of Itaipu hydrelectric plant in the border between Brazil and Paraguay. Such suspicions, however, ended during these governments after visits to both nuclear programs and Alfonsin’s visit to Itaipu (BBC, 2014).

In the 1990’s, in president Carlos Menem government, Argentina embraced neoliberalism and the pursuit of a close relationship with the USA (translated to the Argentinian submission), Menem adopted an extreme privatization policy, pegged the peso, the national currency, to the US dollar with the currency board, and got to the point of sending a frigate to the Iraq War in 1990. Menem followed the neoliberal trends that spread around the world, including the whole of Latin America. The Argentinian foreign policy in the 1990’s may be summed up with the sentence by Chanceller Guido di Tella about the establishment of “carnal relations” with the United States of America. Miriam Saraiva and Laura Tedesco discuss this subject: “In terms of nuclear policy, the government considered that by making changes there would also be benefit for the regional relations. President Menem gave continuation to the integration process with Brazil started in 1985 and paid special attention to the cooperation policy in nuclear matters. Starting in the 90’s both countries jointly gave up on their autonomous nuclear policies. After over two decades of resistance to the non-proliferation instrument, both countries enacted the Tlatelolco treaty and signed the Non-Proliferation Treaty (NPT) of nuclear weapons. This integration of nuclear policies, coordinated with an acceptance of the international provisions reining over the theme, contributed for both countries to seem like more reliable partners to the USA and to the European Union. These changes were possible internally because of the political demobilization of the Armed Forces after the fall of the military dictatorship. In the early 90’s the military was under civil command, which partly explains the success of President Menem in changing foreign policy and strategic themes which had been, historically, under military ruling. During the period the most controversial act was, no doubt, the Argentinian participation in the Gulf War. President Menem decided to send battle ships without previously consulting the Congress nor the neighboring countries. Chanceller Cavallo argued that such decision would help integrating the Argentinian economy to the world, would increment the levels of foreign capital investments and, therefore, meant a continuity to the domestic economic reforms (Clarín, 19/9/90:5). In this scenario, foreign policy seemed, once again, attached to economic strategies” (SARAIVA; TEDESCO, 2001, p. 132-133).

The Treaty of Asuncion in 1991 originated the Mercosul (“Mercado Comum do Sul” or “South Common Market”), which brought together Brazil, Argentina, Paraguay and Uruguay. The commerce between Brazil and Argentina grew very much in the 1990’s (going from 3 billion dollars in 1991 to 14,8 billion in 1998), even though there have been moments of protectionist demands by the Argentinian industry: “This was some policy that brought consensus among political parties, even if it had to go through moments of low popularity, especially in situations when the trade deficit with Brazil made itself present; for example, in 1992. In this period protectionist arguments picked up steam mainly at the Argentina Industrial Union (‘UIA’ in Spanish), as well as rumours coming from entrepreneurial sectors that encouraged Argentina to abandon Mercosul to join the North America Free Trade Agreement (Nafta). This dichotomy Nafta/Mercosul was present in the government’s discourse during the 90’s. From the Argentinian press came accusations that Brazil kept a protectionist attitude towards the Argentinian economic liberalization. Brazil was considered the hegemonic power whose autonomy grew because of Mercosul, whilst Argentina showed an increasing dependency. Despite these doubts about its limitations and possibilities, Mercosul symbolized one of the biggest transformations in the period: the traditional adversary turned into the biggest trade partner positioning itself as an ally in the field. In a watershed for negotiations and alternance between moments of advance and stagnation, from the signing of the Treaty of Asuncion until the end of the decade, the commerce between both countries had an expressive growth. Still, this growth did not come packed with an articulation in the fields of industry and currency exchange, plus the devaluation of the real in 1999, in contrast to the conversibility of the Argentinian currency, had a negative impact on trade between both countries. This strengthening in the trade landscape, however, did not translate into a political alliance in the international sphere. In this respect, the USA kept on being the main reference” (SARAIVA; TEDESCO, 2001, p. 134-135).

