Latin America And Globalization Essay ⋆ Political Science Essay Examples ⋆ EssayEmpire

Since the 1990s, globalization has become a buzzword in Latin American political science. Although it has many meanings, the term is generally employed as a met concept to explain a complex set of processes. These processes include the liberalization of trade; the emergence of new forms of social relations; and increasing cross-border flows of services, capital, technology, people, information, ideas, and culture, facilitated in large part by innovations in communication, technology, and international governance structures.

Debates Surrounding Globalization In Latin America

Two central debates have guided much of the literature on Latin America and globalization. The first debate centers on the novelty, scope, and inevitability of globalization’s effect on the Latin American state. On this account, Held (2000) identifies three basic positions in contention: the globalist, who sees globalization as inevitable and irresistible by the national order; the traditionalist, who rejects the novelty of the process and clings to traditional, state-level explanations; and the transformation list, who sees a significant shift at the global level but questions globalization’s inevitability and scope. The second debate, in contrast, accepts globalization’s transformative properties and seeks to unravel its positive and negative features in Latin America. This debate is typically characterized by two, competing narratives. The first narrative, globalization as progress, has tended to stress the positive features of globalization in Latin America, including its capacity to increase wealth, freedom, democracy, cultural diversity, civil society, and social relationships. The second narrative, globalization as disaster, has tended to stress the negative features of globalization in the region, including its imperialistic tendencies, exploitation of labor and the poor, the undermining of democracy, the homogenization of culture, and the destruction of the natural environment.

Current Globalization Issues In Latin America

What is new about globalization for Latin America? As demonstrated in the writings of Raul Prebisch, Latin American dependency theorists, and the Import Substitution Industrialization policies of the 1950s and 1960s, Latin America has long recognized that it is part of an international economic system. However, when referring to globalization in Latin America, scholars typically are referring to the critical period of state restructuring and market liberalization that began with the Mexican debt crisis in 1982 and 1983 and continued throughout the 1990s and 2000s.The root cause of this crisis is often traced back to the world energy crisis in 1973, when the Organization of the Petroleum Exporting Countries (OPEC) limited the supply of oil and drastically raised prices. While many Latin American countries were severely hurt by the increase in oil prices, OPEC countries accumulated unprecedented amounts of excess reserves, or petrodollars, which were subsequently recycled through loans to Latin America and other middle-income developing countries to help these countries pay for oil and elaborate development projects. A second oil shock in 1979 led to additional lending to help Latin American countries pay for oil price increases. This second price increase also produced inflationary pressures, which industrial states sought to control by raising interest rates. The overall impact of these events was excess lending, inflation, and higher interest rates, leading to the debt crisis in Latin America in 1982. Starting with Mexico, numerous Latin American countries found themselves no longer able to service their debt payments. On the brink of bankruptcy, these countries were forced into negotiations with multilateral lending institutions, namely, the International Monetary Fund (IMF) and the World Bank.

The ensuing restructuring initiatives and the prolific role of multilateral lending institutions in these negotiations of the mid-1980s is often taken as early evidence of globalization’s presence in Latin America. These negotiations spawned a multitude of economic policy recommendations that meant to stabilize Latin American economies, rectify the region’s balance of payment difficulties, and integrate Latin American economies into the emerging global economic system. Initial measures in the 1980s included reducing deficits, restricting credit, instituting devaluation, and holding down wages. However, beginning in the 1990s, more extensive market liberalization policies were deemed necessary and subsequently introduced throughout the region. In some cases, such as Nicaragua in the early 1990s, market liberalization initiatives were introduced directly and voluntarily by Latin American political and policy elites who were committed to an emerging free market international policy culture. In other instances, such as Bolivia in the late 1990s and 2000, market liberalization reforms were introduced as conditions of IMF and World Bank lending through structural adjustment programs. The conditions of these loans entailed a variety of market liberalization measures, including the reduction of tariffs and the elimination of quota restrictions, privatization of public companies, deregulation, curtailment of social spending, and reductions in the cost of labor. A well-publicized instance of structural adjustment is the privatization of the Cochabamba water supply in 2000 as a condition of Bolivia’s acceptance of a $25 million loan from the World Bank that year. The economic philosophy behind this restructuring effort is often referred to as the Washington Consensus, a phrase first coined in 1989 by John Williamson, then of the Washington-based Peterson Institute for International Economics, to connote the consensus that existed among members of the U.S. Congress, international financial institutions, the U.S. Federal Reserve Board, and U.S. think tanks about what constituted desirable economic policy reforms for stabilizing Latin American economies and integrating Latin America into global markets.

