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9-08-2015, 23:31


The population of Latin America and the Caribbean reached 519 million people at the close of the twentieth century. Yet in twentieth-century world history Latin America was usually marginalised, perhaps because it did not in the first half of the century play a major role in the global conflicts of this century, which had their epicentres in Europe and Asia. Perspectives began to change only in the 1950s – not because of a belated recognition that millions of the world’s population deserved better, but because of the Cold War. Before then only Argentina’s flirtation with fascism had aroused wider interest. After the Second World War the spread of Marxism and the influence of the Soviet Union aroused Western concern, especially that of the US. Attention focused on Arbenz’s Guatemala, on Che Guevara’s efforts to spread communism from Cuba to the mainland, on Allende’s Chile, on the Sandanistas in Nicaragua and on the civil wars in El Salvador, Guatemala and Peru. With the launching of President Kennedy’s Alliance for Progress in 1961 the US made an attempt to address the social, economic and political injustices of Latin America. But as the fear of Marxist revolution grew in the 1970s and 1980s, positive policies took second place to ensuring the military defeat of revolutionary movements. Then, as the 1980s drew to a close, two new issues attracted world attention to South America. One was the dangers besetting the global environment. Life on earth is dependent on careful balances, on a shield in space enveloping the world. The ruthless destruction of Brazil’s huge rainforest could have incalculable consequences for the world’s climate. Attention was thus drawn to the plight of the Indians in Brazil and to the devastation of large forest areas. The second problem was drugs – cocaine, heroin and marijuana. Heroin was trans-shipped mainly from Asia, where the poppies grew, and also from Mexico. Marijuana was cultivated in Mexico, Colombia and Jamaica. The greatest demand, especially in the US, came to be for cocaine and its derivative, crack. Drugs posed an immediate threat to the well-being and lives of mankind. It was estimated that in 2000 there were 14.5 million addicts in the US alone, spending a hundred billion dollars annually. The drug scourge had a particular hold on the deprived and unemployed, so it was rife in the poor black ghettos. But it was by no means confined to the poor: crack was used by the jaded and hedonistic of all social classes. Yet the illegal drug trade was associated with crime and violence on a hitherto unprecedented scale. For many peasants in Latin America in the last decades of the twentieth century the growing of the coca leaf was their only source of income. They were paid little for it. Most of the leaves were grown in Peru and Bolivia, but Colombia, with its illegal refineries, was the drug centre of Latin America; here cartels and drug barons reap colossal rewards. The economic problems of these debt-ridden countries gave the US some leverage in its battle against the drug scourge. In return for aid and trade concessions, President George Bush hoped to cooperate with the governments of the three Andean nations, Colombia, Bolivia and Peru. Peru was in bad shape economically and politically. It was beset by a hardline active Maoist guerrilla movement, the Sendero Luminoso or Shining Path, which specialised in killing supporters of the government. Peru also had a large foreign debt equivalent to half its gross national product. Neighbouring Bolivia was one of the poorest countries of Latin America, with a crushing foreign-debt burden. The armed forces of these countries, with US help, destroyed some of the plantations of coca in almost impenetrable jungle clearings, but the growing of coca leaves continued in many others. Medellín, the drug capital of Colombia, became the centre of violence too, with determined government efforts to strike against the drug barons being answered by bombs and assassinations. In Paraguay, where the dictator General Alfredo Stroessner ruled for thirty-four years supported by the military, government enjoyed a cosy relationship with the drug barons. A military coup finally overthrew him in 1989. It was uncertain whether his successors would end the corruption and curb the trade in drugs. Drug trafficking involved the whole of Latin America in shipments to North America and Peru from the Atlantic ports as well as those of the Pacific. As long as so profitable a market existed in the West, the chances of suppressing it at its source were slim. With the end of the Cold War and the demise of the Soviet Union, the problems of Latin America were viewed in less ideological terms. It was an important world trading partner, most US exports going to the region, and its debts were a significant factor impeding trade and development; to default on them would present a serious problem to Western banking. Latin America was also a vital source of raw materials, not least Venezuelan oil. In Latin America, the Third World and the Western world lived side by side. But the enormous economic growth since the 1960s did not improve social justice; democracy remained weak, the military strong; the rich became richer, the poor benefited little, if at all. Latin America presents a rich palette of cultures; there is racial injustice but also much intermarriage and blending of races. As the twentieth century neared its end, a demographic time-bomb was ticking away: could the rapid population growth be slowed to a manageable increase? The problems of the continent were enormous, and it was vital to find solutions for them. Latin America was not likely to disappear from the agenda of world history again. In the nineteenth century, investment in Latin America became a profitable destination for the venture capitalists of Western Europe and the US. Britain built railways and became the principal investor before the First World War, and the US invested particularly in Cuba and Central America, buying up many great plantations. While coffee-growing remained largely in Central American hands, American investment and political influence at its height was epitomised by the United Fruit Company, which monopolised the banana plantations and trade, owning its own shipping line and much else besides by the close of the nineteenth century. Despite this large influx of foreign money, the masses of Latin America remained poor and the disparity of wealth and poverty extreme. During the first half of the twentieth century, moreover, there was only a small manufacturing industry throughout South America. Essentially there existed an alliance between the Latin American elites – the cattle-raisers of the Argentine, the owners of the coffee plantations of Brazil and local merchants – and foreign-owned enterprises, from which both drew immense profits in good times, to the exclusion of the subsistence masses. For the consumption of manufactured goods and luxuries the Latin American market remained small, since 90 per cent of the population did not earn enough to buy them. This has been one of the principal impediments to the continent’s industrial diversification. Without an adequate domestic base the difficulties of establishing manufactures that can be profitable at home and competitive abroad are immense. Latin American governments are also characterised by instability, which, in the past, has discouraged investment – the local elites simply sent their money abroad to safer havens. It is instructive to compare the heavy indebtedness of Latin American nations with the estimated flight of capital abroad from 1982 to 1988. Nevertheless, state sponsorship and foreign investment since 1945 are gradually transforming Latin America, and large-scale industries have been established in all the major Latin American nations, Mexico, Brazil, Argentina and Chile. As in industrial Europe, there has been a shift from agricultural pursuits to manufacture, from rural society to urban. But the forced pace of rapid industrial development has left many Latin American states burdened with huge debts to the West which most have no prospects of repaying at high interest rates. The expectation that with modernisation, with the expansion of a professional middle class, with the growth of an urban skilled workforce, their standard of living rising, and with increasing education and literacy Latin American authoritarian politics would give way to Westernstyle democracies is not yet being fulfilled. In Latin America, as in other developing regions, there is no such automatic and inevitable link between economic progress and democracy. In many Latin American states in the 1980s, the military handed government back to democratic civilian rule. But frequently this represented an improvement only on the surface. Amnesty International publishes an annual survey of human-rights violations. It makes salutary reading. Torture and killings were still widespread in the exercise of political power against opposing groups. During the 1970s and early 1980s this barbarism probably reached heights not witnessed before in modern Latin American history and, one hopes, not to be reached again. At least 90,000 people simply ‘disappeared’; no one knows for certain how many were picked up from their homes or in the street, never to be heard of again. At the trial of the Argentinian junta chiefs in 1985, it was estimated that 9,000 had disappeared during the six years of military rule from 1976 to 1982; in Guatemala, Chile, Haiti and El Salvador, torture and executions without trial by ‘security forces’ or death squads were widespread. In the 1960s a powerful new voice of protest against oppression made itself heard. The Catholic Church, which for centuries had been a pillar of conservative society, ceased to give unconditional support to the ruling elites. But the Vatican and Pope John Paul watched with consternation any Marxist leanings of bishops, priests and nuns amid the social tensions and political struggles of Latin America. In its most extreme form, ‘liberation theology’ looked to Marxism for an explanation of poverty and oppression but rejected atheism. But mostly the Church was simply speaking out against the extreme inequalities of wealth and against the unjustified and indiscriminate use of force. This became clear to the rest of the world in 1968 when the bishops of Latin America met at Medellín in Colombia in the presence of Pope Paul VI and published a most remarkable declaration which read in part: Latin America still appears to live under the tragic sign of under-development . . . Despite all the efforts that are made, we are faced with hunger and poverty, widespread disease and infant mortality, illiteracy and marginalism, profound inequalities of income, and tensions between the social classes, outbreaks of violence and a scanty participation of the people in the management of the common good – Complaints that the hierarchy, the clergy, the religious are rich and allied with the rich also come to us. The Church dedicated itself to becoming the Church of the poor and oppressed. In 1978 the Latin American bishops met again in Puebla, Mexico, and the majority progressives