The strategic aspects of military nature, as we’ve seen, lost importance to the Argentinian foreign policy in this period, and the State’s attitude was redefined now having economic matters as premise, and in a liberal perspective. The results in this period were bad for most of the population:

Argentina has, after the reforms in the 90’s, a worsened income distribution than in 1980. The rise in inequality is seen via analysis of the Gini index, which has gone from 0.365 in 1980 to 0.412 in 1985; 0,443 in 1994; and 0,459 in 1997 (Tedesco, 2000). Whereas GDP growth was 11.6% from 1993 to 1998; for the same time frame, 80% of industrial wages dropped in 23.1% (Tedesco, 2000). If wages went down as there was a growth in productivity, absolute profit rate was also going up, which generates a strong impact in income distribution and helps in understanding the evolution of the Gini index (SARAIVA; TEDESCO, 2001, p. 130-131).

Fernando de la Rua, opposition from Union Civica Radical (“Radical Civil Alliance”) wins elections in 1999, after the two Carlos Menem governments, promising changes from the peronist Menem government. In foreign policy, as well as in economic policy, little changed, however. In economy, the peso was still anchored to the dollar in a 1:1 parity, which made it as strong as the dollar but harmed the country’s economic competitiveness. President De la Rua did not alter this policy (which was technically difficult and very costly politically speaking) and the country faced a serious crisis in 2001. Bernal-Meza addresses the issue: “[…] big changes in foreign policy could not be hoped for. Changes would be rather in attitude and in form than in content (Bernal-Meza, 1999a). Argentina wouldn’t leave behind its aspiration of becoming the main interlocutor of the USA in South America, now through a low-profile policy. The small differences in foreign policy from Menem to De la Rua revolve around a comeback to interest in Europe, Spain in particular, the main foreign investor in Argentina, and pleas to solidify the multilateral consensus, aspiring to a bigger democratization of the United Nations. In summary, besides the differences in style, De la Rua’s foreign policy did not do much to differentiate itself from the previous one. The failure of successive models of development and international integration influenced foreign policy, marking it with a line of significant continuities, changes and ruptures, reflecting stages of alignment with Great Britain at first and of autonomy and new alignments (with the USA during the 50’s, 60’s and 70’s), to reach the period of new alignment and subaltern insertion in the 90’s. However, under these ‘superficial inconsistencies’, there was a structural coherence that allowed for explaining (Puig, 1984; 1988), primarily through the countries’ image in the eyes of its elite, the then relations between the economic model and of insertion abroad” (BERNAL-MEZA, p. 89, 2002).

In December 2001, the country declared a moratorium on its external debts, at the time estimated in 132 billion dollars, 45% of the country’s GDP. Demonstrations on the streets, restrictions in cash withdrawal in banks (the corralito) and lootings in stores and supermarkets. De la Rua resigned. The country had five presidents in ten days. The biggest crisis in Argentina’s history was set up by a decade of neoliberalism.

After a very unstable period, aperiod of changes in who held office, in the transition between 2002 and 2003 Argentina was captained by Eduardo Duhalde. The main legacy of the Duhalde government was opting out of the proposals of total dollarization of the economy and choosing instead the “pesification”, thus making the national currency become once again the reference, not the dollar. Followed by an expressive devaluation of over 200% (at first a number around 40% was expected), the industry got propelled, there was substitution of imports with the gain of competitiviness and there was recovery coming, fall in unemployment, even if there had been high inflation. Duhalde’s foreign policy was closer to Nestor Kirchnner’s than Menem’s. Duhalde tried approaching Brazil, as did Nestor, looking for a counterbalance to the USA, something very different from the “carnal relations” policy with the USA executed by Menem’s diplomacy.

Yet, the moratorium and inheritance from the 90’s still made the situations met especially difficult for president Nestor Kirchnner and that made its mark in his foreign and economic policies. The country was in an accentuated political, economic and social crisis, product of the neoliberal experience in the 90’s, with the impactful mistake of implementing the currency board to control inflation, and also the alignment with USA policy. Elected with only 23% of the votes in the second turn of the presidential elections, Kirchnner needed to go after a fast economic recovery to, besides evidently taking the economy out of the grave crisis it was in, obtain legitimacy with the population. In foreign policy, Kirchner tried to improve Latin America’s integration, especially in South America, in coordination with Lula’s Brazil and Chavez’ Venezuela. The external action looked into questioning the world order led by the USA.

