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A History of Latin America and the Caribbean

Chapter 6: Contemporary Latin America, Part I

1959 to 2014

This chapter is divided into seven parts, which cover the following topics:

Part I

One More Overview
       The Roller Coaster Ride of Economics
       The Abandonment of the Monroe Doctrine
       The Pink Tide
       The Changing Role of the Church
       Getting Along and Meaning It
       The Drug Trade
       Environmental Challenges
Cuba: The Revolution Continues
Venezuela's Democratic Interlude
Brazil: The Death of the Middle Republic
Weak Radicals and the Argentine Revolution
Colombia: The National Front
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Part II

Democracy Breaks Down in Chile
Peru: The Revolution from Above
Mexico: The PRI Corporate State
Meet the Duvaliers
Honduras Goes From Military to Civilian Rule
Ecuador: From Yellow Gold to Black Gold
Tupamaros and Tyrants
The Somoza Dynasty, Act Two

Part III

Paraguay: The Stronato
Brazil: The Military Republic
Bolivia: The Banzerato
Red Star In the Caribbean
The Perón Sequel and the "Dirty War"
Panama: The Canal Becomes Truly Panamanian
The Dominican Republic: The Balaguer Era
The Guianas/Guyanas: South America’s Neglected Corner
       French Guiana

Part IV

The Salvadoran Civil War
Belize: A Nation Under Construction
The Guatemalan Civil War
The Southernmost War
Among the Islands
       Bermuda, the Bahamas, and Dominica
       St. Kitts & Nevis
       The Netherlands and French Antilles
Colombia: Land of Drug Lords and Guerrillas
The Pinochet Dictatorship
Peru: The Disastrous 1980s

Part V

The Switzerland of Central America
Nicaragua: The Contra War
Ecuador After the Juntas
Chasing Noriega
Argentina’s New Democracy
Hugo's Night in the Museum
Democracy Comes to Bolivia (at Last)
Haiti: Beggar of the Americas
Peru: The Fujimori Decade

Part VI

Brazil: The New Republic
Cuba's "Special Period"
Chileans Put Their Past Behind Them
Colombia’s Fifty-Year War
Uruguay Veers from the Right to the Left
Daniel Ortega Returns
Ecuador: Dollarization and a Lurch to the Left
The Chavez Administration, Both Comedy and Tragedy

Part VII

Argentina: The New Millennium Crisis, and the Kirchner Partnership
Guatemala Since the Peace Accords
Can Paraguay Kick the Dictator Habit?
Honduras: The Zelaya Affair
Peru in the Twenty-First Century
Bolivia: The Evo Morales Era
The Mexican Drug War
Puerto Rico: The Future 51st State?

One More Overview

For those patient readers who have seen the other chapters of this work, here it is: the last one. At fifty-five years, the period covered here is shorter than the period covered in other chapters, but here the text is by far the longest. It’s not hard to understand why, too. For one thing, there are now thirty-four independent nations in the region defined as Latin America and the Caribbean, more than at any other time in history. In previous chapters, I could bleep over the areas under colonial rule with just a few words about them (e.g., Belize, the Guianas, and various small islands), but now that they are sovereign nations, they must not be ignored any longer. Second, this whole period has taken place within my lifetime, and I can remember when many, perhaps most, of the events covered here were in the news, so I feel the need to explain what makes each one relevant. Next to my textbook, A Biblical Interpretation of World History, this is the longest history text I have written to date. I have added the same kind of additional links that were placed in Chapter 5, so that those who just want to read about one country, rather than read about the whole region, can quickly navigate between the sections that will interest them.

This chapter is also organized like previous ones in that it will begin with a few short sections covering things that affect the whole region, like the Cold War and the narcotics trade; then the narrative from Chapter 5 will resume. Now here is what to be aware of, for all the lands and islands "south of the border":

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The Roller Coaster Ride of Economics

Two world wars and the Great Depression showed Latin America that it was sensitive to events they had no control over, from outside the region. To reduce the effect of such disasters, Latin American economies would have to diversify, which also meant industrialization. What’s more, this would have to happen at a time when population was growing rapidly, and moving from rural areas to the cities.

