Andean Observer

Peruvians to Get New Zealand Working Holiday Visa

2008-11-17T03:24:00.000-08:00

Peruvians between the ages of 18 and 30 will soon be able to apply for a one-year New Zealand Working Holiday Visa, according to representatives from the New Zealand Ministry of Foreign Affairs and Trade (MFAT) and the Peruvian Embassy in New Zealand. Sources say that a formal agreement is likely to be signed by New Zealand and Peruvian government representatives at the APEC meeting that begin in Lima this week.

The Working Holiday visa allows young people one year in which they can combine travel in New Zealand with part-time work. New Zealand has extended access to this visa to most European and other OECD countries, as well as other Asian and Latin American countries including Chile, Argentina, Mexico, Uruguay and Brazil. The number of places available for each country has typically been 200, but may be increased depending on demand. Chile is now allocated 1,000 places, after the number of applicants consistently exceeded the available visas.

In order to obtain the visa, applicants have to show evidence of sufficient funds (currently $4,200 NZD), a return ticket or funds to purchase one, travel insurance, and medical clearance (specifically a TB-free certificate). They are also not allowed to bring dependent children with them and are only allowed to use the visa once.

People with Working Holiday visas in New Zealand often end up fruit picking or working in the hospitality industry. This may mean some hard work, but wages are usually high enough to save money to travel further, and most Latin American backpackers say they have a good time in New Zealand.

Categories: Working Holiday Visa, Peru, New Zealand, Latin America, backpackers

Does Land Reform = Socialism?

2008-09-23T05:33:00.000-07:00

Some of the bloggers I've been reading from Bolivia say that the coverage from Reuters on the situation there has been reasonably balanced. Overall I suppose they're not doing a bad job by not making the expulsion of the American ambassador the only or the most crucial news.

However, it's annoying that most mainstream news sources see the need to mention Bolivia's 'leftist' or 'socialist' government, about four times more than they describe the regional governors as 'rightist'. And nowhere in the international media can we find any mention that the Union Juvenil Cruceñista, the Santa Cruz 'youth organisation' involved in the attacks on national government property, is described by independent parties as a neo-fascist group.

The article I linked to also contains subtle dog whistles such as describing Brazilian president Luiz Ignacio 'Lula da Silva as a 'moderate leftist' (with the implication that Evo Morales and the Bolivian government are 'extreme'?).

One throwaway phrase describes Evo Morales as advocating 'deeply socialist policies such as land reform'. This refers to Morales' aim to redistribute idle land from farms larger than 10,000 hectares to poor landless peasants. The paper I previously linked to from Mark Weisbrot and Jorge Sandoval makes the case for why such reform might be needed; Bolivia has close to the most concentrated land ownership in the world.

But regardless of arguments about inequality, is it true that land reform is 'deeply socialist'?

Land reform was indeed a key policy of socialist governments in Cuba, Chile and Nicaragua. But breaking up estates and redistributing land has a long history in many countries, and has been carried out by administrations across the political spectrum, including nationalist military administrations in South Korea, Taiwan and Peru.

In fact, in a number of places land reform has been seen as a key step in capitalist development. There is evidence, argued by Amartya Sen and others, that small farms are more efficient, at least in the developing world. Small farmers need less incentive to become more productive compared to landlords with large holdings. The surplus generated by argiculture can be used for investment in industrial development. The distribution of land also equalises income and creates a larger internal market for the rest of the economy, further stimulating industry.

Renowned Latin America scholar Cristobal Kay argues that the comprehensive agrarian reforms, in South Korea and Taiwan, and agriculture's synergistic relationship with industry, were key reasons for the startling success of industrial development in those countries, while the half-hearted reforms in Latin America were too late and limited to have a similar effect (and in the case of Chile and Guatemala were almost entirely reversed).

We also shouldn't forget our part of the world, where in New Zealand the first Liberal goverment broke up large estates and distributed property to smallholders in the nineteenth century, and land reform began in Victoria from about 1860. These early reforms were instrumental in New Zealand and Australia becoming the relatively egalitarian countries of today rather than ending up more like Argentina.

It's worth drawing a comparison between Bolivia, and another land reform that is currently being pushed by a Latin American government that no one would accuse of being socialist. In Peru, Alan Garcia has argued stridently that large areas of communal land in the sierra and jungle regions are 'idle' and should be 'put into value' by being sold to investors.

Taking advantage of its powers to issue decrees granted by Congress to 'ready' the country for the implementation of the FTA with the US, the Peruvian government decreed that communal land in the sierra and jungle regions could be alienated if 50% of the community voted in favour. This sparked such vehement protests that Peru's usually-supine congress drafted a draw to repeal these provisions.

Like Evo Morales, Alan Garcia and his government are also pushing for the redistribution of land, only into fewer hands rather than more. He has described those who oppose such moves as 'dogs in the manger' for holding back the more intensive exploitation promised by outside investment in agribusiness, forestry and petroleum.

But if this is the description applied to impoverished communities in the sierra and jungle resisting the loss of what little they have, what should we then say about the rich landlords of Santa Cruz?

Unrest in Bolivia, Latin American Problem

2008-09-14T03:18:00.001-07:00

The current unrest and violence in Bolivia is another reminder of just how difficult social and economic reform is in Latin America. In some ways Bolivia is a special case. It is deeply divided, not only socially, but also geographically, between the impoverished, indigenous altiplano of the northwest, and the 'half moon' of mestizo-dominated provinces in the southeastern lowlands which have wealth from gas fields and agribusiness.

Yet, throughout the region the problems of redressing the 500 year-old imbalances of wealth, power and resources continue to to seem intractable.

On the one hand, left-wing governments often seem over-eager to write new constitutions and strengthen presidential power, opening themselves to accusations of authoritarianism. On the other, the reluctance of wealthy elites to support an orderly process of reform (eg, by giving up some land and paying more taxes) give credence to arguments that change can't happen through existing processes and institutions. The frustrated expectations in Brazil and the apparent abandonment of reformist policies in Peru are examples of why more radical approaches start to seem attractive to those who want to address inequality.

This paper from Mark Weisbrot and Jorge Sandoval at the Center of Economic Policy Research is a good summation of the current distribution of land, natural gas resources and revenue in Bolivia. It provides a reasonable case for the need of the central government to push through land reform and gain a greater share of taxes from gas production. Weisbrot and Sandoval point out that in Bolivia a much greater share of these revenues go to the regions than in most parts of the word, and that the 'autonomy' demanded by provincial leaders in Santa Cruz and Tarija would be regressive:

In most developing countries, it is assumed that these valuable resources belong to the nation
as a whole, not to the particular region in which happens to be underground. This is especially important for developing countries, since their development strategy – the means by which they can eliminate extreme poverty and reduce overall poverty – is based on using the rents from their mineral wealth to diversify away from hydrocarbons, as well as investing in economic and social infrastructure.

In the media, much of the international attention has focussed on the expulsion of the US ambassador from Bolivia, and the frankly uncouth 'show of solidarity' from grandstanding Hugo Chavez in also expelling the American ambassador to Venezuela. It's disappointing that there can't be more civility at the highest political levels as an exmaple to people who take their cues from national leaders. However, whether US agencies have had any role in fomenting the current discord in Bolivia is an open question; Weisbrot et al point out that the US government has refused to release information on who it gives funds to in Bolivia.

Reports of 17 deaths have been mixed up with discussion of the overall struggle between the government and the eastern provinces. But in fact the worst violence has been in the backwater region of Pando, which has a total population of 70,000 and is hardly a front line of the struggles over land and gas. Radio interviews claim that a group of peasants intent on marching to the provincial capital of Cobija were intercepted and fired on by a group of 'paramilitaries' with machine guns, who included employees of the provincial government and Brazilian mercenaries. The reports blame Pando governor Leopoldo Fernandez for the 'massacre', and government sources have said he will be arrested.

The ten presidents of the Union of South American Nations are meeting in Santiago on Monday to discuss the situation in Bolivia, and according to Bolivian-based blogger Jim Shultz, it will take some leadership from outside -- perhaps from Brazil and Argentina -- to broker a political solution between Evo Morales government and the oppostion from the 'half moon' provinces of Santa Cruz, Tarija et al. But while there's hope for compromise and a sort-term restoration of stability, the ongoing conflicts over land, power and resources will take more than diplomacy to resolve.

Ghost Stories of the Sierra IV: Isabel and the Duendes

2008-09-04T04:34:00.001-07:00

Another story of Lizbeth's from her youth in the sierra. To the village of Cabanaconde, where her family live, a few men would occasionally arrive with a llama train from a remote settlement two days walk into the mountains, on the border between Arequipa and Cuzco. They walked without shoes, having rubbed alpaca fat into their feet to harden the soles. In their community they ate only charqui (dried llama meat) and chuño (dehydrated potato), so would bring salt and firewood to Cabanaconde to exchange for maize and other provisions.