pressed on with the new liberation action. ‘Between Medellín and Puebla, ten years have gone by’, the bishops declared. If we focus our gaze on our Latin American region, what do we see? No deep scrutiny is necessary. The truth is that there is an ever increasing distance between the many who have little and the few who have much . . . we discover that this poverty is not a passing phase, instead it is the product of economic, social and political situations and structures. What was needed, the progressive Church leaders urged, was ‘personal conversion and profound structural changes that will meet the legitimate aspirations of the people for authentic social justice’. In Latin America the leading members of the Church hierarchy knew that if the Church failed to take the side of the poor the masses in their desperation would turn for their salvation away from the Church to a godless Marxism. The Church soon discovered the inevitable political implications of its new role. It spoke out against the ‘disappearance’ of people in Argentina and Chile and against the death squads of El Salvador during the 1970s; it defended the rights of labour unions and spoke up for the Indians excluded from the mainstream of development in Bolivia and Peru. The most far-reaching change in the attitude of sections of the Catholic Church took the form of a campaign to reach out to the ordinary people, to give practical help, to communicate and to organise by creating thousands of grass-roots community groups. These Christian communities in Latin America sought to ‘liberate’ the people through exercise of the faith and through stress on the value and dignity of human life. They were based on selfhelp through discussion and common action concerned with the practical issues of life and politics. Priests, nuns and Catholic laity provided leadership and teaching. But, unlike a left-wing party under rigid hierarchical control, the groups that sprang up relied on their own initiative. In Brazil, where the communities were developed to their greatest extent, tens of thousands of such groups had been formed in the countryside and in the shanty towns by the early 1990s, and as many as half a million of the disadvantaged poor had been brought together. A community might consist of twenty or thirty people meeting in a simple building. They would celebrate mass with a priest, and then discuss their immediate problems and concerns. They would decide on action: to demonstrate, to petition, to demand basic services for their community, such as electricity and housing or perhaps a health centre. They acquired a sense of self-worth and confidence in acting together against corrupt local authorities. Devoted priests, nuns and laity served them. They taught respect for Christian values, as well as basic democracy and non-violent methods of action to improve their lives. In Brazil, the hierarchy spoke strongly in support of this community movement and accepted the strained relations thereby created with the state. Repressive governments understood the risk nationally and internationally of taking any drastic steps against such a strongly united Church. Nevertheless, there were many martyrs when the military, no longer confining themselves to accusations of communist infiltration, resorted to harassment and murder. One such incident which attracted worldwide attention in 1980 was the murder of Archbishop Oscar Romero, an out- spoken critic of the regime in El Salvador, who was shot dead while administering mass in a hospital chapel. Where military regimes suppressed opposition, the Church became the sole national voice of freedom. It was itself deeply divided in some Latin American states, where the hierarchy might be more ready to support the fight against communism than criticise authoritarian governments. In others, as in Brazil and El Salvador, the Church was more united in opposition. On the whole the Church was not revolutionary in action, but where it took a clear spiritual stand against injustice and economic exploitation it became a force that weakened the standing of repressive authoritarian regimes and tore aside the veil of secrecy with which these regimes attempted to hide their crimes. In the longer term the Church functioned as an opposition which, because of the international respect it enjoyed, undermined Western, especially American, support for regimes whose human-rights records had become indefensible. Other organisations, such as Amnesty, trade unions and resistance groups, also highlighted the practices of torture and murder, but the majority of the church representatives when they spoke out enjoyed the inestimable advantage of not being identified as part of the left of politics, despite the attempts by regimes seeking to silence them to slander and misinterpret their motives. In the early 1990s the Church was still making great efforts to improve the lot of the poor masses. But on the crucial issue of population control Pope John Paul’s pronouncements were uncompromising. The only means of birth control permitted by the Church, the rhythm method, was too unreliable and was anyway not effectively practised. Millions of women suffered the dangers and misery of repeated abortions. But high rates of infant mortality and poverty were also responsible for the poor desiring large families. So there were multiple reasons for high birth rates. Whatever its cause, the galloping population growth undermined progress. It is characteristic of regions with high birth rates for the young to predominate, and boys and girls from the shanty towns surrounding many of Latin America’s major cities turned to begging, stealing and prostitution. Young lives became cheap, for instance in Rio de Janeiro, where vagrant children and petty criminals were found shot dead by vigilante groups. Moreover, millions of peasants and urban poor in Latin America were malnourished. Much of the increase achieved in agricultural production, including coffee, was sent for export – it did not feed the peasants, who were landless or eking out a living on the small areas of arable land divided between them. Most of the land was allotted to the larger estates. Only two Latin American countries had low rates of birth in the early 1990s and these were the two with predominantly European populations, Argentina and Uruguay. Without population control, modernisation would do little to help the urban poor or the peasants. With an average annual rate of increase of 3.4 per cent, the population doubled every twentyone years. Population growth in different countries varied enormously. Cuba under Marxist policies cut its increase to just 1 per cent; the highest rates, above 3 per cent, were to be found in Central America and Mexico. More than half the population of the continent lived in two countries, Brazil and Mexico, with a growth rate above 2 per cent in Brazil and 3.5 per cent in Mexico. Generalisations about Latin America tend to require many qualifications. For instance, it is true that only two languages predominate, Portuguese in Brazil and Spanish in the remainder of Latin America (except for French in Haiti), but numerous Indian languages are still spoken, such as Quechua and Aymará, derived from the Incas and Maya and Guarani. Cultural traditions originate not only from the indigenous Indians but from the waves of immigrants through the centuries: Spanish, Portuguese, Dutch, British, French, slaves from Africa and, in the nineteenth and twentieth centuries, labourers from Italy, Germany, North America and Asia.


Colombia is ostensibly a democracy on the US model with a directly elected president and an elected Congress, but the conservative elite continued to ensure its retention of power. Between 1910 and 1930 literacy qualifications for the franchise excluded 90 per cent of the people. The landowners dominated Colombia in the first half of the twentieth century. Coffee became its principal export, while bananas were cultivated by the ubiquitous United Fruit Company. Modest reforms inaugurated by the Liberals in the 1930s made only a small impact. The major consequence of such attempts was to galvanise rightwing reaction supported by the hierarchy of the Church, the wealthy landowners and industrialists. Their declared enemy was one of the leaders of the Liberal left, Jorge Eliécer Gaitán, whose radical proposals in the 1940s of land reform and state intervention in industry were anathema to Colombia’s elite of so-called liberals and conservatives, who shared power. It was this coalition of interests that controlled Colombian politics for a decade after the Second World War, opposing land reform and state intervention. The discontented masses of workers and landless peasants looked to Gaitán for leadership and change. The government responded with repression. In 1948 Gaitán was assassinated, an event that prompted one of the grimmest chapters in Colombia’s violent history. Workers in Bogotá and peasants in the countryside rose against the government, occupying factories and seizing land. Order was restored by the army at the cost of thousands of lives. After an election had been held in 1950, the conservatives ruled dictatorially alone. Colombian politics now exhibited two characteristics: violent repression and liberal economics. But repression never solved the problem. The geography of the country, with poor communications, mountains, valleys and plateaux isolated from each other, was ideal for Marxist guerrilla groups to operate in. Police terror and anarchy, guerrilla warfare and banditry swept through the countryside. By the mid-1960s more than 200,000 Colombian peasants had been killed. Violence remained endemic in Colombia. Reforms have been too few and too ineffective to help the million landless peasants. In the cities the harsh economic climate of the 1970s the world over was a further blow to industrial workers. Coffee prices fluctuated but were generally low. The isolated peasantry now turned to a new crop, the growing of coca leaves. As the 1980s drew to a close, guerrillas and drug barons perpetrated a culture of violence unparalleled elsewhere in Latin America. In the early 1990s the Colombian government tried to end the violence by reaching agreements with the drug barons and the guerrillas, and a new more democratic constitution was framed. The violence in the countryside from fighting between the army and Marxist guerrillas and the drug trade drove one and a half million peasants to poverty on the edges of cities. Although weakened, by the end of the Cold War Marxist guerrilla groups had not been eradicated. The US, meanwhile, has been principally concerned to destroy the coca fields, the only source of income for the peasants, with herbicides, and cooperated with the army supplying helicopters. But progress in Colombia has only resulted in driving the growing of coca and the trade to neighbouring Andean countries, Bolivia and Peru. As long as the demand for cocaine in the West produces profit for the traffickers the growing of coca will continue. The cycle of the conflict and low economic growth is condemning the great majority of the people to poverty in the twenty-first century. In the new millennium 40 per cent of the country is in the hands of the guerrillas.