Effects Of Globalization On Latin America

Given the number of Latin Americans living below the poverty line, the market liberalization policies and global economic integration plans associated with globalization have been contentious policy solutions in the region. For example, during the 1990s and 2000s a number of Latin American countries privatized their water supplies to reduce state spending and open channels for foreign investment. This move sparked massive resistance from civil society organizations, arguing that water is a basic necessity of life and a basic right of the people as exemplified in Bolivia’s Cochabamba “water wars” in 2000. In addition to privatization, numerous Latin American countries engaged in contentious social policy reforms, capping social spending, launching ambitious decentralization projects in health and education, such as Argentina, Colombia, and Mexico in the 1990s. Some countries, like Nicaragua in 1993, even went so far as to implement a system of user fees in education and health care. In response, actors from various segments of civil society have mobilized to confront their governments and to rally against a perceived futility and cruelty of free market solutions.

Politics And Globalization In Latin America

In addition to economic restructuring and global market integration initiatives, globalization is associated also with the concerted move toward political liberalization, political reform, and democratization in Latin America. These initiatives were cast under the rubric of “good governance” and were promoted extensively by the World Bank and other international institutions. The demands for global market integration reinforced pressures for governance reform in Latin America as foreign investors demanded investment guarantees and political stability as safeguards for their investments. The initiatives for good governance reform included anticorruption measures, the creation of judicial branches, accountability reforms, political liberalization, and democratization. Although the impact of these initiatives is debatable, a growing number of countries have nevertheless proven capable of surviving economic crises and transfer ring power through elections. However, despite adopting electoral procedures, many Latin American countries continue to suffer from high levels of corruption and clientelism.

While global market integration initiatives and good governance reform are said to constitute globalization from above, globalization also has led to a convergence among diverse grassroots movements in Latin America, a process referred to as globalization from below. Innovations in technology and communications have enabled local movements in Latin America to become aware of common interests, build networks and alliances, and promote a unified front in the struggle for social justice. Emphasizing the grassroots nature of social movements and the solidarity and networking properties that link them across traditional boundaries, scholars of this alternative perspective demonstrate how globalization enables civil society to pressure states and other powerful actors to take certain positions. For example, in their struggle for land reform and social justice that began on January 1, 1994, the same day the North American Free Trade Agreement entered into force, the EZLN (Zapatista Army of National Liberation) built key networks and alliances with the international community that enabled the movement to achieve significant victories in its struggle against the Mexican state. Labor unions and grassroots nongovernmental organizations (NGOs) throughout Latin America, such as Brazil’s Landless Workers Movements, have appealed also to global civil society, building transnational advocacy networks to lobby for land reform, fair wages, human rights, education, restrictions on child labor practices, and other policy changes.

The debates surrounding globalization continue to this day. Specifically, the literature on this subject continues to examine and explore the scope and depth of neoliberal penetration in the region, the capacity of states to resist these pressures, and the benefits accrued from global policy prescriptions. In recent years, these debates have taken a new twist as several left-leaning social movements have swept to power on distinctly ant neoliberal agendas. The election of Hugo Chávez in Venezuela (1998), Luiz Lula da Silva in Brazil (2002), Néstor Kirchner in Argentina (2003), Evo Morales in Bolivia (2006), and Daniel Ortega in Nicaragua (2006) may be a sign that Latin Americans are reconsidering their role and place in the new, global economy. For example, Chávez has called for “alter-globalization” in Latin America through Pan-Latin Americanism, expressed through regional cooperation in trade negotiations with the rest of the world. While a number of countries have expressed their support for this arrangement, it remains to be seen if Latin America can develop and sustain its own, unique alternative.

Bibliography:

Cohn,Theodore. Global Political Economy:Theory and Practice. New York: Longman, 2000.
Held, David. A Globalizing World? Culture, Economics, and Politics. New York: Routledge, 2000.
Held, David, Anthony McGrew, David Goldblatt, and Jonathan Perraton. Global Transformations: Politics, Economics, and Culture. Stanford: Stanford University Press, 1999.
Keck, Margaret, and Kathryn Sikkink, ed. Activists beyond Borders: Advocacy Networks in International Politics. New York: Cornell University Press, 1998.
Stiglitz, Joseph. Globalization and Its Discontents. New York: Newton, 2002.
Teichman, Judith. “Latin America: Inequality, Poverty, and Questionable Democracies.” In Civilizing Globalization, edited by Richard Sandbrook, 39–52. New York: State University of New York Press, 2003.
Williamson, John. Latin American Adjustment: How Much Has Happened. Washington, D.C.: Peterson Institute for International Economics, 1990.

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