As indicated previously, one cannot forget to account for the inherited impact of the 2001 crisis. In a situation of public debt in default, non-payment, unemployment, rise in the poverty indexes, difficulties to steady governance, the deterioration of the image the people had of the public office of a president, and the disbelief in society. Politics sprang a feeling of anomie that was still present in May 2003, time when the president took office. Facing this situation, society maintained its demands to the leadership with view to rebuild representation mechanisms, improve socioeconomic conditions in the country and optimize the execution of public policy.

Nestor Kirchnner’s choices in external action attempted at a bigger degree of autonomy for Argentina linked to a model of national development of industrialist perspective, besides being socially inclusive. Consequently, international insertion was not approached as a process of power accumulation due to connections and alignments with poweful agents, what was sought after was the idea that the country projects itself from inside out. As points out Aldo Ferrer in the concept of “national density” the foundation is in national cohesion, in the quality of the leadership, in the institutional and political stability, in the existence of critical thinking and one’s own interpretation of reality, and, finally, of policy conducive of economic development. According to historical references of countries successful in their processes of development, these components of “national density” have always been present. The search for social cohesion was achieved by diminishing poverty, lifting employment levels and income distribution policy. When it comes to relations abroad, Kirchner strongly questioned the policies defended by the central countries, the pressures of international speculative finance sectors and the constraints brought about by credit multilateral organizations (IMF, World Bank) and called for multilateralism and the importance of regional space (BUSSO, 2016).

In the electoral race that took Cristina Kirchnner to succeed her husband Nestor in the presidency there were mentions of her stronger inclination to internationalism in comparison to her predecessor (at this point it is required to specify “internationalist” as adept to a liberal foreign policy in the hall of international institutions led by the USA). This characteristic generated expectations among political and economic actors that had been benefited by the gradual exit of the crisis, but that did not share the same vision for development and preferred to go back to the old practices of the neoliberal period. It was thought that, by the end of 2007, the government, within an internally smoother economic and political status, would look for an alternative for international insertion aimed at awarding political and economic acknowledgement through a reactivation of old connections to traditional international actors – IMF, the international finance sector, the United States, Europe, etc., leaving behind the proposal based on “national density”, that at this point implied certain concessions from big economic actors to make public policy possible. Threfore, a series of matters among which the conflict with agriculture producers, the persistence of ideological convictions in the part of the president to face Argentina’s problems, and, in 2010, the passing away of the former president Kirchnner, will affect the bonds between government and society, setting off a pendular movement between resistence and support (BUSSO, 2016).

Thinking systemically, taking into account the international system and strategic matters besides economic and political ones, Cristina’s governments faced a more challenging panorama when compared to her husband’s. When it comes to the economy, during Nestor’s time the world had a period of generalized economic growth and relative stability, while Cristina had to manage the 2008 crisis’ effects, the biggest crash since 1929, one that caused economic downturn in many economies (mainly in developed countries) and considerable reduction in international trade; and in the second government it was the value of commodities that fell (essential to the Argentinian economy, especially soya). Relations with the USA went through times of oscillation from crisis to attempts at restoration, that until the Obama government refused to support Argentina in the American Supreme Court in reversing Judge Griesa’s ruling, the one that favored the so-called “vulture funds”, deteriorated the relation. It’s important to highlight that the Chinese rise, the shift of much of the world’s trade relations to Asia and the formation of BRICS (constituted by Brazil, Russia, India, China and South Africa), as well as the conflicting re-engagement with Russia, intensified with the Ukraine crisis in 2014, set a new picture for the 21st century, one that worried the West. A more troublesome period in the international scenario and more difficult to manage (BUSSO, 2016).

The model for external action and development was, threfore, steered the same way as Nestor Kirchnner did. Still, the conflict with the agricultural sector rocked the positive relations there were between government and society from the time of the previous president. This made Cristina’s government go through a more difficult time. It was a government that was run to give continuity and also deepen the economic model in effect, and also intended to foster autonomy, something to which it owed making decisions that affected the interests of economic and media nationals. Ties with local actors as the agriculture bodies, Argentina Industrial Union, the Clarin group, the central union CGT and the political opposition were more confrontational and tensioned the political landscape permanently. This situation affected electorally the government in 2009 and 2013, but did not make Cristina Kirchnner change her ways: she modified the social security system, nationalized the airlines company Aerolineas Argentinas and the oil company YPF, dealt with vulture funds, continued with the space and nuclear programs, encouraged the economic policies designed to steady consume and employment levels, and presented to the UN a proposal to establish rules for sovereign debt negotitations (BUSSO, 2016) In said context Cristina’s government reached for a bigger proximity with China, Russia and Latin America, in detriment to relations with the USA. These pressures split and polarized Argentinian society, which in the November 2015, within a slim margin, elected the opposition, the center-right candidate Mauricio Macri.