One day, a man from this settlement brought with him a girl of about ten or eleven, who was his daughter, and left her with Lizbeth's mother. The girl's name was Isabel. Lizbeth's mother sent her to live with her sister in Lima, and when Lizbeth went to stay there when she was studying, Isabel would comb her hair and tell her stories about life in the mountains (years later, I myself would meet Isabel in a crowded, friendly house in the barrio of San Juan de Miraflores).

One story that Isabel told Lizbeth was of an incident that happened when she was about seven years old. At around 5:00 in the evening her mother had sent her home alone from the fields with her baby sister. She went into the family's little shack and prepared alpaca milk for the baby. Then she went down to the river to wash her hands and go to the bathroom. While she was occupied, she heard the baby crying nearby. She found it at the water's edge, without any clothes. Frightened, she picked up the baby and went back to the shack. Through a crack in the wall, she saw two duendes, laughing, down by the river. These are little creatures, old, with pale skins but with normal clothes, that appear around sundown, when the souls go to rest.

Isabel heard the alpacas running around nervously outside. A puma was nearby, causing the alpacas to take fright. She went outside and began to gather firewood, to light a fire and scare away the cat. When she went back into the shack, the baby was no longer there. She found it down by the river, half in the water, stone cold.

The duendes were responsible. They are old and malicious, and need to tap the strength of humans to maintain their life force. To try and make themselves younger, they had taken over the soul of the baby.

Radical Solutions?

2008-08-21T03:38:00.001-07:00

Before I started a Master's in Development Studies, I was already interested in questions about development and mused frequently about them on this blog. After one-and-a-half semesters of fairly intensive studying and reading, it's interesting to look back at how my understanding and views have changed.

In deleting some emails, I came across a mini-rant (pasted below in italics) I'd sent to my US-based sister about the trade deals with Peru, Panama and Colombia, which were at the time a topic of discussion in both the mainstream and grassroots media there.

These were my thoughts a year ago:

I am on balance a supporter of the FTA for Peru because of the commercial opportunities it offers. However, a rudimentary examination of the existing agreement demonstrates that Peru, Panama and Colombia are being forced to suck eggs in order to get their deals. The US has been using its weight in the bilateral negotiations to impose conditions it can't get through the WTO (esp. with regard to intellectual property). This has little to do with the appropriateness or plausibility of these conditions for the country (US-standard copyright protection in Peru within 3 years, yeah right) but rather with a wider agenda.

I reckon if the US really wants to support development in the Andean countries, it should do the following:

1. offer unilateral tariff reductions on all products for a 10--15 year period (similar to the Andean Trade Promotion and Drug Eradication Act, but with more certainty)
2. trade partners required to move towards international/WTO standards on labour, environment and intellectual property (i.e. NOT US-level standards for the latter); milestones to be met to ensure continuation of tariff-free access after 5 and 10-year review periods
3. reduce or freeze direct-to-government aid (including export subsidies disguised as aid), but offer technical assistance especially in local government, law enforcement, education, infrastructure development, agricultural productivity, distribution, marketing, etc. Foment partnerships between schools, universities, police departments, public service, small NGOs, churches, etc. Loans available for insfastructure conditional on robust analysis of the viability of the project.
4. trade partners remove or reduce tariffs on all or most non-agricultural products; non-complementary agricultural products to be left alone for the first 5 years
5. investment protections in place but trade partners allowed to place 'development' conditions such as use of local products or technology transfer
6. legalize cocaine, but slap on big import and sales taxes; coca leaves can be imported tariff-free

The last one is only partly in jest. At present, cocaine is one processed, added-value product that is highly profitable and makes its way easily into US markets (despite all attempts at law enforcement). It's also inevitably associated with significant violence and corruption. What needs to happen is the opposite of the historical: developing countries have a chance to produce and market added-value, mainstream products, while drug-related activity is disincentivised through making it uncompetitive. Such an approach would see all the cocaine labs move inside the US, where their activity would be tightly regulated by ATF officers...). Meanwile, Peru, Bolivia, and Colombia would fill US health food stores with a range of coca teas, sweets, oils, and essences. Groups like the FARC, Shining Path (now moprhing into narcotrafficking operations in Peru), paramilitaries lose their funding and much raison d'etre, either disappearing or being forced to become normal political entities.

Many weighty articles and long perambulations through the thickets of economic history, sociology and politics, I've become much better informed, feel more able to engage in debate, but my views are not a million miles away from what they were then.

Overall, I'm even less sure about the net benefit of the US-Peru trade agreement than I was, in part because I've been made aware that the link between overall economic growth and benefit for the majority is even more tenuous than I realised; in part because of gaining a greater understanding of just how one-sided and hypocritical the conditions in the trade agreements are (and how few of them are even about trade).

As I've learnt recently, suggestion 3 above is just a partial version of what's been on the agenda for international donors for a while through the 'good governance' agenda and the OECD's Paris Declaration on aid effectiveness. There's been a commitment to phasing out 'tied aid' (i.e. exports subsidies disguised as aid) and 'technical assistance' is a major buzz phrase in the aid community (along with its sibling 'capability development'). However, this does still seem to suffer from the longstanding high-handedness of development assistance, and mainly be aimed at bureaucratic elites.

If we do care about 'institutions', a nice alternative approach would be for some kind of properly-funded 'adult exchange programme', where the likes of police officers, petty officials, local council members, etc from developing countries could spend a three-month sabbatical in the equivalent department in a rich country -- and vice versa.

Suggestion 6 is of course mostly flippant, but I'd still be interested in people's reaction to it. The drug trade is not a good thing -- but at the end of the day it's just another manifestation of the inexorable market logic that is elsewhere trumpeted as the solution to everyone's problems. It's rarely mentioned even by liberal commentators, but there's little that's more perverse than a social problem in the rich world being tackled by spraying poison all over environmentally fragile land in a much poorer country.

Categories: development, Latin America, trade, cocaine, coca, Peru, Bolivia, Colombia

Rescuing Ingrid Betancourt: Unanswered Questions

2008-07-10T05:20:00.002-07:00

If the amazing tale of the rescue of Ingrid Betancourt and 14 others by the Colombian armed forces left me with some lingering doubts, it didn't take long for a concrete conspiracy theory to appear. A French-Swiss radio station claimed to have been informed by a reliable source inside Colombia ('put to the test many times in the past') that the FARC had been paid $20 million for the release of the hostages, and that the dramatic 'rescue' was staged.

This was vehemently denied by Colombian Minister of Defense Juan Manuel Santos, who said the government would have no reason to deny paying for the release of hostages, when it had already established a $100 million fund in recent months to pay rewards to guerrillas who released hostages, also offering them legal benefits. Santo said it would "look worse for the FARC" for them to have sold their comrades out.

France, Switzerland and the United Stated likewise denied they had paid a single cent for the release of the hostages

Claims that Operation Jaque ('Operation Check' -- as in chess) had been run by the Americans or even the Israelis were also dispelled. Although the army has admitted recieving training and technical assistance from the US, Israel and even the British SAS, Minister Santos swore that the operation was '100 percent Colombian'.

For the curious among us, the Colombian authorities have been drip-feeding some more details about how the operation was set up and run. Apparently, it started in April when a group of military intelligence operatives who had since December been tracking the guerrilla group that held Ingrid Betancourt, infiltrated the FARC's security ring and managed to gain the confidence of 'Cesar', the guerrilla leader directly responsible for the hostages.

By May, the the infiltrators were able to move freely in the zone, and reported the co-ordinates of the FARC camp to the Colombian Special Forces.

Military intelligence then began to hatch the cinematic plan that was agreed to by army chief Mario Montoya at the beginning of June and kept secret from all but the president and a few officials.

According to reports in El Tiempo, the inflitrators got a high-ranking guerrilla, whose indentity hasn't been revealed [my italics], to convince 'Cesar' that FARC leader Alfonso Cano had ordered the hostages to be brought to him by an international humanitarian mission to discuss a prisoner exchange. The contact with the international group had supposedly been made by another top FARC leader, 'Mono Jojoy'.

The key, according to the Colombians, was the FARC's fear of using the radio, ever since the raid into Ecuador in April that killed 'Raul Reyes' in a pinpoint bombing attack. 'Cesar' was thus unable to directly confirm the arrangement with his superiors. As the time of the operation drew near, the army surrounded what was thought to be the location of 'Mono Jojoy' to intensify this nervousness about going on air.