The vast Andes mountain range divides the coastal strip of western South America from the rest of the continent. The highlands of the western coast from Ecuador to Peru and Chile are populated mainly by Indians, whose way of life has changed little over the centuries. In complete contrast, in the cities on the coast, Santiago, Valparaiso and Lima, Western traditions and a twentieth-century way of life prevail. The masses of Peru suffered during the course of the twentieth century from a kaleidoscopic variety of more or less oligarchic governments, none of which succeeded in bringing about the fundamental economic and social reforms the country needed. Despite opportunistic political parties proclaiming high ideas of reform, periods of government by Congress and presidency with a semblance of democracy were punctuated by spells of authoritarian rule. Peru was unable to develop its industries, oil extraction or mining from its own capital resources. Loans and foreign investment were encouraged in one decade, only to arouse a nationalist reaction against foreign dependency in another. The economy swung from expansion to bust, depending on world prices for the commodities Peru exported, and later in the century the crushing foreign debt added to its burden. But the pattern of Peru’s economic development did not fundamentally differ from that of its neighbours. The effect of bad times on the poor was all the more catastrophic as the disparity in wealth between the top 7 per cent and the bottom 40 per cent was extreme, even in the 1990s. Almost all the Indian population, comprising about a third of the total, was wretchedly poor, the children malnourished. Alcoholism and ill health flourished and in the early 1990s cholera from polluted water supplies reappeared. The splendid buildings in Lima dating from the Spanish colonial period present a bitter contrast to contemporary misery. A society deeply divided is bound to be a society in conflict. Those who ruled Peru variously tried reform and repression, sometimes both at the same time. The landless Indians in the highlands hungered after land reform, migration of Indians to Lima created unsanitary shanty suburbs, and local industries produced an urban working class. It was fertile territory for communism in the 1920s. One of Peru’s bestknown political leaders, Victor Raúl Haya de la Torre, responded with a socialist programme of anti-imperialism, state control, nationalisation and the protection of freedom and human rights. He founded in 1924 the Alianza Popular Revolucionaria Americana, APRA for short. APRA was still a political party in the 1990s and still had a strong following. It soon shed its Marxist intentions when it came to practical politics, since it could attain power and the presidency only with the support of the middle class. It never effectively tackled the Indian problem, which could not be solved without radical land reform. In the 1960s Belaúnde, of the Popular Action Party, was elected as a reforming president. But when the 300,000 Indian peasants rose in revolt in 1965, the army was sent in to crush them. The history of Peru does not always follow what is regarded as a Latin American pattern. The army staged a coup in October 1968 at the height of another economic slump. The junta was headed by General Juan Velasco Alvarado, a man with sympathy for the oppressed Indians and the poor (the Peruvian military has not always been a reactionary force). Alvarado declared that the junta would reform the ‘unjust social and economic order’ and end subordination to foreign economic interests. A revolution was attempted from above. The large coastal sugar estates were expropriated and turned into cooperatives. The landowners on the coast and in the highlands were destroyed as an elite with political power. About 40 per cent of land had been transferred by 1975. The three-quarters of a million squatters in the shanty towns were given rights to the land and a sense of community was encouraged. Worker co-ownership in factories and management was designed to establish ‘industrial communities’ in parallel to the rural communities. Foreign-owned companies, mainly American, were nationalised. General Velasco’s aim was to establish a distinctive Peruvian socialism. The economic flaws soon made themselves felt. While some workers and Indians were helped, overall the reforms did not bring the full benefit that had been expected. Artificially low food prices, designed to help the urban poor, hit the peasantry. The world economic recession of the mid-1970s led to a fall in copper prices and those of other commodities at a time of heavy Peruvian indebtedness to foreign investors. The discredited military junta handed the country back to the civilian politicians. In 1980 Belaúnde was elected president again. He dismantled the kind of corporate state the junta had wanted to set up. Orthodox financial management, especially policies designed to reduce the foreign debt, inevitably resulted in hardship, unemployment and protest. There were many strikes in Lima. In the remote highlands opposition was being organised by a new guerrilla group, the Sendero Luminoso, known in the West as the Shining Path. Inspired by Maoist doctrines, the Shining Path was ruthless in waging war on the class enemies. Despite sweeps by the army, the insurgents retained their bases and plunged the country into bloody strife. In 1985, Peru’s new hope for recovery was the election of the leader of the Alianza Popular Revolucionaria Americana (APRA), Alan Garcia. Young and dynamic he instituted an economic reform plan that attempted to promote Peruvian industry. He was no socialist, preferring to leave industry in private hands, and his refusal to pay all the interest due to foreign investors made him popular. Thus began a long tussle between foreign governments and banks, with the Latin American debtors no longer prepared to impoverish their people in order to honour their financial obligations. Initial American reactions were hostile especially as Garcia also took a stoutly independent line in foreign policy. By the 1990s, with the US now taking the lead, it was accepted that Latin America’s debt burden was too heavy, and that it was better for bankers to accept a reduction than repudiation and a breakdown in trade relations. By the time it came to elections again in 1990, the economy was in a dreadful state, crime and drugs were rampant and the Shining Path was carrying the bloody struggle from the interior to the shanty towns around Lima, murdering fifty mayors in the countryside, as well as missionaries, priests and peasants. In just one year, 1989, insurgents and the government death squads, between them, killed over 3,000 people. The people’s disillusionment with their politicians was vividly demonstrated during the contest for the presidency in June 1990 when the son of a Japanese immigrant Alberto Fujimoro, a university academic promising reform but virtually unknown before, won by a convincing majority. Fujimoro was determined to crush the Shining Path. In return for protection of the coca growers and drug barons, the Shining Path was financed by the drug traffic. The president introduced emergency powers and the conflict was stepped up by both sides. Fujimoro also launched an economic austerity programme, at the same time liberalising the economy and denationalising state enterprises. The immediate result was huge unemployment. Backed by the military, Fujimoro seized dictatorial powers, dissolving Congress and arresting some of the political leaders. Fujimoro claimed that he required executive powers to carry out his programme of deregulating the economy, cutting subsidies and privatising, as well as to fight the Shining Path more effectively. His first success was to capture the guerrilla group’s leader after an intelligence operation in a flat in Lima in September 1992. But that was not likely to end the struggle with the Shining Path or the drug growers and merchants. For the Indians the growing of coca leaves had become an essential part of their survival economy. Great hardship was suffered by the people of Peru, and economic reforms – if they succeeded – would take years to raise the low standards of living. In 1995 Fujimoro was re-elected. Two years later he became a popular hero when he rescued hostages taken in the Japanese Embassy. He had taken personal charge of the military operation, which ended with the shooting of their captors. He waged a successful fight against the Shining Path guerrillas. This reconciled many to his increasingly authoritarian rule. But by 2000 the corruption that was uncovered blighted his attempts to get re-elected despite a constitutional bar for a third term. The scandal broke, Fujimoro left the country. The arrest of his spy chief Vladimoro Montesimo uncovered a veritable can of worms, widespread fraud, bribery and kickbacks. The army generals were deeply implicated in the subversion of democracy and human rights abuses. President Alejaudro Toledo, Fujimoro’s successor, promised to restore democratic rule, and cut the overpowerful army down to size. A dozen generals awaited trial in 2003 and large numbers of officers have been retired. The guerrilla movement is not dead but no longer poses a serious threat. President Toledo’s aim is to return to democratic civilian government.


The Chilean people are predominantly homogeneous, descended from the Spaniards and the indigenous population and later European immigrants. Among Chile’s population, intermarriage has created a society European in outlook and relatively free from racial prejudice. There are few pure Indians left, perhaps 300,000, among them the Araucanian Indians of the south, who have tried to preserve their way of life against the encroachments of modernisation. Chile’s riches in metals and minerals made it, by the 1990s, one of the most developed and urbanised nations in Latin America. In the course of the twentieth century the towns absorbed most of the population. Agriculture played a significant but decreasing role in the economy, with the traditional structures of large estates in the fertile valleys of central Chile worked by a poor landless peasantry surviving into recent times. The close ties between wealthy landholders and wealthy industrial magnates enabled these conservative groups to wield political power far in excess of their numerical strength. Industrialisation and urbanisation in the twentieth century created a relatively large working class, born in Chile and playing an important role in Chilean politics. The authoritarian Pinochet regime that ruled for two decades (1973–90) concealed what had been one of the distinguishing features of Chilean politics in Latin America, its traditional constitutional and parliamentary system, with the military accepting their subordinate though highly respected position. Escalating political conflict, the result of violent clashes of economic and social interests in the 1970s, a national economy in deep trouble as a result of failed socialist measures and of a denial of assistance from the West, especially the US, led in 1973 to a military coup and, as few had expected, to a prolonged, ruthless dictatorship. Before the 1920s the Chilean economy was dependent on the world price of a single commodity, nitrates; since then it has been copper. Prices fluctuated violently and so impeded consistent internal development. Politics, too, were volatile. It is all the more remarkable that from 1891, after the end of a short but bloody civil war, until 1973, with the exception of a short period (1927–31) of suspended civic liberties and military rule, the parliamentary system survived, with regular national elections and peaceful transfers of power from one ruling political coalition to another. Throughout these years political fortunes were heavily dependent on the economic health of the state, which in turn was dependent on the economies of the industrialised West. What made Chilean progress even more problematical was that its prime export-earner, copper, was owned by foreigners. US companies transferred the bulk of the profits home and did not invest them in the less favourable conditions of Chile. The one issue on which all political parties were agreed was resentment of the US, and when the copper companies were eventually nationalised in 1971 by Salvador Allende, the measure uniquely received unanimous support in the Chilean Congress. Characteristic of the period of politics in Chile from 1891 to 1927 was the emerging alliance between the conservative landowner–merchant elite and a middle class alarmed at the rising demands of trade unions whose members were struggling in the inflation-ridden economy to maintain their living standards. The government response was more often repression and imprisonment of union leaders than concession and legalisation of union activities. At the same time efforts were made to reduce workers’ militancy by means of welfare legislation. The military took over in 1927, but the impact of the depression made government a thankless task and the generals handed control back to the civilian politicians and Congress in 1931. Copper prices, which had fallen precipitously, recovered very gradually after 1932; the economy was so managed that Chile escaped the scourge of the 1930s, mass unemployment, at the cost of low wages and inflation. As the decade drew to a close, Chilean politics had become polarised. Working-class politics and union strength had greatly increased and a popular front was formed, a coalition that was no more than mildly socialist in its policies, and inherently unstable when in office. At no time did it pose a threat to the