By Luis Enrique
The present period of instability is a clear example of the intolerable contradictions within the capitalist system on an international level. This situation has already found forms of expression through both reactionary and revolutionary channels. In recent months we have witnessed both the war in Afghanistan, and the revolutionary upsurge in Argentina to give just a couple of examples.
The movement in Argentina and the convulsions in Venezuela, Colombia, Ecuador, and the rest of the region are not isolated, but neither are they completely spontaneous. All of these events are taking place within the general economic and social crisis of the whole of Latin America. For this region of the planet, the 1980s were an economic catastrophe, and the period is known as the "Lost Decade". These years were characterized by severe economic stagnation that had traumatic repercussions for the most oppressed layers of society.
By the 1990s Latin America began to experience a certain level of growth based on exports, and the economy grew at a rhythm of 3 percent per year. But although this development provided juicy profits for the local capitalists and their imperialists partners, it meant little or nothing to the masses of Latin Americans, as the cheap exports were based on a general reduction of wages, increased layoffs, and a paucity of new job creation. In conjunction with this, over the past decade, public enterprise has been almost entirely dismantled; public spending was brutally reduced, and public debt for the year 2000 reached $740 billion.
That is not all. Another element that explains the instability afflicting Latin America at the present time is the fact that the region has suffered three major crises in just six years. The crisis of 1995 that began in Mexico and had an impact on Argentina and Uruguay; the crisis of 1997, caused by the collapse in the Asian "tiger" economies, which focused mainly on South America and caused a new plunge in the price of raw materials in the region; and now the crisis of 2001 which is afflicting the entire region. This new crisis is characterized by a significant fall in exports and an even further cheapening of raw materials. In 2001, Latin America's two primary raw materials exported, petroleum and coffee, fell 20 and 30 percent respectively. These crises have had severe consequences for the masses of Latin Americans, with official unemployment at a ten year high of 8.4% at the end of 2001.
There is no indication that any significant recovery is possible in the short term. The problems not only persist, but are increasing, with the servicing of the public debt costing on average 11% of annual GDP - a high figure by economists' standards. Another unfavorable sign is the level of direct foreign investment which fell from $64.8 billion in 2000 to $58.3 billion in 2001.
In the recent period, aside from Brazil, Argentina, and Colombia, the national currencies of thirteen countries in the region were strengthened against the dollar. But it is clear that this temporary stabilization will be transformed into its opposite at a certain point - a strong currency makes exports more expensive at a time when increased exports offer the only possibility of recovery. This situation will become more and more acute as the crisis continues to deepen and spread. While a monetary devaluation would serve to boost exports, it would make the servicing of the foreign debt intolerably expensive. The entire region would face increasingly severe social and economic consequences. In the case of Argentina foreign debt servicing cost 12.5 percent of GDP in January of 2001, by December of the same year it had reached 23.5 percent. In Brazil, which accounts for one third of Latin America's GDP, foreign debt servicing costs 15.5 percent a year.
During the crises of 1995 and 1997, in spite of the devastating effects on the population, there was a relatively rapid recovery due to the then-ongoing boom in the US economy. This favored not only the Latin American economy, but also the global economy as a whole. Now conditions are very different - the US economy is in crisis, and its impact on the world economy is already being felt - a recovery in Latin America will take longer than in the past.
Taking all of this into consideration, it is not difficult to understand why there is so much tension in Latin America at the present time. During the 1980s, the burden of the crisis fell on the shoulders of the working class. During the 1990s, the recovery was based on the sacrifices of the working class. Now the workers are again being forced to take the full brunt of the crisis. For many long years the working class has patiently put up with the intolerable conditions imposed upon them by the capitalist system. But patience has a limit and all indications are that it has run out. The heroic and crucial struggle of the Argentinean working class is only the first sign of things to come in this part of the planet. In Brazil they have called a general strike for March; in Bolivia, Peru, and Ecuador there have been massive mobilizations against the privatizations and austerity measures imposed by the IMF and World Bank; in Venezuela the workers have forced Hugo Chavez to implement measures that directly threaten capitalist interests; and in Mexico, the rank and file workers of several major trade unions have begun to mobilize against privatizations and attacks on their living standards.
At this point in time, it is indispensable that the forces of Marxism energetically orient ourselves towards the mass organizations of the workers in order to provide them with a class program and methods of struggle. Only then will these parties and trade unions be able to rise up to the historic tasks before them in order to launch a decisive offensive against the bourgeoisie. Faced with the void of capitalism, the only alternative for the workers is to fight for the Socialist Federation of Latin America.