The Great Turning-away of South America

By Tracy Dove, Ph.D
Editor, The Russia News Service

October 30, 2007

The process is not yet complete, although another heavy stone has been laid in the foundation of a concerted South American tendency: Cristina Fernandez de Kirchner won an unprecedented first round in the presidential elections in Argentina this weekend, becoming the country's first female president, but not the only woman in executive office in South America. Fernandez' victory may only be seen as a marital transfer of power- not unlike the Clinton dynasty if Hillary wins- but it is part of an underlying theme in the governments of South American states: elections throughout the region testify that leadership will no longer come from the United States, but will be cultivated from within.

America is slowly losing influence in this part of the world thanks to the Washington Consensus, which convinced South America to open their markets to speculative Wall Street bankers. Staying with the example of Argentina, Carlos Menem took some of this soft advice about hard currency and tied the Peso to the US Dollar. Initially the country attracted investment and IMF money, but the exposure was too much for an under-developed economy; when the US Dollar became over-valued in the 90's so did the Peso, and the result was bankruptcy when Argentina could no longer afford the lifestyle of a Dollar economy.

Argentina eventually defaulted on its huge debt early this century, and there are enough pundits on both sides of the aisle who both criticize and laud this event. In any case it was the people of the country who suffered when their tenuous existences were pushed into desperation, and when elections came around, the free marketers like Menem were jettisoned in favor of greater protectionist policies. We have seen this happen in Brazil as well, when Luiz Inacio Lula da Silva was elected in 2002 on a socialist ticket that vowed to protect Brazil's economy from the same ruthless bankers who wrecked the Argentine economy. The results in Brazil? A growing and prosperous economy with a stock market that has hit an all-time high this week- but without selling-off the country's valuable assets.

While the 90's are recognized as the decade of economic demise in South America, the 2000's can be slotted into an era of American foreign policy failure there. Still smarting from the economic miseries of the 90's, the populations of South America turned decidedly against the United States when George W. Bush attempted unsuccessfully to enlist the region into his Coalition of the Willing for the War in Iraq. But this time the South Americans were not buying; once they realized that the war was a politically-motivated incursion that had nothing to do with 9/11, America lost a lot of friends. The result was general mistrust of American foreign policy, and the leading critic of the region became Venezuelan President Hugo Chavez, who still claims that Bush had tried to overthrow him in a CIA-orchestrated coup attempt in 2002.

South America is feeling confident in its new independence, and the continent has returned a record amount of leftist, anti-capitalist leaders who are not standing at attention in the Organization of American States. Argentina's new President has vowed to continue the economic policies of her husband-President, Nestor Kirchner, which means that Argentina will not be warming up to Wall Street anytime soon. Social policies will continue to be the main focus of Fernandez, and in this way she will be following in the footsteps of her sister-President in Chile, Michelle Bachelet, who also won an election in 2006 on an anti-conservative ticket that promised social justice to the country's women and young people.

Broadly speaking- and leaving out Columbia, which is no longer a real country due to the civil war there- South America has plotted its own political and economic course which will not cross with that of the United States anytime soon. Bush has neglected the region entirely, which has proven well for the South American independence. It is unfortunate that the American President has spent the country's moral capital on a wasteful war, but the result will certainly be a stronger and more independent South America. This may prove well for the US economy in the future, because Americans will soon need new customers to purchase the bonds which secure America's huge debt, and the last laugh may come from the southern hemisphere when Argentines will be negotiating America's bankruptcy- and not the other way around.

Tracy Dove, editor of The Russia News Service, is a Professor of History and Dean of Summer Programs for the Lessing Institute. He also teaches history at the Anglo-American College in Prague.

See all previous articles by Tracy Dove here.