U.S. Role Turned Upside Down


Why U.S. economic, military, and covert influence is waning.

In 1823, James Monroe told the world that the United States would not permit European colonization in the Western Hemisphere. But the Doctrine has repeatedly been a tool to justify intervention on behalf of U.S. interests, and rarely a tool for protection. Latin Americans were not consulted before the Doctrine was announced. Now they say it's time to send Monroe home.

IMF logo

1 IMF:

For most Americans, the International Monetary Fund is just one of the hulking edifices in downtown Washington, D.C., filled mostly with men in dark suits. But for millions of people in the developing world, the IMF is painfully familiar.

For more than a quarter-century, this public financial institution has imposed policies on countries that have been disastrous for the poor and the environment. Governments have gone along with these harsh measures for fear of losing the IMF “stamp of approval” needed to get credit from other sources. Today, however, South America is leading a historic break from the IMF.

At the forefront is Argentina, a country that was once a star IMF patient. In the 1990s, the country took a full dose of the IMF's bitter medicine. Like medieval doctors, IMF economists prescribe the same “cure,” no matter what the ailment. While seemingly more sophisticated than bloodletting, the success rate of IMF policy reforms has not been much greater.

Based on textbook “free market” theories, the IMF prescription includes public spending cuts, market liberalization, deregulation, and privatization. Countries that implemented these reforms in the past 20 years had slower economic growth rates than during previous periods. In Argentina, millions of citizens suffered reduced access to services and lost both jobs and health care coverage.

In 2001, the country suffered a total economic meltdown. With their jobs evaporated and their currency worth next to nothing, thousands of formerly middle-class Argentines had to resort to selling their possessions on the street and rummaging through garbage for food. When the IMF ordered more spending cuts, the country exploded in riots. Only after the government threatened to default on its loans did the IMF back down. And once Argentina rejected the IMF's medicine, it started a remarkable recovery.

That act of standing up to the IMF—and surviving—was empowering for other countries chafing at IMF control. Beginning in late 2005, Argentina and three other major IMF clients—Brazil, Uruguay and Ecuador—announced they would pay back their loans early and completely.

A reduced need for loans was one factor, but another was the emergence of the Venezuelan government as a major lender. Flush with oil money, Venezuela purchased bonds from Argentina and Ecuador to help them repay their IMF debts. This year, Venezuela and Argentina took steps to create a formal Bank of the South as an alternative to the IMF and other institutions that require similar loan conditions. Ecuador, Paraguay, and Bolivia are also initial backers of the new bank.

Some other key clients have followed Latin America's lead. The IMF's total loan portfolio has shrunk by more than two-thirds over the past couple of years, and most of the remainder is loans to one country—Turkey. By 2010, the IMF is expected to face an operating deficit of almost $400 million as its income from interest on loans dries up.

Citizens in countries liberated from IMF control will have greater power to advocate for more equitable economic policies that reflect each country's particular needs. They can also enjoy the irony of the IMF itself faltering financially. We'll see if the dark-suited economists care to drink their own medicine.

Sarah Anderson directs the Global Economy Program at the Institute for Policy Studies.

President Correa

2 Rafael Correa, president of Ecuador

“We can negotiate with the U.S. about a base in Manta, and if they let us put a military base in Miami, if there is no problem, we'll accept.”

Promising during his election campaign to close the U.S. airbase in Manta, Ecuador. Correa continues to pledge that the lease for Manta will not be renewed when it expires in 2009.

SOAW logo

3 SOA: School's Out

As they grapple with the legacy of “dirty wars,” Latin American countries are questioning their participation in the School of the Americas (SOA).

This academy at Fort Benning, Georgia, now renamed the Western Hemisphere Institute for Security Cooperation, is alma mater to many Latin American dictators and death squads.

The School of the Americas Watch (SOAW), which advocates closing the SOA, has sent delegates to meet with governments throughout Latin America. The delegations have included torture survivors Carlos Mauricio, from El Salvador, and Pablo Ruiz, from Chile, along with SOAW founder Fr. Roy Bourgeois. Lisa Sullivan Rodriguez, SOAW's Latin America coordinator, says, “We have visited 12 countries in the last year, and 11 have been receptive.”

Venezuela, Argentina, and Uruguay have stopped sending troops to the SOA. Bolivia is phasing out its participation, and Chile is reconsidering its plans to send troops.