At the same time, the goverment circulated a false report -- picked up by the BBC -- that French and Swiss representatives were in the zone where 'Alfonso Cano' was thought to be located, to give extra veracity to the story of the exchange negotiation.

Meanwhile, from the middle of June a select group of soldiers had began to rehearse the roles they would have to play as representatives of the supposed 'humanitarian mission'. They developed details such as ensuring at least one woman was among the group (as had been the case in previous unilateral liberations by the FARC), bringing a 'cameraman' and 'journalist' along on the mission, and having a couple of the crew wear Che Guevara t-shirts to inspire confidence in the guerrillas. On the morning of the 2nd of July, army chief Montoya dispatched the entrusted few from their base with inspiring words and a reading from the Acts of the Apostles -- the one where Peter is rescued by an angel from the clutches of Herod.

The rest is history, with the moment of the hostages' liberation now available around the world in this edited video.

It's a fascinating account, but there's still something about it that seems not quite complete. There's a logistical void between the story of the 'infiltrator' bringing supposed messages from the FARC leaders to the hostage camp, and the detailed arrangements of the time and place for the helicopter pickup by the 'humanitarian organisation'. According to El Tiempo, the 'messenger' who was really a military agent, brought a message from Alfonso Cano approving the plan in the third week of June. The rescue was two weeks later, on the 2nd of July. How were the exact arrangements of time and place made, and why was 'Cesar' so sure he could trust them?

Athough the FARC may have been fearful enough to maintain radio silence, was there no way for 'Cesar' to get independent confirmation from one of his superiors, which didn't come from somebody who he'd only known since April?

If I had to hazard a guess at what we aren't being told, it would involve the mysterious 'high-ranking guerilla' who helped the military infiltrators. My guess would be that this person might be a bit higher ranking than has been suggested, and that the nature of the deal struck with him (or her) will not be publicly revealed.

A Perspective from Inside Burma

2008-07-06T03:15:00.001-07:00

The world (as defined by the international media) is now largely 'moving on' from the devastating cyclone Nargis in Burma/Myanmar, but of course reality proceeds at a more sluggish pace.

Recently I've been forwarded a couple of updates from a development practitioner working for an international NGO inside Burma and trying to assist the relief effort. The observations from this practitioner -- who we'll call 'John' -- provide a perspective that is different from the potted reports on the news wires. At times they read a little like an except from Catch-22.

In the first communique several weeks ago, 'John' described sitting in frustration in a comfortable hotel in Rangoon. All foreigners were restricted from visiting the affected areas in the Irawaddy delta, able only to blindly funnel aid through in the hope that it would reach the right people. The NGOs in the country were having proposals approved and were receiving funds, but were unable to obtain any detailed information from the affected areas or deploy staff skilled in programme logistics.

Meanwhile, great effort was going into restoring the ornamental parks of the capital to their former prettiness. Cranes, heavy machinery and workers toiled each day to repair the damage. At the same time, the principal waterways of the capital were still contaminated by rotting corposes, which were pushed away from the banks with long bamboo poles in the hope that they would float out to sea. It was too late for indentification, and John speculated that perhaps his 'host' didn't want to count the numbers dead, or couldn't spare the equipment for digging mass graves -- tied up as it was in the important task of park restoration.

Three weeks later, John forwarded another update. He had finally made it to the delta (six weeks late) and was endeavouring to take stock of the situation. What he found was a little different from the picture painted in the international media.

He said it was clear that many people had died needlessly, the Burmese regime cared little for the people, and there was a need for targeted humanitarian intervention.

Yet, as far as he could see, the local people had largely got on with the task of struggling through and rebuilding. In Bogale (one of the worst hit areas), by the time he arrived things seemed quite normal, the streets were clean, and all business were open.

Perhaps through no fault of the NGOs and the donors, the aid was late, and in many cases inappropriate. Post-hurricane, the 'experts' had worried about the risk of water-borne disease. International NGOs had arranged for airdrops of expensive water-purification kits, and a 747 had been chartered to bring in 15,000 50-litre plastic buckets. Yet this has turned out to be far less of an issue than predicted. Burmese village houses have guttering made of a split bamboo pole down which water runs into large clay pots (cheaper than and superior to the imported plastic buckets). Being monsoon season, there was plenty of clean drinking water and the rains were washing away parasites and mosquito eggs, meaning there wasn't much risk of water-borne disease or malaria.

Another practitioner with a food aid programme had returned from outlying villages where they had been distributing 'Kitchen Sets', complete with pots, pans, forks and spoons. He reported that people in the villages were quite mystified, having no idea what a spoon was used for.

The NGOs and development practitioners were left scratching their heads. Donor agencies had flooded the country with money and expensive equipment intended for an emergency which had largely passed and which in some cases was effectively useless. John wondered how much the donors really cared, given the overriding western agenda to open Burma up, and the opportunity to pump in money and people that the hurricane had offered.

On the other hand, the generals of the Burmese regime had seen this coming. Given their overriding interest in maintaining control of the country, their initial move of restricting the movement of aid workers, and ensuring they had little information about conditions in the hurricane-affected areas, made perfect logical sense.

The Amazing Rescue of Ingrid Betancourt

2008-07-03T05:00:00.001-07:00

The way it's being told by news sources, it was like something out of Biggles or Boy's Own. Six years after being kidnapped by FARC guerillas, former Colombian presidential candidate Ingrid Betancourt was today dramatically rescued by the Colombian military along with four US military contractors and eleven members of the Colombian police and armed forces.

Ever since she and running mate Clara Rojas wandered into FARC-controlled territory during the 2002 presidential campaign, Betancourt has been by far the most high-profile hostage of the guerilla group. With her political profile and dual French/Colombian citizenship, she went beyond just being a long-suffering hostage trapped in the jungle, to become a centre of political intrigue. French president Nicolas Sakorzy had personally sworn to secure her liberty. Hugo Chavez aimed to win kudos by leading the negotiations to free her and the other hostages, and was furious when Colombian leader Alvaro Uribe froze him out of this role in November 2007.

Uribe was then seen to have made a faux pas when he authorised the cross-border raid into Ecuador that killed FARC leader 'Raul Reyes' in March. Not only did this create an international incident, but Reyes had also been the main point of contact for international representatives -- including Chavez and Sakorzy -- that were seeking to negotiate Betancourt's release. With the FARC put on the defensive and Betancourt's health rumoured to be deteriorating, hopes of a timely negotiated solution had been deflated. Yet now it's Uribe and the Colombian military who have come up trumps.

Here's the story of the rescue, as told by official news outlets, and narrated in a press conference by Betancourt herself, shortly after her release, clad in army fatigues and looking in remarkably good order for someone who has spent so long in jungle captivity.

Members of the Colombian armed forces infiltrated the FARC unit responsible for holding the key hostages. The infiltrators managed to have three separate groups of hostages brought together in the jungle south of Bogota, and to convince the local FARC commandant 'Cesar' that the hostages were to be transferred to another site in the helicopter of a fictitious organisation that was supposedly negotiating with current FARC chief Alfonso Cano.

As narrated by Ingrid Betancourt herself, early on Wednesday morning, two white helicopters landed in the jungle clearing. Men identifying themselves as delegates of an unknown international organisation, but wearing Che Guevara t-shirts, got out and spoke with the FARC leaders. But no sooner had the helicopter which was transporting the hostages taken off, than it was revealed to belong to the Colombian armed forces. The four FARC guards were quickly overpowered, and the crew of the helicopter announced; "we're the Colombian army; you're freed". According to Betancourt, the helicopter then nearly crashed, as all the hostages jumped up with joy.

Of course, the release of the hostages is great news. And as a victory for law and order without a drop of blood being spilled, it ranks alongside the Peruvian police sifting through the garbage behind a Lima apartment to track down Shining Path leader Abimael Guzman. Betancourt glowingly speculated that only the Israeli special forces could have pulled off a comparable operation.

For Colombian president Alvaro Uribe, it's a massive victory, for him personally and for his no-compromise approach to the FARC. He and the Colombian army were made to appear magnanimous and humanitarian, as they reportedly left untouched another 60 or so guerillas that were in the same area, and which they had surrounded.

But I wonder if anyone else thinks there is something too good to be true about the story? How did the army operatives infiltrate the FARC so successfully? Were they on the ground with the other guerillas in the same zone, and if so, how long had they been there? And how were the battle-hardened FARC guerillas tricked so easily into delivering their crucial bargaining chip into the hands of an unknown group? Why did the freed American contractors not appear before the Colombian media but were flown straight to the US?

I wonder if there isn't a more complicated tale to be told -- and whether in fact the full story will ever be known.