A part of the world that had not previously been known for its cities now produced some of the largest urban centers, like Buenos Aires, São Paulo, and Mexico City. Unfortunately, job seekers flooded into the cities faster than industries and governments could create jobs for them. Thus, cities acquired huge slums in the middle or shantytowns on their outskirts; many workers took informal jobs that paid low wages, which the government could not track or tax.

To make up for lost time the largest nations (e.g., Argentina, Brazil and Mexico) opted for a crash industrialization program, meaning they would try to do it with one big push. When they did not have the funds for it, they threw sound money management out the window and indulged in deficit spending, resulting in economic problems like inflation when the bill became due and they could not pay it; you will hear an awful lot of stories about inflation and debt in this chapter.(1) North America and Europe did not industrialize quietly and painlessly, though the process took several decades for them, so the Latin American approach promised that the next generation would be a turbulent, even a revolutionary one.

When we talked about Latin American economies in previous chapters, we noted that the nations in the region could not industrialize by themselves, so they would have to call on foreigners for help at some point. The former colonial powers of Europe were no longer able to do much here, having been ruined by World War II, so the United States was the country in the best situation to lend a hand. Alas, Latin America was no longer a priority for Washington, which now felt had to concentrate its funds and attention on rebuilding Europe (via the Marshall Plan) and fighting communism. Sure, having friendly neighbors become modernized and prosperous was a worthy cause, but the US government now felt subsidizing this was a job more suited for private investors. Because the tactics of foreign corporations had caused trouble in the past ("neo-colonialism"), US-Latin American relations were about to become more prickly.

It looked like a great blessing in the early twentieth century when Mexico and Venezuela discovered they had Latin America’s largest deposits of oil. Some other nations (e.g., Ecuador, Colombia and Bolivia) later discovered they had oil as well; the Brazilian company Petrobras discovered oil deposits in the Atlantic. But they would find out that oil wealth is not always a blessing. An economy dependent on a valued resource like oil will go through "boom and bust" cycles as the price of that resource goes up and down. What’s more, the profits collected by nations blessed with oil aren’t shared with nations that don’t have it; high oil prices are murder on their economies.

In the case of Mexico, it enjoyed the upswing in profits when OPEC first steeply raised oil prices in 1973, though it has never been an OPEC member. Then the two energy crises of 1973 and 1979 brought shortages which raised the price of oil some more. For Mexico the next few years were great, but then with the sharp fall of oil prices in 1982, Mexico announced it would no longer be able to service its huge foreign debt. That started another international debt crisis; other Third World countries deeply in debt defaulted on payments, foreigners stopped loaning money for a while, and Latin America sank into its worst recession since the 1930s.

Since the late 1980s, Latin America appears to have overcome the chronic problems that have afflicted it since independence; the region is more stable than it has been in the past, elections are more likely to be free, and the military is under tight civilian control everywhere, so we no longer see any caudillos in charge.(2) Because of that, the region has become more attractive to outside businesses and investors, and several countries have loosened the controls their governments used to have over the local economy. It shows in how they have also become willing, for the first time in history, to cooperate with their neighbors by removing protective tariffs over their own industries. Brazil has done particularly well at both industrialization and privatization; economists often link Brazil with Russia, India and China, calling them the four most dynamic, growing economies in today’s world and giving them the acronym BRIC (after the first letter in each country’s name).

Overall, Latin America’s future prospects currently look brighter than they have probably ever been; in economic, political and social terms, the region has arguably made tremendous progress in the period covered by this chapter. Even so, the nations have to prove they can maintain economic growth and stability over the long run, and bring prosperity to most of the population, not just to a well-off minority. Therefore, for the twenty-first century, the primary goal of each nation in the region should be greater and more equitable national development.

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The Abandonment of the Monroe Doctrine

Against the backdrop described above, there was still the question of what government was best for each nation. In previous chapters of this work, the choices were monarchy, democracy and military dictatorship, and because monarchy went out of fashion in the nineteenth century, most Latin American countries alternated between democracy and dictatorship with disturbing frequency. A few underwent social revolutions (Mexico was the best example before the 1950s), and afterwards they established democratic governments that seemed stable as the ones in the United States and Canada. I said "seemed" because the revolutions did not guarantee they would last; whereas the social experiments of Mexico and Costa Rica are still flying today, those set up in Chile, Colombia and Uruguay would have a promising takeoff, only to crash and burn later.