Chilean tradition of parliamentary government. The coalition of the left was exposed to the hostility of the US as the Cold War developed. In 1948 the Communist Party was outlawed (though not for long). During the next twenty-five years, Chilean politics remained deeply divided, elections fiercely contested. The left could not muster majority support and was kept out of power by a coalition of the centre-right. Unemployment was still held in check but the economy was stagnating and inflation a constant problem. The benefits of a substantial rise in copper prices from 1945 to 1955 were counterbalanced by an equally large fall in production. In the 1960s Chile’s economic and social problems multiplied and would have been even worse without the support of Kennedy’s Alliance for Progress. The problems of the rural poor had not been effectively tackled; their influx into the cities created massive new demands for housing, education and employment, a common experience in the underdeveloped regions of the world. The small population (11.2 million in 1980) and its weak buying power could not sustain large-scale home industries except in the most basic goods, which poor people can afford to buy. No Chilean government in the twentieth century had, so far, found a solution to social and economic problems: to the confrontation of political parties and to the opposing interests of the poor, the middle classes and the wealthy elite. Any bold policy that attempted to breach the status quo was immediately stymied by the opposition in the Chilean Congress. Yet, for just one decade from 1964 to 1973, Chile’s political leaders did try to break out of this cycle, and their failure had tragic consequences. As the presidential elections of 1964 approached, the communist–socialist alliance, led by a veteran Marxist politician Salvador Allende, looked like polling the most votes, though he would not win an absolute majority; the parties of the right were second in strength, and third was a new Christian Democrat Party, pledged to implement thorough reforms and led by Eduardo Frei. To prevent the left coming to power, the parties of the right decided to back Eduardo Frei. Allende called for a socialist revolution and Frei for a ‘revolution in liberty’, which would not endanger civic rights or rights to property. The Johnson administration in Washington was determined to do what it could to keep Allende from winning. There must be only one ‘Cuba’ in the hemisphere. The CIA channelled substantial funds to Frei’s campaign, and he won easily. Nevertheless, Allende, who had nearly won in 1958 in a threecornered contest, made a strong showing. Frei’s policies were boldly reformist and he was helped by a large influx of US aid amounting to $327 million from 1964 to 1967. One longstanding problem concerned the US copper concerns. Frei did not nationalise them, but bought a state share as part of a Chileanisation programme. The state took an interventionist role in planning the economy. Local industry was diversified; with the country rich in timber, a paper industry was established, and petrochemicals were developed. Joining the Andean Pact with Peru, Bolivia, Ecuador and Colombia created a larger market. But the emphasis was on nationalism and independence from foreign economic domination. A more determined attempt at rural reform was made and the break-up of the large estates was begun. Between 1964 and 1967 copper prices rose steeply, as did production. Then copper prices fell again and inflation soared. There were large-scale strikes met by violent repression. As the 1970 presidential elections approached, all classes of society, for different reasons, were becoming disenchanted with Frei’s economic reforms. With the conservative right now putting up their own candidate and the constitution preventing Frei from standing again, it was clear that this was Allende’s opportunity. President Nixon and his national security adviser, Henry Kissinger, regarded an Allende victory as totally unacceptable to the US. It would end Cuba’s isolation and, they believed, mark the beginning of an advance of Marxism in South America. Subsequent US congressional investigations have revealed the extent of US intervention. The Chilean military were encouraged by the CIA, on instructions from Washington, to stage a coup to prevent Allende assuming the presidency. But the Chilean army commander-in-chief, General René Schneider, stood by the constitutional process and blocked the plot. The conspirators thereupon decided to remove him: he was shot an killed, possibly accidentally, when a third attempt was made to abduct him. This brutal intervention outraged the Chilean generals and the planned military coup did not materialise; another constitutionally minded commander-in-chief replaced the murdered man. When the election results were announced, Allende had won the largest number of votes, 36.3 per cent, but his rightist rival came a close second with 34.9 per cent and the Christian Democrat had secured 27.8 per cent. Allende could rightfully claim the presidency and was duly inaugurated by Congress, but he could not assert that he had won a national mandate to undertake a socialist revolution. For that, in any case, he would need majorities in Congress, which would be able to veto any Marxist transformation. The three years of Allende’s presidency in Chile are one of the most bitterly disputed periods in Latin American history. To some Allende became a martyr; his supporters accused the US of repressing the righteous struggle of a Marxist for the betterment of the people. In fact, he achieved more by his death at the hands of the military than he had accomplished during his presidency; the barbarity of what followed brought out the contrast between the humane president and his successor, General Augusto Pinochet. ‘Allende’ became the rallying cry of the left and of the many demanding justice and change in Chile. The economic fundamentals were not favourable to Allende, and the price of copper was turning down from a peak in the late 1960s. Although Frei had made progress, it was not enough; and high inflation, which Frei had attempted to check with austerity measures, had returned. Allende restored and improved the living standards of the workers by a large increase in wages while controlling prices. The benefit was short-lived: a boom was followed by higher inflation. Allende’s left coalition was committed to a transition to socialism, which meant state control of the economy to a much greater extent than his predecessor had thought possible or desirable. On the issue of foreign companies operating in Chile, nationalism and resentment of their economic role united all parties when in 1971 Congress approved the nationalisation of the US copper companies. Compensation was denied on the ground that their excess profits over the years had exceeded any compensation due. Other US companies, powerful in the US, such as Ford and ITT, were taken over too; but when it came to nationalising the big banks and the largest concerns in Chile, there was an outcry from the industrial elites. Vigorous land reform enacted by Frei but until then hardly implemented added the landowners to the implacable opposition. The middle classes were alarmed by the expansion of state control, from which only the smallest enterprises appeared to be exempt; it was easy to frighten those small shopkeepers by suggesting that their private ownership would not last long either. Meanwhile, the expectations of many workers ran high. Through occupation of factories they tried to force the hand of the government, and sometimes they succeeded in doing so, though Allende tried to retain control of policy. A number of key questions now arise. Was Allende leading Chile to a fully Soviet-style state, as his opponents maintained? Allende was an experienced politician who had participated in Chile’s constitutional politics for many years. He now headed a coalition of the left, which extended from moderate socialists to the communists, who were themselves more moderate than their East European counterparts; but the coalition also embraced extreme radical groups who wanted to hasten the creation of a socialist state. Would Allende be able to control the coalition, or would the extreme elements take over? By 1973 Allende had boxed himself in; he could rid himself of the extremists only if he could secure the support of the reformist Christian Democrats. That he tried to make an opening to the centre shows that his intention was not only to maintain himself in power but to moderate the course of change. He was not a mouthpiece of Moscow but a socialist seeking a Latin American solution to Chile’s economic and social problems. Nor was Allende following in Castro’s path, though the Cuban leader was enthusiastically received when he visited Chile in 1971. Allende did not forcibly dissolve Congress, abolish the opposition parties or rule by making use of repression, terror, censorship or the suspension of civil liberties. There may have been supporters for such a course among his coalition partners, but the army’s loyalty was to the constitutional process and if Allende had tried to establish an authoritarian Marxist regime he would have plunged Chile into civil war. The path to socialism was blocked by Congress, where the opposition had a majority. Allende resorted to undemocratic means to bypass Congress and to continue expropriations, making use of his presidential powers. He proposed a constitutional amendment, replacing Congress with a People’s Assembly and submitting this to a plebiscite. Congress predictably rejected this device in 1972. The proposal marked the high point of Allende’s attempts to create a Marxist state. Allende did not pursue this extra-legal course; instead with the economy in chaos he moved towards Frei’s Christian Democrats. Their support would have provided the coalition with a firm majority in the country while neutralising the extremists in the coalition. The negotiations came to nothing and the appalling state of the economy in 1973 was creating widespread unrest. The inflation rate had reached 150 per cent, inexperienced bureaucrats were running the state sectors of industry, private industry was demoralised and factory owners were not inclined to cooperate with a socialist government. A black economy flourished. Foreign credit was exhausted. And the sorry state of the economy was primarily the result of Allende’s policies, though the Nixon administration remained implacably hostile and helped to undermine Allende. The principal US weapon was to deny aid and loans, which totalled only $18 million for the three years from 1971 to 1973, as against $156 million from 1968 to 1970. Since mid-1970 Nixon had blocked the Chilean economy, and private investment dried up. For a year, from the summer of 1972 onwards, there were increasing numbers of strikes, boycotts and mass street demonstrations of the pro- and anti-Allende masses. The opposition encouraged this public confrontation and the Marxist coalition called out its supporters. In the congressional elections in the spring of 1973, which were free and democratic, Allende’s Unidad Popular not only held on to its support but increased it (compared with the presidential election) to 43 per cent, though this was still less than the combined opposition figure of 55 per cent. The weakness of Allende’s ‘transition to socialism’ was that it never won the support of the lower-middle class – the shopkeepers and small traders, those with some stake in a free-enterprise economy. By the summer of 1973 terrorist incidents were added to largescale strikes and demonstrations. After negotiations with the Christian Democrats had failed, Allende sought the support of the army and brought in a moderate general as minister of defence. On this general’s resignation, Allende turned to another who was believed to share the army’s traditional constitutional outlook – Augusto Pinochet. But the military were plotting a coup. On 10 September 1973, they struck. Allende hurried the following morning from his private residence to the presidential palace, rejecting offers of safe conduct and exile in the Latin American tradition. By this courageous decision he ensured that the coup would be condemned as unconstitutional. An attack by fighter planes set fire to the palace and Allende died there resisting the assault on his authority, an outrage in the long constitutional history of Chile. The military junta’s campaign of repression against civilian supporters of the former Allende government also had no parallels in Chilean history. Certainly nothing as bloody had occurred since the civil war almost a century earlier. ‘Suspects’ were rounded up in the football stadium. Thousands of likely opponents were imprisoned; thousands were murdered, perhaps 5,000, possibly three times that number, during the early days after the seizure of power. The hope of the urban poor and peasants for a new deal was buried under bayonets. The military ruled, Allende was gone and Washington heaved a sigh of relief. But it was one thing to get rid of a Marxist leader, another to replace him with a reformist, democratic, free-enterprise government respecting human rights. This is what the US wanted, as did the majority of the Chilean people. General Pinochet, who emerged as the caudillo, the strongman of the junta, broke with Chilean military tradition and did not hand back power to the civilian politicians. His regime ‘suspended’ all political activity, sent Congress packing and drove political parties underground. The democratic representative constitution was set aside and an emergency ‘state of siege’ declared that