Bogotá Tales

2008-06-25T23:51:00.001-07:00

A story told by Paola's flatmate Olguita about her an experience of her mother's cousin's wife (that description alone may sound a warning, but we'll get back to that later). For now, let's call Olguita's extended family member Rosa.

It was the señora Rosa's first trip to Bogota, and she was very nervous, having heard so much about what a dangerous place it was. Travelling across town on the bus, she was seated next to a man who she thought looked like a suspicious character. While looking out the window at the crowds and sights, she suddenly felt that her purse was lighter in her hand.

Convinced that she had been sneakily robbed, in a flash of panic she turned to the man sitting next to her and snapped: "the wallet!". The man gave a startled look and started to shuffle guiltily away across the seat. Rosa's heart was racing. She clutched her keys in a fist and jabbed them towards the man's ribs. "Give me the wallet" she demanded, her voice shaking.

Looking uneasily at the pointy object being pushed towards his stomach, the man reached slowly into his jacket pocket and pulled out a wallet, which the señora Rosa snatched back and placed in her purse. The man got up from the seat, beat a hasty retreat to the front of the bus, and got off at the next stop.

When the señora Rosa got to her cousin's place and was able to check her belongings, she found that she had an extra wallet -- belonging to the man on the bus.

Certain aspects of this tale, such as the relation of the protagonist to the story-teller, and the lack of further details (like, what did the señora do then?) raise alarm bells*. It has many of the characteristics of an urban legend. But I guess the point is not so much whether it's true, but that it could be. In Bogotá, the moral says, people can even get mugged by accident.

I actually like better another story told by Olguita, this time about her immediate family. Her cousins had gone out on the town with a friend, taking the family car. The boys were out partying until the small hours, until in a rather inebriated state, they somehow managed to drag the car back home and sneak into the house.

The next day Olguita's uncle asked them how the night had been. "Oh, you know, nothing special, said Olguita's cousin. " We came home really early".

Olguita's uncle nodded sagely. "Yes, isn't it amazing how early they're getting the paper out these days", he mused.

On their arrival home, the boys had parked on top of the recently delivered morning newspaper, which was found jammed under the car's right front tyre.

*This story relies on the tendency not to use possessive pronouns in Spanish for things where ownership is obvious -- so the señora demanded 'la billetera' rather than 'mi billetera'. But it also requires a suspension of disbelief that in a situation of dispute she wouldn't have insisted she wanted 'my wallet'.

The Sustainability of Development

2008-05-27T15:51:00.001-07:00

The semester passes quickly. In a couple of weeks, this subsection of my development studies course is all over, and next Friday I have to hand in the 'journal' which is made up by the last umpteen posts on this blog.

I've jumped about thematically, and have spent an inordinate amount of time on a couple of peripheral topics. I'll try and wrap it up in some kind of coherent way.

Within much of the standard development theory, a range of competing theories -- from both liberal/modernisationist and Marxist/dependency perspectives -- assume similar processes and results for development: urbanisation, industrialisation, economic growth and increased material consumption.

In the last couple of weeks we've been looking at critiques of those assumptions from the indigenous, rural, feminist, environmentalist, and postmodernist angles.

I'm just going to look briefly at one of those: the environmental perspective. This is often presented as the true full-frontal challenge to the 'development' paradigm. It worms its way into most debates, whether they be in the letters to the editor, blog comments section, and questions to visiting speakers (the Joe Stiglitz talk was no exception).

Let for a moment me take on the character of the environmentalist interlocutor.

All these arguments you're having, you the capitalists and you the socialists, they all assume that what we want is growth. As if there are unlimited resources and we can just keep on growing. We let me tell you, we live on a single planet with finite resources, and we just can't keep on growing forever...

Taken at face value, there's a lot there to nod sagely and agree with. We do indeed live on a physical world with finite resources. (We haven't figured out how to live anywhere else yet, and even if we could create some controlled environment on Mars, I know where I'd rather be). In just a couple of hundred years of industrial development, we've managed to make some significant alterations to fragile membrane of rocks and gases on which we live. About thirty years ago, we'd begun to punch a hole in the ozone layer. Now climate change is the dominant issue. Who knows what irreversible changes will eventually be seen in the world's oceans?

Preserving the environment and even rolling back some of the damage is an essential part of development. GDP per capita is an inadequate measure of human wellbeing, and no technological miracle in the near future will make it reasonable for replicas of Los Angeles to cover the planet.

Yet, I do have some problems with the attitudes that are lurking in this environmentalist objection. Firstly, there's a strong streak of pessimism about human potential and the ability to creatively overcome difficulties. Collective action to address the ozone problem was an example of what canbe achieved when needed. Climate change presents a far greater challenge, but we can only keep trying. Also, if the negative consequences of our actions are often unpredictable, so are the positive twists of fate: who in the 1950s and 1960s would have predicted the internet, or even the Green Revolution.

More importantly, I find the 'no more growth' to frequently be in bad faith. All too often, it is delivered by the 'we live a sustainable lifestyle with our olives and organic chickens in Martinborough, our solar heating panels and our Toyota Prius' set. If such people reluctantly acknowledge their inability to 'wean' themselves off all modern conveniences, they rarely accept that their position as privileged members of an interdependent capitalist society (computer programmer, consultant, boutique food producer) is the result of a centuries-long chain of specialisation, high energy use, and resource exploitation.

As I said in the 'why do I care' post, the freedoms they [I] have, and the ability to worry so much about future generations, are a direct result of the material prosperity which we have inherited from the resource-using technological development of the past. Making a choice to live a certain kind of life with the cushion of money in the bank and modern services at hand is entirely different from condemning people in developing countries to stick to their donkey-powered wells.

Of course the very same processes that built Sheffield and Los Angeles can't be repeated in exactly the same way all around the world. And the rest of the world has probably learnt enough not to want that (ok, China's current development pathway notwithstanding). But assertingthat 'sustainable development is impossible' is a unilateral declaration that progress has ended. This violates the Kantian or Rawlsian principle of integrity (if you didn't know your place within it, what kind of world would you wish for).

Witin the debates are about how the lives of the world's billions of poor can be improved, putting forward the 'no more growth' environmentalist objection is a little like saying 'I don't care'.

The Paradoxes of Development, Part 1

2008-05-27T15:50:00.001-07:00

If I'm asked to think of how life should be, I think of my time in La Antigua, Guatemala. In a valley with a climate of eternal spring, in a town of cobblestone streets with flowers growing from rooftops, I and scores of other backpackers happily wiled away our days studying or teaching in language schools. We drank mojitos and played dominoes with the beautiful daughters of the local oligarchy; relaxed in splendid baroque courtyards full of hanging plants in large ceramic pots; ate delicious late breakfasts of fresh beans and eggs, seasoned with green chili and served by indulgent mestizo matrons.

In the streets, local women in colourful, elaborately woven ponchos sold crafts or plump bocadillos of chicken and avocado. People were friendly and smiled a lot. On Sundays, people gathered to gossip and flirt in the plaza, as the hazy outline of Volcan de Agua hovered over the 17th-century arches. To this day it brings me pleasant memories.

But did not the whole reality of this idyll rest -- from the 16th century to the modern day -- on hierarchy, exploitation and oppression?

Beyond the pretty plazas of Antigua was a polluted capital of slums and rampant crime, a rural hinterland of peasants struggling to subsist on patches of land, rich landlords exporting cash crops on the back of exploited rural labourers. The whole country was still traumatized by a vicious, twenty-year civil war that had seen death squads rampaging through indigenous villages.

Gazing dreamily over the volcanoes from our sunny courtyards as we drank the damn fine coffee, we were inheriting the role of the Spanish colonial elite. Look into almost any critical history of Latin America, and this lot come out the villains. Whether as the first wave of a long line of outsiders tapping the continent's 'open veins'; a corrupt and decadent culture who bequeathed fatalism, supersitition and lethargy to their mestizo descendants; or simply inflexible defenders of privilege who failed to ever achieve political reform, the Spanish tend to get the blame.

And yet...has anyone devised an urban layout more harmonious, an architecture more suited for living; a religion richer in ritual, metaphor and existential comfort, a more seductive blend of music and food and romance?

Compared to Guatemala, New Zealand is an oasis of peace, equitable wealth distribution, transparent government and progressive politics. Despite a few economic hiccups in the past forty years, we're still in the world's twenty 'most developed' countries. We've always been at the forefront: land reform, the vote for women, social welfare programmes, rejection of the nuclear umbrella, civil rights for gay people. We're thirty years into an imperfect but world-leading process to compensate indigenous tribes for historical abuses.

Life should be good, right?

