The challenge to US imperialism

FRFI 170 December 2002 / January 2003

US imperialism faces a major crisis: it cannot accumulate the profits necessary to maintain its current position in the world. These are not simply the profits generated in the USA but the total profits generated by its exploitation of workers throughout the world. In addition, European investment throughout America in recent years has pushed the USA onto the defensive; it cannot lose opportunities for its own capital. Within Latin America there is the challenge from popular movements which has resulted in the election of Presidents Chavez in Venezuela, Gutierrez in Ecuador and Lula in Brazil. ALVARO MICHAELS reports.

US strategy to resolve this problem is straightforward. It has to re-establish its imperialist monopoly within Latin America, crush the popular movements and massively intensify the rate of exploitation. How will it achieve this? Through the 34-nation Free Trade Area of the Americas (FTAA), the extension of the North American Free Trade Area. The FTAA removes all economic power from any state (except, of course, the USA): all state services have to be privatised, there has to be complete freedom of movement for capital to allow investment without restriction, state subsidies have to be ended and taxation on movements of all commodities abolished. In these circumstances the most productive and largest capitals will win, and they will be US multinationals. Through the FTAA the US hopes to restore its domination, exclude competing imperialist powers and further manipulate the continent in its interests alone.

As in the Middle East, oil is crucial. The US is determined to control oil production in Latin America. Colombia’s known oil reserves are 2.6 billion barrels, but only about 20% of its potential oil fields have been explored. At present, Colombia is producing roughly the amount
of oil that Kuwait supplied on the eve of the last Gulf War. Together with neighbouring Venezuela and Ecuador, Colombia supplies the US market with more oil than all the Persian Gulf producers combined.

The people of Latin America are, however, resisting. New popular movements have emerged since the terrible defeats of the 1970s (Chile, Argentina) and the 1980s (Central America). The tide of resistance has spread throughout South America as economies collapse under the weight of their foreign debt. The indignation and fury of the people is taking political shape. Despite the massive impoverishment in countries such as Argentina, Uruguay and Ecuador, despite the terror in Colombia and the efforts to destroy Chavez in Venezuela, no popular movement has been defeated in the last decade. But the US will add further to its brutal record within Latin America to re-establish its position as ruler of the Americas. It has actively fostered the election of a terrorist, fascist government in Colombia. In a recent and astonishing display of gun-boat diplomacy, 600 Marinesaboard the USS Portland sailed up the international waters of the Amazon river in September 2002 through Brazil to Peru, just outside of Iquitos, a point which gives access to Ecuador and Colombia as well.

Assassination – state strategy

The Clinton-Bush strategy of militarising the Colombian State is now an undisguised counter-revolutionary assault. Two battalions of US Marine Jungle Expeditionary Forces have received orders to enter Colombia in February 2003. The battalions, some 1,100-strong, will have orders to eliminate all high officers of the FARC (Revolutionary Armed Forces of Colombia) and to scatter those who escape.

Officially there are 400 US armed forces and 400 civilian contractors in Colombia. In fact there are up to 2,000 US personnel at any one time including special forces teams, military intelligence, trainers and satellite station staff. US spy planes fly over Colombia 24 hours a day.

Although oil is the key US concern, BP remains the biggest foreign investor in Colombia, controlling over half of the country’s crude oil production. The company continues to make payments to the 16th Brigade of the Colombian army and has refused to pay proper compensation to hundreds of peasants forced off their land by its OCENSA pipeline, who now live in complete destitution. BP and other oil companies lobbied in support of Plan Colombia, and its interests have ensured the British Labour government backs fascist President Uribe in his onslaught against the Colombian people.

More than 60,000 Colombians have been killed since 1985, mostly victims of the fascist paramilitaries. In 2001, over 4,000 civilians were killed. Amnesty International says the toll for 2002 is likely to be higher. 2,000 union leaders have been assassinated in the last four years, 2.5 million peasants internally displaced, 4 million externally displaced. The terror is set to intensify in the new year.

Against US imperialism

Seventy per cent of the 12 million people of Ecuador live in poverty. The country is bankrupt. It has a deficit in its balance of payments of $1bn. Interest rates are more than 20%, there is a 10% dollar inflation rate, and a public debt of $16 billion with a capital flight of a (mysteriously!) similar figure. For the mass of the people poverty is extending its grip whilst corruption has accelerated.

Lucio Gutierrez is the new president. With 55% of the vote on 24 November, he beat Alvaro Naboa, the richest man in the country and 14th richest in Latin America. Gutierrez is backed by peasant and indigenous organisations allied in the Pachakutik Patriotic Society, the militant Popular Democratic Movement and the Marxist-Leninist Communist Party of Ecuador (the PCMLE).