effectively abolished freedom and civil rights. These were not short-term measures. The ‘state of siege’ was only lifted fifteen years later in the summer of 1988 as Pinochet was seeking to improve the image of his repressive regime on the eve of a referendum designed to confirm him in power; even Chilean exiles were now invited to return. But Pinochet’s first task in 1973 was to ensure the security of his military regime. This he did during the next fifteen years by waging a ruthless campaign to eliminate any opposition; people were picked up in the street or in their homes and just ‘disappeared’, without trial; their relatives were told that nothing was known about them. All social classes were affected, and all shades of political opinion, though the main target was the left wing. A regime of terror was inaugurated. Women as well as men were imprisoned, tortured and killed; others languished in prisons and camps. The ‘disappeared ones’ became one of the most horrifying features of recent Latin American history. In Chile (a rough estimate) 3,000 are missing, in Argentina 30,000, in Guatemala 35,000, in El Salvador 9,000, in Haiti 15,000; children were orphaned, their identities obliterated, and they have been adopted by politically ‘safe’ parents. These flagrant violations of human rights aroused only sporadic protest in the West, but Pinochet was safe from any effective international interference. The attitude of the US was of particular importance. The Nixon–Ford administrations wanted a stable government in Chile, preferably one that was reasonably democratic and supported a freeenterprise economy, with a decent human-rights record. But the US also saw in Marxism a cancer spreading out from Cuba; it had to be contained in Cuba; should it break out of this isolation, given the severe problems of Latin America, it would not halt in any one country, but would spread to the neighbours of the US and present a threat to America in its own hemisphere. The fight against communism was therefore to be given priority. Large-scale aid once more flowed to Chile: loans to assist economic recovery, aid under the Food for Peace programme (eight times larger than what was given during the Allende years) and funds to purchase arms. In all these measures the Nixon–Ford administrations expressed their support for Pinochet. It is true that their purpose was to defeat communism, not to underpin the Chilean regime’s brutalities, but they could not escape the dilemma: the two were linked – they were making, as they saw it, the choice that best served US interests. As Kissinger explained, the US should not become involved in ‘temptations to crusade’. But Senator Edward Kennedy and other members of Congress embarrassed the Republican administrations with their opposition and their attempts to restrict aid to Chile by linking it to human rights. The administrations’ task thereby became more difficult, but ways were found to continue giving aid from 1973 to 1976, the most repressive years of the Pinochet regime, during which the opposition was decimated. For them, by the time the new Democratic president Jimmy Carter made human rights a key plank of US policy, with particular reference to Latin America, it was too late. Aid to Chile and other repressive regimes was drastically cut, without noticeable effect on the brutality of these regimes. The US could not bring about their fall by economic means, nor was economic aid sufficient to maintain them. That is why US policy in Chile is such an instructive example of the difficulties and frustrations that appeared to face Washington’s policy makers. It was in Chile, too, that Western academic economists and technocrats were allowed a decisive influence in policy making to cure the economic chaos that was prevailing at the end of Allende’s presidency. The Chilean generals did not understand economics but, opposed as they were to socialism, backed free-market remedies being advocated by Professor Milton Friedman’s Chicago School. At its most basic, the theory was that the free-market system should be allowed to function and that all artificial restraints, such as protection of economic sectors that were otherwise not competitive, trade unions bidding up wages beyond their market value, state-run industries not dependent on commercial profits, should be removed. Inflation would be cured, and market forces would achieve a balance between supply and demand, provided the government balanced its own budget and kept the supply of printed money in check. Ideologically, the father of this economics was Friedrich Hayek, who saw in socialism and its central controls the modern road to slavery. The attitudes and expectations of workers and employees could best be changed by the sharp shock of changing the protectionist system quickly. Paradoxically, it was a nation that had fallen under a vicious dictatorship, the kind of state Hayek most abhorred, which now provided the laboratory. In Chile the technocrats did not have to worry about the immediate practical consequences: workers would be cowed and trade unions would not be allowed to interfere. In a less authoritarian regime, the severity of Chile’s inflation (it had reached 500 per cent in 1973) would have ensured that the remedies were applied with more circumspection. Looked at in the short term, the economic policies adopted in Chile were successful. People even talked of a ‘Chilean miracle’; inflation was down within a few years to less than 10 per cent; the growth rate in the 1970s was healthy. But the price paid in terms of distress experienced by the poorest was equally spectacular; there was large-scale urban unemployment and mounting debts. The bankers had miscalculated in their belief that good profits could be earned from Latin America’s most repressive regimes which had a record of keeping their countries stable and which repaid their foreign loans punctually. Then the decline in commodity prices in the early 1980s hit Chile hard, dependent, as it still is, on exports of copper; servicing the foreign loans places an increasing drain on an economy. The Pinochet regime also came under mounting pressure, not only from opposition at home expressed in massive strikes, but from the Reagan administration, which in 1986 sponsored a UN resolution criticising Chile’s human-rights record. Even his fellow generals opposed Pinochet when he declared he would stay in office until 1997. In September 1986 he narrowly survived an assassination attempt; this he countered with another bout of severe repression, which included arresting leaders of the opposition. The left-wing guerrilla group, the Patriotic Front, planted bombs. The papal visit of John Paul II in 1987 brought more criticism on Pinochet’s head and the generals were openly calling for a hand-over to a civilian president. Violent street demonstrations accompanied Pinochet’s 1988 campaign for the plebiscite designed to confirm him in the presidency until 1997, but the general was sufficiently confident to lift the state of emergency and to allow the opposition to campaign against him. In the event the Chileans rejected Pinochet by the surprisingly small majority of 463,833 votes out of a total of just over million. No doubt the improved economic situation, with substantial growth from 1985 to 1988, and memories of the chaos Allende had left behind him had persuaded nearly half the voters to back Pinochet – better the devil you know. But the result was decisive enough. In December 1989 Patricio Aylwin Azócur, a 71-year-old lawyer, won the presidential elections and was inaugurated in March 1990. Pinochet did not retire but confined himself to the role of commander-in-chief. In November 1990 he celebrated his seventy-fifth birthday – too old, one might hope, to turn the constitutional clock back again, but it remained to be seen whether the army would resume its former role of respecting representative constitutional government. Although the price paid in human terms was considerable, the Pinochet years transformed the national economy. In the aftermath of the military regime, the country learnt the grisly truth about the years of dictatorship. Nearly 2,300 had died, many by shooting and torture, and nearly 1,000 had simply disappeared (at least one unmarked mass grave was uncovered). One of the hardest tasks confronting Chile in the 1990s was to come to terms with its past, and to keep the military in check. It also faced the challenge of reforming its social and economic structures – including health provision, education and housing – while at the same time ensuring employment and maintaining a freemarket economy. The ghosts of the Pinochet years are receding, Pinochet old and ill has slipped into irrelevance. The democratic government is in control. Constitutional reforms in 2003 eliminated the life senators and the army will no longer be permitted to play a leading role in politics. The amnesty for the part played in the ‘dirty war’ was also annulled.


Like Chile, Argentina was ruled by an authoritarian military junta during the 1970s which paid no respect to human rights. Unlike Chile, however, Argentina had never developed a broadly based parliamentary tradition. The second-largest country in Latin America after Brazil, Argentina covers an area greater than Western Europe, but the countryside is sparsely populated, since grain-production and cattle-ranching, the agricultural backbone of Argentina’s export economy, require relatively few labourers. It trades profitably, exporting wheat and refrigerated beef and importing manufactured goods. Before the Second World War, Britain had the largest foreign stake, having invested in railways and some industries. Argentina’s population is concentrated in the towns and grew rapidly from less than 2 million in the mid-nineteenth century to 8 million by 1914, and to 37 million in 2000. This growth derived mainly from massive immigration from Italy and Spain during a period of rapid expansion from the 1880s until the onset of the depression in 1929. Argentina thus became the most Europeanised of Latin American nations, but these Western traditions were more those of southern Europe, where representative government and democracy had not flourished in what was still, then, a largely underdeveloped region. Government in Argentina was nominally representative and democratic, but in reality it was manipulated by a wealthy oligarchy whose power was based on their ranches and related agricultural industries and, of course, on the support of the army. The oligarchy had nothing to fear from peasants in the countryside, as there were practically none; nor were there indigenous Indians in significant numbers: they had been decimated in the last of the Indian wars towards the close of the nineteenth century when the military took away their lands to the south and south-west of Buenos Aires. Political, social and economic tensions arose from a different quarter as Argentina developed – from the urban workers, the small shopkeepers, the low ranks of trade, industry and the professions, excluded from influence and from a fair share of the country’s growing wealth. They did not, however, organise themselves to participate in the electoral process. Trade unions, which followed the anarchist and syndicalist traditions of Spain, were severely repressed and their leaders imprisoned. More successful was another new group of outsiders, the recently prosperous and the middle classes, who had gained their share of economic but not political power. They formed the Radical Party and finally came to power in 1916. In the strikes following the First World War, their earlier, more sympathetic attitude to the urban workers turned to repression. In socialism, syndicalism and anarchism they identified the enemy within. During the 1920s the urban workers’ wages rose but expectations grew even faster. The Radicals had made many enemies on the left as well as among the ousted conservative oligarchy, and a limited democracy functioned only until a military coup in 1930. The conservative–military alliance, contemptuous of democracy – though manipulated elections were held – saw much to admire in the Nazi Germany of the 1930s and only entered the war against the Axis at practically the last possible moment to avoid exclusion from the Allied United Nations in 1945. By then the military had tired of the vestiges of representative government, with its party system and the disproportionate power the conservative oligarchy enjoyed. In 1943 the officers organised a coup; the rising star among them was Colonel Juan Perón. While the corporate state in Europe faced defeat, it survived in Franco’s Spain and was to survive in Perón’s Argentina. Perón and his mistress and later wife, Evita, created a new power base, an alliance of the army with the hitherto politically powerless masses of urban workers. The workers remained powerless but they gained the illusion of power by supporting the charismatic caudillo. Franco in Spain, Salazar in Portugal and Perón in Argentina were apparent anachronisms in the Western world, which had fought for freedom and democracy, but they survived and flourished. Perón could also claim legitimacy after he won elections in 1946 with a strong showing of 54 per cent. One reason for his success was the introduction of a host of social welfare schemes, higher wages, minimum wages and pensions. Evita used state funds to finance her foundation which showered benefits on orphans and the poor. When she died in 1952, still young and beautiful, the national mourning was unprecedented. The myth of Evita supported Perón’s rule which, under its glossy populist surface, used the repressive tactics of a fascist