Mauricio Macri’s foreign relations turned back to the 1990’s position of a subordinate integration to the global flows of capital, back to the specialization in agricultural production and to the subordination to the USA-driven world order. When campaigning, Macri’s coalition Cambiemos (“Let’s change”) argued that Argentina was “outside the world” and in antagonism with the USA because it refused to negotiate with holdouts (the so-called “vulture funds”), the ones in possession of Argentina sovereign bonds that did not accept the previous negotiations promoted in 2005 and 2010, and accepted by 93% of lenders. In 2016 Macri renegotiated the debt with these funds. Cristina Kirchnner’s government refused to accept what was ruled by judge Griesa, of New York, and refused to pay those who had refused to take part in the previous negotiations. The aforementioned ruling, coming from a single American federal judge, interfered with Argentina’s international relations. For not addressing the ruling in the American Justice, as in e.g. pleading the case was discussed in the Supreme Court, Obama’s government ended up taking side with those investors and not with Argentina. It was a political decision of the USA not to support a government with whom it did not have good relations and that followed guidelines different from those it voiced, a government that loomed closer to the BRICS.

External relations clearly moved onto centering around a free market perspective in place of other matters, as security for example. Focus falls on Mercosul and not so much on Unasul or Celac. Unasul (“Union of South American Nations” or “União das Nações Sul-Americanas”) was an initiative piloted by Brazil, with strong support coming from the Kirchner couple in Argentina, to create an institutionality that encompassed the whole of the continent. Celac was created as an alternative to Organization of American States, largely influenced by the USA. In practice, Unasul and Celac were left emptied by many governments in the region, including Argentina’s and Brazil’s. And, ultimately, Argentina’s current government has no commitment to Mercosul because it defends, as some politicians in the Brazilian right (seen in the case of Temer government’s former Chanceler and senator Jose Serra), that the block ceases to be a customs union (in which all participants hold the same tariffs for third party imports and are open to free trade among themselves, even if in Mercosul trade is not free for all products) and commences to be a free trade zone. Given such status, the country would be available for agreements with the major players in world trade in the Macri government understanding: the USA, the European Union, China, Japan and Russia.

The Macri administration defends a “smart insertion strategy” with more bilateral agreements. Therein one sees a “smart agenda” focused in new sectors as internet of things, big data and AI. Taking into consideration the low investment in scientific research (the Macri government was not able to alter this structure) such objective looks out of reach realistically. Argentina has sought to coordinate with Brazil in the intent of settling a free trade agreement with the Eurpean Union, negotiation that goes back all the way to 1999. For now, heavily due to Euroupean resistance, the agreement has not been closed.

Regarding economic policy, Macri embraced a neoliberal stand with public prices liberation and the end of the subsidies that were granted in the Kirchnner governments (which meant a substantial boost in tariffs and in inflation), and cuts in public expenses and benefits. Poverty went up considerably in comparison to the previous government. The country also has substantially gone into debt in dollars in this Macri period (according ot the newspaper El Pais the debt in dollars has gone up 35%), and needed to sign a deal with the International Monetary Fund of 50 billion dollars to “soothe the market”, that is, less vulnerable to financial market speculators. With that aim, it has commited itself to behave with more economic orthodoxy and restraint. Macri, for political reasons, wants to be reelected and avoided even this agreement with the IMF, in this government a policy of even tougher restraint, favored by many economists and market agents. In the 2006 Nestor Kirchnner government, Argentina could pay the IMF debt off, at the time in 9,8 billion dollars.