SOAW has visited five countries in 2007. In Panama, which expelled the SOA in 1984, a public outcry arose after SOAW informed the media that Panamanian police had recently attended the school. In El Salvador, human rights groups expressed concern that the new International Law Enforcement Academy may serve the same function as the SOA. After Colombian officials refused to meet with the SOAW, the delegates accompanied Puerto Matilde residents, refugees from paramilitary violence, to tell an army field officer about continued killings in Colombia.

SOAW also visited Guatemala, El Salvador, and Honduras, and will continue its outreach this year in Mexico, Costa Rica, and the Dominican Republic.

Jeremy Orhan Simer is a writer, activist, and Spanish interpreter who lives in Seattle.

President Chavez

4 U.S. Funds Fronts

The U.S. government has a well-established history of intervening in Latin American politics. In recent years, gunboat diplomacy has given way to more sophisticated techniques.

Venezuelan President Hugo Chávez's Bolivarian Revolution is causing concern in Washington. In response, the National Endowment for Democracy (NED) and the U.S. Agency for International Development (USAID) have to date funneled more than $50 million of U.S. taxpayers' money to anti-Chávez groups, some of which led the April 2002 coup against Chávez.

Documents obtained under the Freedom of Information Act show that, in the months before the coup, the NED quadrupled funding to groups such as the labor federation Confederación de Trabajadores Venezolanos (CTV—also associated with the AFL-CIO), CEDICE, Asamblea de Educación, Fedecámaras, Consorcio Justicia, and right-wing political parties including Primero Justicia, COPEI, Proyecto Venezuela, and Acción Democrátia.

Many of these groups received training from NED-funded groups such as the International Republican Institute and the National Democratic Institute to improve political platforms and communications strategies.

In one compelling case, Consorcio Justicia, which says it works on issues of justice in the country, planned a conference, using $80,000 of NED money, for April 8, 2002—just 3 days before the coup—to discuss developing a “transition plan” for a new government in Venezuela. The headline speaker at the conference was to be Pedro Carmona, who took over briefly during the coup as dictator. The conference never took place.

USAID has established an Office for Transition Initiatives in Caracas, funded with $10 million to “promote democracy and stability.” The funds were provided to many of the same organizations involved in the coup, who also led the a 64-day shutdown of the oil industry from December 2002 to February 2003. A grant from USAID to an organization affiliated with the CTV and Fedecámaras, the two main groups directing the shutdown, was aimed at crafting TV commercials in support of the action.

More than 300 politically motivated organizations and programs in Venezuela now receive funding through the NED and USAID, despite Venezuela's laws prohibiting foreign government funding of political activities.

The investment has, so far, had no effect. The 2002 coup was put down by the people. Two years later, they defeated a referendum to recall Chávez, and in 2006 re-elected him by a substantial majority.

Eva Golinger is a Venezuelan-American lawyer living in Caracas and author of The Chávez Code: Cracking US Intervention in Venezuela (Olive Branch Press, 2006) and Bush vs. Chávez: Washington's War in Venezuela (Monte Avila Editores, 2006).

U.S Social Forum

5 Forum Heads North

The World Social Forum started in Porto Alegre, Brazil, as an alternative to the World Economic Forum. The WSF emphasizes non-heirarchical, democratic organization. The WSF model has now moved north, to the Southeast Social Forum (YES! Issue 39) and to the US Social Forum, slated for June in Atlanta.

In Their Own Words

Rosalinda Guillen

Rosalinda Guillen
Community to Community Development, Bellingham, WA

I think the best part of the Social Forum is that we all understand that getting along together, transforming our relationships, and finding solutions is forever evolving. I like the saying that's used by a lot of the Social Forum activists, “We make the road by walking.” And the walking never stops and the path is forever going forward.

I see it as critical right now in the current political environment for social justice movements to come together and look beyond our own regions, and look beyond our own specializations in the work that we're doing and begin to intersect our issues. To me, the exciting part of the US Social Forum is to begin to build that path, so to speak, so that we're all walking together instead of waving at each other from different paths along the regions.

J Scott

Jerome Scott
Project South, Atlanta, GA

The U.S. government is trying to drive a wedge between African Americans and the immigrant community, particularly the Latino community. We think it's really important that we unite, that we don't allow that wedge to be driven. And, you know part of our future plan is to build a black-brown alliance through the process of the US Social Forum and beyond. We think that a movement for social and economic justice in the United States is so necessary. We have got to build that movement up so that it's worthy of uniting with the movements that are developing across the globe. We look at the US Social Forum process as a major movement-building moment. And so that's why we're putting so much effort into it.

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