The mid-twentieth century saw communism join militarism and democracy as a third government choice, one that gave Latin Americans an alternative to Uncle Sam, if they had anti-US feelings. If they could not get what they wanted from the United States, could they get a better deal from the new enemies of the US? It seemed like it when Fidel Castro overthrew a pro-US dictator on Cuba, and the Russians rushed in to take advantage of the opportunity they would gain by having an island outpost near the US mainland. Consequently the United States became Castro’s implacable foe, for Washington now believed in the "domino theory," which stated that every time a nation fell to communism, it became harder for other nations to keep from doing the same thing. It also made the United States friendlier to governments which declared themselves both democratic and anti-communist. Two results of this policy were the founding of the Alliance for Progress in 1961, a program designed to give aid to those Latin American countries that favored evolutionary, not revolutionary changes; and the sending of marines into the Dominican Republic in 1965 to stop its civil war before it turned that country into another Cuba.

In 1954 the United States showed in Guatemala that it would not tolerate a communist or pro-communist government in the western hemisphere. Likewise it tried to topple Castro’s revolution, but this effort, the Bay of Pigs invasion, was a fiasco. After the 1962 Cuban Missile Crisis a live-and-let-live attitude set in; it seemed that Washington accepted the idea of a Soviet satellite state existing so close to American shores.

For more than a century, the Monroe Doctrine had been regarded as a key component of US foreign policy. We saw in Chapters 4 and 5 how the United States used it to justify its actions in the western hemisphere. The part of the Monroe Doctrine promising that the United States would stay out of European affairs had been forgotten in World War I, but the declaration against Old World colonization in the New World was still seen as valid in the mid-twentieth century, and the way the Russians dominated non-Russians, both within the Soviet Union and in other countries with communist governments, looked a lot like colonialism. Thus, when the United States stopped actively working to bring down the Castro regime, it was seen as the most serious blow the Monroe Doctrine had suffered to date.

At this stage, most Latin American governments, if not ordinary Latin Americans, chose to stick with the United States. They knew the Yankees could give them more than the Soviets if they were friendly, and were in a better position to strike at them if they weren’t. Conservative elements in Latin American society, from wealthy landowners to the Catholic Church, also feared what could happen if the revolutionaries took over. Acting on these fears, army officers toppled civilian governments in the "Southern Cone" nations (Brazil, Uruguay, Chile and Argentina) when it looked like they would soon go communist. At the peak of the right-wing tide in the 1970s, almost every country south of Costa Rica was run by a military dictatorship; the only exceptions were Colombia, Guyana and Venezuela. Furthermore, the tactics they used to stay in power, like Argentina’s "Dirty War," were very costly in the lives of their subjects.

These juntas discovered that because they saw eye-to-eye on most matters, they could get the help of other juntas against their domestic enemies, and even the help of US agencies like the CIA, if they called their enemies communists. In 1975 they launched a cooperative effort to do just that, called Operation Condor. The main participants were the six southernmost countries of Latin America: Argentina, Bolivia, Brazil, Chile, Paraguay and Uruguay. The United States gave technical assistance and military aid part of the time, and Colombia, Ecuador, Peru and Venezuela were also involved, but not wholeheartedly. By the time Operation Condor ended in 1983, thousands of guerrillas and other dissidents had been rounded up; estimates of the number killed range as high as 60,000. Thousands more went missing and came to be known as desaparecidos (the disappeared) in Spanish. After democracy was restored, several of the worst perpetrators of atrocities were brought to justice, but there are still many questions about this sinister operation, and it is likely that some will never be answered. Also important, the trust Latin Americans had in their leaders was forever shattered. For that reason, the election of several left-wing governments since the end of the 1990s (see the Pink Tide below) can be seen as an equal and opposite reaction to what happened in the region in the 1970s.

