The
Massive Impact of Neoliberalism
Liberalism returned and the new generation of liberals were
called neoliberals. Neoliberalism emphasized free trade, export production, and
the doctrine of comparative advantage. People such as Fernando Henrique Cardoso
and Carlos Menem were neoliberals. Free-trading neoliberals slashed the import
tariffs that nationalists had raised to protect Latin American industries. They
deregulated capital flows such as removing nationalist-inspired limits on
profit that multinational corporations could freely take out of a country each
year. They removed the nationalist-inspired subsidies that made basic
foodstuffs and public services affordable for the poor. In the 1980s, many
Latin American countries struggled to keep up payments on foreign debts. The
debts increased due to high world oil prices and heavy short-term borrowing.
Foreign lenders believed that the solution to their debt was in free-market
policies. Now Latin America was able to make payments on their debts and for a
few years, Latin America was considered a great emerging market among US
investors which offered vast investment opportunities. US fast-food franchises
arose in major cities in Latin America. In 1994, the Free Trade Agreement
(NAFTA) was created. A year later, Brazil, Argentina, Paraguay, and Uruguay inaugurated
their own free-trade zone called Mercosur. This allowed middle-class apartment
dwellers from Mexico City to Santiago to access the Internet, tune in via
satellite to US or European television, and become avid consumers in a
transnational economy. Chile stood out the most as a neoliberal success story.
Chile boasted low inflation, good credit, steady growth, and diversified
exports. http://www.naftanow.org/
Some
social consequences of neoliberal reforms are that the dismantling of bureaucracies
left many without employment and providing water and electricity to the poorest
areas was not profitable. There were some challenges to neoliberalism such as
the Zapatistas. They were a group that used Zapata’s name on the day NAFTA went
into effect to rebel in Mexico. These Zapatistas were Mayas from villages near
the Guatemalan border. They had a subcomandante named Marcos who was a
mysterious ski-mask-wearing, pipe-smoking spokesperson who appeared on T-shirts
all over the country. Thousands went to Chiapas where the rebellion was
occurring. Due to this group, the Mexican government devoted itself to
deporting the observers and crushing the rebellion. Another challenge came from
the Shining Path insurgency that arose in the Peruvian highlands. The Shining
Path’s “campaign of terror” owed more to the mystical vision of its leader,
Abimael Guzmán, than to its old-style
Marxist ideological roots. They soon lost momentum after the capture of their
leader in 1992. Indigenous leaders demanded sufficient land to farm and a fair
share of government benefits. Above all, they asked to be allowed to remain
themselves, preserving their language, their lifeways, and aspects of their
political autonomy. http://www.corpwatch.org/article.php?id=376