NILSSON - Latin American Responses To Globalization in The 21st Century PDF

International Political Economy Series
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Massachusetts, Boston, USA and Emeritus Professor, University of London, UK
Titles include:
Leslie Elliott Armijo (editor)
FINANCIAL GLOBALIZATION AND DEMOCRACY IN EMERGING MARKETS
Eudine Barriteau
THE POLITICAL ECONOMY OF GENDER IN THE TWENTIETH-CENTURY
CARIBBEAN
Gabriel G. Casaburi
DYNAMIC AGROINDUSTRIAL CLUSTERS
The Political Economy of Competitive Sectors in Argentina and Chile
Peter Clegg
THE CARIBBEAN BANANA TRADE
From Colonialism to Globalization
Matt Davies
INTERNATIONAL POLITICAL ECONOMY AND MASS COMMUNICATION IN
CHILE
National Intellectuals and Transnational Hegemony
Yvon Grenier
THE EMERGENCE OF INSURGENCY IN EL SALVADOR
Ideology and Political Will
Ivelaw L. Griffith (editor)

THE POLITICAL ECONOMY OF DRUGS IN THE CARIBBEAN
Jerry Haar and Anthony T. Bryan (editors)

CANADIAN–CARIBBEAN RELATIONS IN TRANSITION
Trade, Sustainable Development and Security
Tricia Juhn
NEGOTIATING PEACE IN EL SALVADOR
Civil–Military Relations and the Conspiracy to End the War
R. Lipsey and P. Meller (editors)

WESTERN HEMISPHERE TRADE INTEGRATION
A Canadian–Latin American Dialogue
Gordon Mace, Andrew F. Cooper and Timothy M. Shaw (editors)

INTER-AMERICAN COOPERATION AT A CROSSROADS
Don Marshall
CARIBBEAN POLITICAL ECONOMY AT THE CROSSROADS
NAFTA and Regional Developmentalism
Juan Antonio Morales and Gary McMahon (editors)
ECONOMIC POLICY AND THE TRANSITION TO DEMOCRACY
The Latin American Experience
Manuela Nilsson and Jan Gustafsson (editors)

LATIN AMERICAN RESPONSES TO GLOBALIZATION IN THE 21ST CENTURY
Leo Panitch and Martijn Konings (editors)

AMERICAN EMPIRE AND THE POLITICAL ECONOMY OF GLOBAL FINANCE
Eul-Soo Pang
THE INTERNATIONAL POLITICAL ECONOMY OF TRANSFORMATION IN
ARGENTINA, BRAZIL, AND CHILE SINCE 1960
Julia Sagebien and Nicole Marie Lindsay (editors)

GOVERNANCE ECOSYSTEMS
CSR in the Latin American Mining Sector
Henry Veltmeyer, James Petras and Steve Vieux

NEOLIBERALISM AND CLASS CONFLICT IN LATIN AMERICA
A Comparative Perspective on the Political Economy of Structural Adjustment
Henry Veltmeyer, James Petras

THE DYNAMICS OF SOCIAL CHANGE IN LATIN AMERICA
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Basingstoke, Hampshire RG21 6XS, England
Latin American Responses
to Globalization in the
21st Century
Edited by
Manuela Nilsson
Assistant Professor and Department Chair of Peace and Development Studies.
Linnaeus University, Sweden
and
Jan Gustafsson
Associate Professor and Director, Centre for the Study of the Americas,
Copenhagen Business School, Denmark
Introduction, selection and editorial matter© Manuela Nilsson and
Jan Gustafsson 2012
Individual chapters © contributors 2012
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Contents
List of Tables vii

Notes on Contributors viii
Introduction 1
Manuela Nilsson and Jan Gustafsson
1 Latin America’s Political and Economic Responses to
the Process of Globalization 16
Raúl Bernal-Meza and Steen Fryba Christensen
2 Energy Policy and Twenty-First Century Globalization:
The Responses of Brazil and Venezuela, and Opportunities
for Renewable Energy Development in the Americas 36
Erik Brand and Matthew Schewel
3 Remittances and Social Development: The Latin American
Experience 58
Manuel Orozco
4 Globalization and the Formation of the Political Left in
Latin America 76
Martin Nilsson
5 Global Discourses, Local Meanings: Indigenous and
Nationalistic Responses to Neoliberal Globalization
in Bolivia 96
Anne Marie Ejdesgaard Jeppesen
6 Between God and the State: Globalization and Human
Insecurity in Latin America 115
Andrés Pérez-Baltodano
7 Unintended Exports: The Globalization of the
Mara Salvatrucha 134
Thomas Shannon Stiles
8 Globalization, Transition, and Insecurity in Mexico 149
Patricia Olney
9 New Patterns of Violence in Latin America 171
Dirk Kruijt
v
vi Contents
10 Latin American and European Relations in an Age

of Uncertainty and Opportunity 188
Guy Edwards and Enrique Mendizabal
11 China and Latin America: What Sort of Future? 207
William Ratliff
12 South-South Relations in Brazil’s Response to the Challenges
of Globalization 231
Steen Fryba Christensen
Conclusions: Latin America and Globalization—Challenges,
Responses, and Perspectives in the Twenty-First Century 253
Jan Gustafsson and Manuela Nilsson
Index 263
List of Tables
3.1 Geographic distribution of remittances (as percentage

of total flows received) 59
3.2 Central America in the global economy, 2008
(in $ millions) 60
3.3 Remittances and key economic indicators 61
3.4 Income expenditures on food by level of education
among remittance recipients 64
3.5 Income expenditures on food by Haitian recipients
(per $100 earned) 64
3.6 Receiving remittances and savings 72
3.7 Remittances received and amounts saved 72
4.1 Democratic periods in Latin America (twentieth century) 79
4.2 Political actors’ choice of democratic and
economic models 86
12.1 Brazilian exports (billions of US dollars) 238
12.2 Regional distribution of Brazilian exports (%) 239
vii
Notes on Contributors
Raul Bernal-Meza is Professor of International Relations at National

University of the Centre of Buenos Aires Province. He is the author of
six books as well as more than 90 book chapters and scientific articles in
European, Latin American, and Canadian journals dealing with global poli-
tical economy, Latin American economics and sustainable development,
Latin American foreign policy, Latin American integration, regionalism,
globalization, and International Relations theory, among others. He has
been a consultant to the OAS, UNESCO, CEPAL, and the UN.
Erik Brand publishes the daily Latin America Advisor at the Inter-
American Dialogue in Washington, DC, where he also directs the
organization’s corporate program and has created the Dialogue’s weekly
Energy Advisor newsletter. Previously he served as the associate publisher
at the International Advisory Group, Inc. in New York City.
Steen Fryba Christensen is an associate professor at Ålborg University,

Denmark. He has published articles and book chapters on various
aspects of the Brazilian economy, politics, and international relations,
with a recent emphasis on the role of the BRIC countries and regional-
ism in the changing global order.
Guy Edwards is a research fellow at the Centre for Environmental

Studies, Brown University. He has worked for the Overseas Development
Institute, the consultancy River Path Associates, and edits the blog
Intercambio Climático.
Anne Marie Ejdesgaard Jeppesen is an associate professor at Copenhagen

University and leader of the Centre for Latin American Studies. She
has published on Argentinean Peronism and the labor movement in
Argentina, Bolivian ex-miners and peasants, coca-leaf producers, poverty
alleviation, democracy, and identity constructions in social movements.
Her recent publications are about food security and the new political
constitution of Bolivia.
Jan Gustafsson is an associate professor and Director of the Center

for the Study of the Americas at the Copenhagen Business School,
Denmark. His main academic interests are Latin American politics,
culture, and identity; theory of culture and identity; semiotics; and
viii
Notes on Contributors ix
subjectivity. He has a particular interest in Cuba and the national and

transnational construction of Cuban identities. He has also written on
the subject of utopian political thinking in Latin America.
Dirk Kruijt was Professor of Development Studies from 1993 to 2008 and
is at present Honorary Professor at Utrecht University. He is the former
president of the Netherlands Association of Latin American and Caribbean
Studies (NALACS) (1994–8), and a research fellow at a variety of research
institutes and study centers in Europe, Latin America, and the Caribbean.
He is an associate member of the Latin American FLACSO system (Facultad
LatinoAmericana de Ciencias Sociales, 1990–present) and has conducted
fieldwork in Bolivia, Brazil, El Salvador, Guatemala, Nicaragua, Costa
Rica and Panama, Cuba, Colombia, Mexico, the Netherlands Antilles and
Aruba, Paraguay, Peru, Suriname, and Venezuela. His research interests
and publications focus on social exclusion and poverty, ethnic and class
conflicts, civil–military relations, and urban violence.
Enrique Mendizabal is a research fellow and Program Leader of the

Research and Policy in Development (RAPID) program and Chair of
the Latin America and the Caribbean Group at the Overseas Development
Institute (ODI) in London. He has published extensively on the roles
that research policy networks and think tanks play in global, regional,
and national development policies.
Manuela Nilsson is an assistant professor and Department Chair of Peace

and Development Studies at Linnaeus University in Sweden. In addition
to her 25 years of teaching experience in Sweden, the United States,
Nicaragua, Mexico, and Uganda, she has 15 years of practical experience
in peace-building and civil society training in Latin America. Her research
and publications focus on conflict transformation, peace-building, and
reconciliation processes in post-conflict societies.
Martin Nilsson teaches at the Department of Political Science at Linnaeus

University in Sweden. His 2005 dissertation was titled “Democratization
in Latin America during the 20th Century – the Left and Deepening
Democracy”. His research and publications focus on democratization pro-
cesses and political parties, particularly left-wing parties in Latin America
and Europe.
Patricia Olney is an associate professor of Political Science at Southern

Connecticut State University, where she specializes in Latin American
democratization and security studies. Her most recent publications
concentrate on local politics in Mexico and she has begun research on
x Notes on Contributors
Iran’s activities in Latin America. She has been a Visiting Research Fellow
at the Center for US–Mexican Studies at the University of California
in San Diego as well as at the Centro de Estudios Internacionales at
the Universidad de los Andes in Bogota, Colombia, and has conducted
extensive fieldwork in Mexico.
Manuel Orozco is senior associate and Director of Remittances and

Development at the Inter-American Dialogue, Chair of Central America
and the Caribbean at the US Foreign Service Institute, and adjunct
professor at Georgetown University, where he is senior researcher at the
Institute for the Study of International Migration. He has conducted
research in many countries in Latin America, particularly in Central
America and the Caribbean, and published several books and many arti-
cles on global flows of remittances, globalization, democracy, minority
politics, and migration issues, particularly in Latin America.
Andrés Pérez-Baltodano is Professor of Political Science at the University

of Western Ontario. He has published extensively on state formation,
democracy, and political culture with particular reference to Latin
America. His most recent book is La Subversión Ética de la Realidad: Crisis
y Renovación del Pensamiento Crítico Latinoamericano (2009), published
by the Instituto de Historia de Nicaragua y Centroamérica (IHNCA) of
Universidad Centroamericana (Nicaragua).
William Ratliff is a fellow at Stanford University’s Hoover Institution

and Curator of the Americas Collection in the Hoover Archives. He has
specialized in China’s relations with Latin America for 45 years and often
written on differences between the cultures, institutions, and histories
of the two geographic regions. His other topics of research include Latin
American politics and legal reform, US foreign policy, reform in contem-
porary Vietnam, and the Chinese Revolution in a global context.
Matthew Schewel is a journalist with the Latin America Advisor news-

letter at the Inter-American Dialogue in Washington, DC. He is the lead
editor of the weekly Energy Advisor, which covers trends and develop-
ments in Latin America’s energy sector. His work has also appeared
in the Latin Business Chronicle, America Economia, Poder Magazine, The
Guadalajara Reporter, and other media.
Thomas Shannon Stiles is adjunct professor of International Relations

at Webster University Scott Air Force Base and on the Board of Directors
of the Council on Foreign Relations, St Louis Committee. His research
and publications concentrate on security issues in Central America. His
most recent focus is on transnational criminal organizations.
Introduction
Manuela Nilsson and Jan Gustafsson
To talk about Latin America and globalization seems to be an almost

tautological exercise. Not only has the region been closely related to
other parts of the world for more than 500 years, its integration into
a European-dominated world system after 1492 also marked one of the
most important moments of modern “globalization,” particularly in
terms of connecting all parts of the world to one another. Since then, the
countries of Latin America have been part of large regional economic,
political, social, and cultural systems, first, as European colonies, later
as more or less peripheral political and economic systems with a rather
limited space of independent action. This, however, in no way means
that Latin America’s entry into the processes of accelerated globalization,
particularly after the end of the Cold War, has been smooth or unprob-
lematic; or that the region’s national, regional, and other particular
characteristics—not least its relative geographical isolation and its
historical dependence on a single powerful neighbor—do not play a role
in this process of integration into a globalized world.
“Globalization,” however, is a highly contested concept and continues
to be the center of lively debate across the social sciences. Although the
concept itself has been discussed since the 1960s, so far no consensus
has been reached on anything concerning globalization: there is no
universal definition of what it is; we argue whether it exists in the first
place, what caused it, when it started and how—if ever—it will come to
an end. We agree even less on how it has affected our lives and discus-
sions about the impact of the globalization phenomenon are becoming
increasingly polarized. Does it enhance or undermine human security,
democracy, and social equality? Does it have a positive impact on the
economy and create a world market with opportunities for all, or does
it rather increase poverty, destroy the welfare state, and widen the gap
1
2 Introduction
between rich and poor around the world? Has it deprived the state
of sovereignty in favor of giant supranational organizations or rather
changed state form and functions, and increased international coopera-
tion for the benefit of global solutions to common problems? Does it
harmonize, integrate, homogenize, suppress, or divide cultures? The
questions about globalization’s impact are endless.
Three main discourses have dominated the globalization debate
during the past decade (Held et al., 1999; Held and McGrew, 2003).
Globalists predict that with accelerated globalization traditional politi-
cal and economic state structures will give way to globalist structures in
which key actors—first and foremost, transnational companies—will use
de-nationalized state structures merely as executers of their orders. While
the nation-state declines and state sovereignty erodes, a global popular
culture is in the process of emerging; fixed political identities crumble
and will be replaced by multilayered global governance, a global civil
society, and cosmopolitan orientations. Globalists are divided into two
groups: neoliberals, who regard this future outcome of globalization as
essentially beneficial because a new global division of labor unburdened
by state-structure restraints provides advantages for everyone, and
neo-Marxists, who see it as the final and disastrous victory of global
capitalism over the disadvantaged masses. The skeptical discourse, on
the other hand, maintains that globalization is a social construction
with little explanatory value created predominantly to justify and
legitimize the imposition of a liberal economic system whose impact
has been vastly exaggerated. Skeptical scholars point to the fact that
there have been earlier periods of economic interdependence in history
and doubt that national governments which, after all, still constitute
the core members of international institutions, have lost their grip
on their economies, or will do so in the foreseeable future. They con-
sider the end of the nineteenth and beginning of the twentieth century
as the high time of global interconnectedness and see current processes
more resembling yet another regionalization process. Skeptics predict
a stronger development of regional blocs and a resurgence of nationalism
and national identities. Finally, the transformationalist approach takes
a middle way. It acknowledges the enormous transformational impact
of globalization as well as its accelerated stage in our contemporary age
without daring to predict foreseeable outcomes. Transformationalists
rather emphasize the multidimensional aspect of globalization as a
process that cannot be reduced to the economic dimension only and
has a highly uneven impact on the regions and the individual states.
For transformationalists, globalization has rather changed the scale of
Manuela Nilsson and Jan Gustafsson 3
human social organization, extending the reach of power relations over

the world in which development in one region affects the quality of
life of another. They also warn of the downside effects of the globalization
tide, particularly in terms of worldwide inequality, and they are
seconded in that dire outlook by members of the skeptical as well as the
neo-Marxist team.
Similar to the transformationalist view, we part from the premise that
globalization—the set of processes that has resulted in an increasing
interconnectedness of economic, political, social, and cultural systems
across geographical boundaries—is a reality, although complex, multi-
faceted, and contradictory, and that it affects different parts of the world
in different ways. Thus, a more “localized” look at globalization might
add another perspective to these discourses by casting a doubt over
any generalizations concerning globalization’s overall impact and by
urging an assessment from a different set of regional, or even national,
perspectives.
This volume consists of a collection of chapters that analyze different
aspects of how Latin America has responded to the most accelerated
period of globalization to date: the two decades following the end of
the Cold War. The wave of democratization that set in during the 1980s
was followed by an opening toward the free-market system throughout
Latin America that produced fertile ground for globalization to take its
full effect. The period therefore offers itself as a prime example to assess
the impact of globalizing forces in the region. Expecting Latin America
to be a homogenous region is a mistake, however, despite its common
historical and cultural traits, its geographical isolation, or the fact that
the region shares one single neighbor. Political and economic power
is unevenly distributed and the level of development is by far not to
be called even, either. There are also different levels of demographic
and economic interdependence on the United States as well as differ-
ences concerning the degree to which the Latin American countries
have opened their economies to international competition. Democratic
governance and natural resource levels differ considerably too and the
region harbors governments with a decidedly anti-US position side by
side with close traditional US allies.
It is therefore understandable that an assessment of the impact of
globalization on such a diverse group of countries has to take into
consideration that they may have quite differentiated reactions to the
increasing imposition of global forces. Some countries or sub-regions
have coped considerably better with the increasing impact of global
forces than others and the same goes for different social groups. At first
4 Introduction
sight, the picture is confusing and seems at times even contradictory.

Economic growth is, at least in some cases, coupled with increasing
poverty and inequality as well as an upsurge of left-wing governments.
Societies have become transnational, but so has crime, and new security
threats have arisen along with new opportunities to counteract them.
Globalization has renewed Latin American efforts for regionalization
but also opened up avenues for new international alliances that allow
the region to loosen the tight connection with its giant northern
neighbor, the United States.
To assess the impact of globalization on Latin America and the
responses it has evoked is therefore a complex challenge, one that
continues to call for new approaches and perspectives. When concen-
trating on globalization’s impact on specific regions, scholars so far have
focused mainly on the United States, Europe, and Asia. In recent years,
a fair amount of literature has appeared which focuses on specific aspects
of globalization in Latin America and ranges from human trafficking,
democracy, legal culture, and the environment to issues concerning
women and equality (Friedman and Perdomo, 2003; Timmons and
Thanos, 2003; Millet et al., 2008; Dello Buono and De la Barra, 2009).
However, few actually attempt to look “at the big picture.” Of those few,
most authors tend to equalize globalization with neoliberal economic
politics and take a predominantly critical stand toward the latter. As
a development strategy for Latin America, they declare globalization a fail-
ure that is responsible for unequal development, poverty, rising social,
economic and political insecurity, and unfair regional trade agreements
throughout the region (Gwynne and Kay, 2004; Harris, 2005; Perez
Baltodano, 2006; Johnson and Lopez-Alves, 2007; Robinson, 2008).
Most concentrate predominantly on what has been generally regarded
the most apparent, as well as the most important, aspect of globali-
zation: economic globalization.
This volume attempts to widen this perspective by evaluating the
globalization phenomenon in a more holistic way. Our interest is not
to arrive at a final verdict on the question whether globalization has a
negative or a positive impact on Latin America, thereby glorifying or
condemning the process itself. Instead, we wish to call attention to the
need to include more angles into the debate. Without taking a stand
on either side of the debate, this book offers a multifaceted insight into
the many expectations and fears raised by Latin America’s incorpora-
tion into the sphere of global interconnectedness, the challenges it
is currently facing as well as the opportunities globalization offers to
the region as well as to specific countries. Globalization is a complex
and dynamic process that, as it proceeds, reaches into more and more
aspects of our lives. Those “new topics” need to be taken into conside-
ration when evaluating the phenomenon’s impact, alongside with the
more traditional issues, such as the impact of globalization on economic
growth figures, social equality, and political stability. We have therefore
included in our publication topics such as fears evoked by the creation
of a new class of informal citizens and the dangers of transnational
crime as well as the hopes connected with energy politics, increasing
remittances, the growing relationship with China and South-South
cooperation, and the new direction into which emerging markets are
increasingly looking when searching for international alliances and new
alternatives.
In order to address the complexity of the task of assessing Latin
America’s responses to globalization as a reflection of its impact on the
region, we encouraged a wide range of authors to participate in the project.
Scholars from Latin America, the United States, and Europe responded
to our call and the book therefore collects interdisciplinary perspectives
not only from inside Latin America, but also from surrounding interna-
tional actors, such as the United States, the European Union (EU), and
China. In our selection of authors, we strove for diversity, not homo-
geneity of opinion. Furthermore, the book includes a large number of
topics within relatively short chapters in order to offer the reader a more
diverse variety of opinions reflecting the complexity of the globaliza-
tion debate. The volume’s underlying premise is that the impact of the
globalization phenomenon on a particular region can be fully grasped
only if one takes a more holistic view than what has been done so far
in the current debate. A more integrated approach sheds a better light
on the many different and complex social, economic, and political issues
that are influenced by the globalization phenomenon and interact with
each other to create a variety of responses within that particular regional
context.
This book is subdivided into four areas: economic issues; political and
social reflections; security factors; and Latin America’s relationships with
the external world. Within each of those areas, we selected a number
of topics presenting opportunities as well as challenges that globali-
zation brings to the region, fully aware that there are many more which
should be included into the debate but cannot all be accommodated in
this book. Some chapters deal with the region as a whole, whereas others
concentrate on a particular country’s response to the global forces,
always keeping in mind that the impact of and response to globalization
is not uniform but varies regionally as well as nationally.
6 Introduction
Latin American responses to the impact of economic

globalization
Latin America’s economic performance during the past six decades has
been marked by cycles of impressive growth as well as stagnation and
decline and by an overall volatility in growth patterns across the region.
During the 1930s and 1940s, the region opted for State-led import sub-
stitution industrialization (ISI) and highly protective policies, which led
to substantial industrial growth but also had significant costs in terms
of lost opportunities to exploit the benefits of expanding world trade
between 1950 and 1970. In the 1960s and 1970s, many Latin American
countries began to abandon exclusive ISI policies, but protectionism
received its final blow only in the 1980s, a decade that witnessed a
wave of democratization in the entire region, but also rising indebted-
ness and poverty and stagnating economies (Cárdenas, Ocampo, and
Thorp, 2000). Neoliberal structural adjustment policies, which empha-
sized macroeconomic stability often at the expense of social benefits
and focused mainly on trade liberalization, strict fiscal management,
and privatization of State firms, were adopted by or imposed upon
many Latin American countries as the one-size-fits-all cure for their
stagnant economic performance. Despite or, as many say, because of the
neoliberal policies introduced by the structural adjustment policies, the
growth performance of the region in the 1990s was rather volatile and
unequally distributed and did not bring the quick economic recovery
expected. Major economies such as Mexico, Brazil, and Argentina
suffered serious crises during that decade or, in the case of Argentina, in
2001. However, by the turn of the twenty-first century, Latin American
economies showed improvement again and in 2004 a major boom set
in during which Latin America experienced solid growth, historically
low inflation, and a significant decline in poverty, although inequality
due to unequal distribution of the benefits of this export-led growth
remained a major characteristic of Latin American societies throughout
this time.
The worldwide economic crisis that set in during the fall of 2008 was
expected to take a major toll on Latin America. A year into the crisis,
in the fall of 2009, experts predicted dire ramifications for the region,
including plummeting economies, reduced remittances, and waves of
returning migrants, increasing poverty, rising social unrest, and political
instability, even a possible reorientation away from market-oriented
policies toward State-centered, more inward oriented economies (National
Intelligence Council, 2008; Hakim, 2009; Orozco, 2009a). Although the
crisis certainly ended the boom period, we can say today, yet another
year later and on the verge of slow but worldwide recovery, that Latin
America nevertheless survived it better than expected. A number of
Latin American countries actually seem to be managing the crisis much
better than the United States and parts of Europe, and countries such as
Brazil and Peru have been able to maintain decent growth rates.
The first three chapters of this book are dedicated predominantly to
those economic challenges and opportunities with which the region
has been confronted in the past two decades and highlight different
responses to those challenges. As Raúl Bernal-Meza and Steen Fryba
Christensen point out, the region has gone through two distinct phases
and could be seen as having recently entered a third phase with regard
to its responses to globalization as well as its position in the globali-
zation process. Whereas the 1990s showed an alignment with the
Western world and a concerted shift toward neoliberal solutions to the
crisis of the 1980s and the end of the Cold War, the socioeconomic
developments that resulted from this shift led to a new phase that was
introduced around the turn of the twenty-first century. In this new phase
Latin American responses have become increasingly heterogeneous as a
growing number of Latin American countries shift their focus away from
liberal trade to closer regional cooperation, even at times with demon-
stratively anti-US tendencies. Underlining the connection between
political and economic phenomena, the authors find that Latin America
today is submerged in a situation of heterogeneity expressed through
its different state models, different ways of integration in the interna-
tional system, through different models of regionalism and different
foreign policies with regard to relations with their northern neighbor.
This makes it highly difficult to confront the world system with a
united vision.
The second chapter focuses in on a more specific topic within the
economic frame: energy. Energy has been a primary driver for globali-
zation in the late nineteenth century already. As prices for oil have
reached record highs in recent years, the importance of energy in
the twenty-first century globalization has expanded dramatically and
global competition for energy influences in large part the way globali-
zation continues to increase. The energy topic is particularly interesting
within the Latin American context because Latin America, with the
exception of Central America and the Caribbean, is an energy-rich
region, harboring large reserves of natural gas as well as roughly 10%
of the world’s conventional oil reserves. Venezuela, Mexico, Colombia,
Ecuador, and Trinidad and Tobago are exporters and Brazil has recently
8 Introduction
joined that group with its off-shore oil field discoveries. Argentina
and Bolivia produce enough to satisfy their internal demand. The net
petroleum importers are Peru, Brazil, Chile, Paraguay, Uruguay, and
all the Central American and Caribbean countries with the exception
of Trinidad and Tobago. With its vast energy reserves, Latin America
therefore plays a key role in the global energy debate, one that will
increase as hydrocarbons become scarcer worldwide and the region
identifies and exploits its advantages in renewable fuels. But there is
no common regional response to the energy challenges and opportuni-
ties that globalization presents to Latin America, and hopes for energy
collaboration in the Americas are tempered by tendencies, especially
the United States, to seek energy independence, and the potential for
conflict in the region over control of resources. The two countries with
the most energy reserves in South America—Brazil and Venezuela—have
responded to twenty-first century globalization in different ways. Erik
Brand and Matthew Schewel review how both countries have used energy
in their economic and political strategies when considering the future of
energy policy in the Americas and they compare ways in which recent
developments in the energy sector have played a role in the commercial
ambitions and foreign policy evolution of two of Latin America’s most
energy-rich nations. The chapter also reviews the debates surrounding
Latin America’s renewable energies and their potential in the global
marketplace.
Our last economic angle focuses on remittances, those regular
money transfers of migrant workers sustaining their families at home.
Worldwide remittance flows are a direct outcome and a general character-
istic of globalization and have affected Latin America in a particular way.
A study by the World Bank (Fajnzylber and López, 2008) concluded that,
in Latin America and the Caribbean, remittances produce a number
of important positive socioeconomic effects, such as higher savings
and macroeconomic stability, better access to health and education,
increased entrepreneurship, and reductions in poverty and inequal-
ity and therefore contribute directly to development. Manuel Orozco,
a Central American-born specialist on remittances working now from
Washington, confirms these positive implications in his chapter about
remittance-flow impacts on social policy in Latin America and the
Caribbean. He finds that the effects of remittances on recipients’ social
expenditures are substantial, serving particularly as social insurance and
protection during crises or natural disasters. The author also explores the
impact of remittances on poverty reduction and inequality and finally
discusses the limitations of remittances as financial tools.
Globalization’s socio-political impact on Latin America
As economic, social, and political issues interact with one another

constantly, it has been a challenge to clearly categorize the chapters in
this volume. As an example of interacting social and economic factors,
Manuel Orozco shows how remittances help reduce poverty and inequal-
ity, which are persisting phenomena throughout the Latin American
region. Those phenomena are often presented as one of the reasons for
another phenomenon in Latin America during most of the first decade
of the new millennium: the rise of the Left. Leftist regimes today repre-
sent more than 60% of the region’s population (Lustig, 2009). However,
this new Left is far from homogeneous, as Martin Nilsson points out. He
explores the Left’s view on globalization as related to democracy and
the economic system in the context of its resurgence in Latin America.
Nilsson discusses the societal and political transformations that led
to the Left’s resurgence in the late twentieth century and includes
a conceptualization of the Latin American Left, addressing both the
radical participatory and the social democratic Left in relation to their
fundamental views on globalization. While the social democratic Left’s
position is best understood as a response on how to best cope with
and accept globalization, the radical Left and its resurgence is seen
as a reaction to the negative impact of globalization, and especially to
neoliberal politics and adjustments. Evo Morales’ rise to power in Bolivia
has been widely regarded as a good example of that left-wing populist
response to neoliberal globalization outlined in Nilsson’s chapter and in
fact Morales has on many occasions made his critical view on neoliberal
politics very clear. However, Anne Marie Ejdesgaard Jeppesen argues that
it would be wrong to reduce Morales’ political success to only this one
factor. She concludes that Morales’ election in Bolivia was the result of
a combination of global, local, economic, political, social, and cultural
factors that joined together in a nationalistic and indigenous response.
Jeppesen’s chapter discusses some of these factors, focusing first on
the connection between the success of Evo Morales in the elections of
January 2005 and the resistance against the kind of neoliberal policies
and economic globalization that had prevailed in the country for more
than 20 years. Jeppesen also analyzes those parts of the globalization
processes connected to discourses on democratization, decentralization,
and indigenous rights that have been used by local actors and given
local significance.
In our third contribution to this part of the book, Nicaraguan political
scientist Andrés Pérez Baltodano analyzes the impact of globalization
10 Introduction
on the capacity of the Latin American State to generate conditions

of ontological security for the most vulnerable sectors of society. The
author highlights the increasing role of religion as a source of human
security in Latin American societies where the social role of the State has
been curtailed. Finally, he discusses the implications of the resacraliza-
tion of Latin American societies for democracy in the region.
Globalization and security
Pérez Baltodano’s analysis seems to echo concerns already voiced a decade

ago. In the early 1990s, the United Nations Development Program
(UNDP) (1994) warned that increasing global interconnectedness has
created a crisis of human security, expressed in constant threats to
basic human needs that demand the formulation of strategies that
transcend national boundaries. Rising crime is part of that increasing
human insecurity Pérez Baltodano underlined in his chapter, and Latin
America is regarded to be one of the world’s most violent regions. The US
National Security Council (2008) recently predicted that drug-trafficking
organizations, sustained in part by increased local drug consumption,
transnational criminal cartels, and local crime rings and gangs, will
continue to undermine public security in large parts of Latin America
and warns that together with the persistent weaknesses in the rule
of law, particularly the smaller countries in Central America and the
Caribbean will verge on becoming failed states. Developments in recent
years in that sub-region seem to support that dire prediction. The current
drug war in Mexico, with more than 30,000 casualties, is possibly the
most illustrative but sadly by far not the only example.
Two of the three chapters included in this section of the book
focus on particular expressions of transnational crime in the Central
American area and Mexico, the geographic connection between South
America and the United States. Within the framework of the expansion
of transnational criminal organizations as an outgrowth of globaliza-
tion, Thomas Shannon Stiles analyzes the impact of globalization on the
creation and growth of the maras, street gangs consisting of Central
American immigrants to the United States which began operating in the
early 1990s in Los Angeles. The reasons for their growth are complex
and range from poverty, dysfunctional families, a lack of education, and
marginalization to a preceding history of civil war, easy accessibility of
arms, and a culture of violence in the region (Cruz, 2007). While these
are all considered local conditions that influenced the creation of the
Mara culture in Central America, increasing global interconnectedness
has helped this process along by creating opportunities for transnational

expansion. Stiles’s chapter therefore pays special attention to the con-
struction of the Mara structure as a transnational criminal operation
that now has its headquarters in Central America and has managed to
acquire increasing international reach. The Mara’s internationaliza-
tion is closely related to another topic which has occupied the news in
recent years: Mexico’s security crisis and gang and drug-related killings
which underscore the country’s conversion into the new processing
station for drug exports from Latin America to the United States and
which goes hand in hand with increasing criminal networks in the
entire Central American region. Today, Mexico processes 60% of
the synthetic drugs destined for consumption in the United States
(Orozco, 2009b).
Patricia Olney analyzes the reasons for Mexico’s current security crisis.
She stresses that the democratic transition completed in 2000 and
coinciding with Mexico’s entry into the global market through NAFTA
in the 1990s created a power vacuum that facilitated the settlement
of criminal structures and enhanced a culture of violence in Mexico
that current governments find hard to tackle. The author underlines
the fact that while globalization provided conducive conditions to
increase drug trafficking, the Mexican security problem is nevertheless
rooted in specific internal conditions that have their origins way back
in the political history of the country in the twentieth century and
constitute the predominant causes of the rise in violence we see today.
Thus, as Jeppesen has done in her chapter on Bolivia, Olney once again
underlines the fact that internal, national factors and transnational and
globalization forces are intertwined, reinforcing each other.
The section’s third chapter takes a more regional approach. Growing
illicit drug markets and transnational crime as well as increased legal
and illegal migration facilitated by the globalization process also have
an impact on Latin America’s democracy, as Dirk Kruijt demonstrates in
his chapter on new patterns of violence in Latin America. Kruijt makes
the point that Latin America’s democracy is a democracy with fault
lines. As another example of how social, political, and economic issues
interact with security factors the author describes the impact of drug
markets upon urban poverty and argues that it has become increasingly
heterogeneous, reflecting marked changes of the Latin American urban
class structures. He emphasizes the point that the growth of the poor,
informal, and excluded sectors of society together with a local gover-
nance void has produced new violent actors and new patterns of
violence firmly anchored within this new “informal citizenship.”
12 Introduction
Alliances old and new: Latin America as a global actor
The fourth and final part of this book focuses on Latin America’s role
in this new phase of global interdependence. How does globalization
influence Latin America’s old alliances and in what way does it open
up doors for new ones? We decided to include three chapters about this
topic within this collection: the first evaluates the relationship with a
traditional ally, Europe; the last two concentrate on new alliances and
focus on China and general South-South connections.
Since this volume focuses on presenting recent perspectives in the
debate about globalization’s impact on Latin America and the region’s
responses, we decided not to include Latin America’s most traditional ally,
the United States, but focus on alternative alliance perspectives instead.
However, these perspectives cannot be analyzed without understanding
Latin America’s relationship with the United States. Since most of the
region gained independence in the early nineteenth century, its most
important relationship has been with its only direct neighbor. US rela-
tions with Latin America have never been easy, though. The enormous
difference in terms of wealth and power between the United States and
the countries of Latin America has fundamentally shaped hemispheric
attitudes on both sides. Aware of the immense political and economic
influence of their only neighbor and reluctant to reject the commercial
and political opportunities an alliance with the United States offers,
Latin Americans have nevertheless developed a deep distrust concerning
US intentions toward the region. This distrust, and a certain defiance to
accept US leadership, was created by decades of a relationship marred by
domination, control, and abuse. Furthermore, American interest in the
region has experienced periods of intense focus as well as times of out-
right neglect. America’s embarking upon the war on terror was just the
last example of the latter and Latin America is again reacting with a new
display of defiance. The initiative to create a new hemispheric organiza-
tion that would be an alternative to the Organization of American States
(OAS) and exclude the United States and Canada is but one example of
this. In this light, the Left’s accession to power in the region could also
be interpreted as yet another attempt at resistance to US influence.
The financial crisis certainly did not help to improve that relation-
ship but underlined instead Latin America’s vulnerability to the ups and
downs of the US economy. Experts warn that unless the US government
pays more attention to its southern neighbors and their needs, it
could lose its traditionally privileged position in the region (National
Intelligence Council, 2008). While no Latin American country presents
an imminent threat to its security interests, the United States is

nevertheless interested in inter-regional cooperation in terms of energy
issues, transnational crime and drug trafficking, economic regionalism,
and the environment. However, it has been disappointed by the Latin
American defiance toward US leadership, the surge of left-wing regimes,
Latin American criticism of US conceptions of democracy, and resist-
ance to progress on US free-trade plans, as well as the region’s slow
development and persistent political instability in certain areas. While
globalization has increased the complexity of the US-Latin American
relationship, the United States still remains the major source of trade
and investment and its politics on issues ranging from trade through
immigration to narcotics control will continue to exert a significant
impact on the entire hemisphere.
Latin America’s second most important traditional relationship is with
Europe. While European historical relations with the region go back into
the colonial period, US domination of the western hemisphere after
Latin American independence and throughout the twentieth century
limited the region’s relations to Europe. However, during the 1980s
and particularly during the 1990s, relations between Europe and Latin
American began to intensify again. Enrique Mendizabal and Guy Edwards
describe Latin America’s relationship with Europe with an eye to the
future. The authors frame the current state of affairs between Latin
America and Europe within the context of the past 30 years. Looking at
opportunities as well as challenges to this complex relationship, their
analysis includes political, economic, and commercial aspects, levels
of cooperation including aid, as well as cultural and social dimensions
including migration, and finally offers some conclusions and recommen-
dations toward the future.
Globalization, however, also offers new alternatives to Latin America
and during the past decade the region has clearly begun to accept them.
Secured and somewhat subdued by the overwhelming presence of their
northern neighbor, Latin Americans have traditionally been reluctant
to stray from the assigned path and join the international debate as
independent actors. With the end of the Cold War, however, Latin
American governments have increasingly realized that they are losing out
on current opportunities by hanging on to traditional allies. Their most
important new opportunity is the People’s Republic of China (PRC), as
William Ratliff notes in his chapter. While Latin American ties with China
reach back at least into the Spanish colonial empire of the mid-sixteenth
century, they have seen an explosive growth in recent years. The PRC
raised its stake in the region to a “strategic” level in its November 2008
14 Introduction
Policy Paper, which focused on support for mutual interests, economic

cooperation, cultural links, and Latin American recognition of the “one-
China principle.” Ratliff analyzes the hopes and fears Latin Americans
and Chinese associate with this new relationship as well as the questions
raised by China’s possible impact on the security, politics, economics, and
culture of the region. He maintains that concerns that the Chinese rela-
tionship with Latin America will undermine democracy and weaken the
US position seem not to be shared by either the United States or China.
It has become rather obvious that China is unwilling to join the anti-US
front in Latin America. In the end, he concludes that Latin Americans
themselves are responsible for using relations with China to advance
their own broad national interests or for letting China establish a domi-
nant position reminiscent of history’s other main external actors: Spain,
Portugal, the United Kingdom, and the United States.
While increasing commercial ties with China, now the world’s
second-largest economy, is a somewhat predictable move on the part of
many developing countries, the last two global decades have also seen
a general trend of strengthening relationships between members of the
developing world instead of relying completely on old alliances with
the northern hemisphere. Latin America is no exception. In a recent
report, the Inter-American Development Bank predicted not only China
but also India to become increasingly more important trading partners
for Latin America than Europe and discussed opportunities to increase
ties between the two Asian powerhouses and the Latin American
region (Mesquita Moreyra, 2010). Thus, in our final chapter Steen Fryba
Christensen explores that most innovative opportunity globalization has
to offer Latin America. Using Latin American giant Brazil as a case study,
the chapter analyzes the historical background for the Lula govern-
ment’s South-South strategy and the overall response to the challenges
that the globalization process has presented Brazil with in recent years.
It offers a deeper look into Brazil’s extra-regional South-South relations,
emphasizing both economic and political aspects.
Finally, in our conclusions, we take a look at the balance sheet and
the general situation of the region, discussing opportunities, challenges,
hopes, and fears, and the future for Latin America in an increasingly
globalized world.
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1
Latin America’s Political and
Economic Responses to the
Process of Globalization
Raúl Bernal-Meza and Steen Fryba Christensen
Changes in the global system
In order to identify the characteristics of the actual phase of historical

capitalism that is typically denominated “globalization,” a few reflections
are first required. From a historical systemic and structural theoretical
and methodological perspective, the world has been characterized by
globalization from the creation of the world system, based on the First
Economic Order that came out of the European expansion between the
end of the fifteenth century and the beginning of the sixteenth
century.
What we today identify as “globalization” is just the most recent phase
of capitalist history in which the globalization of capital coincides with
a system of ideas that did not exist in the previous phases and which was
made possible thanks to the development of systems of information, tele-
communication, and informatics. These new systems were generated by
the technological revolution following the capitalist crisis of the 1970s,
which was reflected in the questioning of the Fordist model of produc-
tion and the welfare state. This questioning stemmed from the crisis in
capital accumulation. The 1980s, however, saw a change in the regime
of accumulation. The previous intensive regime of industrial capital-
ism was transformed into a new regime characterized by transnational
capital mobility and the constitution of a historically new international
bloc of social forces centered on the United States or, in other words,
a period of new North American hegemony. To sum up, the 1980s saw
the emergence of a new international bloc based on the growing struc-
tural power of internationally mobile financial capital (Gill, 1986; Gill
and Law, 1989; Bernal-Meza, 1991, 2000). The responses to the crisis of
Fordism and the welfare-state arrangements in the developed countries
16
Raúl Bernal-Meza and Steen Fryba Christensen 17
came to be known as the “third industrial revolution.” It implied new

dynamics of global capitalism’s expansion, which accelerated with the
disintegration of the Soviet bloc and the ensuing disintegration of the
Union of Soviet Socialist Republics (USSR). From then on there was
a growing emphasis on an economic policy approach more in line
with the interests of transnational finance capital. This was expressed
through enhanced coordination of the macroeconomic policies of the
seven most industrialized countries and the acceptance of a framework
of thinking that fitted the international financial regimes (International
Monetary Fund (IMF), World Bank) and was translated into the greater
use of conditional lending and structural adjustment packages in deal-
ings with Third World economies. This new structure was consecrated
in what came to be known as the “Washington Consensus,” which
enabled the states to apply neoliberal policies of structural adjustment,
privatization, deregulation, and cutbacks in their social policies. These
policies opened up a phenomenal transfer of riches from the develop-
ing countries to the central capitalist economies that were dominated
by transnational finance capital. In Latin America this phase was
expressed through the foreign debt crisis. The epitome of the foreign
debt crisis, the 1980s came to be known as “the lost decade.” The
Latin American foreign debt, which at the end of the 1960s totaled $23
billion, had grown to $318 billion by 1981 and to $423 billion in 1990
(Bernal-Meza, 1991).
The logics of “globalization” required a new international context,
which was provided by the fall of socialism and the end of the Cold War.
While this new global order of unipolarity was coming into being, the
Latin American governments undertook the implementation of different
variations of the neoliberal model, and Latin America, from Mexico to
Argentina, obtained a high degree of homogeneity in economic adjust-
ment policies, deregulation, and privatization as well as in foreign
policies. The foreign policies were particularly similar in their acceptance
and support of North American hegemonic visions of “globalization”
in the unilateral opening up of Latin American economies, in state
reforms,—which in this case meant substituting the structures of the
developmental state with those of the neoliberal state. The countries also
concurred in seeing “open regionalism” as a way to promote regional
integration. All these Latin American countries adopted foreign policies
that they themselves called “pragmatic” and “low-profiled” (Bernal-Meza,
2009). However, between the end of the 1990s and the start of the new
century a new wave of crises, which in many cases were unprecedented
in terms of their depth, swept the region. Venezuela, Bolivia, Ecuador,
18 Globalization: Political and Economic Responses
and Argentina were the most severely hit, while Brazil, Mexico, Peru,
Uruguay, Paraguay, and the Central American countries were also seri-
ously affected.
Against this background, new national social and political alliances
in the region spurred a new panorama of diverse forms of “leftist”
government and the return of nationalist policies. The novelty of it all was
the tendency of new governments’ being dominated by socio-political
forces rooted in indigenous and peasant masses, as in the case of Bolivia,
Ecuador, and Paraguay.
In short, there was a sudden emergence of new governments with
reactive political visions centered on the strengthening of the state and
the return of economic nationalism; the presence of different models or
types of state that were not convergent—in terms of either development
policies, policies of international integration or foreign policy—led
to the implementation of individual state policies that were not arti-
culated in the region or in sub-regions as a whole. As a result, regional
leadership became an object of dispute, and projects of integration and
cooperation tended not to converge.
In the meantime, China’s re-emergence as one of the key actors on
the political and economic global scene toward the late 1970s has been
widely noted all over the world as one of the most important events
in modern history (Xing, 2010). The “rise” of China thus introduces a
new set of dynamics into the global context in which Latin American
nations must chart their course. China’s impact on the world system
has become greater only in the twenty-first century, as when China
was admitted as a member to the World Trade Organization (WTO) in
2001 (see the discussion by Steen Fryba Christensen in this volume). To
some, China is mostly a source of new economic and political opportu-
nities, while to others the country presents new risks of increased Latin
American dependency and de-industrialization. China’s share of global
manufacturing exports has risen steadily throughout its reform process
and its international competitiveness in this area is a major competitive
challenge for the Latin American manufacturing sectors. From 3.7% of
global manufacturing exports in 1995, China’s share rose to an impres-
sive 15.9% in 2009, while Latin America’s share remained relatively
stagnant (Gallagher, 2010, p. 5).
It seems fair to say that among all the main factors that may help us
understand the crises of contemporary capitalism—including the finan-
cial crisis that started in 2007—it is the dominance of finance capital
over productive capital that stands out as a prime factor (Rapoport and
Brenta, 2010).
Global system in the first decade of the twenty-first century
A context consisting of an international political system in transition,

important determinants of unipolarity and hegemony, and a process of
globalization dominated by finance capital have created an extremely
complex situation for developing countries. The characteristics of
the present historical phase of capitalism—where the combination of the
globalization of capital and the globalization of a system of ideas enables
countries with the largest economies to dominate others—increasingly
limit the alternatives for an individual way out for developing countries,
with the exception of the largest developing countries such as China,
India, and Brazil.
The crisis phase initiated in 2007 has shown once more the difficul-
ties of controlling nationally and internationally mobile finance capital
because of the hegemonic bloc that dominates the international system
to serve its own interests. We are in the presence of a financial system
that is much broader than the traditional banking system and which
has developed greatly under the protection of the financial deregulation
and internationalization facilitated by neoliberal globalization; this has
put the Bretton Woods system under critical pressure, but governments
of the central countries are unwilling to restructure. The crisis of multi-
lateralism gives momentum to the development of counter-powers
such as the BRICs and South Africa that seek to participate in global
economic governance without changing the rules. These new alliances
weaken the projects of regionalization, such as those encountered in
South America. They are counter-hegemonic alliances, but at the same
time they implicitly recognize the hierarchical structures of global
economic governance as evidenced in their support of and loans to
the IMF.
Transformation of the international agenda
The end of the Cold War implied the weakening of questions linked to
security issues and a strengthening of the themes considered “low poli-
tics.” This led to a situation where a new kind of diplomacy—economic
diplomacy—came to occupy the place that had formerly been occupied
by the diplomacy of “high politics.” As this change occurred, more
countries were able to participate in multilateral negotiations. However,
owing to the characteristics of states and their political systems, develop-
ing countries for the most part do not enjoy conditions that enable
them to confront multilateral negotiations on an equal footing.
Characteristics of international trade

Considering the techno-industrial development and its long-term
impact on the specialization in international trade, it seems reasonable
to conclude that the argument in favor of free trade derived from the
theory of specialization in international trade cannot be sustained (as Raúl
Prebisch rightly demonstrated). Comparative advantages have remained
relatively stable over time. Countries with low incomes specialize in
products intensive in land; middle-income countries specialize in pro-
ducts that require the intensive use of labor, and high-income countries
are characterized by their intensive use of technology and labor. The
ascent heralded by the theory of specialization occurs only to the extent
that countries are transformed into producers with an intensive use of
human capital, which is expressed in the intensive use of technology.
The participation of intra-industrial trade in total trade increases with
the level of income. Since the economy of a country diversifies more
when income increases and given the greater trade volume between rich
countries, the flows of bilateral trade become more intensive in intra-
industrial trade and at the same time income per capita tends to become
more equalized (Gullstrand and Olofsdotter, 2007).
So, although developing countries experienced major growth in their
participation in world exports in the 1990s, this development does not
seem to have had an effect on the structure of global specialization in
general. While these general tendencies correspond to Latin America’s
experiences, China has been successful on this point with its continu-
ously expanding participation in global manufacturing networks.
Impact of technological development

While trade negotiations in the WTO involved disputes between agri-
cultural protection and demands for the opening up of the industrial
sector, the scientific-technological development followed its own
logic of such magnitude that as new technological developments were
applied to industry and services, developed countries were faced with
a new series of problems. Thus, as the technological gap widened,
the developed countries started to press for including Trade Related
Aspects of Intellectual Property Rights (TRIPs). Six countries—the
United States, Japan, France, the United Kingdom, the Netherlands,
and Germany—today produce 83% of global technological innovations
and possess more than 90% of global patents (Oppenheimer, 2010). In
Latin American countries, however, only a few countries such as Brazil,
Mexico, Argentina, and Chile have the capacity to adapt technologies.
The rest are simply at the mercy of technology imposed from the
outside. The United States registers 77,000 patents every year, South
Korea, 7500, Brazil 100, and Argentina 30 (Oppenheimer, 2010).
A synthesis of the Latin American sub-system

It will not be possible to give a complete picture of the whole Latin
American region due to its great heterogeneity. Instead the path chosen
in the analysis next has been to single out a number of significant,
contrasting country examples. The Latin American scene is currently
characterized by a degree of heterogeneity that is much greater than
has been seen during the past 50 years. A number of factors at the
systemic, regional, and national levels contribute to this heterogeneity.
At the systemic level a number of global governance issues dealt with
in multilateral negotiations are in need of reform, but these reforms
are not forthcoming. We are referring here to the UN reform at the
political level, to the stalled WTO international trade negotiations, and
to negotiations on climate change. Also, some countries are finding it
harder to engage in scientific-technological cooperation since the incor-
poration of TRIPs into international trade negotiations. Furthermore,
Latin America faces challenges associated with the growing conver-
gence of political and trade interests between the United States and the
European Union (EU). Finally, relations between the United States and
different Latin American countries now vary substantially after negotia-
tions on a Free Trade Area of the Americas were abandoned.
At the regional level we find very different types of state or, in other
words, states that pursue quite different foreign policies and strategies
for economic growth. Chile finds itself with a “logistical” type of state
that promotes global free trade. Brazil pursues a development state path
with the ambition of gaining political prominence in the international
system. Venezuela and Bolivia are strongly state-directed economies
aiming at national development. Argentina has an industrialist policy
with strong state control and protectionist tendencies. Finally, Peru
and Uruguay are examples of states in transition from neoliberalism.
There are five strategies of international trade integration in Latin
America: Mercosur’s, the Andean Community’s, Caricom’s, Chile’s, and
finally Mexico’s with its involvement in the North American Free Trade
Agreement (NAFTA). At the same time, the South American region has
three different integration projects in place that are not necessarily
compatible, namely Mercosur (Mercado Común del Sur (Common
Southern Market)), Unasur (Unión de Naciones Suramericanas (Union
of South American Nations)) and ALBA (Allianza Bolivariana para los
Pueblos de Nuestra América (Bolivarian Alliance for the Peoples of

our America)). Foreign policy orientations are also heterogeneous. The
Kantian approach of seeking harmonious international relations that
dominated in the 1990s has been abandoned and instead we see a
number of countries, such as Brazil, Venezuela, Argentina, and Bolivia,
stressing the need for enhancing their own power in order to cope with
an international political setting dominated, as they see it, by conflicts
of interest. The governments of the latter three lack a strategic policy
vision of their position in relation to the region and the world and have
relations with other governments in the region that are either distant
or conflict-ridden. We also see disputes for regional leadership where
Venezuela is willing to pay the price of leadership, whereas Brazil is not.
And, finally, at the national level we see a strengthening in the role of
the state and foreign policies that are guided more by nationalist orien-
tations than in the 1990s. This has also led to disputes over leadership
between Brazil and Venezuela.
Identifying the main components of political heterogeneity in

Latin America in 2010: Ideal type states
The substitution of a neoliberal ideal type for the “developmental” state
was followed by new different responses: at different points in time, two
countries (Chile and Brazil) advanced toward the ideal type of the
logistical state (Cervo, 2008), whereas others such as Argentina returned
to differentiated forms of the developmental state. Still others, such as
Bolivia, Ecuador, and Paraguay, started a process of state construction
on new social bases consisting primarily of peasants and indigenous
masses. As for Venezuela, it is in transition toward a type of state capital-
ism. Finally, some countries, for instance Peru and Colombia, have
attempted to maintain a heterodox mixture, combining the neoliberal
state with the developmental state.
Logistical state
This post-developmental model of integration in the world economy,
which was formulated theoretically by Amado Luiz Cervo, aims at
overcoming the asymmetries between nations by elevating the national
situation to that of the advanced countries, by transferring the respon-
sibilities to societies from the former “business state,” and at the same
time by helping society realize its interests. The logistical state imitates
the behavior of advanced nations, particularly the United States. Its for-
eign policy component, in the area of international economic relations,
points toward reducing technological and financial dependency, and
promoting innovation in production and other initiatives that reduce

its external vulnerability. Internally, the model seeks to strengthen
the national structural economic nucleus in order to promote its inter-
nationalization. Cervo stresses that the ideology underlying this model
combines a liberal orientation in external economic relations with a
developmental orientation of the state toward the interior of the eco-
nomy. The aim is to advance in the construction of power resources and
to use them in order to create competitiveness (Cervo, 2008, pp. 85–7).
Construction (or reconstruction) of a state based on new social classes and

ethnic groups
As the most relevant and surprising example has been Bolivian, special
emphasis is given to this case. Particularly in Bolivia, but also to some
extent in the case of Ecuador and Paraguay, a reformulation of the
vision of the state was carried out by the newly elected government
together with its popular-indigenous base, opposed as it was to the
realist conception of the state and its Hegelian roots, which is dominant
in Brazil and other countries of the region.
The arrival of the government of Evo Morales in January 2006
profoundly modified the context of bilateral relations between Brazil
and Bolivia as well as the context of intra-regional relations. The recon-
struction of the state carried out by the Morales government implied
the adoption of a collective decision-making form based on criteria of
representation that benefited the great majority of the population of
indigenous origin, which had until then been excluded from existing
power structures. One of the instruments used to provide resources for
the project of a new state was the policy of nationalization (basically in
the area of hydrocarbon and energy), which enabled the state to regain
its control over energy resources and refineries and limit the interests of
Brazilian capital (Petrobrás).
The nationalization of the oil sector affected not only bilateral relations
with Brazil but also the region’s integration into the global economy.
It implied the inclusion of the energy theme as a priority in the South
American agenda and modified regional thematic priorities, influencing
also the international relations of other countries, as in the case of gas-
related relations between Argentina and Chile. Owing to other external
factors such as the increase in international prices and the fall of oil
and gas production in Argentina, the producing countries (Bolivia,
Venezuela, and Ecuador) became the center of diplomatic attention on
the issue of regional integration. Although the logic of decision-making
and political management in Bolivia quickly differentiated Morales
from the rest of South American governments and their realist visions of
power, it was his nationalization of the oil sector that sparked the first
disputes with Brazil since the conflict over Acre.
Argentine neo-developmental model

The social, economic, and financial deterioration that followed in the
wake of the implementation of the neoliberal model in Argentina threw
the country into a serious development crisis in 2001–2. Argentina saw
its poverty indicators skyrocket and its gross domestic product (GDP)
fall by double digits. The country became a catastrophic example of the
disasters that neoliberal strategy could provoke. The opposite happened
in Chile, which prospered in the 1990s while pursuing a neoliberal
strategy supported by a broad national consensus during the democratic
governments of the Concertación coalition that took over power after
Pinochet’s authoritarian regime.
From 2003, after the heterodox leadership of Eduardo Duhalde, Argentina
returned to a new form of the developmental state. Néstor Kirchner and
later Cristina Fernández de Kirchner led the country in the reconstruc-
tion of a national capitalist model based on private and state capital. In
order to restore the state in its role as a dynamic actor and promoter of
economic growth, the model of development and integration into the
international economy moved toward a type of open-economy national-
ism or free market nationalism; it returned to the active participation of
the state known from the industrialist past through the nationalization
of companies that had been privatized in the 1990s and through the
creation of new public companies. Moreover, the government attempted
to promote the formation of new private economic groups that would
respond favorably to the long-term objectives of the government. Under
this model, the market stopped playing the role of assigning resources
and wealth as the state resumed some of its redistributive functions dating
back to the pre-1976 period, and which governments between 1984 and
1989 had unsuccessfully attempted to restore.
Venezuela in transition toward state capitalism

Under the domination of the so-called socialism of the twenty-first
century and sustained by a set of ideas that are still not clearly defined
but are centered on “Bolivarianism” and pushed forward by its president
Hugo Chávez, Venezuela is in the process of creating a model of state
capitalism based on the nationalization of private companies of both
national and foreign ownership in areas considered of strategic impor-
tance to the political aim of creating a “Bolivarian State.”
Paradigms of foreign policy
Argentina: Open economy nationalism or free market nationalism

The model of development and the international economic insertion
of open economy nationalism or free market nationalism that has char-
acterized the governments of Néstor Kirchner (2003–7) and Cristina
Fernández Kirchner (2007–) in terms of an economic policy paradigm
has not had a clearly defined expression in terms of foreign policy.1
The rupture with the foreign policy approach of peripheral realism
pursued in the 1990s, which expressed the international worldview of
the neoliberal state, has been clear in three aspects:
• The vision or idea regarding globalization—in which we include the

type of relations pursued with the IMF, the World Bank, and the WTO.
In this respect the governments between 2003 and 2011 were unwill-
ing to make agreements with the IMF that implied IMF supervision of
national economic policy, and they likewise rejected IMF suggestions
about policy modifications. With regard to the World Bank, these
governments adhered to the views expressed by the former Vice-
President of the World Bank, Joseph Stiglitz, who criticized the bank’s
favoritism towards developed countries at the expense of developing
countries.2 As for the WTO, negotiations in the Doha Round were
rejected as long as there was no positive revision in terms of benefits
for developing countries, and Argentina took part in the formation of
the G-20 alliance opposed to the protectionist policies of the largest
industrialized countries (United States, EU, Japan). When Brazil later
changed its position, Argentina maintained its alliance with India
and China.
• The degree of economic openness,—where Argentina has pursued a
protectionist economic policy, even with regard to intra-Mercosur
trade, and has accepted only regionalist projects with a protectionist
character.
• The type of relations with the United States and its hemispheric
project the Free Trade Area of the Americas (FTAA),—where Argentina
was part of the group that was most opposed to the North American
project (together with Venezuela and Brazil). Argentina maintained
a policy toward Washington in which confrontations and criticisms
of the US government’s hemispheric and global policies have pre-
dominated. Similarly, it opposed the posture of the United States in
hemispheric themes such as the political conflict in Honduras and
the situation regarding military bases in Colombia, and it adhered to
the defense of those countries most criticized by the United States,

such as Bolivia, Venezuela, and Cuba. Considering its position on
regionalism and the role of alliances, Argentina has essentially main-
tained its preference for Mercosur and it has given special emphasis
to its bilateral relations with Brazil.3
Chile: Logistical state, multilateralism, open regionalism, and realism

The democratic governments of the 1990s to the present all abandoned
Chile’s “high profile” foreign policy that had been its diplomatic
tradition4 until 1973. The Concertación governments turned Chilean
foreign policy into a policy of the commercial state, which in a sense was
taken over from the military regime and its pragmatic realism posture.
This explains the absence of new and original formulations (Bernal-Meza,
2005, p. 290).
On the issue of international insertion, Chile pursued a policy of open
regionalism. In its international economic strategy, Chile has deepened
its neoliberal reforms of the 1970s following a strategy of bilateral free
trade with various countries. Chile’s regional activism in the region has
followed the idea that it should convince its regional associates to share
its more pragmatic version of integration (Bernal-Meza, 2009).
Brazil: Continental regionalism and power accumulation

The analysis of the guiding principles behind Brazil’s foreign policy
should be seen in conjunction with the state paradigm that dominated
in the period analyzed. In this case the predominant paradigm was the
one that the country maintained between 1930 and 1989, denominated
“the Developmental State.”
With regard to Mercosur, the first challenge was to move from a
closed economy to a more open economy with international competi-
tiveness, and to increase their negotiating power in international trade
negotiations and extend markets through economic integration. The
construction of a broad geo-economic zone in the Southern Cone was
part of a strategy of hemispheric political positioning: it gave Brazil pre-
stige and power and allowed it to take on a leadership role toward the
United States and its hemispheric initiatives, particularly the creation
of the FTAA. These elements were sufficient to sustain the aspirations of
the Brazilian leading classes seeking to achieve the recognition of Brazil
as a regional power.
However, the foreign policy paradigms backing this aim have not
been homogenous. Thus, while Cardoso sought international recogni-
tion by participating in the multilateral vision of former President Bill
Clinton, a vision based on a Kantian neo-idealism, Lula da Silva has

sought international recognition on the basis of a realist vision of world
politics, according to which the main powers are rivals in a contest for
world power, and his government has not recognized the existence of
an explicit unipolar situation.5 His government has increased its lead-
ership aspirations, now to a global level, under the realist vision that
sought to assure Brazil’s ascent in the hierarchy of world power and
to position the country strategically in the international system, in
particular on the United Nations Security Council (Bernal-Meza, 2006).
But, at the same time, the Brazilian political leadership recognizes that
such a position presupposes a favorable environment that supports
Brazil’s power projection. This type of environment should be assured
through a network of integration and regional cooperation with Brazil
as its central axis.
With Lula, Brazil became the only South American (and Latin
American) country to adopt realism as a paradigm for foreign policy after
the concept had been abandoned by Brazil itself, along with Argentina
and Chile, in the latter half of the 1980s. In the light of the paradigm of
realism, the delimitation of the “spheres of influence” became a matter
of evident fact: according to the Brazilian view, there are two areas of
influence in the Western Hemisphere; one headed by the United States
and comprising, among others, Mexico, Central America, and the
Caribbean, and another led by Brazil, comprising the South American
nations. With the return of realist thinking, the new foreign policy saw
the international system as a power game confronting the most power-
ful actors in the system. Multilateralism left the realm of utopia and was
transformed into an exchange of interests to be distributed according to
the results of trade negotiations. For this purpose it was crucial to rebuild
coalitions and alliances among similar countries. Taking over the think-
ing of Celso Lafer, the future of global scenarios will adjust to a vision of
a world order in which one sees the loss of unilateral hegemonic stabil-
ity as an opportunity for Brazil to reposition itself and gain recognition
as an emerging global power. The ideal model of the “logistical state”
presents itself as the key instrument for obtaining this reintegration into
the global power order.
Thus, in recent years Brazil has combined an active participation in
multilateral forums with the promotion of its national interests from a
realist perspective. What is new is that Brazil is combining its drive for
power measured by the accumulation of military capacity with a strategy
founded on “reciprocal multilateralism” (Cervo and Bueno, 2008). This
two-thronged strategy shows that Brazil has come to take a dominant
position in the diverse domains of international relations, ranging from

the area of regional security to the domain of finances.
Venezuela: Bolivarian foreign policy