When militarism faded from South America, Central America became the main trouble spot in the region, thanks to civil wars in El Salvador, Guatemala and Nicaragua. By supporting anti-Sandinista rebels in Nicaragua, and sending troops to intervene in Grenada (1983), Panama (1989), and Haiti (1994), the United States used old-fashioned "gunboat diplomacy" to impose its will, the last time it would do so in the western hemisphere. Peace came at the end of the 1980s, when the collapse of the Soviet Union and the defeat of the Sandinistas in the 1990 elections cut off the leftists from their bases of support. The Sandinistas did return to power in Nicaragua later on, but by this time the United States had lost interest in removing them, or any other anti-American government. To give another example, Venezuela’s Hugo Chavez was as obnoxious and annoying as Cuba’s Castro, but Washington never raised a finger against him; it continued to buy his crude oil instead. For that reason, it is safe to assume that the Monroe Doctrine has become a dead letter.

Citgo = Hugo.

With most of present-day Latin America no longer acting as client states of Washington, future historians may write that the United States won the Cold War, but lost the peace that followed.

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The Pink Tide

Recently, a number of Latin American countries have elected governments with a strong left-wing bias. So far none have gone all the way to communism, the way Cuba did, but they are definitely sympathetic to communist aims, even if they aren’t willing to use the "C" word. Years ago, American conservatives referred to people with communist-like views as "Pinkos," to distinguish them from true "Reds," and likewise the term "Pink Tide" has been coined to describe the current leftist trend in Latin America.

The Pink Tide governments that are most communist, and least friendly to US interests, are Nicaragua under Daniel Ortega and Venezuela under Hugo Chavez. Other countries run by left-wing political parties in recent years include Ecuador, Brazil, Argentina, Uruguay, Bolivia, and Chile. At the time of this writing, three quarters of the region’s people are under such governments; it is probably easier to keep track of the countries that are right-of-center politically (only Paraguay, Colombia, Honduras, Guatemala and Belize come to mind).

Founders of Banco del Sur.

In 2009 seven South American nations got together to found Banco del Sur (Bank of the South), a moneylending organization that unlike the International Monetary Fund, will be operated by Latin Americans, for Latin Americans. The list of presidents who signed the bank’s charter reads like a Who’s Who of the Pink Tide. In the above picture, from left to right: Rafael Correa (Ecuador), Evo Morales (Bolivia), Néstor Kirchner and Cristina Fernández de Kirchner (both Argentina), Luiz Inácio Lula da Silva (Brazil), Nicanor Duarte Frutos (Paraguay), and Hugo Chávez (Venezuela).

The Pink Tide is mainly a reaction against the right-wing, pro-US governments that often marked Latin American nations in the past. Generally Latin American citizens have felt that such governments supported US imperialism without doing enough (or doing anything) to improve their lives. They are also more willing to defy Uncle Sam these days, now that the Yankees are no longer inclined to remove a government they cannot get along with. If US President George W. Bush noticed that the countries to the south were getting unfriendly, he was too preoccupied with Afghanistan and Iraq to do anything about it, while Barack Obama, being a leftist himself, is definitely in favor of this trend.

There is reason to believe that instead of being a permanent movement to the left, the Pink Tide will soon be followed by a more moderate swing towards the political center. In the early 2000s, the Pink Tide had a leader in Hugo Chavez, and an enemy or bogeyman in President Bush. However, Chavez is now dead, and Bush has retired to his ranch, so the movement no longer has strong forces either pulling or pushing it. The 2014 presidential election in Brazil may be a recent example; while Brazilians may like Dilma Rousseff personally, they are also tired of being governed by her party since 2002.

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The Changing Role of the Church

According to a 2013 estimate, there are 483 million Roman Catholics in Latin America today. This works out to 80.8% of Latin Americans, and 41.3% of all Catholics worldwide. Because church attendance in Europe is down to single-digit figures, Latin America has become the Catholic Church’s most important continent (or should I say continent and a half?). The only countries in the region where Catholics don’t outnumber the followers of other sects are former British and Dutch colonies: Guyana, Suriname, and various Caribbean islands.

For that reason, it is appropriate that the Church has gotten a Latin American pope. In 2013 the cardinal of Buenos Aires, Jorge Mario Bergoglio, became Pope Francis. His election was a milestone for many reasons: Francis is the first Jesuit pope, the first pope from the New World, the first Pope from the southern hemisphere, the first Third World pope, and the first non-European pope since the eighth century (the last was a Syrian, Gregory III).

