Post-neoliberalism: lessons from South America
Post-neoliberalism: lessons from South America
Javier Lewkowicz 9 February 2015
After a period of rapid liberalisation South America undertook a programme of renationalisations, while still bearing the marks of the neoliberal phase - what might be termed 'post-neoliberalism'.
For much of South America, the last decade can be defined as “post-neoliberal.” This means two things: the neoliberal period left its imprint—much of it structural in nature—and, at the same time, many of its core principles were cast aside. Despite some inevitable historical continuity, there has been noteworthy divergence, as evidenced by changes not just in the content of public policy but also in its formulation. These began in the wake of the Washington Consensus, which produced economic prescriptions eagerly promoted by international lending agencies, and were maintained through a series of neo-developmental programs that, in recent years, were not the product of a set plan but rather undertaken on the fly, generating their own attendant popular demands.
Neoliberalism left indelible marks: disintegrating societies, deteriorating industrial frameworks, neglected public sectors, and political systems in crisis. It also impeded the State’s ability to manage development by enabling legislation that benefitted corporate interests, undermining fiscal, monetary and commercial mechanisms as well as regulatory capacities, eliminating entities able to intervene in markets, and privatising public companies.
The privatisation wave swept through the region between 1990 and 1995. In that brief period, according to figures from ECLAC, direct foreign investment in Latin America and the Caribbean surged from $126bn to $278bn USD (an increase of 120 percent). An estimated 1,500 public companies were either sold to the private sector, closed, or declared bankrupt.[1] This affected utility companies as well as other key sectors such as industry, transportation, logistics, and communications. Privatisation was part of a regional plan to seek political alignment with the United States, the motivation for which was a reaction to the debt crisis of the '80s and a concomitant impulse to integrate the countries of the region into the Brady Plan and, by extension, into international credit markets.
During the era of developmentalism that characterized the '50s and '60s, public companies played a pivotal role in the exploitation of non-renewable resources, utilities, and manufacturing. They were at the heart of state power, which is why a privatisation backlash would come to define the subsequent neoliberal period - along with licensing contracts that favoured big business and the coopting of public companies by an executive with close ties to multinationals. It was a way of declawing the state.
More:
https://www.opendemocracy.net/ourkingdom/javier-lewkowicz/postneoliberalism-lessons-from-south-america