This week, the chapter talks about how the aftermath of the dirty wars in Latin America and the political cycle the majority of the countries went through.
After the dirty wars, in the late 1970s/early 1980s, Latin American countries were for the most part in bad economic shape: poor economic management along with corruption at almost all political levels led to extremely high inflation and high foreign debt. This led to a drift to the right – a lot of the states elected more conservative (particularly fiscally conservative) leaders, who had to renegotiate the external debt with the International Monetary Fund in order to continue in the world market. The conditions imposed by the IMF prioritized debt repayment, so the governments had to impose austerity measures, open their borders to trade and foreign investment, and decrease their role in the economy.
These measures made it more difficult for the economies to recover. In addition, the decrease in social spending and the competition with foreign industries led many people leaving in the countryside to go the urban centres in search for a job, or to try and migrate to other countries with more and better opportunities.
Ultimately, these austerity measures, combined with the perception that they were favouring the wealthy, acted as a catalyst for a new swing to the left in politics. These new leaders promised to keep commitments to free trade and to the global market, reassuring financial institutions and states across the world, at the same they promised to increase social spending and to reduce extreme poverty.
Dawson argues that both right and left wing governments were very similar in practice: inequality and poverty declined more or less at the same rate in countries with right and left-leaning leaders alike, due in a huge part to the sustained economic growth that had been happening since the 1990s. This growth happened thanks to the commodity export boom: demand and prices were both high for minerals and crops such as soybeans, supporting an increase and social spending. Even though this reliance on commodities tends to distort local economies and cause inflation, governments had few other options, and ultimately relied heavily on them to ensure economic growth in Latin American countries.
Finally, Dawson talks about indigenous peoples and their newly strengthened role in the political sphere. Because the extraction of commodities such as minerals and oil immensely affects indigenous communities and their land, they found power and tried to guarantee some rights for themselves. However, even though a lot of politicians campaigned on doing just that, ultimately they barely kept to their promise: even though some political and cultural rights were ensured, subsoil goods were still legally owned by the state, which gave them permission to extract and harvest those commodities. But not without resistance – indigenous peoples have been fighting back in order to guarantee their land and livelihood are not exploited with no repercussions. It hasn’t been easy, as the mining companies have a lot more resources and connections to the political and judicial system. However, the Lago Agria case in Ecuador illustrates how these Native peoples are still willing to fight for their land.