Venezuela’s international policy, which is sustained by the paradigm of
“Bolivarian revolution,” is expressed through different means: a foreign
policy directed at specific governments, an oil policy, and a strategy
for economic cooperation. One of the objectives is the formation of a
regional and international anti-North American front and the support
political movements and governments that are aligned with its vision.
The Bolivarianism promoted by the Chávez government considers that
the present projection of the thinking of the Liberator (Simón Bolívar) is
a struggle against the renewal of “Monroeism” and its instruments such
as the Organization of American States (OAS), the FTAA project, and
the Inter-American Treaty of Reciprocal Assistance. They see the globali-
zation process as an unavoidable challenge that presents enormous risks
to the countries of Latin America. To confront these risks, Venezuela
defends the mechanism of integration through regional blocs, which
justifies its promotion of the Bolivarian Alternative for Latin America
and the Caribbean, ALBA.
Colombia: Support for respice polum: Alignment and subordination

Columbia’s internal situation, marred by the presence of guerrilla groups
and drug cartels, has impeded the Colombian state from exercising its
dominance throughout the national territory and has created (also given
the predisposition of the traditional dominant political sectors in the
country for maintaining a tacit alliance with the United States) a situ-
ation where Colombia maintains an international situation guided by
no foreign policy except for its alliance with the United States. In other
words, the traditional power groups have defined that, in the context
of internal deterioration and of difficulties with the Venezuelan govern-
ment, the best alternative is “not to have a foreign policy.” Instead, it
turns its international projection toward supporting the hemispheric
and global strategies of the United States.
Responding to the challenges of globalization through

regionalism
Latin American regional integration was initially embarked upon in
the 1960s during a period in which Latin American countries generally
pursued policies of import substitution and industrialization. In the
historical period that concerns us here—the period starting at the end of

the Cold War—regional integration initiatives were promoted alongside
neoliberal strategies of openness, deregulation, and privatization. The
regional approaches of the 1990s are therefore generally referred to as
“open regionalism” or “new regionalism.” The hope was that the comb-
ination of neoliberal reform policies along with regional initiatives
would help promote renewed economic dynamism in a region that
had experienced the “lost decade” in the 1980s due to the constraints
provoked by the external debt crisis and the collective responses of
the private and official creditor community. Among all the regionalist
projects it is the creation of Mercosur, a free-trade agreement signed in
1991 by Argentina, Brazil, Paraguay, and Uruguay, and which was trans-
formed into a customs union in 1995, that stands out together with
NAFTA between the United States, Canada, and Mexico. In addition to
these initiatives, regionalist projects were revived in the Andes region
and in Central America (Christensen, 2007b).
However, the regional scene changed character around the turn of
the millennium with the advent of financial instability and economic
stagnation in a large number of Latin American countries. Particularly
Argentina, Uruguay, and Venezuela experienced severe difficulties, but
also Brazil, Paraguay, Bolivia, and others experienced unsatisfactory
development results, whereas a few countries, particularly Chile and
partially Colombia, fared more favorably. As a result, Latin American
regionalism of a new and more heterogeneous type emerged.
Three main tendencies stand out. Two of these put no emphasis on
free trade in contrast to the neoliberal tendencies of the 1990s, whereas
the third tendency couples an emphasis on free trade with the United
States with a strategy of diversification in particular toward Asia and
Latin America.
The first regional grouping is ALBA, an initiative led and largely
financed by Venezuela as part of its regional and geopolitical strategy,
where it seeks to build its “own” group in order to promote its Boliviarian
views and protect itself from the United States. ALBA, formulated by
Chávez from December 2001, stems from Simón Bolívar’s project of
creating a Latin American and Caribbean Confederation and is defini-
tively a counter-hegemonic instrument. It is not so much an initiative
of economic integration as an attempt to relaunch the Liberator’s idea
of creating an American Confederation made up of the republics that
gained independence from Spain to constitute a common front against
the economic blocs of Asia, Europe, and North America. With this idea
Chávez meant to reduce the political power of the United States in
Latin America and to weaken its efforts toward hemispheric economic

integration through FTAA. Chávez proposes to convert Latin America
into one single bloc with a greater negotiating capacity.
Second, Mercosur changes character in the aftermath of the develop-
ment problems experienced by its members in connection with their
neoliberal strategies of the 1990s. It becomes less focused on liberal aims
of free trade and a so-called “perfect customs union” and comes to form
the central axis of a regional integration scheme, Unasur, at the conti-
nental level of South America. Unasur is largely a Brazilian geo-politically
oriented initiative through which Brazil seeks to enhance its leadership
role in “its” region while striving for a more prominent role in the
global hierarchy of states (Guimarães, 2006), and in its competition for
influence in the region with particularly the United States (Christensen,
2007a; Bernal-Meza, 2010); but it is also part of Brazil’s geo-economic
strategy to give particular emphasis to infrastructural interconnectiv-
ity and energy cooperation. All South American nations are members
of Unasur, but since they pursue quite different paradigms in terms
of development strategy and foreign policy orientations, it hardly
represents a common world vision. As discussed by Christensen in this
volume, the unofficial leader of Unasur, Brazil, pursues a strategy of
diversification in its economic as well as its political relations with extra-
regional partners as part of its economic and political international
strategies. This fact has created some skepticism as to Brazil’s intentions
in the region.
Last, a group of countries, Mexico, Chile, Peru, and Colombia (and
also Central America) have emphasized free-trade agreements with
the United States, thus continuing the neoliberal orientations of the
1990s. At the same time, however, these countries are also increasingly
following Chile’s lead toward economic diversification through free
trade agreements with other partners, in particular with China and
other Asian countries.
Globalization and development outcomes in the first

decade of the twenty-first century in Latin America
In this analysis we have distinguished between two distinct phases of

globalization and responses to globalization by Latin American coun-
tries. The main arguments have been that the external debt crisis and
the end of the Cold War were responded to in a relatively homogenous
way by Latin American countries, namely through neoliberal economics
and pragmatic or, one could also say, “passive” strategies of alignment
with the United States and the greater Western world. However, as this
strategy in many cases produced quite unsatisfactory results in terms of
economic development, a new and more heterogeneous phase ensued,
as discussed previously. Some countries such as Chile, maintained their
neoliberal orientation on account of their successful experience with
neoliberalism in the past. This took shape mainly its relatively success-
ful export-oriented strategies which Chile began implementing already
in the 1980s, thus ensuring it a less problematic outcome in 1990 and a
much lower degree of external economic vulnerability than many other
Latin American countries, which were experiencing deep economic
crises (Argentina, Brazil, Peru) experienced. Also, Chile did not pursue
an all-out neoliberal strategy, as it implemented policies of control with
capital flows in the 1990s (Bernal-Meza, 1995), thereby assuring itself
of greater overall stability than in the countries that were hit by new
economic crises in the late 1990s.
The new orientations were generally successful in promoting economic
recovery and new economic dynamism as well as greater economic
stability, thanks to the combination of economic growth and current
account surpluses that most countries enjoyed in the period between
2003 and 2007. This combination had for the most part eluded Latin
American countries in the twentieth century where growth had typi-
cally been associated with current account deficits. According to the
Economic Commission for Latin America and the Caribbean, the period
2003–7 was the most favorable period in the world and in the region
(CEPAL, 2010, p. 9).
Thus, this newfound development success was not only a result of a
heterogeneous set of appropriate homegrown development models and
strategies; it was helped along by a propitious external environment.
From the Latin American perspective, China’s economic dynamism
came both as a challenge and as an opportunity. A challenge because of
its strong competitiveness in the manufacturing sector and an opportu-
nity because of its huge and rising demand for natural resources, which
was enormously profitable for exporters of natural resources due to soar-
ing prices until the financial crisis in 2008. This particularly benefited
South American economies, although Argentina and Brazil, as the most
developed economies in the manufacturing sector in South America, also
faced stark competition from China. For Mexico and Central America,
China’s economic expansion has mostly been seen as a challenge due
to their strong specialization in manufacturing exports. The region’s
huge trade deficits with China bear witness to its poor competitiveness
(CEPAL, 2011).
Several South American countries therefore saw the Chinese export

market grow strongly throughout the first decade of the twenty-first
century, and today China has become the largest export market for
Chile and Brazil and has also moved up the ladder in the case of most
other South American countries. Therefore, China’s rise has been
helpful in promoting stability and growth in the short run, although
it has also exposed Latin American countries to the risks of Chinese
policies that hurt Latin American interests, as in the case of the barriers
imposed on Argentine soy exports to China in 2010.
The international financial crisis that broke out in the United States
in 2007 led to a reduction in primary product prices, although prices
are now on the rise again. The impact of the financial crisis was felt in
Latin America at the end of 2008 and in 2009 and provoked economic
stagnation in many countries, in part in response to protectionist ten-
dencies in developed countries. In this context, China and Asia came
to be of increasing importance to many Latin American economies as
export markets and thereby acted as a useful stabilizing factor. However,
there is a pronounced North-South trade pattern between almost all
Latin American countries and China to the advantage of the latter.
China’s importance in the structure of particularly South American
commodity exports makes these countries particularly exposed to deci-
sions in Chinese trade policy.
The relations between China and Latin America are essentially
guided by objectives emphasized by China but not shared by the Latin
American countries. Thus China uses the attractiveness of its market as
a foreign policy tool and as a source of power in bilateral relations.
Conclusions
During recent years, developments in Latin America, and particularly

in South America, have left the impression that the region, both Latin
America as a whole and South America, are experiencing a process of
differentiation and fragmentation that is challenging its characteristics as
a homogenous sub-system of similar elements in terms of development
strategies, international insertion, and international political alliances.
The emergence of new governments with reactive political visions
centered on the strengthening of the state and the return of economic
nationalism; the presence of state models or types that are not conver-
gent led to the implementation of individualized state policies, thereby
disarticulating the region or the sub-regions as a whole; competition
for regional leadership and the impulse given to projects of integration
and cooperation which did not converge led to this fragmentation. As

a Brazilian analyst has pointed out, Latin America in the twenty-first
century presents a diversity that is difficult to coordinate both in the
economic and in the political realm (Cervo, 2009, 85).
Latin America of today finds itself submerged in a situation of
heterogeneity expressed through its different state models, different
ways of integrating in the international system, through different mod-
els of regionalism and different foreign policies with regard to relations
with the United States, multilateralism in the UN and the WTO and
with respect to “globalization” (understood as more or less openness).
All this makes it extremely difficult to confront the world system with
a united vision.
Notes
1. See, for instance, the different perspectives of Busso, 2006; Cisneros, 2006;
Corigliano, 2008; and Simonoff, 2009).
2. For instance, with regard to the promotion of globalization and its relation
to the opening up and deregulation of peripheral economies, environmental
policies, the transfer of nuclear waste to countries of the Third World, etc.
3. See, for instance, the coinciding vision of Simonoff, 2009.
4. Cf. Bernal-Meza, 1989a; Bernal-Meza, 1989b.
5. For a broader presentation of these views, see CERVO, 2002; Bernal-Meza,
2002; Bernal-Meza, 2006; Bernal-Meza, 2008.
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2
Energy Policy and Twenty-First
Century Globalization: The
Responses of Brazil and Venezuela,
and Opportunities for Renewable
Energy Development in the
Americas
Erik Brand and Matthew Schewel
Introduction
The fast-rising demand for hydrocarbon resources worldwide has brought

new levels of attention to issues surrounding oil and gas in the Americas
and an increased urgency for finding viable alternatives to hydrocarbons.
Latin America is no newcomer to the world stage in these energy
debates, given the role of Mexico and Venezuela as major oil producers
in the twentieth century and Brazil’s leadership in developing biofuels
over the past four decades. While oil-rich countries of the region have
largely avoided the worst of the political abuses and economic traps
that have characterized “oil curse” states in the Middle East and Africa,
the phase of accelerated globalization that followed the end of the Cold
War presented the region with a new set of challenges: changed politi-
cal power structures, accelerated economic dynamics and a new cast of
extra-regional actors clamoring for a piece of the energy pie.
With globalization effectively raising the demand and therefore
increasing competition for limited energy supplies, the countries of
the region have been seeking collaborative policies for the Americas,
especially in areas such as biofuels. For some—the countries with
oil—collaboration implies the chance for economic prosperity and new
political power; for others—generally smaller countries without energy
resources of their own—this collaboration, through initiatives such as
PetroCaribe, has become something of a necessity. Yet the notion of
collaboration seems less appealing to some segments in these societies
36
Erik Brand and Matthew Schewel 37
than the promise of “energy independence.” In fact, the stated objective

of most oil-consuming governments in the Americas, especially the
United States, had become “energy independence”—not collaboration
(Hakim 2010). And, as the scarcity of energy increases, so the potential
for internal and external conflict is likely to grow in some countries of
Latin America, as it has in other parts of the world (Isbell, 2007).
At no time were these factors more evident than in the summer of
2008, as world oil prices shot past record highs to near $150 per barrel.
Windfall hydrocarbon revenues were fueling major new government
investments in energy infrastructure and social projects. South America’s
largest economy, Brazil, grew an average of more than 4% in the years of
this oil boom, lifting some 20 million people out of poverty. Brazil’s
national energy company Petrobras set out on an unprecedented five-
year, $112 billion capital expenditure program. Vast “sub-salt” offshore
oil finds, recently found to be located at a distance equivalent to a Mount
Everest under the surface of the ocean, sparked such enthusiasm on Wall
Street that, with a simple business plan and license to look for oil, one
new Brazilian company, OGX Petroleo e Gas Participacoes, attracted $3.9
billion in investments in an initial public offering. Recognizing that the
sub-salt finds could alter the nation’s destiny for generations to come,
Brazil’s government abruptly sought more control over the country’s
sub-salt reserves, establishing a new regulatory model more limiting to
foreign investors in the sector. Meanwhile, in Venezuela, a country with
the hemisphere’s largest proven reserves and a major supplier of oil to the
United States, the state oil company, PDVSA (Petroleos de Venezuela), was
able to continue its petro-diplomacy, granting low-cost oil to Caribbean
basin nations (above and beyond its substantial financial support of the
Castro brothers’ regime in Cuba) and even offering low-cost heating oil
to the urban poor in several major cities in the United States.
High oil prices prompted a boom in alternative energy resources, as
biofuels, wind, hydro, nuclear, and other technologies gained serious pub-
lic and investor attention as alternatives to hydrocarbons. Brazil’s largest
sugar-cane processor had recently listed public shares to fund its ambitious
ethanol export plans, and major new wind farms were under construction
in Mexico by Cemex, the multinational cement company, and farther
south in wind-rich nations such as Uruguay and Argentina. At the same
time, high oil prices were weighing on Central American and Caribbean
nations. Because most of these countries imported their fuel and sub-
sidized prices for consumers, analysts worried over how long public
finances could sustain the record costs and speculated about the potential
for social unrest over higher consumer prices. Concerns also arose over
38 Energy Policy: Responses and Opportunities
interconnection plans and supply agreements, as disputes escalated

between Bolivia, a country with important gas reserves, and Brazil, while
gas flows from Bolivia to industrial São Paulo state were briefly threatened
by social unrest. Argentina, Chile, and Bolivia also traded diplomatic
barbs, as gas flows were restricted amid high demand brought on by
drought. In Mexico, where production at state oil monopoly Pemex had
fallen dramatically, efforts by the administration of Felipe Calderón to
open the sector to private and foreign investment led the opposition party
to occupy the legislative chambers, stonewalling meaningful reforms.
Latin America was not totally insulated from the worldwide economic
crisis of 2008–09, which brought lower economic growth, falling oil prices,
and a credit crunch that raised questions about the funding of a range of
projects, hydrocarbon and renewable ones alike. But the region weathered
the crisis far better than similar shocks in the past, in part due to strong
macroeconomic management and continued demand for raw materials
from China, which took on even greater importance for some countries,
given a slow recovery in the United States. With the support of new invest-
ment from China and again-high oil prices, Latin American countries have
resumed the development of oil, gas and renewable energy, picking up in
2010 where they had left off before the Great Recession of 2008.
Globalization in the twenty-first century has led to responses from coun-
tries of Latin America and the Caribbean that vary widely, with differences
that defy easy labeling, even among countries that possess significant oil
resources and would seem to have much in common. In the past, analysts
have observed the neoliberal trend and the anti-neoliberal backlash in
the region. Others have described the “two lefts” in Latin America—the
“pragmatic” left of Brazil and Uruguay compared with the “ideological”
left of Venezuela and Bolivia (Castañeda, 2006; see also Nilsson in this
volume). Still others have sought to make sense of the region’s response
to globalization by dividing countries into groups—“globalizers” such as
Chile and Colombia, soft-globalizers such as Brazil, and anti-globalizers
such as Bolivia and Venezuela (Tissot, 2008b). This chapter surveys recent
responses to globalization by examining approaches to the energy policies
of two of the region’s most resource-rich nations—Brazil and Venezuela. It
also reviews the debates surrounding Latin America’s renewable energies
and their expansion in the global market.
Two experiences with energy and globalization:

Venezuela and Brazil
Energy was a key driver of what some describe as the first modern era of
globalization, in the late nineteenth century. Foreign investment, trade,
technology, capital, labor, mobility—all hallmarks of globalization—

were driving the exploitation of hydrocarbons a century ago in Latin
America.
Much as today, major shifts in commerce and trade were then reshap-
ing Latin American societies. Who would have thought that whale oil
would soon be replaced by electric current, that combustion engines
would usurp steam power, that ocean liners would be replaced by air
liners within decades of the first trans-oceanic flight? Oil discoveries
worldwide were fueling these innovations, and along with them came
profound changes in the economic and political relationships between
nation-states. Latin America is geographically well positioned with
some of the largest sources of energy—both traditional and “new”—on
the planet.
Two countries in the region, Brazil and Venezuela, have much in
common. Together they hold the largest oil reserves yet discovered
in South America; they both maintain national oil companies—
PDVSA in Venezuela and Petrobras in Brazil—that are responsible for
exploiting hydrocarbon reserves, as opposed to fully open-market
participation; they both have popular, democratically elected, left-
leaning presidents in power. However, the two have taken different
approaches to using their energy resources domestically, as well as in
trade and foreign policy. While Venezuelan president Hugo Chávez
proudly proclaims to use the nation’s oil wealth to counteract the
hegemony of the United States in the world—through discount oil
to countries like Cuba, considered foes in Washington, for exam-
ple—Brazil has sought to use its energy resources, including renewable
biofuels such as ethanol, to secure its economic autonomy and expand
trade and commerce. Brazil’s style of petro-diplomacy, in contrast to
Venezuela’s, is seen by observers as primarily commercial, rather than
political, in design and scope. The evolution of energy resources in
both countries helps explain how the two countries came to take these
different approaches.
Venezuela
The first oil drilling in Venezuela began at Lake Maracaibo in 1878—
a year before Thomas Edison invented the incandescent lamp. By 1929,
just ten years after gasoline replaced kerosene as product leader of the
American petroleum industry, Venezuela was the second-largest oil
producing country, behind only the United States. By World War II,
Venezuela was the largest oil exporter in the world. During the war,
Venezuela passed the Hydrocarbons Law of 1943, which guaranteed
the government a higher participation in the business, including an
increase in domestic refining, and a 16.6% royalty in exchange for

allowing international oil companies access to Venezuela’s reserves for
40 more years. Production surged from 800,000 barrels per day in 1944
to 3.2 million barrels by 1960 (Economides, Martínez and Puky 2007).
These events occurred, to the minds of citizens left out of the oil boom,
under a series of military strongmen whose friends and family ben-
efited from the country’s oil wealth, a perception that has long pitted
Venezuela’s poor against the “oil oligarchy.” Despite decades of democ-
racy, this antagonism shapes the country’s political climate to this day.
In the following decades, the tired caudillo system that had dominated
Venezuela wore itself out, allowing for democratic rule in 1958 that has
existed in the country almost uninterrupted ever since. Venezuela became
a founding member of the Organization of the Petroleum Exporting
Countries (OPEC) and soon found itself able to exert some political and
economic muscle behind its rich oil reserves. With the Middle East oil
embargo of October 1973, oil prices quadrupled by the following year,
greatly benefiting Venezuela financially in spite of its relatively small role
in the Middle East dispute. While Arab states were hoping to use oil as
a stick to steer Western nations’ foreign policy against Israel, the opportu-
nity for greater oil wealth prompted Venezuela’s newly elected president,
Carlos Andres Perez Rodriguez (who took office in 1974 and would later
return to power in 1989–93), to increase state control of Venezuela’s oil
industry, which became fully nationalized in 1976 with the creation of
PDVSA. The promise of realizing new oil wealth for Venezuela’s people,
on a scale previously only imagined, was at hand. But creating PDVSA
in the 1970s didn’t entail the full exclusion of foreign companies.
Concessionaires were subject to some changes, yet were still independ-
ent and competed against one another, while PDVSA served as a sort of
umbrella company, eventually to become, in the 1990s and after a period
of liberalization known as the apertura, one of the best-run national oil
companies in the world.
The political and economic turmoil of the 1970s were hard on
Venezuela. Public debt spiraled. The boom years of the 1970s and early
1980s were followed by the debt crisis and plummeting oil prices.
In these years, the government devalued its currency; Venezuelans’
real standard of living fell dramatically, corruption led to worsening
social indicators and disillusionment with government. As the country
entered the 1990s, the main political parties were discredited, non-oil
sector industries were nearly non-existent, and frustration levels with
cronyism, poverty, and the status quo were rising. So Venezuela—relatively
early in its development as a sovereign state—had quickly become
a major oil producer, and its economic path and political evolution
were shaped by this experience as an early player in the field. Because
it never needed to develop a non-oil economy, the nation had only a
small industrial sector, and state spending on social programs remains
subject to the prices it can command for exported oil. Those who
worked for PDVSA did very well; those left out were excluded from the
benefits of Venezuela’s oil wealth.
In 1992, a politically active left-leaning lieutenant-colonel in
Venezuela’s military, Hugo Chávez, led a coup attempt against the
unpopular President Perez. Chávez was unsuccessful in seizing power
then, but managed to maneuver democratically into office five years
later, in 1998, winning some 58% of the vote on a platform of improved
social policy (health, education, poverty-alleviation) and fiery rhetoric
decidedly against the United States and the “Washington Consensus”
principles of market capitalism. At last, it seemed to many, an advo-
cate of the poor would be willing to leverage the state’s oil wealth for
the benefit of its citizens. Chávez’s “Bolivarian Revolution” polarized
Venezuelan society. The opposition lacked legitimacy after decades of
ineptitude, and none of its leaders could match Chávez’s charisma.
A crippling general strike in 2002–03 at PDVSA—perceived as a standoff
between President Chávez and opponents wanting to bring down his
government—seemed for a time to put his rule at risk. But the strike
ended badly for its leaders and resulted in the dismissal of approximately
20,000 PDVSA staff (many at the managerial level) out of a workforce
of 45,000. The disruption captured the attention of US officials as well
as consumers at the pump. As oil output slowed dramatically from a
pre-strike production of 2.8 million barrels per day, US gas prices spiked
24% during the ten-week strike. The sudden shock showed the extent
to which the United States and Venezuela are linked, at times more
by convenience than by choice, in their oil-based trade relationship
(Erikson and Wander, 2009). While some analysts wondered if the com-
pany could recover from such a comprehensive loss of management and
technical expertise, PDVSA quickly recovered and has kept producing, if
not at levels that critics consider optimal. High oil prices have helped the
company deal with these setbacks. The oil boom improved Venezuela’s
terms of trade significantly (by 110% from 2003 to 2007). Its economy
grew at an average annual rate of more than 10% since 2003, albeit cou-
pled with inflation of some 20%, among the highest in Latin America
during what was generally a low-inflation period for the region.
Meanwhile, Chávez increasingly purged the oil industry—and other
sectors in the economy—of foreign companies that didn’t accept his
terms of business. By 2007, he had made his most aggressive effort

to capture control of the oil sector by buying out foreign companies’
stakes, leaving Chevron the sole major US oil company in the country.
Tax ministry “findings” of irregularities, followed by fines and tem-
porary office shutdowns, became common. Chávez’s government
had taken over foreign-held assets in oil, food, cement, and other
sectors, and pressured domestic companies in financial services and the
media, especially, to cede control to the state. In addition to making
huge investments in social programs at home, Chávez sought—and
achieved—a role on the international stage for Venezuela, emerging
as the outspoken voice of populations throughout the world angered
over the perceived “imperialism,” past and present, of major Western
powers. Soon after taking power, Chávez became the most vocal and
active opponent of the United States, eclipsing even the ailing Cuban
leader, Fidel Castro, in his public disdain of the “Yankee empire”
(Erikson and Wander, 2009). Chávez has sought to expand Venezuela’s
sphere of influence through a number of high-profile and ambitious
projects both within and outside Latin America. At the center of these
have been Venezuela’s hydrocarbons as a lever and tool for what has
become known as Chávez’s “petro-diplomacy.”
Petro-diplomacy
Using Venezuela’s “energy largesse” as his diplomatic tool of choice,
Chávez actively pursues relationships with world leaders who share his
opposition to the United States. Belarus, which the United States has
called Europe’s only remaining “outpost of tyranny” under its longtime
president, Alexander Lukashenko, has received Chávez warmly, with
the two leaders in 2010 signing an agreement to invest $1.6 billion in a
joint venture aimed at producing 200 million cubic feet of natural gas
per day by 2012, according to media reports at the time. Chávez and
Libyan strongman Muammar Gaddafi formed an unlikely friendship.
In the throes of an insurrection in the spring of 2011, Gaddafi was
rumored, falsely it turns out, to have been on board a plane seeking
refuge in Venezuela, bringing even more international media attention
to the two leaders’ close ties. Former military men from humble back-
grounds, both proclaimed that the United States was trying to unseat
them for access to their nations’ oil wealth (Dobson, 2011). Chávez
has visited Iran at least seven times while president, supporting Iranian
President Mahmoud Ahmadinejad in the heat of massive protests against
his claim to a landslide election in the summer of 2009 that captured
global attention. At the time, the Venezuelan government demanded
an “immediate end to maneuvers to intimidate and destabilize the

Islamic Revolution.” The two countries have announced some 200
bilateral agreements in areas such as energy, education, culture, science,
and technology. In 2009, Chávez and Ahmadinejad inaugurated a new
Irani-Venezuelan bank as an alternative to existing multilateral lenders.
North Korea, considered by the United States to be one of the most
dangerous states in the world, has had a number of meetings with
Venezuelan officials. In 2005, North Korean diplomats visited Caracas
to discuss energy cooperation and announced plans to open embassies
in each other’s countries. Closer to home, Venezuela has been assisting
the Castro brothers’ regime in Cuba with oil shipments in exchange for
medical assistance and other support. Venezuela is reported to be selling
up to 100,000 barrels of oil per day to Cuba, discounted by as much as
40% (Alvarez, 2009).
Of course, not all of Chávez’s foreign visits feature countries
considered pariahs to the United States. Apart from Cuba, Venezuela’s
PetroCaribe initiative has helped other Caribbean nations that depend
on imported oil, and which subsidize electricity and petroleum for
consumers, to cope with high prices and mitigate the effects of globali-
zation. Announced in 2005, the initiative allows the participants—about
a dozen nations—to buy oil from Venezuela on generous terms, such
as 25-year financing at 1% interest, and options to pay back in other
commodities such as food. While most analysts agree that PetroCaribe
provides important assistance to countries that could otherwise be
dealing with social unrest in the face of record-high energy prices,
even government officials participating in the initiative point out that
in the long term, market-distorting deals such as PetroCaribe could
detract from efforts to wean their countries off hydrocarbons and
replace oil with more locally developed and renewable energy sources
(Burke, 2009).
Venezuela has also been engaged in energy discussions with larger
global players such as China and Russia. Chávez has visited Russia
more than eight times during his presidency. In 2005, Gazprom, the gas
monopoly, won tenders to look for gas in Venezuelan waters. Gazprom
later announced it was considering investing billions in a Venezuelan
gas pipeline project. In 2008, Russian President Dmitry Medvedev visited
Venezuela (along with Brazil, Cuba, and Peru) with energy cooperation
at the top of his agenda. The following year, Russia approved a draft
agreement with Venezuela to jointly establish a bank to finance bilat-
eral energy and other projects. The bank, to be funded by Russia’s
VTB and Gazprombank and Venezuela’s treasury and PDVSA, is to be
headquartered in Moscow and have a branch in Venezuela. Venezuela,

along with Brazil, has become Russia’s most important strategic partner
in the region (Arizmendi-Posada, 2008). While Russia is generally
perceived as using Venezuela as a political foil against the United
States—through numerous arms deals and offers to develop nuclear
energy for Chávez, both of which have garnered significant attention
in the US media and prompted statements from US officials—China has
been focused on Venezuela in more economic terms.
According to one Washington-based political analyst, Venezuela is “the
high-risk, highest-payoff component” of China’s Latin America energy
portfolio (Ellis, 2009). When Chinese Vice-president Xi Jinping visited
Venezuela in February 2009, in the midst of the global economic crisis
and the apparent meltdown in the industrialized economies in Europe
and the United States, a Chinese expert suggested that “in the age of
globalization, South-South cooperation has acquired both necessity and
momentum of development” (Shixue, 2009). Fryba Christensen (in this
volume) deals further with the new trend of South-South cooperation.
Others have noted, however, that geography may yet get in the way of
grand plans. Venezuela has been pushing, for nearly as long as Chávez
has been in power, for a “China strategy” as a mechanism to reduce its
economic dependence on the United States, but not much has come
of that. Despite the political rhetoric, “geography still goes against
Venezuela’s petroleum strategy” (Tissot, 2008a). Oil sources closer to
China make Venezuela a long-shot hedge, analysts suggest. The energy
partnerships between China and Venezuela cannot be seen independ-
ently from the Chinese partnership with Saudi Arabia and African oil
partners (Altamirano, 2009). Saudi Arabia is the main Chinese energy
partner and will remain so because it can satisfy both China and the
United States without there being any sense of conflict at all.
By 2011, Chávez had pledged to send one million barrels of oil per
day to China within the next three years. According to a Wall Street
Journal report, however, that plan would require a drastic increase in
production, as such shipments would account for just less than half of
what Venezuela was then producing, while at the same time potentially
putting a strain on Venezuela’s finances (much of the oil shipments to
China are rumored to be sold at steep discounts). Moreover, critics of
Chávez’s oil deals suggest that Venezuela-sourced oil, supplied to China,
Cuba, and others at a discount, is often sold in the open market for an
easy profit. The Journal report cited sources who say China was paying
as little as $5 per barrel of oil and then in turn selling it at a “sizable”
profit instead of refining it domestically. William Ratliff’s chapter
(in this volume) on Latin America’s relationship to China provides the

background to this oil cooperation.
Closer to home, within Latin America, Venezuela has sought alliances
and agreements with a host of countries. In nations that have elected
left-leaning leaders—Ecuador’s Rafael Correa, Nicaragua’s Daniel Ortega,
and Bolivia’s Evo Morales—Chávez has struck numerous energy deals.
With Argentina, a country that defied international lenders in default-
ing on some $100 billion in bonds earlier this decade, Chávez bought
more than $3 billion worth of bonds with his oil windfall revenue,
timely financial support that helped Argentina back on its feet.
Opponents of Chávez, many of whom are now expatriates in the
United States or other countries, generally have little patience for
the “politically-motivated” energy projects of petro-diplomacy. They
see a weakened economy at home, and worry that PDVSA will wither
without more investment in itself or without the assistance of foreign
capital and expertise. Luis Giusti, the former CEO of PDVSA who was
replaced when Chávez took power in 1998, has noted that by 2007
the “development cost” of a barrel of oil in Venezuela’s Orinoco had
risen to eight times as much as in Saudi Arabia. Venezuelans would be
better served by a more efficient energy sector than “giving away” oil
resources to foreign powers to curry political favor, critics suggest. The
amount of money spent by Chávez’s government outside of Venezuela
has become a powerful argument used by critics of Chávez. By the end
of 2008, over a ten-year period, Chávez’s government had donated or
committed an estimated $53 billion overseas, according to a report by
Oxford Analytica (Giusti, 2007).
Brazil
Meanwhile, South America’s “other” big player with significant hydro-
carbon reserves, Brazil, has made headlines for its own advances in
energy. In contrast to Venezuela, Brazil’s brand of petro-diplomacy is
regarded by observers as primarily commercial, rather than political,
in design and scope. While PDVSA has been struggling to expand the
production needed to satisfy its international commitments, Brazil’s
national oil company, Petrobras, is seen to be on the rise. Over the past
decade, Petrobras has “stolen the mantel” from PDVSA as the most
impressive Latin American oil and gas company. This has prompted
analysts to ask: Whose energy vision will win out in Latin America?
Brazil’s or Venezuela’s? (Tissot, 2007)
Other countries of the region came later than Venezuela to exploit-
ing their hydrocarbons, a factor that in hindsight has been perhaps
to their benefit, providing time for their economies to modernize and

diversify without the “oil curse.” Early attempts to find oil in Brazil in
the late nineteenth century were small-scale, individualized enterprises,
and foreign companies had limited involvement. Not until the late
1930s did Brazil’s government make a stronger effort to control the oil
sector, when the National Petroleum Council was established. The first
proven oil discovery on Brazilian territory was made the following year,
but production remained tiny, reaching only 950 barrels per day in
1950. The state oil company Petrobras was established, under President
Getulio Vargas, as a state monopoly in 1953.
As the largest country in South America in geographic terms as well
as by population, Brazil consumed all the oil Petrobras could produce,
and self-sufficiency, much less export capabilities, was not realistically
expected in the early years of the company. When Venezuela was
exporting significant amounts of oil, Brazil had its coffee economy and
rubber booms, to be certain, but it also diversified its manufacturing
sector and agricultural capacity. Oil developed more slowly in Brazil
and, as a result, has had a more balanced position in Brazil’s economy.
These factors helped Brazil avoid some of the socioeconomic and
political problems of an oil oligarchy. Brazil’s diversified manufacturing
sector, high agricultural productivity, and its own development of
ethanol fuels in the 1970s, consciously designed to wean itself off
foreign oil, have helped spare Brazil some of the troubles experienced
by its neighbor to the north.
In the 1970s, the average Brazilian production was 200,000 barrels
a day, while consumption reached 1,115,000 barrels per day, according to
Petrobras. But the 1974 discovery of the offshore Campos Basin marked
a turning point toward self-sufficiency. In the 1990s, Petrobras invested
heavily in deep-water research, aiming to tap the roughly 65% of its
offshore exploratory blocks that are located deeper than 400 meters.
In 1997, Brazil’s government approved Law N. 9.478, which created
the National Council for Energy Policy (Conselho Nacional de Política
Energética) and the National Petroleum Agency (Agência Nacional do
Petróleo). The law also curbed Petrobras’s monopoly in Brazil to allow
competitors to bid on developing the country’s oil fields. Royal Dutch
Shell was the first foreign crude oil producer to set up exploration and
production operations in the country under the new structure, accord-
ing to the Energy Information Administration. Others now in Brazil
include Anadarko, BG Group, Chevron, Repsol, and Statoil.
This new law also allowed Petrobras to seek agreements with other
Latin American governments, and it began operations outside of Brazil.
By 2003, domestic oil production had reached the 1.54 million barrels
per day, approximately 90% of domestic demand. By 2006, Brazil
declared itself self-sufficient in oil, yet the outlook for exporting oil
from Brazil’s fast-growing economy remained uncertain. Then, in the
fall of 2007, Brazil announced it had discovered vast pre-salt deposits
of oil in deep waters offshore Brazil. Petrobras estimated in November
that year that the Tupi field may have as much as 8 billion barrels of oil,
the largest find in the Americas since Mexico’s Cantarell field in 1976.
Since then, some officials have speculated that up to 30 billion barrels
of oil may be located in the deep sub-salt reserves offshore Brazil. Some
experts predict Brazil’s reserves may rise has high as 50 billion barrels,
ranking it ninth in the world (O’Neil, 2011).
Annual foreign direct investment (FDI) in Brazil could double to
some $30 billion per annum after auctions for new offshore oil finds,
Francisco Gros, the late former president of Petrobras, said in June
2008: “If we do this right, this could change not just the oil discus-
sion, this could change the face of Brazil” (Simpson, 2008). As the
vice-chairman of OGX Petroleo e Gas Participacoes, an exploration and
production company, Gros helped shepherd the firm from its inception
to an initial public offering that netted some $3.5 billion on the São
Paulo Stock Exchange in June 2008, near the peak in the oil price rally.
Auctions for investors to participate in the country’s sub-salt fields were
abruptly halted, as the government considered regulatory models and
tax regimes for the new finds.
The ascent of Petrobras began to accelerate under the market-friendly
leadership of moderate President Fernando Henrique Cardoso (1995–2003)
and thrived under a self-described leftist, former union leader President
Luiz Inacio Lula da Silva. Even the prospect of Lula, once considered
a radical in Brazilian politics, taking power in Brazil had international
markets worried, and prior to his election it looked as if Brazil’s
investment and growth prospects could be dimmed under his govern-
ment. Lula quickly signaled, however, that he would not follow the
nationalization path that his counterpart Hugo Chávez had taken in
Venezuela. Elected with a strong mandate, Lula moved quickly to assure
investors he would maintain an orthodox economic policy, and left the
presidency in 2010 after two successful terms. His handpicked successor,
Dilma Rousseff, had been energy minister under Lula, an indicator of
the importance of energy in Brazil under Lula.
While Dilma handily won the election in 2010, international oil
companies would probably have liked to see right-of-center candi-
date Jose Serra elected into office. Serra’s plan to develop the pre-salt
deposits offshore Brazil largely kept in place the more market-friendly

concessionaire model that had existed and worked well in Brazil for
more than a decade. Lula and Rousseff, in contrast, supported a new
regulatory framework for the pre-salt areas. Under the new framework,
Petrobras must have at least a 30% stake in all future joint ventures
in the pre-salt areas not previously auctioned off. “Petrobras’ role is
now much bigger with regard to Brazilian oil,” said company CEO
Sergio Gabrielli in December 2010, upon the bill’s passage. “We have
the responsibility of being the sole operator.” Companies partnering
with Petrobras now need to share a portion of extracted oil with the
state. It remains to be seen whether Brazil calculated correctly in this
new regulatory framework, whether they got it “right”—as Gros had
questioned—or if the increased role for the government will be more
problematic than anticipated.
Brazilian diplomacy
A month after taking office in January 2011, Rousseff made her first
trip abroad, choosing neighboring Argentina. The trip was aimed at
“confirming that the Brazilian government’s foreign policy will prioritize
South-South relations and relations with neighboring countries,” the
Agencia Brasil news agency reported. Dilma discussed electricity and
nuclear energy collaboration with her counterpart, Cristina Fernandez de
Kirchner. This approach to foreign policy is consistent with the South-
South diplomacy that her predecessor, Lula, championed. Lula visited
the African continent at least nine times in his eight years as president
of Brazil. While Lula on these visits did not necessarily seek out figures
opposed to the United States, as Chávez has done, Lula did not make
a point of avoiding controversial leaders, either. Lula visited Equatorial
Guinea, an oil-rich West African country governed by strongman Teodoro
Obiang Nguenma Mbasogo, who rose to power more than 30 years ago
in a military coup. Whereas Chávez has sought friendship and solidarity
with leaders criticized by the United States, however, Lula’s mission on
such visits was primarily explained as commercial. “Business is business,”
Celso Amorim, the Brazilian foreign minister, said in response to a
reporter’s query over the human rights record in Equatorial Guinea. In
another South-South gesture, Brazil took a strong lead in helping restore
order in Haiti after its deadly political unrest in 2004. The Brazilian army
led the United Nations peacekeeping forces there, with more than 1000
troops of its own on the island, and provided humanitarian aid.
As with Venezuela, China has expressed a strong interest in work-
ing with Brazil. In 2009, Petrobras announced it had secured a loan
of $10 billion from the China Development Bank. The deal involved
increasing Petrobras’s sales volumes to China of 150,000 barrels of oil
per day for the first year and 200,000 barrels per day in the following
nine years (through 2019). About half of China’s crude oil requirement
is met through imports, according to industry newsletter Platts. That
year China became Brazil’s top trading partner, displacing the United
States from that position. Lula also traveled several times to India for
meetings that hit upon topics such as civilian uses of nuclear energy and
collaboration in creating international markets for biofuels. The two
countries share significant agricultural production potential, although
markets for ethanol export have yet to be worked out. “Commerce is
the key to our future relationship,” a Brazilian diplomat told report-
ers in 2004. In 2010, Lula was selected for India’s Indira Gandhi Prize
for Peace, Disarmament and Development. “Lula has championed the
cause of the global south and has worked to strengthen bonds among
the developing countries,” a prize committee statement said.
Of course, this South-South policy is not without discord. In 2010,
Brasilia and Washington were at odds over Brazil’s defense of Iran’s
nuclear program, when Brazil and Turkey teamed up in the UN Security
Council to reject sanctions on Iran for nuclear violations. Brazil has
also been supportive of Palestinian statehood, recognizing Palestine in
December 2010, thus contradicting US policy in favor of Israel. But the
role of energy in Brazilian diplomacy, through its South-South lens,
has been much more focused on trade and economic development
than on ideology. As oil prices neared their peak in 2007, Michael
Shifter, president of the Inter-American Dialogue in Washington, wrote:
“For Chávez, oil is everything—right now that translates into a lot of
money—and that is what fuels his agenda, which involves enhancing
his personal power and building a coalition in opposition to the US.
For Lula, in contrast, energy is a piece of a broader, longer-term strategy
to secure Brazil’s status as Latin America’s dominant power and an
opportunity to collaborate with the US” (Shifter, 2007).
Renewable energy: A new frontier for resource-rich

Latin America
While Brazil and Venezuela have occupied the headlines in recent years
with respect to hydrocarbons, rising concerns over the economic cost,
market volatility, and environmental sustainability of fossil fuels have
led countries across the region to turn to renewable energy as a way of
diversifying and boosting the reliability of their energy supply. Hopes
are high that the region can harness the riches of the land, wind, and
sun—in addition to its rivers—as significant sources of alternative
energy. In Brazil, the promise of replacing traditional fossil fuels with
a renewable alternative has been partially realized, with ethanol made
from sugar cane accounting for 40% of transportation fuel (Goldemberg,
2008). New biofuel, wind, and solar technologies are attracting foreign
investment, in some cases with the help of government incentives, and
nuclear power is attracting renewed attention in some of the region’s
larger economies, although the March 2011 nuclear crisis in Japan
triggered by a devastating earthquake and tsunami has somewhat
dampened that enthusiasm. Few parts of Latin America have faced the
challenge of diversifying their energy mix with greater urgency than
Central America and the Caribbean, which have historically relied
heavily on fossil fuels for power generation and suffered the harsh
reality of rising oil prices prior to the global financial crisis of 2008.
In sum, governments and the private sector across the region—from
Mexico’s windy Tehauntepec isthmus to the sugar-cane fields of São
Paulo state—are hoping to establish Latin America as a global renewable
energy leader, even as they confront a host of logistical, regulatory, and
public policy challenges.
Brazil, a global biofuels leader
The Western Hemisphere is said to hold approximately 80% of the

world’s biofuels capacity and is home to the world’s two largest ethanol
producers: the United States and Brazil. But these two countries didn’t
become biofuels giants overnight; their dominance resulted from years
of regulatory planning and market intervention. The need for a reliable,
renewable alternative to gasoline became particularly pressing during
the energy crisis of the 1970s, when oil prices soared. Recognizing the
nation’s dependence upon oil imports, the Brazilian government—then
a military dictatorship—created Proalcool, a program to stimulate
domestic ethanol supply through a series of quotas, price setting,
low-interest loans and a mandatory blending rate of 20% ethanol in
gasoline (Sandalow, 2006). The program helped triple ethanol produc-
tion between 1979 and 1985; by the mid-1980s, ethanol constituted
around 50% of Brazil’s fuel supply.
But lower gas prices during this period made ethanol less attrac-
tive, and public support for the program waned following an ethanol
shortage in 1990. In the 2000s, the development of flex fuel vehicles,
which can run on gasoline and ethanol, launched the newest phase of
the country’s ethanol program. In both 2008 and 2009, flex fuel cars
accounted for more than 90% of new vehicles sold in Brazil. In addi-
tion, sugar mills can burn the biomass left over from sugar production,
known as “bagasse,” to power their own operations and export surplus
electricity to Brazil’s electricity grid. By 2016, it is estimated that cogene-
ration of electricity from bagasse could produce 11,018 MW in surplus
power (Goldemberg, 2008).
Despite the onset of the credit crunch toward the end of 2008, Brazil’s
ethanol industry continued to attract investment, even as US ethanol
producers such as Verasun filed for bankruptcy. US agricultural giant
ADM announced an investment of $500 million in Brazilian ethanol,
Monsanto paid $300 million for a sugar-cane biotechnology firm, and a
consortium of investors led by Paladin Capital announced a $1 billion
joint venture to produce ethanol and electricity. Some ethanol propo-
nents even suggested Brazil’s sugar-cane ethanol industry would make
it through the credit crunch “stronger and even more resilient than
before” (Velasco, 2008). This was partly borne out by the fact that in the
years following the global economic crisis major world energy players
BP and Royal Dutch Shell announced multibillion dollar investments or
joint ventures with Brazilian ethanol companies.
In 2007 the Brazilian government signed a biofuels cooperation
agreement with the United States, the only country in the world that
produces more ethanol than Brazil. The two countries pledged to
create universal standards for ethanol, collaborate on biofuels efforts
throughout the hemisphere, and advance both technical cooperation
and research and development. In March 2011, US President Barack
Obama and Rousseff elevated this partnership to a high-level Strategic
Energy Dialogue that includes greater cooperation on oil development,
green energy, nuclear power, and biofuels. Both countries are working
together to expand biofuels cooperation in Central America and the
Caribbean, home to net energy importing countries hit especially hard
by fluctuations in oil prices. Some of these are also historically sugar-
producing countries, so “they know exactly what sugar cane means in
terms of business and technical aspects” (Vieira de Carvalho and Rojas
Sánchez, 2009). But the Brazil-US agreement did not address a funda-
mental tension underlying the ethanol debate, namely the 54 cents per
gallon tariff the United States maintained on imported ethanol and the
corn subsidies that support US corn-based ethanol industry. As some
analysts have noted, a policy of subsidizing the corn-based ethanol
“runs headlong into the broader goal of encouraging free trade” (Stark,
2007). However, the US tariff on imported ethanol expired at the end of
2011. The US tariff and the lack of policies promoting Brazilian etha-
nol in other developed markets, such as the European Union (EU) and
Japan, had generated obstacles for Brazilian ethanol producers trying
to establish their product as a global commodity, as have the logistical
difficulties of bringing the fuel to the market.
In addition to ethanol from sugar cane and corn, biodiesel production
from various oil crops is on the rise. Dual feedstocks, which can be used
for both food and fuel, have spawned a wide-ranging debate about the
costs and benefits of biofuels. The tensions reached a crescendo in 2007
and 2008, when both Haiti and Mexico experienced rioting over food
prices. Biofuels production had contributed to a 75% increase in global
food prices, according to the World Bank. Critics of increasing biofuel pro-
duction argued that in “the scramble to supply the world with biofuels,
poor people will get trampled” (Rusu, 2007). But others criticized the con-
nection, arguing that the amount of land shifted to biofuels production
in the United States and Brazil was not sufficient to drive up prices along
the scale they had been rising at (Schuh, 2008). While second-generation
biofuels—made from energy-dedicated crops, cellulose, or plant waste—
would largely resolve the food-versus-fuel dilemma, these technologies
still face a myriad challenges on the road to commercial viability.
Electricity generation and the promise of wind, solar,

and nuclear power
Overall, Latin America has experienced sustained economic growth for a

decade (briefly interrupted in 2009), bringing with it a surge in demand
for electricity. As a result, power consumption grew at an average annual
rate of 4.9% in South America and 5.2% in Central America from 2004
to 2009. Whereas hydropower had traditionally provided the backbone
of the region’s generation capacity, the liberalization of power sectors
in various Latin American countries and relatively low fuel prices led to
a shift toward fossil-fuel-fired power projects, due to their lower costs
and quicker start-up times (Garten and Rothkopf, 2009). But oil prices
skyrocketed in mid-2008, revealing the volatility and insecurity of
thermal generation if it came to be relied upon too heavily.
Latin America’s rivers, including the vast Amazon and its tributaries in
South America, provide the region’s largest source of renewable energy,
constituting 59% of the total electricity output in 2005, although that
percentage is declining. Large dams such as Itaipu, the world’s second-
largest hydroelectric facility straddling the Parana River on the border of
Paraguay and Brazil, were traditionally favored in the region due to their
relatively low cost of electricity generation (Krauter and Kissel, 2005).

The high initial costs of dam construction were financed through long-
term loans, many of which were taken out by military governments,
as in the case of Itaipu. But by the 1990s, large hydro projects came
to be criticized both for their vulnerability to droughts and extreme
climate events as well their high social and environmental costs, which
include the displacement of people, greenhouse gas emissions from
decaying biomass, and public health effects (Bermann, 2007). Many
local populations remained skeptical of these large hydro projects “due
to the legacy of state-owned investments that focused on ‘development’
and little attention on environmental and indigenous issues” (Tissot and
Martin, 2009). Strong opposition and financial difficulties have slowed
the development of large hydroelectric projects in Central America in
recent years, but countries such as Costa Rica, with its planned 631 MW
Diquis project, are still forging ahead. One renewable option touted by
experts is small hydropower plants, which have smaller environmental
and social impacts than large dams and have been used extensively in
China to electrify rural areas (Garten and Rothkopf, 2009).
As oil prices climbed to record levels during 2008, enthusiasm for
renewable energy in Latin America reached a high point. Investors
signed on to build billion dollar wind farms in Chile’s Patagonia region,
while ministers in Brazil and Chile talked up the potential for nuclear
power to decrease dependency on fossil fuels and volatile hydro plants.
But, unlike hydropower, other forms of renewable energy such as wind,
nuclear, solar, and geothermal energy cannot compete without the
government playing a significant role, whether it is through passing
new regulations, enacting market incentives, or investing in expensive
technologies (Krauter and Kissel, 2005).
Latin America increased its installed wind capacity by 21% in 2008,
with Brazil and Uruguay leading the pack, but fell substantially below
the worldwide 28% increase. Wind power is still in its infancy in Latin
America, the primary cause being “the lack of a regulatory framework
that can offer legal certainty and establish clear and reliable conditions
to attract investors interested in alternative energy for electricity genera-
tion” (Sainz, 2008). Wind-power industry leaders urged governments
to follow the lead of Spain or Germany in establishing feed-in tariffs,
citing Brazil’s Proinfa program and Chile’s Ley Corta as steps in the
right direction. In early 2009, Mexican President Felipe Calderón inau-
gurated a 250 MW wind farm in the Tehuantepec isthmus that will
supply electricity to cement-producing giant Cemex, and his govern-
ment has set a goal of fulfilling 25% of its energy needs with renewable
resources by 2012 (Thurber and Williams, 2009). And in late 2009,

Brazil conducted its first licensing round solely dedicated to wind-power
capacity, receiving competitive bids for 1805 MW spread over 71 wind-
farm projects.
Only three countries in the region currently have nuclear capacity—
Argentina, Brazil, and Mexico—with two plants in each country,
although Chile, Venezuela, and Uruguay are also considering adding
nuclear to their energy mixes (Squassoni, 2009). Brazil recently received
environmental approval to restart construction on a third reactor at
its Angra facility and is looking to grow the percentage of the coun-
try’s electricity provided by nuclear from 2% in 2008 to 2.2% by 2017.
But this expansion faces challenges from groups such as Greenpeace,
which claim the nuclear program is driven by military and mining
interests and, in fact, violates Brazil’s constitution (Lerer, 2009). In
Chile, which has conducted government-backed studies to determine
the viability of a nuclear program to help reduce dependency on fossil
fuels, opponents claim that going nuclear would create a host of new
dependencies on countries that process and manufacture nuclear fuel
(Larraín, 2008). Others argue that in an energy-poor country such as
Chile, all options should be open to discussion and the only thing
unacceptable is a “decision based in dogma and prejudice” (Arriagada,
2008). In March 2011 the United States and Chile signed a memo-
randum of understanding on nuclear cooperation which covers areas
that include the operation of nuclear research reactors and medical uses
of radiation, even as the Fukushima nuclear plant incident in Japan led
many in Latin America and across the globe to question the safety of
nuclear power.
Regional integration and cooperation efforts
Unlike oil policy, which has often divided producing and importing
countries in the region due to its intense politicization, renewable
energy has provided a new horizon for bilateral and multilateral engage-
ment in the Western Hemisphere. Before winning the US presidency in
2008, Barack Obama, in his only speech addressing policy aspirations
for Latin America, unveiled an Energy and Climate Partnership for the
Americas (ECPA), one of his few concrete proposals for the region. The
ECPA, which is currently being implemented, establishes a number
of ongoing multilateral projects and allows countries to propose
their own initiatives. At the Summit of the Americas in 2009, energy
cooperation also featured high on the agenda, with leaders discussing
Obama’s renewable energy partnership, energy efficiency, and electricity

interconnection. Some observers have highlighted the latter as an area
ripe for regional and sub-regional cooperation, citing initiatives such as
Central America’s SIEPAC project and a plan to link the power grids of
Andean countries with Panama and Brazil (Martin, 2010).
The global arena is another area for cooperation, and Latin American
countries such as Brazil and Mexico have taken on prominent roles in
the global climate change debate. Former Brazilian President Lula billed
himself as a spokesman for less-developed countries on the issue of
both climate change and trade. Mexico hosted the 2010 UN-sponsored
meeting on climate change and has proposed a “green bank” that
would invest funds from developed countries in sustainable projects in
the developing world.
Conclusion
Countries in Latin America have crafted their own responses and policies
in the face of global energy developments such as price volatility, politi-
cal changes (both within the region and externally), and advances in
renewable energy technologies. In Brazil, the Lula and Dilma govern-
ments have overseen an increased role for the state in the development
of the country’s vast offshore oil fields while pragmatically aiming to
strengthen Brazil’s economic and commercial partnerships abroad.
Venezuela’s Hugo Chávez has taken a more ideological approach to
petro-diplomacy, but has also sought to gather investments and build
alliances with global energy powers such as Russia and China. As emerg-
ing market economies such as China and India increase their domestic
consumption, it seems clear that both Brazil and Venezuela will increas-
ingly be able to benefit from their oil wealth. Latin American countries
will also benefit from the growth in renewable fuels and technologies.
While the region may still lag behind in renewable power capacity,
Latin American nations will continue to make investments in green
technologies and cleaner power sources. The renewable energy sector is
also providing new opportunities for bilateral and multilateral coopera-
tion among countries in the region that may sidestep some of the
political sensitivities that have hitherto hindered collaboration on oil
and gas. On the whole, there remains great hope that Latin America’s
energy-rich nations will be able to capitalize on their natural resource
wealth as they seek a more significant role in global politics and address
the rising domestic demand for energy that is both a catalyst for and a
consequence of greater economic development.
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3
Remittances and Social
Development: The Latin
American Experience
Manuel Orozco
Introduction: On globalization, migration,

and remittances
International migration and the economic activities that immigrants

engage in with their home countries are becoming a significant feature
of globalization. Cross-border human mobility is a result of transna-
tional, economic, environmental, and political trends. This migration
in turn generates a marketplace for activities between migrants and
their homelands. These activities include services, capital investment,
charitable donations, and family remittances, the last of which is a
partial transfer of immigrant income sent to relatives in their home
country. More than 70% of migrants send money to their families as
part of an obligation to look after them.
A conservative estimate puts the volume of remittances at around $400
billion. As shown in Table 3.1, the flows of remittances benefit all regions
in the world, though there are differences within some regional areas.
First, nearly 90% of all flows come from the five indicated regions of the
world, of which 35% and 31% originate from North America and Western
Europe, respectively. Second, the table shows variations in regional
dependency on remittances. Most of Latin America receives remittances
from North America, particularly the United States, whereas Africans
mostly receive remittances from Western Europe.
These flows into a household constitute an important income stream
and function as catalyzers of social and financial wellbeing. As this
chapter shows, remittances support basic social provisions such as
health and education in families that would otherwise struggle to afford
them, and contribute to building assets, such as savings or real estate.
58
Manuel Orozco 59
Table 3.1 Geographic distribution of remittances (as percentage of total flows

received)
Origin SE Asia/ North Western Russia/ Arab Africa
Oceania America Europe Kazakhstan OilExp.
Destination
East Asia & 37% 41% 12% 0% 1% 0%
Pacific
Europe & 5% 18% 46% 11% 1% 0%
Central Asia
Latin America & 2% 77% 15% 0% 0% 0%
Caribbean
Middle East & 2% 14% 44% 0% 8% 0%
North Africa
North America 4% 38% 51% 0% 0% 0%
South Asia 4% 30% 18% 0% 11% 0%
Sub-Saharan 3% 19% 45% 0% 3% 5%
Africa
Distrib. (87% of 10% 35% 31% 5% 3% 0%
the world)
Source: Orozco, Manuel. “Estimating Global Remittance Flows: A Methodology” Washington,
IAD, 2007, and IFAD, Sending money home: Worldwide remittance flows to developing countries,
Rome, 2007.
This chapter is organized as follows: first, there is a section on

the contextual background of remittances in Latin America and the
Caribbean (LAC). Second, the research and survey data that corroborate
the perception of remittances as social protection through spending
on healthcare and education are examined. This section also evaluates
the gender dimensions of remittances by analyzing the implications
for senders, recipients, and transnational families. Third, the role of
remittances as social insurance during crises or natural disasters is
explored. Finally, we take a closer look at the impact of remittances on
asset-building.
Remittances to Latin America and the Caribbean (LAC):

A brief overview
The volume of remittance flows to LAC increased to more than $60

billion in 2008. The increase was due to a number of factors, including
reactions to economic downturns in LAC, strengthened ties between
the United States and Latin America, improved competition in money
transfers, increases in contact among members in a transnational
60 Remittances and Social Development
Table 3.2 Central America in the global economy, 2008 (in $ millions)
Sector Guatemala El Salvador Honduras Nicaragua Costa Rica D. R.

