Succeeding on the margin

Last week, Anita Snow, an AP reporter who spent ten years working in Havana, wrote a fantastic piece about returning to Cuba and how things are changing for average Cubans. The entire piece is great and worth reading. What really caught my attention, however, was how the Cubans she quoted spoke about the reforms of the last few years and the possibilities created by the recent rapprochement with the United States. All of them talk about the new economic opportunities open to them and how they think their lives can continue to improve. This stands in contrast to many opponents of the new policy position toward Cuba here in the United States as well as many prominent dissidents, who focus much more heavily on issues of political rights and democratic transition.

This is certainly not to say that those issues aren’t important. Cuba’s status as an open dictatorship with a completely closed political system remains a stain on the Americas, not least because so many prominent democratic politicians openly fawn over Fidel Castro and the Cuban Revolution. Nevertheless, I think it’s very likely that right now, most Cubans are far more concerned with the potential economic benefits of reform than they are about political ones. Moreover, helping generate a sustained improvement in the material living standards of Cubans is a much more achievable goal from the perspective of US policymakers than a democratic transition. The negative effects of the embargo on Cuba’s economy are probably overblown, but allowing US citizens and companies to travel, work and invest in Cuba will almost certainly be a net benefit for the Cuban economy, improving the livelihoods of Cubans. In contrast, the current arrangement is a net negative for the Cuban economy and Cuban livelihoods, yet also has done nothing to generate a political transition, or even superficial moves.

There a definite value to human rights activists and dissidents in Cuba fighting for a political opening above all else. And in a perfect world, Cuba would be well on its way there. However, treating that as the price of entry for Cuba to have economic and political relations with the United States makes perfect the enemy of good. Cubans end up poorer than they otherwise might be, and still stuck living in an oppressive dictatorship. US policy toward Cuba needs to be geared to improving the lives of Cubans within the current constraints, while working to bring about the eventual political opening.


Lula the Overrated

For the second consecutive election in Venezuela, former Brazilian president Luis Ignácio Lula da Silva has filmed an ad in support of the PSUV (chavista) candidate for president. Setting aside the gross hypocrisy of Nicolás Maduro constantly assailing the opposition for being foreign agents while prominently displaying a foreign leader’s endorsement on his campaign website, I think it casts into relief the degree to which Lula the president and Lula the person are different, and how both get way more credit than they deserve.

Lula is often depicted as the face of a sort of moderate left which governs democratically and within a market framework, but still with a strong sense of social justice. This sits in opposition to both the traditional Latin American left and the populist left typified by Hugo Chávez, which were distrustful of democracy and antagonistic to market-based economics. Despite initial fears by many, Lula, who had previously run for president on a much more radical platform, did govern in a democratic way and largely sought to improve on the reforms implemented by his successor, most notably with Bolsa Familia, a conditional cash transfer program credited with reducing poverty dramatically. During his presidency, the economy grew rapidly and the country’s democratic institutions grew stronger. All of that said, Lula’s economic performance is often exaggerated and his commitment to democracy and human rights abroad has not been robust.

During Lula’s time in office, the Brazilian economy did grow rapidly, even weathering the global financial crisis. However, much of that was due to factors outside of his control, and it may have served to prevent necessary reforms which are hampering growth now under his successor. Specifically, the period after 2003 was a good time for nearly every economy in Latin America, mainly as a result of the rapid growth in China. Chinese demand for resources pushed up commodity prices, delivering a boom for producer countries. For Brazil, this was particularly the case with soy beans and iron ore. This all happened after a decade of significant, if incomplete, pro-market reforms under Fernando Henrique Cardoso. During his presidency, Lula failed to make any significant reforms to improve Brazil’s notoriously sclerotic labor markets or significantly improve investment in infrastructure and education, creating severe bottlenecks in the economy which are even threatening Brazil’s preparations to host the 2014 World Cup. Growth under Lula was impressive, but much of it was due not to his policies but to solid pro-growth policies in China.

On human rights abroad, Lula has been too willing to let ideology determine his response. For instance, in 2010, imprisoned Cuban dissident Oswaldo Zapata Tamayo died as a result of a hunger strike while Lula was in the country. Rather than condemn Cuba’s treatment or even (understandably) simply refuse to comment, Lula instead compared Zapata Tamayo to a common criminal in Brazil. This was particularly galling because of the time Lula himself spent as a political prisoner during Brazil’s last military dictatorship.