Instead, people are grumpy and bitter that they aren't even better off. The political issues that most excite people are tax cuts are retaining the legal right to hit their kids. There's precious little respect for the life of the intellect. The popular press has nearly scraped right though the bottom of the barrel. Our cities have nothing that is visionary and very little that is even attractive. The slums of third world cities are hardly more depressing, and certainly more colourful, than the surburban monotony of Papakura, Tawa, or Bishopdale. Social interaction is timid and superficial. We go out to bars where we can't hear, and drink until we can't speak. When we win at our favourite sport we feel only relief; when we lose we're plunged into wordless despair. An undercurrent of violence simmers uncomfortably beneath the surface of our society.

Do the most pleasant ways of organising life need to be the province of a privileged elite? Does opportunity to contemplate the volcanoes over a coffee rely on an underclass of peasants slaving in the fields? Does it take antidemocratic tyranny to make the imaginative leap beyond acquiring the next consumer good?

Does equity and progress produce only people envious of each other's imagined advantages, squabbling over their rightful share? Does successful political compromise and the rule of law just produce a nation of NIMBYs? Does beauty, charm and passion require hierarchy, oppression and supersitition? Does development equal banality?

Or could it be that it's all even more complicated than we thought; that there are good things hidden in the middle of the worst systems? That our greatest satisfactions might be our greatest illusions? That we haven't even really started to figure it out?

Venezuela: Yes, There's More

2008-05-21T05:03:00.001-07:00

In two recent posts I covered the debate about social and economic policies in Venezuela, partly to emphasize how in considering development issues it's important to understand the facts and all their nuances before lanching into ideological debates.

I linked to an article from Francisco Rodriguez, former economist to the Venezuelan national assembly, who made the intriguing argument that the Hugo Chavez government had not actually made a very high priority of addressing poverty (something generally assumed by both boosters and critics of Chavez).

I then discovered a piece by US analyst Mark Weisbrot, who critiqued Rodriguez' use of data and suggested that in fact the evidence generally pointed to increased social spending and steady progress for the Venzuelan poor.

My second post was sympathetic to Weisbrot's contention that the picture changed after a fuller review of the data. However, I then received a communication from Francisco Rodriguez himself, who pointed out that I had obviously not seen his rebuttal to Weisbrot. He noted that because Foreign Policy does not allow the use of footnotes, it hadn't been possible to make clear all the data sources he had used, which in fact drew from the work he has been doing for at least ten years.

Rodriguez says that the arguments of Weisbrot "[rely] on erroneous reading of the evidence or use of severely biased indicators that do not accurately reflect the evolution of the Venezuelan economy or the well-being of the poor".

Let's review the substance of the rebuttal to Weisbrot, under the categories I used in the previous two posts.

Spending Priorities

Rodriguez questions the relevance of Weisbot's point that the absolute level of social spending has increased during the Chavez administration. Given that Venezuela has had a huge windfall thanks to oil boom, he points out, all categories of spending are going to increase. Therefore, " if we are interested in evaluating a government’s priorities... we want to study how it has allocated it among different possible objectives". And he returns to his original point that the relative portion allocated to Venezuelan health, education, and housing is the same as it was in the 1990s.

The only big increase in government social spending is on social security, which Rodriguez argues is regressive because people in the informal economy don't have access to pensions (an important point, and akin to my convoluted argument about Peruvian labour laws in this post -- i.e. for them to be important, first you've got to have a job).

Weisbrot had also pointed to what he quoted as $13 billion social spending by the Venezuelan state oil company PDVSA. Rodriguez publishes the detailsof the PDVSA budget, showing that of this spending only about a quarter is on health, education and housing (the 'misiones'). The rest of the 'social spending' includes debt refinancing, infrastructure projects, and defense projects.

My question would be: although not as large as claimed, the social programmes funded by PDVSA are new initiatives, and therefore should they not bolster the total proportion of public spending counted as 'social'?

Inequality

In the two previous posts I described how Weibsrot and Rodriguez disagreed about whether inequality, as measured by the Gini coefficient, had gone up or down during the Chavez administration. Weisbrot had been unsure about which sources Rodriguez had used for his inequality measures and suggested that they might have been cherry picked. He cited data from the Venezuelan National Statistics Insitute to suggest that inequality has actually dropped since Chavez came to power.

In his rebuttal, Rodriguez points out that the series cited by Weisbrot excludes people whose reported income is zero (presumably the poorest of the poor). Furthermore, he provides time-series graphs using data derived directly from the Venezuelan Household Surveys. Using different methods (and including people with zero income), these all show that income inequality has dropped from a peak in 2002, but is only now back to the level it was in 1995. Latest data suggests inequality is still on a downward track, but that still excludes the zero-income groups, so the jury is out.

Poverty reduction

Weisbrot had interpreted Rodriguez as saying that many developing countries achieved a two point reduction in poverty for every point of GDP growth -- meaning Venezuela would have had to eliminate poverty entirely by 2007. Rodriguez makes clear that he was talking about the 'income elasticity of poverty reduction', a technical calculation, which, despite digging tentatively into some background reading, I can't entirely understand. Suffice to say that according to Rodriguez, given its level of economic growth, Venezuela should have seen poverty reduced to between 18--22.5 percent, rather than the 27 percent that has been achieved.

In correspondence, Francisco Rodriguez agreed that Peru was a far worse performer again (having seen poverty reduce very slowly from 54 to 43 percent in a period when its economy grew by around 40 percent) but that Chile, Mexico and Brazil are the examples commonly cited as having combined economic growth with good social progress. I'd note that each of these countries is subject to its own debate -- there are some discussions of Chile here and here.

Literacy

Rodriguez had written a paper with co-author Daniel Ortega (presumably not the Nicaraguan Sandinista leader) which cast grave doubt on whether the Chavez government's Mision Robinson literacy programme had taught 1.5 million Venezuelans to read and write. Using information from the Venezuealan Household Surveys, Rodriguez and Ortega pointed out that there were still more than a million illiterate Venezuelans in 2005, barely less than the 1.1 million before the start of the Mision Robinson programme.

Weisbrot complained that Rodriguez had used a question from the Household Survey not designed to measure literacy, and also took issue with some of the methodology in the analysis. But Rodriguez argues in his rebuttal that if we assume the Household Survey data to be accurate, there is no possible interpretation consistent with the claim that Mision Robinson enrolled and educated 1.5 million people. At most, around 40,000 people (a small fraction of the number claimed) could have been taught to read and write since 2003.

Health Indicators

Weisbrot suggested that individual indicators which Rodriguez reported as worsening (low birth-weight babies, ) could be due to measurement errors, since overall the indicators show improvement. Rodriguez counters by arguing that under a government with a strong focus on poverty we should expect to see across-the-board improvements. Instead, infant mortality has declined at the same rate as during the 90s, while some things might have got worse. He concludes by agreeing with Weisbrot that "official Venezuelan statistics are far from...ideal", pitching this as further evidence of a haphazard approach by the government to implementing and evaluating its social programmes..

Conclusions

Phew. There endeth the debate (for now at least). Why have I spent so much time on this, and how indeed do I justify including it in what is supposed to be my development studies journal (ends next week)?

I guess because in looking at development issues there are several different questions to ask. There's the question of what development is, which is a favourite in the humanities section of the academic setting and which I've flirted with in a couple of recent posts. There's the question of how this can be achieved, which is the issue that a lot of the practical and political debate focuses on. Then there's the third question, worth asking before we jump to the second or even the first: do we know what's actually going on?

Stone the Mayor's House, That'll Help

2008-05-14T04:08:00.001-07:00

While I'm doing my development studies course, issues I've wondered about before seem to become clearer. Confused and contradictory situtations that baffled me when travelling in Latin America start to slot into narratives of economic structure and class struggle; social indicators and policy choices.

But every now and again I'm reminded that, beyond the classroom and books, the real world is as incoherent as ever.

When I lived in Peru, I became sceptical about the routine of marches, strikes and roadblocks that occurred on an almost weekly basis. These often seemed to be futile, as protesters demanded things which were beyond the government's control, or which wouldn't have made any difference to their problems (such as the resignation of president Alejandro Toledo). The sight of a street blocked by a heap of rocks drew an exasperated sigh, as all it seemed to achieve was to prevent ordinary people from making it to work or school.

At worst, such disturbances were childish and destructive, such as when supporters of Antauro Humala tore up the paving stones in Arequipa's beautiful plaza de armas during the 'Andahuaylazo' in January 2006 (a 'rebellion' in the Andean town of Andahuaylas that achieved only the death of three provincial policeman).

Back in New Zealand, immersed in written history and politics, I castigate myself for becoming so blinkered and bourgeois. Latin American history has seen such unrelenting domination of political and economic power by small elites, and such exclusion of indigenous people and the rural poor, that oppositional politics seems an obvious response, perhaps the only way that marginalised groups have made any gains.