Remittances 4315.00 3788.00 2707.00 1056.00 624.00 2,410.8
Merchandise 5375.93 2620.62 2639.10 1487.11 9312.48 1,397.9
Exports (not
including
maquiladora)
Maquiladora 1683.94 1928.10 3344.90 1152.60 1683.94 4,734.6
Official 551.71 243.2 1677.11 2034.72 129.24 86.9
Development
Assistance
Income from 1275.60 733.9 630.9 276.2 2160.60 3,519.7
Tourism
GDP 34,020.00 22,110.00 14,220.00 6,360.00 29,490.00 29,333.2
R⫹X⫹A⫹T/ 39% 42% 77% 94% 47% 41%
GDP
Source: Central Bank of each country.
family, and improved accounting of the money received. In 1980 only

17 countries reported flows on remittances; by 2004 the number was 30.
Even these figures, reported by central banks, are considered to be con-
servative estimates.
These flows have had an economic impact on several of these econo-
mies. First, the sheer volume has become an important source of foreign
savings, helping sustain foreign currency reserves. Table 3.2 shows that
in many Caribbean and Central American countries, remittances are
the most important source of income and exhibit far more stable flows
than other factors.
Second, remittances respond to macroeconomic shifts, particularly to
inflation, thus manifesting countercyclical tendencies. Third, in some
countries, particularly in smaller ones, these savings affect the coun-
try’s growth rate. Fourth, remittances represent an economic engine
attached to an intermediating industry that includes other kinds of
service and transaction. Fifth, remittances have a distributive impact on
a country’s economy.
As shown in table 3.3, in the broader LAC context, remittances are
increasingly forming an important share of the national income. Although
they represent only 2% of Latin America’s gross domestic product (GDP),
the impact of remittances varies across countries and regions and is
greater in smaller economies.
At the national level, such variations are associated with the
relationship to GDP, to per capita GDP and flows as well as to the
Manuel Orozco 61
Table 3.3 Remittances and key economic indicators

Country Indicators Volume ($ millions)
% of Per Average 2001 2005 2009 2010
GDP capita Transfer
Antigua and 1.0 141 220 ⫺ ⫺ ⫺ ⫺
Barbuda
Argentina 0.2 17 212 100 780 853 886
Barbados 4.6 685 220 ⫺ ⫺ ⫺ ⫺
Belize 5.8 243 220 ⫺ 81 100 100
Bolivia 6.9 118 235 103 860 1023 964
Brazil 0.3 27 541 2600 5792.7 6768 6800
Colombia 2.0 109 220 1756 4126 4145 4023
Costa Rica 2.0 134 301 80.25 400 535 509
Cuba ⫺ ⫺ 100 900 1100 1200 1200
Dominica 1.3 62 220 ⫺ ⫺ ⫺ ⫺
Dominican 7.8 357 176 ⫺ ⫺ ⫺ ⫺
Republic ⫺ ⫺ ⫺ 1807 2559.5 3033 2908
Ecuador 5.2 210 293 1430 1827 2495 2324
El Salvador 17.2 620 339 1910.5 2830.2 3465 3540
Grenada 4.3 263 220 ⫺ ⫺ ⫺ ⫺
Guatemala 11.4 326 363 584.3 2992.8 3912 4127
Guyana 24.1 365 179 90 260 356 374
Haiti 19.6 143 123 810 1077 1641 1971
Honduras 21.5 392 225 460 1763 2483 2529
Jamaica 14.9 811 209 967.5 1651 1798 1911
Mexico 2.4 247 351 8895 20,034 21,132 21,271
Nicaragua 12.4 144 133 660 901 915 966
Panama 0.9 58 196 ⫺ 254 291 297
Paraguay 3.1 81 263 ⫺ 550 691 723
Peru 1.9 85 169 930 2495 2665 2534
St. Kitts and 0.8 91 220 ⫺ ⫺ ⫺ ⫺
Nevis
St. Lucia 0.3 16 220 ⫺ ⫺ ⫺ ⫺
St. Vincent and 1.8 101 220 ⫺ ⫺ ⫺ ⫺
the Grenadines
Suriname 0.1 4 220 ⫺ 55 103 109
Trinidad and 0.5 82 200 40.9 97 116 123
Tobago
Uruguay 0.3 32 198 ⫺ 110 116 120
Venezuela, RB 0.0 5 138 136 271.9 733 756
Source : Central Banks of each country, World Bank Development Indicators, data collected
by the author.
cost of sending money. For example, Haiti, Nicaragua, El Salvador,

and Jamaica are countries where the remittances received represent
more than 10% of total GDP. However, not all of these countries are
relevant when remittances are measured in per capita terms. Those
countries that receive more than $100 per capita include ten countries,
among which are Mexico, Guatemala, Ecuador, and Barbados. These
differences are noted in the average amounts sent as well as in the
relationship between the annual amount sent and per capita income
in these countries. The following table highlights these differences.
Although the average amount sent is around $270 per month, when
that figure is compared to per capita GDP, again the results vary. The
cost of sending money also varies across countries and may be associ-
ated with volume; the lower the incoming volume, the more expensive
the transfer will be. The differences in these trends are a function
of specific country conditions as well as the history of migration.
For example, although Central America, the Caribbean, and Mexico
have a historical relationship of migration to the United States, each
migratory pattern and its subsequent remittance flows respond to the
realities of these countries.
These flows and their manifestations in the LAC region show the pres-
ence of three distinct groups as they relate to the impact these funds
have in each country. One group is represented by countries such as
Mexico, Guyana, and Haiti, whose flows have an effect on most, if not
all, of the indicators mentioned previously. That is, remittances consti-
tute an important part of the country’s national and per capita income,
as well as of the inflow to a household’s income, which is at least twice
the average per capita income. A second group, as in Brazil, Colombia,
and Paraguay, is one in which remittances have an effect in half of
these indicators. Last, a third group is that which is minimally affected
by remittances—for example, Chile, Uruguay, and Venezuela. This last
group is host to migrants and therefore the outflow of remittances is
more substantial than the inflow.
Remittance recipients and social assets
Remittances exhibit a social development function that allows for the

recipient’s wellbeing to be protected. In fact, remittances play a three-
fold role, depending on personal and structural circumstances; they can
be a source of asset building, social protection, and livelihood survival.
Social protection such as health and education are directly related to
the productive potential of households. The deficiencies in nutrition,
Manuel Orozco 63
illness, and lack of access to quality education that are common in

low-income families will result in limited returns on the labor mar-
ket, perpetuating a poverty cycle. As a result, attempts to measure
the effects of migration on social development have focused on
the levels of education, health, and nutrition within remittance
recipient households in comparison with levels within non-recipient
households.
In order to understand the trends in remittance recipient invest-
ment in the areas of nutrition, health, and education, we examine
recipient household survey data from eight countries: Colombia,
Cuba, Dominican Republic, Ecuador, El Salvador, Guatemala, Guyana,
and Nicaragua. Of the remittance recipients surveyed, nearly three-
quarters were women, 38% of respondents had completed secondary
school, whereas 34% had a primary school education or less. Women
recipients also exhibited lower levels of education than men, and the
percentage of women who had not completed primary school was
twice as high as the percentage of men. About half of the women
surveyed earned less than $150 a month, not including remittances.
Women surveyed represent the most vulnerable population of remit-
tance recipients in the light of lower levels of educational attainment
and lower incomes. This is compounded by the fact that women tend
to be the principal caregivers for children in the household, respon-
sible for the children’s nutritional intake, healthcare, education, and
general wellbeing.
Investment in nutrition
In Mexico, Lopez-Cordova finds that infant mortality and birth weight
improve among children in households that receive remittances
because the remittances enable enhanced housing conditions, allow
mothers to stay home and care for their newborn, or improve access
to public services (Lopez-Cordova, 2005). The aforementioned studies
examine the relationships between educational attainment and health
conditions in remittance recipient households. While a connection
between remittance income and actual increases in investment in
health, education, and nutrition is assumed to play a part in these
improvements in educational attainment, data on income expendi-
tures among recipients are not examined. Here we consider survey data
on spending choices. Nearly 80% of all remittance recipients reported
spending their income on food purchases (Orozco, 2005). The percent-
age of women devoting their income to food purchases is about ten
percentage points higher than the percentage of males. The likelihood
also increases for those with lower independent incomes and lower
levels of education. For example, while nearly 90% of those respond-
ents who did not complete primary school rely on remittances for food
purchases, only 70% of college graduates report using remittances to
buy food (see Table 3.4).
This finding is consistent with the assumption that those with lower
levels of education will earn less on the job market. The tendency for
women to be dependent on remittances to buy food may also be due
to the fact that women are less likely to have an additional source of
income, as many are homemakers or do informal work inside the home.
As a result, these recipients display a higher dependence on remittances
to meet basic needs.
In a survey of Haitian remittance recipients, respondents were asked
to identify how much of every $100 in income they earned was spent on
food (see Table 3.5). More than half of Haitian respondents report dedi-
cating up to 40% of their income to food purchases (Orozco, 2006b).
Investing in health
Remittance recipients are also used to pay for healthcare, includ-
ing preventive care. Indeed, 31% of remittance recipient households
Table 3.4 Income expenditures on food by level of education among

remittance recipients
Spends on food (%)
University degree 69.5
Some university 70.2
High school degree 79.2
Primary school 83.6
Did not complete primary school 89.0
Source: Orozco (2005).
Table 3.5 Income expenditures on food by Haitian recipients (per $100 earned)
Men Women
Between $1 and $20 31.70 34.95
Between $21 and $40 25.61 24.78
Between $41 and $60 17.68 16.81
Between $60 and $80 0.61 0.44
Between $81 and $99 2.43 2.21
Does not spend remittance on this 21.95 20.79
Source: Orozco (2006b).
Manuel Orozco 65
surveyed reported spending their money on health-related expenses. An

additional 17% reported spending on medication. A smaller percentage
of about 5% are covered by health insurance plans financed by their rel-
atives abroad. Among Haitian remittance recipients nearly one-quarter
of women report spending on healthcare expenses. One-fifth of women,
compared to about 16% of men, spend up to $20 on healthcare for every
$100 they earn (Orozco, 2006b).
A recent in-depth survey conducted by the International Organization
for Migration (IOM) and the Vice-President’s Office of Guatemala (2006)
sheds further light on the medical expenses of remittance recipient
households and the kinds of investment made. The majority of funds
spent on healthcare in these households come from remittances and
not from earned income. The proportion of social expenditure coming
from remittances varies by department and gender, which may be an
indication of more vulnerable populations. For example, on average
approximately 60% of healthcare expenditure made by the families of
emigrants are funded by remittances, with that percentage reaching
more than 85% in the departments of Chimaltenango, Sololá, and
Totonicapán (IOM and the Vice-President of Guatemala, 2006).
According to the survey, about one-third of emigrant households in
Guatemala used a private hospital in 2006, with household members
over the age of 50 more likely to be seen at a private hospital than
younger cohorts (IOM and the Vice-President of Guatemala, 2006).
There are several factors that contribute to a family’s decision to seek
private rather than public medical attention, including the cost of the
consultation, the type of illness or treatment, the perceived quality of
customer service, and previous negative experiences.
Remittances and investment in education

Low-income families are often forced to use cost-benefit analyses to make
choices about preventative healthcare and educational attainment for
children, and in many cases the opportunity and direct costs make these
investments impossible. One of the most common factors accounting for
this is the opportunity cost of children and young adults who can work
at home or in the formal labor market, especially among larger families or
in rural or semi-rural areas where schools are remote (Basu, 1999; Strauss
and Thomas, 1995).
Existing research suggests that remittances may ease some liquidity
restraints that families face, allowing investments in health and edu-
cation services which otherwise might not have been possible. Two
studies on educational attainment in Latin America suggest that the
additional income derived from remittances has a positive effect on

educational attainment for children in a household. Cox-Edwards and
Ureta (2003) examine school retention rates in El Salvador at tradi-
tional “exit points” for students, usually at the end of each three-year
cycle of primary school such as the third, sixth, or ninth grade. The
authors find that the increases in household income due to remit-
tances do ease budgetary constraints and positively affect the dropout
rate for children in rural areas. According to the study, retention rates
improve at these critical junctions among children from households
that receive remittances, regardless of the amount of money received
(Cox-Edwards and Ureta, 2003). Hanson and Woodruff conducted
a similar study in Mexico (2003), focusing on accumulated school-
ing for ten–15-year-olds in rural areas. The authors find that while
the emigration of a family member may disrupt family life in a way
that hinders educational attainment, remittances seem to make more
money available to finance education. Mexican children in migrant
households complete significantly more years of schooling (Hanson
and Woodruff, 2003).
Education expenditures are in fact among the most important
expenses allocated by migrants and their families. In a survey of remit-
tance recipients across seven countries, nearly 42% of women reported
using remittances to fund expenditure on education. The number of
men was slightly lower at 37%. The income and level of educational
attainment of the recipient seem to have little influence on recipients’
likelihood to invest remittances in education, and respondents with
more education are only slightly more likely to invest in education.
Again, IOM’s Guatemalan national household survey sheds more
light on the ways in which families use remittances to fund education
(IOM and the Vice-President of Guatemala, 2006). Nationwide, the
majority of funds spent on health and education by remittance recipi-
ent households come from remittances and not from earned income.
In 2006, a total of $203 million was spent on education. In the depart-
ments of Chimaltenango, Sololá, Quetzaltenango, Chiquimula, and
Jalapa more than 80% of expenditure on education was made by house-
holds with one or more family members abroad. The national average
is about 68%.
According to the United Nations Educational, Scientific and Cultural
Organization (UNESCO), about 91% of girls and 95% of boys in
Guatemala were enrolled in a primary school in 2004 (UNESCO, 2004).
These figures are roughly the same as IOM’s survey of children from
emigrant households between the ages of 10 and 14. However, on
Manuel Orozco 67
a national level, enrolment in secondary school dropped to 32% for

girls and 35% for boys in 2004. This drop in enrolment is consistent
with Cox-Edwards and Ureta’s (2003) description of traditional “exit
points” in education, where families choose whether or not to continue
their children’s schooling at certain periods.
A case study of the community of Salcajá in Guatemala reveals that
there are a variety of elements which may factor into a parent’s decision
to withdraw their child from school at the secondary level, including the
poor quality of public schools and the absence of instruction at this level
in their communities, or the high cost of private schools and associated
expenses such as transportation and supplies (Alvarez Aragon, Gonzalez
Decas and Castillo, 2006; Orozco, 2006a). The data on secondary school
enrolment collected by the IOM in its survey of emigrant households in
Guatemala may suggest that remittances do relax households’ financial
restraints in such as way as to allow them to continue to invest in edu-
cation over a longer period of time (2006). While enrolment does drop
among youths between the ages of 15 and 19, it remains higher than the
national average, with nearly 70% of boys and 62% of girls remaining
enrolled in an educational institution.
Increased investments in secondary and post-secondary educa-
tion also become apparent when the types of institution attended by
students are examined. Since public primary education in Guatemala is
more accessible and less costly than secondary education, the majority
of children of emigrant households attend public institutions. However,
the balance begins to shift around the first level of Guatemalan
secondary education, where the number of children in private schools
or cooperatives nearly doubles. The proportion of students in private
schools further increases in the second level of secondary school,
known as diversificado, where between 85 and 93% of the investments
made in education at this level are made through private institutions
or cooperatives. This would suggest that not only do these families
have the resources necessary to continue their children’s education
beyond the traditional drop-out points where the costs associated with
obtaining a formal education become greater; they are also opting for
private institutions.
Remittances in times of economic downturn and poverty
While remittances regularly support the basic needs of families, they

also act as social protection in times of economic downturn and parti-
cularly in times of crises or natural disasters. Emigrants, who are in
frequent contact with their family members at home, react quickly and
effectively by sending funds to address needs associated with conflict,
financial crisis, or natural disasters.
Guatemala and Hurricane Stan

The case of Guatemala after Hurricane Stan in October 2005 is a prime
example of how migrants abroad supported their relatives at home in
a time of need. Hurricane Stan primarily took its toll in rural areas that
were especially affected by the torrential rains and subsequent landslides.
According to surveys done by the IOM and the Vice-President’s Office
of Guatemala (IOM and the Vice-President of Guatemala, 2006), of the
nearly 9000 homes fully or partially destroyed by Hurricane Stan, more
than 5000 of them were in rural areas. Research shows that people in
rural areas typically receive more remittances than people in urban areas,
and Guatemala is no exception. In fact, areas that were the hardest hit
by the hurricane were also those that received the highest amount of
remittances in October 2005. More than 50% of households affected by
Stan nationwide are remittance recipients (IOM and the Vice-President
of Guatemala, 2006).
The month the hurricane struck remittances increased by 15% com-
pared to the national average. Sending money was also encouraged
by money transfer operators, such as Wells Fargo & Company, who
discounted the transfer costs to Guatemala and other areas affected by
the hurricane during October 2005 and who themselves contributed
to the cause. Remittance recipients had a comparative advantage over
non-recipients in the post-Stan environment. Prices rose for essential
goods and those who were able to count on remittances arguably were
able to recover more quickly than had they not received them. The IOM
survey reported that nearly 70% of homes affected by the hurricane
were reconstructed with the aid of a total of $1.4 million in remittance
money (IOM and the Vice-President of Guatemala, 2006).
Dominican Republic and the banking crisis

In mid-2002 the Dominican Republic entered a severe economic
recession connected to the decline in tourist revenues from 2001 and
a banking crisis that bankrupted four institutions and affected foreign
exchange, savings, and access to capital. Moreover, Dominicans in the
United States were severely affected by the economic recession that
started in 2001. Senders found that because their dollar was stronger
there was no need to send extra money during times of local currency
devaluation in the Dominican Republic. An econometric analysis of
Manuel Orozco 69
remittance transfers before, during, and after the period of the crisis
shows that despite the banking crisis, migrants continued sending
money back home (Orozco, 2005). The analysis looked at how remit-
tances responded to inflation, exchange rates, unemployment, and
interest rates. The regression results showed that current inflation was
the only statistically significant variable. Furthermore, they indicated
that immigrants mostly respond to price changes in everyday activities,
which is consistent with the evidence that the majority of transferred
remittances go to cover basic household needs. In the case of the
Dominican Republic, these findings are particularly important because
they indicate that the market of transfers responds independently of
exchange rate variations. Therefore, under conditions of economic cri-
sis people seek to protect their families against external shocks (Source:
Central Bank of the Dominican Republic).
Poverty
Studies have also shown that remittances tend to reduce poverty.
Richard Adams’ (2004) work on remittances and poverty reduction ana-
lyzed remittance and poverty trends worldwide and found a statistical
relationship between these two variables. His analysis showed that a
10% increase in international remittances from each individual would
lead to a 3.5% decline in the share of people living in poverty. In this
2004 study on remittances and poverty in Guatemala based on house-
hold survey data Adams found that remittances also reduced poverty
in that country. His findings showed that international remittances
reduce the level of poverty by 1.6% and the depth of poverty by 12.6%.
Moreover, in his 2006 study on the effect of remittances on distribution
of wealth in Ecuador, Mauricio Orbe found that the Gini coefficient
dropped from 0.54 to 0.52 as a result of incorporating remittances
into the income equation, indicating that remittances reduce income
inequality. In general, remittances make recipients wealthier across
all income groups.
Remittances and asset building
Remittances have an impact development because of their effect on

income. Remittances have a direct effect by increasing disposable income,
which typically turns into savings accumulation. This means that out
of all income earned, remittances included, savings are set aside and
accumulated, and they increase as disposable income increases from the
amount of remittance received. Thus, at the household level, remittances
fulfill the function of contributing to building liquid and fixed assets. In

turn the flow of money has an effect on financial institutions. What is
more, there exist differences among people receiving remittances from
non-recipients in their financial practices. In general, remittance senders
tend to think and consider investment options and remit for savings or
investment in the household. Moreover, recipients tend to have a higher
ability to save, invest, and open bank accounts.
In many countries, the percentage of people holding bank accounts
is higher among remittance recipients than among non-recipients.
A similar pattern is found among those who save, where the percentage
among recipients is also higher. Empirical evidence shows that those
who receive remittances in substantial amounts are more likely to have
bank accounts, savings, and investments (Orozco, 2005; Orozco, 2007a;
Orozco, Burgess, Castillo and Romei, 2010). Using national survey data,
Orozco found that in Guatemala and Nicaragua the percentage of peo-
ple with bank accounts is higher among those receiving remittances.
More importantly, it was found that for every additional dollar received,
savings increased by at least 30% (Orozco, 2008, p. 30).
Using household survey data for three CIS countries (Georgia,
Azerbaijan, and Moldova) to explore the relationship between finances
and remittances, Orozco showed that remittances are positively and
statistically associated to the ownership of a bank account and already
existing asset ownership (Orozco, 2007b). In Georgia those owning
accounts are more likely to express an interest in investing in some
asset-building activity. Thus, as the extent to which people receive
remittances in larger amounts is associated with an interest in building
assets, business and policy strategies are prime opportunities for leverag-
ing the flows.
Sending for savings and sending for business and loans

Investment in business and real estate, in particular, and migrant dona-
tions to their local communities are unambiguous and concrete forms
of financial asset accumulation at individual and community levels.
We find that between one and two in ten migrants invest in their home
country, and nearly three in ten build savings at home. Statistical analy-
sis showed that females remit about 9% less money than do males, that
the amount of funds remitted increases by about 5% for each year of
age, and that the longer an individual has lived in the United States, the
less he or she is likely to remit. However, the longer a person has been
remitting, the more money he or she tends to remit.
Manuel Orozco 71
When examining the relationship between remittance sending and

financial obligations, we find that when an immigrant has a bank
account, it increases the amount remitted by 9%. In addition, indivi-
duals who report having a savings account in the home country remit
nearly one-quarter more dollars.
The demand for financial services, however, has yet to be met by
a supply of these products from financial institutions. This is due to a
combination of factors such as misperceptions of behavioral spending
among recipients, a lack of access to remittance receiving locations,
financial literacy, and business models geared toward high-income
groups. For example, fieldwork research worldwide has shown limited
efforts to provide financial intermediation among remittance senders
or recipients.
A case study: Guatemala and Nicaragua

Here we take a closer look at the case of remittance recipients in Guatemala
and Nicaragua who withdraw their money at banking institutions. In
both countries more than 65% of remittances are paid at bank branches,
and some banks seek to offer financial services to recipients more actively
than others. BanRural, one of the largest banks in Guatemala, has been
the leader in paying remittance transfers to families with migrants abroad
and has also pursued a strategy to offer financial products—savings in
particular—to this population. Those receiving remittances through
BanRural are predominantly families living in rural areas. In Nicaragua,
BanPro, one of the largest banks in the country, has also been a leader
in remittance payments and in 2010 started to offer financial products
to recipients. Most of its recipients are people living in urban areas. This
comparison shows increases in the amounts saved, and how people
respond by mobilizing their savings when businesses offer financial
products.
First, more than 70% of remittance recipients from both countries
are women and have earnings. Among Guatemalans the main source of
remittance transfers was the United States (over 90%), whereas among
Nicaraguans it was partly the United States (50%) and partly Costa
Rica (25%).
Second, the share of remittance dependence varies between the two
nationalities. Among rural Guatemalans 75% of total income comes
from remittances as opposed to 57% for Nicaraguans. These groups
received $4400 and $3800, respectively, in a year. Part of the reason
for this has to do with the extent to which there exist other sources of
income for the beneficiary. Two differentiating factors are rural location
and gender. The data on Guatemala is collected only in rural areas to
predominantly (80%) women recipients. Women in rural Guatemala are
much less integrated in the country’s labor force than any other group
in the country.
Third, nearly half or more of both populations were saving regardless
of gender, rural location, age, or income. The percentage of Guatemalan
remittance recipients saving was higher than in Nicaragua (see Table
3.6). Thus, despite the fact that Guatemalans are more remittance
dependent, they are still saving. According to data from six countries
where financial education has been carried out, Nicaraguans are those
with the least savings. The reasons are mainly that remittance recipients
in Nicaragua have lower incomes, and therefore higher economic needs
for basic consumption. As people receive more remittances, savings
among recipients also increases (see Table 3.7):
Finally, there is a relationship between savings and account ownership
related to financial intermediation. When a financial institution is more
proactive in its outreach, the number of people mobilizing their savings
and the amount saved increase. BanRural has been active in bringing
people into their branches to deposit their savings, whereas BanPro has
only recently been strategizing these methods. Part of these strategies
Table 3.6 Receiving remittances and savings

Guatemala Nicaragua
Does not save Save Does not save Save
Per cent who saves 27.5% 72.5% 55.2% 44.8%
Amount received Q28,332 Q39,964 C$ 49,125 C$ 69,594
Source: Orozco, Manuel. Financial literacy projects in Guatemala and Nicaragua, 2010, 2011.
Table 3.7 Remittances received and amounts saved

Annual amount Guatemala Nicaragua Nicaragua from
received from United Costa Rica
States
Under 1500 268 509.96 310.95
1500 to 2500 336 729.63 419.65
2501 to 3500 414 570.33 366.45
Over 3500 788 1099 504.05
Source: Orozco, Manuel. Financial literacy projects in Guatemala and Nicaragua,
2010, 2011.
Manuel Orozco 73
includes removing barriers to entry. In Nicaragua, one key restriction

is that a person wanting to open a bank account needs to provide two
personal references with fixed telephone landlines, but in the entire
Nicaragua there are fewer than 150,000 fixed lines.
One important incentive launched by financial institutions in favor
of remittance recipients is that of financial literacy. When people are
provided with tools on how to budget and formally save, behavior
modification changes through a formalization of financial products
(Orozco, Burgess, Castillo and Romei, 2010).
In sum, finance and access to financial resources are cornerstone
components of material asset accumulation, which is a key element of
economic development. Migrant remittance family transfers directly
interplay with financial matters, further highlighting the importance of
integrating these flows into formal financial activities.
The global economy, and the limitations and challenges

of the impact of remittances
This paper has shown that remittances play an important role as a

social and financial protection mechanism. As the global economy
increasingly relies on foreign labor to support its mode of production,
immigrants’ financial engagement with their home country does have
an effect on the economic and social development of families and soci-
eties. Remittance recipients benefit from the added source of income,
which in turn smoothes consumption and increases savings. However,
it is also important to bear in mind that the overall effects of these
flows will depend in large part on the absorption capacity of the local
economy and on how government policy intervenes in or integrates the
reality of remittances into its public policy agenda.
An overall aim of policy efforts must be to modernize the productive
base of local economies while leveraging resources from migrant foreign
savings. In concrete terms this means linking investment opportunities,
savings creation, local and central government-enabling environments,
and an increased risk propensity among local, national, and transna-
tional entrepreneurs.
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Dialogue.
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4
Globalization and the Formation
of the Political Left in
Latin America
Martin Nilsson
Introduction
Globalization’s most prominent phase of acceleration in the twentieth

century coincided roughly with the third global wave of democratiza-
tion in the 1980s and 1990s. During this period, most Latin American
countries became democracies (Huntington, 1991). Simultaneously, but
not necessarily intimately related to this global spread of democracy,
the economic model of neoliberalism was adopted across the region.
During the 1990s, negotiations on global free-trade agreements inten-
sified, for example in North America the North American Free Trade
Agreement (NAFTA), in South America the (Mercosur), and in Central
America (CAM). Furthermore, in the 2000s, negotiations began toward
the establishment of the Free Trade Area of the Americas (FTAA) across
the continent, but were put on ice in 2005. At the beginning of the
democratic wave, most of the newly elected Latin American govern-
ments were right wing—neoconservatives or neoliberals—and therefore
committed to the maintenance of elite-democracy combined with free
trade and market economic policies (Middlebrook, 2000).
Nevertheless, this global development of democracy and neoliberal
economy has come to present a paradox in Latin America. On the one
hand, democracy has expanded the right to vote to all adults, and has
established free-and-fair elections, thus giving political access to groups,
such as radical leftist parties, that had been excluded from political
influence under the previous military regimes. On the other hand,
most of the democratically elected governments have not followed
the example of traditional democratic governments as, for instance, in
Western Europe. According to opinion polls (e.g. the Latinobarómetro)
conducted at the beginning of the post-Cold War era, more than
76
Martin Nilsson 77
60% of the interviewees were discontented with their government,

their political leaders, the political parties, and the political institu-
tions’ failure to provide for basic needs such as employment, education,
and security. People perceived the political institutions as weak, the
military influence in politics as substantial, the political process as
being run by technocrats; they saw the global economy as the deter-
mining factor of all political development, and deplored how major
social and economic inequities marginalized large sections of society
(PNUD: La Democracia en América Latina—Hacia una Democracia de
Ciudadanas y Ciudadanos, 2004). This indicates that people in the early
2000s had a desire for another political direction than the one set out
by the economic and social policies of the newly elected right-wing
governments in the 1980s and 1990s.
Consequently, in the late 1990s the political left began winning elec-
tions or coming in second right behind right-wing candidates all over
Latin America. This wave of democratically elected left-wing leaders has
many causes and explanations, but the reaction against globalization,
in particular the neoliberal economic system and its failure to deliver
socioeconomic development, could be seen as a particularly important
factor. Though the Left as such has not been unified by one single
political agenda, the victories for the recent left-wing wave in Latin
America could still be said to have begun in 1998 when Hugo Chávez
was elected president of Venezuela, thanks to his populist leftist agenda.
Chávez’s victory was followed by similar electoral successes in Chile,
Brazil, Ecuador, Argentina, Uruguay, Bolivia, Costa Rica, Peru, Paraguay,
Guatemala, El Salvador, and Nicaragua. And in other countries the Left
has become the main opponent to the ruling conservative government.
Investigating the debate on the consequences brought about by this
leftist shift in society and politics, this chapter aims to explore the
Left’s view of globalization and its attitudes toward democracy and the
economic system during this phase of left-wing resurgence in Latin
America. Following a brief overview of the development of democracy
and neoliberalism, the chapter discusses the societal and political
transformations that brought about this resurgence. The chapter then
conceptualizes the Left, addressing both the radical participatory left
and the social democratic left, their views on globalization as well as
some of the consequences of their policies. Finally, the Left’s views
on globalization, political as well as economic, are related to the three
main discourses of globalization, namely the globalist discourse, the
skeptical discourse, and the transformational discourse, as described in
the introduction to this volume.
78 Formation of the Political Left
Democracy and neoliberalism in the age of globalization
During the 1980s, Latin America taken as whole went through at least
two major transition periods, both of which were connected to political
and economic globalization. The first was the transition from military
dictatorship to electoral democracy, as illustrated, for example, by the
peace agreements in Central America. The second transition phase was
from the Import Substitution Industrialization (ISI) model to the neo-
liberal economic model.
Before going into detail, let’s take a quick look at the historical back-
ground to these transitions. As table 4.1 shows us, during the 1920s,
regular and relatively fair elections were held in a few countries such as
Chile, Argentina, and Uruguay, but the economic depression and the
political ambitions of the military halted the spread of democratic rule
across Latin America. Therefore, while democratic rule was established in
Uruguay, Chile, and in Costa Rica, by the 1940s most other countries had
established military dictatorships. One often forgotten example of demo-
cratic rule is Guatemala (1944–54). That country was one of the first in
Latin America to establish democratic rule by adopting a new democratic
constitution guaranteeing free elections as well as political, social, and
economic rights. Eventually, however, the democratic era ended when
the military seized power in 1954 in reaction to the radical socioeconomic
reforms carried out by the left-wing government. From the 1940s onward,
elections were held from time to time in countries such as Brazil, Ecuador,
Peru, and Bolivia. During the second global wave of democratization
(1940s–60s), the oldest and still-existing democracies in Latin America
were established: Costa Rica in 1948, and Colombia and Venezuela in
1958. Despite recent discussions about the state of democracy in Colombia
and Venezuela, they still remain among those Latin American countries
that have the longest record of democratic rule.
Nevertheless, in consequence of the military coups in Chile, Uruguay,
and Argentina in the 1970s, and the military dominance in Brazil,
Bolivia, Ecuador, and Peru, most of the Latin American countries were
saddled with military dictatorships. This is why the democratization
processes of Costa Rica, Colombia, and Venezuela stand out as excep-
tions (together with communist Cuba, but for other obvious reasons) to
the dominance of military rule in the region. Just a few years after the
military seized power in the Southern Cone, the third global wave of
democratization in the mid-1970s moved from Spain, Portugal, and
Greece to Latin America (Huntington, 1991). In 1978, the military in
Ecuador was forced to leave power, as table 4.1 shows us, and later on
Martin Nilsson 79
Table 4.1 Democratic periods in Latin America (twentieth century)

Year of Transition Country
1918–1933*, 1945–1973, 1984– Uruguay
1944–1954, 1984–1996*, 1996– Guatemala
1946–1955*, 1983– Argentina
1949–1973, 1990– Chile
1948/1949– Costa Rica
1958– Venezuela
1958–1974*, 1974– Colombia
1956–1964* Brazil, Bolivia, Ecuador, Peru
1978– Ecuador
1980–1992, 2001– Peru
1982– Bolivia, Honduras
1985– Brazil
1989– Panama
1984–1990*, 1990– Nicaragua
1993– Paraguay
1982–1994*, 1994– El Salvador
1997/2000– Mexico
Note: * A form of semi-democracy was established, mixing elements of dicta-

torship and electoral democratic rule. The principles of electoral democracy
could be questioned.
in the 1980s and 1990s, democratically elected governments replaced

military dictatorships across the region. By the mid-2000s, all the
Spanish- and Portuguese-speaking countries in Latin America, with
the exception of Cuba, had made the transition to democratic rule
(Puddington and Piano, 2005). And for the first time in most cases the
Left—radical or moderate—now had the opportunity to participate in
free-and-fair elections across the continent.
In the 1980s, most of the democratic transitions in Latin America
occurred in parallel to the transition from the ISI model to the neoliberal
economic model (Huntington, 1991). ISI meant active state interven-
tion and the allocation of economic resources, trade protectionism,
regulation of macroeconomic activities, inflow of foreign capital and
loans, social and economic reforms, and support for the development of
national companies. In contrast, the neoliberal model meant economic
integration, free trade, deregulation, privatization, and even less concern
with social reforms (Kay, 1989; Roxborough, 1992; Armijo and Faucher,
2002; Sandbrook and Romano, 2004). Several scholars have stressed
this phase of two parallel transitions and its consequences—at least
the short-term consequences. For example, Rueschemeyer, Stephens,
and Stephens (1992) claim that the representation of the elite through
conservative parties was crucial to the democratization process in Latin
America (see also Stephens and Stephens, 1999; Durand and Silva, 1998).
The main explanations given were the poor economic conditions, the
fact that the radical left was no longer seen as a threat, and that the
economic elite had been excluded from the political process during
the military dictatorship. In addition, the combination of an electoral
democracy with a neoliberal economy would also curb people’s demands
for further democratic and social reforms. Jeffrey M. Paige (1997) comes
to a similar conclusion, arguing that the ruling oligarchy finally accepted
electoral democracy as a main tool to promote the neoliberal economic
model. In addition, Middlebrook (2000) argues that the conservative
parties supported the neoliberal model mainly as a means of furthering
economic prosperity and a peaceful future.
Not only did the internal actors in the Latin American states connect
democratization to the neoliberal economic model; external actors, such
as the International Monetary Fund (IMF), the World Bank, the World
Trade Organization (WTO), and the United States insisted on that com-
bination too (Cavaluzzi and Petras, 1999; Sheahan, 1991; Cobbs, 1991;
Coleman, 2002; Kapur and Naím, 2005). All these actors demanded
relatively free-and-fair elections in combination with structural economic
changes. The US multilateral and bilateral influence on international
institutions and through bilateral negotiations virtually forced all other
countries to establish and develop neoliberal economic models. Although
the United States has from time to time contributed to the destruction
of democracies—take, for instance, Guatemala (1954) and Chile (1973)—
the US position in favor of democracy was instrumental in promoting the
third wave of democratization in Latin America (see Wiarda, 1997).
However, the combination of electoral democracy and neoliberal
economic policies has been heavily criticized for its negative social
consequences, and the rebirth of the radical left in the 1990s could be
seen as a reaction to these consequences. Gwynne and Kay (2000) argue
that the essence of neoliberal ideology is to replace a strong state with a
minimal one by reducing the scope of public administration and other
social services. Thus some scholars argue that the neoliberal model of
the 1990s increased social and economic inequalities in most of the
Latin American countries through policies intended to cut salaries,
curb union rights, and reduce social benefits such as food subsidies
(Cavaluzzi and Petras, 1999; Wade, 2004; Sandbrook and Romano,
2004). The social impact of neoliberal policies on new democracies
became evident during and just after the transition from the ISI model
Martin Nilsson 81
(see also Perez Baltonado’s chapter in this volume). While the economic
elite benefited from the integration into the world market, most people
actually became worse off (Kaufman and Segura-Ubiergo, 2001; see also
Baer and Maloney, 1997; Roberts, 2002). Weyland (2004) argues that
while the neoliberal model has in fact strengthened the protection of
democracy as a system (against both external and internal threats), it
may have a negative impact on the long-term quality of democratic
development.
All in all, the spread of democracy and neoliberalism in Latin America
was supported by the international community as well as by domestic
elite groups; however, by the late 1990s the fundamental problem of
social inequality and poverty had still not been resolved. As a result, the
Left, and in particular its more radical factions, took on a more promi-
nent political role. The revolutionary left-wing discourse advocating a
violent and social revolution was replaced by a more democratic one
fighting for influence through the ballot box, and the shift paved the
way for a wave of left-wing electoral successes in the 2000s throughout
Latin America. In reality, however, the Left was and still is not unified.
There are, in fact, at least two types of left-wing party: one is the more
radical left and the other the more pragmatic social democratic left.
Rebirth of the political left
The past decades have proven to be an ambivalent period for the Latin
American Left. During the military era in Latin America, the Left—
including leftist organizations, parties, and individuals—were often
inspired by Marxism and favored Marxist strategies for achieving
socialism (Martz, 1989; Ellner, 1993). In the 1960s, most of the leftist
groups were in favor of violent revolution, a stance that reduced the
Left to playing a minor role in Latin American politics, dominated as
it was by the military and right-wing parties who often used the com-
munist threat as an excuse for military coups and interventions. Social
democratic parties have been rare in Latin America, with the Partido
Liberación Nacional (PLN) and the Acción Democratica (AD)—the
major political forces in Costa Rica and Venezuela—being two of the
few exceptions (Castañeda, 1993, p. 327).
In the 1970s, the Left gradually began to modify its views on revolu-
tionary change (Ellner, 1993; Roberts, 1998; Lievesley, 1999; Brown,
1996). Several events contributed to the Left’s discarding revolution
as a way to solve the fundamental problems of Latin America: the
assassination of Che Guevara killed the dream of a revolution across
Latin America; Allende’s hope for a “democratic and peaceful socialist

revolution” ended with the 1973 coup, which resulted in years of
brutal military dictatorship; and the collapse of communism and the
end of the Cold War largely discredited the socialist model in the late
1980s. This trend of events and changes left the political left-wing
ideologically exhausted, with little faith in Marxist-Leninist ideas, the
Marxist utopia, anti-capitalism, or social revolution. The Left found
it difficult to redefine its role in a society where the socialist project,
whether by guerrilla war or peaceful means, had proven a failure; where
neoliberalism had sided with elitist democracy, and where military
dictatorships had been replaced by democratically elected right-wing
governments. The Left found itself confronted with the task of finding
an alternative to the alliance between the global neoliberal economic
model and electoral democracy and figuring out how best to develop
and strengthen democracy in Latin America. Although the political left
lacked a clear, united path toward this aim, the legacy of violent revolu-
tion had vanished and the ballot box eventually produced a wave of
successful elections.
The trend of successful elections began in 1998 (see Schamis, 2006;
Castañeda and Morales, 2008; Baker and Greene, 2011) with the landslide
victory of Hugo Chávez’s populist leftist victory in Venezuela. Chávez’s
victory was followed by that of Ricardo Lagos, a moderate socialist elected
president of Chile in 1999. Lagos represented the center-left coalition, la
Concertación, which had ruled Chile since the return of democratic rule
in 1990 with two successive Christian democratic presidents. The elec-
toral victories of the Left moved on to Brazil, where Luis Inácio da Silva,
the former metalworkers’ union leader and the leader of Partido dos
Trabalhadores (PT, the Workers’ Party) won the presidential elections in
2003 (and was re-elected in 2006); and again to Ecuador, where in 2003
the military officer Lucio Gutierrez rose to the presidency on a populist
platform and with the support of the indigenous people; to Argentina,
where Néstor Kirchner won the presidential election in 2003, representing
the left-wing Peronist party and alliance, Frente para la Victoria. Alluding
to this wave of electoral leftist successes, Hugo Chávez, during an unan-
nounced appearance at the 2003 World Social Forum in Porto Allegre,
Brazil, called attention to the “the birth of a new left” in Latin America.
Between 2004 and 2006 the left wave rolled on with the victories
of a presidential candidate from the Frente Amplio in Uruguay, indige-
nous Evo Morales and his radical agenda in Bolivia, socialist Michelle
Bachelet’s success in Chile, with the Partido Liberacion, member of
the international group of Social Democrats, gaining the presidency in
Martin Nilsson 83
Costa Rica, and the re-election of former president Alan García in Peru
representing the third-way social-democratic party, the Alianza Popular
Revolucionaria Americana. Also, in 2006, the former revolutionary
Sandinista leader Daniel Ortega won the presidential race in Nicaragua,
and Rafael Correa’s Alianza Patria Altiva I Soberana (PAIS) won the
presidency in Ecuador. In 2007, Christina Fernández de Kirchner won
the presidential election in Argentina, and the social-democrat Álvaro
Colom won the run-off election for president in Guatemala. In 2008
the leftist Fernando Lugo became president of Paraguay, and in 2009
the former guerrilla movement Frente Farabundo Martí para Liberación
Nacional (FMLN) won the presidential election in El Salvador with a
moderate candidate. Toward the end of 2009, the Brazilian left man-
aged to get Dilma Roussef elected as the country’s first female president,
and the Frente Amplio won another presidential election in Uruguay.
In other countries, the Left gained major electoral ground and became
the predominant challenger of right-wing presidencies, such as the
Partido de la Revolución Democratica (PRD) in Mexico (see Castellano,
2001). However, in 2010, the Chilean right won the presidency, and in
Colombia the right also managed to stay in power after a new election.
This may be the beginning of the end of the left wave in Latin America,
though it would be unwise to draw any hasty conclusions.
Though this broad left trend of both radical and more moderate left
parties has been clear, people’s political attitudes have tended to favor
the right of the political center (Seligson, 2007; see also Baker and
Greene, 2011). However, there are internal variations to be found, as in
the case of Costa Rica, where the social-democratic party and the social-
conservative opposition stand slightly to the right of center as far as
ideology is concerned. In other cases, such as in El Salvador, Nicaragua,
and Chile, the ideological distance is much greater between any left (rad-
ical or moderate) and right. Among the countries in the Andes, Ecuador
stands out because its people seems to have an extraordinarily low faith
in liberal democratic institutions and in a political system without
political parties something which might contribute to the supporting of
a populist government (Seligson, 2007). Still, the aforementioned vic-
tories, taken together, represent a monumental trend that has not been
matched historically (see Cleary, 2006, p. 35). Scholars have used differ-
ent terms for categorizing the Left: “the moderate left,” “the reformist
left,” “social-democrats,” “socialists,” “left-wing populism,” “leftist neo-
populism,” “the participatory left,” “the radical left,” “the petro-left,”
and “the nationalist left.” This chapter moves beyond the multitude
of conceptualizations to focus, instead, on two broad categories that
encompass distinct attitudes toward democracy and socioeconomic

reforms and, thus, toward political and economic globalization (see
Roberts, 1998; Castañeda, 1993; Walker, 2008; Castañeda and Morales,
2008). The two categories used here are the radical left and the social-
democratic left. According to Arditi (2008), these categories have been
constructed as the left has manifested itself in different cases through
party programs, speeches, or in other actions or policies either while in
government or in opposition.
The first is the radical left, a broad category that in all cases
challenges the global trend of liberal democracy, social injustice, and
the hegemony of neoliberal economic policies. Instead, as table 4.2
shows us, it struggles for state intervention in the economic sector,
social reforms, and the redistribution of wealth to the masses. Today,
this radical new left is represented by the left-wing parties in Nicaragua,
El Salvador, Guatemala, Mexico, Venezuela, Ecuador, Bolivia, and Brazil,
though the Left in power in Brazil, for example, has followed the third
way, that is, social-democracy or left-center policies. In terms of socio-
economic policies and state intervention it has similarities with, for
example, Allende’s presidency in Chile (1970–3) as well as with tra-
ditional European social democracy. The radical left comes in at least
three different versions. The first is the populist version, where the radi-
cal left will quite often proclaim drastic socioeconomic reforms and the
redistribution of land, which are attractive to the masses but generally
considered unrealistic by others. It also challenges the domination of
the international and economic elites (see March, 2007; Walker, 2008).
According to Walker (2008), the resurgence of this popular left largely
hinges on the collapse of the old political institutions as well as on new
social demands from young people, workers, and indigenous people.
The broad left movement behind Chavez in Venezuela is probably the
best example of the populist version. The second version is the par-
ticipatory version, in which the left advocates the participation of the
people, particularly emphasizing the need to engage people at the local
level and in the socioeconomic spheres (see, for example, Barber, 1984;
Pateman, 1970). This version opposes the idea of a representative liberal
democracy. A prominent example here is the Workers’ Party in Brazil. A
certain influence of the participatory idea is also found in Bolivia, where
the social movement, Movimiento al Socialismo (MAS), was created
from below long before Morales won the presidency—in contrast to,
for example, Chavez’s political movement, Partido Socialista Unido de
Venezuela, which was established from above as a result of electoral tri-
umphs. The third version is the one based on Marxist values, in which
Martin Nilsson 85
case there sometimes exist connections to Marxist parties in democratic

as well as authoritarian regimes such as Cuba. However, we also find
internal opposition to the Marxist and revolutionary past of this third
version as, for instance, among former guerrilla groups in Nicaragua
and El Salvador, where there exists a major internal debate about their
Marxist and revolutionary past.
As mentioned, the radical left is neither a unified political force in
Latin America nor does it pursue the same political agenda throughout
the region. And yet it is united in a broader sense, mainly by its will
to challenge the liberal doctrines of democratic institutions and neo-
liberalism and by its efforts to address the increasing load of state-led
economic policies as well as the issues of social reforms and the redistri-
bution of wealth from the rich to the poor. So far Chávez and to some
extent Morales in Bolivia as well as Correa in Ecuador represent the
more radical tendencies of the participatory left. They are challenging
the ideas of multi-level governance, free-trade agreements, neoliberal
economic policies, and all the international and domestic actors that
support these global tendencies. Together with Cuba they have also
created Alianza Bolivariana para los Pueblos de Nuestra América (ALBA)
to emphasize the struggle against poverty and social injustice, and as
an alternative to the neoliberal trade blocs in the Western Hemisphere.
In 2009, the members also agreed to establish a new monetary union,
with a new trading currency, the sucre, which might develop into a real
currency as an alternative to the US dollar.
The second category, as table 4.2 shows us, is the left-of-center social
democrats who represent a centrist position between laissez-faire capi-
talism and a socialist economy. The modern social-democrats tend to
stand for reformism and pragmatism, and have done away with legacy
slogans such as class struggle and socialism. They also support liberal
democracy and do not mind maintaining some of their predecessors’
neoliberal economic policies. This tendency more or less follows what
Anthony Giddens (1994) has described as the third way of modern
social democracy, and which lies, as he sees it, between the right and
the traditional left in the global era. In theory, according to Giddens,
this implies a modern stance on issues related to globalization, economic
integration, and free-market economy. The social democratic platform
also encompasses ideas and values such as equality, protection of the
weak, freedom and autonomy, rights coupled with obligations, and
cosmopolitan pluralism and democracy. Social justice is still considered
important, but collective problems in society should also be addressed
by promoting more equality and individual freedom. This third way
constitutes a major political force among the leftist parties in, for exam-
ple, Chile, Argentina, Uruguay, and Costa Rica, and has also set out the
guiding principles for the Lula administration in Brazil.
Seen on a wider regional scale, the political spectrum of which the
Latin American Left is a part comprises, at one end, right-wing parties,
corporations, military forces, and the US administration in favor of
promoting elite electoral democracy and neoliberal policies (Gills and
Rocamora, 1992; McSherry, 1998; Paige, 1997; Saxe Fernández, 1999).
At the opposite end we find the radical participatory left with an anti-
capitalist agenda. In between these two we have the Christian democrats
and the social democratic left, that is a “left-of-center” promoting lib-
eral democracy and interpreting globalization as a natural and modern
way to develop society (compare with Roberts, 1998; Lievesley, 1999).
The table 4.2 shows us how the political actors differ on their choice of
democratic and economic models. At the left end of the spectrum, there
are three main differences. The first is that the social-democratic third-
way left is in favor of liberal democratic institutions, with an emphasis
on electoral rule and political and civil rights, whereas the goal of the
radical left is to establish not only liberal democratic institutions but a
participatory democracy where people participate actively in the entire
political process—initiating proposals, making decisions and implement-
ing policies—especially concerning the socioeconomic spheres. The
second difference concerns the fact that the third-way social democrats
have more or less accepted the market-economy and the neoliberal
economic system of the 1980s and 1990s. In contrast, the radical left
is opposed to free trade, privatization, and other neoliberal economic
policies, advocating instead state intervention and state control of the
economy. Consequently, the radical left also demands that the state
Table 4.2 Political actors’ choice of democratic and economic models

Economic Neoliberalism Anti-capitalism
model (1980s–2000s) (20th–21st century)
Democratic
model
Electoral Democracy The Right, the

economic elite,
the military forces
Liberal Democracy Third Way Left,
Christian
Democrats
Participatory Democracy The Radical Left
Martin Nilsson 87
play an active role in providing socioeconomic reforms for the people,

whereas the social-democratic left prefers to carry out socioeconomic
reforms in combination with state agencies and private entrepreneurs.
On the contrary, the political right, the economic elite, the military forces
and the United States tend to support the globally dominant ideas of elec-
toral democracy coupled with a pure neoliberal economic model.
Cases of radical and moderate Left in Latin America
In 2009, the Left held 13 presidencies, but by 2011 the number was
down to 12 after the socialists lost to the Right in that year’s Chilean
presidential election. In Argentina, Brazil, Guatemala, Chile, Costa
Rica, Uruguay, Peru, and Paraguay, and probably also in El Salvador,
the reformist and social democratic presidents have attempted to
carry out modest social and economic reforms. The reforms have
been seen as moderate in the sense that they have not challenged the
existing global political or economic order—liberal democracy and
market economy—although some attempts to modify the neoliberal
economy, especially on issues related to free trade and privatization,
have been made. However, in other Latin American countries, such
as in Venezuela, Bolivia, Ecuador, and Nicaragua, the presidents have
been more radical and have challenged the political, social, and global
economic order (Walker, 2008; Moreno-Brid, and Paunovic, 2008). The
radical socioeconomic agenda aims to carry out major socioeconomic
reforms and the redistribution of wealth from rich to poor. The radical
left has in these cases, through party agendas and in public speeches,
voiced its opposition to free trade ideology and the supra-national
organizations supporting market-based policies. ALBA, the commercial
bloc created by these radical governments together with Cuba, dif-
fers from other trade blocs (Salazar, 2006): it does not limit itself to
economic issues, but aims at defending the rights of the Latin American
peoples by fighting poverty and social injustice. Furthermore, these
radical presidencies also attempt to challenge the domestic as well as
the international elites in favor of a global free-market economy.
The most prominent case of the radical political Left is Venezuela.
Hugo Chávez’s “Bolivarian revolution,” with its popular slogans such
as “Socialismo del siglo XXI” and “Patria, socialismo o muerte” and
its anti-elitist appeal to the broad masses, is strongly opposed to most
of the global norms and institutions deriving from the Western world, at
least those dominated by the United States. So far it has challenged and
largely replaced the basic rule of the Venezuelan liberal political system
rooted in the “Pacto de Punto Fijo” of 1958 (see also McCoy, 1999,
2005; Kornblith and Jawahar, 2005; Levine, 2002). This democratic pact
between all the old elites, including the social-democrats, combined
representative democracy with market economy and limited social
reforms and aimed to uphold the existing economic world order (ISIS
up to the 1980s). Today, the Bolivarian revolution includes strong
political transformation as well as social and economic reforms to
reduce poverty. Most of the criticism against Chávez’s revolution can
be traced back to measures and policies initiated when the country first
started to turn its back on the liberal democratic order, something that
happened even before Chávez became president; measures and policies
intended to strengthen presidential powers while weakening the powers
of Congress and the judicial system, and measures curbing political
and civil rights (Corrales, 2001). Nevertheless, Chávez’s Bolivarian
revolution has undeniably decreased poverty, solved a number of social
problems, and contributed to strengthening grassroots democracy in
rural areas and in the poor city barrios. Most of the socioeconomic
reforms are channeled through state programs; Misión Mercal is a
state-owned company selling subsidized food and other basic products
all over the country; Misión Barrio Adentro provides free medical care
for all; Misión Guaicaipuro aims to guarantee indigenous people their
collective rights; and the land-reform program, Misión Zamora, gives
small farmers the right, in some cases, to receive land expropriated from
big farmers. By 2010 Venezuela had reduced not only poverty but also
extreme poverty in the country, and most people had obtained access
to free public education and healthcare.
From the outset, Chávez’s radicalization challenged the domestic
economic elite, the Washington consensus, and neoliberal economic
policies (McCoy, 2005; Kornblith and Jawahar, 2005; Moreno-Brid and
Paunovic, 2008; see also Levine, 2002). Since the revolution began,
Chávez has survived a military coup (2002), won referendums on staying
in office and on a new constitution (2004); and in 2006 he was re-elected
as president. His failure to win approval for additional constitutional
changes in December 2007 seemed to weaken Chávez’s authority
temporarily, but that all changed when in late 2008 he won another
constitutional referendum (this time about the possibility for presidents
to be re-elected more than once). He still seems to have support from
many poor people in Venezuela. However, the reforms to nationalize a
few food factories and natural mineral companies and Chávez’s strained
relations with the Venezuelan media have further increased the polari-
zation between Chávez’s supporters and his opponents at home and
Martin Nilsson 89
abroad such as the United States and foreign companies. As a result of

this radicalization, Venezuela may take another direction in the future,
a direction than may lead to a dictatorship and the further curbing of
political rights—compensated, however, by some strengthening of social
rights. All in all, the conditions of the poor may improve over time, but
at the expense of liberal democratic institutions.
Another case in point is Bolivia (Walker, 2008; Sánchez, 2008; Rochlin,
2007). Toward the end of 2005, Evo Morales won the presidency,
thanks to the support of the indigenous people and the Movimiento
Al Socialismo (MAS). As Ejdesgaard Jeppesen points out in this volume,
it would be wrong to reduce the rise of Morales to a populist reaction
to globalization. During the first years of Morales’ presidency, Bolivia
boasted mostly positive macroeconomic indicators related to growth,
unemployment, and trade. The most concrete example of his radi-
cal policy was the nationalization of the country’s natural gas supply
(in part generated by international companies), which will bring in
billions of dollars to the state. It is likely that other natural resources
will also be nationalized in the future. Furthermore, in late 2006 the
Bolivian Congress voted in favor of a controversial land-reform program
aimed at redistributing land to mostly poor and indigenous people in
rural areas. Other social reforms have included a campaign against
illiteracy and an initiative to provide medical care to rural populations.
In December 2007, an elected constitutional assembly representing the
major parties prevailed in establishing Bolivia as a multi-ethnic country,
and in implementing social reforms financed by the national mineral
resources. Consequently, some of the richer regions held referendums
that resulted in a number of regions’ declaring their regional autonomy.
When the government refused to recognize the regions’ self-proclaimed
autonomous status, demonstrations and coups against the Morales
administration followed. Finally, a new Bolivian constitution was
approved in a referendum in 2009. The new constitution recognizes
municipal, provincial, and indigenous autonomy. Morales was re-elected
in 2009 and has vowed to continue his radical policies, declaring that
Bolivians will not have any real political power until they have control
over the Bolivia’s economy and its natural resources (see Ejdesgaard
Jeppesen’s chapter in this volume). However, criticism of the constitu-
tion and its radical measures further deepened already existing conflicts
in Bolivian society. While the radical Left, supported by the peasants,
the miners, and indigenous groups, continues to struggle against the
old elite system and the neoliberal policies established in the 1980–90s,
the economic elites, representing mainly a few regions and a minority
in the national parliament are intent on maintaining or reestablishing

the pre-Morales political and economic order.
If we turn to other Latin American countries, however, we find that
other political strategies have been pursued (Navia, 2008; Altman,
Castiglioni, and Luna, 2008). For example, in Argentina, Brazil, Uruguay,
and Costa Rica, the ruling social-democratic governments have main-
tained the liberal democratic order and market economy, and only
demonstrated modest ambitions for social reforms. In doing so, they
have tried to cope with globalization, and have accepted not only liberal
democracy, but also some features of the neoliberal economic model.
As far as the issue of trade is concerned, the left-wing regimes more or
less abandoned the idea of the US-dominated FTAA after the last Round
Table in 2005. Today, for example, the Mercosur has expanded, giving
associate membership to the countries in the Andes, including Chavez’s
Venezuela, and bilateral agreements have also been established. In addi-
tion, the Central American countries have set up their own free trade
zone and have also established bilateral agreements with, for example,
the United States. In addition, there exist a large number of bilateral
free trade agreements between different countries across the region and,
especially, Chile and Uruguay have been eager to establish free-trade
relations with other countries. As for Brazil, it plays a central role in Latin
America’s attempt to address the issue of poor countries on the global
political stage in claiming, for example, that a free trade agreement in
the Americas should abolish subsidies for US agricultural products. In
all these cases the social democratic as well as other non-radical govern-
ments have supported the fundamental ideas behind free trade and
regional integration, although they eventually rejected the FTAA in the
mid-2000s. These moderate positions are in stark contrast to the radical
Left’s governmental policies of trade and Latin American integration,
and its ambition to extend the ALBA to other Latin American coun-
tries. It seems appropriate to compare Brazil’s position with Costa Rica’s
democratic development as it began in the late 1950s, and with Chile’s
in the 1990s. In both cases the social-democratic parties accepted liberal
democracy and eventually also the neoliberal market economy, throwing
in some social reforms as compensation (Peeler, 1992; Cavarozzi, 1992).
Concluding remarks: Some implications for policies and

future development
To summarize, the new tendencies of the Latin American Left can be

said to have followed two distinct paths. One followed by the reformist,
Martin Nilsson 91
social-democratic Left, which supports liberal democracy and a market

economy and therefore complies with the global and national political,
social, and economic order of the day (neoliberalism). The other path is
the one taken by the radical left, who would like to develop participatory
democracy with socioeconomic reforms that may potentially challenge
liberal democracy and a market economy—as well as the major actors
behind these structures, in both the global and the domestic arena. As a
result, their reactions to globalization are rather different.
The radical, and to some extent popular, participatory Left’s ideas
about a radical political, economic, and social agenda are the ones repre-
sented by Chávez in Venezuela, Morales in Bolivia, Ortega in Nicaragua
and Lula’s Workers’ Party in Brazil (although the presidency of Lula
was actually more moderate in practice. This alternative has risen as
a consequence of the neoliberal economic model’s failure to solve the
socioeconomic situation in Latin America. Historically, this type of radi-
cal agenda with a more anti-capitalist approach advocating social reforms
has similarities with cases when left-wing parties in power tried to
develop radical democracy with strong economic and social anti-poverty
measures, as in Guatemala (1944–54) and Chile (1970–3) (see Oxhorn,
2003; Nilsson, 2008). In the late 1960s, Chile already had a relatively sta-
ble liberal democracy with a market economy (ISI)—supported by all the
political parties, the economic elite, the military, and the US authorities.
When President Allende tried to enforce participatory democracy in the
political, economic, and social spheres, launch anti-capitalist economic
policies, establish state intervention, and carry out radical social and
economic reforms, it all became too much for the military; the military
coup in 1973 put an end not only to the Allende presidency, but also
to democracy as such. Almost the same happened in Guatemala when
the democratic left-wing governments (1944–54), particularly under the
more radical Arbenz government (1951–4), started to change the political
system and propose radical social and economic reforms, such as the
expropriation of land and other social redistributive measures that threa-
tened the economic power of the Guatemalan landlords and US interests.
The ensuing military coup in 1954 smothered the newborn democracy in
Guatemala. What it all comes down to is that these radical political and
economic changes to society were challenged by the same actors—the
economic elite, the military and external (mainly US) forces, and the
parliamentary right—actors who were behind the military interventions
and the fall of the democratic governments in both Chile and Guatemala.
However, so far this type of participatory democracy coupled with
socioeconomic reforms has not met with any major support from the
international community (take ALBA as an illustrative example) either

then or now, and although theoretically possible, it seems an unlikely
basis for a future political strategy on the global scene.
On the other hand, we find the more pragmatic social-democratic
left and the Christian democratic alternative, as in the case of Costa
Rica (1949–), Venezuela (1958–), and Chile, Argentina, and Uruguay
in the 1990s—regimes that were all committed to promoting liberal
democracy within a market economic model (ISIS to the 1980s and
neoliberalism in the 1990s–2000s), but without really producing any
major efforts to combat social inequalities. Two historical examples of
this alternative are Costa Rica (1950–80s) and Venezuela (1958–80s). In
these two cases there was a development of liberal democracy and socio-
economic reforms together with an acceptance of the market economic
model (Booth, 1999). Compared to the alternative of an elite-democratic
system, this alternative focuses more on representative liberal democracy
and less on neoliberal economic policies, which it has so far left unchal-
lenged. Therefore, the social-democratic Left supports liberal democracy
and some of the principles behind neoliberal economic policies, playing
along and complying with the global and national political, social, and
economic order of the day. In contrast, the radical left opposes this order
and would like to develop a radical and participatory democracy with
socioeconomic reforms that may potentially challenge liberal democracy
and the market economy, thus also challenging the major actors behind
these structures, both domestically and globally. It remains to be seen
whether any of the left-wing actors in Latin America are able to solve
the fundamental problem of social inequality that is tormenting the
region and live up to the expectations of the Latin American population
that brought them to power; and whether their particular approach to
globalization will aid them in that endeavor.
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5
Global Discourses, Local
Meanings: Indigenous and
Nationalistic Responses to
Neoliberal Globalization in Bolivia
Anne Marie Ejdesgaard Jeppesen
Introduction
The government of President Evo Morales in Bolivia has been seen by

many researchers and commentators on Latin America as a left-wing
populist response to neoliberal globalization (Gray Molina, 2007), and in
fact Evo Morales has on many occasions made his critical view on neolib-
eral politics very clear. It would be wrong, though, as this chapter argues,
to see the Morales government only as a response to neoliberal globali-
zation. In fact, there are important local dynamics that need to be taken
into consideration if one wishes to understand fully the logic behind
Evo Morales’ coming to power. Far from being the sole consequence of a
populist response to neoliberal globalization, the social uprisings and the
political crisis that preceded the election of Evo Morales in January 2005
were the result of a combination of global, local, economic, political,
social, and cultural factors that merged together in a nationalistic and
indigenous response. This chapter discusses some of these factors, focus-
ing first on the connection between the success of Evo Morales in the
January 2005 elections and the resistance against the kind of neoliberal
policies and economic globalization that had dominated the country
for more that 20 years. Second, it analyzes the political aspects, that is
how discourses on democratization, decentralization, and indigenous
rights have been used by local actors and given local meanings. Finally,
I discuss how all these phenomena fused together in a complex response
that was both nationalistic and ethnic/indigenous.
Bolivia is considered to be one of the poorest countries in Latin
America. In 2002, 5.5 million of a population of 7.5 million were
considered poor, and of these 3.5 million in a state of indigence. It is
96
Anne Marie Ejdesgaard Jeppesen 97
also a country with a very high degree of inequality (Gini coefficient

