Monday, November 19, 2007

Of Dogs and Demagogues

While commending Peruvian president Alan Garcia for engaging directly with the public in written form, I have to join many other critics in finding his arguments distinctly lacking and his style dogmatic and bullying.

At best, his 'dog in the manger' article amounts to a grand statement of faith in the tenets of neoliberalism, about ten or fifteen years out of date. At worst, it's an apology for a continuation of the 'open veins' economy -- sucking out the country's natural wealth for the benefit of foreigners and a small local elite.

The first major problem with Garcia's article is that he offers nothing really new. Peru's president could be channelling the International Monetary Fund as he stresses need to establish (large-scale) private property rights and declares his faith in the transformative power of 'investment'. But Peru has already had at least ten years of neoliberal orthodoxy, and five years of steady economic growth, little of which has so far trickled down to ordinary people.

It was impatience with this state of affairs that drove the 2006 election. Garcia was elected to deliver a stronger State and enact social democratic reforms. His slogan of 'responsible change' captured rather well the national mood for improving the lot of the majority, while maintaining a cautious faith in free-market fundamentals.

On the campaign trail, Garcia promised to finish the stalled General Labour Law, end large-scale employment outsourcing, establish royalty payments for mineral resources (whose soaring prices are giving mining companies bonanza profits), and review the trade agreement with the US 'line by line' to strike a better deal for Peru.

These are politically difficult tasks, and the current government can't be entirely blamed for not having made much headway with any of them. But instead of explaining how the same objectives can be achieved gradually or through different means, Garcia seems to have tossed aside any ambition for the government to play a role in building a fairer society.

Worse than Garcia's ideological swing is the weakness of his excuses for not doing more. When he says that there is no money to meet demands for a health and social security safety net he conveniently ignores the fact that Peru has the lowest tax take in Latin America, notably lower than comparable market economies like Chile and Colombia. He completely dismisses concerns about the environmental impact of mining as 'last century' but presents no plan for an independent environmental authority that might be trusted to assess the real impact of individual mining projects.

The second major problem with Garcia's rhetorical positions is that they're divisive and antagonistic. The ongoing poverty and exclusion, especially of those in the rural south of Peru, means democracy remains extremely fragile. Strike and marches are commonplace. Nationalist leader Ollanta Humala is always ready to stir up trouble, and memories linger of his brother Antauro's aborted 'uprising' at New Year 2005.

You'd assume that a social democrat with ambtions to statesmanship would try reaching out to those who voted for Humala and convincing them that more can be achieved through democratic reform than by constant fist-shaking. Instead, Garcia chooses to blame and browbeat. His tirade about the 'idleness' of the land, forests and oceans appears to imply that the occupants are themselves idle, and to be blamed for their own poverty. He accuses dissenters and and environmentalists of being 'old communists', brushing aside the same genuine concerns about the environment and labour rights that led US Democrats to insist on changes to the US-Peru trade deal.

Finally, and most seriously, Garcia offers nothing positive. There are no case studies of successful small business or communities; no empowering vision of how ordinary Peruvians can develop their unique skills and traditions into valuable niche industries -- indigenous textiles, jewellery, crafts, eco-tourism, wine and pisco, highland crops and health foods being just a few contenders.

There is dismissal of any other form of ownership other than large scale commercial property. Garcia is probably right in saying that there needs to be more medium-size farms with the ability to invest in modern production. But he fails to describe how ordinary Peruvians might make such advances themselves through co-operatives, better access to credit, or his own government's Sierra Exportadora programme. The suggestion seems to be that small landowners should just sell up to foreign investors and join the migration to the already-overcrowded cities.

The only mention of a positive example is the town of Ilo, which Garcia says is 'the most advanced in Peru' thanks to 'mining and fishing'. This is disingenuous. Ilo's progress has come after 20 years of co-ordinated community action, battling with the Southern Peru Copper Corporation to clean up the town's contaminated air and beaches As late as 1997, sulphur dioxide emissions around the town were fourteen times the level recommended by the World Health Organization.

A further irony lies in the countries he holds up as examples of progress: Germany, Japan and Korea are all relatively resource-poor nations that got where they are today through the hard work and ingenuity of their people, rather than by exploiting mines and forests.

With deep divisions that go back to the Spanish conquest, Peru desperately needs constructive leadership that convinces people they are capable of improving their own lives. Technocratic previous president Alejandro Toledo was a failure in that respect -- muddling his way to a historically low approval rating of 7 percent. Alan Garcia is a much more populist figure, with a gift for appealing directly to the public. It's a pity, then, that in this case he has wasted his considerable rhetorical talent by delivering a message that is anything but unifying.

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Simon said...

Holding Japan up as a beacon of hope today certainly raises a few questions. Given what little I know of Peru, I would assume from the article that Peru is struggling to modernise - something which the Japanese certainly did exceedingly effectively. Where they drop the ball is the next step - building a sustainable consumer-based society. Japan's economic malaise is certainly the big challenge Japan faces today.

Simon Bidwell said...

Hey Simon -- you're right that 'modernisation' is a good summation of the challenges facing Peru. But I'm intrigued -- do you mean that Japan has failed to buld a sustainable consumer-based society? How so, and what are the reasons?