South America in 2021

6 January, 2021

Videoconference between Fernandez and Bolsonaro. The Brazilian president leads a dismantling of Mercosur that would asphyxiate Argentine capital and bring the Argentinean disaster to a new stage.
Videoconference between Fernandez and Bolsonaro. The Brazilian president leads a dismantling of Mercosur that would asphyxiate Argentine capital and bring the Argentinean disaster to a new stage.

1 The important thing about this year’s World Bank forecasts for the continent are not the figures. Not even the trends. Rather, for the first time it acknowledges that the driving force of accumulation is not only not internal, but depends on a set of international prices… resulting from Chinese demand. Thus, the economic forecast is restricted to estimating how a bubble-drive domestic market and basically supported by the state, will respond to the ups and downs of Asian demand. Therefore, in economies with a high percentage of informality (=extreme precarization), it is necessary to estimate the impact of the pandemic in the region during 2021. And it doesn’t look good, of course.

Iván Duque already stated that more than one million irregular migrants, the vast majority of whom are Venezuelans, would not be vaccinated. Problem: Public Health in general and vaccinations in particular make sense from a population perspective. These are effective policies given certain volumes and percentages of the total number of people living in the territory. Excluding groups not only shows a genocidal willingness towards the excluded group, but also easily renders the effort useless in the rest of the population. The reality: the most ludicrous nationalism serves only as a cover for the state’s inability to ensure an effective vaccination process while attempting to use migrants as a weapon against its rival in Caracas thus generating a new backwards migratory flow. The Colombian health system is already overwhelmed in the capital and close to collapse in the rest of the country. And in Chile, Brazil or Argentina the situation is neither better nor can it be after having opened businesses in order to promote Christmas sales. The third wave is terrifying there. Furthermore, the expectations of an effective vaccination campaign are not any better either. In Brazil, government incompetence was such that there are not even syringes to be vaccinated. In Argentina, after the fiasco in the delivery of Russian vaccines, the expectation ends up falling, again, on China… and comes conditioned on closer cooperation with China.

2 In the background, Fernández thinks that he can keep playing the game of balancing the U.S. and China, at least for some time. The sectors of the Argentine bourgeoisie closest to the U.S., however, are not so sure, and ask for a turnaround, alleging possible reprisals by Biden. But the reality of a dependent demand prevails. And in fact, the only good news in sight for Argentine capital is the historic rise in the price of soybeans thanks to China’s demand. We are talking about a typically semicolonial economy, in which the internal market depends on the state taxing and redistributing a substantial part of the income from exports. The closure of corn exports by the government is a palpable demonstration of the contradictions of this model in which the externally oriented sectors and the internal productive sector are dissociated. When a commodity such as grain, which used to be part of the internal circuit of the export sector, becomes international, everything falls apart. As corn rises on the international market – that is, as it succeeds as a new export – fattening prices escalate, meat exports are jeopardized, and domestic supply decreases, driving inflation even higher. The result: the state has to intervene to stop what seemed like good news.

Seen from the perspective of workers’ interests, the result is a brutal clamp: on the one hand, food inflation directly threatens livelihoods, on the other hand, price increases in fuel and basic services – which the government decided in order to pay off debt without further raising its financing costs – continuously and generally erode wages. The state is only capable of cleaning up its accounts and national capital of recovering the rhythm of accumulation by sucking more and more income from labor. What is the outlook for 2021? The increase in demand and international prices will give a certain shelter to national capital, making it increasingly dependent on China, but the basic needs of workers will not gain any shelter.

Covid cemetery in Brazil

3 In Brazil, an apparently much more diversified and powerful economy, with a much more solid domestic market… the underlying problems are the same. The budget debate has been significant: in the end Bolsonaro has focused on shielding the arms race and militarism, and, faced with the most basic contradictions, he shamelessly lets it be known that the country is broke. This has obviously outraged economists who act as spokespersons for São Paulo’s financial capital, who are coming out of the woodwork to remind us that today Brazil can continue to issue debt in its own currency and not in dollars, a qualitative difference of the first order if we compare it with the rest of the region. In reality the contradiction that Bolsonaro discovered ran somewhere else. If he wants to make Brazil’s military weight grow even more and at the same time fatten up the agro-export capital that supports him, he needs more resources, but the accounts do not match up without reducing even more and even more quickly the minimum aid to the most precarious workers. But he cannot do this, even less so during the pandemic, without causing a disaster not only for workers – who are already starving – but for basic state cohesion and internal demand. And for half a century, Brazilian capital has not generated a volume of capital applications large enough to exploit that entire workforce. To put it in Bolsonaro’s way: the poorest workers, who are millions, are not prepared for almost anything.

Perspectives: basically the same as Argentina. For workers another year of hell ahead. And in imperialist policy, Bolsonaro will have to balance China and the US whether he wants to or not because Brazilian capital cannot give up either market. What’s more, it will have on the one hand to obtain more from the relationship with Argentina and rediscover Mercosur. But the most important thing: in order for the United States not to become too difficult an ally and condition too much the game with China –starting with 5G– they will have to promote a distraction… and the main one is called Venezuela.

