Historical Perspectives on Latin American and East Asian Regional Development

By Noam Chomsky

http://www.informationclearinghouse.info/article15993.htm

12/26/06 "Japan Focus" -- -- There was a meeting on the weekend of December 9-10 in Cochabamba in Bolivia of major South American leaders. It was a very important meeting. One index of its importance is that it was unreported, virtually unreported apart from the wire services. So every editor knew about it. Since I suspect you didn't read that wire service report, I'll read a few things from it to indicate why it was so important.

The South American leaders agreed to create a high-level commission to study the idea of forming a continent-wide community similar to the European Union. This is the presidents and envoys of major nations, and there was the two-day summit of what's called the South American Community of Nations, hosted by Evo Morales in Cochabamba, the president of Bolivia. The leaders agreed to form a study group to look at the possibility of creating a continent-wide union and even a South American parliament. The result, according to the AP report, left fiery Venezuelan President Hugo Chavez, long an agitator for the region, taking a greater role on the world stage, pleased, but impatient. It goes on to say that the discussion over South American unity will continue later this month, when MERCOSUR, the South American trading bloc, has its regular meeting that will include leaders from Brazil, Argentina, Venezuela, Paraguay and Uruguay.

There is one -- has been one point of hostility in South America.That's Peru, Venezuela. But the article points out that Chavez andPeruvian President Alan Garcia took advantage of the summit to bury thehatchet, after having exchanged insults earlier in the year. And thatis the only real conflict in South America at this time. So that seemsto have been smoothed over.

The new Ecuadorian President Rafael Correa proposed a land and rivertrade route linking the Brazilian Amazon Rainforest to Ecuador'sPacific Coast, suggesting that for South America, it could be kind oflike an alternative to the Panama Canal.

Chavez and Morales celebrated a new joint project, the gas separationplant in Bolivia's gas-rich region. It's a joint venture with Petrovesa(PDVSA, Petroleos de Venezuela, SA. Pronounced "pedevesa"), theVenezuelan oil company, and the Bolivian state energy company. And itcontinues. Venezuela is the only Latin American member of OPEC and hasby far the largest proven oil reserves outside the Middle East, by somemeasures maybe even comparable to Saudi Arabia.

There were also contributions, constructive, interesting contributionsby Lula da Silva, Brazil's president, Michelle Bachelet of Chile, andothers. All of this is extremely important.

This is the first time since the Spanish conquests, 500 years, thatthere have been real moves toward integration in South America. Thecountries have been very separated from one another. And integration isgoing to be a prerequisite for authentic independence. There have beenattempts at independence, but they've been crushed, often veryviolently, partly because of lack of regional support. Because therewas very little regional cooperation, they could be picked off one byone.

That's what has happened since the 1960s. The Kennedy administrationorchestrated a coup in Brazil. It was the first of a series of fallingdominoes. Neo-Nazi-style national security states spread across thehemisphere. Chile was one of them. Then there were Reagan's terroristwars in the 1980s, which devastated Central America and the Caribbean.It was the worst plague of repression in the history of Latin Americasince the original conquests.

But integration lays the basis for potential independence, and that'sof extreme significance. Latin America's colonial history -- Spain,Europe, the United States -- not only divided countries from oneanother, it also left a sharp internal division within the countries,every one, between a very wealthy small elite and a huge mass ofimpoverished people. The correlation to race is fairly close.Typically, the rich elite was white, European, westernized; and thepoor mass of the population was indigenous, Indian, black,intermingled, and so on. It's a fairly close correlation, and itcontinues right to the present.

The white, mostly white, elites -- who ran the countries -- were notintegrated with, had very few relations with, the other countries ofthe region. They were Western-oriented. You can see that in all sortsof ways. That's where the capital was exported. That's where the secondhomes were, where the children went to university, where their culturalconnections were. And they had very little responsibility in their ownsocieties. So there's a very sharp division.

You can see the pattern in imports. Imports are overwhelmingly luxurygoods. Development, such as it was, was mostly foreign. Latin Americawas much more open to foreign investment than, say, East Asia. It'spart of the reason for their radically different paths of developmentin the last couple of decades.