Then I read this article from La Republica, and it takes me back . In the frigid and chaotic Andean city of Juliaca, a group of concerned citizens decided to protest against the price rise of basic goods. Hundreds of people blocked streets with stones, and impeded the transit of the few bicycles and taxis that tried to circulate. Later, a few of the protesters went down to the residence of the regional president and threw stones through his window. Then they did the same at the house of Juliaca's mayor, whom they accused of 'being in league with [Peruvian president] Alan Garcia'

The unavoidable question for me is: why? In the abstract, we can talk about poverty, frustration and exclusion. But how throwing stones through someone's window is ever going to help anything, let alone make food prices go down, is unclear. Sure, the national government continues to appear distant and uncaring, but not even they can do much about the international price of foodstuffs. As for being in league with the president, there are indeed constitutional requirements that regional authorities do not act directly in contradiction of national policies. But these authorities were democratically elected by the people of the region. Privileged local elites, maybe, though the mayor of Juliaca, David Mamaní Paricahua, is (I deduce from his name) of indigenous background

This routine is repeated so often, it's almost as if the blocking streets and throwing stones were themselves the real purpose, and the political cause just an excuse. Maybe it's reactionary, but sometimes you can't help thinking that development problems have their roots in some social and cultural malaise that renders debates about economic structure and social policy largely irrelevant. How to get beyond such a malaise, is something I confess to having little idea about.

Bringing It All Back Home

2008-05-04T03:45:00.001-07:00

Despite, or perhaps because of this currently being my 'development studies diary', I should lay off the theoretical discussion and stats for a bit and bring it back to a bit more of a personal level.

This occurred to me in the light of an entertaining and provoking visiting lecture from Jeph Matthias, himself a former Development Studies student at Victoria. I came in a bit late, so didn't catch whether he was a biologist-turned doctor-turned development worker, or had made some other combination of those career movements. In any case, his current role is working in a remote town on the Nepal-Tibet frontier.

Jeph had some philosophical thoughts on development and a couple of nice metaphors about what it means and where we're going. He felt that human development has reached a stage where we are going to see qualitative change: "as boiling water changes state into steam, so we have to decide whether were going to be part of the remaining water bubbling away in the pot, or part of the new state" (ok, so it didn't sound nearly as zealous the way he said it -- Jeph followed all his comments with "maybe").

His another analogy was with a hive of bees -- there have always been insects that fly around by themselves, but at some stage bees decided to dedicate themselves to restricted roles within the greater whole of the hive (again, less totalitarian-sounding the way he described it). It wasn't clear if the bee metaphor best described the way global society would have to reorganize itself as the reality of resource shortages hit, or how highly interdependent late capitalism is organised now.

However, what most caught my attention was a little excerpt he gave us from his 'development studies diary', which he'd written about climbing in the Kaikouras and shooting goats -- making the point about the feral urges continuing to be what drives us, even as we move to supposedly more civilized states. Maybe my diary ought to be a little bit less dry and boring, I wondered.

Jeph showed a photo of his brother-in-law in a yak herder's tent high in the Himalayas and asked us how the two people were different. Discussion concluded that the yak herder had a great array of skills which equipped him to survive in that environment. Jeph's brother-in-law didn't have those abilities, but had use of lots of things (his MacPac gear; a GPS system) that he couldn't possibly have made himself, taking advantage of the massive interdependence of western civilisation (the hive?).

It reminded me of what I said in my first 'why do I care' post. As I said there, even in the not especially remote rural areas of Latin America, people were far more capable of handling the environment with the few tools they had available than I or most other backpackers. Yet we had privileged lives, with more freedom than they could dream of.

There's something disturbing about that -- about the helplessness of the westerner, as well as his privilege. Ever since labour specialisation really got going during the industrial revolution, people have drifted away from the state of being practical and self-sufficient enough to take care of ourselves. Although we live long and comfortable lives, there's an undercurrent of discomfort and angst about having lost -- or never acquired -- the capacity to exercise those practical skills

Reflecting on Jeph shooting his goat, a student in the class mentioned some studies of comparative happiness which found that across a wide range of cultures, the access to the sex, food, water, and shelter were the key determinants of well being. Is development, indeed all human endeavour, just an extension of our biological drives?

I don't mean to really answer that, although I will mention in passing my scepticism towards the pat explanations offered by evolutionary psychology.

Better to talk about my own experiences. There might be children reading this blog, so I won't discuss the first of those biological drives. But it's true that it's hard to find an experience close to as profound as the quenching an intense thirst. Among my vivid memories is working all day in 36-degree heat on a carnival lot in New York and finally getting a chance to slot my $1 into the Coke machine (or was it Pepsi?) and feel the simultaneous explosions of cold, bubbles and sugar in my parched throat.

That same carnival tour (maybe the hardest I've ever worked) holds memories of other intense experiences related to fulfilling basic needs. A mammoth cheesburger of Alberta beef after setting up all day on the carnival lot in Edmonton. A precious few hours drifting into sleep, on a Greyhound bus following a long straight road through the Canadian night. Sleep in particular takes on the character of a sexual or religious experience when you're very short of it.

Yet there are different things that I remember most keenly; that have made life something to be thankful for. Natural landscapes: the first time crossing Burke's Pass into the tussocky vastness of the McKenzie country; the first awe-inspiring view of the Andes coming into land in Santiago; soft summer evening light over the lush islands of the Whangarei heads; the view from El Morro in Arica towards the distant snowy peaks of Coropuna and Solimana rising out of the blue haze

Cities as well: the first impressions of Paris, with the huge gold domes of Hotel des Invalides rising over the Seine. London's irresistible melancholy, the air heavy with two thousand years of history.

Or some combination of the two: can anyone have dreamed a more beautiful setting than La Antigua, Guatemala, with its ruined baroque churches overflowing with bougainvillea, its green volcanoes turning transluscent in the sunset, and its late wet-season night time flashes of lightning in the hills? A more timeless feeling than looking out from the orange-tree and fish-pond courtyards of La Alhambra in Grenada, Spain, to the Sierra Nevada and the Andalusian plain?

Those make nice pictures, but there are still other things that matter more. Achievements: for me, not the routine expected things like getting a degree or a job as a policy analyst, but occasional successes that somehow belong more in the real world -- a blog post or article appreciated by strangers; a tour to the Colca Canyon sold to a group of sceptical tourists; even something as insignificant as a goal that helps the team win the division 3 lunchtime indoor football match.

And of course, time spent with family and friends, shared experiences, especially if they're combined with some of the other life-enhancing things (food, wine, scenery, success, sport).

Finally, reminding myself of all these things, I hit upon the most and uniquely human experience of all: nostalgia.

The Facts Strike Back for Chavez

2008-04-23T03:40:00.001-07:00

There's nothing like a bit of cut and thrust with facts and figures to shake up your prejudices.

In a recent post I cited former economist to the Venezuelan national assembly, Francisco Rodriguez, as casting doubt on the achievements of the Hugo Chavez government, and even suggesting that his image of being oriented towards helping the poor is mostly a public relations coup.

However, I've since discovered a substantive riposte from Mark Weisbrot, economist at US progressive think tank Center for Economic and Policy Research. Weisbrot pulls apart the arguments of Rodriguez, showing how they make distinctly selective use of available data.

These are the specific claims from Rodriguez that Weisbrot disputes:

Inequality has increased under Chavez, with the Gini coefficient going from 0.44 in 200o to 0.48 in 2005

Weisbrot reveals this as cherry picking, with the two figures taken by Rodriguez from different data sources, and no good reason for these two years being chosen. In fact, when the available measures of inequality from various sources (UN Economic Commission for Latin America, the World Bank and Venezuela's National Statistics Institute) are seen over their full periods, there appears to be a decrease in inequality under Chavez. Weisbrot notes that by comparison the Gini index in the US has gone from 40.3 to 46.9 during 1980--2005, a large upward distribution of income.

Other countries have reduced poverty by two percentage points for every percentage point of GDP growth (as opposed to one point in Venezuela)

I did point out in my original post the Rodriguez hadn't named any of these countries. Weisbrot makes the point that if Venzuela had reduced poverty by two percent for every point of GDP growth, it would have completly eradicated poverty -- an implausible achievement in four years.

Chavez has not increased the proportion of government spending on health education and housing

Again, Rodriguez has been selective in his choice of indicators. Weisbrot questions why he only mentions central government spending when there have been large allocations from the National Development Fund run by PDVSA (the state oil company). And the social spending from central government has increased in absolute terms, from 8.2 percent of GDP in 1998 to 13.6 percent in 2006. Overall, social spending is now 20.9 percent of GDP, and in real per capita terms has increased by 314 percent in this period.