Venezuelan inflation exceeded 3.684% this year

4 The situation in Venezuela is hard to describe. Collapse falls short of it. The level of destruction of production and the degree of decay of the state and class relations are simply overwhelming. But the collapse of capital and the disarticulation of society do not diminish the parasitism of a Venezuelan bourgeoisie who unashamedly says that the dollarization of misery is revolutionary and clings, among scavenger fights over pieces of the remaining state, to its exploitative role. The only thing that could make the situation of the workers even worse is an acceleration in the militarist escalation. And everything points that way. The hard core of the Lima Group – the United States, Canada, Brazil, Uruguay, Colombia and Chile – has begun the year by closing ranks with a very worn Guaidó. For the reasons already noted, Brazil, Colombia and Chile have every interest in encouraging the U.S., which has been too invested in harassing the regime, albeit with little to show for it. Bolsonaro, Duque, Lacalle and Piñera don’t care about Guaidó himself. Guaidó at this point is the United States and the weaker, more fragile, even ridiculous its political position the more they have to gain because the more Washington depends on them to be able to continue in the stick to their own guns. The mystery is which approach Team Biden will take in a few days. The change is a unique opportunity for the U.S. to get rid, at no great cost, of a bad hand by placing it on Trump’s shoulders. But let’s not kid ourselves, what’s at stake is Guaidó and with it what its interested allies can obtain from the U.S. What is not going to happen is for the United States to give up its battle with the Venezuelan government. Every passing day, Russia, China and Turkey assert themselves over Venezuela’s ruins. To give up that position, even if it is ruinous, is unacceptable for the strategy of continental affirmation that US capital wants and that Biden seeks.

Celebrations after the results of the Chilean referendum in October.

5 In Chile, meanwhile, 2021 is marked by the process of general reconstitution of the political apparatus that began with the referendum on the opening of a constituent process. On April 11 there are elections for the constituent assembly, and on September 21 for the presidency. In the background, a social and health management disaster with decreases in production greater than the surrounding countries. But it seems that the general rinse is not going to be as expensive for Chilean capital as everything pointed out: if 2018 saw a drop in copper prices of 20%, in 2019 they rose by 5% and this year everything points to the metal price will set a historical record. Another thing is whether it will succeed in bringing back into the fold a politically very atomized and excited petty bourgeoisie. In the presidential polls, the stalinist mayor of Recoleta – the Bohemian-Cheto district of Santiago – leads with only 18%, followed by the ultra-right-wing Lavín with 11%. Muñoz, Bachelet’s right-hand man and the hope of the institutional left, does not even reach 3%. For the workers, things do not look as colorful and festive as they are for the politicized petty bourgeoisie and for export capital. In fact, unemployment is already over 11.2% in a country where the general conditions of exploitation imposed by the state cover little or nothing of the workers’ needs. More importantly, an important part of the anti-crisis policy has been to allow the withdrawal of savings from the pension fund – in Chile pensions were privatized during the Pinochet era – to avoid famine. The result is that a mass of 3 million workers in a country of 18 million inhabitants have been left without pensions and today have neither income nor savings. Blessed transversal revolts of the petty bourgeoisie: small businesses are saved at the cost of the little cash that reaches the workers taking away their pensions.

6 Ecuador will also hold a presidential election within a month. It seems that the rupture caused by the revolution of the rural petty bourgeoisie in 2019 and the horrors created by the infamous management of the pandemic and a stunted health system, will cause the return of the correism that Arauz’s candidacy promises. But it would be wrong to reduce the Ecuadorian political fractures to a distancing between the petty bourgeoisie and the ruling class as a whole. It is the latter which is in reality fractured between Guayaquil and Quito, between the classic bourgeoisie and the bureaucracy, between the priorities of national capital, over the relationship with Brazil, with the US, with China… It is to all these quarrels that the rural petty bourgeoisie, allied with correismo, adds its own desperation. Meanwhile, the situation of the workers has rapidly deteriorated and points to nothing but new attacks now, if Arauz’s triumph is confirmed, from the left.

7 A significant fact is that throughout the continent the polls show a growing electoral disinterest. In Peru, after the last upheavals of November, it seems that the discredit of the political apparatus is greater than ever and that less than half of the population would vote. In itself, this does not mean a challenge to the system, it only raises the bar for the ideological effort that the ruling class will have to undertake in order to renew its political structures. But there is more to it than that. On the one hand, it shows a working class that is very much punished ideologically and materially, a working class which, although it has not yet asserted itself, does not allow itself to be easily led. And that is important in a context in which regional alliances are going to take on an increasingly aggressive character. Because 2021 is very possibly going to represent the last opportunity for Argentina and Mexico to take the definitive leap and try to form an alliance of imperialist interests to counterbalance the Lima triangle formed by Chile, Brazil and Colombia.