And, of course, the elite elements were strongly sympathetic to theneoliberal programs of the last 25 years, which enriched them --destroyed the countries, but enriched them. Latin America, more thanany region in the world, outside of southern Africa, adhered rigorouslyto the so-called Washington Consensus, what's called outside the UnitedStates the neoliberal programs of roughly the past 25 or 30 years. Andwhere they were rigorously applied, almost without exception, they ledto disaster. Very striking correlation. Sharp reduction in rates ofgrowth, other macroeconomic indices, all the social effects that goalong with that.

Actually, the comparison to East Asia is very striking. Latin Americais potentially a much richer area. I mean, a century ago, it was takenfor granted that Brazil would be what was called the "Colossus of theSouth," comparable to the Colossus of the North. Haiti, now one of thepoorest countries in the world, was the richest colony in the world, asource of much of France's wealth, now devastated, first by France,then by the United States. And Venezuela -- enormous wealth -- wastaken over by the United States around 1920, right at the beginning ofthe oil age, It had been a British dependency, but Woodrow Wilsonkicked the British out, recognizing that control of oil was going to beimportant, and supported a vicious dictator. From that point, more orless, it goes on until the present. So the resources and the potentialwere always there. Very rich.

In contrast, East Asia had almost no resources, but they followed adifferent developmental path. In Latin America, imports were luxurygoods for the rich. In East Asia, they were capital goods fordevelopment. They had state-coordinated development programs. Theydisregarded the Washington Consensus almost totally. Capital controls,controls on export of capital, pretty egalitarian societies --authoritarian, sometimes, pretty harsh -- but educational programs,health programs, and so on. In fact, they followed pretty much thedevelopmental paths of the currently wealthy countries, which areradically different from the rules that are being imposed on the South.

And that goes way back in history. You go back to the 17th century,when the commercial and industrial centers of the world were China andIndia. Life expectancy in Japan was greater than in Europe. Europe waskind of a barbarian outpost, but it had advantages, mainly in savagery.It conquered the world, imposed something like the neoliberal rules onthe conquered regions, and for itself, adopted very high protectionism,a lot of state intervention and so on. So Europe developed.

The United States, as a typical case, had the highest tariffs in theworld, most protectionist country in the world during the period of itsgreat development. In fact, as late as 1950, when the United Statesliterally had half the world's wealth, its tariffs were higher than theLatin American countries today, which are being ordered to reduce them.

Massive state intervention in the economy. Economists don't talk aboutit much, but the current economy in the United States relies veryheavily on the state sector. That's where you get your computers andthe internet and your airplane traffic and transit of goods, containerships and so on, almost entirely comes out of the state sector,including pharmaceuticals, management techniques, and so on. I won't goon into that, but it's a strong correlation right through history.Those are the methods of development.

The neoliberal methods created the third world, and in the past 30years, they have led to disasters in Latin America and southern Africa,the places that most rigorously adhered to them. But there was growthand development in East Asia, which disregarded them, following insteadpretty much the model of the currently rich countries.

Well, there's a chance that that will begin to change. There arefinally efforts inside South America -- unfortunately not in CentralAmerica, which has just been pretty much devastated by the terror ofthe '80s particularly. But in South America, from Venezuela toArgentina, it's, I think, the most exciting place in the world. After500 years, there's a beginning of efforts to overcome theseoverwhelming problems. The integration that's taking place is oneexample.

There are efforts of the Indian population. The indigenous populationis, for the first time in hundreds of years, in some countries reallybeginning to take a very active role in their own affairs. In Bolivia,they succeeded in taking over the country, controlling their resources.It's also leading to significant democratization, real democracy, inwhich the population participates. So it takes a Bolivia -- it's thepoorest country in South America (Haiti is poorer in the hemisphere).It had a real democratic election last year, of a kind that you can'timagine in the United States, or in Europe, for that matter. There wasmass popular participation, and people knew what the issues were. Theissues were crystal clear and very important. And people didn't justparticipate on election day. These are the things they had beenstruggling about for years. Actually, Cochabamba is a symbol of it.

This is a lightly edited and excerpted version of Noam Chomsky'sDecember 15, 2006 talk to a Boston meeting of Mass Global Actionfollowing a recent trip to Chile and Peru.