regime. A state economic plan and state intervention, with a drive to industrialise, were designed to build a new Argentina. The workers prospered. The economic downturn after 1949, however, soon brought old tensions to the surface. More orthodox economic management lowered standards of living and political theatre and the support of the Peronist masses alarmed the Church and the oligarchic and military elite. In September 1955 the military engineered another coup and Perón quietly departed into exile. An independent, elected, civilian president was allowed to rule for just four years from 1958 to 1962, before the military deposed him and seized power again: they were always ready to mount coups when the outcome of the electoral process displeased them. The president elected in 1963 lasted only another three years before a further military coup. But throughout the decades the appeal of Peronism, despite the efforts of the military to suppress it, did not lose its glamour among the urban masses. Argentina depended on world markets for its exports and imports, but in general the terms of trade during the 1950s and 1960s moved against primary producers, though there were brief periods of prosperity, not least because it presented a home market large enough for considerable expansion of the industrial sector. Argentina was plagued by wild swings of economic policy between boom and slump, and it was saddled with the ever increasing burden of foreign loans. Despite its ‘European face’, in its economic development and the strength of its military, Argentina was also very much a Latin American country. Amid mounting political violence, Perón returned in 1973 and was elected president, but it was too late for him to achieve a political rerun of his former success. Nine months after his election he died. His third wife briefly assumed the presidency, but she was quite unable to master the deteriorating economic and political situation. In March 1976 a military junta staged yet another coup and took over power for the next six years. This junta turned out to be the most bloody and repressive in the modern history of Argentina. The world media was able to draw attention to its brutality thanks to the courage of the women, the ‘grandmothers’ who every week demonstrated silently before the presidential palace, holding placards and pictures of members of their family who had ‘disappeared’. Their disappearance was the consequence of the ‘dirty war’ the junta waged indiscriminately against the opposition; not only were guerrillas arrested and killed but anyone regarded as subversive could suffer the same fate. For the military there were no constraints imposed by a rule of law. Mass graves were subsequently discovered, but no one can be sure how many died during the years of terror – perhaps 30,000. And in managing the economy the generals were no more successful than their predecessors. Early improvements in response to stricter monetary controls gave way to inflation and recession in the 1980s. In a bid to divert popular discontent the junta, then headed by General Leopoldo Galtieri, decided on a surprise invasion of the British Falkland Islands, claimed by Argentina as Las Islas Malvinas. The Falklands had come under British occupation in 1833, and the sparse population of some 2,000 overwhelmingly wished to remain British. Under international law, the Argentinians had a doubtful case, but successive British governments would still have preferred a solution that satisfied Argentinian national pride. The main obstacle to a settlement proved to be the British Parliament which understandably would not hear of any diplomatic solution that might hand British citizens over to an authoritarian Argentinian regime. There was no chance of any peaceful outcome once the Argentinians launched an invasion of the islands on 2 April 1982. The British governor and his guard of a few soldiers could offer only token resistance. The United Nations and other intermediaries, including General Alexander Haig, the US secretary of state, attempted to find a peaceful solution, before the British military and naval task force being assembled 8,000 miles away could reach the Falklands. One of the most controversial events in the war was the sinking by a British submarine of the Argentinian cruiser, the Belgrano, on 2 May with great loss of life, at a time when the Argentinian navy was on its way home. Prime Minister Margaret Thatcher was accused at the time of having deliberately torpedoed a promising peace plan that had only just been proposed. It is more than doubtful that the generals would have withdrawn the force from the Falklands, which was the minimum British requirement. In a short conflict the untrained Argentinian conscripts were no match for the British professionals, but the Argentinian air force, with its modern fighters and up-to-date weapons, inflicted severe casualties on the task force. On 14 June 1982 Port Stanley was recaptured and the Argentinian commander surrendered. In Britain there was no feeling of enmity or hatred for the young Argentinians caught up in the conflict. At the ‘victory’ church service in St Paul’s Cathedral, prayers were said for both the British and the Argentinian dead. It was the most unnecessary war of modern times, and could perhaps have been prevented had the British government listened in time to warnings of an impending invasion. Instead, inadvertently, the wrong signals were sent to Buenos Aires. The invasion itself had been greeted in the Argentinian capital with wild enthusiasm, though the British residents were not in any way molested – to that extent, at least, it was a civilised conflict. A deep chord in Argentinian nationalism had been touched, and the generals were heroes. The let-down of defeat was bound to be traumatic. The one good result was that the military junta could not hope to stay in power much longer. The military made way for civilian rule in October 1983. Raúl Alfonsín and the Radical Party won the subsequent election. Alfonsín inherited appalling economic problems exacerbated by his inability to end the state of conflict on the basis of accepting British sovereignty over the Falklands. After the casualties the British had suffered, a compromise of that principle, possible perhaps before the invasion, had now become unthinkable. The Argentinian economy did not recover, which made Alfonsín increasingly unpopular at home, but the president, a lawyer by profession, restored the rule of law, and humanrights violations ceased. This earned him international recognition and goodwill. Those in the military responsible for torture and murders during the ‘dirty war’ were brought to trial, a development unprecedented in Latin American history. A handful of the military, as well as the leaders of the junta, were sentenced to various terms of imprisonment in 1985. But Alfonsín was not really strong enough to come to grips with the many criminals in the army, which remains a potential power in the state. The most serious and immediate threat to democratic institutions in Argentina, however, has been the perennial problem of the economy. When Raúl Alfonsín became president in December 1983, the inflation rate had reached 2,000 per cent, and foreign capital had fled from the shattered economy. Alfonsín’s conservative economic measures and his wage and price controls stabilised the economy only for a time, and did so at the expense of the workers’ standard of living. In 1986 the Peronist General Confederation of Labour called strikes against the economic programme and in the following year the Peronist opposition provided good evidence of their reviving strength when, in elections for provincial governors, they won most of them while Alfonsín’s Radical Party only just retained a majority in the Chamber of Deputies. The economy continued to deteriorate, and the army was growing restless, though attempted coups by rebellious elements of the military were easily defeated by loyal commanders. Inflation was close to 200 per cent in 1988 and reached 600 per cent in 1989; the hardships this caused were a gift to the Peronists. Their choice for presidential candidate in May 1989 was an unusual one, the charismatic 59-year-old Carlos Saul Menem. Alfonsín had lost the will to govern and transferred the presidency to Menem (who had won the election) prematurely in July. Menem began with a drastic austerity programme, but by the end of the year Argentina was suffering even worse inflation. The president attempted, in a Peronist spirit, to build agreements between state employers and trade unionists, with the blessing of the Church. Amnesties granted to those members of the military convicted of human-rights offences, including three of the imprisoned junta, were also intended to reconcile the army. The breakdown of Menem’s marital relations, his wife claiming she had been locked out of the presidential palace, added an element of colour to Argentina’s chaotic domestic situation. In October 1990 Menem issued decrees curbing the right of the Peronist-dominated trade unions to strike, a move that created a split among his supporters. Two months later, the restiveness of the military led to an attempted coup, and to pacify the armed forces Menem pardoned the high-ranking officers responsible for torture and murder during the ‘dirty war’. His reputation ultimately, though, would depend not only on whether he could dismantle the Peronist corporate state, with its featherbedding, its swollen bureaucracy and its uncompetitive state enterprises, but also on whether inflation could be kept under control in the long term. He made a determined start in 1991 to privatise state industries and turn Argentina into a deregulated market economy. Hyperinflation was curbed, the international bankers were delighted and overlooked the risks. The price of modernisation and reform was high unemployment, but by 1997 the Argentine economy seemed to be in robust growth as trade liberalisation, privatisation and foreign investment fuelled production. It all went horribly wrong. The Argentine peso had been pegged to the dollar on a one-to-one basis during the decade of the 1990s and Argentinians had enthusiastically changed their pesos into US dollar greenbacks. Rising foreign and international debts, the world economic slow down and unbalanced budgets, brought about a spectacular crash when the International Monetary Fund would not rescue the currency. In December 2001 devaluation followed and Argentina defaulted on its debts. The dollar peg was unsustainable. The banks closed their doors. The economy descended into barter, angry Argentinians demanded that they be allowed to draw on their savings now frozen by decree. Rioting in Buenos Aires forced President Fernando de la Rua to resign in January 2002. Congress appointed a caretaker president who was then followed by Eduardo Duhaldo. It was the worst financial crisis in Argentina’s history with consequences reminiscent of the Great Depression of 1929. This time not only the poor but the middle classes were venting their anger. Argentina’s default on its debts closed help from the International Monetary Fund. Remarkably, democratic institutions did not collapse and bring the army to power. After a year of chaos Eduardo Duhaldo’s interim government succeeded in creating a semblance of stability once more. The future, however, in this once wealthiest of Latin American countries remains clouded by the continuing financial crisis and weak political leadership. More than half the people live in dire poverty and one in five are unemployed. A new surge of protest and unrest has only been avoided by governemnt financial handouts. The International Monetary Fund is in negotiation with the government to find a way forward.


A contrast to a large and powerful country is the small state of Uruguay. Uruguay had for a long time enjoyed a tradition of comparatively free and representative civilian government. It was a progressive and prosperous country exporting meat, cereals and wood and its population of less than 2 million in the 1950s, with large-scale European immigration, was relatively homogeneous. Uruguay also enjoyed the distinction of having introduced the first welfare state in the Western hemisphere. It was not coincidental that tiny Uruguay was chosen to launch the Alliance for Progress in Latin America. But the strength of these traditions did not save Uruguay from a military coup in 1973. The excuse was the need to suppress the left-wing Tupamaros guerrillas. The first three years of military rule witnessed torture and killing of victims as horrifying as any in Latin America. As elsewhere in much of Latin America, mounting economic problems returned the soldiers to barracks in 1984. The military leaders handed over to a civilian government the task of clearing up the mess and assuming responsibility for the unpopular austerity measures that would be required. The civilian president in turn attempted to amnesty the military who had been involved in humanrights abuses, but angry demonstrations and the Uruguayan Congress frustrated his efforts until 1989. Austerity measures provoked strikes and general dissatisfaction. One positive development was that the Tupamaros guerrillas ended their fight and entered politics; another that free presidential elections could be held in November 1989, which gave victory to the candidate of the opposition. Democracy has shown itself admirably robust despite its economic problems. Uruguay was badly hit by Argentina’s financial collapse. To help the country from following Argentina into default a savage austerity programme and IMF loan conditions caused the population real hardship.