Certain indicators such as low birth weight, access to piped water, and number of dwellings with dirt floors have worsened under Chavez

More cherry picking. Showing the full range of social indicators, Weisbrot demonstrates that most have improved over the past few years, with a notable improvement in access to sanitation and a steady decline in infant mortality. Seen alongside the rest of the data, it's possible that the indictators cited by Rodriguez could be measurement anomalies.

There's no evidence that the Robinson literacy programme has had any effect

There's some discussion of the methodology used by Rodriguez to draw this conclusion. Weisbrot says he relies on a survey that wasn't designed to measure literacy. He concludes that there's not enough evidence either way.

Chavez's big spending and the rise in imports threatens to cause a balance of payments crisis

Weisbrot points out that while imports might be increasing, Venezuela still has a very significant balance of payments surplus of around 8% of GDP, which, if it were applied to the United States, would see a surplus f $1.1 trillion rather than their actual $739 billion deficit.

Weisbrot does accept a couple of the Rodriuguez criticisms as reasonable. For one, the exchange rate is over valued, subsidising imports and making non-oil exports too expensive. At 25 percent inflation is also too high, though Weisbrot notes that it was 40 percent when Chavez came to power, and 100 percent in 1996. Finally, there are shortages of basic foods, although Weisbrot sees no reason why Venezuela can't import plenty more, being a very long way from having a balance of payments crisis. He denies that Venezuela is in anything like the situation of previous Latin American governments (Alan Garcia's 80s regime et al) described in The Macroeconomics of Populism.

Weisbrot also argues that social progress would have been a lot better if it hadn't been for the economic crisis caused by the oil company's strike in 2003, at a time when it was controlled by the Venezuelan opposition. The statistical tables show this caused a blip in many indicators, including a temporary leap in poverty. Weisbrot concludes:

"While it is useful to discuss the imbalances in the Venezuelan economy and what might be done to correct them, there is little use in presenting such a grossly exaggerated picture of an economy as if it were on the brink of ruin, and pretending that Venezuela's poor have not benefited from the economy's most rapid economic expansion in decades, and from the government's large increases in social spending and programs."

Against the weight of evidence, it seems clear that Francisco Rodriguez has set out with a pre-formed conclusion about lack of progress under Chavez, and has set out to fit the evidence around that. The reasons may be ideological, or they may date from his personal frustrations in working with the Chavez government, disapproval of its methods, or a belief that the country is headed down the wrong track.

In any case, it's a reminder of how easy it is for basic facts and figures to be politicised. For me, with pre-existing scepticism towards Chavez based on his buffoonery, authoritarian tendencies, and clumsy attempts to interfere in other countries, it's all too easy to just accept claims like those of Rodriguez at face value.

Hugo Chavez -- Not Helping the Poor that Much?

2008-04-10T02:28:00.001-07:00

Following on from the previous post about inequality, here's an interesting article in Foreign Policy by Francisco Rodriguez, chief economist to the Venezuelan National assembly from 2000-04. Rodriguez deconstructs the belief, prevalent among not only Hugo Chavez supporters but also his critics, that Chavez has redistributed resources to the poorest in Venezuelan society.
Certainly, there is a wide range of different opinions of Chavez and his government, which we might summarise as follows:

a) Chavez is a dictator who is buying support by redistributing the oil wealth. He will eventually make himself president for life, let all the terrorists camp out in his back yard and form some kind of nuclear alliance with Iran
b) Chavez is popular among many in Venezuela because he has used the oil price boom to establish promising though rather haphazard social programes for people who have always been marginalised. He's an annoying (though occasionally amusing) demagogue who has authoritarian tendencies and but has won his elections fair and square
c) Chavez is the reincarnation of Simon Bolivar and Che Guevara combined, a charismatic leader who is righting the wrongs of centuries and setting a model for 21st century socialism.

What supporters and opponents alike (I'm more or less category B) agree on is that Chavez has redistributed wealth and prioritised helping the poor. Yet this orthodoxy is precisely what is questioned by Francisco Rodriguez. Having worked closely with the Venezuelan adminstration, Rodriguez argues that the perception that Chavez has done a lot for the poor is mainly the product of good public relations campaigns.

Although poverty in Venezuela was reduced from 53 to 27 percent between 2003 and 2007, Rodriguez claims this is almost entirely due to rapid economic growth in the wake of the oil boom. The one percentage point reduction in poverty for every point of GDP growth is a poor return, says Rodriguez, compared with other (unnamed) developing countries which have managed two points of poverty reduction per point of GDP growth. In addition, he says:

The average share of the budget devoted to health, education, and housing under Chávez in his first eight years in office was 25.12 percent, essentially identical to the average share (25.08 percent) in the previous eight years. And it is lower today than it was in 1992, the last year in office of the "neoliberal" administration of Carlos Andrés Pérez -- the leader whom Chávez, then a lieutenant colonel in the Venezuelan army, tried to overthrow in a coup, purportedly on behalf of Venezuela's neglected poor majority.

The further statistics Rodriguez cites include:

-- the Gini coefficient (a way of measuring income inequality, the higher the worse) increased from 0.44 to 0.48 between 2000 and 2005
-- infant mortality has dropped, but at the same rate (3.3 percent per annum) as the previous nine years, and much less quickly than in Argentina, Chile and Mexico (5.2--5.5 percent per annum)
-- the percentage of underweight babies, percentage of people without access to running water, and percentage of people living in house with earthen floors all slightly increased between 1999--2006
-- the much vaunted Robinson literacy programme shows "little evidence [of having] had any statistically distinguishable effect on Venezuelan illiteracy"

The most notable policies of the Chavez administration, according to Rodriguez, have in fact been its nationalisations and expansion of state economic (rather than social) activities. These appear to be leading to a re-run of the 'macroeconomics of populism', a particularly Latin America affliction where expansionary government policies eventually lead to balance of payments problems, spiralling inflation, and a decline in real wages (Alan Garcia's 1985-90 mandate in Peru perhaps winning the prize for the most disastrous example of this cocktail).

His concluding paragraphs strike me as rather wise and, for those who've paid attention to any of my previous posts, run along similar lines to other conclusions I've favoured:

It would be foolhardy to claim that what Latin America must do to lift its population out of poverty is obvious. If there is a lesson to be learned from other countries' experiences, it is that successful development strategies are diverse and that what works in one place may not work elsewhere. Nonetheless, recent experiences in countries such as Brazil and Mexico, where programs skillfully designed to target the weakest groups in society have had a significant effect on their well-being, show that effective solutions are within the reach of pragmatic policymakers willing to implement them. It is the tenacity of these realists -- rather than the audacity of the idealists -- that holds the greatest promise for alleviating the plight of Latin America's poor.

Thoughts for Food

2008-03-30T23:39:00.001-07:00

Writing in Dissent Magazine, Thomas Pogge takes on the complex issue of international economic growth and inequality. His main aim is to take issue with the idea that 'first we've got to grow the cake before we share it out' and the assumption that the best way to reduce poverty is through all-out economic growth that will benefit all through trickle-down processes. Instead he suggests that more equitable economic growth may be of much greater benefit to the poorest, even if it's a little slower, at a very small opportunity cost to the richest.

Pogge's starting point is one of nifty dynamic graphs of international GDP per capita (at purchasing power parity) along the lines of those developed by and displayed on the
Gapminder website. This one was displayed in the March 2004 issue of the Economist as a piece of one-upmanship on market globalisation critics. Charted at country level, poorer countries have grown more slowly over the last twenty years than rich countries. However, when you account for each country's population (changing the size of the dots on the graph) , the slope of the trend is reversed, thanks to the success of China and India.

All very well, says Pogge. But this considers only one of the dimensions of inequality -- between countries. Also relevant is inequality within countries. Little can be inferred about the poverty-reducing effect of a country's growth in average wealth if all the extra income is going to the richest. For example, survey data indicates that the income of the bottom decile in the United States is not much more than that of the bottom decile in Hungary, and only half that of the bottom decile of Japan or Norway.

Pogge makes what I agree is the important point that the relative income share is also important to consider, because "many things money can buy are positional or competitive: political influence, for instance, and access to education and even health care depend not merely on how much money one has to spend but also on how much others are willing and able to spend on those same goods".

That is a point that can be disputed at an ideological level, and then we get into complicated debates about rewards and incentives. But even if we just stick to differences in absolute income levels, the situation is a lot more extreme when developing countries are considered. For example, the income of the poorest decile in Turkey is nearly three times that of Colombia's poorest (although the two countries have a similar GDP per capita at PPP), and the lowest decile in Colombia earns only 7.4% of the average national income. Even more strikingly, in Vietnam, which is only half as rich as Colombia, the poorest decile has an income more than twice as high as the poorest decile in Colombia.