From mid 19th century to the 1930’s, Argentina, with its agriculture exporter model, had positioned itself as one of the richest countries in the world. The 1930’s crisis questioned this model, and the country, in the following decades, was not able to transition to a modern industrial economy, even if it had made its effort in industrialization. The timeframe from the dictatorships in the 70’s and 80’s to the present Macri government portrays a pendulum movement that at times points to a subordinate insertion in the USA’s global order and at other times prefers a more autonomous position, getting closer in alignment with Brazil (after the end of the military dictatorship), with the remaining Latin America, and more recently, in the Kirchner governments, with actors as Russia and China. Argentina’s next presidential election, as well as Brazil’s, should discuss once more the type of economic policy and insertion in the world stage that the country should pursue.


REFERENCES

BARBOSA, Wilton Dias; PORTILHO, Isaque Elias. As políticas externas de Argentina e Brasil durante seus regimes militares: uma abordagem comparativa. Relações Internacionais, n. 51, p.107-123, 2016.

BBC, 2014. Alfonsín ajudou a mudar a relação entre Argentina e Brasil, dizem analistas. BBC News Brasil.1 abril 2009. Disponível em https://www.bbc.com/portuguese/noticias/2009/04/090331_argentina_alfonsin_mc_cq, Acesso em 10 jul. 2018

BERNAL-MEZA,Raul.Política exterior argentina: de Meném a de la Rúa. São Paulo: São Paulo em Perspectiva, vol. 16, jan-mar. 2002

BUSSO, Anabella. Les ejes de la acción externa de Cristina Fernández: câmbios hacia un nuevo horizonte o cambios para consolidar el rumbo? La Plata, Província de Buenos Aires: Revista Relaciones Internacionales, 2016.

COMINI, Nicolás. The future of Mercosur: the argentinean perspective.  In: IV JORNADAS EUROPEIAS – Regionalism under stress: toward fragmentation and disintegration. FDUSP, 25 e 27, 2017, São Paulo, Faculdade de Direito da Universidade de São Paulo. Disponível em: <https://www.youtube.com/watch?v=lZpxXDruqEQ> Acesso em: 9 jul. 2018.

JIMÉNEZ, Diego Miguel. La política exterior de Raúl Alfonsín (1983-1989): um balance aproximativo. Buenos Aires: Temas de Historia Argentina y Americana XVII, 2010.

PIMENTEL, Matheus. O que mudou na Argentina após 1 ano de Mauricio Macri. Nexo Jornal Ltda, 9 dez. 2016. Disponível em: <https://www.nexojornal.com.br/ expresso/2016/12/09/O-que-mudou-na-Argentina-ap%C3%B3s-1-ano-de-Mauricio-Macri>. Acesso em: 9 jul. 2018.

SARAIVA, Miriam Gomes; TEDESCO, Laura. Argentina e Brasil: as políticas exteriores comparadas depois da Guerra Fria. Brasília: Revista Brasileira de Política Internacional, 2001.

SIMONOFF, Alejandro. Regularidades de la Política Exterior de Néstor Kirchnner. Monterrey, México: Confines de relaciones internacionales y ciencia politica, 2009

All the quotes in this text have translated from Portuguese and Spanish into English by this Blog.

 


 

The post cold-war Brazil and the global geopolitical scenario: how has Brazilian foreign policy evolved in recent decades?

  • Introduction

In this text I will conduct a brief historical review, which will take as its beginning the immediate post-war period and will end at the present time. That’s done so it’s possible to have an adequate understanding of Brazilian foreign policy in the recent period comprising the 1990’s, the beginning of the Post-Cold War, and also the beginning of an era of democratically elected presidents, up to the present day. The framing in history was defined by the recognition of the historical specificity of the Cold War international relations, constituted in the geopolitical and ideological bipolarity of the blocks led by the USA and the USSR, and their influence on the world. After this period, between 1989 and 1991, with the fall of the Berlin Wall and the fragmentation of the USSR, the following decades watch, first in the year of 1990, the liberal triumphalism and its utopia of self-regulated markets, free trade and cooperation between the nations, and from the year 2000 on, the return to the old geopolitics of national States, with the return of Russia as a relevant actor on the international scene, the rise of China and the emergence of the BRICS group, with its proposals, already in the development phase, of their own bank and fund, and the ambition of becoming an alternative to Western institutions established in the agreements of the post-war period, in Bretton Woods.

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