0,614) (Gray Molina, 2007, p. 124). Land distribution is among the
most unequal in Latin America and it is in the rural areas that we find
the most persistent form of poverty. The majority of the population is
of indigenous origin—according to some, up to 60% (Ströbele-Gregor,
1994). According to the new Bolivian constitution, there are 38 official
languages in the country. Spanish is only one of them. This shows the
cultural complexity of Bolivian society and the challenges that any
government must face, and it gives us an impression of the multiple
agendas and reactions to the different aspects of globalization we may
expect to find.
In the following discussions I distinguish between different aspects of
globalization. Globalization has been understood as the intensification
of global interconnectedness, that is, an intensification of economic,
political, cultural, and ecological interdependence and “flows of capi-
tal, people, goods, images, and ideologies” (Inda and Rosaldo, 2002,
p. 5). For the sake of analysis I separate the economic and political
aspects from the cultural ones (images and ideologies), though I am
aware that in many cases this is not possible. For instance, neoliberal
economic policies have been accompanied by an ideological frame-
work that demands attention and without which their globalization
would not have been possible. Nevertheless, it is important to bear in
mind the global struggles for access to and control over resources and
markets which permeate not only the strategies of private business
corporations but also government policies. European expansion into
the “New World” and later into Asia and the African continent—seen
by some scholars as the beginning of globalization—consisted to a large
extent of state-led projects to conquer new markets and to control
resources. In the case of Bolivia, minerals have historically been some
of the most important resources and control over the mining industries
has been vital since the Spanish colonization. But because of the tin
mining crisis in the 1980s, some of the important strategic resources
today are hydrocarbons, namely gas and oil, but also, more surprisingly,
water. The control over these resources has been of strategic interest
to transnational corporations and has been the reason for conflicts
between local and international interests.
Two recent incidents, clearly connected to neoliberal economic
globalization and to the struggles for control over strategic resources,
have been decisive for the political development in Bolivia. One is the
so-called “water war” in Cochabamba in 2000, and the other is the 2003
“gas war” in El Alto. The name “war” used in both cases is illustrative
98 Bolivia: Indigenous and Nationalistic Responses
and reflects how poor Bolivians confronted neoliberal privatizations

by drawing on traditional forms of social organization and their long-
lived experiences with social uprisings. In what follows I first discuss
the economic aspects of the neoliberal policies that were at the root of
the conflicts and then focus on the social movements, concentrating
primarily on the water war.
Neoliberal economic policies in Bolivia
As indicated by Gray Molina (2007), the overall economic model in

Bolivia has changed several times during the twentieth century, but the
prevailing development pattern has nevertheless remained the same.
He defines the dominating pattern as one concentrated on the expor-
tation of a very few products that have primarily been turned over to
the market without processing or aggregated value (ibid.). One example
of the vulnerability of such an economy is the tin mining industry,
which was the Bolivian state’s most important source of income until
the international tin market collapsed in 1985. The collapse gave way
to the introduction of a neoliberal structural adjustment program intro-
duced by the National Revolutionary Movement (Movimiento Nacional
Revolucionario, MNR) government of Victor Paz Estenssoro in 1985.
The New Economic Policy (Nueva Política Económica, NPE), as the
program was named, was in fact a “classical orthodox economic shock”
(Klein, 1992, p. 275) designed to stabilize an economic situation with
high inflation, high foreign debt, and falling income. The economic
package was characterized by currency devaluations, new taxes, and
severe cuts in government expenditure on, for example, health
and education; but most important of all by the privatization of pub-
lic enterprises, thus taking yet another step toward integrating the
Bolivian economy into a global market—very much like the rest of Latin
America at the time (Portes and Roberts, 2004; Gwynne and Kay, 2004).
The minister of economics in the Paz Estenssoro administration was
the young, US-trained economist Gonzalo Sánchez de Lozada, who was
later to become president of Bolivia, first in 1997 and again in 2002.
The NPE was introduced by Decree 21060. The decree was intended to
“liberate” the labor market, and was therefore also the sine qua non for
the privatization of state enterprises, in particular the mining industry,
which had been of strategic importance to the Bolivian state for dec-
ades, but which was now considered an obstacle to development and
a burden to the state budget. The social consequences were devastat-
ing. In 1985–6 thousands of miners and their families were forced to
abandon the mining centers and move to the cities of Oruro, La Paz/El
Alto, Cochabamba, and Santa Cruz. Some groups migrated to the coca-
growing areas of the department of Cochabamba, taking with them
their experiences of organized protests and working-class solidarity1
(Ejdesgaard Jeppesen, 2004). The Bolivian labor movement was seri-
ously weakened by these measures and with it the debate on social
problems and poverty.
The social costs of the NPE were severe throughout the 1980s and
1990s, but none of the subsequent governments, despite differences in
political stance, changed the overall framework of the economic model.
Although these government policies were in fact met with protests from
the labor unions, the peasant movements, and other social movements
including indigenous groups, it is only in connection with the water
war in Cochabamba in 2000 that we find a popular resistance to the
neoliberal policies that was sufficiently strong to be able to influence
government decisions. In the following section I recount this conflict
as an example of the popular uprisings that preceded the 2005 election
of Evo Morales.
The water war in Cochabamba

Thomas Kruse defines the conflict over the privatization of the
municipal water and sanitation company SEMAPA2 in Cochabamba as
“an example of the tensions and conflicts that globalization provokes at
local levels” (Kruse, 2005, p. 124 [my translation, AMEJ]). Kruse defines
globalization as the decisive presence of “protected foreign investment
and the state construction that this requires, under the guardianship
of the international financial institutions” (ibid.). In this perspective
the role of international financial institutions such as the World Bank
is decisive. Not only do they promote privatization, but in the case
of Bolivia, for example, the World Bank also finances, supports, and
ultimately demands privatizations. At the same time these institutions
participate in the restructuring of the state so as to ensure the configu-
ration required by the privatization processes. Moreover, in the case of
Cochabamba, local banks and local political interests intermingled with
those of the international financial institutions.
The Cochabamba department3 has a subtropical climate suitable
for cultivating many different crops. The main city itself is growing
rapidly and in a planless way. Water has always been important for
both personal and agricultural use and has therefore also been a source
of conflict, but there was never an important private market before the
privatization of the public water company, SEMAPA. On the contrary,
Kruse characterizes the situation as follows: “access to water is mediated

by multiple and weighty social, cultural and historic mechanisms, and
has little to do with a ‘market’ where water is just a simple ‘economic
commodity’” (Kruse, 2005, p. 136). SEMAPA both captured and distributed
water to many parts of the city and to the surroundings of Cochabamba,
but at the same time there were an enormous number of micro-systems
under different kinds of community control, some of which had existed
for centuries and had been ruled by ancient systems of customary laws
and habits. Other wells were quite new and made by groups of citizens
who were tired of waiting for the municipality to finally connect them
to the SEMAPA system (Ejdesgaard Jeppesen, 2004).
The privatization was recommended by the World Bank, which also
gave substantial loans to the Bolivian governments from 1996 in order to
facilitate the privatization process (Kruse, 2005, p. 132). The conditions
of the bidding were defined in 1998 by the Hugo Banzer government
(1997–2001), which, in 1999, issued a decree that made it possible to
initiate negotiations with the only bidder, the consortium created by
Bechel Enterprises called Aguas del Tunari. Bechel Enterprises, originally
a North American enterprise specializing in engineering and construc-
tion, had at the time decided to enter the lucrative water market, and
Cochabamba seemed to be a good place to start. As Kruse comments; at
the beginning of 1999, when Aguas del Tunari had been operating for
a month, the inhabitants of Cochabamba were buying their water from
a company controlled by North American capital, managed by English
managers collaborating with Spanish and Italian engineers, endowed
with a minority participation of Bolivian enterprises (several of which
had important connections to the political sphere) and domiciled at a
post office box in Amsterdam (Assies, 2003, p. 142). Not only did water
tariffs go up, in some cases by 150 percent, but Aguas del Tunari also
took over the local systems that had been created and managed by
local communities and neighborhood organizations. However, owner
compensation was never settled.
A wave of massive social protests started in January 2000 and con-
tinued in February and April the same year. The president at the time
was the former dictator Hugo Banzer, leader of the political party AND
(Alianza Nacional Democratica) that had won the elections in 1997. As
a result of the protests, the contract with Aguas de Tunari was cancelled
and the law that had made the privatization possible (Act No 2029 on
potable water and sewerage) was changed (Kruse, 2005; Assies, 2003).
The question is how it was possible for local actors not only to challenge
the government and the international financial and business interests,
but also to force their will upon them? The answer to this question has
to do with the way people organize themselves in Bolivia, and with
the variety of social movements, labor unions, peasants’ organizations,
and neighborhood associations—and, in the case of Cochabamba, also
irrigators’ associations and potable water committees together with
middle-class intellectuals, engineers, and environmental specialists,
and at one point also the civic committee. The Bolivian population is
extremely well organized, perhaps the best organized in Latin America,
and it has on many occasions been able to force presidents from their
post—dictators as well as elected leaders (Klein, 1992; Dunkerly, 1984;
Ejdesgaard Jeppesen, 2006). However, the water war was exceptional
even by Bolivian standards.
It was in the Cochabamba department that the powerful peasants’
movements, the sindicatos agrarios, started (Dandler, 1969; García Linera,
Chávez León, and Costas Monje, 2005). In the city of Cochabamba
there is, furthermore, a strong federation of factory workers unions,
the Federación de Fabriles, and in the province of Chapare we find the
coca leaf growers, the Cocaleros, formerly headed by Evo Morales and
organized in the Seis Federaciones del Trópico as a substructure of the
peasants’ organization, the CSUTCB.4 Everywhere we find the presence
of former miners, among peasants, in the unions, and in the neighbor-
hood organizations. (Ejdesgaard Jeppesen, 2004). The social uprisings
that followed the privatization of SEMAPA were essentially headed by a
new organization called La Coordinadora, a coalition of social organiza-
tions opposed to the privatization of water. The Coordinadora can be
seen as a manifestation of the crucial networks that underlie collective
action “before, during, and after the events,” as Escobar (1992) puts it.
According to Melucci, the social movements are nourished by the “daily
production of alternative frameworks of meaning, on which the net-
works themselves are founded and live from day to day” (Melucci, 1988,
cited in Escobar, 1992, p. 73). In the case of Bolivia’s social movements
these symbolic aspects of social action, the “production of alternative
frameworks of meaning” are very clear.
In January 2000, for example, the Coordinadora declared that “rights
are not negotiated, they are conquered, and people should fight together
for a just cause or tolerate the humiliation of bad governments!” (cited
in Kruse, 2005, p. 147 [my translation, AMEJ]). The organization
invented forms of protest never seen before, such as holding their own
“referendum” by setting up 150 ballot boxes at strategic places in the
city, asking people about their views on privatization. Of the 48,276
votes gathered in a very short time, 97% were against privatization
(Kruse, 2005; Assies, 2003). The Coordinadora also delivered alternative

background information for the ideological fight against privatization
and neoliberal globalization with the help of the intellectuals belong-
ing to the organization. In addition, the Coordinadora also used forms
of action practiced by social movements many times before, such as the
occupation of the head office of the civic committee and of Aguas del
Tunari, road blockades, and protest marches. But it was not until April,
when the government had the police arrest all the negotiators of the
Coordinadora, that the fights became violent and 60,000 people took to
the streets in protest. That same afternoon the head of the department of
Cochabamba declared that the contract with Aguas del Tunari had been
cancelled. Shortly afterwards, however, the government declared a state
of siege and arrested some of the leaders of the Coordinadora and leaders
of social movements in other parts of the country such as Felipe Quispe,
the leader of the peasants’ organization, the Confederación Sindical
Única de Trabajadores Campesinos de Bolivia (CSUTCB). As a result,
city riots reached a climax. Some of the leaders of the Coordinadora went
into hiding, which shows how members of social movements continue
to draw on experiences from periods with military governments.
Following several days of fighting between the army and the angry popu-
lation of Cochabamba organized in labor unions, peasants’ organizations,
coca-leaf growers’ unions, water committees, irrigation cooperatives,
and neighborhood committees, 100,000 people gathered in the main
square of the city to listen to the negotiations between their repre-
sentatives and the government commission being transmitted directly
over the loud speakers (García Linera, Chávez León, and Costas Monje,
2005, p. 633).
It is noteworthy that there was no political party among the organi-
zations involved—a sign of the widespread lack of confidence in the
political system and the old political parties. The Coordinadora, the organi-
zation that headed the conflicts in Cochabamba, is, as its name indicates,
a coordinating committee as well as a network. It owes its existence to
an undergrowth of social movements that, as mentioned, participate in
the specific and thematic social struggles at a particular moment. The
Coordinadora revealed an extraordinary capacity to organize as well as
to mobilize these very different groups of people and organizations, who
were all in one way or another affected by the government’s decision to
privatize the water supply of Cochabamba. The Coordinadora served as an
example in the subsequent “gas war” in El Alto in 2003, where it played
an active role together with other social movements in the Coordinadora
de Gas. The Coordinadora also organized demonstrations in Cochabamba
against the gas exports through Chile, and calling for President Sánchez
de Lozada to step down. As mentioned, the contract with Aguras del
Tunari was cancelled and the law was changed.
The gas war in El Alto

Bolivia has one of the largest gas reserves of the region, the second
largest in Latin America. The oil and gas reserves have mainly been
exploited by foreign companies such as Standard Oil and Gulf Oil,
although, before the Evo Morales government, there were some gov-
ernment attempts to nationalize the oil reserves (Klein, 1992). Gas is
exported primarily to the surrounding countries through pipelines.
The gas war started in September 2003 and the first round ended when
President Sánchez de Lozada (2002–3) fled the country, leaving behind
a death toll of 70 people killed by the army. The crisis was caused by
a plan to export gas to the United States through a pipeline going
through Chile. President Sánchez de Lozada had signed a contract
with the international consortium Pacific NLG at the very end of his
first presidency in 1997, according to which Bolivia would keep only
18 percent of the expected income from the gas exports. Furthermore it
seems that the gas price the president had negotiated with the foreign
company was very low compared to current market prices.
The 2003 uprisings differed in many ways from the previous ones.
The epicenter of the social uprisings was the town of El Alto, another
fast-growing poor city, situated at 4000 meters above sea level on the
edge of the high plateau above the capital, La Paz. El Alto has its own
independent municipal government and a very active neighborhood
organization, the FEJUVE-El Alto (García Linera, Chávez León, and
Costas Monje, 2005). Most of the people living in El Alto are migrants
from the surrounding rural areas who struggle for their livelihoods
in the informal sector (Gill, 2000; Widmark, 2003). The city has grown
since the beginning of the twentieth century without much attention
from the government, and people have had to organize themselves to
provide streets, houses, schools for their children, water supply, sanita-
tion, and electricity for their neighborhoods. Very often the inhabitants’
ways of organizing themselves have been shaped by their experiences
from the rural communities where they come from.
In the uprising the National Congress of Labor Unions, the COB
(Central Obrera Boliviana), also came to play an important part since
El Alto had become a center for industry and commerce. The COB called
for a general strike to support the activities of the FEJUVE. Also the
political party of Evo Morales, the MAS, joined the protesters in El Alto.
Nevertheless, the local committees in El Alto were the organizers of the

road blockades and the marches. They also organized the food supplies
to the participants, and first aid to the wounded, all with remarkable
discipline. Wave after wave of demonstrators descended to the city of
La Paz to demand the president’s resignation and nationalization of the
gas sector and call for a constitutive assembly to rewrite Bolivia’s consti-
tution (García Linera, Chávez León, and Costas Monje, 2005).
The gas war ended with the resignation of President Gonzales Sánchez
de Lozada, who took off to Miami, leaving the conflict and the country
in the hands of his vice-president, the intellectual, Carlos Mesa.
According to Nancy Grey Postero (2007), the 2003 gas war showed that
social movements had begun to integrate ethnic differences with issues of
class, but in fact Bolivian peasants have for decades expressed their strug-
gle for better living conditions as a double-sided struggle, that of class and
that of indigenous identity (see next). Nevertheless there were also new
elements in the 2003 October uprisings, as is discussed next.
Political aspects, global discourses, and local politics
Since 1985 Bolivia has been dominated by three political parties: the
MNR, the MIR,5 and the AND, that until the presidential elections in 2005
joined in different forms of government coalition, sometimes also with
the participation of other smaller parties. This is what Bolivian intellectu-
als have named “la democracia pactada,” the “contractual” democracy
(Mayorga, 2006). The MNR was the leader of the 1952 Revolution, which
changed Bolivian society profoundly. The MNR governments of the 1950s
and 1960s introduced universal suffrage, and land reform that practically
abolished the hacienda in the high plateau and the valleys, where most
of Bolivian foodstuffs are grown. The MNR also nationalized the mines,
and initiated a close collaboration with the trade unions, especially the
miners’ union, the FSTMB, which in some periods was even able to name
the minister of mining.
However, the role of the trade unions changed under the military gov-
ernments from 1964 to 1982 because the military regimes were generally
very hostile to labor, especially to the miners (Dunkerley, 1984; Nash,
1979; Ejdesgaard Jeppesen, 2004). The military was responsible for several
massacres in the mining centers and banned union activities as well as
political parties. Yet Bolivian democracy showed its strengths when it was
reinstalled in 1982 and the political parties re-emerged from hiding.
As mentioned, the new economic model was introduced by the MNR
government in 1985. It was continued during the MIR-ADN coalition
government from 1989 to 1993. The coalition itself came as a surprise to

many observers, since General Hugo Banzer, the leader of ADN, had
persecuted and repressed the MIR, a left-wing party, when he was a military
dictator from 1971 to 1978. The coalition was, more than anything else,
an expression of the level of collaboration and agreement between the
dominant political fractions. The neoliberal economic model continued
under the MNR government from 1993 to 1997. During his presidency
Sánchez de Lozada introduced one of the most ambitious and important
political changes in recent Bolivian history in 1994, when he launched
a decentralization process and proposed the Popular Participation Act
(LPP). The idea of political and administrative decentralization and of
“bringing the state closer to the people” (World Bank, 1997, p. 110) was
part of a global discourse, which was very much present during the 1990s
in international organizations such as the World Bank. It was in many
respects a result of the “anti-State” discourse that dominated the neoli-
beral paradigm. What nobody seemed to realize was that in many ways
both the decentralization process and the LPP formed the basis of Evo
Morales’ success in the 2005 elections, as we shall see later, and therefore
ultimately also contributed to the resignation of Sánchez de Lozada and
his fleeing the country in 2003 as a consequence of the gas war.
In April 1994, the Popular Participation Act was passed. Its purpose
was to pave the way for a less centralistic Bolivian state to prevent ethnic
exclusion and to improve the livelihood of all Bolivians through a more
just distribution and a better administration of public resources (Ley de
PP, 1994, p. 7). Before April 1994 Bolivia had only 13 municipalities,
mostly provincial and departmental capitals, but the new Act increased
this number to 311. It also established a layer of autonomous elective
local governments endowed with their own budget in the form of a 20%
share of the national taxes proportional to the number of inhabitants
in the jurisdiction. It defined in clear terms the responsibilities of the
local government and it required the municipalities to prepare develop-
ment plans in collaboration with local organizations. For this purpose
the Act “invented” a new territorial authority, the OTB (basic territorial
organization) that could consist of, for example, peasant communities,
indigenous peoples, or neighborhood councils. This meant that the LLP
gave legal recognition to many local organizations, some of which had
existed for centuries as forms of practice and self-rule among people,
mostly in the countryside (Ejdesgaard Jeppesen, 2002). In this way,
the Act combined, at the local level, the Western tradition of a liberal,
representative democracy and indigenous traditions as seen, for exam-
ple, in the ayllus6 and sindicatos (see next).
The coca-leaf growers were quick to understand the political

opportunities that the LLP offered them. Instead of voting for the tradi-
tional political parties, they formed, on the basis of their sindicatos, their
own political organization, which was later to become the MAS. In the
December 1995 elections three of their candidates won the elections
in the municipalities of Villa Tunari, Chimoré, and Puerto Villarroel
and they also won the majority in the municipal councils. This meant
that the people in power were now “peasants who know what it means
to suffer”—as related by Felipe Cáseres, coca-leaf grower and mayor
of Villa Tunari.7 This was only the beginning of the coca-leaf growers’
electoral success and their first step toward winning the presidency in
2005. Thus, an important element of Evo Morales’ success is that he
acknowledged, and continues to acknowledge, the use of democratic
elections. Another element was his realization that in Bolivia elections
were not enough (Archondo, 2007; Ejdesgaard Jeppesen, 2006).
The basis of Evo Morales’ political career was, as mentioned previ-
ously, the sindicatos (unions) of the coca-leaf growers in the Chapare
province in the department of Cochabamba. The typical coca-leaf
grower is a migrant, mostly from the Andean areas of the Cochabamba
department, although he may also come from other areas, and he and
his family have left their place of origin to seek better living conditions
in very risky surroundings. They break new ground, cultivate the jungle
where there was no agriculture before, and enter a more dynamic
market. This makes the coca-leaf grower a pioneer in many respects, but
when it comes to organizing, he draws on traditions from the peasant
history of Bolivia. Although the peasant sindicato in Bolivia is a very
local phenomenon and in some respects based on the ancient ayllu and
on traditions that probably go back to pre-Columbian rural societies in
the Andes, in the case of the coca-leaf growers, the character of their
crop connects them directly to a global market of illicit drugs and to the
US anti-drug policies. Thus, the Chapare province may at first glance
seem an isolated place, but in fact it is connected to international
networks of cocaine traders, drug experts, anti-drug policemen and
military personnel, as well as to an international network of academics,
non-governmental organizations (NGOs), and politicians.
This is the background of what Rafael Archondo calls Evo Morales’
Mirada planetaria—that is, his global view that goes far beyond the
frontiers of his own province and even beyond the national or regional
frontiers (Archondo, 2007, p. 85). Evo Morales did not invent this
global view. It was forced upon the coca-leaf growers and their leaders as
they were struggling for survival, both because of the presence in Bolivia
of North American military and drug-enforcement agents, because of

agreements between the Bolivian governments and the United States,
as, for example, in 1988 (CEDIB and ILDIS, 1992), and because of North
American anti-drug policies, which resulted for instance in interna-
tional declarations such as the UN Vienna Convention of December 20,
1988 (ibid.). This global view combines very well with anti-imperialism,
which is also an important factor in Evo Morales’ success. His
anti-imperialistic position gave him a connection to a network of inter-
national or globalized anti-neoliberal and anti-imperialistic intellectuals
and NGOs, and to a global network of pro-indigenous organizations,
a sign of what Inda and Rosaldo characterize as the world of “global
interconnectedness,” only this time in the cultural and political sense of
the term (Inda and Rosaldo, 2002). These contacts and networks are of
a different kind than the neoliberal and economic relations of business
and finance, but they are also a part of globalization. Thus, Evo Morales
was cited in international publications and invited to international
conferences long before he became a well-known politician in Bolivia
(see, for example, García Argañarás, 1997).
Already in some of their first political statements, the coca-leaf grow-
ers emphasized the indigenous, cultural, and traditional use of the coca
leaf, trying in this way to distance themselves and their crop from the
illegal production and trade of cocaine. The coca leaf belongs to the
ancient Andean culture. It is used for religious and other purposes, as
medicine, and for chewing (Resoluciones del II Congreso Nacional, 1997,
p. 35). The highland peasants and the miners have used it for centuries
to overcome cold, fatigue, and hunger. When arguing along these lines
the coca-leaf growers became the defenders of Andean (indigenous)
culture and not cocaine traders (as the governments of Bolivia and the
United States claimed). In this way, the coca-leaf growers could link
their struggles to the indigenous struggles, not only in Bolivia, but in
Latin America and the rest of the world, as I explain next.
The indigenous mobilizations
Since the beginning of the 1980s, indigenous peoples have mobilized

throughout Latin America to defend their right to their own languages,
their own territories, and their own cultures. During the past decades they
have been accompanied by some of the flows of images, discourses, and
ideologies that also form part of globalization (Inda and Rosaldo, 2002).
Indigenous rights are internationally stated, protected, and defined by
ILO Convention No. 169. In Bolivia the convention was signed in 1991
by President Jaime Paz Zamora, leader of the MIR. Many other Latin
American governments are in support of the convention, just as the
constitutions of several Latin American countries now define their socie-
ties as multi-ethnic or multi-cultural (Grey Postero, 2007, p. 234, note 8).
In Bolivia, for instance, the Sánchez de Lozada government amended
the constitution in 1994, thus redefining Bolivian society as both multi-
ethnic and multi-cultural. International conventions as well as national
legislation have thus enabled indigenous organizations to fight for
territories and legal recognition.
International NGOs have given important support to indigenous
movements throughout the continent, including Bolivia—as became
evident in the struggles of CIDOB,8 the umbrella organization of the
indigenous groups from the lowland departments (Grey Postero, 2007).
During the 1990s, the neo-liberal governments in fact encouraged, to
a certain degree, the social work of these NGOs in order to relieve the
state of some of its responsibilities (Arellano-López and Petras, 1994).
What these governments apparently failed to realize was that not only
were they in fact encouraging the NGOs’ symbolic and political work
that went with the social tasks performed; they were indirectly giving
momentum to international institutions and global discourses of rights,
because of the cooperation between the local organizations and inter-
national NGOs.
In Bolivia the global discourses of human and indigenous rights have
been appropriated (Inda and Rosaldo, 2002, p. 23) by the local organiza-
tions according to their history and their traditions. This is, for example,
the case of the CONAMAQ,9 the organization of highland ayllus and
Aymara Indians in the departments of La Paz and Oruro, and of the
CIDOB, the Confederation of Indigenous Organizations of the Lowlands
(García Linera, Chávez León, and Costas Monje, 2005). The CONAMAQ is
the result of strong political mobilization among Aymara-speaking peas-
ants in the highland areas of the Oruro, Potosí, and La Paz departments
dating back several decades (Albó, 1996; García Linera, Chávez León,
and Costas Monje, 2005). The CIDOB, founded in 1982 with the help of
an international NGO, is an umbrella organization that coordinates the
land struggles of several very different indigenous peoples, such as the
Guaranís, the Chiquitanos, and the Ayoreo Indians. However, the most
important organization for the indigenous majority in Bolivia has without
doubt been the National Confederation of Peasant Unions, the CSUTCB.10
Formed on the basis of class after the 1952 Revolution and affiliated to
the National Congress of Workers, the COB, the CSUTCB has during
the past two decades changed its discourses of identity constructions
into a combination of class and ethnicity (García Linera, Chávez León,

and Costas Monje, 2005). It was only after the 1952 Revolution that
Bolivian peasants, most of them illiterates, were given the right to vote
and have thus integrated into the political community of the nation.
As another act of integration, the word “peasant” was chosen to replace
the word “indian” that had been employed for centuries as a way to dis-
criminate against the indigenous majority. Nevertheless the CSUTCB has
been very conscious of its double identity, class, and ethnicity. Already
in 1992, following an analysis of the racism of political parties and the
labor movement in general, the Congress of the CSUTCB stated:
Because of these political and labor union circumstances [(i.e. the racism,
AMEJ )], the SCUTCB has strategically orientated the struggle toward
creating a political instrument that will be able to confront this colonial,
racist, and imperialistic State until its liquidation, constructing, in its
stead, a new multinational, multicultural, democratic, socialist, com-
munitarian State born of our own original roots of ideological, class,
national, and cultural identity.
CSUTCB (1993, pp. 29–30)11
As we can see from this passage, the identity expressed combines several
elements. The utopian society to emerge from the struggles against the
racist society of the present is a combination of both indigenous and
class-based goals. In some periods some aspects of this complex identity
have been more important than others, but after the social uprisings at
the beginning of the new millennium the indigenous identity has been
reinforced. The anger also inherent in the quotation is directed against
the Bolivian State, which is seen as colonial, racist, and imperialistic;
however, it is not combined with a critique of the economic model,
something which is perhaps surprising.
The CSUTCB’S latest publications also emphasize the defense of the
coca leaf and the importance of collaborating with other social move-
ments, such as the CIDOB, the Organization of Colonisers (CSCB),12
and Peasants without Land (MST).13 Nevertheless, there have been
disputes between the coca-leaf growers and factions within the CSUTCB
that have divided the organization. But in spite of internal divisions the
coca-leaf growers and their sindicatos collaborated with the CSUTCB,
the COB, and other social movements in the gas war in September and
October 2003, setting up street blockades in Chapare and in doing so
effectively blocking the only road between the two important cities,
Santa Cruz and Cochabamba. One of the clearest manifestations of
the CSUTCB’s double identity is perhaps the hunger strike that took
place during the gas war in September 2003, and which was decisive in
ousting the government of Sánchez de Losada. Leaders of the peasant
organization called for a hunger strike in the offices of the local radio
station San Gabriel in El Alto. The radio is probably the most important
means of communication among poor people in Bolivia. The San
Gabriel radio station broadcasts most of its news in Aymara and thus
forms part of a parallel and subaltern media network in Bolivia. The
peasants were joined by representatives from local organizations, who
would send groups of people to participate in the hunger strike for
five–six days and then relieve them with others (García Linera, Chávez
León, and Costas Monje, 2005, p. 154). The strike lasted for more than
25 days. It united Aymara peasant communities organized in both the
CONAMAQ and the CSUTCB, with neighborhood organizations in the
city of El Alto, and their daily debates and decisions were broadcast
by the radio, just as it also connected the poor city of El Alto to social
movements in other parts of Bolivia, especially in Cochabamba.
The gas war revealed a new “indigenous activism blended with a
renewed populist notion of the nation, reflecting the fact that the major-
ity of Bolivians are both indigenous and poor” (Grey Postero, 2007, p. 5).
This “populist notion of the nation” expressed by the poor inhabitants
of El Alto was fueled by their experiences with neoliberal economic
policies, policies that had not eradicated, but, so it would seem, had
in fact increased poverty. Moreover, this particular kind of nationalism
was fueled by decades of indigenous struggles for recognition and inclu-
sion (Grey Postero, 2007, p. 3). The aim of the protesters was therefore
to defend “their” gas and to keep the income derived from the natural
resources in Bolivia. In this way the social uprisings and the defense of
the natural resources by the poor, indigenous majority were directed
against international (i.e. foreign) economic interests, the neoliberal
economic model, and the political establishment in Bolivia responsible
for implementing that model. At the same time there is a clear sense of
belonging to the nation state Bolivia, that is, “our” Bolivia, the Bolivia
that belongs to the poor, indigenous majority and not the Bolivia where
foreigners can come and take what they want.
The nationalistic and ethnic/indigenous response to neoliberal

globalization
This new political stage was adeptly seized by the MAS and Evo Morales,
since the coca-leaf growers managed to embrace class, as well as ethnicity
and nationalism in their political program (Ejdesgaard Jeppesen, 2006).
The success of their efforts was reflected in the presidential elections

in December 2005, when Evo Morales was elected with an absolute
majority.
The ethnic question must not be underestimated. Evo Morales is the
first president of indigenous origin in Bolivia. He comes from a humble
background as the son of a poor Aymara-speaking Andean, peasant
family; he emigrated to the Chapare province as a young man, and
his “only school” has been the training he got through the system of
the sindicatos, the coca-leaf growers’ unions (Archondo, 2007, 83). He
has been arrested several times, has been beaten up by the police on a
number of occasions and for more than a decade he has accompanied
his fellow peasants in Chapare in the street blockades and the marches
through the mountains to reach La Paz. Evo Morales represents the
excluded majority of poor, indigenous people in Bolivia and he shares
their experiences of hunger. Very few politicians—if any—can speak with
as much credibility as he can to the people who fought the politics of
neoliberal globalization and the Bolivian governments during the upris-
ings of 2000 and 2003. The nationalism advocated by the MAS and Evo
Morales is highly complex. In fact, the nationalism of the indigenous
populations of Bolivia may seem surprising, when you consider the his-
torical exclusiveness of the Bolivian State. Still today Bolivians speak of
the “exclusive republic” (la república excluyente) and in one of his works,
García Linera, the vice-president of Bolivia, defines the State as mono-
lingual and the Nation as pluri-lingual, meaning that the Bolivian state
in the past did not reflect the composition of the people (García Linera,
Mealla, and Alcoreza, 2007). Why not then join the Aymara groups in
Peru or the Quechuas in Ecuador and form a completely new nation
of only indigenous peoples? The paradox derives from the fact that
the sense of belonging to the Bolivian nation is very strong. Even the
1952 Revolution took on important nationalistic overtones. It pointed
to the anti-nationalistic policies of big corporations and of the previous
governments as the argument for nationalizing the mining industries,
although it is important to note that this was not an ethnic nationalism.
What we witness today is a powerful ethnic and indigenous nationalism
based on the consciousness of having gained power over the State.
The Evo Morales government is facing many challenges. Both the
nationalistic and the ethnic dimensions of his program and Bolivia’s new
constitution have been met with resistance, as has his close collabora-
tion with Hugo Chávez. Nevertheless, his clear anti-imperialist, pro-poor,
and pro-indigenous commitment has gained him wide support among
Bolivians all to familiar with the more negative aspects of globalization.
The new “indigenous activism” in Bolivia consists, according to

Mayorga, of a “conglomerate of identities and social movements,” which
means that the political community of the nation is no longer perceived
as “a nation” but as an articulation of several “original nations” (naciones
originarias) (Mayorga, 2006, p. 10). This is reflected clearly in Bolivia’s
new constitution (Ejdesgaard Jeppesen, 2009). But the nationalism advo-
cated by all these social and political actors in Bolivia is also a reflection
of decades of experiences with neoliberal policies, the privatization of
public enterprises, and the influence of transnational corporations. If we
add to this experiences with poverty, racism, and the power of popular
mobilization and social movements, we may begin to understand the
complexities of the Bolivian answer to neoliberal globalization.
Notes
1. For the history of the miners, see Dunkerley (1984) and Nash (1979).
2. Servicio Municipal de Agua Potable y Alcantarillado.
3. Bolivia is divided into seven departments (departamentos), headed by
a democratically elected prefecto. Each department is divided in provinces.
4. Confederación Sindical Única de Trabajadores Campesinos de Bolivia.
5. Movimiento de Izquierda Revolucionario.
6. The Ayllu is an ancient Andean organization form, an extended family
network, living together in a specific area, where they shared land, animals,
and crops. Decisions were and are still today made by consensus. The
agrarian sindicatos build on these ancient traditions.
7. I interviewed Felipe Cáseres during my fieldwork in Bolivia in 1996–7
(see Ejdesgaard Jeppesen, 2002 and also 1997a, b).
8. Confederación de Pueblos Indígenas del Oriente Boliviano.
9. Consejo Nacional de Ayllus y Markas del Qullasuyo.
10. For the history of the CSUTCB, see Rivera Cusicanqui (1984).
11. My translation from the text in Spanish: La CSUTCB, por estos hechos políticos
y sindicales, en lo estratégico, ha orientado la lucha con el fin de dotarse de un
instrumento político que se enfrente contra este Estado colonia, racista e imperia-
lista hasta su liquidación, y a cambio, construir un nuevo Estado Multinacional,
Pluricultural, Democrático, Socialista, Comunitario, nacido de las propias raíces
originarias, de identidad ideológica de clase, nación e identidad cultural.
12. Confederación Sindical de Colonizadores de Bolivia.
13. Movimiento sin Tierra.
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6
Between God and the State:
Globalization and Human
Insecurity in Latin America
Andrés Pérez-Baltodano
Globalization constitutes a direct challenge to the preservation and

expansion of human security. By “human security” I mean “safety from
the constant threats of hunger, disease, crime, and repression” and
“protection from sudden and hurtful disruptions in the pattern of our
daily lives—whether in our homes, in our jobs, in our communities, or
in our environment” (UNDP, 1994, p. 3). The meaning of human security
articulated by the United Nations is also expressed in the concept of
“ontological security” articulated by Anthony Giddens: “the confidence
that most people have in the continuity of their self-identity and in
the constancy of the surrounding social and material environments of
action” (Giddens, 1991, p. 92).
The relentless search for higher levels of economic competitiveness and
market efficiency, for example, has significantly weakened labor rights
and job security around the world. At the same time, the globalization
of Western values has increased “cultural insecurity” in many societies
of the South. More recently, the global financial crisis that exploded in
the United States in September 2008 showed the interdependent nature
of the global economy and its capacity to generate conditions of human
insecurity all over the world (South Centre, 2008).
This chapter uses a historical and comparative approach to analyze
the impact of globalization on human security in Latin America and
examines some critical cultural responses to this phenomenon. More
specifically, it analyzes the relationship between some of the new forms
and levels of human insecurity created by globalization and the inten-
sification of religiosity in the region. Europe is used as a comparative
historical reference that shows how the evolution of democratic
state-society relations generated the unprecedented levels of human
security achieved by European societies. The case of Europe is also used
115
116 Globalization and Human Insecurity
to show the existence of a historical correlation between secularization

and human security in this part of the world. However, Europe is
not used here as a normative model, but simply as a historical refer-
ence point to make it easier to understand the historical specificity of
Latin America.
In contrast to Europe, the evolution of state-society relations in Latin
America never generated proper conditions for the consolidation of
human security (see IIHR, 2011). Moreover, as this chapter shows, globali-
zation has reduced the capacity of Latin American states and societies
to generate these conditions. After the initial enthusiasm generated by
the political transitions from authoritarian rule that began in the 1980s,
Latin Americans appear to be losing confidence in democracy, politics,
and the State (see PNUD/OEA, 2010). In these circumstances, millions
of men and women are turning to religion as a source of meaning and
security in a world that they feel is beyond their control (see Chesnut,
2007; Pérez-Baltodano, 2007). The final part of this chapter identifies
two possible political outcomes of these trends.
God, human security, and the State: The European

experience
Ideas of God have changed in response to the evolution of society’s

capacity to generate conditions of certainty and stability. In the case
of Western Europe, the emergence and consolidation of modernity
paralleled a change in society’s understanding of the idea of God. More
specifically, modernity displaced the dominant providentialist religious
culture of Europe and facilitated the consolidation of a deist religious
perspective. This transformation served as the foundation for the secu-
larization of European culture and politics (Taylor, 2007; Lloyd, 2008).
Providentialism is a theological concept that expresses a vision of the
history of individuals and societies as processes governed by God “in
concordance with His plans and purposes” (Hodgson, 1992). In Europe,
this perspective was gradually replaced by deism, a worldview in which
God is perceived as a Supreme Being that is responsible for the creation of
the world but without interfering in the evolution of history or disrupt-
ing the natural laws of the universe. The emergence of this “modern”
view of God was made possible by the evolution of science and tech-
nology and by the parallel emergence of a new confidence in human
beings’ capacity to control their own destiny.
Politically, this cultural transformation found expression in the emer-
gence of an understanding of history as a process that can be conditioned
Andrés Pérez-Baltodano 117
by human will and the constitutive power of ideas. This understanding

gave rise to the Modern State as an institutional arrangement designed to
organize social relations and “life chances” within recognized legal and
territorial boundaries.
Continuous regulation of social relations across territorial space
resulted, over time, in the institutionalization of “behavioral expecta-
tions” (see Luhmann, 1990, pp. 21–79). As such, the institutionalization
of the Modern State came to represent what David Gross (1981–2) calls
the “spatialization of time and experience.” The principle of territorial
sovereignty is the most important legal-political expression of this
phenomenon (see Taylor, 2003).
The role of the State underwent significant change in the eighteenth
century, when the Enlightenment introduced the idea of progress. The
idea of an open future dissociated from the past challenged society’s
ability to overcome contingency and generate conditions of order.
In retrospect, it is possible to say that this challenge was met by the
ideas of popular sovereignty and representative democracy. Democracy
placed sovereignty not in the king or in the State, but in “the people.”
The development of the administrative and regulatory power of
the State was significantly expanded with the emergence of a civil
society, that is, with the constitution of free associations that were not
under the influence or control of the State. The formation of these
associations provided the State with an opportunity to use society’s
organizational capacity as an extension of its own regulatory power
(see Rose, 1996; Holmer Nadesan, 2008). At the same time, the creation
of communication channels between society and the State provided
people with an opportunity to “determine or inflect the course of state
action” (Taylor, 1990, p. 4; Giddens, 1984).
The evolution of society’s capacity to influence State power generated
the unprecedented levels of human security associated with democracy,
citizenship rights, and the Welfare State. It also generated the possibility
of expanded citizenship rights to sectors of society—women, for
example—who were not part of the gender-blind classic democratic
notion of “the people.” Moreover, increasing levels of human security
are strongly correlated with decreasing levels of religiosity, as measured
by the declining power of providentialism throughout the history of
European societies. The sense of confidence and optimism that informs
the modern European mind “is grounded in a conviction that provi-
dential purpose is at work in the world. This purpose, however, is not
understood as divine intervention; it is immanent in the efforts of
human beings to fulfill their natures” (Lloyd, 2008, p. 295).
Even today, the correlation between human security and secularization

can be established by comparing, for example, the levels of institution-
alized social protection and religiosity in Europe and Latin America. As a
recent study points out, “countries with higher level of welfare spending
have a proclivity for less religious participation and tend to have higher
percentage of non-religious individuals” (Gill and Lundsgaarde 2004,
p. 425). In this and many other studies, Europe ranks higher in institu-
tionalized social protection and lower in religiosity than Latin America
(Rees, 2009; Ruiter and van Tubergen, 2009).
God, human security, and the State: The Latin American

experience
The idea of the Modern State generated by European history was trans-
planted to Latin America and the rest of the world through a combination
of exporting and importing mechanisms that included imperialism,
colonialism, and programs of development assistance (see Badie, 2000).
The idea of the State, however, did not find in Latin America the
material and cultural conditions for its successful adaptation. First, the
new independent countries lacked the power to operate as sovereign
states. They occupied a position of economic and political depend-
ency within the nineteenth-century world system. Second, the State
bureaucracies that these countries inherited lacked the regulatory
capacity needed to organize social relations within their territorial
boundaries. These bureaucratic structures—designed as instruments of
the imperial crowns in Portugal and Spain for the exploitation of the
“new” continent—were inadequate to construct “imagined communi-
ties” in America. In fact, they were not even able to physically penetrate
the territory they were supposed to control. Finally, the social structures
inherited from colonial times had been designed to exclude the masses
and to protect the power of the Spanish and Portuguese crowns and
their representatives in the American colonies. The Criollo elites that
achieved power after the independence used these same structures to
oppress blacks, Amerindians, and mestizos (see Bethell, 1987; Haring,
1990; Pérez-Baltodano, 2003).
The chances for the new American societies to overcome these objec-
tive obstacles were limited by the cultural conditions within which
Latin American states were born. The Enlightenment and its ambition
to enhance the human condition through democracy and the power
of reason did not make serious inroads into Portugal and Spain. These
two colonial powers were central to the Counter-Reformation led by
the Catholic Church to maintain its power in the face of the Lutheran
revolution. With the help of the Inquisition, they enforced in America
a rigid and radically anti-modern Catholic doctrine that centered on the
idea of a providential God to whom everything—including politics and
the State—had to be subordinated.
In these conditions, the separation of Church and State that occurred
in many Latin American countries during the nineteenth century was
mainly a legal-formal phenomenon that did not significantly affect the
religious culture of the region. Mexico’s nineteenth-century liberalism,
for example, was anti-clerical above all. Octavio Paz called it “declama-
tory” (Paz, 1982, p. 45). The same can be said of Colombia, whose 1863
Constitution decreed religious freedom, removed the name of God from
the text, and established a clear separation between Church and State.
However, as Rodolfo de Roux points out, that just implied “the laiciza-
tion decreed by a not-yet secularized society.” After the constitution
was proclaimed in 1863, the Colombian Catholic Church continued
to preserve its “hegemony over control of the symbolic goods of salva-
tion” (De Roux, 2004, p. 65). The Mexican and Colombian cases were
repeated in other Latin American countries where history continued to
be perceived as a process controlled by God.
The adoption of the idea of the modern European state in a highly
providentialist religious culture was a central dimension of the still-
unresolved tension between what Carlos Fuentes and others call the
“legal country” and the “real country” of Latin America. In the “legal
country,” people have rights and are protected by the law. In the
“real country,” the State typically negates citizenship rights and routinely
condones and promotes injustice and inequality. The “legal country” is
the country of constitutions and democratic institutions. In the “real
country,” however, society does not have the capacity to control State
power democratically. Moreover, in the “real country” of Latin America,
the State lacks the capacity to administer justice and generate condi-
tions of human security within its territorial boundaries (see Serrano and
Kenny, 2005). Furthermore, the States of most Latin American countries
do not even have the capacity to penetrate the physical territory that
they formally control. The power of the State in the “real country” of
Latin America, as Guillermo O’Donnell points out, “fades off” outside
“the national urban centers” (O’Donnell, 1993, p. 1358; see also Keck
and Neaera Abers, 2006). This weakness is evident in countries such
as Colombia and Mexico, where the State is unable to displace drug
cartels from the large swaths of territory that they control. Moreover,
the social evolution of Latin America has not produced structures of
citizenship rights capable of creating the kind of congruent relationship

between the State and society that played a key role in the development
of human security in Europe and other parts of the world (see Held,
1991). Even in today’s Latin American electoral democracies, the condi-
tion of political, civil, and social citizenship remains weak (UNDP, 2004,
pp. 27–9). Therefore, in Latin America, the State floats above societies
that do not have the power to influence State policies and actions. With
the advent of electoral democracy, people may elect their governments
but have very little capacity to influence the organization and uses of
State power.
As in Europe, (in)security and religiosity are correlated in Latin
American history. More specifically, high levels of insecurity coexist
with high levels of religiosity. In Guatemala, 80% of the people who
participated in a global survey of the Pew Global Attitudes Project stated
that religion played a “very important role” in their lives. The same
statement was made by 77% of participants in Brazil, 72% in Honduras,
69% in Peru, 66% in Bolivia, 61% in Venezuela, 59% in Mexico, and
39% in Argentina. Only Africans registered higher degrees of religio-
sity than those of Latin Americans. The corresponding number for the
United Kingdom is 33% compared with 27% in Italy, 21% in Germany,
and 11% in France (Pew Global, 2002).
Statistical data, however, do not entirely reveal the influence of
religion in the lives of Latin Americans because the word “God” means
different things to different people. The God that religious people in
Europe see as playing a “very important” role in their lives is most
likely a God that is not perceived as a force that regulates and controls
individual and human histories. The God of most religious people in
Europe is perceived as a force working in accordance with the general
principles of deism. The God of religious people in Latin America, on
the other hand, is typically a powerful force that meticulously shapes
and determines the course of history. It is a God that performs miracles
and intervenes in the lives of individuals and societies.
Some polls show that approximately nine out of ten Mexicans believe
in a providential God and are predisposed to ask for an intercession
from the Virgin of Guadalupe or from a saint (see Legorreta, 2003).
In Nicaragua, a survey published in 2002 showed that 79% of the
people interviewed believed that God, and not their own individual
will, was the force that determined their lives (La Prensa, 2002). In
Peru, millions of people believe in the supernatural powers of “el Jesús
de los Milagros,” recently named by the Peruvian Parliament as the
“patron of Peru.” In the public announcement of this decision, President
Alan García asked the icon to help his country: “We ask of you develop-
ment, justice and happiness for Peru” (El Comercio.pe, 2010).
The “enchanted land” in which millions of Latin Americans live
resembles the European medieval world ruled by God, necessity, and for-
tune (see Marzal, 2002).1 For most of them “the ordinary circumstances
of everyday life constitute a continuous threat” (Laing, 1971, p. 171).
Globalization, human security, and the State
The neoliberal forces of globalization intensified the external dependency

of Latin American states, diminished their social role, and encouraged
the isolation of important components of the economic policy-making
process from the pressures of domestic politics. These transformations
had a negative effect on human security because people found them-
selves increasingly subjected to decisions beyond their control. This
became painfully evident during the stabilization and adjustment crisis
of the 1980s, when Latin American governments negotiated with the
International Monetary Fund (IMF) and the World Bank to obtain new
credits in order to restore external balance. In securing the support of
these organizations, Latin American governments agreed to introduce a
number of economic, political, and institutional reforms along neolib-
eral lines (Sunkel and Zuleta, 1990). The social and psycho-sociological
impacts of both the crisis and the adopted neoliberal policies were
dramatic (see Saraví, 2009; IIHR, 2011). Social spending suffered a 24 per
cent drop in the 1980s (ECLAC, 1998). During this decade, the quality
and level of social services deteriorated even in the countries with the
most sophisticated social protection systems of the region (O’Donnell,
1996, p.1).
Moreover, during the 1980s the average per capita income in the region
“fell by 11%, real wages declined substantially and there was a sharp
increase in unemployment and or underemployment” (Psacharopoulos,
1993, p. 74). At the same time, the poverty rate went from 40.5% in 1980
to 48.3% in 1990. It went down to 43.8% in 1999 before moving up to
44% in 2002. It went down again to 36.3% in 2006, 34.1% in 2007, and
33% in 2008. It moved to 33.1%, which represents 183 million poor
people, in 2009. Therefore, in absolute numbers, there are more people
living in poverty in Latin America today than in 1980, when the 40.5%
poverty rate was equivalent to 136 million people (ECLAC, 2010, p. 11).
The unemployment rate increased steadily during the first half of
the 1980s. It decreased during the second half and deteriorated during
the 1990s (Tokman, 2010). From 4.6% in 1990, it went up to 5.8% in
1994 to 6.7% in 1997, to 8.6% in 1999, to 11% in 2003. It went down

to 7.1% in 2008 before moving to 8.1% in 2009 (CEPAL, 2000–1, p. 90;
ECLAC/ILO, 2010, 5).
These statistics hide the full impact of neoliberal reforms. Employment
rates do not reveal the insecurity that is inherent in the “flexible” labor
markets created by globalization. Most new jobs generated are created
in the informal sector, where job security and working conditions are
poor. The size of the informal sector rose from 25.6% in 1980 to 31.9%
in the 1990s (O’Donnell, 1996, p.3). In the 1990s, seven out of every ten
jobs in urban areas “were generated in the informal or low-productivity
sectors” (ECLAC, 2000–1, p. 87; OIT, 2010).
The deterioration in the quality of employment continued after 2000.
In Decent Work in the Americas: An Agenda for the Hemisphere, 2006–15,
the International Labour Organization (ILO) offered a dramatic picture
of life and employment in the region:
There are 239 million economically active persons in employment or

willing to work. Over 23 million of these individuals are affected by
open unemployment, and approximately 103 million are employed in
the informal sector, often without labor rights or social protection …
The two groups most affected by this situation are women and young
people.
ILO (2006, p. 1)
Ironically, the deterioration of Latin America’s social conditions and

human security after the 1980s took place at the same time the region
was undergoing processes of “democratic transition.” The tensions
and contradictions produced by the combination of democracy—as
an inclusive political system—and neoliberal economics—as a system
that generates exclusion and inequality—prompted many observers to
warn governments that “excluding large sectors of the population from
the tangible and intangible benefits of progress was incompatible with
the consolidation of increasingly open, pluralistic and stable demo-
cratic systems.” They added: “sustained economic exclusion reflects in
political exclusion which undermines governance” (IDB/UNDP, 1993,
pp. 3–4; see also Sunkel and Zuleta, 1990).
After almost four decades of democratic experimentation, the ten-
sions and contradictions generated by the combination of neoliberalism
and democracy continue to threaten the political systems of the region.
Neoliberalism has moved Latin American countries away from the idea
of democracy as a model of state-society relations based on citizenship
rights. Instead, it has promoted an electoral version of democracy in

which people can elect their governments but cannot condition the
public policy processes that affect their lives. This electoral model
remains dominant even after the resurgence of the populist left initi-
ated by the election of Hugo Chávez in Venezuela in 1998 (see Nilsson’s
chapter in this volume). This situation, as a recent political evaluation
of the region indicates, is not sustainable (PNUD/OEA, 2010, p. 23). By
weakening both the capacity of the Latin American states to respond to
people’s needs, and societies’ capacity to control State power democrati-
cally, neoliberalism has reinforced human insecurity in the region.
Emigration is probably the most dramatic response to the new world
of insecurity created by globalization in Latin America. The decision
to emigrate is, typically, a measure of last resort for people who no
longer believe in the possibility of building a normal life in their own
societies. This is the case for most Latin American emigrants who
flee their countries because of “lack of economic opportunity, or to
escape crime and violence” (The Economist, 2002). Emigration, then,
is a dramatic decision based on the premise that the intense forms of
uncertainty generally associated with this experience are preferable to
what is perceived as the certainty of poverty, violence, and even death
in one’s own country. From this perspective, emigration can be properly
perceived as an “indictment of the failure of democracy or of economic
reform—those who can vote with their feet” (The Economist, 2002).
Millions of Latin Americans have voted with their feet after losing faith
in the promise of economic and political reforms. From 1995 to 2000,
the net migration rate for Latin America and the Caribbean was the
highest in the world (IOM, 2005).
Emigration did not slow, not even during the years of economic
growth registered between 2003 and 2008 (ILO, 2006, p. 70). This could
mean that the sense of insecurity experienced by Latin Americans has
become a permanent existential condition that informs Latin Americans’
perceptions of their social and material environments of action. This
was confirmed by a study that compared some objective measures of
economic performance with Latin Americans’ subjective perceptions of
their own wellbeing during the period of economic recovery before the
2008 global financial crisis. The study revealed that positive objective
measures of economic performance—gross domestic product (GDP)
growth, for example—do not necessarily correlate with positive subjec-
tive appreciations of wellbeing. This apparent incongruence was more
accentuated in countries with high levels of socioeconomic inequality
(ECLAC/Latinobarómetro, 2010, pp. 43–4).
Puzzled by the absence of a consistently positive correlation between

economic growth and economic optimism among Latin Americans,
ECLAC-Latinobarómetro pointed out that the region was like a “patient
whose physical conditions improve but whose spirits remain low” (PNUD/
OAS, 2010, p. 15). In fact, the results of the ECLAC Latinobarómetro are
not surprising. The Latin American mind is an “embodied mind” and
not a disembodied “spirit” (see Merleau-Ponty, 1964). In other words, it
is a mind that occupies a body that is conditioned by an integrated social-
political-economic-cultural-natural reality. Therefore, Latin Americans do
not perceive the world through the kind of one-dimensional “economic
reasoning” used by Comisión Económica para América Latina (CEPAL)
to argue that the “health” of the Latin American region has improved
because it has experienced some years of economic growth as measured
by conventional economic indicators. Latin Americans do not experience
economic growth in isolation from, for example, job insecurity and the
sense of injustice generated by the brutal structures of social inequal-
ity that exist in the Latin American region. Income inequality in Latin
America “is 65% higher than in high-income countries, 36% higher than
the income inequality observed in East Asian countries and 18% higher
than that reported for sub-Saharan Africa” (UNDP, 2010, p. 16). The
Latin American mind is also an “emotional mind” that reacts with fear to
economic insecurity and to the constant threat of murder and theft that
is part of life for millions in the region. It is estimated that 27% of the
murders that occur in the world take place in Latin America, which has
only 8.5% of the world’s population (PNUD/OEA, 2010, p. 116). Finally,
the Latin American mind is a deeply religious mind. It is a mind shaped
by a providentialist religious tradition that reproduces a view of history
as a process lived by humans but controlled by God.
Between God and the State
Where do the vulnerable and the poor try to find a sense of security in
today’s Latin America? Apparently neither in the State nor in the pro-
mise of democratic politics. According to Latinobarómetro (2010), only
32% of Latin Americans trusted the judicial system. The government
was trusted by only 45% of the participants, whereas political parties
received 23% of favorable responses. The Church, despite its conti-
nuously declining capacity to instill confidence in Latin Americans, was
trusted by 67% of the respondents (p. 72). The low levels of confidence
in public institutions shown by Latin America also find expression in
the increasing levels of political cynicism that prevail in the region.
In 2007, 51% of those interviewed by Latinobarómetro declared that

“politics is too complicated and cannot be understood.” In 2010, this
figure went up to 54% (Latinobarómetro, 2010, p. 58).
Support for democracy moved from 58% in 1995 to 61% in 2010.
Meanwhile, the percentage of Latin Americans who would prefer an
authoritarian regime remained stable at around 15%. The percentage
of people who declared themselves “indifferent” to the type of
regime moved from 16% in 1995 to 22% in 2003 to 16% in 2010
(Latinobarómetro, 2010, p. 23). When Latin Americans are asked more
directly if they would opt for an authoritarian regime over a demo-
cratic government if authoritarianism could resolve their economic
problems, the support for democracy declines sharply. In a study
conducted by the United Nations, 54% of Latin Americans stated that
they would sacrifice democracy to resolve their economic problems
(UNDP, 2004, p. 31). In the meantime, millions of Latin Americans are
inclined to find the meaning and security that current democratic insti-
tutions cannot generate rather in the old idea of a providential God.
This is not new or surprising. The relationship between providentialism,
ontological insecurity, and the search for security beyond politics in Latin
America has been documented and explained by social psychology, pop-
ular education, and Liberation Theology. The work of social psychologist
Ignacio Martín-Baró (1998), for example, shows how traditional Latin
American Christians tend to turn suffering and docility into a “religious
virtue” that gives them emotional strength and a sense of purpose in life.
In the field of pedagogy and popular education, Paulo Freire’s work (1979)
also demonstrates how the “oppressed consciousness” of Latin Americans
inhabits a magical world in which the victims of exploitation interpret
their own suffering as a divine design. Once again, the poor find a meas-
ure of comfort and security in the notion that they live in accordance
with God’s plans. Liberation Theology also contributed to the elucidation
of the relationship between providentialism and ontological insecurity.
It fought the idea of Christianity as a source of resignation for the poor
and attempted to transform the Christian message into a call for the
transformation of the social structures that reproduce poverty and inequality
(see Gutiérrez, 1988).
The sense of insecurity that social psychology, liberation psychology,
and Liberation Theology studied in the 1970s and 1980s has become
more intense as a result of the neoliberal economic reforms of the past
four decades. Concurrently, the religiosity of Latin Americans has
intensified, especially among the most vulnerable sectors of society. The
increasing religiosity of Latin Americans is revealed in the rapid growth
of the Pentecostal and the Catholic Charismatic movements in the region

over the past four decades. These “renewalist” movements operate within
an explicit providentialist theology that teaches “God is in charge and
purposefully, powerfully guides nature and history.” In congruence
with this perspective, Catholic Charismatics and Pentecostals “see social
problems as the result of wrong relations between humans and the super-
natural realm.” For them, the solution to these problems “arises from
religious action that seeks to order the relationship between humans and
the supernatural” (Smilde, 1998).
The theology of Latin American renewalist Christians runs against the
principles of Liberation Theology, which proposes that the “Kingdom of
God” should be interpreted as a metaphor for justice here on Earth. Then
it is a painful irony, as R. Andrew Chesnut suggests, that the “preferential
option for the poor,” preached by Liberation Theology, was ignored by
the poor, who opted for the “Spirit” (Chesnut, 2007, p. 64).
According to a ten-country study published by the Pew Forum (2006),
in 1970, Pentecostals and Catholic Charismatics accounted for just 4.4%
of the total Latin American population. By 2005 this figure had jumped
to 28.1%. Today, approximately 30%, 49%, and 60% of the populations
of Chile, Brazil, and Guatemala, respectively, call themselves Pentecostal
or Charismatic (Pew Forum, 2006). The same study reveals important
country variations. In Brazil, Chile, Argentina, Guatemala, El Salvador,
and Nicaragua Pentecostals represent more than 10% of the national
populations. In Mexico, Venezuela, Colombia, and Peru, Pentecostals
account for less than 10% of the population. These countries, however,
are experiencing “significant Pentecostal growth” (Pew Forum, 2006).
Moreover, Pentecostalism has demonstrated the capacity to intensify
(“pentecostalize”) traditional providentialism among Catholics. This
can be seen with particular clarity in the case of Guatemala. Timothy
J. Steigenga (2005) points out that 88% of Guatemalan Pentecostalist
Protestants say they had benefited from a miracle. More than 70%
of Catholics and even 64% of people who say they have no formal
religious affiliation also claim to have had such an experience. The
phenomenon of “pentecostalization” could be behind the growing
number of renewalist Catholics in Brazil, where, according to Chesnut
(2007), half of the Catholic population is charismatic. In his estimation,
the Catholic Charismatic Renewal (CCR) accounts for one-third of the
total Catholic population of the region (p. 66).
The relationship between the impressive growth of renewalist
Christianity revealed in the aforementioned statistics and ontological
insecurity becomes more evident when one takes into consideration
that renewalists typically belong to the most vulnerable sectors of Latin