Gutierrez’s victory followed the creation in May 2002 of an electoral pact, the National Salvation Front, from forces opposed to neo-liberalism. The pact demands an end to the FTAA and opposes privatisation and foreign concessions which remove wealth from Ecuador. It also opposes any involvement in Plan Colombia and intends to take back its base at Manta from the US.

On the Hemispheric Day of Action against the FTAA on 31 October, 20,000 marched in Ecuador’s capital. ‘No to the FTAA, No to imperialism,’ read the banners. The police fired tear gas. 2,000 marched on the Suissotel, where 25 trade ministers, including Bob Zoellick the US trade representative, were meeting with 900 assorted CEOs and trade lobbyists, The demonstrators successfully demanded that a delegation of 40 be allowed in. Leonidas Iza, President of the Ecuadorian indigenous federation, told the ministers ‘we don’t have food to feed our children. Our markets are flooded with cheap imports. Imported milk is dumped in Ecuador for half of what it costs to produce it, but transnationals [mostly Nestlé] sell it back to us at $1.80 per litre. We have no way to live, and the FTAA will only make it worse. When we complain, the US government calls us terrorists...we are hungry and tired and things have to change’. Now Gutierrez has to start this process.

Reactionaries against the constitution

The wealthy, the middle class, the church establishment and the labour aristocrats behind the defeated coup attempt of April 2002 continue to plot the removal of President Chavez. The millionaire mass media have waged a constant campaign of distortion against the government. At least two assassination attempts during October alone have been thwarted.

On 10 October, an anti-Chavez demonstration of some 1 million people took place in Caracas. Three days later, however, there was an even larger demonstration in support of the president. On 22 October, a strike called by the opposition failed. On the same day, 14 senior Venezuelan military officers assembled in the Plaza Altamira in Caracas, calling on the middle class, the police and the rest of the military to rise up in ‘legitimate rebellion’. They were left unmolested for three weeks, despite already facing prosecution for April’s failed coup. Meanwhile leaders of the armed forces announced that they would remain loyal to the president.

The opposition has demanded a referendum on Chavez’s leadership, claiming to have a million signatures in support. However, the supreme court has ruled that this does not have to take place in February 2003 as the opposition had hoped.

On 16 November Chavez finally ordered that the Caracas police force be taken out of the mayor’s hands. The virulently anti-Chavez mayor had allowed his police to attack, kill and wound pro-Chavez supporters at demonstrations held against the clique calling for rebellion. Many workers have criticised President Chavez for being ‘too democratic’ and are openly saying ‘if this conflict deepens to the point that we need to be armed, we will be armed’ (Financial Times, 19 November 2002). Another coup attempt is imminent.

After the election

Brazil is one of the least egalitarian countries in the world. 53 million out of its 175 million people live below the poverty line. 23 million are homeless, and eight million unemployed. Millions are malnourished and 40,000 every year die of hunger. Whilst three per cent of Brazil’s people own two-thirds of its land, four million are landless.

In October, Lula da Silva became the first elected ‘leftist’ president of Brazil with 61% of the vote. His Workers’ Party (PT) increased its congressional representation by 57% and its Senate representation by 75%. However, gains in local state governor elections were much more limited: only one PT candidate was successful in winning one of these powerful posts. Lula will therefore be dependent on his electoral allies, including the rightist parties which supported him, when he takes up office in January 2003.

Lula has already conceded to IMF blackmail when along with other party leaders in August he agreed to stick to Brazil’s existing economic policy in exchange for a ‘virtual loan’ of $30.4 billion (see FRFI 169). Of this, $24bn will be made available in 2003, only if a severe fiscal policy is implemented. Over the last eight years, Brazil’s public debt has swollen from 29% of GDP to more than 62%. The IMF loan aims to force Brazil into an annual fiscal surplus of 3.75% of GDP until 2005. The current short-term interest rate is 22%, one of the highest in the world. Imperialism is demanding that Brazil must increase the misery of even more of the poor, provide even cheaper resources and sell off more of its real assets, to pay off its debts. Agreeing to US terms for the FTAA is part of this process. A default of much of the $120bn private sector foreign debt is looming in the first quarter of 2003.

Following his election Lula said Brazil would honour its $250 billion foreign debt, but pleaded for the international community to recognise ‘that we cannot have people suffering from hunger every day’. At present he opposes President Bush’s ambitions to have the FTAA in place by 2005. In response White House trade official Robert Zoellick said that if Brazil did not enter the FTAA, it would have to sell its products in Antarctica!


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