Peruvian Workers Resist Neoliberal Policies – Will Mexico Follow?


Throughout Latin America, revolt is growing against so-called free market economic policies, a major article in the July 19 New York Timeslamented. The immediate focus of the article was the mass protests in the southern Peruvian city of Arequipa against the planned privatization of two state-owned electricity generators.

The newly installed government of Alejandro Toledo, himself raised to the presidency by a popular revolt against the brutal neoliberal regime of Alberto Fujimori faced a virtual insurrection in the key highland city.

In his turn, Fujimori had initially claimed to be a liberal when he ran against the rightist ideologue Vargas Llosa. And then, once elected, he proceeded to implement the policy that Vargas Llosa openly campaigned for.

Likewise, in his election campaign, Toledo had promised that he would not privatize the electricity generators and after his election proceeded to try to sell them to a Belgian conglomerate, Tractabel. Moreover, the Peruvian courts are now investigating this same corporation on charges that it bribed Fujimori.

The mass revolt forced Toledo to back off from his planned privatization. But he has not abandoned it. He referred the question to the Peruvian Supreme Court. The fact is that unless Toledo is prepared to break from capitalist and imperialist domination, which he clearly is not, he has no choice but to continue his privatization projects. The other bourgeois rulers in Latin America are in the same dilemma.

In its July issue, Umbral (“Threshold”), the paper of Socialist Action’s Mexican cothinkers, the Liga de Unidad Socialista, featured a report of the Arequipa uprising in its lead article, which denounced the privatization plans of the newly elected Mexican president, Vicente Fox. The article was entitled: “A Mexican-Style Enron Plan. ”

The author of the article, Jaime Gonzalez, stressed the violence and determination of the Arequipa uprising: “Hundreds of people were injured, dozens arrested, at least one [protester] killed.” He continued:

“Hundreds of soldiers tried to impose control after Toledo decreed a suspension of constitutional rights for 30 days. But the population, enraged by the repression, came back into the streets of Arequipa, the second largest city in the country … [and] they boldly defied the state of siege.”

Moreover, the revolt started to spread. In the adjoining department [province] of Tacna, huge crowds blocked the roads leading to the departmental capital, threatening an explosion if the government tried to keep Arequipa under military control.

In Mexico, Gonzalez pointed out, there was also a new government brought into office by a revolt against an old regime that had abandoned its populism to embrace the new capitalist offensive. In Mexico, like Peru, the new government claimed to be offering a corrective to antidemocratic policies by its predecessor. But Mexican president Fox’s promises are proving equally empty:

“On April 13, on his radio program, Fox promised that he ‘saw light at the end of the tunnel,’ that the economy would resume its growth in June. … There are a number of reasons why he would have done better to be quiet. One of the most important is one that all our readers are familiar with. … Every time the president predicts growth, instead of the situation getting better, we fall apart.”

There are essentially two pillars of Fox’s economic policy, Gonzalez wrote-the privatization of the electrical industry and taxing food and medicines. So, the rebellion in Peru was a very bad omen for the Mexican government.

In Mexico, as in Peru, the bourgeois opponents of the incumbent government want to take advantage of the rebellion against neoliberal policies but without offering a real alternative.

“The PRI [the former government party] and the PRD [a somewhat populist bourgeois party] know that the question of electricity rates is very delicate, that privatizations have a terrible image for the population, and that above all it is necessary to prevent the sort of popular protests that happened in Peru….

“But what may happen is that their plans will be no less privatizing but will be seen as benign in comparison to the more aggressive plan of Fox. A clear example is the bill presented by Senator Manuel Barlett, who as a former minister of the interior was one of the leading neoliberals in the PRI.

“Today he wants to present himself as a knight in shining armor defending nationalized industry. What he offers might be called a Mexican Enron scheme. It calls for keeping state ownership of distribution but leaving private corporations wide margins to make extortionate profits from the generation of electricity.”

In other words, in Mexico, there is the same wiggling of bourgeois politicians between the demands of the capitalists for greater profits and the rebellion of the masses against their robbery.

The July 19 New York Times article put it this way concerning Latin America in general:

“Sometimes-violent protests in recent weeks have derailed the sale of state-owned companies worth hundreds of millions of dollars. The unrest has made potential investors jittery, and whipsawed governments already weakened by recession.

“The backlash has given rise to leftist politicians who have combined pocketbook issues and economic nationalism to explosive effect.”

Some bourgeois economists are even ready to concede defeat: “The most worrying reading is that perhaps we have come to the end of an era,” said Rafael de la Fuente, chief Latin American economist for BNP Paribas in New York. “That we are closing the door on what was an unsuccessful attempt at orthodox economic reforms at the end of the 90s.”

The New York Times writer, Juan Forero, of course had to argue that it was only “popular perception” that the free market policies had not been beneficial for working people. But he had to recognize that the “popular perception” was now becoming a real force.

“‘We privatized and we do not have less poverty, less unemployment,’ said Juan Manuel Guillén, the mayor of Arequipa and a leader in the antiprivatization movement here. ‘On the contrary. We have more poverty and unemployment. We are not debating theoretically here. We are looking at reality.'”

Forero had to admit: “Indeed, 44 percent of Latin Americans still live in poverty, and the number of unemployed workers has more than doubled in a decade. Tens of millions of others, in some countries up to 70 percent of all workers, toil in the region’s vast informal economy, as street vendors, for instance, barely making ends meet.”

Forero did give statistics about a decline in the percentage of poverty. But “popular wisdom” holds that “there are liars, damn liars, and statisticians.” And in Latin America, it seems that the hired economists’ statistics of economic improvement are no longer being believed by the masses of people who are confronted with the reality of growing poverty and unemployment.

However, there is no longer any room for the populist half-measures of the past. Within capitalism, there is no alternative today to neoliberalism except socialist revolution. That is a lesson that the masses in Latin America are learning.

It is why a popular slogan in Argentina is “all the bourgeois politicians must go,” and why the people are trying to build their own alternative forms of government. Similar experiments are also beginning to develop elsewhere in Latin America, including in Mexico, as the July issue ofUmbral notes.

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