But everywhere the Catholic Church is not as strong as it used to be, and that applies to Latin America, too. Several competing influences are responsible for this trend: modernism, philosophies like secular humanism, modern politics, evolution, fewer people becoming priests, monks and nuns, and the overall tendency for people to be less god-fearing these days. It shows in how Church membership numbers in Latin America are going in the same direction as those in Europe -- down. For example, take Brazil, officially the world’s largest Catholic nation. Whereas Brazil’s population was 90 percent Catholic in 1970, the 2010 census reported that less than 65 percent of present-day Brazilians consider themselves Catholic. And those statistics do not tell how many are true believers, as opposed to nominal (non-practicing) Catholics and those practicing syncretism (Catholicism combined with another religion, like the veneration of pre-Columbian gods). That is why Cardinal Cláudio Hummes remarked, "We wonder with anxiety: how long will Brazil remain a Catholic country?"(3)

If a religious vacuum is growing in Latin America, you would expect another religion to step in and fill it; so far the only one to make significant inroads here is Protestant Christianity. For a long time Protestant missionaries didn't even talk about evangelizing Latin America, because they considered it already Christian territory. They changed their minds after the twentieth century began, though, and have seen astounding success there in recent years. Three changes in their practices made it possible:

  1. Missionaries began concentrating their efforts on the poor and on indigenous populations that spoke languages besides Spanish and Portuguese -- people that had been overlooked before.
  2. The birth of Pentecostal missions, which were more eager to make converts than mainstream Protestants were.
  3. Local converts began building their own congregations and denominations, allowing them to reach out to still more people without being directed by the original missionaries.
In 1900 there were only fifty thousand Protestants in all of Latin America, and the entrenched Catholics often persecuted them; by 2000 there were an estimated 64 million. The most rapid growth has been among the Pentecostals and the Seventh-Day Adventists. We mentioned above that Brazil is the world's largest Catholic nation, but it is also the largest Pentecostal one; the Assembly of God Church claims 22 million members there alone! Currently the most evangelized country is Guatemala, with between 25 and 40 percent of its people born-again believers; they include two former presidents, General José Efraín Ríos Montt and Jorge Serrano Elías.

Some Latin American Catholics tried to keep the Church relevant by coopting Marxism, rather than fighting it; we call this approach Liberation Theology. By the 1960s, many clergy had come to the conclusion that Latin American governments, both democracies and dictatorships, had failed to solve the problems of hunger and poverty. They also thought that that capitalism would always perpetuate the gaps between the rich and poor, and that even when the United States was dispensing aid, those who needed it were not helped much. For them the revolutionary societies China and Cuba were setting up looked like better role models for Latin America's future.

Liberation Theology's leading proponents included Gustavo Gutierrez (Peru), Juan Luis Segundo (Uruguay), Jose Miguez Bonino (Argentina), Jose Porfirio Miranda (Mexico), and Dom Helder Camara (Brazil).(4) To them salvation came mainly through political and economic liberation, and they concentrated on those parts of the Bible (Old Testament prophets like Amos and Micah, and the teachings of Jesus) which attack the principle of private property. The result was a form of Christianity that was a combination of Jesus and Karl Marx. As Father Camilo Torres, a Liberation Theologist who was shot in 1966, put it: "The Catholic who is not a revolutionary is living in mortal sin."

Above the rank of bishop, most members of the Church hierarchy remained part of the "establishment"; Dom Helder Camara was an exception to the rule, being an archbishop. It was younger priests, with congregations full of poor people, who found it appealing to get involved in the struggle against social and economic injustice. Of course few priests joined guerrilla units, but they could give moral support by denouncing those in power, for causing the poverty of everyone else. In that sense they were resuming the role the clergy had played during the colonial era, when it defended parishioners against the worst abuses of the Spanish government. Dissident priests would also defend the violent actions of revolutionaries as the natural response ("counter-violence") to government oppression.