American societies. As Chesnut points out, “although pentecostalism
has ascended the region’s socioeconomic pyramid, particularly since
the 1980s, it continues to be predominantly a religion of the popular
classes” (p. 41). Pentecostalism, from this perspective, can be seen as a
socio-religious strategy for “coping with poverty” (Loreto Mariz, 1994).
At the very least Pentecostalism offers a sense of social solidarity that
many poor people have not been able to find in the Catholic Church.
As Loreto Mariz poignantly points out, after Vatican II and Liberation
Theology “the Catholic Church [opted] for the poor because it is not
a church of the poor. Pentecostal churches do not opt for the poor
because they are already a poor people’s church. And that is why poor
people are choosing them” (p. 80).
To sum up, the growing number of renewalist Christians in Latin
America represents a clear intensification of religiosity in the region.
The unintended political consequences of this phenomenon cannot
be underestimated. The 2006 Pew Forum study reminds us that
Guatemala has had two Pentecostal presidents. Brazil “has witnessed
the formation of an evangelical congressional caucus that consists
largely of Pentecostals and includes about 10% of the country’s parlia-
mentarians.” Chilean Pentecostals “host an annual independence day
celebration attended by the president.” And Pentecostals in Nicaragua
“founded a political party that has fielded presidential candidates and
won seats in congress” (Pew Forum, 2006).
The meaning and future direction of the politics of charismatic
Christianity in Latin America is the object of an intense academic
debate. The central question in this discussion was properly articu-
lated by David Stoll some years ago: “Is Latin American Pentecostalism
a step on the road to demystifying, secularizing, and rationalizing
Latin American society …, or is it inevitably thaumaturgical—that is,
magical and mystifying …?” (Stoll, 1993, p. 14). It is impossible to
provide a definitive answer to this question. The historical specificity
of each national society has conditioned and will continue to condi-
tion the future of Latin American charismatic Christianity (Catholic
and Pentecostal) in different and unpredictable ways. Therefore, no
significant generalization can be made as to the specific influence that
charismatic Christianity will have on the future evolution of Latin
America. It is possible, however, to argue that a relation of elective
affinity exists between human insecurity and religiosity in the region.
The concept of elective affinity was used by Max Weber to explain
the relationship between Protestantism and Capitalism in Europe.
In more general terms, this concept can be used to explain in a “non-

deterministic fashion the coincident interaction of components from
different sociocultural systems in comparative analysis” (Swatos Jr., 1998).
Therefore, a relation of elective affinity exists when some material
conditions and some cultural conditions “coincide in such a way that
each is especially favorable to the other, and the whole form a culture
complex (or civilizational complex) that is especially powerful for the
advancement of all of these sociocultural spheres combined” (Swatos,
1998). In the case of Latin America, providentialism and human insecu-
rity reinforce each other. The insecurity that millions of Latin Americans
experience in their everyday lives validates the providentialist view of
history as a process that is beyond human control. At the same time,
a religious providentialist worldview that induces the believer to find
comfort and security outside the realm of social and political action
facilitates the reproduction of the forces that generate insecurity in
Latin America (see Smilde, 1998).
Can the vicious circle between insecurity and providentialism be
broken? Let us conclude this chapter by identifying two possible future
scenarios for the relationship between providentialism and human
(in)security in Latin America. In the positive scenario, charismatic
Christianity enhances civic virtues and radically improves the quality of
gender relations and family life in Latin America with unexpected posi-
tive consequences for democracy and social relations at the national
and regional levels (see Valenzuela, 2009; Drogus, 1994). More specifi-
cally, in this scenario charismatic Christianity facilitates the articulation
of collective identities that, in turn, facilitates political mobilization
(see Wightman, 2008). In this scenario, the substantive principles of
Christianity—justice and solidarity, for example—are eventually used
to confront the instrumental logic of the market. As a result, the idea of
God as the causal center of history is transformed into “a conviction”
that neither existing social structures nor the forces of nature can
prevent the triumph of the idea of good and the idea of justice that
are central to Christianity (Tillich, 1973, pp. 252–71). To pray, from
this perspective, means “to become the answer to our own prayers”
(Claiborne and Wilson-Hartgrove, 2008).
In a negative scenario, the vicious circle between human insecurity
and providentialism is not broken. In this scenario, increasing human
insecurity intensifies religious providentialism, creating a situation in
which the spirit of pragmatic resignation associated with providentialism
facilitates the reproduction of ineffective States that are not challenged
by society (see Pérez-Baltodano, 2007). At the same time, the States’
incapacity to generate conditions of human security validates people’s

tendency to distrust politics, democracy, and the State as sources of
ontological security. Furthermore, in this scenario the neoliberal model
of state-society relations becomes normalized to the point that Latin
Americans transfer their mental dependence on an omnipotent and
providential God to their perception of the economic and political
global forces that shape order at the national level. In these circum-
stances, the elites adapt their interest to the imperatives of the global
market, while the poor kneel before a providential God without real-
izing that such a God hides the functioning of the market’s “invisible
hand,” whose index finger points to who will eat and who will not, who
will live and who will die in today’s globalized world.
Notes
1. Manuel M. Marzal uses the word “enchantment” in a Weberian sense. As
Michael Saler explains, Max Weber talked about the “disenchantment of the
world” to make reference to “the loss of the overarching meanings, animis-
tic connections, magical expectations, and spiritual explanations that had
characterized the traditional world, as a result of the ongoing ‘modern’ proc-
esses of rationalization, secularization, and bureaucratization” (Saler, 2006).
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7
Unintended Exports: The
Globalization of the Mara
Salvatrucha
Thomas Shannon Stiles
Globalization has been heralded as the keystone of development. At the

same time, it has been vilified as yet another attempt by countries with
a high standard of living to maintain developing states in a permanent
state of dependency. Both interpretations have arguments on their side,
but globalization is neither a panacea nor a pandemic. At the end of the
twentieth century the bi-polar system of the Cold War collapsed and
globalization reached a level unseen since before the First World War.
Borders became more porous, while advances in technology allowed for
quick and easy communication and transfer of monies and aided in the
sharing of ideas. Governments of both developed and developing states
struggled to adapt as they jumped at the new opportunities to push into
emerging markets. However, an unintended consequence of globaliza-
tion has been the strengthening of transnational criminal organizations
(TCOs). This, of course, demonstrates the ability of criminal organiza-
tions to take advantage of being well ahead of the learning curve.
In the past 20-plus years many scholars and practitioners have been
examining the growing trend of globalized criminal organizations. While
research efforts have concentrated predominantly on globalization and
its effects on TCOs such as the Asian Triads, the Japanese Yakuza, the
Russian Mafia, and the Mexican Cartels, relatively little research has
focused on the Central American street gangs, in general, or on the
Mara Salvatrucha, specifically. Mara Salvatrucha lacks the sophistication
of TCOs, which are more commonly known by the general populace,
but they have existed for a much shorter time and are increasingly using
technology and other byproducts of the newly globalized international
system to gain strength at an alarming rate. This lesser known but no less
dangerous criminal organization is in many ways the perfect example of
transnational crime in the era of globalization. The origins of the Mara
134
Thomas Shannon Stiles 135
Salvatrucha, their mode of operation, their international connectivity,

and their ever-increasing criminal reach all demonstrate the impact of
criminal globalization on Central America.
While in the 1990s the Cold War era conflicts in Central America ground
to a halt and a new type of threat was emerging in the region, criminality
was quickly replacing the political motivations of the armed conflicts and
guerrillas, and they were easily replaced by globalized criminal networks
crossing borders and cultures with relative ease. During the same period
two street gangs in Los Angeles, California, found themselves well
suited to the emergence of transnational crime. These local Latino street
gangs, the M-18 and Mara Salvatrucha 13 (MS-13), became international
players as much by happenstance as by design. While each has become
technically proficient in their criminal enterprises and the sophistication
of their networking abilities, MS-13 has become much more recognized.
By all accounts this gang has intentionally or unintentionally placed the
elements of globalization as a key element in its business model. They
have incorporated technology, liberalized trade and immigration policies
as well as the general connectivity of the modern world into the everyday
business routines they have established.
The transnational aspect of MS-13 is best demonstrated by the fact
that they currently operate in at least three Central American countries
(El Salvador, Guatemala, and Honduras) as well as in Mexico, the United
States, Canada, and Spain. In the United States estimates have placed the
MS-13 in at least 42 states. In Mexico they have established a presence in
at least 24 states (Cevallos, 2007). According to a 2008 Associated Press
article, more than 200 MS-13 cliques containing 5000 members are active
in Mexico (Stevenson, 2008). In all probability these numbers tend to be
optimistic, since there is increasing evidence that the Maras are becom-
ing more involved with other criminal enterprises such as the Surenos
in the United States and Los Zetas in Mexico (Bunker, 2010, p. 10).
Members move freely across borders and operate with impunity. They
have developed complex networks among a variety of other criminal
organizations, allowing the organization to flourish into a transnational
criminal enterprise.
Humble beginnings
The origins of the MS-13 began with the mass migration that took
place during the Central American wars of the 1970s and 1980s. Large
numbers of Central Americans fled the violence and persecution and
sought refuge in the United States. The influx of Central American
136 Globalization of the Mara Salvatrucha
refugees into relatively impoverished areas with high rates of criminality

became the precursors to the formation of street gangs. Nowhere was
this more prominent than in Los Angeles and other parts of southern
California (US Bureau of Census, 1990).
In the barrios of Los Angeles, Central American refugees found them-
selves with extremely limited choices. Most had children that came to
the United States after their parents were relatively established and in
some cases had second or new families. In many of these areas little to no
social services were available to the families, especially to the youth. The
displaced and disenfranchised youths were surrounded by urban gang
culture and were forced to deal with the ever-present threat of violence.
Initially, a rather benign street gang known as Mara Salvatrucha Stoners
emerged. The gang’s main concerns were wearing Ozzy Osbourne
T-shirts and defending their region or “turf” from other relatively weak,
disorganized gangs. In response to the harsh conditions, they formed
gangs in order to defend themselves (Logan, 2009, p. 89). In the late
1980s, after one of the founders of the Mara Salvatrucha Stoners died,
the gangs became more violent, and in order to protect themselves the
Mara Salvatrucha Stoners turned to the Salvadoran immigrants, who
were veterans of the bloody civil war in El Salvador (Logan, 2009, p. 89).
With hardened combatants becoming members of the gang, the level
of violence escalated. From these origins, Mara Salvatrucha 13 began to
emerge (Boraz and Bruneau, 2006, p. 36).
Initially, simple street crime, not uncommon in many urban areas both
in the United States and essentially every other country, was the modus
operandi of the Maras. Muggings, extortion, and various other relatively
minor crimes soon escalated into more complex and extreme criminal
actions. As the scope of these crimes increased, the scope of the criminal
enterprises also increased. Many of these gang members were introduced
into the US prison system, and in essence enrolled in what can best be
described as “criminal finishing school.” According to John M. Hagedorn
in his book, A World of Gangs, the adaptability of modern street gangs
have allowed them to view prison as a place to advance their causes and
“advance their interests” (Hagedorn, 2008, p. 12).
In prison, and even in the county jails, the primarily Salvadoran Maras
quickly began to form relationships with criminals from various other
ethnic groups. Never lacking for ingenuity and always seeking to better
their position, the Maras began forming alliances and recruiting members
from other ethnicities (Castro, 2005, p. 3). The Mexican Mafia, or eme,
a prison gang that held great influence in the Latino gang community,
began to take notice of the Maras. After dangerous negotiations and
escalating tensions, eme began to use the Maras as contractors. In

return and as a show of respect, Mara Salvatrucha adopted 13 into their
name, since eme is the 13th letter in the alphabet (Logan, 2009, p. 89).
This action gave a certain criminal legitimacy to the gang and further
cemented ties that would become transnational.
Networking in the criminal world is as much an art form as networking
in the legitimate business world; it is often the key to growth and to
building future opportunities. When deportation of the Maras became a
more widespread response, it quickly allowed the gangs to take advantage
of the networking and loose working arrangements with members of
other gangs were quickly formed.
The massive wave of deportations that took place from the mid-1990s
until 2004 enhanced the networking element of globalization. It has been
estimated that between 1996 and 2004 half a million immigrants were
deported for committing crimes that would have carried a one-year or
greater sentence. Of this half-million, 80% were Latin American (NACLA,
2004, p. 1). These gangs have continued to strengthen as both local recruits
and new deportees have become active members. Again, the deportations
from the United States continue to feed the problem. The sheer numbers
deported during the 2006 fiscal year demonstrates the trend. During this
time the number of criminal deportees to El Salvador was 3679, Guatemala
was 3589, and Honduras was a staggering 5559. Each of these was nearly
doubled from fiscal year 2005 (Ribando, 2007, p. 16).
The number of gang members seems easily to reflect the same trend.
The correlation between the number of deportees and the number of gang
members cannot simply be a coincidence. However, one study states that
“90 percent of deported gang members return to the United States as fast as
they can” (Johnson and Muhlhausen, 2005, p. 42). The staggering numbers
of gang members in Central America is overwhelming and the specific
numbers are further clouded by the continuing cycle of migration that is a
part of Central American life. The best estimates presented are from 2005
and actually open more questions than they provide answers. However,
they do provide an interesting snapshot of the raw power of the gangs. It
should also be noted that while all of the gangs presented are active in the
region, the number that have international reach has not been completely
quantified. The three states with the largest number of active gang mem-
bers are: El Salvador with four main gangs comprising 10,500 members,
Guatemala with 434 gangs consisting of 14,000 members, and Honduras
with 112 gangs and 36,000 gang members (Eliézar Hernández, 2005).
A great many experts on the Maras have linked the origins of some
members to the paramilitaries, the leftist rebels, and even the Central
American militaries of the 1980s. While the original generation of

Maras has had members with significant experience in these organiza-
tions, the more recent members do not. An issue of greater concern is
the number of Maras actively seeking military training in their host and
home countries. According to the US National Gang Intelligence Center,
Maras are actively joining the US military (US Navy Defense Criminal
Investigative Service, 2006). In at least one case several members joined
after the leader of their clique was sentenced to imprisonment. Perhaps
the most concerning example of gang activity inside the military was
the recruitment of several gang members who enlisted as a group. These
gang members now at Fort Lewis, Washington claimed that they were
relatively open about their gang affiliation when enlisting (National
Gang Intelligence Center, 2007, p. 7).
While the training itself is of great concern, two other aspects of this
must be examined: the ability of the gang to obtain weaponry and the
relative ease with which military personnel travel around the world.
The movement and training will allow these gang members to make
more, and perhaps more powerful, international connections, enabling
them to open new territories and create greater opportunities.
Evolution of a street gang
Scholars who have examined the evolution of these gangs from local
minor criminal enterprises have developed a three-tiered generational
model. The Maras are perhaps the best example of this evolutionary
process.1 First-generation gangs are traditional street gangs. They are
limited by turf and lack political ends. Their ability to influence events
outside of their traditional area of control is severely limited. The crimes
this generation of gang commits tend to be rather limited too. Second-
generation gangs tend to focus on the distribution of drugs or “taxing”
drug-trafficking routes. In many ways these gangs function as a business
and have a larger geographic and political focus. They also tend to
begin to form a much larger criminal footprint as their activities widen
in both scope and geography. The third-generation gang operates or
wishes to operate on a truly global scale. They have established ties with
other international criminal entities; they have developed their own
international reputation, and have established at least a limited com-
mand and control mechanism. In essence they operate as globalized
non-governmental organizations (NGOs). However, in this evolution-
ary stage the politics and actions of the gang are often mercenary in
nature (Sullivan, 2008). The Maras have followed this model; whether
this evolution was a distinct plan or simply the culmination of events

remains to be seen. However, the origins easily fit the mold of a third-
generation gang—in essence a globalized criminal enterprise.
Globalized crime
Origins alone cannot label a criminal enterprise as a byproduct of globali-

zation. These criminal enterprises must function on a global scale with
varied connections and methods. The Maras easily fulfill these pre-
requisites. Transnational crimes such as smuggling people, dealing in
stolen car parts, and drug trafficking are all hallmarks of the globalized,
transnational street gang. The transnational description is perhaps most
concisely described by noted international legal scholar Luz Nagle as “a
far-flung network for the exploitation of highly lucrative transborder
criminal activities and the coalescing of a proto-transnational confed-
eration of an illegal armed force” (Nagle, 2008, p. 5).
Initially US law enforcement on the Mexican border downplayed
the involvement of the Central American gangs in smuggling people
into the United States. However, the evidence of their involvement
continues to mount. One member who has been repeatedly deported
states that he can get up to $3000 per person by bringing both MS-13
members and other illegal aliens north with him (Lopez et al., 2005,
p. A1). While Mexican cells of MS-13 more frequently smuggle illegal
aliens into the United States, evidence suggests that Guatemalan cells
of MS-13 have been smuggling Guatemalans into southern Mexico
(Millett and Stiles, 2008, p. 31). The Maras have played a large role in
smuggling and trafficking people in throughout Central America and
Mexico. Maras have been heavily involved in the trafficking of prosti-
tutes and prey on illegal migrants along highways and railroads that run
from Guatemala through Mexico to the US border. In Chiapas, Mexico,
the authorities arrested 57,000 aliens in 2002; almost all of them were
Guatemalan (Grayson, 2003, p. 2).
While smuggling people is a lucrative enterprise for Maras, traffick-
ing in people is becoming yet another aspect of their modus operandi.
The difference between smuggling people and trafficking in people is
more than simple semantics. Smuggling is simply the illicit movement
of migrants; trafficking is something much more sinister. The United
Nations has defined trafficking as
the recruitment, transportation, transfer, harboring or receipt of per-

sons, by means of the threat or use of force or other forms of coercion,
of abduction, of fraud, of deception, of the abuse of power or of

a position of vulnerability or of the giving or receiving of payments
or benefits to achieve the consent of a person having control over
another person, for the purpose of exploitation. Exploitation shall
include, at a minimum, the exploitation of the prostitution of others
or other forms of sexual exploitation, forced labor or services, slavery
or practices similar to slavery, servitude or the removal of organs.
United Nations n.d.
The Maras have mastered the technique of people-smuggling. The

move into trafficking simply tapped the pre-existing skill sets of run-
ning prostitution and extortion rings. Some women have been sent
abroad as sex slaves, whereas others have been kept in the country to
service both domestic clients and the growing international illicit sex
industry (DePaul University, 2002). Children are also victims of these
activities. It is estimated that more than 2000 of these children are
engaged in prostitution in Guatemala (Inter-American Commission of
Women, 2001).
The trafficking in stolen cars and car parts has also become a lucrative
transnational business for the Maras. The use of cars stolen in the United
States and Mexico has become a type of tender between the Mexican
Cartels and cliques of Maras (Farah and Roberson, 1995, p. 1). In addition,
different cliques or groups of Maras use it as a way of trading among
themselves internationally. According to Al Valdez, an investigator with
Orange County, California’s District-Attorney Office, as much as 80%
of the cars driven in El Salvador are stolen in the United States (Valdez,
2009). While this number seems a bit high and the ability to verify such
numbers is low, this remains an excellent example of the importance of
car theft and smuggling to the Maras.
Central American states have found themselves a victim of geography.
With Colombia’s well-known drug production to the south and Mexico’s
role as both a drug producer and a transshipment point to the north,
Central America has become a key link in the drug-trafficking chain.
This turn of events has led the Mexican Cartels to become a pressing
issue in Guatemala, Honduras, and El Salvador, and at the very least
a concern for the other states of Central America. It has also opened
a new and evolving role for the Maras in transnational crime. Initially,
the Mexican Cartels considered the Maras to be weak and disorganized,
but as they have become more adept, the Cartels have increased their
role. In Honduras, Joaquín Guzmán Loera is believed to be control-
ling the Sinaloa Cartel’s operations in Mexico by what is essentially
telecommuting. According to Former Honduran Minister of Security

Óscar Álvarez, this has enabled the Maras to join forces with the foreign
syndicates by working as contract killers, extortionists, and drug dealers
(Ayuso, 2008). In Guatemala, the connections seem less solidified. The
Federation Cartel and to some degree the Sinaloa Cartel are both known
to operate there. However, much of the violent work is contracted to
former Guatemalan and Mexican Special Forces (Cook, 2007, pp. 7–9).
This fact, however, does not preclude the Maras from working as local
distributors and for transportation. The use of Maras as hired secu-
rity has already been documented (Mclemore, 2006). El Salvador has
the least cartel influence. However, the extremely porous nature of
the borders in the region and the impunity with which gang mem-
bers move across these boundaries allows for the employment of the
Salvadoran Maras in other states. In addition, Salvadoran Maras can be
used as transportation.
These new working relationships have opened up the drug-trafficking
operations where the international nature of the Maras has allowed them
to become a conduit for drugs while in the employment of the Mexican
Cartels. In addition, a domestic market is created and controlled by
the Maras in their home countries. In part this is due to the increasing
amount of cocaine left in the Central American transit areas. It is esti-
mated that 10% of the estimated 150 tons of cocaine coming through
Guatemala are sold in the domestic market (UNODC, 2007, p. 48). In
the neighboring countries the percentage of product left behind is less
but still significant. An estimated 5% of the cocaine coming through El
Salvador and 1% of the cocaine coming through Honduras are fueling
the developing domestic markets (UNODC, 2007, p. 49).
The advancement of cheap technology has made it possible for the
globalized Maras to make use of the Internet and mobile telecom-
munication. The Internet is now filled with videos and chat rooms
depicting the life of the Maras. On Facebook alone a quick search for
Mara Salvatrucha produces more than one hundred pages. The website
YouTube generates another 8000. Not every site is gang managed or
produced by the gangs themselves and some are sites established to
share information on the gang with academics and law-enforcement
professionals. Another segment is, of course, simply unaffiliated youths
attempting to appear “cool.” However, the hardcore gang affiliates do
produce a large number of videos and web pages. It is possible to watch
gang initiations on websites that share videos and some members of the
Maras have created music videos that show gang activities. On many
networking sites it is possible to find chat rooms and blogs in both
English and Spanish promoting the Maras’ lifestyle. Some of these blogs
and chat rooms stress that the gang can provide protection and a sense
of belonging. Others demonstrate the possibility for economic gain
through criminal activities, and some simply play on the stereotypical
aspects of machismo. What is the goal of such activities? In the most
basic sense these videos are recruitment tools (Unmuth, 2006). The
gangs have also been using the videos and blogs as a way to threaten
other gangs and to designate territory.
Apparently, Maras are also becoming more involved in cybercrime.
The Internet fraud scheme informally known as the “Nigerian Scam”
where a wealthy foreigner asks your assistance via email to transfer funds
or hide money and which requires an advanced fee to be paid is now
apparently part of the Maras’ criminal arsenal.2 Interestingly enough,
the targets are not limited to one country, but now include Panama
and Costa Rica as well as the United States. According to one Central
American law-enforcement official, the Maras are becoming much more
sophisticated in their use of information technology, adding identity
theft and credit-card cloning to their operations (Confidential contact,
2008). The US Department of Justice has also verified that the Mara
Salvatrucha is involved in identity theft (Gonzales, 2007). The Los Angeles
Times has reported that several gangs, including the MS-13-affiliated
Mexican Mafia, have become more involved in computer-based identity
fraud (Menn, 2008). Further evidence of the growing threat is the fact
that in 2007 the US Department of Justice and the US Federal Bureau of
Investigation participated in an International Law Enforcement Academy
cyber-training workshop in Costa Rica on Cybercrime and Training.
Criminologist Susan Ritter has stated that the younger, newer members
of the Maras are attending colleges and universities and studying various
aspects of business (Logan and Morse, 2007, p. 10).
The use of mobile international telecommunications is continually
demonstrated by examples produced by US Federal authorities and
international news sources. In June 2007 the US Attorney-General and
the acting Director of the Bureau of Alcohol, Tobacco, and Firearms
announced they were indicting two leaders of the Maras in Central
America for having ordered murders inside the United States (Gonzalez,
2007). There has also been anecdotal evidence that a Mara clique leader
in Honduras teleconferenced with his compatriots in Los Angeles,
California during a meeting with his attorney.3 With this ease of
communication it has been reported that prisons in El Salvador have
become a communications hub for the various cliques of Maras operat-
ing globally (Trinica, 2006, p. 40).
International reach and consequences
The international ramifications of the globalization of the Maras are

of the utmost importance. Maras have become an international criminal
threat. Their global reach has brought them to the attention of nearly
every law-enforcement agency in the Western hemisphere, if not the
globe. They have become recognized as a truly transnational entity due
to their ability to move across borders, maintain strong connections
and operate criminally in a wide variety of countries. The Maras have
become so internationally connected that the International Criminal
Police Organization (INTERPOL) has not only acknowledged them as a
transnational threat but also on December 9, 2008 issued an alert after
14 members escaped from the Centro Judicial de San Salvador Isidro
Menendez detention center (INTERPOL, 2008).
The extent to which the Maras are international actors can also
be demonstrated by the wide variety of countries in which they are
now operating. The traditional areas of the United States, Mexico,
El Salvador, Honduras, and Guatemala are quickly expanding. In 2006
the topic of Maras moving into Nicaragua was mentioned quite fre-
quently at a regional studies meeting.4 In Costa Rica, recent reports
have stated the existence of active cells of MS-13 (Gilmour, 2007, p. 53).
During the past seven years there has been an increase in the use of
Mara Salvatrucha and Mara in graffiti in the capital city of San Jose;
however, there is still some question as to the operations of the Maras
in Costa Rica (Millett and Stiles, 2008, p. 39). Even Canada has reported
its first Mara activities. In 2006, a small clique of Maras moving into
a neighborhood in Vancouver and establishing safe houses and a drug
sales network became a top news story (Carrigg, 2006).
However, the Maras have not been limited to the Western Hemisphere.
According to one news service, members of the Mara Salvatrucha have
been detected by Spanish law-enforcement agencies in Barcelona
(Barrillas, 2006). The report of Mara activity in Spain has met with a
great deal of criticism: many believe the Maras in Spain have no true
connection with the groups in Central America. Interestingly enough,
similar questions have been asked by law-enforcement agencies and
academics about many groups of Mara. The glorification of the “Thug
Life” in music and the media attention given to these gangs have
led to several instances of non-networked gangs’ taking the name of
well-known gangs in order to increase their prestige or credibility. The
side-effects of this lead to perhaps one of the most difficult tasks in the
study of gangs—Maras or otherwise—namely, discerning between true
members of the larger gangs and simply local youths emulating the
gangs’ activities, criminal and otherwise.
Another great concern, when examining the Maras, is the level of threat
they pose. At a local level the differences between a true transnational gang
and simply a local street gang are rather insignificant; a criminal is no less
dangerous to local law enforcement whether it is a transnational criminal
organization or local disenfranchised youth. For the national security
professional and the international security community, however, there
is an enormous difference. The impact of a true transnational criminal
organization can be that of urban insurgency (Manwaring, 2005).
Thomas C. Bruneau of the US Naval Postgraduate School has paraphrased
five national security threats produced by transnational gangs: they often
overwhelm the legal system through violence, impunity, and sheer num-
bers; they challenge the power of the State, especially in areas characterized
by corruption and the inability of the State to provide public goods and serv-
ices; they often act as an alternative government in so-called ungoverned
areas; they dominate the informal economic sector or grey market through
the establishment of businesses, and use violence, extortion, and bribery of
government authorities to compete with legitimate companies; and they
infiltrate law enforcement, security, military, and NGOs to further their
goals and demonstrate latent political power (Bruneau, 2005).
In essence, these gangs undermine the sovereignty of their host states at
a very basic level. This erosion of sovereignty has implications for neigh-
boring states. The concept of spillover is neither new nor particularly
insightful; however, it does bear consideration. In a globalized post-Cold
War era strong neighboring states are not necessarily the prime threat to
security: weak states have become the new threat. A neighboring state
becoming a haven for terrorists and/or criminals, and the inability of
the weak state to control its borders, have massive implications for even
the strongest neighbor. The impact of civil conflict, criminal or otherwise,
has been demonstrated by multiple cases. The spillover of the Colombian
conflict obviously impacted their Andean neighbors (Millett, 2002).
The current crisis in Mexico is spilling over at an unprecedented rate,
as demonstrated earlier in this chapter. The Maras as a truly globalized
criminal enterprise will pose a threat to the host country as well as all
neighboring states, wherever they are located.
Globalized and regional responses
The threat of transnational gangs has not only become an issue for the
governments directly threatened by their violence; it has also become a
regional and global issue. In response to the criminal activities of the
Maras and their impact on the collective good, so often discussed among
globalization experts, regional and global responses are being developed
and practiced. Intergovernmental organizations such as the Organization
of American States (OAS) and the Inter-American Development Bank have
introduced measures to aid in the suppression of these gangs (Millett and
Stiles, 2008, p. 39). The Inter-American Development Bank has funded
microcredit loans that have allowed reformed gang members to reintegrate
into society by training them in various skill sets (Ribando, 2007). The
OAS has increased research and training conferences on the issue of street
gangs in general and on the Maras in particular. The most noteworthy of
these actions has been the 2007 meeting of the OAS Technical Group on
Transnational Organized Crime (Millett and Stiles, 2008, p. 39).
Entities from outside the region are also aiding in combating these tran-
snational criminal institutions, but often in a more limited role. In August
2007 the US Federal Bureau of Investigation set in motion the preparation
of a joint gang intelligence-monitoring service (Batres, 2007). In addi-
tion, many academics and practitioners from the US national security
community have studied and addressed the situation at various confer-
ences. One of the most significant actions taken by the United States and
its regional partners has been the Merida Initiative. This massive action,
which funds counter-narcotics activities in Mexico and Central America,
is primarily focused on Mexico and its battle against the various cartels;
however, 16% of the overall funding, approximately $258 million, is
designated to fund anti-criminal operations in Central America (Farah,
2011, p. 28). In 2010 this segment of the Merida Initiative was relabeled
Central America Regional Security Initiative or CARSI (GAO, 2010).
However, two significant factors have hindered massive international
involvement: the perceived corruption in regional law enforcement and
the fact that the focus of the United States defense community has been
on situations in the Middle East and Central Asia. It can only be con-
cluded that the globalized threat of transnational street gangs in Central
America must be faced by a globalized response.
Intergovernmental organizations, NGOs, and national governments
must work together to assist one another in responding to a continually
evolving criminal threat.
Notes
1. For the most prominent examples see Sullivan (2006, pp. 487–504) and
Manwaring (2005, 2007).
2. This author has been contacted in such a scheme that pertained to assisting
a wealthy Honduran in moving his hidden savings to a bank in Costa Rica.
3. This has been discussed at various colloquia and conferences but no hard
evidence. has ever been displayed.
4. Several discussions took place with this author and regional experts at a
Conference of the Midwest Association for Latin American Studies in Managua,
Nicaragua in November 2006.
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8
Globalization, Transition, and
Insecurity in Mexico
Patricia Olney
Introduction1
For most of the past century Mexico was considered one of the most
stable countries in Latin America and even the world. While many
countries suffered through coups d’état, revolutions, and civil wars,
Mexico’s Institutional Revolutionary Party (PRI) oversaw peaceful presi-
dential successions every six years for over half a century and remaining
in power until the dawn of the new millennium, a total of 71 years.
While the apparent national peace was deceptive, as it masked episodic
violence, especially at the local level (Niblo, 1999; Shirk, 2005, pp. 63–8),
Mexico’s image of stability was not shattered decisively until 1994, a year
many remember as Mexico’s official induction into the post-Cold War
globalized economy through the implementation of the North American
Free Trade Agreement (NAFTA). As if to underline the contradictory
nature of globalization, this was also the year the Zapatista Army of
National Liberation (EZLN) burst onto the scene, starting the “first
post-modern revolution” (Carrigan, 1995). While NAFTA symbolized
Mexico’s modernity and integration into the developed world, the
EZLN reminded the world that much of Mexico remained poor and that
traditional forces stood to lose a lot from the onslaught of modernity
epitomized by NAFTA, one of the greatest symbols of globalization. Later
that same year, the PRI´s presidential candidate, Luis Donaldo Colosio,
was assassinated, calling attention to the aspect of the instability Mexico
is now closely associated with—drug-related violence, which has cost
almost 16,000 lives in 2010 alone (Stevenson, 2010). His assassination
took place in the first state won by the National Action Party (PAN),
the opposition party that broke the PRI´s hegemony at the national
level in 2000. The PAN’s determination to change Mexico’s benchmark
149
150 Globalization, Transition, and Insecurity in Mexico
of legitimacy from the Mexican Revolution to liberal democracy, with

an emphasis on rule of law, threatened many powerful interest groups,
including organized criminals. By the mid-1990s, its trickle of local
victories starting in the 1940s and 1950s had become a flood—by 1995
the PAN controlled two states and so many major cities that it was
governing more than one-third of the population of Mexico (Mizrahi,
2003; Shirk, 2005). At the same time, organized crime was stepping into
the power vacuums of a rapidly imploding PRI, as the party-State lost a
geometrically increasing number of elections at the local level. Criminal
organizations started spreading their tentacles throughout the country
and causing high-profile events at the national level, such as the assas-
sination of Archbishop Posadas Ocampo in 1993, alerting analysts to the
depth of the security crisis.
These glaring examples of instability shattered the myth that whatever
its flaws, the PRI could always guarantee the safety and security of
the country, and contributed to the legitimacy crisis that eventually
led to Mexico’s national democratic opening in 2000 with the victory
of the PAN’s presidential candidate, Vicente Fox. The PAN held onto
the presidency in the highly contested elections of 2006, when Felipe
Calderón edged out his closest rival, Andrés Manuel López Obrador of
the Party of the Democratic Revolution (PRD), by less than 1% of the
vote. The first decade of the new millennium has ushered in democratic
reforms that are radically transforming the political and cultural land-
scape of Mexico but which bear witness to an escalation of criminal
violence, making parts of Mexico some of the most dangerous places
in the world. As alluded to in the introduction to this volume, these
negative consequences of more open borders are evidence of the complex
mixture of the challenges and opportunities globalization presents in the
region. Open borders facilitate both legal and illegal trade and improve
cooperation between states but also among criminal groups. In Mexico,
a country weakened by the implosion of its senescent one-party regime
but which has not yet developed the strong democratic institutions
needed to replace it, criminal groups can easily obtain the upper hand.
This chapter starts with an overview of Mexico’s current security situa-
tion followed by an account of its evolution over the last few decades. It
then addresses some of the most important causes of this violence includ-
ing the post-Cold War economic and security policies of both Mexico and
the United States. Finally, it summarizes the responses to these challenges
by Mexico’s “globalization” presidents, those that started the process
of opening Mexico’s borders and building modern democratic institu-
tions instead of closing themselves off from the United States under
Patricia Olney 151
the premise that trade with the developed world weakened developing
countries by keeping them underdeveloped and dependent. These
presidents were Carlos Salinas (1988–94), Ernesto Zedillo (1994–2000),
Vicente Fox (2000–6), and Felipe Calderón (2006–12). Ironically, the high
levels of violence are also an indicator of Mexico’s success—for the first
time in Mexico’s history the State is strong enough to institute a rule of
law that can eventually be enforced, trading a strategy of indirect control
over territory through informal arrangements for a strategy of direct
control through building effective security and judicial institutions.
Globalization contributes both to the escalation of violence by increasing
opportunities for criminals and disgruntled elites from Mexico’s deposed
revolutionary system and to the cooperation with and exposure to
American culture that is institutionalizing a new political culture capable
of supporting a stable, modern Mexican state.
Mexico’s security situation: An overview
Drug-related violence is the most glaring aspect of Mexico’s current

security crisis, costing more than 34,612 lives between 2000 and
2010, on track to rise to 65,000 by the end of President Calderón’s
term in 2012 (De Córdoba and Luhnow, 2011). Some of the most
affected places, such as Juárez, Chihuahua, on the US-Mexican border,
are recording more lost lives than during the most violent period of
Mexico’s history—that of the Mexican Revolution. Mexico is the entry
point for approximately 90% of the cocaine, 80% of amphetamines,
half of the marijuana, and a significant amount of the heroin entering
the United States (Burton and Stewart, 2009). While all estimates are
approximate as statistics about the flow of illegal products are generated
by an imperfect science, the consistency of sources from one year to the
next suggests which updates are reliable. The Mexican drug-trafficking
organizations obtain an estimated $17 to $38.3 billion from these sales
(GlobalSecurity.org, 2011), more than the $15 billion generated by oil
sales in 2008. Meanwhile, Mexico’s federal budget for law enforcement
is approximately $1.2 billion (Luhnow and De Córdoba, 2009),
although the counter-drug industry in the United States was estimated
by the White House to be $8.5 billion in 2010.
The drug-trafficking organizations or cartels operate in an estimated
47 countries (Zambrano, 2010) and are networked with criminal organ-
izations in Colombia, Central America, South America, Europe, China,
and the United States (Burton and Stewart, 2009). They are also allied to
youth gangs, such as those described by Thomas Shannon Stiles in this
volume, who help them ship and distribute the drugs, organize protests
against military intervention in some cities, and also act as hit men when
cartel leaders hold clients accountable for “breach of contract” (Fernández
Menéndez, 2006; Lara Klahr, 2006; Manwaring, 2007). It is estimated that
there are more than 5000 Central American gangs in Mexico (“Crimen
Organizado…”, 2009), and hundreds of thousands of these transnational
gang members are active in hundreds of the more than 2000 US cities
(Archibold, 2009). As drug-control policies have become more aggressive,
drug-trafficking organizations have diversified their operations, branching
out into such activities as kidnapping, extortion, human and sex traffick-
ing, art theft, auto theft, contraband, and other such activities (Glenny,
2008). There are 65 reported kidnappings per month in Mexico, a number
that may only capture about 10% of the actual number as the authori-
ties claim that 90 per cent of cases go unreported (Oppenheimer, 2008;
Bergman, 2008; EFE, 2011). High degrees of police complicity in organized
crime have severely reduced trust in authorities. Many organized criminal
groups are either led or protected by members of local, state, and federal
police forces (Althaus, 2010; Stratfor.com, 2008).
Currently, at least a dozen significant drug-trafficking organizations
are active in Mexico, including the Sinaloa, Gulf, and Juárez cartels and
their offshoots, but their names and numbers are constantly changing.
One, La Familia Michoacana, is particularly ominous to Mexico’s long-
term stability. La Familia, which now has franchises in states other than
Michoacán, seems to represent a new generation of drug cartels that
are competing directly with the State for a social base and increasingly
resemble insurgent groups. It was founded in Michoacán after the turn
of the millennium and its leaders claim to want to strengthen “family
values” and eliminate drug cartels and drugs in the state of Michoacán.
However, they engage in a wide array of organized criminal activities
and, despite their strong religious propaganda, are responsible for a
large percentage of the total drug trafficking phenomenon and some of
the most gruesome murders in recent years (Emmott, 2009; Grayson,
2010b; Osoro, 2009).
Drug organizations such as La Familia Michoacana are trying to
provide a cultural alternative to the rule of law that has been proving
highly effective. With an ideology that blends Catholicism with some
of the most deeply rooted Mexican revolutionary and traditional val-
ues, drug cartels are marketing themselves as a more reliable institution
than the State, often establishing parallel power structures (Agren, 2007;
Guillermoprieto, 2008). As Grayson (2010a, pp. 201–7) argues, drug car-
tels subsidize the material, social, and security needs of poor populations
Patricia Olney 153
by providing jobs, building churches, funding celebrations, defending

family values, building roads, collecting “taxes,” and spreading their
money generously in the style of traditional Mexican “caciques” (local
strongmen).
On the other hand, drug-trafficking organizations are increasingly
adopting the strategies and tactics of insurgent groups that aim to
destabilize the state. They use military-grade weapons, such as gre-
nades, automatic weapons, explosives, and even surface-to-air missiles
(Baltimore, 2009; Ellingwood and Wilkinson, 2009; Gould, 2008;
Wimmer, 2009) and increasingly target high-level state officials (Estrop,
2009; O’Grady, 2008). They also build sophisticated tunnel systems on
the US-Mexican border and invest millions of dollars in high-technology
submersible vessels and other innovations that help them avoid detec-
tion (Southern Pulse, 2009). It is estimated that they invest billions
of dollars in bribes to “gatekeepers” in Mexico and the United States,
threatening the integrity of institutions in both countries but especially
Mexico (Burton and West, 2009; González, 2009). They threaten to
derail Mexico’s democratic reforms and have thoroughly penetrated the
prison and judicial systems (Díaz, 2009; Emmott, 2009).
Los Zetas, composed of former members of elite military units, controls
70% of the northern border state of Tamaulipas, Mexico (Rodríguez,
2009), and is active throughout the country (Grayson, 2010a, p. 181).
Drug cartels are also increasingly controlling elections in local Mexico,
making their control over territory even more absolute. Drug-trafficking
expert Edgardo Buscaglia estimated that organized crime affects 63% of
Mexican municipalities (Miller Llana and Brodzinsky, 2010).
The drug cartels’ increasing financial power is thus translating into
increasing military power and making them a threat to the stability of
the Mexican state as well as to the more fragile states of Central America
(Meiners, 2009). There is also the potential of Mexican cartels’ forming
alliances with terrorist groups who wish to perpetrate attacks in Mexico,
the United States, or other countries. There have been reports of cartels
cooperating with the Revolutionary Armed Forces of Colombia (FARC)
and even of their encounters with Hezbollah operatives (Esquivel,
2008). Some cartels penetrate remote areas populated by indigenous
peoples where there is little State presence. It is in these same areas that
Islamic radical organizations, particularly Iran’s main proxy organiza-
tion, Hezbollah, have been said to recruit (Andersen, 2010, p. 78).
Thus, the situation appears to be dire, yet, as will become evident in
the following section, it is a problem with deep roots in Mexico’s politi-
cal past. It is less current policies and more politics of the past, when
the PRI was still in power, that are causing organized criminal networks
to launch an all-out war of survival.
The evolution of organized criminal violence
While organized crime has long been a part of the Mexican political
landscape, it was part of a complex arrangement between PRI authori-
ties and affiliated groups at all levels of government, the security forces,
and criminal organizations. Most evidence of this is anecdotal but oral
histories collected in local Mexico confirm that it was very prevalent,
and particularly visible at the local level. For example, the first opposi-
tion mayor of the city of Zamora, Ignacio Peña (1996) observed:
One of the only reasons my victory was recognized was because

I threatened to go to Los Pinos [the Mexican presidential palace] with
photographic evidence of the collusion between organized criminals
and the municipal branch of the federal electric company.
The regime appeared stable and effective at the national level and man-
aged to prevent information from the local level from making headlines
because Mexico analysts focused on Mexico City, assuming that in the
highly centralized regime only the main seat of power was relevant.
Collusion between politicians and organized crime at the national
level was also a feature of the system but it was easier to conceal. In
the 1930s drug trafficking was already widespread and former Mexican
president, Lázaro Cárdenas, proposed making it part of Mexico’s “motor
for development” and putting it “at the service of the Revolution,”
having roughly the same role as oil (Andrade Bojórges, 1999). During
the Second World War, the United States secretly encouraged Mexican
poppy growing in Sinaloa, a tradition that has continued ever since
(Grayson, 2010a, p. 61). In the 1950s, Mexican authorities made pacts
with drug traffickers in much of northern Mexico, but at the time they
could do so from a position of strength, as the State still outgunned
the cartels. From the 1950s until at least the mid-1980s the traffickers
adhered to rules of the game that guaranteed stability and low levels
of violence. They did not sell drugs in Mexico, target innocent civil-
ians, or invade places controlled by competitors, for example, and they
respected PRI authorities (Grayson, 2010a, p. 29).
The torture and assassination of Drug Enforcement Administration
(DEA) agent Enrique Camarena in 1985 by drug traffickers was a key
turning point (Grayson, 2010a; Toro, 1998, pp. 141–2, Chacón, 2002,
Patricia Olney 155
p. 159). The Mexican government’s inability to protect the US agent and

particularly the implication that government officials were involved in
his torture and murder revealed the level of corruption in Mexico and
elevated drug control as a priority in US policy. The first opposition vic-
tories at the State level were another turning point. When the National
Action Party (PAN) won the governorships of Baja California in 1989
and Chihuahua in 1992, the arrangements between organized crimi-
nals, security forces, and public authorities began to unravel (Astorga,
1999; González Alcocer, 2001, pp. 83–91). The torture and murder of at
least 400 women in Juárez, Chihuahua between 1992 and 2005 is one
of the symbols of the changing security situation (Watson, 2009). All of
the rules of civility were suspended and the behavior of criminal groups
became increasingly savage.
The end of PRI hegemony in 2000 accelerated the deterioration of
the security situation as it completely broke the centralized power
structure that had existed up until then. As one PRI leader, Edmundo
Amaya Quiróz (2006), noted: “We became orphans,” referring to the
end of the ancient practice of having all activity orchestrated ulti-
mately by the president, who had always been from the PRI. The
increasing weakness of the presidency (Berrueto, 2007) and the demise
of the PRI emboldened drug traffickers and led criminal groups to fill
the vacuum resulting from the PRI-regime’s implosion. As multiparty
politics spread throughout local Mexico, the modern patterns of party
competition borne out by statistics were misleading: political parties
were weak and manipulated by strongmen in the region. Especially in
rural areas multiparty politics, masquerading as “alternation in power”
became a way to infuse old and new strongmen with democratic
legitimacy (Zárate Hernández, 2005). Why the situation escalated to
the levels of violence we see today is in great part due to national and
regional policies as the post-Cold War era gave way to globalization,
the “open borders” paradigm. As with increasing globalization Mexico
and the United States relaxed their security apparatus and lifted trade
restrictions, they created incentives for local power brokers who lost
the support of central government authorities and organized criminal
groups while simultaneously diminishing the controls that used to
keep them in check.
The causes of Mexico’s security crisis
Authors have attributed today’s security crisis to a wide range of causes.

Some emphasize US and Mexican policies, particularly the impact of
prohibition, noting that it accounts for both the huge profit margins
and the need to enforce contracts through violence (Glenny, 2008;
Tokatlián, 2009; Toro, 1998). The War on Drugs, immigration policies,
especially the forced deportation of Central American gang members
(as Stiles describes in this volume), and the militarization of the drug
war are also blamed for the escalation in violence (Andreas, 2009; Díaz,
2009; Manwaring, 2007). Others argue that post-Cold War economic
policies are to blame, including regional trade and integration policies
such as NAFTA, said to have exacerbated crime in Mexico by facilitat-
ing the flow of drugs, people, and weapons (Dermota, 2000; Ganster
and Lorey, 2008; Pimentel, 1999). NAFTA is seen as the quintessence
of globalization’s introducing new technologies that have strengthened
criminal organizations. Malkin (2001) blames domestic free market pol-
icies, also known as “neoliberal policies,” for exacerbating inequalities
and eliminating the subsidies many peasants relied on, giving the urban
and rural poor little choice but to join the criminals. Others empha-
size the role of corruption, especially in the police forces (Instituto
Mexicano, 1998; Pimentel, 1999; Ravelo, 2005; Reams, 2007).
The proximate causes of Mexico’s security crisis can best be summa-
rized as resulting from a combination of post-Cold War changes in the
drug industry, the gradual implosion of the PRI-regime that left power
vacuums filled by organized criminals and guerrilla groups, and the
militarization of the drug war, leading violence to replace negotiation
as a government strategy to combat drug traffickers. However, these
events are driven by two more encompassing post-Cold War trends that
help to indicate Mexico’s future prospects. First are the post-Cold War
security and economic strategies spearheaded by the United States and
embraced by Mexico, or what Andreas calls “the unintended feedback
effects of past policy choices” (Andreas, 2009, p. 3). Early US post-Cold
War foreign policy initiatives include a push toward regional integra-
tion, the War on Drugs, and the downplaying of security as a national
priority. Mexico’s own adaptation to changes in US priorities further
destabilized the country, particularly because of the PRI-regime’s instru-
mental use of institutions and organizations. Second is a shift in the
Mexican benchmark of legitimacy from revolution to democracy, which
led to the loss of elite consensus embodied in a violent battle between
Revolutionary Nationalists and a growing group of reformers in all three
of the main political parties (PRI, PAN, PRD) who want to institute a
rule-of-law regime. This second phenomenon is complicated and due to
space constraints cannot be dealt with thoroughly in this chapter, but
the following section will flesh out the way post-Cold War policies and
Patricia Olney 157
the onset of accelerated globalization in the following decade played

a major role in Mexico’s current security situation. The revolution in
communications, the increasing power of a global human rights move-
ment and the growth of a middle class supporting opposition parties in
pursuit of democracy led the PRI-regime to lose its monopoly on politi-
cal power and its ability to control the criminals (Pimentel, 1999, p. 34).
The forces unleashed by the process we call “globalization” resulted in a
diffusion of power and thus created a context in which criminals could
thrive, as Anne Marie Ejdesgaard Jeppesen notes in her chapter about
Bolivia (given previously). The demise of the Soviet Union similarly
diffused power in the international context.
The post-Cold War North American security paradigm
The end of the Cold War left governments and analysts without a
compass—the bipolar paradigm had been a fixture for so long that its
absence set everyone scrambling for ways to make sense of the post-
Cold War world. The initial euphoria led to a post-World War-like
optimism that global peace was achievable. Partly under the assump-
tion that trade wars could replace military wars in the post-Cold War
world (Koshy, 2001; Luttwak, 1990; Russell Mead, 1990), the develop-
ment of a Free Trade Area of the Americas gained traction and its first
substantive application was the North American Free Trade Agreement
(NAFTA) (Hakim, 1993). Meanwhile, the War on Drugs was imposed
by the United States as the new guide for military intervention in the
Americas and its unforeseen consequences were to shift the balance
of power toward Mexican traffickers and the drug routes from mari-
time and aerial Caribbean routes to overland routes through Mexico.
Finally, the redefinition of security (Joint Security Commission, 1994)
in both Mexico and the United States after the fall of the Soviet Union
led to a relative neglect of the security apparatus, especially in Mexico
and Central America, as they were no longer epicenters of proxy wars
between the United States and the Soviet Union. Both countries to some
degree shifted their priorities from security matters to economic ones.
Stripped of their resources, mission, and the Cold War respect of govern-
ment authorities, and tempted by the opportunities free trade opened
up for organized crime, tens of thousands of security personnel either
defected to organized criminal groups or moonlighted as criminals
(Astorga, 1999; García Luna, 2006; Pimentel, 1999). Meanwhile, radical
leftists throughout Mexico consolidated their social bases in the many
pockets of the country where the State has been absent for centuries, as in
parts of Oaxaca and Chiapas, creating the conditions for insurgency-like

drug cartels such as La Familia Michoacana. As the Cold War grip
eased and the ruling elites abandoned their revolutionary ideals, some
Revolutionary Nationalists within the government formed alliances
with leftist guerrilla groups, leading to the emergence of the EZLN (De
la Grange and Rico, 1997, Beltrán del Río, 1993), while others may have
looked to criminal groups for financing (Curzio, pp. 90–9).
At the same time, by the mid-1980s, the Drug War was raging and
gained saliency as the new national security paradigm. The 1985
Camarena affair mentioned earlier, in which a US DEA agent was mur-
dered by drug traffickers protected by high-level politicians and members
of the security forces, helped turn US attention to drug traffickers. In
1989 the War on Drugs was used as the official reason for a December
operation to oust Panamanian president Manuel Noriega. By the early
1990s, bringing down the Medellín and Cali cartels in Colombia had
become a national priority, and their demise strengthened Mexican
cartels because the emphasis on interdicting drug shipments in the
Caribbean shifted drug transshipment routes from those in the air and
sea to overland ones through Mexico.
Furthermore, the US security strategy toward the Latin American
region changed dramatically. With some notable exceptions, such as
Peru’s Shining Path, leftist groups were no longer seen as major security
threats and Latin American governments and armies were no longer
provided with the hefty resources they had previously received to com-
bat them (Salazar, 2002, p. 8). A more ominous turn of events was that
security forces given a blank check by both the Mexican and the US gov-
ernments during the Cold War had become both extremely corrupt and
extremely powerful, but had suddenly lost their strategic importance.
As the Mexican presidency became progressively weaker, these security
forces stopped answering to anyone in the State apparatus. Some lead-
ers within the security forces went from having alliances with criminal
groups—while still imposing conditions that would limit violence and
the ill-effects on the society—to gaining control over the criminal
groups and combating an increasingly reformist state that threatened
their interests (Grayson, 2010a; Klesner, 2006, p. 403; Piccato, 2007,
p. 65; Pimentel, 1999).
Mexico’s post-Cold War policies
Meanwhile, the Mexican ruling elites were embracing some of the

same shifts in policy promoted by the United States, although filtered
Patricia Olney 159
through a very different power structure. The PRI-state’s stability

had always depended on a delicate balancing act demanding that all
members of the “Revolutionary Family,” the ever-expanding network of
interest groups in the PRI-state, have opportunities to obtain positions
of power and access to public resources (Pimentel, 1999, p. 36). By the
1980s these arrangements were rapidly unraveling. The United States
started to support modern, free-market reformers within the PRI at the
expense of Revolutionary Nationalists, and the ruling factions in Mexico
started to mirror these priorities. The PRI-state’s struggle to fend off the
opposition both inside and outside of the PRI led to the relative neglect
of national security issues (Grayson, 2010a, pp. 45–52; Gutiérrez, 2007,
pp. 132–9).
The 1988 elections in which a PRI split led to the opposition candi-
dacy of Cuauhtémoc Cárdenas and the allegedly fraudulent victory of
PRI candidate Carlos Salinas, provoked a bitter feud between the PRI
and its “bastard” twin, the Party of the Democratic Revolution (PRD).
The PRD wanted to revive Revolutionary Nationalism at a time when
the ruling faction of the PRI was trying to replace it with a more mod-
ern benchmark of legitimacy—classic liberalism (at least economic).
However, the rule of law was so antithetical to the way the PRI-state
worked that even PRI reformers were not trying to end corruption. The
PRI-state functioned on the basis of an extremely centralized hierarchical
system that rewarded loyalty and parceled out favors to a wide array of
clienteles in its fold. Pimentel (1999, p. 33) goes so far as to argue that
throughout its 71 years in power the PRI-regime used its security forces to
“control, tax, and extort the organized criminal elements,” granting
them impunity in exchange for financing. Trying to change the nature
of the PRI-system from within was practically a suicidal mission—one
that entailed destroying the foundations of the PRI, which represented
a carefully structured network of agreements among dozens of factions or
camarillas. As the recently interviewed Argentine professor Mariano Turzi
(2010) said about Latin American clientelistic arrangements in general:
“The political forces and interest groups that benefit from the central
government’s patronage will not give up their privileges easily, even if
that means undermining stability and the power of the state.”
Therefore, while some factions of the PRI-state were sacrificing the
PRI to modernize Mexico and perpetuate the power of their particular
political groups, others were willing to sacrifice modernity to save the
revolutionary nationalist modus operandi that gave the party legitimacy
and protected their group interests and claims on power. As one of
Mexico´s best political analysts, Gabriel Zaíd (1985, p. 3), presciently
observed, the PRI system was all about “standing in line” to get rewards:
a modern system would destroy the line and make rewards competi-
tive. These two colliding forces represented a glacial cultural shift that
changed the benchmark of legitimacy from revolution to democracy.
Before it lost power in 2000, the PRI had not functioned as a real
political party: the party base and democratic procedures did not
determine candidacies or policies; the party was mostly a tool of the
state. Madero Belden (1992) notes: “The PRI was not a party … but a
placement agency that does outreach work at election time (p. 126) …
candidates were designated; the party base was not consulted” (p. 128).
To Moore (1970, p. 65) “the PRI was little more than a tool for social
forces.” It was therefore almost impossible to democratize the PRI—it
practically had to be reinvented. As a result, policies aimed at modern-
izing Mexico’s economy and political system were encouraged by the
United States and pursued by ruling elites at the expense of stability and
Mexico’s security interests. Political groups were defending themselves
from each other, not defending the country from security threats.
Complicating the security situation further, drug trafficking was also
treated as a tool by the state, only the strategy usually strengthened
regional strongmen at the expense of the State. Andrade Bojórges (1999,
p. 24) observes “[In] Mexico drug trafficking … is a social movement
manipulated by the State in the same way as the labor movement.” He
implies that just as labor was coopted by the State by encapsulating it
into large unions, with leaders imposed from above, drug traffickers
were also treated as an interest group, to be controlled from within
the state. The cost of cooption as a system was that the PRI-state went
bankrupt in 1982 and rapidly unraveled, although the easy loans inter-
national banks flush with petro-dollars offered to countries throughout
the region was a contributing factor. The changes in economic policy
meant the end of the discretionary use of resources that had long guar-
anteed stability (Berrueto, 2007; Curzio, 1999, pp. 91–2).
Then Interior Minister in President De la Madrid’s administration,
Manuel Bartlett allegedly decided drug money could help the party fight
off opposition within and outside of the party and appointed governors
loyal to him who would work with the traffickers (Rodríguez, 2006,
p. 171, Vázquez, 2006). There were rumors that drug money was used to
finance the PRI´s campaign in Tabasco to prevent a PRD victory there, as
well as to finance the Worker’s Party (PT) campaign in Durango to keep
the PAN from winning in the 1990s (Contreras, 1996; Curzio, 1999,
pp. 85, 93; Rincón Lira, 1996; Salúm del Palacio, 1996). Authors Andrade
Bojórges (1999), Beltrán del Río (1993), and Calderón Mólgora (1994)
Patricia Olney 161
suggest that the PRI deliberately gave free rein to drug traffickers in
Michoacán to make PRD mayors, who won half the municipalities in
that state in 1989, appear incapable of governing. PAN representatives
made the same argument in northern Mexico (Álvarez Monje, 1996;
Hernández, 1996). Interestingly, when the PRI became the opposition
party in Chihuahua, its president, Eloy García Tarín (2006), claimed the
PAN administration of President Fox neglected its security obligations
in that state perhaps to make things harder for the PRI.
The post-Cold War security policies of both countries, and the subroga-
tion of security interests to political ones in Mexico and to trade concerns
in the United States, led to the spread of organized crime, especially
drug trafficking, this time unbridled by any arrangements with the State
or national governments. Open borders, human rights constraints on
post-Cold War national governments, and the communications revolu-
tion further created incentives for criminals. Segments of the security
forces stopped working for the government, especially as the PRI lost
power, and started working for criminal organizations or forming their
own competing criminal organizations. Defections from security forces
increased during the Zedillo administration and skyrocketed to more
than 110,000 in the Fox administration (Gutiérrez, 2007, p. 145).
Responses of Mexico’s “globalization” presidents
A key factor related to the exposure of the organized crime that had
long been contained within the State was the gradual process of creat-
ing modern institutions by the “globalization presidents”—those who
opened Mexico’s borders to the United States and the rest of the world
and started Mexico’s transition toward citizen-controlled and -oriented
institutions rather than those that served a monopolistic state. These
were the last two PRI presidents, Carlos Salinas de Gortari (1988–94)
and Ernesto Zedillo (1994–2000) and the post-transition PAN presidents
Vicente Fox (2000–6) and Felipe Caderón (2006–12). Salinas modernized
Mexico´s economy but the cost was the debilitation of the traditional
state and the empowerment of organized criminals. Legal reforms in
the 1990s transferred more and more financial and police power to
the local level (Shirk, 2005, p. 38), which presented an opportunity for
drug traffickers who, according to local political representatives, started
to control elections and became the de facto power holders in many
parts of the country (Klesner, 2006, p. 403). Power was deposited in the
parts of the country where federal laws could not yet be imposed and
therefore was transferred to interest groups that thrived in a lawless
context, what Eisenstadt (1999, p. 270; 2004, pp. 433–4) called “local
‘holes,’” in Mexico´s democratic opening.
A shake-up of national security organizations began in the last PRI
administration before transition, that of Ernesto Zedillo, and continued
in the two post-transition PAN administrations. Before Zedillo came to
power, judicial institutions were often political instruments but under
his leadership they became more independent (Concha Cantú, 2006,
p. 366). Zedillo presided over the consolidation of Mexico’s world-class
electoral institutions—the Federal Electoral Institute and its judicial
arm for adjudicating electoral disputes, the Federal Electoral Tribunal.
He also tried to drive private money out of campaign financing by
devoting large sums of public money to finance the 1997 elections, an
unpopular move that led some to suggest he was trying to combat an
entrenched dependency on drug financing (Instituto Mexicano, 1998,
p. 47; Klesner, 2006, p. 390).
Zedillo was unable to have an impact on the corruption within the
police, especially the local police, but he was the first to start extraditing
drug traffickers to the United States, demonstrating his commitment
to the rule of law. Still, because he did not exercise the many informal
prerogatives of the presidency that were vital to the PRI-system, he
was perceived as weak, particularly since the new institutions could
not contain traditional political forces. Perhaps partly as a result of
reduced opportunities to benefit from a long tradition of corruption
that seemed to be coming to an end, or because of the weakness of the
government, many members of the security forces began to defect to
the side of organized crime, numbering more than 150,000 between
2000 and 2008 (Grayson, 2010a, p. 157; Paterson, 2009). These efforts
to professionalize the security forces and to provide real autonomy to
local governments provided the potential for a modern democratic state
in the long run, but they were overwhelmed by a traditional political
culture in the short and medium run. The transition from PRI to PAN
rule further accelerated these trends, weakening the traditional foun-
dations of the State before the institutions to replace them could be
sustained by the political culture.
During the Fox administration that marked Mexico’s democratic transi-
tion there was a major effort to professionalize the security forces, a process
outlined by García Luna (2006), who in 2001 led the effort by forming
Mexico´s first modern investigative police force, the Federal Association
of Investigation (AFI), Mexico´s FBI. Fox also attempted a complete over-
haul of the port and customs systems, trying to root out corruption at the
points of entry of both legal and illegal goods (Malkin, 2003). However,
Patricia Olney 163
Fox was inexperienced, politically disconnected from even his own party,
and most critically, showed little respect for the military (Grayson, 2010a;
Proceso, 2003). He did nothing to win their allegiance even as he contin-
ued Zedillo´s militarization of drug control policy.
The spread of narcotiendas, locales where illicit drugs could be
purchased, especially in urban areas, accelerated during the Fox admin-
istration as well as in the Party of the Democratic Revolution’s (PRD)
administrations in Mexico City—they numbered more than 5000
by the end of his term (El Universal, 2006). Further evidence of the
government’s inability to control the territory was that Fox had no
official policy for dealing with dozens of guerrilla groups, including
the Revolutionary Armed Forces of Colombia (FARC), perhaps because
he wanted to be seen as fighting for the rights of those pursuing social
justice and against the perpetrators of dirty wars (Alcocer, 2006). Fox did
not address inter-cartel violence in Michoacán, nor did he stop the feud
between the Sinaloa and Gulf cartels in Tamaulipas that led the Sinaloa
cartel to gain almost absolute sovereignty over a key border state. In
addition, the individual who coordinated President Fox´s travel plans,
Nahum Acosta, was believed to be reporting the president’s schedule to
the Beltrán Leyva brothers of the Sinaloa cartel, although Acosta was
eventually released for lack of evidence (Grayson, 2010a, pp. 51–2).
Fox’s successor, Felipe Calderón, has been the first president to take on
all of the cartels directly, a politically courageous move that could only
have long-term rewards. There were 156 clashes between security forces
and drug traffickers in the first three years of his term and only 16 dur-
ing Fox’s entire term in office, evidencing Calderón’s unwillingness to
negotiate with cartels (Luhnow and De Córdoba, 2009). Predictably, the
transition from a strategy of negotiated peace with the cartels to one of all
out war has led to extreme levels of violence. Like Colombia’s President
Uribe in the case of Plan Colombia, Calderón enlisted US help through
the Mérida Initiative, a $1.3 billion US aid package designed to focus
on police training, judicial reform, and institution building. Like Uribe,
Calderon enlisted the assistance of the Mexican army in a strategic sense,
not reluctantly like Fox, to help the State move toward a monopoly over
the means of force. The goal of the Merida Initiative is to help Mexico
establish direct control of the territory through the development of an
effective national police force while simultaneously pursuing institutional
reforms that will bring Mexico closer to the rule of law ( Johnson, 2010).
For the first time since the consolidation of the PRI-regime, there are
efforts to empower local-level representatives of a national level police
force so that the rule of law can be extended throughout the territory.
Calderón has increased funding for police and embarked on a mission