Uruguay’s north-eastern neighbour is Brazil, the largest and most powerful country on the South American continent. Although Brazil is the neighbour of all but two South American nations (Chile and Ecuador on the west coast), geography and the Portuguese roots in its history have tended to isolate it from the rest of the continent. Yet there are common Latin American features too, such as the question of the fate of the indigenous Indians; in Brazil, intermarriage has practically submerged them in the multiracial society of European and African origins. In the least approachable recesses of the Amazonian jungle Indian tribes are precariously surviving, threatened by progress, exploitation and the cutting down of the rainforests. There are probably only about 220,000 Indians still inhabiting the frontier regions, who supposedly enjoy government protection. Until the end of the Brazilian empire in 1889, Brazil, despite its rich mineral resources, was a comparatively backward country relying mainly on the export of coffee. To provide labourers for the coffee plantations, Africans were sold into slavery and transported to Brazil, where slavery was not abolished until 1888. Brazil relied mainly on exporting coffee and importing manufactured and luxury goods to satisfy the small urban middle class and the wealthy plantation owners and merchants until the 1920s; a small industrial sector developed, and the coffee oligarchy dominated politics until the revolution of 1930. The first strong push for industrialisation occurred during the years from 1930 to 1945 when the country was ruled by the authoritarian regime of Brazil’s first outstanding political leader of modern times, Getúlio Vargas. Vargas, brought to power by the army in 1930 against a background of economic crisis, introduced a new authoritarian constitution in 1937 which established what was called the estado novo. The state became supreme in politics, industrial relations and economic management. No parallel social revolution was attempted. Vargas had to maintain the support of a coalition of interests: merchants, industrialists, the landed oligarchy of plantation owners with their ill-paid dependent rural workers, a subsistence peasantry, and urban workers preserved their unequal shares of the national wealth. Strict labour laws controlled the growing numbers of industrial workers. The state nationalised the banks and basic industries, and an iron and steel industry was started. Although by the close of the Second World War Brazil still relied mainly on the export of coffee, the basis for its later industrial growth was laid during the Vargas dictatorship. That dictatorship came to an end in October 1945, when the army forced him into exile. In the conditions prevailing after the war, with the victory of the Western free world over Nazi tyranny – although Vargas had shrewdly joined the Allied cause in 1942 – Vargas’s authoritarian state was regarded by the army as an embarrassment. The US was now all-powerful in the Western hemisphere. An election was held in December 1945, though only half the electorate was enfranchised; two generals competed for the presidency. The outcome was the formation of a conservative government ardently hostile to communism. In 1950 Vargas entered the next electoral contest and won, but his attempt to create a power base by gaining the support of the workers with wage rises and sympathetic labour legislation soon revealed the limits of Brazil’s constitutional system. He did not last out his term. The right-wing military charged Vargas’s administration with corruption and communist penetration. Driven from office for a second time in 1954, Vargas ended his contest for leadership by committing suicide. The presidential election of 1955 was won by Juscelino Kubitschek with the popular João Goulart, Vargas’s minister of labour, as running mate. Kubitschek campaigned for the defence of democracy and fast economic growth. The army watched to make sure that he did not stray too far to the left, but mounted no military coup, as some urged it to do. In a limited sense it could, therefore, be credited with safeguarding parliamentary government. The military saw it as their patriotic duty to stabilise a guided democracy with a preference for civilian rule. A decade later, elected president again, Goulart attempted to reform the country’s archaic land and tax structures. He also wanted to extend the franchise to the illiterate peasantry to check the power of the rural oligarchies. Frustrated by Congress, Goulart’s policy initiatives grew more radical as he appealed to the left for support, and not only to the industrial workers but to the peasants as well. He now added land expropriation to his reform package. This brought the wrath of the army and opposition down on him. A conspiracy had been taking shape in 1964 among right-wing army officers and conservative politicians, with urban middle-class support, to stage a coup. It was assured in advance of US goodwill. On 1 April 1964 Goulart was overthrown virtually without a struggle and fled to Uruguay. The military took over. This time they did not hand power back to civilian politicians. During the early years of the generals’ rule, repression had not yet taken its more extreme forms. A façade of parliamentary government was maintained. Then a new constitution in 1967, which curtailed political rights, prompted leftwing urban and rural guerrillas to resort to arms, but they never secured a mass following. Their only spectacular success was the kidnapping of the US ambassador in 1969. From 1968 to 1973 the military junta reacted with ferocity. The torture and murder of opponents became common and widespread, and the repressive security apparatus survived the defeat of the guerrillas. The various attempts made by the generals to enlist broader support and a more acceptable constitutional image all failed. Internal opposition, strikes and, particularly, the condemnation of the most radical Catholic Church in Latin America wore down the generals’ desire to accept the responsibility of ruling Brazil. They handed the government back to civilian rule in 1985. It was no coincidence that this was done at a time of severe and prolonged economic crisis. And the military in the 1990s had not abandoned their role of intervening when they judged it to be necessary. The Brazilian economy had expanded spectacularly since the Second World War, transforming the country into a modern industrial giant. Coffee no longer dominates and amounts to only about 10 per cent of total exports. By 1981 Petrobas, the huge oil and chemical state industrial complex, was the largest corporation in Brazil by far. Modern technology is represented in the armaments and aircraft industries, which export to the rest of the world. The multinational oil companies have established themselves, while Ford, General Motors and Volkswagen have developed an efficient motor industry. Foreign industry and private investment, and the large bank loans required, were attracted by the availability of cheap and plentiful local labour, which showed itself eminently capable of being trained; no less attractive were the repression of labour and the comparative freedom from strikes, as well as the political stability which the generals’ police state seemed to guarantee. Thus the unhappy link was established between capitalism, foreign penetration and repression which so powerfully fuels anti-Western, particularly anti-North American, sentiment among the masses. The Brazilian economy achieved rapid growth but it also had to weather periods of austerity and retrenchment when forced development produced high inflation and severe balance-ofpayments crises. After the Vargas period, the next phase of spectacular growth was kickstarted by the ambitious economic plan masterminded by President Juscelino Kubitschek in the 1950s. It was he who decided to construct the brand new capital of Brasilia as an expression of the country’s unity, confidence and ultra-modernity, but his boom, based on attracting foreign investment, had to be followed by another period of austerity. Under the generals a new boom began in 1968. It was checked but not stopped by the tripling of oil prices in 1973–4. Foreign bankers, flush with Middle Eastern oil money, poured it into Brazil which, accordingly, accumulated the largest foreign debt in the world. Brazil had already become predominantly urban before the 1950s, but the urban workers did not share in their country’s wealth. Their real wages, which had been rising in the 1950s, fell again after 1960; many workers received no more than the minimum wage, which during these two decades almost halved. This, in turn, provided the profits for an industrial and technical elite and allowed Brazil to enjoy spectacular growth rates. By 1981 the cycle of growth had come to a full stop. The economy in the 1980s was overshadowed by the need to service the foreign debts and, despite a successful industrial sector, the Brazilian government could not devote to social and welfare programmes the resources so desperately needed by the poor. The crippling constraints this imposed on the Brazilian economy created that vicious circle of social deprivation and political instability characteristic of so much of the South American continent. As elsewhere in Latin America, the civilian administration of President José Sarney in 1986 introduced a harsh austerity programme; inflation was halted for a time, but the plan collapsed and inflation was back at 800 per cent in 1987. Apart from the state of the economy, the burning question was whether Brazil would become some sort of democracy by virtue of the new constitution. When this was promulgated in October 1988, the president was allowed wide-ranging powers and the armed forces were given the ambiguous responsibility of maintaining ‘constitutional order’. In other respects the repressive rule of the previous military dictators was repudiated. The new constitution guaranteed basic civil rights, including the right of workers to strike as well as freedom of speech and the freedom of the press. Another restructuring plan for the economy to beat rampant inflation was launched in January 1989. President Sarney’s obvious failures led to his defeat in the presidential elections that November. A more positive aspect of his administration was that it took the first steps towards protecting the Amazon rainforests, whose despoliation had aroused international concern. In March 1990 the new president, Fernando Collor de Mello, was inaugurated. Mello promised to transform Brazil’s economic chaos. A stylish 40-year-old, he vowed to help the underdogs, the ‘shirtless ones’, and to end the mismanagement and corruption of the years of the generals and President Sarney. Mello began his presidency with the most radical austerity measures of any Latin American reformer by freezing 80 per cent of all but the smallest financial assets for eighteen months. He slimmed down the large bureaucracy and vowed to move towards a free-market economy, dismantling Brazil’s high tariffs and exposing the featherbedded state industries. The result in his first few months was unemployment and recession. By the summer of 1990 he had to ease up on some of his draconian measures and inflation began to rise once more. The economic future also depended on a favourable settlement with foreign creditors to ease the payments on Brazil’s huge debt. A preliminary agreement was reached in 1991. Mello’s determination to stop the despoliation of the Amazon and to protect the few Indian peoples still left won world approval. It only slowed and did not halt the advancing destruction. Brazil was also chosen for the Earth Summit, a conference intended to protect the environment but which achieved little. Brazil dominates the economy of southern Latin America: Mercosur, the regional economic free trade area, was founded in 1990 by Brazil, Argentina, Paraguay and Uruguay; in 1996 Chile became an associate member. Trade between them has risen fivefold. A decade after the end of military rule much had been achieved in Brazil. It has opened its trade to the world: in the mid-1990s its Gross Domestic Product was three-quarters that of China, whose population is seven and a half times larger. But the functioning