Pogge goes on to consider China, the great poster child for development through maket globaisation. While he acknowledges that there have been large gains for Chinese, including the poorest, he wonders whether even greater reductions in poverty could have been possible with more equitable growth. Between 1990 and 2005, the national per capita Chinese income grew by 236 percent, but that of the bottom decile just 77 percent, while their relative share declined from 30 to 16 percent of the average. Had the relativities been retained, suggests Pogge, even at the expense of a couple of percentage points of growth per annum, the poorest 40 percent of Chinese would all be better off in absolute terms than they are today.

Finally, he considers inequality between human beings world wide. Here he suggests that China's success may have been at the expense of the global poor elsewhere. With only a limited amount of access possible to the still-protected markets of the rich and powerful nations, could China have crowded out the gains of other developing nations by winning the race to the bottom in terms of labor and environmental standards? It's a provocative thesis, but if valid, would be a caution against supposing that other nations can simply follow China's path.

Overall, comparing humans to other humans paints the most dramatic picture of all. Sticking to PPP terms, the poorest quintile of humanity controls just 0.4 percent of the world's wealth, while the richest 1 percent controls 31.6 percent. Doubling the wealth of the bottom two quintiles (40 percent) of the world's population would take just 1.5 percent of the wealth of the top 1 percent. Pogge concludes:

Most of the massive severe poverty persisting in the world today is avoidable through more equitable institutions that would entail minuscule opportunity costs for the affluent. It is for the sake of trivial economic gains that national and global elites are keeping billions of human beings in life-threatening poverty with all its attendant evils such as hunger and communicable diseases, child labor and prostitution, trafficking, and premature death. Considering this situation from a moral standpoint, we must now assess growth—both globally and within most countries—in terms of its effect on the economic position of the poor.

It's a good argument that helps cut through some of the ideological fog in all the contradictory statistics. But it still leaves the massive question of just how you do engineer economic growth with less inequality. If it requires 'more equitable institutions', what are these equitable institutions, and how should they work?

Categories: development, Latin America

Modernisation, Shmodernisation

2008-03-30T23:30:00.001-07:00

Excuse the potted summaries of my development studies lectures. They are part of my 'diary', which will contribute to a portion of my course work grade.

A couple of weeks into the lectures, we got to Modernization Theory, the starting point for any discussion of development theories. This comes from the period around the end of the Second World War, when there was a surge of interest in how the poor benighted masses of the world could improve their lives by becoming much more like us in the West.

On the one hand, getting the starving natives to the point of having a refrigerator and a car in the driveway would make them less susceptible to the Red Peril. On the other hand, if you were a communist, modernisation had to be part of the glorious dialectical march of history.

According to the standard view, modernisation happens along a number of different dimensions. To the uninitiated, a lot of this will look less like a theory than the set of assumptions we still go by most of the time.

Population -- high birth and death rates give way to a period of rapid population growth, then finally to a stabilising population with both birth and death rates low.

Economy -- subsistence agriculture with little specialisation and exchange through reciprocity eventually sees production removed from consumption, a high degree of specialisation, and exchange through money rather than reciprocity.

Society -- tribal societies where kinship networks dominate and social status is inherited give way to meritocractic societies based on the nuclear family and a secular, scientific education. Class becomes a key organising factor of society.

Politics -- tribal groups with local control and close association between political and religious leaders give way to the modern democractic state with mass participation in politics based on political parties, separation of church and state, and mass communication through the media.

Geography -- modernisation diffuses through space, with transport, trade and urban centres hastening the process of modernisaton and vice versa. The spread of modernisation can be measured by things like kms of roads, telephone connections, kids in school, and newspaper circulation (and nowadays mobile phones and internet connections).

Although we are about to learn about all the critiques of modernization theory and how it has been superceded by theories that are more sophisticated or diametrically opposed, much of it clearly still drives how we think about the world. For example, a lot of people might have had deep reservations about the likelihood of the neoconservative dream of turning Iraq into a 'modern, secular liberal democracy' and thereby 'transforming the Middle East'. More people still rejected the means by which it was to be achieved. But there was certainly a general sense that it was a desirable goal.

Joe Stiglitz and His Discontents

2008-03-30T23:28:00.001-07:00

Friday evening we went to see Nobel prize winner, former Clinton adminstration and World Bank honcho and best selling author Jospeh Stiglitz 'chat' with NZ-domiciled economic journalist Rod Oram as part of Readers and Writers week at the Wellington International Festival.

In the course of the hour or so of discussion we got for the $25 entry fee, Stiglitz:

--reiterated that 'there needs to be a balance' between the responsibilities of markets and government. He cited his own work on information asymmetries as demonstrating why markets aren't always efficient, and pulled out what was no doubt a favoured quote that 'the reason why the invisible hand is invisible is that in many cases it isn't actually there' .

-- heaped special praise on the the Scandinavian countries as having effectively struck that balance and having succeeded through 'investing in their young people' and being prepared to pragmatically review and revise policies.

-- stressed that governments need to implement redistributive policies to compensate those who lose out under international trade and globalisation. He (to my moderate surprise) slightly favoured Obama to achieve this in the US, but said that 'the policy differences between the two [Democratic candidates] are much less than those with McCain'.

-- argued that central banks should not be restricted to narrow inflation-only targets, but should also have economic growth and employment as objectives. He suggested that former Federal Reserver chairman Alan Greenspan bore some of the blame for the current credit crisis, by encouraging people to take out variable-rate mortagages.

-- in response to the inevitable 'but is economic growth sustainable' audience question, agreed that better measures of economic wellbeing and progress than simple GDP need to be developed, factoring in environmental degradation, resource depletion and so forth (check out the work of Partha Dasgupta for what these might look like).

When asked about whether he preferred a cap-and-trade system or carbon tax, he said that the two were near enough to equivalent if emission credits are auctioned. Giving away the emissions allowances -- as is set to happen in New Zealand -- he thought would 'give scope for corruption'. Ideally, said Stigliz, there should be a fully international auction of emissons permits.

Stiglitz came across as the atchetype sensible progressive, spontaneuously applauded on occasions by the 1,500 or so right-on middle class Wellingtonians. With his friendly-bear demeanour and softly gruff tones, he reminded me of another maverick New England academic, philosopher Daniel Dennett. As was the case when I watched Dennett tear apart creationists in front of a group of atheist or agnostic philosophy students, I thought it might be more fun to see Stiglitz put his well-reasoned messages to a crowded town hall in rural Texas, or maybe Te Kuiti.

Development and Dependence

2008-03-11T03:02:00.001-07:00

One of the recommended books to consult in our Development Studies course is a text of sorts called The Companion to Development Studies, edited by Vandan Desai and Robert Potter,

Heading straight for the bits on Latin America, I found confirmation that Eduardo Galeano's poetically fist-shaking The Open Veins of Latin America had its intellectual foundations in a body of work called dependency theory

As described in my review of Open Veins, Galeano describes an exploiting 'core', which dominates industrial production (and makes the decisions), and an exploited 'periphery', which provides raw materials and cheap labour. Core-periphery relations can exist between continents (eg, Europe--Latin America), between countries (eg, Brazil--Paraguay) and within countries (eg, Lima--Andean Peru)

Dependency theory originated with a group of Latin American economists who worked with the United Nations in the aftermath of World War 2 and came to present a peculiarly Latin American perspective on development. Dependency theory was notable in being the first body of thought on these issues that actually originated in the 'developing' world. It's easy to spot its origins in Marxism -- for many dependency theorists, the 'underdevelopment' of the third world periphery is a necessary correlation of the development of the rich countries. Exploitation is seen as inherent in the very nature of capitalism.

A brief glance through the short articles in Desai and Potter told me that dependency theory has been critiqued from several quarters. There have been technical criticisms from within Marxism, which made me glaze over a little even in the one-paragraph versions. There have also been arguments that dependency theory requires excessive ad hoc adjustment to fit the very diverse kinds of economic relations that exist at different places and times.

With a bit more reading, I'm likely to agree with the latter views. However, as I noted in the review, it doesn't need to be a grand theory, and you don't need to be a Marxist, to find Open Veins a compelling historical account of Latin America's economic and political history that strikes to the root of the continent's problems.

As also noted, the book ends in the mid-70s, amidst a dark wave of miltary dictatorships but before the numerous economic crises of the 80s and 90s. The controversies resulting from these events suggest that the debate about dependency theory is far from dead. As I read further, I expect to hear more about how, as colonialism has ended and local democracy has strengthened, the power relations of core and perpiphery have been perpetuated through mechanisms such as debt and trade rules. I might even try to contribute some such thoughts myself.