Similarly, on democracy, Lula has been quick to step to the defense of leftist presidents while seemingly oblivious to eroding democratic norms by those same presidents. For instance, when Manuel Zelaya was overthrown in a coup by the legislature, judiciary and military, Zelaya ended up taking refuge for month in the Brazilian embassy in Tegucigalpa after sneaking back into the country, and Brazil refused to recognize the newly elected president. This is not to say that the Brazilian government was wrong to support Zelaya (the US and every other country in the hemisphere did as well), simply that their support was overwhelming and unequivocal. This stands in contrast to Lula’s decisions to endorse Chávez and now Maduro. The Venezuelan constitution (whose convention was convened by Chávez and was written overwhelmingly by chavistas) is worth less than the paper it’s printed on, Maduro is acting president despite the fact that the constitution explicitly says someone else should be, and the institutions of the state are openly being used in the campaign while the opposition is limited to a handful of minutes of airtime per day. Despite all this, Lula felt it his duty to express his support for a de facto president running in a free, but certainly not fair election.

Lula, without a doubt, deserves the popularity he enjoys in his native country. Saying he could have done better does not change the fact that millions left poverty during his presidency. Sadly though, in supporting first Chávez and now Maduro, Lula seems determined to ensure that his pretty successful model is not replicated elsewhere.

What am I missing?

Protesters in Buenos Aires during a cacerolazo against Cristina Kirchner's goverment in 2012. (La Nación)

Protesters in Buenos Aires during a cacerolazo against Cristina Kirchner’s goverment in 2012. (La Nación)

Reading this piece about the authoritarian leanings of a subset of the kirchnerista movement (followers of late former president Néstor Kirchner and his wife and current president Cristina Fernández de Kirchner) in Argentina* sparked a recurring question l have about these types of governments’ intellectual supporters; what are they seeing that I’m not? Specifically, how does someone from the left look at Argentina or Venezuela and see it as a desirable model, especially compared to Uruguay, Chile or even Brazil?

For instance, when I look at Venezuela, I see a country with a decimated productive capacity, 20% inflation, rampant crime, and a complete disregard for the rule of law (not least, the constitution that the current government’s supporters drafted just 14 years ago) that is borrowing huge sums of money at rates above 15% in spite of the trillion dollar oil boom over the last decade that has buoyed the economy. I don’t see anything that would be much of a model for anyone, much less Europe, and yet there are very intelligent people who do see something valuable and worthy of replication, perhaps even in Europe. The situation is similar in Argentina, except without the oil and not as advanced in its interfering in the economy or circumventing the rule of law, though the government is moving quickly on both fronts.

On the other hand, one can look at countries like Chile between 1990 and 2009 and Uruguay over the last decade and see examples of governments that are clearly left-of-center, but pragmatic in their economic policies. Chile in particular, has had consistent, strong economic growth over the last two decades even while other countries in the region suffered dramatic crises that erased entire half decades of growth. Moreover, the poverty rate has fallen and stayed down, all while maintaining a robust (though still not ideal) democratic system that remains in the process of reforming itself. Uruguay presents a similar case. It possesses Latin America’s oldest and in many ways, most robust, welfare state, and the current president was a left-wing guerrilla fighter during the 1960s and 1970s. Yet he has governed economically in a manner similar to the Socialists in Chile (i.e. broadly in a neoliberal fashion) and recently described the indefinite reelection so popular among Latin American presidents of the left and right (including among chavistas and kirchneristas) as being “monarchic.” None of this is to say that these countries don’t have their problems but they do illustrate that it is possible to achieve economic growth and work toward a more equitable society within a democratic framework and without intervening dramatically into the economy.

So what do they prefer about the more heavy-handed approaches? Typically, the main argument in favor of a more chavista or kirchnerista model–whether the person making it endorses or merely tolerates their undemocratic tendencies–is that they can achieve similar levels of growth without the pernicious effects of capitalism on inequality. However, as a paper by Birdall, Lustig and McLeod entitled, Declining Inequality in Latn America: Some Economics, Some Politics demonstrates, it’s the Social Democratic model epitomized by Chile and Uruguay that has done a better job of reducing inequality and increasing social spending over the last decade. And it’s not clear at all that, even in the short run, these alternative models are better for growth, notwithstanding the likely scenario (at least from my view) that the arbitrary meddling with the economy will stunt future growth as investment disappears and the productive capacity stagnates or declines.

So I return to my initial question, what makes these models more attractive to a certain class of intellectuals? What is it that they see that don’t? Is it a situation more along the lines of what Scott Sumner outlines here where these people are projecting how they would prefer the world to be rather than reacting to the world as it is (or vice versa for me)?

* For the record, I find this argument a bit overwrought. I could be wrong, since I have very little contact with any kirchneristas, but I tend to believe that most people choose to see undemocratic actions by the president as a necessary evil rather than a feature of the model.