to professionalize the most numerous and corrupt police forces—those
of the municipalities. He is raising salaries, vetting requirements, and
creating a database to be used by police at all levels of government
(Miller Llana, 2010). He supported the efforts of former PRI governor
of Chihuahua, José Reyes Baeza, to change Mexico’s legal system to one
that more closely approaches the US system (Ellingwood, 2009) in
order to increase levels of transparency and expedite court decisions.
He has also financed the construction of new high-security prisons
and extradited more drug traffickers than all previous administrations
combined (Fox extradited 20, Calderón extradited 180 through 2008
and 258 through 2010) (The Economist, 2009). However, while each of
these presidents took a step forward toward modernizing and profes-
sionalizing Mexico’s institutions, improving the country’s security, and
establishing the rule of law, they also have been associated with setbacks
that exacerbate Mexico’s security situation, giving the illusion that
nothing is changing. Since the most critical element required to achieve
the rule of law is cultural, what we will probably see is a very glacial pace
of change toward real reform in a “three steps forward, two steps back”
pattern. It could take ten, twenty, or more years before the institutional
reforms and changes in political culture are consolidated enough for
organized crime to be forced to operate elsewhere.
Conclusion
Organized crime and insurgent group violence can take place only
when there is complicity in the local society it is embedded in. In
Mexico’s case, organized crime has supporters among the Revolutionary
Nationalists in the elites and among the poorest sectors of the popula-
tion where the Mexican Revolution still represents the standard by
which the government is judged: how well the State makes progress on
the redistribution of land and wealth. Post-Cold War policies in Mexico
and the United States led to the subrogation of security interests to
political and trade interests that, along with more open borders, cre-
ated an environment in which illegal groups could thrive. One reason
there is such a big difference between crime levels on the Mexican side
of the border and those on the US side is because the rule of law is the
standard of legitimacy in much of the United States whereas it is only
beginning to become the standard in Mexico.
Yet many of the causes of the current security crisis are internal. The PRI
was a tool for the governing elites to turn the indirect control they had
Patricia Olney 165
by virtue of alliances with local strongmen in post-revolutionary Mexico

into direct control by the State. As part of this process of national inte-
gration the PRI-State presided over the imposition of a political culture
on Mexican society that has been termed “Revolutionary Nationalism.”
It has many characteristics, the most relevant of which is an incompat-
ibility with the rule of law.
While this is typical of revolutionary one-party regimes, particularly
because they are too centralized to allow for much transparency or
oversight, Mexico’s situation was worse than most because its elites
prolonged the life of the system and increased the social base that relies
on clientelistic arrangements. By the 1970s there was pressure both
inside and outside the Mexican government to make a shift from clien-
telism toward a free market system and from a one-party to a multi-party
system. Still, the ruling elites were able to delay any transfer of power
to the forces in society by borrowing money, relying on oil wealth,
and even plugging into drug networks. Power was so fragmented in
post-revolutionary Mexico that turning indirect sovereignty through
arrangements with local strongmen into direct sovereignty by agents of
the PRI-State was always a high priority. The method by which indirect
control became more direct control was through corruption—breaking
the official rules of government in favor of an informal system that
reinforced the hierarchical nature of power and rewarded leaders of the
various political groups or “camarillas” for loyalty and discipline, instead
of for popularity or responsiveness to citizens. Power had to flow from
the top down, never from the bottom up, even though the formal rules
required democratic processes.
Reforms such as those sought by a modernizing Mexico are dif-
ficult because they require cultural support and are therefore slow to
evolve—in the short term there are no political rewards of the type the
revolutionary system thrived on. A new social contract based on the rule
of law is required to re-establish elite consensus and deprive organized
criminals of the kinds of leadership and social base that is making them
such a grave problem today. In essence, it is necessary to consolidate
the shift in the benchmark of legitimacy from revolution to democ-
racy. With everyone agreed on the rules of the game, mechanisms of
accountability and transparency could gradually erode the corruption
so endemic to the revolutionary system. Meanwhile, the continued
advances in communication and transportation networks will continue
to provide opportunities for Mexico to join forces with other countries
to tackle transnational problems and accelerate domestic democratic
reforms, but also for criminals to exploit power vacuums and network
with one another. It may be that just as Mexico’s democratic opposition

once tolerated negotiated pacts in lieu of strict adherence to laws in
exchange for institutional reforms that would eventually make negoti-
ated pacts impossible, so the Mexican government, in the guise of a
2012 PRI victory, may end up accommodating the powerful interest
group organized crime has become. The hope is that the reforms set in
place by the Calderón administrations will continue to be consolidated
in future administrations, regardless of which party comes to power,
and that Mexico will one day achieve direct control over the entire terri-
tory and a cultural transformation that will no longer leave it vulnerable
to being taken hostage by criminal groups.
Note
1. This chapter was made possible by research and reassigned time grants
from Southern Connecticut State University. It is based partly on local-level
research conducted in 22 Mexican states in 1992, 1995–6, 1998, and 2006–8.
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9
New Patterns of Violence in
Latin America
Dirk Kruijt
The quality and character of Latin America’s society is changing. Mass

poverty, a process of informalization of the economy and society, and
social exclusion are being accompanied by an explosion of violence by
non-state actors. These fault lines of the socio-political order produce
a second-class citizenship. In this chapter we document the conse-
quences of this change.1
The most substantial political change to sweep through Latin
America, with its 75% urbanized population in the decade of the 1980s,
was without doubt the replacement of military dictatorship by demo-
cratic governments. Tragically, during the same period, democracy was
re-established during the outburst of a grave economic crisis leading to
long-term consequences. The mainstream model of economic adjust-
ment reforms in the 1980s and 1990s induced impoverishment and
instability in both economy and society. The evident failure to expand
the urban labor markets and to provide basic public services such as
education, health, and security produced an ineffectual integration
of the incessant migration stream from the rural hinterland in Latin
America and the larger island states in the Caribbean. This precarious
or even restricted integration is related to a trans-generational process
of informalization and social exclusion in the urban, more precisely
metropolitan environments. This development is reflected in high per-
sistent inequality in the distribution of urban income and wealth, in the
expansion of slums, and in the deterioration of popular neighborhoods
over the past two or three decades.
Latin America as a region has not been unaffected by the globalization
process. Its relations with the United States and, to a lesser degree, with
the European Union (EU), have always been important and the migra-
tion process to the United States and Europe as well as these markets for
171
172 New Patterns of Violence in Latin America
legal and illegal export products is a factor that can’t be ignored: without
the formal (legal) and informal labor markets of the United States and
in the EU (Spain, for instance), the economic situation of the poor in
several Latin American and Caribbean countries would be much more
burdensome. In 2008 Mexico received $27 billion in remittances from the
country’s legal and illegal migrants; In the same year, each of the Central
American republics received between $3 and $4 billion in remittances.
Colombian and Ecuadorian migrants in Europe also sent considerable
amounts of remittances to their homelands. Another consequence of
the globalization process is the upsurge of violence related to the illicit
economy, especially the drug economy.
In this chapter we are not primarily interested in an overall picture
of the complicated linkages of the entire production and transportation
circuit between the Andean producer countries and the final consump-
tion markets in the United States and Europe. Here our focus is on the
drug-related violence in the American region as such.2
At present, the region seems to be overtaken by informality and self-
employment, which is visible in the informal trading on street corners
and sidewalks in the slums, which gradually encroach on a greater
proportion of the urban area. Latin America is the continent where
the great majority of the population is simultaneously poor, informal,
and excluded. No country in the region can pride itself on having
won the struggle against poverty, of having reincorporated the mass of
population that had previously descended into informality, or of having
reinstated the vulnerable categories (including the indigenous, mestizo,
and black populations) that for generations have suffered the stigmas
of second-class citizens. Considering the matter from the outside,
the development of Latin American informality is astounding: it has
become an absolute challenge to every national government, whatever
the ideology of its presidency or the composition of its cabinet. The
informal sector is composed not only of owners of micro-enterprises
and their employees; the vast majority is formed by the self-employed,
whose economic activity is a means of day-to-day survival. Considering
the matter from within, Latin American informality has an ethnic face
too. Ethnicity is a stratifying factor. In the Andean countries, Central
America and Mexico, features of the indigenous cultures mix with
elements of informal society. Mechanisms for survival predominate: ties
of ethnicity, religion, real or symbolic family relationships, closeness to
the place of birth, and local neighborhood relations.
Second-class citizenship in Latin America has been associated,
traditionally, with the indigenous populations, the underdeveloped
Dirk Kruijt 173
rural hinterland, and the fragmented land tenure of the indigenous

communities. But, in the second half of the twentieth century, the
pattern of segregation, restriction, poverty, and de facto second-class
citizenship acquired an urban face. Between 1950 and 1980, the share
of Latin America’s informal economy grew steadily, only to accelerate in
the 1980s and 1990s. In another publication, on the dynamics of urban
poverty, informality, and social exclusion in Latin America (Kruijt, Sojo,
and Grynspan, 2002), we introduced the notion of “informal citizen-
ship,” the precarious implantation of (urban) second-class citizenship.
An important UNDP (2004) report coined the terms “low-intensity
citizenship” and “low-intensity democracy” as typifying post-dictatorship
democracy in the region. Latin America has thus become the continent
where in most of its countries a significant segment of the population
is at once poor, informal, and excluded. Latin America’s economy and
society are not without their fault lines: a consistently large underclass
of second-class citizens as part of its class structure and a consistently
present reservoir of violence. As is demonstrated in the remaining part of
this chapter, through the growth and consolidation of large segments of
poor, informal, and excluded citizens together with the relative absence
of the State in parts of its territory (the so-called “government voids”)
perpetuators of a new breed of non-state violence emerged and new
patterns of violence arose in the informal social order.
Urban poverty and the erosion of the formal social order
Urban poverty has become increasingly heterogeneous, reflecting

marked changes in the Latin American urban class structures. The
chronically poor are now joined by the “new poor,” descending from
the strata of the middle and industrial working classes who were directly
affected by the adjustment policies of the 1980s and 1990s. Old and new
poor converge in the bulging sector of informal micro-entrepreneurs and
self-employed in search of survival and livelihood strategies. The decom-
position of the urban working class has led not only to the formation of
a new edifice of urban social stratification but also to changes in the size
and composition of poor household family structures. The traditional
role of men as heads of families is ebbing away with the increase in the
number of female-headed households in the popular neighborhoods.
Furthermore, the informal economy and society even generates hidden
migration cycles, demographic breakdowns, and cleavages within the
family structure. Central America, with its poverty-stricken and war-
torn societies, perhaps provides the best example of the disruption of
families as a result of intra- and extra-regional migration processes: the

displacement process of war refugees’ fleeing violence and the popula-
tion exodus to Mexico and the United States. Their remittances keep the
informal society of El Salvador, Guatemala, Honduras, and Nicaragua
afloat (see Manuel Orozco’s chapter in this volume). This is accompanied
by the family’s dependence on remittances, the structurally reduced
employment market, the high unemployment rates of women and
younger people, the broken families, the despair of the family left
behind after the “temporary” migration of the male members, and the
bitter choices that had to be made between self-employment of some
kind and emigration.
This river of poverty and exclusion bursting its banks and generating
this new basin of informality and second-class citizenship has been
portrayed by Peruvian anthropologist Matos Mar (1984, 2004) as
the desborde popular (popular overflow). He took into account the
collapse of the traditional support institutions of the democratic order:
the political parties, the status of the parliament as legislator, the stature
of the magistrates as the legitimate authorities in the sphere of law and
order, the collapse of the once powerful trade-union confederations,
and the weakening of other conventional entities of civil society such
as the chambers of industry and commerce, the professional organiza-
tions of doctors, lawyers, and engineers, and so on. He also analyzed
the timid birth of a diversity of organizations representing the informal
entrepreneurs and self-employed, such as local and regional chambers
of craftsmen and comedores populares (community-run canteens with
cheap meals in the slums of Lima Metropolitana). What all of these
have in common is an ambivalent relationship of dependency on pro-
fessional development organizations such as religious and ecclesiastical
foundations, non-governmental organizations (NGOs), donor agencies,
private banks “with a social face,” and municipal and central govern-
ment organizations, as their financiers. Twenty-first century Peru and
Latin American are, in his opinion, “a national society that is incom-
plete and unfinished, not authentic, a half-way formed Republic, to be
reconstructed, revaluated and revitalised to create the possibility of …
full, participatory citizenship with [national] identity” (Matos Mar,
2004, p. 116).
Another characteristic of this new class structure is the implicit
duality of the formal and informal economy and society. Originally
interpreted as a short-term under- and unemployment phenomenon,
employment in the informal economy appears at present to have
become consolidated and the informal economy thus shapes a kind
Dirk Kruijt 175
of informal society, partially inserted in the formal order and partially

forming a parallel social structure with its internal social hierarchies.
This process also initiated the collapse of the traditional support insti-
tutions of the democratic order: the decline of political parties, the
erosion of the status of the legislature and the judiciary, the dwindling
stature of the magistrates as the legitimate authorities in the sphere of
law and order, the collapse of the once powerful trade-union confedera-
tions, and the weakening of other conventional entities of civil society
such as the chambers of industry and commerce, the professional
organizations of doctors, lawyers, and engineers, and so on. The parallel
institutions, parallel hierarchies, and parallel sectors that have emerged
along the lines of poverty, informality, and social exclusion may well
have formed a more durable, albeit heterogeneous, economic, social,
political, and cultural order.
This newly emerging class transformation also has consequences with
respect to the political order. It is interesting to notice that during the
past ten years all Latin America’s non-electoral government changes
were instigated not by a military coup but by social movements of the
poor neighborhoods, the slum dwellers, the urban informales, the ethnic
movement in the urban informal society, mostly by ad hoc popular
protests movements, mass meetings, regional protest alliances, sit-down
meetings, and hunger marches. Several substitutions of presidential
regimes in Argentina (four in 2001), Bolivia (two in two years), in
Ecuador (eight in ten years), in Peru at the fall of Fujimori (2000) were
the result of this new democracia de la calle. Latin America’s complex
class structure is producing substantial changes in the region’s social
and political landscape.
From desborde popular to desborde de la violencia
Urban second-class citizenship is also citizenship with a violent face. In

the 1970s and 1980s, the “divided,” “fragmented,” or “fractured” cities
were mostly typified in terms of urban misery or social exclusion and
were described in terms of the dichotomy between elites and well-to-do
middle classes and their gated communities (see Caldeira, 2000) versus
the “forgotten” slum dwellers. The intertwined dynamics of social
exclusion and the proliferation of violence have acquired clear spatial
dimensions. Urban segregation refers not only to the geographical
distribution of the traditional markers of poverty (human deprivation,
dilapidated housing, absent services, and degraded public spaces) but
also to the territorial and social division of cities in “go” and “no-go”
areas, that is to say, from the perspective of the middle-class citizen

and local public administration, even the police. The slums and shanty
towns have come to be seen as veritable enclaves that obey a totally
different set of rules and codes of conduct.
Take the case of Rio de Janeiro, whose poverty-stricken and crime-
ridden favelas are synonymous with “no-go areas” within the metropolitan
boundaries; they acquired a depressing reputation among researchers and
authors dealing with urban violence. Ventura’s (2002 [1994]) publication
on the cidade partida was to be followed by other publications.3 The rela-
tionship between the recent increase in poverty and violence in Buenos
Aires was discussed in comparative terms by Saín (2007). Pécaut (2001,
2003) examined extensively the Colombian situation where urban social
exclusion, crime, and violence became part of the vortex of large-scale,
drug-based organized crime and political violence within the country’s
degenerated civil conflict.
In other words, the connection between urban poverty, insecurity,
and violence has been rephrased in terms of the failure of citizenship.
The social and cultural dimensions of contemporary urban violence
and fear in Latin America’s metropolitan territories was analyzed com-
paratively and illustrated for the first time in a collection of articles and
essays edited by Briceño-León (2002), and Rotker (2002). Moser and
Mcllwaine (2004) published the results of a systematic and comparative
study on urban violence as perceived by the urban poor. They distinguish
between social, economic, and political categories of violence. “Social”
covers domestic violence, both inside and outside the home, including
domestic violence and child abuse. “Economic” includes street crime
(mugging, robbing, drug-related violence, and kidnapping) and is moti-
vated by material gain. “Political” encompasses guerrilla and paramilitary
conflict, internal wars, and political assassination. It is interesting to
observe how consistently the urban poor in nationwide surveys and
group interviews report about the complex interconnections between the
different sources of violence.
Violence, however, is not only firmly rooted in the daily life of the
metropolitan and urban poor; it is also a characteristic of the long-lasting
civil wars in Central America and the Andean countries. In two publi-
cations, Koonings and Kruijt (1999, 2004) analyzed the shift between
State-induced violence, the legacy of State terror of the Latin American
military dictatorships in the 1960s, 1970s and 1980s, and the violence
stemming from non-State actors operating in urban “violence enclaves”
and disputing urban territories, generally the habitat of the urban poor.
Armed actors with a military background, criminal gangs, youth, bands,
Dirk Kruijt 177
and “normal” criminal gangs have managed to mount parallel systems

of violence of national significance in countries such as Colombia,
Guatemala and Mexico, and, to a lesser degree or on more localized
scale, in Argentina, Brazil, and Peru. Colombia and Guatemala are, sadly,
two good examples of causality chains between nationwide violence
and local violence enclaves and violence pockets. Post-war Guatemala
is infested with new forms of violence caused by street gangs, by former
paramilitary forces, and by former military and police members tied to
drug trafficking. US deportation schemes influenced the origin of youth
gangs and drug-related bands in Central America and the Caribbean
(see chapter 8). In Colombia the desborde de la violencia has been insti-
tutionalized during the past couple of decades. Political conflict in
Colombia has also been intensified by drug-linked violence and local
criminality. The civil war in this country is reproduced intensely by
micro-wars in the metropolitan areas and the urban comunas.
Present-day armed actors
Latin America’s post-dictatorship economies and societies are marked by

police violence and violence by a variety of armed non-State actors. The
members of the latter are generally (male) adolescents and young adults
who act in youth gangs, local militias, and/or private drug armies. It is
not uncommon for former guerrilla fighters and paramilitary forces, and
for former members of the armed forces and the police, to join the ranks
of these violent extra-legal actors. The establishment of drug routes,
as commercial trade routes and/or as distribution points for the urban
consumer markets, aggravated these problems, as it formed the basis
for the emergence of “local violence systems” in countries throughout
the region.
Next we present an overview of the presence of non-State actors in
Latin America and the Caribbean.
Colombia was, and still is, a country where multi-actor internal wars
are fought out at national, regional, and municipal level (González,
Bolivar and Vázquez, 2006; Leal Buitrago, 2006a, 2006b). Until the late
1980s four different guerrilla forces were present. At present (2008) only
two, the FARC (the majority force) and the ELN (the minority force)
are active fighters. In the past, most of the guerrilla battle groups or
frentes imposed “war taxes” on coca producers and local drug lords and
kidnapped local entrepreneurs. Afterwards they incorporated “regional
protection” and coca cultivation into their military and financial
logistics. Also in the late 1980s, the drug-entrepreneurs in Medellín
and Cali created paramilitary units. Other rural entrepreneurs followed

their example and that resulted in a dispersed structure of regional and
local vigilantes and sicarios, subcontracted professional murderers. These
paramilitary gangs, sometimes in close cooperation with the regional
security forces, emerged as parallel counter-insurgency battle groups.
They established “clean zones” in which they represented law and
order by means of extortion and intimidation. In 1997 these regional
forces were united in the Autodefensas Unidas de Colombia (AUC). The
higher paramilitary echelons used their power to penetrate “legitimate”
business: rural property and the patronage of local and regional “tame
politicians” whose campaigns they financed, a phenomenon known as
“para-politics” (Duncan, 2006). In 2007 the majority of the rank-and-file
members were disarmed after an agreement was brokered with the
government. However, most analysts indicate the reappearance of smaller
mini-gangs of local-based paramilitary forces, comparable with the emer-
gence of a multiplicity of mini-cartels after the disarticulation of the two
major cartels of Medellín and Cali. Mini-gangs of armed actors compete
with other twilight youth gangs and local criminals who are engaged in
mini-wars about the control of small, mostly urban, territories. One of
the first studies of juvenile gangsters, the sicarios in Medellín, shows that
they have turned violence into a strategy not only for income but also
for status and prestige in the neighborhood. A recent study on Medellín
points to the presence of ex-guerrillas and ex-paramilitary members who
followed their example, establishing day-to-day control on streets and
in city blocks by imposing protection taxes on local taxi and bus drivers
and small and micro-entrepreneurs (Rozema, 2007).
Peru and Bolivia: youth gangs operate not only in Colombia. In other
Andean countries the phenomenon of youth gangs is also surfacing.
In Ayacucho, Peru, for instance, home base of the macabre guerrilla
movement, Shining Path (Degregori, 2010), around 800 youth street
gangs surfaced in the post-war decade.4 In present-day Bolivia, after the
“water wars” (Crabtree, 2005) and other popular protest movements
that ended with the renunciation of two consecutive presidents in
2003 and 2005, President Evo Morales was challenged by youth gangs,
subcontracted by his political adversaries in the eastern departments
and functioning as protesters while attacking indigenous members of
parliament in 2007 and 2008.
Central America: in Guatemala, a country that during the 36 years
between 1960 and 1996 was the scene of an atrocious internal war, one
can observe three categories of armed actors in the post-war decade:
first, there is the phenomenon of the “dirty powers” (los poderes oscuros),
Dirk Kruijt 179
a loose network of ex-combatants and ex-military, ex-functionaries of

the military intelligence who joined the ranks of the new booming drug
economy (Sieder et al., 2002; Peacock and Beltrán, 2004; Goldman,
2007). Then there are the “regular” criminal gangs that specialized in
car robbery, kidnapping, and subcontracted murder. A third category is
the youth gangs, in post-war Central America called maras (see Shannon
Stiles’s chapter in this volume). In El Salvador, Honduras, Guatemala,
and to a lesser extent Nicaragua, the maras or criminal youth gangs
are national security threat number one (Savenije and van der Borgh,
2004; Rodgers, 2007). The maras emerged during the 1980s and were
consolidated after the Central American Peace Agreements in the 1990s.
The name-giving of the oldest maras in San Salvador, Tegucigalpa
and San Pedro Sula is a reminder of their US origin. The Salvadoran
maras Salvatruchas and Barrio 18 assumed the names of two initially
Salvadoran street gangs in Los Angeles after the deportation of some
gang leaders from the United States to El Salvador. The mara phenome-
non proliferated in the poor barrios in Central America’s most important
cities who were recruited from the jobless, unemployed—and unemploy-
able because of their tattoos—young boys and girls in the slums. Tens
of thousands children and young adults, from 12 to 30 years of age,
are mareros. In El Salvador and Honduras the mareros account for 45%
and in Guatemala for 20% of the homicides in 2003 (Peetz, 2004).5 The
Central American marero economy depends on territorial control and
drug trafficking. The mareros form a very loose collection of mutually
rivaling gangs that are engaged by disputes over small territories. Their
subsistence is guaranteed by extortion, usually of local smallholders,
taxi drivers, and transporters, and by petty drug trafficking. They share
a comparable repertoire of rituals, tattoos, codes of conduct, internal
loyalty, and extreme violence in order “to be respected.” The scale
of youth gang operations is so extended that recently a special anti-
mara law was accepted by parliament, and security commandos were
formed by police forces and military personnel in Honduras (Operación
Libertad, 2003) and El Salvador (Plan Mano Dura, 2003). The number
of victims due to mara incidents has already surpassed the number of
victims of the civil war in El Salvador. In April 2005, the three chiefs
of staff of the Armed Forces of El Salvador, Honduras, and Guatemala
asked the chief of the US Southern Command, General Bantz Craddock,
for technical and financial assistance in order to “create a joint Army
and Police Special Force to combat drug trafficking and youth gangs.”6
Jamaica: violence and drugs determine the environment in which
armed youth gangs operate in Kingston. The first territorial gangs
operated in the city’s ghettos and slums where the underprivileged

and the poor received a hard-handed “suggestion” during electoral
campaigns. Clientelist political entrenchment in a system of bipartisan
political representation was accompanied, from the 1970s, by gunmen
organized in gangs and affiliated to one of the two political parties.
More than half of the constituencies of the poor Kingston districts are
characterized by ingrained preferences for political candidates. Whereas
politicians previously protected ganja trading and drug bosses, the afflu-
ence of the drug money started to reverse the relationship between gangs,
drugs, and political support. In the 1980s a crack and cocaine trafficking
network was consolidated in Kingston—in fact, across Jamaica—with
linkages to the Colombian producer market and the US and European
consumer markets. At present, drug gangs finance politicians and even
share part of the drug surplus with the police to buy “protection.” The
Jamaican posse—a loose collection of Jamaican gangs—have established
“posse colonies” on the US east coast—and especially in New York. The
US posses and their British affiliates—called yardies—are notorious for
their use of violence in drug-related activities (Clarke, 2006).
Brazil: anomalies such as regular funding, by drug money, of local
NGOs operating in the slums of Rio de Janeiro and other metropoli-
tan areas are common practice—the traficantes wish to express their
benevolence to local development. For instance, Deusimar da Costa,
president of the Federaçao Municipal das Asociações de Favelas do Rio
de Janeiro, acknowledged quite frankly that a peaceful coexistence with
the traficantes was a fact of life. “They are moradores (members of our
neighborhood),” she said, “and their presence does not trouble us. They
have the power of intervention and they are moradores, after all. We
share, as you would call it, a symbiotic life. We are not inclined to call in
the police.”7 The local drug gangs can also express their territorial aspi-
rations, for instance, by closing, temporarily at least, the metropolitan
highway to the airport, as has happened several times in Rio de Janeiro
at the behest of different favela chiefs. In some cases, they explicitly
negotiate spheres of influence with the local church leaders. Jonas
Pedreina, president of the association of moradores in one of the favelas
in northern Rio de Janeiro and an evangelical church leader, declared
that the local drug boss had offered to finance all church, NGO, and
neighborhood activities, “no strings attached.” The pastor and the
favela leader had refused his offer.8 In daily practice the drug economy
and the churches have learned to respect each other and to maintain
relations of peaceful coexistence. The necessities of daily coexistence
cannot hide the fact that drug bosses and gang leaders have reproduced
Dirk Kruijt 181
national war scenarios in the form of urban territorial disputes. Several

thousand child and adolescent soldiers in Rio de Janeiro operate in drug
gang wars. The relationship between youth gangs and drug trafficking
was typified by Zaluar (2000, 2004) as “perverse integration” of the clan-
destine economy and slum violence. Here one observes a legacy of the
political violence in previous decades. Leeds (1996) and Koonings and
Veenstra (2007) mention the fact that the leadership of organized crime
learned about “politics” from the leaders of the urban guerrilla move-
ments who after their arrest were imprisoned, as punishment, together
with drug traffickers and dangerous criminals. Their co-inmates learned
how to organize and how to appeal to public favor. Criminal organiza-
tions such as the Comando Vermelho surfaced in the 1990s as a “parallel
power” in Rio’s favelas. Organizations within the drug economy, headed
by traffickers and supported by small armies of child and adolescent
soldiers, wield power as local authority and local justice in the popular
neighborhoods. Between the neighborhood associations, the criminal
gangs, and the municipal police, complex relationships of peaceful
coexistence, conflict, financing, extortion, and dominance exist.
Discussion
The complex articulation between the processes and actors belonging

to the realm of formality and informality, of inclusion and exclusion,
of law and order and criminality, and of the civil and the “uncivil”
society, is the context of violence and fear experienced by the poor and
marginalized population segments in the metropolitan areas and the
urban agglomerations in Latin America.
It is interesting to notice that in the context of permeating violence
and fluctuating mini-wars in small urban territories the armed forces
usually do not play an overwhelming role. During the long years of
military dictatorship, civil-military governments, and civil wars the
armed forces were the principal perpetuators of State-related violence
directed against the internal enemies of the State: revolutionary move-
ments, guerrilla forces, peasant and union leaders, and presumed
“communists.” State terror and the complicated apparatus of repression,
formed by the system of interlinked intelligence services, state security
forces, paramilitary units, and police extensions created “societies
of fear” at the national level, intensified in combat zones and theatres
of counter-insurgency against guerrilla forces and other insurgents. In
the 1990s, during the process of withdrawal of the military govern-
ments and the transition to civilian governments, the military presence
which had manifested itself in the past, now demonstrated itself in the
form of a shadow presence, through the “compulsory military advisors”
and “civil-military ties” between the public sector, the intelligence
service, and the leading generals. While even in the twenty-first century
the (military) intelligence services and state security bureaucracies
in many Andean and Central American countries are still focused
on the internal enemies of the State, the armed forces in the southern
cone countries publicly withdraw from the political arena, reformulat-
ing their objectives clearly in the direction of “professional soldiers”
(Koonings and Kruijt, 2002). The armed forces are leaving the direct
confrontation with non-State violent actors to the police and the special
police forces, more adapted to urban aggression, and explicitly trained
in counter-aggression.
Another trait is the proliferation of “private vigilantism”: private
police, privately paid street guardians in the middle class and even
popular metropolitan districts, private citizens’ serenazgos, private pro-
tection squads, special forces in the financial sector recruited from
former police forces and the army, extra-legal task forces, paramilitary
commandos, death squads, and so on; a legacy of the prolonged civil
wars in countries such as Colombia and Guatemala, but gradually
extended to the urban spaces in the majority of the Latin American
countries and some Caribbean island states such as Jamaica, confronted
with this “new violence.” Continuous fragmentation of the military
and paramilitary organizations and in some cases the guerrilla forces
of the civil wars in Colombia and Guatemala contributes to a more
hidden, more ambiguous scenario of semi-organized crime and extor-
tion of public functionaries and private persons.
Third, there are the new armed actors in the favelas, villas, barriadas,
or comunas, all these terms covering the local misery neighborhoods
where the local boss or trafficker is invested with the factual authority
with regard to law and order, at the same time being the benefactor of
local development, the local churches, and the local NGOs. Usually,
the local population has to choose between the formal police force
(frequently absent) and the de facto guardians of the informal local
order. Here it refers sometimes to extensive jurisdictions of perhaps 25%
of the urban space in metropolitan Rio de Janeiro, São Paulo, Buenos
Aires, Bogota, Medellín, Mexico DF, Guadalajara, and other important
agglomerations. Local chiefs of armed perpetrators represent the local
parallel law and justice. Sometimes they impose taxes, in other cases
they act as financiers of local development. Perhaps they negotiate
with the local social, political, and religious leadership that has learned
Dirk Kruijt 183
how to survive in terms of peaceful coexistence. These new bosses in

the Argentine villas, the Brazilian favelas, the Columbian tugurios, the
Guatemalan zonas, and the Mexican delegacías are reproducing former
war scenarios in “their” territories. A considerable segment of the youth
in the marginalized neighborhoods is unemployed and without oppor-
tunities to be employable. They find a certain status, even identity
and belonging, in the gangs and maras, a fact that explains the rela-
tive popularity of gang membership as a life style in Argentina, Brazil,
Colombia, Venezuela, Central America, and Mexico.
The many mini-war scenarios in Latin America and the Caribbean and
the proliferation of the (urban) armed actors involved are related to the
phenomenon of local governance voids. Governance voids exist where
the legal authorities and the representatives of law and order are absent
and, consequently, a local vacuum of “regular” law and order is created
(Koonings and Kruijt, 1999, pp. 12). In this vacuum a kind of osmotic
symbiosis emerges between the State (the police, the law system) and
“common” criminality and criminalized former members of the armed
forces, the police, paramilitary units, and guerrilla combatants. “Law
and order” is then the result of a fluctuating order of parallel forces
of local power players and “moral” authorities (elected representatives
of associations of vecinos, pobladores, or moradores, priests and evan-
gelical pastors, even successful entrepreneurs or owners of radio and
TV stations) in shifting alliances. In these voids, alternative, informal
or “parallel” structures arise, seeking various forms of confrontation or
accommodation with the legitimate authorities and with civil society.
The new urban war lords of local violence: the chiefs of the local drug
traffickers, the leaders of the maras in the slums of Central America, the
monopoly holders of local illegal violence, however accepted, are the
new enforcers harsh but clear customary justice. They are also the new
local tax collectors who distribute the revenues.
The UNDP (2004) report about the state of Latin America’s democ-
racy mentions that the majority of the region’s population would
prefer an authoritarian government provided that it would resolve the
consolidated mass poverty and control the outbursts of violence. This
“voting with the feet” of Latin America’s second-class citizens raises
the question about the stability of the political order that is based on
widely generalized second-class citizenship. Informal citizenship in a
context of violence seems to be the standard integration mechanism
of the poor and the underprivileged. Considerable segments of the
Latin American population survive in the informal economy and
society, where poverty exists side by side with everyday violence. Many
of the armed actors and power players are recruited from among the
informales and the excluded. This phenomenon of social exclusion-
cum-violence shared by the masses of the urban poor tends to destroy
the foundations of the democratic order and its domains of citizenship.
Continuous violence, even in restricted territorial enclaves, contributes
to the erosion of legitimate governance. The paradox is that most Latin
American governments, as many local popular leaders and church
authorities previously did, have accepted a de facto peaceful coexistence
with the violent non-State actors, as long as they do not constitute a
challenge to the national political order. The question is, of course, how
long the economic, social, and political order in Latin America can be
maintained by this uneasy equilibrium between “acceptable” levels of
exclusion and “acceptable” levels of violence.
Notes
1. Part of the conceptualization is discussed in Alba and Kruijt (2007), Koonings
and Kruijt (2007, 2009), and Kruijt and Koonings (2007, 2009).
2. See, for instance, Benítez Manaut (2010), Kruijt (2011), Thoumi et al. (2010),
and Vellinga (2004).
3. See, for instance, Barcellos (2003), Chaves Pandolfi and Grynszpan (2003),
Evangelista (2003), and Zaluar (1994, 2001).
4. Author’s interview with Ana María Tamayo, Instituto de Derecho Legal (IDL),
Lima, February 16, 2008.
5. According to several sources, mentioned by Peetz (2004, p.59), the number of
mareros varies between 14,000 and 200,000 in Guatemala, 10,500 and 35,000
in El Salvador, and 36,000 and 100,000 in Honduras. Nicaragua estimates
4,500 mareros, Costa Rica 2,600, Panama 1,385, and Belice 100.
6. Siglo Veintiuno (Guatemala), 15 April 2005.
7. Author’s interview with Deusimar da Costa, Federaçao Municipal das
Asociações de Favelas do Rio de Janeiro (FEMAFARJ/FAR-Rio), Rio de Janeiro,
August 28, 2003.
8. Author’s interview with Jonas Pedreina, Rio de Janeiro, August 29 and 30, 2003.
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10
Latin American and European
Relations in an Age of Uncertainty
and Opportunity
Guy Edwards and Enrique Mendizabal
We believe that there is a window of opportunity for boosting

the Strategic Partnership between Latin America and the
Caribbean and the European Union.
Alicia Bárcena, Executive Secretary of the
United Nations Economic Commission for Latin
America and the Caribbean (ECLAC, 2011a).
Introduction
The Strategic Partnership between the European Union (EU) and Latin
America and the Caribbean (LAC) was created in Rio de Janeiro, Brazil, in
1999 to foster and strengthen political, economic, and cultural links between
the two regions.1 Observers have been critical of the partnership for failing
to achieve more results and reflect the evolving regional and international
contexts (Freres and Sanahuja, 2006; Freres et al., 2007; Maihold, 2007;
Maihold, 2008; Malamud, 2008; Mendizabal and Edwards, 2008; Sanahuja,
2008). Conversely, there has been criticism from within the EU Council of
Ministers that those downplaying the lack of success within the Strategic
Partnership have confused a lack of substance with a lack of serious research
(Buck, 2009). However, at the Madrid Summit in May 2010, the EU High
Representative for Foreign Affairs and Security Policy, Catherine Ashton,
called for a “new era of EU-LAC relations” arguing that the dialogue between
the regions needs to be “more effective and more results orientated.”2
This chapter seeks at least partially to fill the research gap and to chart a
more moderate path in the attempt to untangle the nuances of this highly
complex bi-regional partnership. We consider bi-regional relations across
four key areas: political, economic and commercial, cultural and social
dimensions, including migration levels, and cooperation, including aid.
188
Guy Edwards and Enrique Mendizabal 189
The diversity and breadth of Latin America’s relationship with Europe

in this new era of uncertainty and opportunity suggests that in some
areas bi-regional relations are constructive and successful, whereas in
others they have been frustrated or undermined by a broad range of
both endogenous and exogenous factors. Finally, we offer some conclu-
sions and prospects for the future of the Strategic Partnership.
We confine ourselves to the period of relations between Latin America
and Europe from the 1980s until the present day. This period has
witnessed a plethora of global events and transformations across both
regions and globally which have directly and indirectly influenced the
context in which bi-regional relations exist. The opportunities and
constraints that these processes present to Latin America and Europe go
some way to explaining the current state of the partnership. At a time
when Latin American republics celebrate their bicentennial anniver-
saries of independence from European colonial rule and a number of
leaders herald the beginning of the Latin American decade (Statement
by Santos, 2010; Ferrero-Waldner, 2011; Moreno, 2011), it is an appro-
priate time to reflect on what relations between these regions currently
represent in the twenty-first century.
Latin America and Europe: The political dimension
Relations between Latin America and Europe began to intensify during

the 1980s and particularly in the 1990s. In 1983, the then European
Community concluded a regional framework agreement with the
Andean Pact (now the Andean Community). The following year
the European Community launched the San Jose process to support
attempts to resolve the conflicts in Central America and those in
Nicaragua and El Salvador and the support of Guatemalan refugees in
Mexico, and in 1985 it signed a framework cooperation agreement with
the Central American states. In September 1987, informal meetings
between the European Community and the Rio Group began and these
were later institutionalized in 1990 by the Declaration of Rome (Alecu
de Flers and Regelsberger, 2005; Smith, 2008).3
Since then, relations between Latin America and Europe have become
ever more complex and have focused on a plethora of issues, although
they have focused primarily on economics and trade, political coop-
eration, and regional integration. At times, that variety has reflected
the different motives of Europe and its member-states. Mercosur,
for example, attracted European interest as a result of its signatories’
wanting to further regional integration drawing on European models
190 Latin American and European Relations
(Klom, 2003). Additional interest on the part of both Europe and Latin
America has focused on counter-balancing US influence in the region
and pressure to establish a Free Trade Area of the Americas (FTAA)
(Alecu de Flers and Regelsberger, 2005). In Spain, there is consensus
that Latin America is very important to Spanish interests and there has
been a strong focus on their common history, culture, and language
(Malamud, 2006). In 2010, Germany unveiled its new Strategy on Latin
America and the Caribbean, which identifies international cooperation
on climate change and organized crime, the expansion of economic ties
and cross-border networking in science, education, and culture as the
three main priorities (German Federal Foreign Office, 2010).
Connections between Latin America and Europe operate at a number
of levels. This multilevel relationship includes bilateral and multilateral
negotiations through both regional and sub-regional institutions. In 1995
the Interregional Framework Agreement for Cooperation between the
EU and Mercosur was signed in Madrid to consolidate political dialogue
with Mercosur and provide a space for development cooperation, techni-
cal assistance, and further trade and economic activities (Klom, 2003).
However, it was not until 1999 that the European Council of Ministers
granted the mandate for negotiations between the EU and Mercosur.
The negotiations were suspended in October 2004 largely due to dis-
agreements over the EU’s agricultural subsidies and access to Mercosur
markets for manufactures and services (ECLAC, 2008). The Madrid
Summit in 2010 resulted in the decision to relaunch negotiations for
an EU-Mercosur Association Agreement following a process of informal
contacts conducted earlier in the year to analyze the conditions.4 The
Madrid Summit also resulted in the conclusion of negotiations for an
Association Agreement between the EU and Central America and the
conclusion of the negotiation of a Multi-party Trade Agreement between
the EU and Colombia and Peru (Council of the EU, 2010).
The first EU-LAC Summit was held in Rio de Janeiro, Brazil in June
1999. It was designed to strengthen the cultural, economic, and political
ties between Europe, Latin America, and the Caribbean and resulted
in the creation of a Strategic Partnership (Smith, 2003). Subsequent
EU-LAC Summits have been held in Madrid (2002), Guadalajara,
Mexico (2004), Vienna, Austria (2006), Lima, Peru (2008), and
Madrid (2010).
Within this wider context, bilateral relationships between individual
EC/EU member-states and different groups and individual Latin American
states continue. The Ibero-American summits, celebrated annually since
1991, are an important part of Spain’s relationship with Latin America.
However, they tend to act more toward Spanish and to a lesser extent
Portuguese geopolitical ambitions (Roy, 2006) than European ones as
a whole. Gratius (2010) suggests that for historical and cultural rea-
sons, Spain’s relationship with Latin America is more sentimental than
rational and its lacks a policy for Latin America. Prior to the Madrid
Summit in May 2010, Spain failed to take on a liaison role between
Europe and Latin America and its influence on the EU’s Latin America
policy has waned, especially since 2004. This can partly be explained by
the EU’s enlargement, which has reduced Spain’s room for maneuver in
EU foreign policy and also to its more general inaction in foreign policy
(Gratius, 2010).
Spain was able to support the successful conclusion of the Madrid
Summit of 2010, which succeeded in giving a fresh impulse to bi-regional
relations with some results, such as the creation of the EU-LAC Foundation,
new trade deals, and a Latin American Investment Facility.
A possible force for making the EU more significant in the eyes of
Latin America might derive from the Treaty of Lisbon, which entered
into force in December 2009 with important changes to the EU’s institu-
tional arrangements on foreign policy issues. The treaty is intended
to give Europe a clearer voice in relations with its partners worldwide.
A new High Representative for the Union in Foreign Affairs and Security
Policy, Catherine Ashton, who is also the Vice-President of the European
Commission, works to increase the impact, the coherence, and the
visibility of the EU’s external action, which includes the creation of a
new European External Action Service designed to provide support to
the High Representative.5
However, the diminishing political and commercial power of the
EU on the world stage vis-à-vis the emerging economies in Asia and
Latin America presents a changing context for analyzing European-
Latin American relations. At the 2009 United Nations Climate Change
Conference in Copenhagen, European leaders did not attend a key
meeting to secure a deal negotiated by the United States, China, Brazil,
India, and South Africa (Meilstrup, 2010), which Vaïsse and Kundnani
(2011) describe as a major defeat for the EU. On the commercial front,
ECLAC (2011b) predicts that over the next five years, it is possible
that the EU could be displaced by China as the LAC’s second-largest
commercial partner.
Gowan (2011) argues that the emerging economies such as Brazil
with growing levels of investment in Europe are attempting to influ-
ence European politics to back their own objectives. Whether effective
or not, it is certainly not possible to understand fully the relationship
between Europe and Latin America without taking into account the role
of Latin America’s traditional global partners such as the United States
(Smith, 2008), as well as newer partners that include China, Japan,
India, Russia, and Iran, which make for an ever more varied range of
interactions.
The United States has played a key role in the Western Hemisphere
and remains a priority for both Europeans and Latin Americans
(Smith, 2008; Kaufman, Purcell, and Simm, 1995 cited in Whitehead,
1999). Malamud (2008) argued that since Latin America is part of the
US sphere of influence, Europe’s capacity to act autonomously in the
region is limited.
But, more recently, Latin American countries of the region consider
the United States more distant and less relevant to their interests,
needs, and choices than before. Several Latin American countries have
adopted a more assertive and autonomous stance in their foreign policy
(Gardini and Lambert, 2011). Brazil’s defense of Iran’s nuclear program,
in direct conflict with the US objective of preventing Iran from gaining
nuclear weapons capacity, is an important example (Hakim, 2011).
China has assumed a large and steadily growing role in the region’s
economies, displacing the United States as the number one trading
partner with Brazil (Hakim, 2011). This growing economic role of China
in Latin America and its political consequences, dealt with by William
Ratliff in this volume, provides an additional context in which to view
Latin America’s position in a rapidly globalizing world.
A review of bi-regional relations would therefore be too limited if
it focused entirely on the specific political spaces that include the
EU-LAC, EU-Mercosur, and Ibero-American summits. The G20 Summit
of 2008, which saw three Latin American countries attend (Argentina,
Mexico, and Brazil), is a case in point. It also provides an opportunity
to consider the role of Latin America in a potentially new phase of
globalization and economic interdependence.
As Steen Fryba Christensen suggests (also in this volume), Latin American
South-South cooperation has emerged as an important feature of both Latin
America’s intra-regional and its extra-regional relations, particularly with
West Africa. Increasing levels of Brazilian development assistance, which
amount to approximately $1 billion per year, demonstrate how Brazil and
other developing country donors are enriching the conventional aid and
donor landscape and present interesting prospects for trilateral coopera-
tion with traditional donors such as the EU (Cabral, 2010).
This diverse and volatile landscape both underlines the complexities
of relations between Latin America and Europe and the multiple
scales and areas in which the regions overlap. It also exposes the
difficulties inherent in improving the Strategic Partnership to advance
bi-regional objectives.
But it is not possible to describe Latin America in the same terms
as one might describe the EU and its member-states. Latin American
governments are taking initiatives to form their own regional institu-
tions that sometimes reinforce but also compete with more traditional
inter-American organizations such as the US-led Organization of
American States (OAS) (Hakim, 2011). These attempts to forge new
regional bodies such as the Union of South American Nations and
the Community of Latin American and Caribbean States, created in
2008 and 2010, respectively, should be acknowledged and investigated
further. Latin America is a highly heterogeneous group without a com-
mon voice or regional institutions comparable to the EU.
In their relations with other regions or countries, Latin American
countries depend on bilateral relationships and sub-regional institu-
tions. These bilateral relationships extend to relations with individual
European countries outside the formal EU institutions, including bilateral
cooperation programs.
The economic dimension
The 2008 financial crisis hit the global economy particularly hard,
sparing neither Europe nor Latin America. Foreign direct investment
(FDI), official development assistance (ODA), remittances, and trade
from Europe to Latin America slowed down (The Economist, 2009).
However, according to the World Bank, Latin American countries
were able to bounce back from the global recession faster than other
regions because of their sound economic fundamentals and better
preparedness to fight a global financial crisis (World Bank, 2010).
Malamud and Steinberg (2011) argue that Latin America, together with
Asia, is spearheading global economic growth due to sound economic
policies implemented both before and during 2008 and by the latest
commodities boom. The International Monetary Fund (IMF) (2010)
stated that economic growth in the Latin America and Caribbean
region was projected to rise at 4% in 2010 and 2011, with Brazil, Chile,
Mexico, and Peru accounting for the majority of this predicted growth.
In contrast, European recovery has been slower at less than 2%. (See also
Bernal-Meza and Fryba-Christensen in this volume.)
Latin American resilience to the international financial crisis was
shown by the fact that the region achieved the fastest-growing flows of
both inward and outward FDI in 2010 (ECLAC, 2010a). Latin America
is becoming increasingly internationalized and globalized and FDI is
a key part of that process (ECLAC, 2010a). China is now the region’s
third-largest trading partner behind the United States and the EU, and
as previously mentioned could overtake the EU during decade 2010–19
(ECLAC, 2010a, 2011b).
An indication that the United Kingdom, among others, had to think
afresh about the opportunities offered by the region can be seen in a
speech given by the UK’s Foreign Secretary, William Hague, in November
2010 when he called for the UK government to stop underestimating
Latin America and look again at the opportunities for greater political
cooperation and trade and investment (Allan and Edwards, 2011).
Economic relations are a predominant feature of the EU-LAC rela-
tionship. From 2000 to 2009, the EU became the main source of FDI
in Latin America, with 43% of the total accumulated flow. Some 70%
of the FDI flowing from the EU to Latin America originated in Spain,
the United Kingdom, and France. Since the 1990s, Spain has increased
its participation in FDI to the region, reaching almost 50% of the total
from 2000 to 2009, with Mexico, Brazil, Argentina, and Chile as the
main recipients (ECLAC, 2011b).
This investment has paid off for Spain. Armed with historic and
cultural links, Spanish corporations have been able to draw profits
from Latin America in significant proportions. In 1999, after a decade
of an aggressive strategy of purchasing newly privatized corporations,
the region accounted for 65% of the total overseas investment efforts
of Spanish enterprises; and by 2005, corporations such as BBVA and
Telefonica Mobiles obtained almost 50% of the profits from Latin
America (Santiso, 2008). Spain has also used its strength derived from
Latin American markets to acquire European enterprises.6 Spanish
involvement has had significant effects that extend beyond the board-
rooms: in 2005, Telefonica was the second-largest taxpayer in Brazil
($2.8 billion) and the fourth-largest employer with 44,000 employees
(Santiso, 2008).
However, since 2010, the levels of European FDI in Latin America have
contracted more than for the United States (ECLAC, 2011b). In 2010
ECLAC (2010a) reports that the United States was the main investor
in the region, accounting for 17%, followed by the Netherlands (13%),
China (9%), and Canada, Spain, and the United Kingdom (4% apiece).
In 2010 outward FDI from the Latin American and Caribbean countries
nearly quadrupled over 2009 figures, amounting to $43.108 billion and
reflecting the strong growth of trans-Latin firms. The higher flows of
outward FDI in 2010 stem primarily from firms in Mexico, Brazil, Chile,
and Colombia, which together accounted for more than 90% of the
region’s outward FDI in 2010. Much of this process has taken place in basic
industries (hydrocarbons, mining, cement, pulp and paper, and iron and
steel), mass consumption manufactures (food and beverages) and some
services (energy, telecommunications, air transport, and retail commerce).
A significant proportion of Latin American and Caribbean transnational
investments are directed at neighboring countries (ECLAC, 2010a).
This is a new world in which emerging multinationals are challenging
large OECD-based corporations and forcing them to adapt (Santiso, 2008).
In 2005, Cemex performed one of the largest transactions ever carried
out by a Latin American firm with the acquisition of the UK’s RMC for
close to $6 billion. After this, sales in Mexico dropped to only 21% of
the firm’s total sales, behind sales in the United States (27%). Sales in
Europe, which in 2005 was Cemex’s largest market, represented nearly
40% of total sales (Santiso, 2008).
Trade agreements
In the early 1990s, there was an acceleration of trade between both
regions, especially in Latin American and Caribbean imports of
European goods. However, the economic and financial crises affecting
the countries of the region during the second half of the decade
hindered this dynamism (SELA, 2011).
The EU is currently Latin America’s second-largest trading partner
after the United States. Central American exports to Europe almost
doubled between 2000 and 2006, from $3.6 billion to $7.2 billion,
whereas exports to the United States grew by a more modest 20%
(ECLAC, 2008). The EU accounts for approximately 16% of the Andean
community’s trade with the world and, as such, is this group’s second-
largest trading partner after the United States. Andean countries export
twice as much to the United States as to the EU; however, exports to the
European market grew faster during the period 2000–6 than those to
the United States.
Trade flows between the EU and Mercosur are double those between the
EU and the Caribbean, Central American, and Andean countries put
together. Mercosur trades more with the EU than with the United States:
about one-quarter of total Mercosur exports are destined for the EU and
one-quarter of its imports come from that source (ECLAC, 2008).
During the fifth EU-LAC Summit in May 2008, the participants
reaffirmed that they would “actively pursue” the negotiation of associa-
tion agreements, with a target for concluding them the following year
(ECLAC, 2008). Association agreements go beyond market access to

goods and services. The EU has always emphasized economic cooperation
as an integral part of an association process and has consistently pro-
vided political and financial support to further integration in the region
(ECLAC, 2008). A political dialogue and cooperation agreement had
already been signed between Europe and Central America in 2003, which
can be seen as a precursor to the negotiations on an association agree-
ment that started in 2007 between the Central American Community
and the EU (Smith, 2008, p. 93). In April 2009, Nicaragua unilaterally
withdrew from the EU and Central American negotiations, echoing
a similar decision by Bolivia in the case of the EU and Andean nego-
tiations under the influence of the Venezuelan president, Hugo Chavez
(Buck, 2009). The EU and Central America were nonetheless able to
conclude the negotiations on an Association Agreement in 2010, which
includes a free trade agreement.7
The sixth EU-LAC Summit held in Madrid in May 2010 had particularly
significant outcomes in the area of trade. Even if the negotiation of the
agreement between the EU and Mercosur have proved complicated,
those on an Association Agreement between the EU and the five coun-
tries of the Central American Common Market (CACM) plus Panama
were successful, as were those on a comprehensive trade agreement
between the EU, Colombia, and Peru (ECLAC, 2010b). These also follow
in the footsteps of the October 2008 agreement between the EU and 15
countries of the Caribbean that are members of the Caribbean Forum of
African, Caribbean, and Pacific States (CARIFORUM) and the association
agreements in place with Chile and Mexico (ECLAC, 2010b).
Negotiations for an inter-regional Association Agreement between
the EU and the Mercosur were launched in 1999. However, they
were suspended in October 2004 and did not begin again until 2010
after the Madrid EU-LAC Summit relaunched them. The standstill
had been caused largely by disagreements over the EU’s agricultural
subsidies and access to Mercosur markets for manufactures and services
(ECLAC, 2008). These issues continued to plague negotiations during
2011, with reports suggesting that the European Parliament—which
has increased responsibilities in external relations under the Lisbon
Treaty—was sensitive to pressures from the EU farming lobby, while
Argentina’s “protectionist policies” were also seen to be an obstacle to
normal trade (MercoPress, 2011).
These negotiations have been much more complex than those that
the EU has entered into with other Latin American and Caribbean
countries (ECLAC, 2010b). Despite the continuing difficulties, one
element that may precipitate greater progress in the negotiations is the

sustained increase in China’s share of the region’s foreign trade, which
may help to speed up the process.
The social dimension
The EU-LAC relationship has long covered other issues, including

climate change, social inequality, migration, drugs, energy, and aid.
High-level dialogues have intensified on most of these issues, as illus-
trated by the declarations made at the 2008 Lima and 2010 Madrid
Summits, respectively.
Migration flows, for example, and the remittances they generate,
constitute a major factor in the relationship between Europe and Latin
America. In 2005, leaders at the Ibero-American Summit approved the
Declaration of Salamanca, which established international migrations as a
central topic of the Ibero-American Community (Ibero-American General
Secretariat, 2008). Far from being an Ibero-American issue, migration
between Latin America and Europe involves a wide set of countries.
In 2007, LAC countries received $66.5 billion in remittances from
the United States, Europe, and Japan—more than they received from
FDI and ODA combined. Approximately 15% of the remittances come
from Western Europe—in particular, Spain, Italy, Portugal, and the
United Kingdom. These are important for the livelihoods of many Latin
Americans, particularly for the women who are the main recipients and
who spend most of the funds on basics such as food (Mendizabal, 2008).
Remittances to the region slowed during the economic downturn and
the credit crunch has taken its toll (see also Orozco’s chapter in this
volume).
But rather than focus on the economic aspect of the migratory flows
toward Europe, Latin American diplomats point to the effect that this
has on political and cultural relations between both regions. Latin
Americans in Europe, and in particular in Spain, have benefited from
policies such as the Double Nationality Law in Spain that has facilitated
their integration and the formalization of their situation.
Latin American migrants are considered culturally closer to Western
Europe than many of the migrants coming from the new member-states
of the EU. As the European population ages, the potential role that Latin
American migrants could play increases when one takes into account
the closer cultural heritage of the migrants with the host country such
as language and customs. A more official and formal arrangement is
required to facilitate economic migration and protect migrants.
These common or shared sets of values have not, however, always

translated into an improved relationship. Doing business in Europe
is still difficult and an unattractive prospect for Latin Americans.
Migratory difficulties, high and cumbersome barriers to travel through
Europe, and a new wave of protectionist policies have contributed to
the development of this perception. Latin American diplomats in Spain
have noticed how policies and attitudes toward migrants have shifted
dramatically since the attacks on the Madrid transport system in 2004,
and the increase in migrants from North and sub-Saharan Africa. These
changes are also reflected in an increase in ODA to Africa.
Development cooperation
The EU (i.e. the European Commission for the EU and the member-
states) remains the main donor in the Latin America and Caribbean
region. The total amount for the 2007–13 period for Latin America is
estimated at a2.7 billion (European Commission, 2008). In addition, the
European Investment Bank (EIB) for the 2007–13 period is authorized to
lend up to a2.8 billion to Latin America.8
Central America receives the greatest part of EU assistance, which is
focused on rural development, disaster prevention and reconstruction,
social cohesion and regional integration, as well as programs aimed at
strengthening democracy and human rights (ECLAC, 2008). The EU is
also the largest donor in terms of development and cooperation aid to
Mercosur countries (European Commission, 2008).
The European Commission attempts to support Latin American sustain-
able development across a number of projects and initiatives. The
following examples focus on regional activities as opposed to the work
of the European Commission in specific countries of the region.
In 2007, the EU adopted a new Strategy on Aid for Trade with the aim of
assisting developing countries to integrate into the global trading system
and to use trade as an instrument for poverty reduction (EEAS, 2011). In
2009 the European Commission approved a new cooperation program
with a a6 million budget on anti-drug policies, COPOLAD, which aims
to contribute to improving the coherence, balance, and impact of
anti-drug policies in Latin America.9 In 2010, the Euroclima, an environ-
mental program with a total EC budget of a5 million, was launched with
the aim of encouraging bi-regional environmental cooperation with a
special focus on providing decision-makers and the scientific commu-
nity with a better understanding of the consequences of climate change
(EEAS, 2011).
The Latin American network of knowledge centers in the water sector

(RALCEA) was unveiled in 2010 with a total foreseen budget of a2.5 million
with the objective to foster information-based policy and to promote
South-South cooperation on capacity development in the water sector by
supporting the development of a network of knowledge centers.10
The Latin American Investment Facility (LAIF), officially launched
in May 2010, is designed to mobilize additional resources to stimulate
investments in the areas of interconnectivity and infrastructure, social
and environmental sectors, and private-sector growth. The facility oper-
ates in the area of environmental protection by promoting investments
that will improve sound management of environmental resources and
reduced environmental degradation. It will also ensure that low-carbon
and resource-efficient technologies and practices have a strong presence
in all of its focus areas, including interconnectivity and infrastruc-
ture, social and environmental sectors, and private-sector promotion
(EEAS, 2011).
Finally, in May 2010 the creation of the EU-Latin America and
Caribbean (EU-LAC) Foundation was announced at the Madrid Summit,
with the European Commission contributing a3 million up to 2013. The
EU-LAC Foundation contributes to the strengthening of the EU-LAC
partnership process by involving participation and inputs of civil
society to encourage further mutual knowledge, understanding, and
visibility between both regions. Launching activities and fostering new
networking opportunities among civil society actors will be the basis of
the foundation’s tasks.11
The level of collaboration between the EU and regional development
bodies is high. Europe plays key roles in the Inter-American Development
Bank (IDB), the World Bank and the IMF, the Caribbean Development Bank,
ECLAC and the relevant UN agencies. As the EU’s partners in European
development cooperation policy, these institutions contribute to meas-
ures such as financing projects of mutual interest, combating poverty,
and strengthening democracy (European Commission, 2006b). While the
European Commission, through multilateral funding, is meant to offer a
more coherent and consistent strategy for development cooperation, there
have been clear differences and interests among the EU member-states. The
poverty focus of the United Kingdom or the Nordic countries’ demands for
human rights promotion, for example, have to some extent been under-
mined by the historical association of Spain and its cultural and economic
development interests (Dearden, 2008).
However, as Latin America has become an increasingly important
economic partner, ODA appears to be less of a necessity. As LAC is
now a middle-income region, European countries are redirecting

resources elsewhere in accordance with attempts to eliminate extreme
poverty in other regions. This shift is reflected in changing and lower
levels of commitment to development toward the region among
some key European donors. The UK’s Department for International
Development (DFID), for example, has almost completely withdrawn
from the region and has diverted much of its resources to the Middle East
(Navarrete, 2004), despite DFID’s partners in the region expressing their
concern about the loss of a critical player, given its commitment to a
progressive pro-poor policy. In 2007 the Swedish government presented
a plan to reduce from 70 to 33 the number of countries to which it
gives bilateral aid. Most of those excluded are in Asia and Latin America
(Malamud, 2008).
Not all the other traditional development partners are showing a
similar approach. In the case of Spain, aid for development cooperation
for Latin America has doubled, making Spain the main donor in the
region along with the United States (Gratius, 2010).
Reductions in ODA, for example, often mean similar reductions in the
budgets that civil society organizations allocate to the region. This has
equally negative consequences for Latin America’s civil societies, which
have to increase their own bilateral efforts with a number of internat-
ional NGOs or donors. The consequence of this weaning-off process
has the added effect of limiting the development policy debate and
expected outcomes. Fewer development partners translate into fewer
development options and the focus on a small number of policy issues
of direct relevance for those countries whose budgets remain high.
The EU’s support for regional groupings in Latin America can some-
times be seen as a reaction to US policy in the region (Smith, 2008).
When former US President Bill Clinton, for example, invited Latin
American countries to the Summit of the Americas in 1994, the
European Council simultaneously committed itself to negotiating the
EU-Mercosur framework agreement.
Malamud (2008) argues that Europe lacks a valid policy for Latin
America and an increase in the “bilateralization” of the relationship—
on both the Latin American and the European sides. For Latin American
countries closely aligned to the domestic and foreign policy interests
of their European counterparts, this bilateral shift offers important
opportunities in terms of economic, political, cultural, and migratory
factors.
This bilateral approach might be further analyzed by considering the
different interests of the key European players in the region. According to
Roodman (2010) and the Center for Global Development Commitment

to Development Index 2010 (Roodman, 2010), not all of the European
countries focus their attention on the same issues. Spain’s focus on
migration is significantly higher than for any other European country
considered by the index. The United Kingdom, on the other hand,
spends less on migration and more on the environment than Spain.
Conclusion
This chapter has attempted to expose some of the complexities of Latin

