Why Andean states buck globalization

South America's Andean countries are rattling the continent like a fidgety fault line. From Ecuador to Bolivia to Peru, the dawning months of 2000 have lurched from a political coup to paralyzing social movements.

All serve as reminders that the post-cold-war promises of democratization and economic betterment through globalized markets have left many Latin Americans frustrated and poorer than they were a decade ago.

*In Bolivia this week, protests sparked by a water-system privatization plan turn violent, pushing President Hugo Banzer to declare martial law Saturday and warn that democracy itself is threatened.

*In Peru, 30,000 people in Lima chant "Down with the dictator" Tuesday as results from Sunday's presidential election trickle in. Suspicions of fraud are growing as incumbent President Alberto Fujimori's lead widens.

*In Ecuador, Indians and mid-level Army officers opposed to the government's economic program bring down a president and for a brief time in January install a military government - until international pressure effectively ushers the vice-president into power.

*In Colombia, President Andrs Pastrana has proposed a referendum to close down a corruption-plagued Congress until new elections can be organized.

*In Venezuela, public opinion is beginning to turn against a once wildly popular former coup leader turned president, Hugo Chvez. After more than a year in office, he faces a tough reelection bid in May.

"We are seeing what happens when the big expectations created for economic and social improvement collapse into the frustration of unfulfilled promises," says Alfredo Keller, a public opinion analyst in Caracas.

The process of globalization - exposing Latin America to a market-oriented, private-sector economy and international standards for democratic rule and human rights - has ushered in tremendous change that has benefitted some segments of the population, analysts say. Some workers have better access to goods and efficient services, with expanding options for political involvement and freedom of expression.

But for much of the middle and lower classes, observers add, the economic horizon has darkened. Those too poorly educated to benefit from new opportunities in a knowledge-based society are marginalized further, widening the world's worst rich-poor income gap. And as state-run industries have closed, whole sectors of the industrial-era economy have withered.

Privatizations, such as the planned waterworks sell-off that touched off Bolivia's strife, are seen benefitting only the financial elite. One of the principal entrepreneurs involved in the Bolivian package is a member of the ruling coalition who has become wealthy off government contracts. Meanwhile, some residents stewed over a a big water rate hike (see story right).

But if the Andean countries are most destabilized by this process of global change, it is because here more than in other countries of the region, economic upheaval has not been matched by equally swift political reform and modernization.

"The Andean countries offer the worst example of an inability to adapt to the forced march of globalization," says Bruce Bagley, an Andean specialist at the University of Miami. "It's the demise of the old system of governance that doesn't work anymore, without a more modern and efficient system to replace it."

Chile, Argentina, Brazil, and even countries of Central America - some still torn by warfare a decade ago - are doing a better job at reform, analysts say.

"Mexico has irreversibly tied its future to the North American market. Central America and the Caribbean countries are orienting themselves in that direction. The Southern-Cone countries and Brazil are anchored by the stabilizing effect of Mercosur [the four-country customs union]," says Francisco Rojas Aravena, director of the Latin American Faculty for Social Studies in Santiago, Chile. "All of these countries face the challenges of economic and democratic reform, but these issues are accentuated in the Andean countries."

Public revulsion over widespread corruption and a historic attraction to authoritarian rule have left many of the Andean countries with weak political and governmental institutions, analysts note.

Starting with Peru, where President Fujimori pulled a "self-coup" in 1992 to liquidate Congress and other institutions, countries from Venezuela to Ecuador have thrown out the old political parties.

"Ecuador has something like 63 parties, and they're all collapsing," says Mr. Bagley. "Fujimori was attractive because he was a populist without a party, and [Alejandro] Toledo," Fujimori's rival in the anticipated late-May presidential runoff, "represents the same trend."

Venezuela's Chvez rose in the vacuum left by the discrediting of traditional parties, which are widely associated with the corruption and banking scandals that rocked the country early in the 1990s. The problem, analysts say, is that this absence of parties leaves these countries without the means for arriving at consensus over issues like economic policy and human rights, or for channeling citizens' growing demands for political expression. In some countries this vacuum is being filled by a growing civil society of non-governmental organizations. In Ecuador, the movement that toppled former President Jamil Mahuad was led by Indian groups and mid-level military officers.

Contrary to this scenario, countries like Chile, Argentina, and Brazil have maintained a working party structure even while undergoing economic and political reforms, says Mr. Rojas, thus facilitating the kind of consensus countries need for long-term stability. These countries also proceeded with initial political and economic reforms while under authoritarian regimes, analysts add.

The Andean countries are getting to their reforms at a time when authoritarian actions are less accepted by some segments of the domestic population and widely frowned upon internationally.

"I still think Bolivia will be able to overcome this crisis better than some of its neighbors might have because its political system is the least dismantled of the Andean region," says Eduardo Gamarra, director of the Latin America and Caribbean Center at Florida International University.

What happens in Peru after the presidential elections "is defined by one word - instability," says Lima political analyst Fernando Rospigliosi, who predicts that grass-roots social movements would impede a victorious Fujimori from completing another five-year term.

But governments can also use the domestic and international pressure for reforms to build better living conditions. "The good part of globalization is that it is forcing governments away from the old smoke-filled-room system of governance," says Bagley. "The Andean countries can't buck this process, but they can influence it. Building institutions and working effectively at reducing the region's inequalities would be a start."

(c) Copyright 2000. The Christian Science Publishing Society