very similar to the model of development that prevailed in East Asia from 1960 to 1980, the period of East Asia’s “economic takeoff.”
Figure 1.1: Gini Coefficient of Inequality: Selected Latin American Countries, 2002–2016
A more complex and internally differentiated picture emerges when we consider the Human Development Index (HDI). Table 1.2 shows tendencies in and differences between countries according to their levels of human development. Overall, the region has a high level of human development. Chile and Argentina are the only countries with a very high level of human development, and only Paraguay and Bolivia have average levels of human development. All countries witnessed increases in HDI, except Venezuela, where the HDI began to decrease in 2013.
In terms of the factors that the HDI takes into account (education, health, and incomes), Chile has the highest rates of income measured as a factor of HDI (0.812 in 2015), followed by Argentina and Uruguay (0.807 and 0.794, respectively, in 2015). Argentina leads the region in rates of education measured as a factor of HDI (0.808 in 2015), while Chile and Uruguay occupy second and third place in the region. Finally, in rates of health measured as a factor of HDI, Chile is in first place, followed by Costa Rica and Uruguay, with Argentina in fifth place, after Mexico, in 2015.
The transformation in approaches to development, from neoliberalism to neo-developmentalism, was caused in large part by the resistance mounted by vast swathes of the population against the exclusionary policies that sought to force Latin America to incorporate itself into the global economy, policies that benefitted old and new elites. Another key factor leading to the emergence of a new set of policies and politics was the demand for the recognition of oppressed cultural identities. This demand was made especially in Bolivia, Ecuador, and Peru, but members of other ethnic groups also sought recognition in Chile, Mexico, and Colombia. A combination of social movements opposing exclusion and identitarian movements opposing institutionalized racism led to the emergence of a new constellation of political actors, including Bolivarian regimes (in Venezuela, Ecuador, and Nicaragua), nationalist and indigenous regimes (in Bolivia), neo-Peronism or Kirchnerism (in Argentina), and progressive governments like those of the Partido dos Trabalhadores or PT (in Brazil) and the Frente Amplio (in Uruguay). A process of widespread social change accompanied these political transformations, leading to the affirmation of human rights, the growth of feminist movements and improvements in living conditions for women, and increased multicultural awareness in society and politics. Moreover, the emergence of new political actors opposing the United States’ control of the region led to a new geopolitical role for Latin America in the world. The region has diversified its economic and political relationships with countries including China, Japan, South Africa, and, to a lesser extent, Russia, while also encouraging closer ties with the countries of the European Union. Nevertheless, the presence of the United States remains significant, especially in Mexico, Central America, and Colombia.
Table 1.2: Changes in the Human Development Index, 1990–2015
Source: Authors’ own calculations, based on the Human Development Report, 2016 (UNDP, 2016)
Furthermore, the new hegemony of the state was built on weak political institutions, especially weak political parties. These quickly became vulnerable to creeping corruption and clientelism in a context of democratic freedoms in which civil society could be mobilized and the media and social networks used as instruments of denunciation. In the middle of the 2010s, the state’s hegemony entered a period of crisis, caused by a combination of national and regional political factors as well as by the crisis in, and contraction of, the global market. This has led to a new historical turning point for politics and development in the region. Both the economic model centered on the market and the model of development centered on the state seem to have been weakened, and both seem to be undergoing a process of further weakening. It is still not clear what will result or where we should look for political alternatives. What new politics of development might allow us to envision a new democratic order?
The Rise and Fall of Neoliberalism
After a lost decade, Latin America’s socioeconomic development in the 1980s and 1990s was characterized by accelerated integration into the global economy. This process led to dependency and was unsustainable. It entailed the liberalization of markets and the privatization of formerly public industries and of natural resources. For both businesses and states, this process led to the formation of strategic alliances with multinational corporations, particularly in banking, communications, and technology. This meant decreased dependency on the United States, and it allowed for technological modernization, especially in the use of communications technologies and the expansion of digital media. However, during these years, Latin America witnessed spreading corruption, was subjected to the interests of multinational corporations, and suffered from the lack of a model of informational development that would allow its economies to become truly competitive in a global information age. Massive increases in poverty, inequality, and vulnerability to economic crises (including the Tequila crisis of 1995, the crisis in Brazil in 1999, and the Argentinean collapse that led to the bank freeze in 2001) marked the limits of the region’s integration into the global economy. It was clear that Fernando Fajnzylber’s strategy, which called for productive transformation “with equity,” was the only one that might have made Latin America into a modernized region that was competitive in its own right (1990). But the political conditions for implementing this strategy did not exist in any Latin American country in the last decades of the twentieth century.
According to a study undertaken by the United Nations Development Programme (2004), there were increases throughout the region in economic reforms implemented between 1981 and 1990 and again between 1988 and 2003, accompanied by an increase in rates of electoral democracy. Nevertheless, these increases did not translate into significant reductions in rates of poverty, indigence, inequality, or unemployment. The average rate of poverty fell from 46 percent in the period between 1981 and 1990 to 41.3 percent in the period between 1998 and 2003. And, in fact, in the Southern Cone (the sub-region with the highest rate of economic reforms), unemployment actually increased by three percentage points during this time. Rates of poverty and indigence also increased in this period, from 25.6 percent to 26 percent and from 7.1 percent to 8.7 percent, respectively.
We can identify an unfortunate lack of change in the rate of participation of the region’s GDP in global GDP. According to the World Bank, since the 1980s, this has remained around 8 percent. By contrast, China’s relative participation in global GDP went from 2 percent to 11 percent between the 1980s and the second decade of the twenty-first century (World Bank, 2018).
Social protests and political challenges attending neoliberal globalization led to openings in the political systems of many countries (Calderón, 2008). In Venezuela, this resulted in the taking of institutional power by new political actors through elections. These new actors launched the Bolivarian Revolution after the election of 1998, and they were then strengthened by a series of electoral victories for Hugo Chávez and his followers. Nicaragua, Ecuador, and Bolivia elected governments that challenged the Washington Consensus with left-wing strategies for autonomous nationalist development. Costa Rica continued its policies of social democratic pacifism and modernization and preserved its tropical welfare state. Brazil, Argentina, and Uruguay clearly positioned themselves against global financial capitalism even while they were integrated into global competition. On the other hand, in Colombia, the civil war and the paramilitary state led by Álvaro Uribe prevented political change for a time, although this type of change did take place at