American relations with Europe by highlighting the contemporary politi-
cal, economic, cooperative, and social spaces. A greater understanding
is required to establish which of these spaces are the most effective in
advancing elements of the Strategic Partnership.
The partnership between Latin America and Europe is of considerable
significance. The level of political capital invested, aid, trade and invest-
ment flows and cultural ties clearly demonstrate its importance. However,
given the complexities and intricacies of bi-regional and bilateral rela-
tions, a more nuanced understanding of the relationship is required. The
role of the new EU-LAC Foundation could therefore play a pivotal and
constructive role.
The declaration that emerged from the 2010 Madrid Summit enti-
tled “Towards a new stage in the bi-regional partnership: innovation
and technology for sustainable development and social inclusion”
details the advances made in the Strategic Partnership as discussed ear-
lier in this chapter, including the decision to relaunch the EU-Mercosur
negotiations on the Association Agreement (Council of the EU, 2010).
The extensive agenda outlined in the declaration clearly demon-
strates the incredibly ambitious nature of the partnership. This in part
helps to explain one of the fundamental strengths and weaknesses
of this bi-regional relationship: it is very positive that both regions are
in the position to adopt such as an ambitious agenda covering myriad
topics such as multilateralism and global challenges, including climate
change, human rights, narcotics, migration, the eradication of poverty,
and the reform of international financial institutions.
Indeed, over the next decade there are considerable opportunities not
only to consolidate but also to expand the Strategic Partnership. With
Mexico hosting the 2012 G20 Summit and Brazil the Rio⫹20 United
Nations Conference on Sustainable Development, the common agenda
between Europe and Latin America can continue to find space to put
into operation the ambitious objectives agreed on in Madrid in 2010.
The potential to share best practices on social protection, conditional

cash transfers, and migration should not be overlooked. With the rise
of Brazilian development assistance there are also further opportunities
to triangulate development assistance between the new donors and
traditional actors in Europe with recipient countries. The potential for
both regions to collaborate on low emissions, sustainable development
strategies, particularly on clean energy, natural resource management,
and adaptation to climate change, could become key tenets of the
partnership.
Yet it comes as no surprise that to deliver on all these issues is indeed
a complex challenge and provides critics of the Strategic Partnership
with an easy target when all the promises are not delivered on. For this
reason, we have attempted to chart a more sober path to understand
better the complexities of this partnership by highlighting not only
the diversity of relations between both regions but also a number of
endogenous and exogenous factors which play important roles in deter-
mining the outcome of the partnership.
At the international level, the United States and China, and to a lesser
extent Russia, India, and Japan, complement and compete with European
interests in Latin America. At the same time, with the rise of the emerg-
ing economies, LAC countries such as Brazil are beginning to compete
with one another in Europe. Following the period under former US
President George W. Bush, which saw hemispheric relations deteriorate,
the Obama administration is attempting to inject fresh dynamism into
US-Latin American relations. It is worth noting that the US agenda in
Latin America—particularly security, climate change, migration, clean
energy, and democracy—is largely compatible with the European agenda,
which would suggest that greater collaboration between the three actors
is required.
The rapid expansion of China in Latin America represents growing
competition to the shared objectives of the EU-LAC Partnership. The EU
is realizing that the new presence of China in Latin America has caused
a profound change in this partnership. Europe is no longer something
that the countries of South America need, but rather an option they can
pursue or not (Maihold, 2007).
Meanwhile, several Latin American countries have adopted a more
assertive and autonomous stance in their foreign policy (Gardini and
Lambert, 2011). This illustrates to some extent the absence of a clear
Latin American position vis-à-vis international global partners and
reflects a clear asymmetry and heterogeneity within Latin America
(Maihold, 2008).
Latin American countries are still very actively pursuing extra-

regional trade negotiations. This can create strains within sub-regional
groupings, as has been demonstrated by the negotiations between
the Andean Community countries and the United States and the
EU. Certainly several Latin American countries negotiate individually
with extra-regional partners with results at odds with their obligations
under regional or sub-regional schemes (ECLAC, 2010b).
Within Europe, there are difficulties to developing a more cohesive
policy toward Latin America. Latin American diplomats in Brussels
reported that a clear change in focus can be observed with the accession
of new member-states to the EU. This has contributed to a process that
began with a significant increase in attention being given to the Middle
East and Africa. Latin American governments will need to establish a
greater and more effective presence in Brussels in order to participate
successfully in the sophisticated and highly competitive European
lobbying system (Malamud, 2008).
Within this highly complex mosaic of bi-regional relations, it is
unavoidable that the EU-LAC partnership can at times be confusing
and contradictory. However, the EU-LAC relationship does represent
the most progressive and constructive bi-regional platform to advance
a number of regional and international challenges in this period of
uncertainty and opportunity.
Notes
1. The authors would like to acknowledge the helpful feedback on early drafts
by Dr Geoffrey R Edwards and Dr Karl Buck.
2. Video of Catherine Ashton and the Press Conference at the 2010 EU-LAC
Summit in Madrid can be accessed at http://eeas.europa.eu/la/index_
en.htm.
3. In 1986 the Rio Group was set up by Argentina, Bolivia, Brazil, Chile,
Colombia, Costa Rica, the Dominican Republic, Ecuador, El Salvador,
Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay,
Venezuela, and a CARICOM representative.
4. European Commission (2011a) http://ec.europa.eu/trade/creating-opportu
nities/bilateral-relations/regions/mercosur/. Accessed on June 10, 2011.
5. Europa (2010a) http://europa.eu/lisbon_treaty/glance/index_en.htm. Accessed
on May 9, 2010.
6. For example, Telefonica purchased O2; and the Grupo Santander bought
Abbey, both in the United Kingdom.
7. European Commission (2009) http://trade.ec.europa.eu/doclib/press/index.
cfm?id=150&serie=137&langId=en. Accessed on July 22, 2009.
8. European Investment Bank (2011) http://www.eib.org/projects/regions/ala/
index.htm. Accessed on May 13, 2011.
9. European Commission (2011b) http://ec.europa.eu/europeaid/where/latin-

america/regional-cooperation/copolad/index_en.htm. Accessed on July 6,
2011.
10. European Commission (2010) http://ec.europa.eu/europeaid/where/latin-
america/regional-cooperation/ralcea/index_en.htm. Accessed on April 2, 2010.
11. Europa (2010b) http://europa.eu/rapid/pressReleasesAction.do?reference=
MEMO/10/197&format=HTML&aged=1&language=EN&guiLanguage=en.
Accessed on May 25, 2010.
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11
China and Latin America: What
Sort of Future?
William Ratliff
The explosive expansion of China into Latin America and the Caribbean
(LAC) during the early years of this century has raised many hopes and
some fears that would have seemed unthinkable a few decades ago.
China’s metamorphosis into becoming the world’s largest and most
rapidly developing economy is manifest in its soaring bi-lateral trade,
its foreign direct investments (FDI), and the scope of political and com-
mercial visits made in both directions across the Pacific. China will be a
challenge for Latin Americans, but it can be constructively transforma-
tive in most countries if people and their leaders take responsibility for
making it so.
In November 2008 China put Sino-LAC relations in a broad “strategic”
perspective by releasing a Policy Paper on Latin America and the Caribbean
(Policy, 2008), following similar papers on the European Union (EU) in
2003 and Africa in 2006. In this document China proclaimed that the
entire region is of “strategic” importance to the People’s Republic of
China (PRC), meaning mainly that sales in the region, and particularly
the purchase of natural resources, are becoming critical in Beijing’s eyes
(Xiang, 2008, p. 52). The Central Committee of the Chinese Communist
Party (CCP) editorialized on November, 17 that the Policy Paper signaled
a “new chapter of China-Latin America relations.” Chinese Latin
Americanists noted that for the first time the Chinese government was
looking at Latin America as a whole in “strategic” terms (Hsiao, 2008;
Jiang, 2008b). The Chinese Foreign Ministry’s Latin America Bureau
chief Yang Wanming reported that the Policy Paper was put together dur-
ing an extended period of time after informal consultations with Latin
American leaders (Hsiao, 2008). In early 2009 a foreign affairs expert at
the China Institute of Contemporary International Relations wrote that
a multi-pronged foreign policy program like that outlined in the Policy
207
208 China and Latin America: What Sort of Future?
Paper would enable China to “seize the high vantage point [in handling]
the future world order.” He added that China wanted to “show its
hand early” in international relations so as “to send out China’s voice,
maintain China’s image, and extend China’s interests” (Lam, 2009b).
Since it is impossible to be “up-to-date” on breaking news in a book
devoted to current Latin American responses to globalization, I often
use the Policy Paper as a framework for my analysis, though moving
beyond its sometimes propagandistic yet instructive content. I begin
with a focus on Chinese views, interests, and activities in Latin America
and then move on to what many Latin Americans think about China’s
rapid expansion in the region and the PRC’s actual or potential impact
on security, politics, economics, and cultures in the region. In the end,
I attempt a more holistic look at the interrelationship between these
two distinct regions.
China’s foreign relations and the Policy Paper
In his report to the 17th Congress of the CCP in October 2007, President
Hu Jintao stressed that “scientific development and social harmony” are
essential to the construction of “socialism with Chinese characteristics”
and China’s international relations (Hu, 2007). China “is ready to carry
out friendly cooperation with all countries on the basis of the Five
Principles of Peaceful Coexistence,” says the 2008 Policy Paper. Many
Chinese officials today imply incorrectly that PRC foreign policy since
1949 has always been based on the “Five Principles” that gained inter-
national attention in 1955 when then-Premier Zhou Enlai advanced
them at the Asian-African Conference in Bandung, Indonesia. The five
principles are: mutual respect for each other’s territorial integrity and
sovereignty; mutual non-aggression; non-interference in each other’s
internal affairs; equality and mutual benefit; and peaceful coexistence.
These are principles that generally appeal to governments and peoples
who have experienced colonialism and imperialism, including Latin
Americans. But as Professor Zhao Suisheng notes: “Chinese leaders
believe in a set of principles in international affairs, but consideration
of its national interest causes Beijing to make pragmatic compromises”
(Zhao, 2006, p. 15). More bluntly, Edward Friedman writes that the CCP
“tends to act on narrow notions of political realism packaged in a public
relations discourse of eternal continuities and unchanging, principled
behavior” (Friedman, 2010, p. 1).
As the Cold War was ending, Deng Xiaoping laid out a “low profile”
approach to foreign policy in China, sometimes termed “tāo guāng yăng
William Ratliff 209
huì,” meaning to “hide brightness” and “nourish obscurity.” Though

these terms may seem conspiratorial to many foreigners, they largely
meant that China would emphasize developing foreign trade but
would otherwise avoid foreign entanglements so that leaders could
focus on developing the domestic economy. But Chinese policy has
become much more assertive in recent years, made possible by China’s
“fast-growing economic and military might but also the decline of the
US’s international influence in the wake of the Iraqi and Afghanistan
crises and the meltdown of its financial institutions” (Lam, 2009c).
Also, the United States and the EU have increasingly urged China to
become more active in “resolving” such crises as Iran, North Korea, and
the global financial meltdown. In the end, China intends to become
a major force—perhaps the major force—in the world, though this is
played down for now by its political leaders.
The foundation for the PRC’s recent expansion into Latin America and
the world is China’s stunning rise from nearly two centuries of internal
chaos and international occupation and humiliation. The recovery is
particularly manifest in economic statistics that compare China’s con-
ditions in 1978, when market-oriented reforms began, to conditions
30 years later. According to President Hu, during those years China’s
gross domestic product (GDP) grew from 1% of the world economy to
more than 5% and its share of global trade increased from less than 1%
to approximately 8%. Thus China seems to have demonstrated that
sustained, rapid economic development under elitist leadership, with
heavy international involvement in investment and trade, can both
dramatically reduce poverty levels and improve living conditions for
a majority of a nation’s people. China’s experiences attract attention,
as do those of other East and Southeast Asian countries, because they
stand in stark contrast to the absence of such sustained growth in most
of Latin America (Arias, 2011). And China’s success has benefited others.
The UN’s Economic Commission for Latin America and the Caribbean
(ECLAC) reports that Latin America’s relative escape from the worst of
the global financial crisis was due in significant degree to trade with
China (Xinhua, 2009; Fundação, 2010).
But even though links to Latin America have burgeoned in the past
decade, they lacked the kind of focus PRC leaders consider optimal. The
Policy Paper is an effort to provide such a focus by outlining goals, rela-
tionships, and programs. Economics is important, but so are expanding
China’s political stature and ability to influence world developments.
For the first time China formally proclaimed its intention ‘to build
and develop a comprehensive and cooperative partnership featuring
equality, mutual benefit and common development’ in Latin America.

This is how Hu addressed the Peruvian Congress on November 20, 2008
(Hu, 2008a). The Policy Paper sets out four broad goals promoted by
policies and ties in the following fields: political, economic, cultural-
social, and “peace, security and judicial affairs.” The goals enumerated
are (1) to promote mutual respect, trust and “understanding and
support on issues involving each other’s core interests and major
concerns;” (2) to deepen economic cooperation that benefits both sides
[“win-win”], with China and Latin American nations each leveraging
“their respective strengths;” (3) to expand cultural and people-to-people
links that will “promote development and progress of human civiliza-
tion,” and (4) to insist on the “one-China principle”—that the island of
Taiwan, though now called the Republic of China (ROC), is a province
of the PRC—as “the political basis” for cooperative relations. This is the
current short version of the aforementioned Five Principles and it is not
surprising that these goals are attractive to many in Latin America.1
Latin American reactions to the PRC
Latin Americans have many reasons for looking favorably on the global
emergence of the PRC, but there are some concerns as well, many of
which are discussed later. Perhaps the main incentives are:
• Many governments and people in LAC are glad to have an alternative

to Washington after a century of strong US political, economic, and
even military involvement in the region. US leaders and people do
not take LAC as seriously as they do Europe, Asia, or the Middle East.
And yet the US economic links are deeper in Latin America than
in any of the aforementioned regions, as are the rapidly deepening
demographic ties. Thus, in the past decade, perceived national inter-
ests and globalization generally have prompted Latin Americans to
develop economic and political relations actively with other coun-
tries, including European and Asian nations and, above all others,
China. A move toward greater independence from the United States
has brought also the Bolivarian Alternative for the Americas (ALBA),
a regional trade organization founded by Venezuelan President Hugo
Chavez with a distinctly anti-US flavor, and in 2010 the Community
of Latin American and Caribbean States, which excludes the United
States and Canada. In spite of a decline in US acceptance in parts of
LAC, regional polls show fairly close “approval” ratings for the United
States and China (Latinobarómetro, 2008; Oppenheimer, 2009).
William Ratliff 211
• All countries are eager to derive economic advantages from the PRC,
though not all of them reap them equally, as discussed below, and a
major part of those polled in Argentina (52%), Brazil (62%), and
Mexico (41%) considered China’s economic growth good for their
country (Pew, 2010). China has become an important trading partner
for most Latin American countries seeking to expand exports of
primary products and commodities as well as of some manufactured
goods and services, and some Latin American businesses have tried
with limited success to build markets for their goods in China. The
Latin American hope is that Chinese trade and investments will feed
historically unstable economies and enable them to prosper without
the ups and downs of the past. Today the economic growth rate in
much of Latin America is higher than it has been for many years and
LAC has suffered less from the economic crash into 2011 than most
other regions, in large part because of trade with the PRC.
• Most Latin Americans welcome Chinese FDI in infrastructure, and in
exploration for and production of key resources, as well as economic
and technical assistance in varied fields, especially when attached
with fewer “strings” than traditional US assistance, though by no
means without strings, as I discuss below. However, the record of
Chinese investment from 2000 to 2010 has been mixed (see below).
• Some Latin Americans may look increasingly to China for ideas and
assistance in governance, that is, how to draw up and implement a
development plan under elitist leadership, which has for centuries
been the norm in Latin America, as it has been, usually in a much
more authoritarian form, in China. This Chinese (or Vietnamese)
“model” has become more attractive to some Latin Americans since
the somewhat unsuccessful “Washington Consensus” market reforms
in the late twentieth century—particularly since the global financial
crisis was sparked in 2008 by a profligate and irresponsible United
States and developed Western world generally. To many in Asia and
Latin America, the generalized self-interested abuse committed by
Western institutions crippled these institutions’ credibility.
• Many Latin Americans feel some degree of kinship with China
because, like LAC, it was occupied by Western nations before
recovering its independence. But this kinship is apparent only given
contrasting histories, institutions, and cultures.
The breakdown of “winners” and “losers”—economically, politically,

and culturally—will shift over time with changing conditions in
China and the world but, above all, according to how wisely the Latin
Americans take advantage of—or due to their own decisions and actions
are abused by—China’s presence.
Early Sino-Latin American links
Any survey of Chinese relations with Latin America should at least mention
four earlier real and/or alleged links between the regions. First, roughly ten
thousand years ago those who are now Native Americans migrated from
Siberia or even China across the Bering Land Bridge, or traveled by sea,
into the western hemisphere. Second, there are the possible “discovery”
of the Americas by a sixth-century Buddhist monk named Hui Shen on a
trip to Fusang, as described in the sixth-century Chinese histories, or by
a Ming dynasty fleet in the early fifteenth century, more than half a
century before Christopher Columbus. These possibilities are much more
widely accepted in China than in the West. Third, there is the trade that
began in the early Spanish colonial empire and continued for more than
three centuries by means of the Manila Galleons (Schurz, 1939).
Finally, there was the confluence of interests in the mid-nineteenth
century that brought the first formal bi-lateral relations between the
Chinese and several Latin American governments. This occurred mainly
as a result of two developments, one in China and the other across the
world. First, in China millions of people were increasingly being ravaged
by chaos, poverty, and death, tens of millions dying in the Taiping
Rebellion (1850–64) alone. This resulted from domestic decay and con-
flict as well as from foreign invasions. Second, there was a search for
subservient labor in the Americas, beginning with the first Chinese taken
to Trinidad by the British in the first decade of the nineteenth century.
Several decades later the trade became serious when Latin American elites
sought plantation workers to replace the by-then outlawed slaves. Thus,
in 1847, began the importation of several hundred thousand indentured
laborers from southern China. Historically, Chinese Imperial govern-
ments had been indifferent to the lives of Chinese who went abroad
because in the words of historian Edward Dreyer: “Overseas meant out of
mind, as far as official China was concerned” (Dreyer, 2007, p. 185). The
Qing dynasty ignored the brutalizing of its nationals in Latin America for
several decades, but by 1874 abuses had become so bad that Beijing was
forced to establish formal relations with several countries to negotiate
better treatment for Chinese workers. The first country was Peru and then
Brazil, Mexico, Cuba, and Panama. In most cases these early “overseas
Chinese” laid the foundations for subsequent Chinese communities in
the Americas (Hu-Dehart, 1995; Meagher, 2008). In the 1930s and 1940s
William Ratliff 213
the Republic of China on the mainland under Guomindang leadership

opened relations with additional countries. The first country to recognize
the PRC, which was established in 1949, was Castro’s Cuba in 1960 and
Allende’s Chile in 1970.
The stages of PRC relations with Latin America
Chinese-Latin American relations are best broken down into four

periods. The first, 1949–60, was anti-United States but broadly concili-
atory toward most other countries and groups, with active programs of
“people’s” or “cultural” diplomacy to cultivate contacts. A few Latin
Americans—including political, labor, and cultural personalities—almost
immediately began traveling to China and goodwill increased through-
out the decade, until China turned in on itself during the Great Leap
Forward and particularly the Cultural Revolution, when links virtually
stopped (Ratliff, 1969). During the second period, the following decade,
China urged the overthrow of an increasing number of Latin American
governments by guerrilla warfare, the antithesis of the Five Principles.
In the third period, from the early 1970s until Mao Zedong’s death
in 1976, the PRC had a belligerent posture toward the Soviet Union, a
pragmatic relationship with Washington, and reduced its support for
guerrilla warfare in Latin American. Prior to US President Nixon’s trip
to China in 1972, only few LAC governments had established formal
relations with the PRC, in large part in deference to US wishes. But the
trip spurred renewed interest among Latin Americans and China set up
diplomatic relations with a number of Latin American governments,
including the military regimes in Chile and Brazil, the latter demon-
strating Beijing’s political pragmatism (Ratliff, 1976, pp. 7–26, 87–98).
The fourth period, emphasized here, favored cooperation with not
only Latin American states but also with the United States. China began
with reforms under Deng Xiaoping in 1978 and has continued ever since,
accelerating them considerably in the mid-1990s and during the 2000s
(Ratliff, 2009a). Today, cultivating “soft power,” in addition to economic
links, is an essential part of the Chinese foreign policy “package” that is
welcomed, with reservations, almost everywhere in the western hemi-
sphere (Ellis, 2011).
Political relations in Latin America
More than two dozen Latin American chief executives from the entire
political spectrum visited China between 2001 and 2011. Top Chinese
leaders have also visited Latin America, starting with Premier Zhao
Ziyang (to Mexico, 1981) and President Jiang Zemin (Brazil and Cuba,
1993), and lately President Hu Jintao in April 2010. A turning-point
occurred in November 2004 when the PRC president led a large dele-
gation of PRC officials and businessmen to Brazil, Argentina and on
to the 12th Asia-Pacific Economic Cooperation (APEC) summit in
Santiago, Chile. In September 2005 the president took a smaller group
to Mexico. While other political, economic, and military officials toured
Latin America over the next couple of years, the stakes shot up again
in November 2008, when Hu participated in the first round of the
G20 global financial crisis talks in Washington before visiting Costa
Rica, Cuba, and Peru, and attending the 16th APEC summit in Lima.
Vice-President Xi Jinping, Hu’s successor in 2012, spent two weeks in
Mexico, Jamaica, Colombia, Venezuela, and Brazil in February 2009,
and visited Cuba, Uruguay and Chile in June 2011. Most of these and
other high- and medium-level visits are used to cultivate relations
with chief executives, national legislatures, political parties and leaders
of all persuasions, in and out of power, as well as exchanges with
assorted committees, local governments and international political and
economic organizations.
China has encountered political challenges in Latin America over the
past decade. Beijing’s economic interests are now best served by regional
stability, which is needed to facilitate the efficient implementation of
business contracts. Some Latin American countries largely manifest this
stability, others do not, but China is in touch with them all. Among the
former are three of China’s largest trade partners of recent years: Brazil,
Mexico, and Chile. Among the latter are several overtly anti-US gov-
ernments whose actions sometimes more closely parallel China’s past
than its present. This group is most closely associated with Venezuelan
President Hugo Chavez, who has on occasion been a more outspoken
champion of Chairman Mao than most current Chinese leaders. These
latter countries are usually the ones most torn by political and social
instability, with messianic leaders promising to right long-term wrongs
with populist economic policies that current generations of Chinese
leaders know will fail. While more of these regimes would weaken US
competition in the hemisphere—which China would welcome—they
would also create greater regional instability and complicate the delivery
of resources to China.2 Therefore relations with these individuals, par-
ties, and governments must be carefully calibrated so as to avoid
spill-over friction with the United States. Accordingly, unlike Russia,
China has not overtly challenged Washington by selling sophisticated
William Ratliff 215
arms in Latin America. In fact, in Lima President Hu praised President

George W. Bush for his active efforts to improve Sino-US relations even
though the image of the United States in LAC plunged to its lowest
point in years during the Bush administration.
Cuba and Venezuela are special cases for China. To satisfy long-term
energy needs, China has pledged many billions of dollars for the recov-
ery, refining, and delivery of Venezuelan oil, a Chinese commitment
that began even before Hugo Chavez took power, and China has made
investments in other unstable populist countries (Ellis, 2009, chapter 5;
Pomfret, 2010). The relationship with Cuba began decades earlier and
included 25 years of hostility between the mid-1960s and the late
1980s. But most Chinese leaders appreciate Castro’s diplomatic recog-
nition of Beijing in 1960 and his strong support for the Tiananmen
repression in 1989 (Cheng, 2007; Ratliff, 2004). Though some Chinese
Latin Americanists (but not political leaders) say that Cuba must make
major political changes to escape from its current economic malaise,
they too admire Cuba’s stubborn refusal to give in to Washington.
Chinese analysts also think Cuba has a unique geopolitical importance
to Beijing’s competition with Taipei. Chinese leaders thus support Cuba
in part in retaliation for US support of Taiwan’s breakaway from China.
(Ratliff, 2006b). Thus in recent years China has become second only
to Venezuela in propping up the moribund Cuban state and will help
develop Cuba’s apparently significant oil resources.
“One China” in the Americas

Another very specific PRC goal is promoting the so-called one-China
policy—that mainland China (PRC) and Taiwan (ROC) are both part of
a united China. As of early 2011, 12 of the 23 countries still recogniz-
ing Taipei as the capital of China were in the western hemisphere and
11 were in the Caribbean Basin. For several decades Beijing and Taipei
courted these countries by “checkbook diplomacy,” such as the handing
out of cash payments, favorable trade agreements, foreign aid, or the
construction of sports stadiums. The “one-China” case was restated with
direct reference to Latin America in the 2008 Policy Paper.3 On his visit to
Costa Rica in 2008, Hu launched negotiations for China’s first Free Trade
Agreement north of the Panama Canal.
Since the inauguration of Ma Ying-jeou as president of the ROC in
May 2008, the PRC and the ROC have declared a “diplomatic truce,”
pledging to halt the dollar diplomacy as part of a broader program
of improving cross-strait relations. In December 2008 Hu said Beijing
would discuss reasonable arrangements for the island’s participation
in international organizations, so long as doing so does not create an

impression of “China and Taiwan” as permanently separate entities
(Hu, 2008b). Top ROC diplomats say off-the-record they are sure the
understanding will last only as long as Taiwan is under the leadership
of moderates such as Ma.
Economic relations
Most analysts consider Chinese policy toward Latin America mainly in

terms of trade designed to secure and maintain support for sustained
domestic economic development in China. For geographical and geopo-
litical reasons, Latin America will for some time remain less important
to China than Asia, the Middle East or Africa, unless there is a marked
decline in Sino-US relations, at which time its geo-strategic significance
would greatly increase. Hu devoted much attention to economic issues
in his address to the Peruvian Congress in 2008, as did Xi Jinping during
his trips to Latin America in 2009 and 2011. Hu said China and Latin
America should optimize trade and increase investments. He empha-
sized that both sides should enhance communication and coordination
in their stances on such global issues as climate change, food security,
energy and finance, and multilateral trade. This sounds like a major
theme of interest to China, namely “multilateral trade and financial
institutions and regimes with a view to promoting South-South coop-
eration, bringing about a more just and equitable multilateral trading
regime and ensuring a bigger say and greater role in decision-making
for developing countries in international trade and financial affairs”
(Hu, 2008a). The Policy Paper promises customs cooperation, discussions
with Latin Americans about “ways to relieve their debts as China’s abil-
ity permits,” and economic and technical assistance “without attaching
any political conditions.”
China’s new commitment is most clearly seen in foreign trade, which
grew 13-fold during 1995–2007, and though it dipped to $118.2 billion in
2009 (from $140 billion in 2008), that was a much smaller decline than
that which had occurred between LAC, on the one hand, and the United
States and the EU. Bi-lateral trade surged to $180 billion in 2010. The
three largest trade partners were Brazil, Mexico, and Chile, though the
trade has primarily benefited countries selling raw materials (for example
Argentina, Chile, and in some ways Brazil), which the PRC is mostly
interested in. The greatest imbalance has been Mexico’s $8.4 billion
trade deficit with China. As one US analyst has noted, “Chinese goods
are often dumped without duties into foreign markets and ‘anti-China
William Ratliff 217
sentiments are rising’” (Shambaugh, 2008), as are suits before the World
Trade Organization (WTO). However, by 2010 rising wages in China and
Mexico’s proximity to the United States were leading more companies to
invest in Mexico again (Leveille, 2010; Lange, 2011). China’s purchases
of natural resources and farm goods are expected to help boost Latin
America’s economy from 4% in 2010 to as much as 6% in 2011. Yet The
Los Angeles Times reported in February 2011 that “The loss of manufactur-
ing jobs to cheap Chinese imports is raising howls of protest across Latin
America,” though some in Brazil and other countries acknowledge that
domestic factors in this phenomenon often outweigh international ones
(Colitt, 2011; Kraul, 2011).
China’s first Free Trade Agreement (FTA) in LAC was in 2006 with
Chile, while its highest quantity of trade is with Brazil. China is now the
main foreign trade partner for Chile, Brazil and Peru. China and Peru
concluded an FTA during Hu’s visit in 2008 and negotiations began in
late 2008 for an FTA since concluded with Costa Rica. Typical events to
promote links were the China-LAC Business Conference in Chengdu in
October 2010 and the Latin America-China Entrepreneurs Summit in
Bogotá, Colombia, in November 2009. Like the previous 2008 summit
in Harbin, China, the session involved hundreds of business leaders
from China and most Latin American countries.
It is very difficult to determine the levels of Chinese FDI, loans, and
aid to LAC. Loans are reported on periodically but not all promised
loans are delivered, much to the perplexity of Latin Americans. A mis-
understanding during Hu Jintao’s 2004 visit led to ridiculously high
Latin American expectations with respect to Chinese FDI and thus
disappointment with what actually occurred. Chinese FDI has been a
murky affair in part because of disingenuous Chinese state reports. For
example, PRC officials have said that more than $23 billion FDI had
been placed in Latin America by the beginning of 2007, but a major por-
tion of that went to tax havens in the Caribbean from whence it could
be reinvested in China with preferences Chinese law allows for foreign
firms (Xinhua, 2008b). On the other hand, UN trade official Osvaldo
Rosales stated in late 2008 that Latin American countries have undercut
themselves by not proposing enough properly evaluated investment
projects for China to invest in (Painter, 2008).
Above all, China wants to invest in production, domestic transpor-
tation, and the international shipment to China of Latin America’s
natural resources and commodities. Most Latin American countries of
all sizes have already benefited from Chinese investments, as they did
in the past from UK and US investments in resources and infrastructure,
though the potential liabilities are similar in the end, no matter what is
said now about “no strings.” During 2009–10 some of China’s allegedly
promised loans and investments included $20 billion to Venezuela’s
energy sector, a $12 billion loan to Brazil’s national oil company for
offshore exploration, and up to $20 billion in investments in Argentina,
half each in oil and railroads, in addition to the latter’s access to Chinese
currency to pay for imports without having to use US dollars (Romero
and Barrionuevo, 2009; Hook and Webber, 2010).
There have been many tensions and some outright conflicts between
Chinese business persons working in Latin America and both govern-
ments and local populations, with Chinese entrepreneurs complaining,
for instance, about Latin America’s social instability, corruption, and
inefficiency (Jiang, 2008b). In late 2009 American business consult-
ant John Price ticked off Latin American conditions that concern
Chinese and other potential foreign investors that include corruption,
criminality, tax evasion, labor abuses, fraud, inadequate transporta-
tion facilities, and the lack of security. These problems are particularly
discouraging, incomprehensible, and ultimately perhaps intolerable to
many Chinese, who in recent decades have become used to a more vig-
orous work ethic, more stable national conditions, and a more compliant
and efficient workforce (Price, 2009; Ellis, 2010). Serious tensions are
found from Peru to Argentina due to mining, agricultural, and other
agreements the Chinese have signed with Latin American governments
that locals believe violate their rights and interests and businesses
consider unfair because of contraband, dumping, and China’s subsidies
and undervalued currency (Cordero, 2010; Grain, 2011; Kraul, 2011).
Cultural and social relations
Latin American and Chinese analysts frequently note the challenge of

understanding across cultures. One of the latter wrote that if China
wants other peoples to admire PRC “socialism,” the country “must let
the whole world hear the stories that Chinese citizens have to tell about
their democracy, liberty, human rights, and rule of law” (Lam, 2009a).
Most Latin Americans are not very impressed by what they have heard of
China’s accomplishments in these fields. And China’s actual attention to
improving the PRC image is not as serious as one would expect. Programs
in place and/or reportedly being developed range from cultural exchanges
of people to cooperation in healthcare, social security, disaster reduction
and poverty alleviation, environmental protection, consular services,
media activities and tourism. The longest single entry in the Policy Paper
William Ratliff 219
focuses on cooperation in science, technology, and education, which

are critically important to Latin American nations if they are to become
more productive and competitive in the modern world.
A high-profile international cultural program is named after the
Chinese philosopher Confucius. The program consists of so-called
Confucius Institutes and more informal Confucius Classrooms around
the world, including some in Latin America. These are intended to teach
Chinese language and traditional culture to local residents and to culti-
vate cross-cultural goodwill. The program is a bit embarrassing for the
CCP since Confucius was excoriated by the party under Mao Zedong.4
Confucius is now in vogue, however, for at least two reasons. More
open-minded leaders today recognize that Confucius and his tradition
still have something to say to contemporary Chinese. Also, leaders know
that resurrecting this pre-eminent figure in 2500 years of Chinese history
gives the PRC a cultural legitimacy not conveyed by the CCP slogans.
In January 2011 the program’s (outdated) website reported 282 insti-
tutes and 272 classrooms established in 88 countries as of the end of
2009, while China Daily (December 13, 2010) reported 322 institutes
and 369 classrooms in 96 countries, of which about 25 were not yet
in operation. In early 2011 there were about 22 institutes in ten Latin
American countries: Mexico (5), Peru (4), Brazil (3), Chile (2), Argentina
(2), Colombia (2) and one each in Cuba, Costa Rica, Ecuador, and
Jamaica. There were about eight classrooms, six of them in Chile.5 The
small number of institutes in Latin America shows that communicating
with Latin Americans is still not a high priority in Beijing. The United
States, with half the population of Latin America, has about three times
as many institutes. And in the United States these institutes supplement
the dozens of universities and research institutes with strong China
programs, in stark contrast to Latin America, where serious academic
programs are almost nonexistent. Argentine Juan Gabriel Tokatlian puts
Latin America’s cultural dilemma clearly when he notes that, “one of the
greatest challenges for Latin America is to preserve and deepen demo-
cratic values internally” while taking advantage of the opportunities
offered across the field by the emerging China (Tokatlian, 2008, p. 64).
Peace, security, and judicial contacts
On these issues, the Policy Paper says, “The Chinese side will actively
carry out military exchanges and defense dialogue and cooperation,”
including “in the non-traditional security field,” and assistance with the
development of armies in the region, though details are seldom reported.
Qian Lihua, the director of the Foreign Affairs Office of the Chinese
Defense Ministry, said these exchanges are “entirely normal,” and added:
“China has always firmly adhered to the principle of benefitting regional
and global peace and stability, never targeting any third party” (a clear
reference to the United States) “and never endangering the interests
of other countries” (China Daily, 2008). In late 2008 Xinhua reported
that China had “carried out military exchanges and cooperation” with
18 Latin American countries, especially high-level professional and
academic exchanges and personnel training (Xinhua, 2008c).
Xinhua seldom mentions China’s military links with Cuba, though
many high-ranking Chinese military officers have visited the island
and the training of high-level Cuban military and Interior Ministry
(MININT) officers has been common. A top priority has been training
personnel and providing defense technologies for Cuba’s Air and Air
Defense Forces (DAAFAR), among them DAAFAR chief Pedro Mendiondo
Gomez (Ratliff, 2006a; Horta, 2008; Watson, 2010).
China has become increasingly active in judicial cooperation in
criminal and civil matters, including extradition and combating
transnational terrorism and organized crime (Gill and Huang, 2009).
The PRC has sent police units to Haiti since 2004 to support the UN
Stabilization Mission and began sending support personnel after the
2010 earthquake that devastated the small nation.
What about the United States?
When calculating their national interests, Chinese and Latin American

leaders must factor in the United States, still the overwhelming political
and economic power in the region and adamant about its interests
in the hemisphere. The United States has long verbally—though not
always in action—supported democracy and economic prosperity in
Latin America. But in recent years the United States has so empha-
sized terrorism, illegal immigration, and the drug war that many
Latin Americans believe their main interests have been sidelined.
Washington’s relative popularity in the region during the 1990s was in
important ways reversed in the new millennium for various reasons,
among them the “Washington Consensus” reforms of the 1990s, the
policies of the George W. Bush administration and the collapse of
the US financial system in 2008. President Obama was initially very
popular, but disappointment with his inaction in the region quickly set
in. Some US policies in Latin America, such as the American Service-
Members Protection Act of 2003, themselves worsened relations and
William Ratliff 221
threw open the door to Chinese and other international links in the
region (Watson, 2008).
China’s expansion into Latin America must be seen in the far broader
context of Sino-US and Sino-global relations, as Chinese do more clearly
than most Latin Americans. This is because what China does in Latin
America is a very small part of the PRC’s activities in the rest of the
world. Professor Xiang Lanxin has written that China’s move into Latin
America was “largely motivated by the pressing issue of energy security”
and yet, as important as economic factors are, the “key foreign policy
dilemma” for the PRC around the world is the United States. This makes
geopolitical factors “the primary drivers of Chinese policy toward Latin
America” (Xiang, 2008, pp. 45, 49ff.). At the suggestion of Hu Jintao,
since 2006 the United States and China have conducted high-level
annual exchanges involving each country’s officials dealing with Latin
America. The objectives include helping the two governments antici-
pate possible sources of friction and cooperation.
In March 2008 Thomas J. Christensen, then US Deputy Assistant
Secretary for East Asian and Pacific Affairs, testified in Washington that,
whereas the United States and China have some different perspectives,
“In general, we believe that China’s economic engagement with the
developing world is a net positive for China and for the recipient
countries, which need assistance, investment, trade opportunities,
and expertise” (Christensen, 2008). Today many in US political and
academic circles share this largely positive perspective on Chinese
involvement in Latin America, though some analysts are more cautious
when contemplating the longer term (Friedman, 2010).
Is China a security threat to the Americas?
What do Latin Americans think about China’s possible impact on their

national security? Polls conducted by the BBC in 2004–5 and the Pew
Center in 2010 found most Argentines, Brazilians, and Mexicans had
a negative opinion on China’s military growth (Pew, 2010). Actually
very few Latin Americans who make or influence policy think seri-
ously about China at all (Romero, 2010). Over the past century Latin
Americans have been mainly concerned about the United States.
Most Chinese deny that the PRC ever has or will pursue “imperial”
or “hegemonic” policies across the globe. Though it is true that China’s
historical experience is significantly different from that of the West,
China’s borders have swelled and receded repeatedly during periods
of dynastic strength or weakness since the country was first united in
221 BC. At its weakest, China was ruled for centuries by foreigners. At
its strongest, the country consisted of everything under Beijing’s con-
trol today and much of current Vietnam, Korea, Taiwan, and/or the
northern and northwestern steppes as well as the seas off the eastern
and southeastern coasts of the country. But China has never tried to
colonize beyond this “Greatest China,” even when it had the power and
opportunity to do so in the early fifteenth century. Even when Mao
Zedong called for the overthrow of governments in Latin America, it
was mainly for ideological rather than economic reasons.
Many Western countries have a very different record with Western
colonialism and exploitation (Ratliff, 2007). Relevant examples begin
with centuries of Spanish and Portuguese colonial rule in Latin America
and Asia and continue with Western occupations of many Asian coun-
tries well into the twentieth century, including key parts of China
from the mid-nineteenth to the mid-twentieth centuries. China argues
that the United States is still preventing the reunification of China by
its defense of the “renegade” province of Taiwan. Other examples of
what is perceived as aggressive Western military intervention abroad
are attacks on Kosovo/Yugoslavia by Bill Clinton and on Iraq by George
W. Bush, each with some, but limited international support.
In the end, if we take history as a guide, China and Latin American
countries have more reason to worry about possible US intervention than
Washington does to fear any such actions from China or Latin America.
But a new factor has become important in this equation. While during
most of its history China was politically, economically and strategically
self-reliant and inward-looking, it had no strong incentive to even con-
sider intervention beyond “Greatest China.” This is no longer the case.
The goal of continuing domestic economic growth and prosperity has for
the first time in millennia made China widely dependent on other parts
of the world. This new dependence has been pushing Chinese leaders to
broaden their defensive perspective (Huang, 2009; Ellis, 2010).
Does China threaten economic development and

democracy?
As with the United States, Latin America’s predominant culture derives

from Western European roots. But Latin America’s foundations come
from a paternalistic Iberian branch of Western culture that has been
resistant to political and economic ideas and policies that serve the
material needs and wishes of the people. Latin America was colonized
by Spain and Portugal precisely to be drained of its resources and labor
William Ratliff 223
for Iberian interests, and so it was for three centuries. However, LAC’s
failure to accomplish more than it has during two centuries of inde-
pendence is not the fault of the United Kingdom in the nineteenth or
the United States in the twentieth centuries; and to suggest that China
will be responsible for shortfalls in the future is disingenuous (Harrison
and Huntington, 2000; Wiarda, 2001; Oppenheimer 2005, 2010; Vargas
Llosa, 2005; Arias, 2011). The buck on Latin America’s present and
future stops in Latin America (Mahbubani, 2004, p. 247).6
In response to US concerns about possible Chinese direct interfer-
ences with Latin American politics, a high-ranking Chinese official said
that US concerns are quite “unnecessary” since “a stable and prosperous
Latin America is in the shared interests” of both countries (Slavin,
2006). A high-ranking CCP official told me in 2007 that China is quite
happy with Latin America’s paternalistic political institutions, which
make it easier to honor trade agreements.
Does this mean Beijing will never get involved in Latin American
politics? No, because as links and investments expand amidst world
challenges, China will have an increasing stake in responsible and
responsive Latin American governance so as to guarantee the efficient
delivery of goods and secure the safety of its nationals working abroad.7
Chinese analyst Jiang Shixue has written that even by 2008 Chinese and
Latin American political leaders regularly exchanged “views on strate-
gies to improve governance, the management of party affairs, political
modernization and socioeconomic development” ( Jiang, 2008a, p. 35).
If Latin American leaders ask Chinese advisers about policies and
institutions that seem to produce well in China, or perhaps even how to
maintain domestic order, we may be sure Chinese officials will answer
them—as the Policy Paper says they will—and China’s suggestions are
not likely to stress Western-style democratic solutions.
In the wake of recent economic and political crises in the Western
and Arab worlds, closer ties with China may encourage a system that
puts substantial power in the hands of the state in addition to some
private-oriented persons. But, as always, it is the Latin Americans them-
selves who must decide which way to tilt politically and economically.
Much of LAC has done well in recent years, despite the global finan-
cial crisis, and the region as a whole experiencing an estimated 4% in
PPP-weighted growth during 2010–2011. But for this to become a long-
term blessing Latin Americans must learn to take full advantage of the
good years. Osvaldo Rosales of ECLAC has warned: “The key question
is whether South American countries, especially, are taking advan-
tage of [their] commodity export boom to invest in key areas, such as
infrastructure and education. My impression is that we are not doing

it” (Oppenheimer, 2011). Major portions of LAC are still distinguished
above all by world-record rates of poverty and inequality.
Conclusions
As of 2011, China’s activities in Latin America have been predictable,

coming as they have from a large, rapidly modernizing ancient nation
striving diligently to overcome two centuries of domestic decline and
humiliation, and eager to become a major global player. China’s links
to Latin America thus far have been pragmatic and focused on what
Chinese leaders think LAC can contribute to China’s continuing domes-
tic growth, and increasingly as the years have gone by to enhancing its
global clout. China recovered more quickly than most from the financial
crisis that began in 2008, but big questions remain as to its future. A real
slowing of China’s growth could have a serious impact on China itself
and on Sino-US and Sino-Latin American relations. A long-term down-
turn in China or an eruption of remaining domestic problems—from
terrible environmental pollution to increasing inequality and intense
nationalism—could make currently touted “harmonious” relations con-
siderably less sustainable at home and abroad. One must remember that
Chinese “solutions” to crises are sometimes extreme—only 40 years ago
China was in the middle of the Cultural Revolution—and that leadership
reactions in times of crisis cannot be foretold. In 2011 the PRC cracked
down on perceived “dissidents” and sought to block access to news on
uprisings in the Arab world, fearing that the latter developments might
stir up similar actions among Chinese.
But assuming (1) substantial international recovery from the finan-
cial crisis, (2) a continuation of something like China’s current
development trajectory, and (3) tolerably good Sino-US relations,
Latin America should be able to benefit much from China ties in the
years ahead, if national leaders and people begin thinking strategically
and acting wisely. Latin American elites will certainly benefit from
China’s economic involvement by simply fulfilling agreements reached
with Chinese businesses, as they have in the past from other foreign
investments and ties. But the Latin American people generally will be
long-term winners only if their own governments invest heavily in
physical and high-quality intellectual infrastructures and programs for
the future, as the Chinese in most respects have done at home. If this
does not happen, most Latin American countries—and not just the
current “losers” in Sino-Latin American trade—will remain exploited for
William Ratliff 225
their natural resources. If Latin Americans choose to continue on this

route, many will have a bleak future and the temptation will be to shift
the old cry from “Yankee Go Home” to “China Go Home.”
The prospects for cooperation or conflict between China, the United
States, and Latin America will in large part depend on the willingness
or refusal of one or all sides to pursue constructive policies, particularly
the United States and China at a global level. If the Sino-US relationship
goes sour, Latin America will be drawn into more and nastier foreign
feuds than it ever even dreamed of during the Cold War era. That
needn’t happen, but the buck for that future stops with all of the parties
involved (Ratliff, 2009a).
Notes
1. Just as the Policy Paper was being released, China became a donor member
of the Inter-American Development Bank, an organization the PRC had for
decades called a key weapon in the arsenal of “US imperialism.” Almost half
of its initial rather modest contribution of $350 million was earmarked for
micro-enterprises and small and medium-sized businesses which Mao for so
long excoriated.
2. Privately one top Chinese analyst characterized Venezuelan “socialism” by quot-
ing a popular Chinese idiom , (guà yángtóu, mài gŏuròu), that is, to
“hang out a sheep’s head [in a butcher shop window] but sell dog meat inside,”
meaning advertising a quality product—socialism—but selling a shoddy one.
3. On this, the Policy Paper says: “The one China principle is the political basis
for the establishment and development of relations between China and Latin
American and Caribbean countries and regional organizations. The over-
whelming majority of countries in the region are committed to the one China
policy and the position of supporting China’s reunification and not having
official ties or contacts with Taiwan. The Chinese Government appreciates such
a stance. China is ready to establish and develop state-to-state relations with all
Latin American and Caribbean countries based on the one-China principle.”
4. In 1971 Lin Biao, a Chinese general who clawed his way up to just below Mao
Zedong in the Chinese power hierarchy, died under mysterious circumstances
flying to the Soviet Union after allegedly trying to overthrow the Great
Helmsman. China’s big guns were turned on him: “The bourgeois careerist,
conspirator, double-dealer, renegade and traitor Lin Piao was an out-and-out
devotee of Confucius … He used the doctrines of Confucius and Mencius as a
reactionary ideological weapon in his plotting to usurp Party leadership, seize
state power and restore capitalism.” Publisher’s note, Criticizing Lin Piao and
Confucius: Selected Articles. Peking: Foreign Languages Press, 1974. More than
200 pages were published to prove that Confucius “stubbornly supported the
slave system.” p. 1.
5. The website of the organization in charge of the Institutes (Hanban) has
long been unreliable. The numbers on the Chinese- and English-language
websites are about the same, though they are usually about 18 months out of
date, while efforts to run a Spanish-language website have been a disaster. In

January 2010, for example, the Spanish website named only five “Institutos
Confucio en Suramérica,” all of which were in Russia and Central Asia. In
January 2011 there was no Spanish website at all.
6. In the first of his “Ten Commandments for Development,” Singapore senior
diplomat and educator Kishore Mahbubani said: “Thou shalt blame only
thyself for thy failures in development. Blaming imperialism, colonialism,
and neo-imperialism is a convenient excuse to avoid self-examination”
(Mahbubani, 2004, p. 247).
7. It is very difficult to know how many Chinese are living and working in
individual foreign countries. For example, when conflict erupted in Libya
in February–March 2011, news agencies reported the evacuation of more than
35,000 Chinese from that country (Xinhua, 2011).
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12
South-South Relations in Brazil’s
Response to the Challenges of
Globalization
Steen Fryba Christensen
Introduction
Under the governments led by president Lula and the Worker’s Party (PT)
from 2003 Brazil has been pursuing a foreign policy strategy in which
South-South cooperation has become a centerpiece in its responses
to the challenges of globalization. South-South cooperation refers to
cooperation at two levels, namely the regional Latin American level
and the extra-regional level. This aspect of Brazil’s foreign policy differs
substantially from the strategies pursued by the Brazilian governments in
the 1990s, when Brazil emphasized its relations with the United States,
the European Unuion (EU), and its regional partners in Mercosur while it
de-emphasized relations with Africa, China, and other developing coun-
tries (Cervo, 2003, pp. 5–7). The most salient aspect of this foreign policy
shift has been the strong emphasis put on relations with extra-regional
countries such as China, India, and South Africa.
But why has Brazil introduced such a shift in its foreign policy
orientation, and how should we understand Brazil’s foreign policy
strategies in the light of the challenges of globalization? These are the
main questions that I address in this analysis. I argue that the shift in
foreign policy orientation is a consequence of a combination of factors.
First of all, dissatisfaction with the development results produced by
the foreign policy and development strategies that were pursued in the
1990s, second, by a change in government, and, third, as a response to
changes in the international economy, particularly the rising impor-
tance of China and more generally Asia. Brazil’s aims with its foreign
policy shift under the leadership of president Lula’s PT-led coalition
government are threefold: to improve national economic development,
to strengthen Brazil’s position on the international political scene, and
231
232 Brazil’s South-South Relations
to contribute to changing the global order toward one of multi-polarity

and de-concentrated global power. The idea is both to create a more
balanced world economy through the economic strengthening of Brazil
and the developing world and to increase the voice and representation
of the developing world on the international political scene, particu-
larly in multilateral negotiations with relevance to global economic and
political governance. Foreign Minister Celso Amorim (2010, pp. 231–2)
has recently argued that Brazil under Lula has been attempting to build
a fairer and more democratic world order.
The focus on Brazil’s own responses to globalization reflects the view
that the impact of globalization on countries in Latin America, as else-
where, is not produced directly. Such national strategies are important
for development outcomes. William Ratliff makes a similar point in this
volume when he argues that the impact of China’s rise on Latin America
is largely determined by the quality of Latin American countries’ own
responses and institutions.
The chapter is organized as follows. In the first section, I briefly
explore the historical background of Brazil’s international relations and
strategies after the election of Lula as Brazil’s president. In the second
section I analyze Brazil’s development strategies and international
relations with an emphasis on extra-regional South-South relations and
strategies. Finally, a conclusion is drawn.
Historical background
During the twentieth century Brazil was the world’s third-fastest growing
economy until 1980 (Abreu, 2002, p. 15). This success was assured by
pursuing an economic development strategy of import-substitution
and industrialization characterized by a strong state presence in the
economy, high tariff barriers, and a foreign policy with a Third Worldist
orientation (Lima, 2005, p. 35; Lima and Hirst, 2006). However, a series
of developments in the international context, such as the oil crises of
the 1970s, led to a growing foreign-debt burden and to severe external
economic vulnerability and economic stagnation.
Faced with the crisis context, the otherwise successful strategy came
under increasing criticism, and a widely shared belief that the strategy
had exhausted its usefulness emerged (Lima and Hirst, 2006, pp. 21–3).
The dominant interpretation was that Brazil’s way to get out of its dif-
ficulties was to win international confidence through a combination of
neoliberal policies of economic openness, privatizations, prudent fiscal
policies as recommended by the International Monetary Fund (IMF) and
Steen Fryba Christensen 233
the World Bank, and a foreign policy with an emphasis on cooperative

relations with the United States and the European Community, and
on active and constructive engagement in multilateral institutions.
Mercosur, the regional integration project founded in 1991 by Argentina,
Paraguay, Uruguay, and Brazil, was seen as a way to increase Latin
America’s negotiating power in international trade negotiations (Cervo,
2003). A coalition of the centrist Brazilian Social Democratic Party and
the right-wing liberal PFL was voted in on a policy platform like the one
just described. However, after some initial success in assuring economic
growth, the stabilization of inflation, and a reduction in poverty, Brazil
faced financial instability as a consequence of growing foreign debt and
the subsequent rise in external economic vulnerability. This led the
government of President Cardoso to devalue the Brazilian currency, the
real. The hopes attached to the real plan—the financial plan that had
helped bring Cardoso to power—were not fulfilled. This led to some
rethinking toward the end of the Cardoso government about how to
respond to globalization. Cardoso criticized the asymmetrical outcomes
produced by globalization, and a new emphasis on cooperation with
South America and larger emerging countries was introduced (Lessa,
Couto, and Farias, 2009). His government was also successful in getting
a law of fiscal responsibility passed in 2000 in an attempt to create stabil-
ity and new economic growth (Castro, 2009). The renewed development
problems, however, contributed to weakening the popularity of the gov-
ernment and paved the way for a change of guard in the 2002 elections,
in which Luiz Inácio “Lula” da Silva of the PT became president in
a coalition government of the leftist PT and the Liberal Party (PL).
During the election campaign, Lula criticized Cardoso’s policies for their
neoliberal orientation, for lacking a national development project, and for
endangering Brazil’s sovereignty. He strongly criticized the US proposals
for the Free Trade Area of the Americas, arguing that it should be seen as a
policy a US annexation of Latin America rather than as a free-trade agree-
ment (Bandeira, 2003, p. 154). International financial markets reacted
with nervousness at opinion polls that had Lula winning the election, and
Brazil’s risk rating surged to more than 2000 basis points (BCB, 2003). Lula
responded to this by writing a “Letter to the People” on 22 June in which
he promised a change from the neoliberal course while also declaring that
Brazil would honor its debt obligations and pursue a cautious policy in
order to reduce the external economic vulnerability if he became president
(Lula, 2002). This cautious posture helped assure access to IMF financing
but was criticized by some on the political left as proof of PT subordination
to the IMF and imperialism, and as a drastic political and ideological shift
when compared to the PT’s historical agenda (Coggiola, 2004). However, as

argued by Jorge Almeida (2002) it was exactly the moderate discourse and
policy approach exemplified by the alliance with PL that helped to assure
a broader electoral basis of support for Lula’s candidature.
Brazil’s development strategies and international

relations after 2003
The Lula government’s overall policy orientation has been evaluated

very differently. Some see it as representing continuity or even as
a deepening of the neoliberal model (Coggiola, 2004) while others find
that Lula’s policies represent an important reorientation (Lima and Hirst,
2006; Christensen, 2007). There were clear elements of continuity in
macroeconomic policy and economic openness. Support for economic
openness has grown under the Lula government. Eighty-eight percent
of the foreign policy elites in a study by Amaury de Souza from 2008
thus supported the policy of economic openness (Souza, 2008, p. 6). The
concept of “foreign policy elites” refers to political, business, academic,
union, and non-governmental organization (NGO) elites who take part in
discussions about Brazil’s foreign policy. Sean W. Burges (2009, pp. 195–6)
argues that a broad consensus in favor of neoliberal policies has emerged
in Brazil, although the neoliberal orientation has special Brazilian char-
acteristics. For instance, there is support for active State involvement
in the economy and for a significant social orientation. This position is
valid. Continuity in economic policy principles is definitely clear, but the
changes are also significant. I find that the overall balance of the economic
and foreign policy strategies of the Lula government marks an important
reorientation and that this reorientation is particularly clear in the area
of international relations and with regard to the new emphasis on South-
South cooperation, which aims at changing the globalization process so
as to safeguard the interests of Brazil and other developing countries. It is
important to notice that a significant part of Brazil’s South-South coop-
eration deals with economic aspects such as export diversification and
the search for influence in global economic governance in multilateral
negotiations with the help of South-South coalitions.
Brazil’s regional South-South relations and its

North-South relations
Almeida (2006) argues that from the outset the foreign policy of the
Lula government emphasized the historical priorities of the PT, namely
South-South cooperation and a progressive social agenda. These aims
were advanced through a combination of a number of foreign policy

initiatives and a strategy to diversify exports and economic relations
with a particular emphasis on trade with the South. In the following,
I briefly analyze Brazil’s relations with Latin America and leading
developed countries in order to account for how Brazil’s extra-regional
South-South relations fit into Brazil’s general position within the inter-
national economy and the interstate system.
At the Latin American level Brazil has particularly emphasized
relations with South America. From the Brazilian perspective, South
America could be used as a platform for Brazil’s aims in two ways,
namely as a platform for Brazil’s competitive insertion into the global
economy as the Cardoso government had already emphasized in its
national development plan for the period 2000–3 (Lessa, Couto, and
Farias, 2009, pp. 95–6), and, second, as a platform for Brazilian regional
leadership of the South American continent.
Already in 2003 Mercosur and the Andes Community made a trade
agreement and shortly after this an agreement was reached for South
America as a whole, leading to the creation of the regionalist scheme
of Unasur that, contrary to Mercosur with its focus on trade, from the
outset focused on cooperation in infrastructure regarding transports,
energy, and telecommunication (Lessa, Couto, and Farias, 2009,
pp. 96–102). Arguably, Brazil’s main interest in South America is
economic. South America makes up the bulk of Brazil’s exports and
investments in Latin America. Taken as a whole, Latin America functions
quite well for Brazil from an economic perspective. Approximately 80%
of Brazil’s exports to the region were made up of manufactured products
in 2009, compared to just 44% in total exports (BCB, 2010). Similarly,
Brazilian outward foreign direct investment (FDI) has risen substantially
in recent years, with much of it going to South America (Cervo, 2010,
pp. 22–5). As argued by Sanahuja (2009), Unasur satisfies a wide number
of interest groups in Brazil, from agro-industry to the oil and industrial
sectors. The leading national industrial business organization CNI sees
South America as strategically important from the perspective of the
industrial sector (CNI, 2007, pp. 9–11).
It is often argued, however, that Unasur is largely a political project of
the Brazilian government. In the strategic thinking of Secretary-General of
Foreign Affairs Samuel Pinheiro Guimarães (2006), political unity in South
America is seen as a way to contribute toward a multipolar global order in
which South America would be one of the power poles. He sees Mexico
and Central America as part of the US sphere of influence. Under the
Lula government, Brazil’s geostrategic aim has thus been to assure Brazil’s
leadership of South America in its competition with the United States

for influence in the region (Christensen, 2007, pp. 145–6; Bernal-Meza,
2010, p. 202). In 2009 Unasur agreed on the creation of a common South
American Defense Council, adding a security dimension to the regional
project. Brazil’s defense minister Nelson Jobim has argued explicitly that
South American security should be a matter for South America, thereby
showing that Brazil’s aim is to avoid US military involvement in security
issues on the South American continent (Einaudi, 2011, p. 7). Thus, Brazil
challenges the European view of Latin America as the sphere of US influ-
ence that Mendizabal and Edwards refer to in this volume. In the military
area, Brazil has furthermore accepted responsibility for leading the peace
mission Minustah in Haiti since 2004 and has played a mediating role
in a long range of conflicts in Latin America during the Lula govern-
ment’s tenure. Brazil’s many initiatives and its role in conflict mediation
as well as the fact that it made up more than 55% of South American
gross domestic product (GDP) in 2007 has assured it a regional leadership
role, as argued by Armijo and Burges (2010, p. 14). Relations with South
America, however, are not unproblematic for Brazil. Brazil is met with
some skepticism in the region because of its aims of becoming a global
power (Vigevani and Ramanzini Jr, 2009, p. 83), the fragmented character
of development and foreign policies in South America (Cervo and Lessa,
2010, pp. 5–6), and also simply because of differences of interests and the
significant economic and power asymmetries between Brazil and its South
American neighbors.
In its relations with the North, Brazil has focused on trade issues. FTAA
negotiations have not moved forward since 2003, and EU-Mercosur trade
negotiations have not made any headway since 2004. Bahadian and Lyrio
(2008, pp. 202–5) explain that the main reason for the lack of agreement
in FTAA negotiations in 2003 was the unrealistic posture of the United
States. It pressed for common rules in the area of government procure-
ment, investment, services, and intellectual property, where the United
States is competitive, but was unwilling to negotiate liberalization in the
agricultural sector, anti-dumping policies, and the reduction of agricul-
tural subsidies. The problem is basically the same between the EU and
Mercosur. Critics of the government’s trade policies find that there is an
exaggerated preference for South-South cooperation and an unwillingness
to pursue North-South trade agreements, which is something that harms
Brazilian development (Veiga, 2009). However, in the 1990s resistance
to the FTAA was also widespread among NGOs, unions, and in the busi-
ness sector, and the Cardoso government was the main obstacle to the
US agenda, according to Albuquerque (1998). In Souza’s 2008 analysis,
elites show a low preference for negotiating free-trade agreements with

the United States and the EU (Souza, 2008, p. 55). Instead, trade with the
North is negotiated multilaterally in the WTO. Guimarães (2003) sees
the WTO as an important organization for the advancement of Brazil’s
interests. The Cardoso government was successful in its negotiations with
the United States in a controversy regarding aids medicine in 2001: Brazil
successfully defended its right to use obligatory licensing for medicines
in situations of public health emergencies against a US complaint that
the law infringed multilateral intellectual property rules (Oliveira, 2005,
p. 58). Similarly, the Lula government won two cases it opened at the
WTO, one against US cotton subsidies and another against EU sugar
subsidies, arguing that the subsidies distorted trade in the agricultural
sector, causing rural poverty in developing countries. In the case of sugar,
the main organization of Brazilian sugar growers, UNICA, was active in
providing relevant arguments (Análise, 2006). In the case of cotton, Brazil
represented itself as well as poor West African countries, arguing that US
subsidies to cotton growers hurt producers in developing countries, lead-
ing to poverty (Guadagni and Kaufmann, 2004).
Brazil’s extra-regional South-South relations

The priority given to South-South cooperation has been part of the
re-emergence of the North-South cleavage along with the centrality of the
development theme in Brazilian foreign policy (Oliveira, 2005, pp. 56–7).
While some analysts describe Brazil’s international relations as balanced,
the emphasis on South-South cooperation having been combined with
good relations to the United States and the EU (Pecequilo, 2008), this
analysis emphasizes the priority given to the strengthening of economic
and diplomatic ties with countries in the South. Coalition-building with
other southern countries has been an important aspect of this tendency, as
has been the diversification of Brazil’s commercial and economic relations
with the South. These elements have been instrumental in Brazil’s attempts
to increase not only its own influence but also that of the developing world
as a whole and to assure the relative economic strengthening of the South
so as to position it to contribute to the development of a more balanced
world order (Amorim, 2010). Thus, although Brazil maintains friendly and
cooperative relations with the dominant countries in the North, a Third
Worldist orientation can be detected in Brazil’s South-South relations.
In its national development plan for the period 2004 to 2007, the Lula
government emphasized the need to increase Brazilian exports as a way of
reducing its external vulnerability. As Table 12.1 shows, Brazil did succeed
in increasing its exports substantially in the years of the Lula government.
Table 12.1 Brazilian exports (billions of US dollars)