In 1970 the leaders of the Church got a message on how strong the revolutionary message was getting, when 183 bishops met in Brasília, and 159 of them voted for a declaration urging the government of Brazil to carry out social reforms, give more voice to the opposition, and investigate reports of prisoners being tortured. This caused one reporter to remark, "What is perhaps possible is that the Catholic Church -- unconsciously, by a kind of institutional genetic selection -- is pushing to the fore the priests and ideas that will preserve its influence by changing its role."(5) Meanwhile over in Chile, some priests went so far as to support the election of Salvador Allende, that country’s Marxist candidate for president, arguing that his drastic social program for dealing with poverty was in agreement with the Christian conscience.

Since the 1960s, however, Liberation Theology has declined, partly because communism has ultimately failed in every country that tried it, and partly because democracy has returned to Latin America. Most important of all was the opposition to the movement from the Vatican. Pope Paul VI tried to keep the movement from catching on after the Second Vatican Council; John Paul II wanted nothing to do with it because he had already seen enough communism in his homeland (Poland); and Benedict XVI rejected it out of hand as a heresy, before becoming pope.

Liberation Theology may have gotten a second chance under Pope Francis. Back in the 1970s, Francis had opposed Liberation Theology, mainly because it gave the Church’s blessing to armed movements like the Monteneros, but economic inequality was also one of his favorite subjects, so he had no problem with radical clergymen helping the poor. In September 2013 he met with Gustavo Gutierrez, and afterwards the Vatican newspaper L'Osservatore Romano declared that because there was now a Latin American pope, Liberation Theology could no longer "remain in the shadows to which it has been relegated for some years, at least in Europe."

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Getting Along and Meaning It

The world became a more interdependent place in the twentieth century; nations learned that there is safety in numbers, and they can achieve more by cooperating with other nations than by competing with them. Especially if the competitor is a superpower like the United States. Thus, since the end of World War II various economic, political and military alliances, often called "blocs," have formed. Examples include the North Atlantic Treaty Organization (NATO), the British Commonwealth of Nations, the European Union (EU, called the European Economic Community before 1992), the Warsaw Pact, the Arab League, the Organization of Petroleum Exporting Countries (OPEC), the Organization of African Unity (OAU, now called the African Union), and the Association of Southeast Asian Nations (ASEAN).

Back in the 1820s, when Simón Bolívar realized that the ex-Spanish colonies would not unite to form a United States of Latin America, he tried to enroll them in an alliance, which would be the next best thing. It didn’t work either, because Latin Americans had just thrown off the Spanish yoke, and could not bring themselves to work with anyone else again, even if they knew it could benefit all parties involved. However, a century and a half later, they would be ready to work together, because working by themselves over the years had proven ineffective. Most nineteenth and early twentieth-century trade, for example, was between Latin Americans and outsiders, when intraregional trade (between Latin American nations) would have at least kept money in that part of the world.

Understandably, one of the first blocs established after that, the Organization of American States (OAS), was the work of the United States, to promote good north-south relations and keep Latin American nations from slipping out of the American orbit, into the communist one. Three purely economic blocs followed in the 1960s. Guatemala, Honduras, El Salvador, Nicaragua and Costa Rica got together to create the Central American Common Market in 1960. This made sense, because those countries had been united before 1840, but the rest of the region was not going to be left out; Mexico, Panama and all ten South American countries joined the Latin American Free Trade Association (LAFTA), also in 1960. However, creating this kind of merger out of nothing was too ambitious; it contained 79 percent of Latin America’s land and 72 percent of its people. Moreover, LAFTA's members did not have a strong will to work together; many Latin Americans at this stage were not willing to give up part of their national sovereignty, or the tariffs that protected their budding industries.(6) The organization sat still without getting anything done until 1969, when five countries in the Andes (Columbia, Ecuador, Peru, Bolivia and Chile) formed the Andean Community of Nations (Andean Pact for short). This was a bloc geared to purely regional interests, still within the larger LAFTA bloc, and it proved to be a manageable size for international cooperation. Venezuela joined the Andean Pact in 1973, while Chile under the Pinochet regime quit in 1976.

