The Massive Impact of Neoliberalism

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