Year Exports
1997 53.0
2002 60.4
2008 197.9
2009 153.0
source: Developed by the author, based on the Central Bank’s

Annual Reports (BCB, Annual Reports 1998, 2003, 2009, and
2010).
The policy document emphasized the need to diversify its economic

relations, with an emphasis on South America, the other BRIC coun-
tries and South Africa (Lessa, Couto, and Farias, 2009: pp. 98–100). In
a speech, in which he summed up the foreign policies of the first five
years of the Lula government, foreign minister Celso Amorim argued
that the government had indeed put emphasis on South-South trade
in its policy practice and that this had helped Brazil expand its trade
links with the South, thus benefiting Brazilian manufacturing exports
(Amorim, 2007). Brazil’s strategies and priorities during the past few
years have been influenced by changes in the international system such
as the emergence of China as a decisive new power, growing interna-
tional commodity prices, and the stronger centrality of countries such
as India, Russia, and South Africa in world development as well as by
the growing Brazilian trade with countries that used to be unimportant
to Brazil’s trade (Vigevani and Ramanzini Jr, 2009, p. 77).
The aims of the diversification strategy as well as South-South political
cooperation are threefold, namely to enhance national economic devel-
opment, to promote a reduced concentration of power in the world,
and to increase Brazil’s influence on the international political scene
(Lima, 2008). On the economic front, the diversification of exports
has been promoted as a way of stabilizing the economy and setting in
motion a process of stable economic growth with the aim of improv-
ing popular living standards and reducing inequality and poverty. This
agenda has been very successful. Poverty has been reduced significantly
and economic inequality has also been reduced (Neri, 2009) and exports
have grown vigorously with a strong tendency towards diversification.
While 38.5% of exports went to non-OECD countries in 2002, these
countries accounted for 57% in 2009, according to Celso Amorim
(2010, p. 216). The tendency is that Asia and Latin America are becom-
ing increasingly important, whereas the relative weight of the EU and
particularly of the United States has fallen.
Table 12.2 Regional distribution of Brazilian exports (%)
Year United States EU LAIA/LAC Asia Other

1997 17.7 27.4 19.8 14.6 20.5
2002 25.7 25.0 16.3 14.6 18.3
2008 14.0 23.4 25.9 18.9 18.9
2009 10.3 22.2 23.3 25.8 18.4
Source: Developed by the author, based on the Central Bank’s Annual

Reports (BCB, Annual Reports 1998, 2003, 2009, and 2010).
Figures for Latin America are not directly comparable because statistics
for 1997 and 2002 refer to the Latin American Integration Association
while the 2008 and 2009 figures refer to the somewhat larger grouping
of Latin America and the Caribbean (LAC). However, LAIA includes the
bulk of LAC markets. It is particularly noteworthy that the relative weight
of the United States has fallen strongly whereas the relative weight of
Asia has grown significantly in the Lula period, not least following the
outbreak of the financial crisis (see Table 12.2). In fact, Asia is the only
growing destination for Brazilian exports in the crisis year 2009 (BCB,
2010, p. 104). China is particularly significant in the Asian category and
from a participation of approximately 4.2% of total Brazilian exports in
2002 (BCB, 2003, p. 149), China accounted for approximately 13.2% in
2009 (BCB, 2010, p. 118), surpassing the United States, which has his-
torically been Brazil’s largest export market. The growing weight of Asia
is associated with a tendency toward primarization of Brazilian exports
as Brazil exports mostly primary goods to China and Asia—exactly the
opposite of the case with Latin America, as noted earlier. Critics of the
Lula government see the reduced weight of manufacturing from 54.7%
in 2002 to 44.0% in 2009 (BCB, 2010) as a problem because it signals
a lack of emphasis on more advanced exports. On the other hand,
the strong primary exports to Asia have helped Brazil build up record
levels of international reserves and can be seen as a significant factor in
Brazil’s growth success.
Brazil has pursued its South-South cooperation strategy through very
active diplomatic relations with the developing world and by using
a variety of channels. Bilateral strategic partnerships, innovative alli-
ances such as the trilateral IBSA Dialogue Forum (India, Brazil, and
South Africa), the G20 coalition of developing countries in WTO trade
negotiations, and the cooperation among BRIC countries (Brazil, Russia,
India, and China), stand out as possibly the most significant. Other
initiatives are also important, though. These include active diplomacy
with Africa, Asia, and different countries in the Middle East, and they
generally have both economic and political aims. On the political front,
Brazil’s ultimate aim is to gain a permanent seat on the UN Security
Council as well as to gain influence in global economic governance. On
the economic front, the aim is to assure Brazil’s economic development
and a more balanced global economic development. It is important
to note that the economic strengthening is both a goal in itself and a
political tool for promoting Brazil’s own influence and that of the devel-
oping world on the international political scene.
In what follows, the most significant aspects of Brazil’s extra-regional
South-South cooperation are analyzed. Emphasis is on the South-South
coalition-building efforts that have been a decisive aspect of Brazil’s
foreign policy strategy from 2003, as well as on relations with individual
countries and regions.
IBSA
In June 2003 Brazil, India, and South Africa formed the IBSA Dialogue
Forum in order to pursue a number of aims, particularly through their
joint strategic articulation in multilateral organizations. From the out-
set, two of IBSA’s main objectives have been to promote the reform of
the UN Security Council and to promote the millenium development
goals (MDGs) set up after discussions in the UN in 2000. IBSA members
wish to be included as representatives of the developing world in order
to democratize the UN, and to work for the principle of multilateral
solutions and against such unilateral actions as the US invasion of Iraq
in March 2003 (Visentini and Silva, 2010, pp. 60–2). Similarly, the IBSA
countries have been focused on strengthening their influence in the
WTO multilateral trade negotiations (Rodrigues, 2010, pp. 54–6), and
they put the issues of poverty and hunger on the international political
agenda (Roett, 2010, p. 134) by creating a fund at the UNDP against
poverty and hunger (incidentally joined by Spain, France, and Chile
(Visentini and Silva, 2010, p. 60)), thereby demonstrating their com-
mon aim of a more social orientation of the globalization process. More
recently, the IBSA countries, along with China, concerted their posi-
tions on responses to the global problem of climate change at the COP
15 meeting in Copenhagen in December 2009 as they negotiated jointly
in the BASIC group (Amorim, 2010, p. 236). The IBSA Dialogue Forum
should be seen as mainly a joint political initiative aimed at negotiating
with the traditionally dominant powers in multilateral forums. In this
way it responds to the perception that the member countries share prob-
lems and have similar interests in a number of mulitilateral negotiation
processes and the idea that these interests can best be advanced
through South-South coalitions (Rodrigues, 2010, p. 46). Apart from
the emphasis on systemic issues, the three countries have also made
agreements among themselves in the areas of trade and technological
cooperation, and Brazil further hopes that this cooperation will prove
helpful in promoting Brazilian exports more broadly in Africa and Asia
(Oliveira, 2005, pp. 61–2) and contribute to the Lula government’s goal
of creating a new international trade geography. However, from the
outset mutual trade was very low among IBSA members, and although
it has grown with the help of IBSA cooperation, there is a low degree of
bilateral complementarity (Rodrigues, 2010, p. 63).
The G20
The IBSA countries are all members of the G20 coalition that was formed
during the WTO negotiations in Cancún, Mexico, in September 2003.
Clearly the G20 formation responds to IBSA’s aim of influencing inter-
national trade rules. Brazil and India are leaders of the G20 (Rodrigues,
2010, p. 60) that today has 19 members: 5 from Africa, 6 from Asia, and
8 from Latin America (Visentini and Silva, 2010, pp. 58–9) plus China.
The G20 coalition, and Brazil’s leadership in this coalition, is an exam-
ple of Brazil’s desire to become a global player (Saraiva, 2007, p. 56).
G20 has a narrow and well-defined agenda, namely that of pursuing
liberal trade in the agricultural sector. The aim is to open up northern
agricultural markets, put an end to export subsidies and bring down
domestic subsidies in the agricultural sector in the developed countries.
The G20 position was defended as development friendly and as a means
of reducing poverty in the developing world. Thus it is noteworthy that
although it can be argued that the G20 is an example of Brazil’s neolib-
eral agenda, the formation of the G20 is an example of the institutional
entrepreneurship of Lula’s Brazil and of its assertive and autonomous
foreign policy aimed at advancing the interests of Brazil and the devel-
oping world jointly in a South-South coalition.
The EU and the United States responded negatively to the crea-
tion of the G20, seeing it as the reason why negotiations were stalled
in Cancún; and following the negotiations in Cancún, the EU and
the United States sought to break the coalition by using threats of
sanctions. As a result, some of the initial members—Colombia, Peru,
Uruguay, and Guatemala—decided to withdraw from the coalition
(Pecequilo, 2010, p. 139; Visentini and Silva, 2010, pp. 58–9). This
exemplifies the difficulty Brazil faces in its competition with the United
States for regional leadership.
Shortly after the negotiations in Cancún, Celso Amorim (2003) argued

that he expected the creation of the G20 coalition to play a decisive
role in introducing a less autocratic multilateral trade system and that
it would help farmers in developing countries. Arguably, the G20 has
been successful since it has survived the pressure from the developed
world, and although no final agreement has been reached, Brazil has
avoided an agreement that might have been negative seen from its
own perspective. It has been successful in its trade actions against the
United States and the EU in the agricultural area, as mentioned earlier,
and negotiations have continued with India and Brazil as key negotia-
tors for the G20. In July 2008, Brazil agreed to a compromise solution
suggested by Pascal Lamy. However, India and China could not accept
the solution because it did not allow sufficient leeway for protecting
infant industries (Roett, 2010, pp. 137–8). The same was the case with
Argentina, which was upset by Brazil’s failure to coordinate with its
largest Mercosur partner (Sanahuja, 2009). This example shows that
although the G20 shares certain interests, coalition members also have
divergent interests (Rodrigues, 2010). On the other hand, the G20 has
been successful in articulating its interests with other developing world
groups (Visentini and Silva, 2010, p. 59) and today it is an important
reference point and player in multilateral trade negotiations.
BRIC
The term “BRIC” was first coined by Jim O’Neill of the American invest-
ment bank, Goldman Sachs, in 2001. O’Neill and his associates’ main
idea (Wilson and Purushothaman, 2003) was that Brazil, Russia, India,
and China were likely to become increasingly important actors in the
global economy due to their size and great potential contribution to
future global economic growth. They also believed that this would
increase the political weight of these countries in the international
system. The concept was met with skepticism among academics early
on, because from the start the BRIC was not a formal group and nowhere
near being a political actor.
From the outset of the Lula government the BRIC countries were
singled out along with South Africa and South America as particularly
relevant to Brazil in terms of the country’s need to diversify its economic
relations to include more South-South links (Lessa, Couto, and Farias,
2009, pp. 98–100). Also, from a geo-political perspective, relations
with BRIC countries, especially India and China, as well as with South
Africa, were seen as important, as pointed out in the previous analysis
of IBSA and G20. In 2006, the BRIC countries had their first meeting
at the level of foreign ministers, and in June 2009, after the outbreak
of the international financial crisis in 2008, BRIC held its first formal
presidential summit in Yekatarinburg, Russia (Flemes, 2010, p. 148). The
main focus of the group was to discuss and coordinate their positions
on global financial governance issues to be raised at the G20 meeting
in Pittsburgh. They agreed on seeking to make the G20, comprising the
world’s biggest economies, the relevant forum for global discussions on
the state of the international economy instead of the OECD-dominated
G7 or G8 in order to assure their own participation in informal global
financial and economic governance discussions at the highest level.
They were successful in this regard (Amorim, 2009a). The main focus
of the BRIC group has been to coordinate their position in the G20 as
a way of gaining influence in discussions on global economic govern-
ance in areas such as the stabilization of the international financial
system, IMF reform, World Bank reform, exchange rates, and trade.
With regard to the exchange rate issue they took the position that the
international financial system ought not continue to be so strongly
centered on the US dollar, and later Brazil, Russia, and China began
diversifying their reserves (Flemes, 2010, pp. 150–1). Thus, the BRIC
country group started out as a sort of coalition within a relatively
narrow and well-defined area, just as the G20 at the WTO had been.
According to Celso Amorim (2009b), the aim of the BRIC group is
to make the world more democratic and diversified by including new
players from the South and it is not against other countries. The coa-
lition thus aims at promoting the rise of its members in the global
hierarchy of states, in this case in the economic arena. The inclusion of
Brazil and other emerging countries, including Argentina, in the G20
represents a success for Brazil in terms of gaining international status and
recognition. However, it is important to be aware of the limited scope of
the BRIC coalition. Lula has argued that BRIC ought to have a common
UN strategy. China has been more cautious, though, because of the high
priority it gives to its bilateral relations with the United States, according
to Flemes (2010, pp. 149–51). Another reason for China’s lack of clear
support for Brazil’s UN Security Council ambitions is that granting a per-
manent seat on the Security Council to Brazil would give momentum to
the collective efforts of the G4, that is, Brazil, Germany, India and Japan,
to obtain permanent membership as well, and China is not keen on giv-
ing that privilege to the latter two. Nin Haibin (2010, pp. 186–9) argues
that China is pleased with the moderate aspirations of the BRIC group
but that it has in fact given more emphasis to cooperation with emerging
powers, as its coordination with the other BRIC countries shows.
The BRIC countries do discuss other issues than coordinated action

in the G20. One theme has been to find ways to stimulate trade rela-
tions among themselves (Flemes, 2010, p. 151). The BRIC group has
recently been joined by South Africa at China’s invitation and in the
third BRIC summit in China in April 2011 the group started setting up
a system of cooperation between the five national development banks
of the now-extended BRICS. The purpose of this cooperation is to
promote investments and trade in local currencies across borders within
the BRICS group (Folha.com, 2011). This policy serves the common
purpose of increasing South-South trade and cooperation and reducing
the centrality of the US dollar, and it fits in well with Brazil’s aim to
promote economic diversification toward the South as a way of foster-
ing development and a multipolar ordering of the world.
China-Brazil strategic partnership

Brazil’s strategic partnership with China was initiated in 1993. However,
it has been deepened during the Lula government, as exemplified by the
cooperation in BRIC, BASIC, and the G20 coalition at the WTO (Haibin,
2010, p. 183). Apart from cooperation in South-South coalitions in
multilateral negotiation arenas, the bilateral partnership covers a wide
range of cooperation areas such as trade, energy, space cooperation, and
technology innovation (Haibin, 2010, p. 185). Oliveira (2010, p. 89)
argues that the main focus is on alliances in multilateral negotiations
and on cooperation in technology and innovation as ways to promote
their common influence on the international political stage and to
break monopoly-like situations in the technological area that are advan-
tageous to developed countries. He does not see a strategic partnership
in trade where, the two countries are mainly competitors.
Because of its economic rise, China has become of growing importance
to Brazil. Furthermore, Brazilian foreign policy elites believe that China
and the other BRICS will gain growing projection in the international
system, whereas established powers such as the United States and
Germany will lose out, relatively speaking (Souza, 2008). Thus, there
are both strong geo-economic and geopolitical motives for Brazil’s
interest in a strategic partnership with China. China gives extra clout
to the coalitions it forms part of largely due to its huge economic size.
Although China and Brazil can be seen as competitors in the economic
area, China is now Brazil’s largest export market, as mentioned earlier.
There have been some criticisms within Brazil of Brazil’s willingness to
accept China’s status as a market economy within the WTO in 2004. The
main criticism is that China is highly competitive in manufacturing and
that this has provoked a very asymmetrical trade composition following

typical North-South trade patterns, with China largely exporting highly
value-added products to Brazil and Brazil largely exporting primary
goods. Brazil has reacted to this with protective measures, particularly in
sectors representing many Brazilian jobs (Saslavsky and Rozemberg,
2009, pp. 223–4). However, as William Ratliff mentions elsewhere in
this volume, according to a 2010 survey by the Pew Institute 62% of
Brazilians see China’s economic growth as good for Brazil. The enormous
growth of Brazilian exports to China and the rise in export prices in pri-
mary products is without a doubt the main explanation for this positive
perception as these exports have helped stabilize the Brazilian economy
as expected.
After the financial crisis the competitiveness problem has been exac-
erbated by a weak Chinese currency and a strong Brazilian currency, and
at the BRIC meeting in China in 2011 president Dilma raised concerns as
to the asymmetrical character of mutual trade; she is expected to argue
that Brazil should be allowed to use different protection mechanisms
against Chinese products (Fellet, 2011). In spite of such differences, the
partnership with China seems to be real and strategic for Brazil, and the
broadening of the BRICS’ common economic cooperation agenda seems
promising from a Brazilian perspective.
Relations with Africa

Relations with Africa and the Middle East have been intensified since
2003 as an element in the overall tendency of the Lula government to
emphasize South-South relations. From the outset, the Lula government
gave renewed attention to Africa (Vigevani and Cepaluni, 2007, p. 1314;
Lessa, Couto, and Farias, 2009, p. 101). This new emphasis was evident
in president Lula’s many trips to different parts of Africa in the first years
of his government. Also, a Brazil-Africa forum was held in the Brazilian
city of Fortaleza in 2003 (Saraiva, 2010, pp. 178–9), while two summits
have been held between South America and Africa (Amorim, 2010,
p. 234). Lula made a total of 12 visits to 23 African countries during his
two presidencies, giving particular attention to the Portuguese-speaking
countries there (Amorim, 2010, p. 233). Some critics find that these
links with often relatively small developing economies have little to
offer Brazil and are largely a reflection of the government’s ideological
posture on Brazilian relations with Africa (Almeida, 2007). However,
Samuel Pinheiro Guimarães (2009) claims that nothing could be more
wrong. He argues that Brazil’s diversification of trade toward Africa and
Arabic countries is extremely important for Brazilian development.
In line with this view José Flávio Sombra Saraiva (2010, p. 169–79)
describes the Brazilian strategy as based on national interests and he
points out that Brazilian business people have participated in several of
the president’s visits to Africa, reflecting the government’s interest in
expanding Brazilian economic interests in Africa.
There is also a solidarity aspect in Brazil’s Africa policy. Brazil is
a new and rising player in the international aid system through Brazil’s
Cooperation Agency, ABC, and, according to Celso Amorim (2010,
p. 233), 60% of Brazil’s cooperation aid goes to the African continent.
Amorim highlights the significance of initiatives in technical coopera-
tion and mentions that the famed Brazilian research centre in tropical
agriculture, Embrapa, opened an office in Accra, Ghana in 2008 and
that it runs a model farm for cotton production in Mali.
Trade between Brazil and Africa has grown strongly during the Lula
government’s tenure. From a total of $5 billion in 2002 mutual trade
rose to $26 billion in 2008 (Amorim, 2010, p. 234). President Lula has
time and again argued that particularly trade with Africa, Latin America,
and other developing countries offers good opportunities for Brazilian
manufacturing exports (FOLHAONLINE, 2009). Brazil’s African policy
can thus be seen as part of the strategy for promoting Brazilian capitalist
expansion. Aid policy offers the potential to create goodwill in Africa but
also to create opportunities for Brazilian businesses, particularly in the
manufacturing sector. Lastly, Brazil’s dialogue with South Africa in IBSA
and its leadership position in the G20 coalition in WTO trade negotia-
tions means that Brazil has come to be seen as an important representative
of African interests (Saraiva, 2010, pp. 180–1). Brazil can thus be seen as
strengthening its soft power through its Africa policy. This may be useful
in advancing Brazil’s bid for a permanent position in the UN Security
Council and could be seen as serving Brazil’s long-term interests.
Relations with the Arab countries and the Middle East

Brazil’s policy toward the Arab world and the Middle East in general
follows a logic similar to its policy toward Africa, though Brazil’s
diplomatic efforts in the peace process stand out as an innovative and
ambitious element in Brazilian diplomacy. Trade with the Middle East
tripled between 2003 and 2008, when it reached $20 billion, and the
two only free-trade agreements by Mercosur have been concluded with
Israel and Egypt (Amorim, 2010, p. 235). High-level summits were insti-
tuted between South America and the Arab countries, starting in 2005
(Amorim, 2010, p. 234). Diplomatic activism is an important aspect of
Brazil’s Middle East policy and in its aim to become a relevant player in
the peace process. This represents a major shift in Brazilian diplomacy.

Lula is the first Brazilian president to visit the Middle East officially
and in 2009 he managed to meet the leaders of Palestine, Israel, and
Iran on separate occasions during a two-week period (Amorim, 2010,
p. 235), reflecting Brazil’s attempt to promote peace in the Middle East.
In many cases, the United States and Brazil have disagreed on how to
deal diplomatically with the Middle East. The two most recent examples
are differences on how to deal with Iran’s nuclear program and how to
deal with unrest in Libya. The Brazilian government’s opposition to
sanctions against Iran and its diplomatic initiatives have created differ-
ences with the US government and others (Amorim, 2010, p. 223, 236)
and has also been controversial in Brazil. It seems clear that Brazil is
pursuing its own international agenda even when there are differences
with leading powers. It is less clear whether this autonomous approach
will help or stand in the way of Brazil’s desire to gain a permanent seat
at the UN Security Council. Opinions in the United States are divided
regarding the desirability of granting Brazil its wish (Einaudi, 2011).
Conclusion
Brazil’s South-South relations have gained a new centrality in Brazil’s

development strategy and in its international political strategies. The
new assertiveness and activism of Brazil’s diplomacy characterizes the
Lula period. This tendency started to some extent during the Cardoso
government toward the end of Brazil’s period of financial instability.
However, the tendency was strongly intensified during the Lula govern-
ment’s tenure with the formation of innovative coalitions such as IBSA,
G20 in WTO trade negotiations, and BRIC/BRICS. An ambitious and
active diplomacy in Haiti, South America, and the Middle East is part of
this pattern and shows a Brazilian government that aims at establishing
itself as a regional leader and a global player. The Brazilian government
has sought to gain influence in global governance, both economic and
political, through multilateral mechanisms and coalition formation.
On the economic side, there has been a strong emphasis on the crea-
tion of South-South economic links in Brazil’s strategy of increasing and
diversifying exports in its search for business opportunities, autonomy,
and reduced external economic vulnerability. Economic strengthening
and greater political influence in regional and global matters were part
of an ambitious aim to change the world after what the Lula govern-
ment saw as a failed neoliberal agenda in the 1990s. This aim was part
of a greater ambition to create more balance in the world in the sense
of promoting more political influence and more successful economic

development for the developing world and of pursuing solidarity-
oriented policies that could help the poorest layers of society, both in
Brazil and in other countries. Changing global power balances has been
part of this ambitious agenda that marks the most significant shift from
the reactive and defensive tendency of the Brazilian governments in the
1990s, where fears of being left out of the dynamics of globalization led to
a passive strategy of collaboration with the dominant countries and con-
structive participation in multilateral organizations. The new strategy has
focused on South-South coalitions with narrow and well-defined agen-
das in multilateral economic arenas. Some of these, particularly IBSA and
BRIC (now BRICS) also have an important dimension of cooperation
among member countries. Strategic partnerships, particularly those with
system-affecting developing countries—that is, countries that are so big
and powerful that they have a direct impact on the functioning of the
world system as a whole—are another important aspect of this overall
strategy. It is worth stressing the significance of relations with China as
well as India, South Africa, and Russia in the BRIC framework. Brazil’s
successful institution-building in South America is another important
example. Although Brazil is encountering difficulties in this arena, some
advances are clear. South America now has a Common Defense Council
and the influence of the United States seems to have been reduced.
Furthermore, economic ties with Latin America, particularly South
America, play an important role in the strengthening of the Brazilian
capitalist system. Enhanced cooperation with other developing regions
such as Africa and the Middle East—another novelty—also contribute to
the general picture of an ambitious global player.
These orientations manifest Brazil’s aim to promote its economic
development and its advancement in the international hierarchy of
states through greater involvement in global governance mechanisms.
Related to this aim has been the desire to contribute to a more balanced
world by means of the creation of a multipolar order in place of a uni-
polar one. Brazil has thus sought to reduce the dominance of the United
States in the world while at the same time increasing its own power and
that of the developing world, particularly the large emerging countries
that have systemic importance. By working toward a more multipolar
world order, Brazil has also wished to promote the multilateral principle
to the detriment of unilateralism.
This shift in orientation can be linked to a sense of frustration with
the Cardoso government’s approach to globalization. This led to some
revisions and some changes in thinking among foreign policy elites.
A first move was made in the late 1990s by the Cardoso government,
but the Lula government represents a more activist and assertive Third
Worldist approach. The change in government and the ideological
orientation of the PT-led Lula government is an important explanation
behind Brazil’s reorientation. Changes in the economic globalization
process such as the rise of China have also played a role in Brazil’s
policy shift. Brazil’s overall strategy has helped it achieve economic
success. This newfound economic strength is an important element
behind Brazil’s increased role on the international political scene,
and may eventually help it in its bid for a permanent seat on the UN
Security Council. However, access to this arena has proven much more
difficult to assure than ascent to a stronger role in global economic
governance.
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Conclusions: Latin America
and Globalization—Challenges,
Responses, and Perspectives in
the Twenty-First Century
Jan Gustafsson and Manuela Nilsson
In our introduction, we proposed to see globalization as a complex,

multifaceted, and contradictory set of phenomena present with differ-
ent intensity and with different manifestations according to context,
place, and moment. We also proposed that Latin America, although
at certain moments seemingly out of pace with some global trends,
has not been excluded from globalization at any time. The chapters of
this book, varied as they are in approach, method, and discipline, have
confirmed these hypotheses. They show that globalization adds further
complexity, not as a simple addition, but as an intrinsic dimension of
the region’s development processes. Therefore, to study “globalization’s
impact” on Latin America is one methodological approach, but the
general task is to analyze the multiple phenomena and mechanisms
that imply a relationship between local, national, or regional processes
in Latin America and processes outside the region. Latin America is an
integral part of the globe and of the phenomena we designate as globali-
zation, and globalization is present in most, if not all, of the economic,
social, and political (plus cultural) processes in the region. An excellent
example of such entangled processes is Ejdesgaard Jeppesen’s analysis of
how global and national actors’ disposal of natural resources in Bolivia
provokes local protests that lead to profound changes in national
politics, which result in important changes in Bolivia’s global strategies
that affect other actors inside and outside Latin America. On the other
hand, this general observation should not, obviously, be an impediment
to methodological approaches that permit more specific and closer
analyses of how some of the various dimensions of globalization have
an impact on—and are impacted by—phenomena in Latin America. We
believe that the chapters of this book have shown such an exercise to
be fruitful and cast light over a number of such aspects. In these brief
253
254 Conclusions
conclusions, we try to sum up some of the points and findings of this

book and point at some of the essential challenges and questions that
Latin America faces.
A fundamental aspect of globalization is the economy, which has
been studied in some of the chapters, both in general and in its more
specific aspects. An interesting finding relates to the quite generally
accepted fear throughout the twentieth century that the Latin American
economy was particularly vulnerable to international fluctuations
and conjunctures, especially in its most globalized periods, when the
region’s economy strongly depended on the prices of raw materials,
agricultural products and other similar commodities. But, as docu-
mented by Fryba Christensen and Bernal-Meza, the region at large, and
some countries in particular, have managed the current crisis much
better than the United States and parts of Europe—in fact, it has been
one of the least-affected regions of the world. This finding provokes a
number of further questions: Is this an expression of a more solid and
independent economy? Is it, after all, a victory for the neoliberal model
or is it rather the opposite: has the partial abandonment of the model
led to this success? Will this tendency continue and could at least some
Latin America countries become, as in the case of several Asian coun-
tries, global motors of economic development? Latin America’s biggest
economy, Brazil, is already going in that direction, but it is surely not
the only country in the region that has been able to perform well under
the current crisis.
Natural resources could be a propellant force in that direction. In
fact, energy resources, particularly oil and gas, have been an essen-
tial part of many Latin American countries’ economies during most
of the twentieth century, and still are into countries such as Mexico,
Venezuela, and Bolivia. Although the world’s energy production and
consumption show rapidly changing tendencies, especially toward
alternative sources, there is no doubt that these countries are still major
players in the global energy markets. On the other hand, alternative
and renewable energy sources are playing an increasing role, includ-
ing in Latin America, in some cases as a national strategy in relation to
energy demand, oil prices, and environment; in others, especially in the
case of Brazil’s development of biofuels, also as an export commodity.
Discussing these and other issues in their chapter, Brand and Schewel
nevertheless wonder if Latin Americans will in the future be better
able to deal with the political sensitivities that have hitherto hindered
collaboration on oil and gas. Furthermore, we have to remember that
not all Latin American countries are resource rich; Central America and
Jan Gustafsson and Manuela Nilsson 255
most of the Caribbean countries rely heavily on energy imports and it

remains to be seen if the region’s recent steps toward greater integration
will also include energy issues and balance out those differences.
Another, to some countries essential and increasing, source of
currency income in recent years has been the remittances sent home by
emigrants, mostly from the United States and Western Europe. As demo-
nstrated in Orozco’s chapter, for a number of countries, remittances are
becoming the first source of income. He also shows that the explosive
increase in this tendency peaked, at least temporarily, around 2006 or
2007 and tended to stagnate or fall from 2008, mainly due to the effects
of the crisis affecting the major receptor countries of Latin American
immigrants, especially the United States, but also Spain. Nothing, how-
ever, seems to suggest that migration from Latin America will seriously
decrease in the coming years, with poverty and social inequality, and
now also the growing insecurity in some parts of the region, being the
major push factors. Although migrants come from almost all social
groups, the remittances are generally most important for poor families
of the recipient countries, who often depend partly or entirely on such
income. The destination and use of these resources, as well as their
potential importance to the reduction of poverty and inequality, are
central questions discussed by Orozco. It is clear that while the impact
of remittances on national and family economies is obvious, their
potential for social and economic improvement is far from fulfilled.
A lack of consistent national policies at a general level and of knowledge
and education among many receivers of remittances are reasons for
which the potential value of this important economic resource remains
to be exploited. Migration is, however, not only a question of money
and “push-and-pull” factors. For many Latin Americans, “home” is not
just one place and one country, but implies travelling or communicat-
ing between two or more countries on a more or less permanent basis.
Many regions of Latin America seem to be permeated by a transnational
way of life that contributes—as one factor among many—to changes in
social life and politics.
Politics and social life in Latin America are indeed closely connected
to globalization processes. Even alleged anti-globalization or national-
ist movements and phenomena are more often than not tied in with
globalization. Jeppesen’s analysis of Bolivia has already been mentioned.
But what happened in Bolivia is also part of the broader “Left wave” of
the decade from 1999 to 2009. This historically unprecedented situation
in the region, discussed in Martin Nilsson’s chapter, does not, however,
correspond to one single tendency. The causes of the rise of the Left are
256 Conclusions
many, but the social backside of globally oriented (neoliberal) economic

policies of the 1990s is one of the most important. But the attitude
towards globalization differs among the different Left tendencies, of
which Nilsson has identified two main ones, partly on the basis of such
an attitude: one is more nationalist and anti-imperialist, whereas the
other maintains a political and economic strategy aimed at getting the
best out of open-market policies while also trying to reduce the social
costs and inequality that seemed to be the price of first-generation neo-
liberal politics. The successes (and failures) of this Left wave raise a series
of important questions and uncertainties. How much to the left are
the different parties and movements formally defined as leftist in Latin
America today? Will the social democrat center-left, often based on
older socialist parties and movements, still constitute an actual alterna-
tive to the right and center-right in the future? And will the more radical
left, often based on new social movements but without a traditional
party structure, be able to maintain its influence in countries such as
Venezuela, Bolivia, and Ecuador, and possibly extend it to other coun-
tries? We could even go one step further and ask if the categories of Left
and Right are still meaningful, or at least as meaningful as in the twenti-
eth century. In any case, surveys by the Chilean-based Latinobarómetro
as well as the US-based Americas Barometer tend to indicate that,
despite the developments of the latest decade and a generalized and
stereotypical idea of extreme political tendencies in the region, most
Latin Americans tend to define themselves as close to the center rather
than to one or the other extreme (Shifter, 2011). This might seem to be
at odds with the evident fact of the left turn, but it does not necessarily
imply a paradox. While in most of the twentieth century Left and Right
were often seen as completely incompatible models for society, today,
years after the latest democratization wave, as discussed in Nilsson’s and
other chapters, left, center, and right are rather seen as options between
a number of choices in a democratic political and electoral system.
The latest annual report of Latinobarómetro (2010) tends to confirm
this tendency, as well as an increasing faith in democracy. This could
indicate that political democracy has become a fact in Latin America,
characterized by stability.
What also seems to be a fact, however, is that the traditional party
structures and political models of the twentieth century are becoming
more or more obsolete in many countries, or that they are, at least, in
the middle of a serious crisis. The 2011 elections in Peru in April and
June—first and second round, respectively—confirmed such a tendency,
or rather a number of tendencies: there was not a permanent party
structure able to support any of the candidates; rather, each candidate

created a coalition of groups, movements, and minor parties around
their candidacy. It was also striking that APRA, the party behind the
former (and twice) President Alan García, was virtually non-existent in
these elections. The most popular candidates of the first round in April
were also the youngest, and neither belonged to the traditional politi-
cal establishment of Peru. They could be termed as “right” and “left”
populists, respectively. The 35-year-old Keiko Fujimori, daughter of
the ex-President Alberto Fujimori (who is in prison for corruption and
violations of human rights), ran on a center-right platform, aimed at
continuing the country’s current economic strategy (and recent succes-
ses). The other was the 47-year-old Ollanta Humala, who stands for a
strong Peruvian nationalism with some elements of indigenism and
leftist politics that remind some of the radical presidents in the region.
Humala carried the majority in the first and second rounds, and there-
fore won the presidency at this second attempt. When he first ran for
president in 2006, he was considered a nationalist radical, but in 2011
he strongly retracted from some of the radical positions and rhetoric of
his first attempt as a presidential candidate. He also distanced himself
from Venezuelan president Hugo Chávez, of whom he has been accused
of being a protégé. Nevertheless, the “Chávez” weapon and accusations
of radicalism and economic nationalism were some of his opponent’s
main arguments against him. In a certain sense, it would seem that
Fujimori and Humala represent two different ways of coping with
globalization: one strategy, Fujimori’s, opts for a very open economy with
a minimum of state control and intervention, whereas Humala stands
for a soft nationalism that permits some state control over natural and
other resources, combined with efforts at poverty reduction, a strategy
more similar to that of ex-President Lula of Brazil than to that of Chávez.
Humala’s victory in Peru could be seen as a sign that the “Left wave” is
not yet over—and possibly that it is a permanent phenomenon—but a
broader perspective on the Peruvian elections and the political situation
in the region as a whole could also point at another hypothesis, namely
that the whole political system is in crisis, one that could lead to the end
of most twentieth-century’s national political models, including exist-
ing party systems and structures and the general idea of politics clearly
definable as pertaining to the “centre,” the “right,” or the “left.”
The current reform process in Cuba also seems to point in this direc-
tion. Although clearly defined as, and allied with, the political Left, Cuba’s
new economic strategies are pragmatic responses to globalization—and
to the problem of the nationalist revolution’s survival—that have
258 Conclusions
similarities with the approaches of Asian socialist countries such as

Vietnam and China. Thus it would appear that even this traditional
symbol of a hard-core Left government is slowly moving toward
economic—and perhaps eventually political—solutions not specifically
identified with the Left.
As this collection of essays shows, globalization is a process that affects
and is affected by more than economics and politics. Human security, in
a very broad sense, seems to be a growing worry to the individual as well
as to the community. Some of Latin America’s most pressing problems are
not readily addressed by mainstream politics. While social inequality,
the role of the State, and the management of national resources are the
main elements of political polemics, security, climate change, and other
problems seem to be much more difficult to deal with. These growing
problems are sometimes used as a rhetorical weapon against an opponent
(who allegedly does nothing or does it in the wrong way), but actual solu-
tions are hard to come by. Religion is, for millions of people, a cultural
and psychological answer to the increasing “lack of ontological security,”
as discussed by Pérez-Baltodano. Worried about the perspectives of a life
that is not only difficult but increasingly more insecure, religion becomes
for many a more active spiritual resource that helps to deal with the fears
and worries of a less secure existence. Traditional and mainstream reli-
gion, mostly the official Catholic Church, is not always sufficient, and
millions turn to more charismatic churches, many of which have their
origin in the United States. Pérez-Baltodano sees two possible effects of
this trend, one positive and one negative. On the positive side, “char-
ismatic Christianity enhances civic virtues, and radically improves the
quality of gender relations and family life in Latin America.” Christian
principles such as justice and solidarity would confront the “instrumen-
tal logics of the market.” On the other hand, Pérez-Baltodano sees the
possibility of a negative scenario implying a vicious circle, in which
people revert to providentialism as the main, or only, answer to human
insecurity, while politics and democratic institutions are blamed for the
individual and collective social problems and looked upon with mis-
trust as instruments for solutions. What the outcome will be remains
to be seen, and both tendencies will probably coexist for many years.
Active and charismatic religious beliefs can be a source of higher moral
standards for the individual, but also an indirect obstacle to active
participation in more mundane social institutions. In relation to this, the
capacity of the State to provide security and other elementary rights for
its citizens is a fundamental problem. Both Pérez-Baltodano and Orozco
point to the fact that the State in Latin America still has difficulties
providing the social and economic security—work, education, housing,

etc.—to which every citizen is entitled. Many Latin Americans lack basic
security of life and property, and rising crime rates make the situation
worse. According to Latinobarómetro, nine out of ten Latin Americans
live in fear of becoming victims of a crime, and 27% believe that crime is
the most important problem their country is facing. This is especially evi-
dent in Venezuela and Central America, but also in Mexico and even in
Argentina (Latinobarómetro), where between 35%, as in Mexico, and up
to 64%, as in Venezuela, consider crime to be the most serious problem.
Both Olney and Stiles show how the interaction between local,
national, regional, and global factors contributes to the security crisis
of Mexico and Central America. Particularly in these countries organ-
ized (and not so organized) crime and public security are probably
the most important problems to deal with. As underlined in the three
contributions to the section on globalization’s impact on security,
crime and violence are very complex problems that need multilateral
responses, including economic and social policies. The strategy of
Mexican President Calderón has been strongly criticized for escalat-
ing rather than stopping violence, and until now the death toll has
confirmed the rationale behind this criticism. On the other hand, one
wonders if there are real alternatives, especially now that drug-related
violence has recently been spreading from Mexico to Central America.
Reinforcement of the law, further militarization of the conflict, and the
destruction of coca plantations have provided “hard” answers for years.
The counter-arguments suggest that these answers hardly ever show
positive results and even tend to lead to more violence. One of the main
arguments against the “hawks” of the drug war is that as long as the
money and the market are there—especially in the United States—drugs
will find their way to the consumers and the cartels and drug lords will
continue to exist. Therefore, an alternative would be to concentrate on
the consumption side rather than on the production and trafficking.
Without the United States and other international markets, the car-
tels would hardly exist and would definitely not have the huge power
they possess today. One of the most radical measures proposed is the
legalization of drugs. But to concentrate on the demand rather than the
supply would require a radical, and probably unlikely, change in the US
policies toward drugs. Many Latin American countries are more or less
critical of these policies and of the federal Drug Enforcement Agency
(DEA). The current government of Bolivia is strongly opposed to the
strategy of burning crops, because to the Bolivians the coca is a cultural
health product that has been used for thousands of years, rather than
260 Conclusions
a raw material used in the production of cocaine. Some see a danger of

US-dominated militarization in the war against drugs, and various presi-
dents, including Chávez, Kirchner, and Lula da Silva, have been very
critical of the US military bases established during the previous decade
in Colombia. Even Mexico’s conservative President Calderón has been
critical of what is seen as a unilateral US attitude. The problem is not
simply and only one of drugs moving to the north, but also of guns
being bought legally in the United States and smuggled into Mexico.
These arms are part of the arsenals used by the cartels against Mexican
police and army. In any case, the problems of drugs and organized
crime in Latin America cannot be solved only at the national or even
the regional level. With globalization providing the framework and
the opportunities for transnational criminal networks to expand and
integrate, the region will have to cooperate to solve the problems of rising
crime rates—not only within, but also with their northern neighbor.
During the twentieth century, Latin America’s most important
international relations have been, in general, with the United States.
Common expressions such as the “US’s back-yard,” the “big stick,”
and “dollar diplomacy” all relate to relationships of hierarchy and
dependence between the “two Americas.” In the twenty-first century,
things begin to look very different. Relations between the United States
and Latin America, at\the bilateral as well as at the multilateral level,
continue to be important, but the terms are changing, and in the future
the United States might cease to be Latin America’s most important
counterpart. Three chapters in this book are therefore dedicated to
the new partners globalization provides for the region. While relations
between Europe and Latin America are historically bound by colonial
ties, Mendizabal and Edwards underline that their fundamental charac-
ter has changed several times, and in the past two decades they have
experienced important changes, including a higher level of reciproc-
ity. The fact that some countries in Latin America experience rapid
economic growth while parts of Europe go through serious crises is just
one indicator of the changing conditions of that relationship. However,
the most important element of change in Latin America’s international
relations is probably the emergence of new and powerful global actors
that lack the resemblance to colonial, neocolonial or post-colonial ties
and offer a more interdependent relationship. The traditional North–
South or centre–periphery type of relationship is increasingly being
substituted by South–South relations. A major actor in this new scheme
of global relations is obviously China. In his chapter about Latin
America’s relations with China, Ratliff explores both the historical as
well as the contemporary dimensions of this relationship. Ratliff shows

that the relations with China have had an important positive impact on
the region’s economy and on the prices of several export commodities,
while speculation about the possibility of China’s imposing political
conditions on the economic exchange appear to be unfounded. Ratliff
maintains that Chinese corporations are pragmatic business partners
that are much more interested in the acquisition of raw materials and
agricultural products from Latin America and in the expansion of a new
market for their products. Relations with China are, thus, both an effect
of globalization and a conscious response to it as Latin America seeks
to maneuver in an increasingly more complex world of economic and
political networks.
Some of the Latin American countries have definitely advanced to
being key players in this new game. Undoubtedly, the far most impor-
tant political and economic global actor in Latin America is Brazil. Latin
America’s biggest country by any measure, Brazil is traditionally consid-
ered a regional strong power, but in the past few decades, and especially
under the two terms of Ignacio Lula da Silva as president, the country’s
global importance has increased significantly. What seems to be the
most interesting and innovative aspect of this development, is that the
goals pursued by president Lula da Silva and his administration—and
seemingly by his successor, Dilma Rouseff—are not only and simply
to obtain political and economic benefits for the country and its busi-
nesses, but to have a broader strategy for a new global order in which
the traditional hierarchical perception of center and periphery, of
North and South, will no longer dominate practices and perceptions of
global relations. This huge task and the enormous international atten-
tion that Brazil and its leaders have received in the past years also raise
many questions. Will it be possible to combine the pursuit of narrower
national goals with a global strategy of what Brazilian foreign minister
Amorim calls “building a fairer and more democratic world order”? (See
chapter 12 in this volume.) Can and will Brazil be a, or maybe even
the, major force in a desired, but probably extremely difficult process
of fundamental change in global relations? What will be the outcome
of the BRIC (Brazil, Russia, India, China) or IBSA (India, Brazil, South
Africa) cooperation? Will there be economic strength and political will
to modify the global power equilibrium? Will Brazil’s president from
2011, Dilma Rousseff (elected October 2010), be able to act with the
same combination of efficiency and charisma as her predecessor Lula?
Such questions underline the regional and global importance of Brazil.
But although Brazil is Latin America’s most important global actor, it
262 Conclusions
is vital also to look at other countries and other regional trends. The
creation of ALBA, the Bolivarian Alternative for Latin America, by
the initiative of Venezuela and Chávez, with its anti-imperialist—or
anti-US—tendency, is one of those trends. The creation of the Union
of South American Nations in 2008, and of the Community of Latin
American and Caribbean States in 2010 are also very important expres-
sions of a region wanting to play a different role in the twenty-first
century than the subordinate one of the twentieth. As a consequence of
these trends, the OAS, the major instrument of inter-American relations
in the last century, seems to be in a critical situation. Once seen as an
instrument of US-dominated hemispheric relations, today its impor-
tance and possibility of actions have diminished.
A preliminary title for this book was: “Latin America and Globalization—
Hopes and Fears.” And, in a certain sense, a final conclusion is that Latin
America has undergone profound changes in the latest decades, some for
the better, others for the worse, and that Latin America today is a region
with grounds for hope as well as for fear. Hopes, because democracy
seems to be more stable than ever before, because an improved and
more independent economy creates a potential for solving problems of
poverty, and because new and more equal relations in the region and the
world may help create a new and better world order. Fears, because Latin
America is still the most unequal region, because millions of people lack
the most basic social, economic, and human rights, and because violence
and crime seem to be a more acute problem here than anywhere else
in the world. And, at any rate, hopes as well as fears depend not only
on national and regional processes, but very much on Latin America’s
current and future responses to globalization.
References
Latinobarómetro. Available: http://www.latinobarometro.org/latino/latinobaro
metro.jsp. (Accessed on June 20, 2011).
Shifter, M., 2011, “A Surge to the Center.” Journal of Democracy, January 14.
Index
ALBA (Bolivarian Alliance for the social movements, 96–114

Americas), 21, 28–9, 85, 87, 90, violence, 96–114, 175, 178
92, 210, 262 Brazil
Argentina democracy, 77–9
crisis, 6, 24, 29, 31 drugs, 180
democracy, 77–9, 92 economic policies, 6–8, 18–21, 31,
economic policies, 17, 21–5, 90, 36–58, 61–2, 195, 232–52, 254
92, 196 energy, 7–8, 23, 30, 36–58, 218, 254
economy, 17–21, 45, 61 international relations, 14, 231–49,
energy, 8, 23, 37–8, 54 261
international relations, 22, 192, with China, 212–14, 216–21
196, 211 with Europe, 188, 190–5, 201–2
with China, 25, 31–2, 211, politics, 22, 23, 27, 30–1, 36–58,
214–21 82–91, 257
with Europe, 194, 203 regional integration, 22–5, 29–30,
with Mercosur, 25–9, 233, 242 36–58, 231–52
with USA, 25 religion, 120, 126–7, 131
politics, 77–9, 82–3, 86–7, 90, 92, violence, 177, 180, 183
175–7 BRIC countries, 19, 238–9, 242–5,
religion, 120, 126 247–8, 261
violence, 177, 183, 259
Asia, 4, 14, 29–32, 59, 97, 124, 134, Caribbean, the, 8–10, 19, 27–9, 31,
145, 191–3, 200, 208–41, 254, 37–43, 50–8, 62, 123, 157–8,
258 171–2, 177, 182–3, 188–90,
Asian-Pacific Economic Cooperation 193–6, 198–9, 207–10, 215,
(APEC), 214 217, 225, 239, 255, 262
Catholicism, 126–8
bagasse, 51 Central America, 7–8, 10–11, 18, 27,
biofuels, 36–9, 49–51, 254 29–31, 37, 50–3, 55, 60, 62,
Bolivarianism, 24, 28 77, 78, 90, 134–45, 151–3,
Bolivia 156–7, 172–3, 176–9, 182–3,
coca, 96–114, 259 189–90, 195–6, 198, 236, 254,
democracy, 77–9 259
drugs, 259 Chile
economic policies, 21, 89, 96–114 democracy, 78, 79, 80, 91
economy, 17, 29, 61, 89, 96–114 economic policies, 21, 22, 26, 30,
energy, 8, 23, 38, 96–114, 254 31, 33
indigenous peoples, 96–114 economy, 20, 23, 24, 26, 29, 31, 33,
international relations, 22, 23, 26, 62, 193, 194
38, 45, 96–114, 196, 253 energy, 8, 38, 53, 54, 103
politics, 9, 18–23, 38, 77, 82–7, 89, international relations, 21, 26, 27,
91, 96–114, 253–77 30, 33, 53, 90, 103, 194, 196,
religion, 120, 133 213, 214, 216, 217, 219, 240
263
264 Index
Chile – continued development cooperation, 190,

politics, 77, 82, 83, 84, 86, 87, 90, 198–200
91, 92 development state, 21
religion, 126, 127 Dominican Republic, 63, 68–9
regional integration, 21, 26, 29, 30 drug cartels, 10, 28, 119, 134, 140–1,
China, Peoples Republic of, 5, 12–14, 145, 151–6, 163, 178, 220,
18–20, 30–2, 38, 43–5, 48–9, 259–60
53, 55, 151, 191–4, 197, 202, La Familia drug cartel, 152, 158
207–25, 231–2, 238–45, 248–9,
258, 260–1 economic crisis, 6, 38, 44, 51, 69, 171
Five Principles of Peaceful Ecuador, 7, 17–23, 45, 61–3, 69, 77–9,
Coexistence, 208 82–5, 87, 111, 172, 175, 221, 256
Great Leap Forward, 213 education, 8, 10, 41, 43, 59–60, 62,
relations with the United States, 67, 72, 77, 88, 98, 125, 171,
215–16, 224, 225 190, 219, 223, 255, 259
citizenship, 11, 117, 119–22, 171–6, El Alto, 97, 99,103, 103–4, 110
183–4 elective affinity, 127–8
class structure, 85 electoral democracy, see democracy
climate change, 21, 55, 190–1, 197, El Salvador, 60–3, 66, 77, 79, 83–5,
198, 201–2, 216, 240, 258 87, 126, 135, 137, 140–3, 174,
Cochabamba, 97, 99–102, 106, 109–10 179, 189
Cold War, 1, 3, 7, 13, 17–19, 29–30, emigration, 66, 123, 174
36, 77, 82, 134–5, 144, 149–50, employment, 77, 122, 141, 172, 174
155–8, 161, 164, 208, 225 unemployment, 69, 89, 121–2, 174
Colombia, 7, 22, 25, 28–30, 61–3, energy, 7–8, 13, 23, 30, 36–55, 195,
78–9, 83, 119, 126, 129, 140, 197, 202, 215–16, 218, 221,
144, 151, 153, 158, 163, 172, 244, 254–5
176–8, 180–3, 190, 195–6, 214, Energy and Climate Partnership for
217, 219, 241, 260 the Americas, 54
Confucius Institutes, 219 ethanol, 37, 39, 46, 49–52
Costa Rica, 53, 60–2, 71–3, 77–87, 90, Europe, 4, 5, 12–16, 29, 44, 58–9, 77,
92, 142–3, 214–19 97, 151, 171–2, 197, 210, 222,
crime, 4–5, 10–13, 115, 123, 134–40, 237, 260
142, 145, 150–7, 161–4, 176, European Union, 4, 21, 52, 171,
181–2, 190, 220, 259–62 188–203, 231
Cuba, 26, 37, 39, 42–4, 61, 63, 78–9, democracy and religion, 115–21
85, 87, 212–15, 219–20, 257 relations with Latin America,
cultural diplomacy, 213 188–203
culture, 2, 4, 10–11, 14, 43, 107,
116, 119, 128, 135–6, 151, financial literacy, 71, 72
162–5, 172, 190, 208, 211, foreign direct investment (FDI), 47,
218–19, 222 193–5, 207, 236
Chinese FDIs, 216–17
democracy, 1, 4, 9–11, 13–14, 40, European FDIs, 193–5
77–92, 104–5, 116–29, 150, Free Trade Area of the Americas
156–60, 165, 171, 173, 183, (FTAA), 25, 26, 28, 30, 77, 90,
198–202, 218–22, 256, 262 190, 237
democratization, 3, 6, 9, 77, 78, 80, G-20, 25, 134, 192, 201, 214,
96, 256 239–47
Index 265
gangs, 10, 134–45 insecurity, see security

gas war, 97, 102–5, 109–10 Institutional Revolutionary Party
governance 123, 184, 211, 223 (PRI), 149–50, 154–66
democratic governance, 2 integration, 18
global economic governance, 19, into the global market, 1, 7, 22, 23,
232, 234, 240, 243, 247–9 24, 26, 79, 81, 85, 149
global governance, 21 national integration, 165, 171,
local governance, 11, 183 183
multi-level governance, 85 regional integration, 17, 21, 23,
governance void, 11, 183 26–32, 54, 90, 156, 189, 196,
government void, 173 198, 239, 255
growth Inter American Development Bank
economic growth, 4–7, 21, 24, 31, (IADB), 14, 145, 199
38, 52, 123–4, 193, 211, 222, interdependence, 2, 3, 12, 97, 192
233, 238, 242, 245, 260 International Monetary Fund (IMF),
export-led growth, 6 17, 19, 25, 80, 121, 193, 199,
industrial growth, 6, 55 232–3, 243
Guatemala, 60–3, 65–72, 77–84, 87, investment 13, 37–8, 42, 45, 47, 50–1,
91, 120, 126–7, 135, 137, 53, 55, 59, 63, 65, 67, 70, 73,
139–41, 174, 177–9, 182, 189, 99, 191–5, 198, 199, 236–7, 242
241 Chinese investment in Latin
guerrilla groups, 28, 83, 85, 135, 156, America, 207–24
158, 163, 178, 181–3 Latin American Investment Facility,
guerrilla warfare, 82, 176, 213 191, 199
Iran, 42–3, 49, 153, 192, 209, 247
Honduras, 25, 60–1, 79, 120, 135,
137, 140–3, 174, 179 left parties, the, 9, 12, 77–92
human mobility, 58 liberalization
human security, 1, 10, 115–22, 129 economic, 6, 237
see also security political, 40, 52
hydroelectric power, 52–3 logistical state, 22, 26, 27
IBSA, 239–48 Maras, 5, 135–45

immigrants, see migration MERCOSUR, 21–30, 77, 90, 189–201
immigration, see migration Mexico
Import Substitution Industrialization democracy, 79, 83
(ISI), 6, 78–80, 91 drugs, 10–11, 149–71, 259–60
indigenous population, 82, 84, 88, economic policies, 17, 21
89,112, 153, 172 economy, 6, 18, 20–1, 52, 62
indigenous rights, 9, 107, 108 energy, 7, 36–7, 52–5, 254
indigenous social movements, 18, international relations, 189–203,
22–3, 89, 96–9, 104, 107–12 207–25
inequality, 3, 4, 6, 8–9, 97, 119, 122, with China, 211–21
123, 125, 171, 224, 238 with Europe, 189–203
income inequality, 69, 124, 238 migration, 62–7
social inequality, 81, 92, 124, 197, politics, 83–4, 149–71
255, 256, 258 religion, 119–20, 126
inflation, 6, 41, 60, 69, 98, 233 security, 10–11, 134–6, 139–47,
informal citizens, 5, 11, 173, 183 149–71
266 Index
Mexico – continued 174, 175–8, 190, 196, 210, 242,

violence, 10–11, 134–6, 139–47, 256–7
149–71, 172, 174, 177, 182–6, Petrobras, 23, 37, 39, 45–9
259–60 Petrocaribe, 36, 43
migration, 11, 13, 58–73, 123, 135, petro-diplomacy, 37, 39, 42–5, 55
137, 171–4, 188, 197–202, 220, privatization, 6, 17, 29, 79, 86–7,
255 98–102, 112, 232
money transfer, 8, 59, 68 protectionism, 6, 79
Monroeism, 28 providentialism, 116–17, 125–6, 128,
Movimiento Nacional Revolucionario 258
(MNR, Bolivia), 98, 104, 105
MS-13, 135–43 regionalism, 7, 13, 17, 26–30, 33
multilateralism, 19, 26–7, 33, 201 see also regionalization
regionalization, 2, 4, 19
National Action Party (PAN), 149, see also regionalism
150, 155 religion, 10, 116, 120, 127, 172, 258
nationalism, 2, 18, 24–5, 32, 110–12, Catholic Church/Catholicism, 119,
159, 165, 224, 257 126–7, 152, 258
natural resources, 31, 89, 110, 207, Christianity, 125–8, 258
217, 224, 253–4 remittances, 5, 6, 8, 9, 58–73, 172,
neoliberalism, 21, 31, 77–82, 85, 91, 174, 193, 197, 255
92, 122, 123 Republic of China (Taiwan) (ROC),
New Economic Policy (NPE), 98–9 13, 207, 210, 213, 215
Nicaragua, 45, 60–3, 70–2, 77, 79–91, resources, see natural resources
120, 126–7, 143, 174, 179, 189, Russia, 43, 44, 55, 59, 134, 192, 202,
196 214, 238–9, 242–3, 248, 261
North American Free Trade Agreement
(NAFTA), 11, 21, 29, 77, 149, secularization, 116, 118
156, 157 security, 11, 13–14, 19, 27–8, 77,
nuclear power, 50–4 115–29, 150–4,161–5, 171,
176–81, 188, 191, 202, 208,
One China policy, 215 210, 216, 218–21, 237, 258–9
ontological security, 10, 115, 129, security cooperation, see security
259 social democracy, see democracy
Organization of American States social spending, 121
(OAS), 12, 28, 145, 193, 262 South-South cooperation, 5, 44, 192,
199, 216, 231–40
Paraguay, 8, 18, 22,23, 29, 52, 61–2, Sovereignty, 117, 144, 163, 165, 208,
77, 79, 83, 87, 233 233
paramilitary, 176–8, 181–3 Spain, 14, 29, 53, 78, 118, 135, 143,
Partido de la Revolución Democrática, 190–201
Mexico), 84, 150, 156, 159–61, strategic partnership,189–90, 193,
163 201–2, 239, 244, 248
Party of the Democratic Revolution structural adjustment program (SAP), 98
(PRD, PDVSA, 37, 39–41, 43, 45
peasant movement, 99 Taiwan see Republic of China
people trafficking, 4, 139–40, 152 transnational criminal networks, see
Peru, 7–8, 18, 21–2, 30–1, 43, 61, crime
77–87, 111, 120–1, 126, 158, Trinidad and Tobago, 7, 8
Index 267
Unasur, 21, 30, 236–7 politics, 22–4, 38–50, 77–8, 81–4,

unilateralism, 248 87–92, 256–7, 262
unipolarity, 17, 19 religion, 120, 123, 126
United Nations Security Council, violence, 183, 259
240–3, 246–9
Uruguay, 8, 18, 21, 29, 37–8, 53–4, water war, 97, 99–103, 178
61–2, 77–87, 90, 92, 214, 233, War on Drugs, 156–8
241 welfare state, 1, 16, 117
wind power, 53–4
Venezuela World Bank, 8, 17, 25, 30, 52, 80,
democracy, 78, 79, 81, 92 99–100, 105, 121, 193, 199,
economic policies, 21 233, 243
economy, 17, 22, 24, 29, 38–50, 55, World Trade Organization (WTO), 18,
61, 62, 88, 218 20, 21, 25, 33, 80, 217, 237,
energy, 7–8, 36, 38–50, 54–5, 61–2, 239–41, 243–7
88, 218
international relations, 22–9, 38–50, Zapatista Army of National Liberation
55, 90, 196, 203, 210, 214, 218, (EZLN), 149, 158
225, 262

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International Political Economy Series

Series Editor: Timothy M. Shaw, Visiting Professor, University of

Ivelaw L. Griffith (editor)

Jerry Haar and Anthony T. Bryan (editors)

R. Lipsey and P. Meller (editors)

Gordon Mace, Andrew F. Cooper and Timothy M. Shaw (editors)

Manuela Nilsson and Jan Gustafsson (editors)

Leo Panitch and Martijn Konings (editors)

Julia Sagebien and Nicole Marie Lindsay (editors)

Henry Veltmeyer, James Petras and Steve Vieux

Henry Veltmeyer, James Petras

International Political Economy Series

List of Tables vii

10 Latin American and European Relations in an Age

3.1 Geographic distribution of remittances (as percentage

Raul Bernal-Meza is Professor of International Relations at National

Steen Fryba Christensen is an associate professor at Ålborg University,

Guy Edwards is a research fellow at the Centre for Environmental

Anne Marie Ejdesgaard Jeppesen is an associate professor at Copenhagen

Jan Gustafsson is an associate professor and Director of the Center

subjectivity. He has a particular interest in Cuba and the national and

Enrique Mendizabal is a research fellow and Program Leader of the

Manuela Nilsson is an assistant professor and Department Chair of Peace

Martin Nilsson teaches at the Department of Political Science at Linnaeus

Patricia Olney is an associate professor of Political Science at Southern

Manuel Orozco is senior associate and Director of Remittances and

Andrés Pérez-Baltodano is Professor of Political Science at the University

William Ratliff is a fellow at Stanford University’s Hoover Institution

Matthew Schewel is a journalist with the Latin America Advisor news-

Thomas Shannon Stiles is adjunct professor of International Relations

To talk about Latin America and globalization seems to be an almost

human social organization, extending the reach of power relations over

sight, the picture is confusing and seems at times even contradictory.

Latin American responses to the impact of economic

Globalization’s socio-political impact on Latin America

As economic, social, and political issues interact with one another

on the capacity of the Latin American State to generate conditions

Globalization and security

Pérez Baltodano’s analysis seems to echo concerns already voiced a decade

has helped this process along by creating opportunities for transnational

Alliances old and new: Latin America as a global actor

an imminent threat to its security interests, the United States is

Policy Paper, which focused on support for mutual interests, economic

Changes in the global system

In order to identify the characteristics of the actual phase of historical

came to be known as the “third industrial revolution.” It implied new

Global system in the first decade of the twenty-first century

A context consisting of an international political system in transition,

Transformation of the international agenda

Characteristics of international trade

Impact of technological development

A synthesis of the Latin American sub-system

Pueblos de Nuestra América (Bolivarian Alliance for the Peoples of

Identifying the main components of political heterogeneity in

promoting innovation in production and other initiatives that reduce

Construction (or reconstruction) of a state based on new social classes and

Argentine neo-developmental model

Venezuela in transition toward state capitalism

Paradigms of foreign policy

Argentina: Open economy nationalism or free market nationalism

• The vision or idea regarding globalization—in which we include the

the defense of those countries most criticized by the United States,

Chile: Logistical state, multilateralism, open regionalism, and realism