of democratic government has been far from smooth. In December 1992 President Fernando de Mello was forced from office surrounded by scandal. His successor Itamar Franco inherited an economy whose currency had collapsed, with hyperinflation exceeding 1,000 per cent. Fernando Henrique Cardoso, appointed minister of finance, began the task of economic reform. In 1995 he was elected president following his success in opening the market and subduing inflation. But Brazil’s problems of protecting the rainforests, saving the indigenous peoples, and providing for the teeming millions of poor crowded into shacks lacking sanitation, remained as urgent as ever at the end of the 1990s. The low educational standards of the children of the poor hinder progress throughout Latin America. In Brazil more than 2.5 million children receive no schooling and those who do average less than six school years. The disparity between the north and the south of the Western hemisphere remained extreme despite progress as the twentieth century came to a close. During the course of Cardoso’s two presidential administrations not surprisingly Brazil’s ills were not all mastered, especially the high crime and murder rate, but as the longest serving democratically elected president he achieved some progress, the most important through his securing a ‘fiscal responsibility law’ which imposed discipline on local state and central spending and so curbed inflation. In social reforms the housing and education took pride of place; nearly all the children gaining access to primary schools. A programme of land reform settled on the 600,000 landless peasant families. Yet, underemployment and unemployment remained high in 2003, not far off one in five. Brazil’s finances remain parlous though saved from default in August 2002 by a $30 billion loan from the International Monetary Fund, the Brazilian administration promising to abide by its fiscal conditions. Public sector debt had risen from 30 per cent in 1994 to 56 per cent of the GDP in 2002 and foreign debt absorbed 90 per cent of Brazil’s export earnings. Reforms of pensions and taxations, and the rooting out of corruption remained essential if the extreme disparity between wealth and poverty was to be tackled. Cordoso could not offer himself again and his chosen successor was defeated by the charismatic Lula da Silva and his Worker’s Party. This was Luiz Inácio Lula da Silva’s fourth election campaign. He was born in the poorest section of society and rose from shoeshine boy to fiery union leader and presidential candidate. Once a socialist radical, by 2003 he presented a more pragmatic moderate image, no longer the nightmare of foreign investors whose support is indispensible for Brazil’s economy. Lula da Silva set out to show that contemporary ‘liberal socialism’ can work with the market and capitalism for the benefit of all the people, while promoting public services. In place of class conflict he promised a ‘social pact’, the working together of all sides of industry. The big new idea was to bring together politicians, unions, business and non-government organisations in a Council of Economic and Social Development to discuss reforms before they were submitted to Congress. Hailed by Brazil’s 50 million poor as a saviour, Lula da Silva promised a new spurt of growth and widespread reforms, all amid a continuing world economic slowdown in 2003. What will he be able to achieve? The gap between promise and reality may prove too wide. His mission, the eradication of poverty and improving on the gross disparity of wealth, was expressed in his inaugural speech on 1 January 2003 with his vision of Brazil leaping into the developed world of prosperity, justice and equality and providing every Brazilian with three square meals a day. For the present, Antonio Palocci, his minister of finance followed a prudent course. But should Lula’s efforts fail to bring the results his supporters aspire to and the mood threatens to turn against his policies, will the radical reappear?


Venezuela is able to generate a large proportion of its wealth not from manufacture but by extracting oil from among the most productive oilfields in the world. Oil contributed 90 per cent of its export earnings in the 1980s and nearly a third of its gross national product. Agriculture plays only a small role in the economy. In the 1960s it overtook Argentina as the wealthiest country in Latin America. In 1987 its population of 18.3 million was estimated to have a gross per-capita income of US$3,230. The two oil-price explosions in 1973–4 and 1979–80 brought enormous new wealth and enabled it to diversify industrially into petrochemicals, iron, steel, paper, and the aluminium industry. Western bankers fell over themselves to provide credit. Caracas acquired the skyscrapers of a twentieth-century city. And yet by the close of the 1980s Venezuela too was beset by the severe problems common to the rest of the continent. Oil prices stagnated and fell back, and Venezuela was unable to meet the scheduled payments to service its large debt. Its economy was over-extended. The bonanza of ‘black gold’ did not benefit everybody. Caracas in the 1990s was surrounded by some of the worst slum townships in Latin America, and there was a high birth rate among the poor. Despite the best system of roads in Latin America, the countryside was cut off and the number of Venezuelans making their living from it dropped rapidly from 40 per cent in 1950 to 18 per cent in 1980. The peasantry, largely landless, survived in conditions not much better than servitude; threequarters of the land was held in large estates, despite land reforms introduced in the 1960s. Although from the 1920s until the Second World War, Venezuela was the largest oil exporter, and in the early 1990s still ranked among the top producers, comparative wealth and economic development did not go hand in hand with enlightened politics and social policies. Until 1958, Venezuela was renowned for being a country under the control of military caudillos. By shrewd manipulation a prosperous cattle raiser and coffee grower Juan Vicente Gómez had managed to make himself one of Latin America’s longest-surviving dictators, remaining in office from the time he seized power in 1908 until his death in 1935. This was a remarkable effort, accompanied by corruption and selfaggrandisement. By the time of his death Gómez had acquired land equivalent in extent to Denmark and the Netherlands put together. However, Venezuela’s development, based on the oil industry, allowed a new professional and middle class to emerge, who were excluded from power by the landed elite and the military. They turned for support to the peasant masses and formed the Acción Democrática Party under the leadership of Rómulo Betancourt. In 1945, with the appearance of democratic government very much the fashion, Betancourt and his Acción Democrática seized power with the help of disgruntled members of the military. Reforms were attempted – land reform for the peasantry and an extension of the franchise in the constitution of 1947. Elections followed. But the military and landed elites threw out the newly elected president Rómulo Gallegos in November 1948 and for ten years Venezuela was ruled by the military. Under Pérez Jiménez (1953–8) the opposition was suppressed. ‘Stability’ suited the foreign, especially US, oil interests in Venezuela, and foreign technocrats developed the industry under Jiménez’s benevolent eye. In 1958 Jimenez and his corrupt government were overthrown in a military coup which for once had popular support, and Betancourt returned from exile. Vice-President Nixon arrived in Caracas on a Latin American goodwill mission to a rough reception from a stone-throwing crowd which identified the US as the principal supporter of the former dictator Jiménez. The elections held in 1959 were won by the Acción Democrática Party, and Betancourt became the first president to complete his term of office, surviving many assassination attempts. The democratic process was at last striking firm roots, with peaceful transfers of presidential powers in subsequent elections. As far as land reform was concerned, however, the drive had gone out of the Acción Democrática, and the more conservative Christian Democratic Party, with which it alternated in power, blocked reform anyway. But in both health care and education, Venezuela made significant progress during the Betancourt years. The man who made the biggest impact on domestic politics was Carlos Andrés Pérez, who became president in 1974 and nationalised the iron and steel industry and the foreign-owned, mainly US, oil companies. Venezuela was distancing itself from US economic and political hegemony. Joining with Mexico, Colombia and Panama in the ‘Contadora’ peace initiative to bring peace to Nicaragua and the other Central American states rent by guerrilla wars was another attempt to organise Latin American affairs without US intervention. From the mid-1980s Venezuela faced grave problems economically, with the fall in oil prices and the burgeoning foreign debt. Carlos Andrés Pérez returned as president after winning the election in 1988, but his introduction of an austerity programme in 1989 led to rioting in Caracas that left 300 dead. He had won the election on his promise to ease Venezuela’s debt repayments. The oil-price rises of 1990 lightened the burden, but as long as Latin American states remained heavily dependent on the unpredictable price fluctuations of one or two commodities, while carrying large debts from earlier profligate development plans, their economies would remain precarious. The hardship caused by economic reform and austerity programmes repeatedly threatened the democracies with social unrest. The unequal distribution of wealth aggravated the problem. Despite a spurt of growth again in Venezuela in 1991, profits failed to trickle down to the poor. Early in the following year, Pérez’s popularity had sunk very low and disaffected elements in the army, hit by declining wages, attempted a coup. Pérez was attempting to reform the democratic process shot through with corruption. Narcotics became a major export besides oil. In hard times the people became disillusioned with their unprincipled democracy. A small group of Venezuelans had filched the benefits of the potential oil riches while 80 per cent of the people remained poor. When oil prices slumped again after 1997 and Venezuela’s economy plunged into disarray, there was a popular upsurge against the corrupt politicians and institutions that had ruled Venezuela for forty years under the guise of democracy. In the elections of December 1998 they turned to a populist leader who promised revolutionary change. Hugo Chàvez won a landslide victory and at first was carried forward by a surge of unprecedented popularity for his ‘promised revolution’. An exmilitary colonel, Chàvez sports a paratrooper’s red beret on his campaigns. Folk hero to the poor, his failed attempt at a military coup had landed him in prison for two years in 1992. Now he was the legitimate president. Venezuelan politics were thrown into turmoil as he battled the established political elites in Congress and the Supreme Court with the introduction of a new constitution and Assembly packed with his own supporters. In April 2002 he was briefly overthrown by an army coup but, with popular support, regained office. The economy did not improve, mismanagement and Chàvez’s authoritarian attempts to govern and introduce reforms, a catalogue of turmoil and failure, led to constitutional efforts to force a referendum and an early election by the opposition joined by the trade unions. Until 2004 Chàvez blocked all efforts to force his hand. The counter of the opposition was to call a general strike. For weeks until February 2003 industry was paralysed including the state oil industry. Chàvez weathered the industrial assault but the prospects for the people are grim. The economy threatened to grind to a halt. In 2004 Chàvez convincingly won the recall referendum. Populist nationalist, stridently anti-American at odds with his Latin American neighbours whose efforts to mediate have failed, the future remained clouded. The failure of a sound political structure and the endemic corruption have blighted Venezuela.