The economic crises of the 1980s convinced the LAFTA nations that they needed an organization with some teeth. Here the two biggest players, Argentina and Brazil, set the pace; from 1985 onward they signed agreements removing the trade barriers between them. When US President George H. W. Bush began talking in 1990 about a "New World Order" and turning the whole western hemisphere into one free trade bloc, Brazil and Argentina said no thanks. They would set up their own free trade zone without US help, and promised to create a South American common market by 1995. Paraguay and Uruguay joined them immediately when they heard the announcement, so in 1991 the four of them declared they were merging into a single customs union; this would be called "the Common Market of the South," Mercosur in Spanish. By the goal date of 1995, Bolivia and Chile were in Mercosur as well.

Mexico did not join Mercosur because it was negotiating a similar arrangement with the United States and Canada at the same time. This was the North American Free Trade Agreement (NAFTA), signed in 1994. The United States considered NAFTA such a success that it offered to enlarge the free trade zone to include more of Latin America, renaming it the Free Trade Area of the Americas. Instead the Latin American nations declined again, choosing to form a bloc under their terms instead of US terms. In 2008 Mercosur and the Andean Community of Nations began merging to form a super-organization, UNASUR. UNASUR’s headquarters will be in Quito, Ecuador; its legislative body, the South American Parliament, will be based in Cochabamba, Bolivia; its bank, Banco del Sur (see the previous section on the Pink Tide), is located in Caracas, Venezuela. Currently all of South America except French Guiana belongs to UNASUR, showing that a continent-spanning bloc may be difficult to achieve, but it’s not impossible.

And the unions don’t stop there. Whereas the Andean Pact, Mercosur and UNASUR made it a point to leave the United States out of what they were doing, Cuba and Venezuela formed a deliberately anti-US alliance in 2004. This is called the Bolivarian Alliance for the Peoples of Our America, or ALBA if you’d rather use the Spanish initials. The goal stated was to promote the values shared by both countries, meaning they would only accept other member nations if they have a "Pink Tide"-style leftist government. Since then seven other nations have joined the Cuba-Venezuela Axis: Antigua & Barbuda, Bolivia, Dominica, Ecuador, Nicaragua, St. Lucia, and St. Vincent & the Grenadines. Honduras was a member briefly, until its leftist government was overthrown in 2009, while Suriname and Haiti are expected to join soon. In 2009 they adopted the Sucre as a common currency between member nations, since Ecuador doesn’t use the Sucre anymore.

The main impression the author gets from these moves to unity is that Simón Bolívar may have been dead for nearly two hundred years, but Latin American society has finally matured enough to grant his fondest wish.

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The Drug Trade

Drugs have been a part of life in the New World for as long as anyone can remember. Especially in the Andes; to reduce the pain and fatigue they experience so much of the time, members of the Quechua and Aymara tribes have habitually chewed coca leaves, the unrefined form of cocaine. And all over the Americas, shamans/medicine men have taken various hallucinogenic drugs, to induce the trance state which they believe allows them to travel to other dimensions.

On the other hand, Latin America’s current role as a key player in the world narcotics trade is a relatively new phenomenon. It only got started in the 1960s and 70s, when drug addicts in North America and Europe discovered cocaine. Peru and Bolivia are the main centers for growing coca; Colombia got involved by growing marijuana and refining coca into cocaine. And because the easiest way to get the drugs into the United States was through Mexico, Mexican drug traffickers became a key part of the network as well.

When the British East India Company sold opium to the Chinese in the nineteenth century, it caused a dramatic change in the balance of trade, once enough people were addicted to the drug. The same thing has happened with the current drug trade; by the end of the twentieth century, estimates of the US market for narcotics ranged from $150 billion to $200 billion per year. While this sounds like a huge, quick profit for the nations that make and transport the drugs, the nations as a whole do not profit, for these reasons:

  1. Only a fraction of the population in those nations get the money.
  2. The government cannot benefit while the trade is illegal and cannot be traced.
  3. Pumping all that cash into the local economy encourages corruption.
  4. Rich drug barons commit acts of intimidation and violence against anyone who gets in their way.
  5. Anti-government rebels have used the drug trade to finance their activities.
Finally, the drug trade has strained relations between the United States and the nations involved in it. There is general agreement that the trade should not take place, but they disagree on how to stop it. The US attitude is that the drugs should be intercepted and destroyed before they leave the countries that produce them, while Latin Americans feel it would help a lot more if North Americans and Europeans cut their demand for illicit substances.

More about the drug trade and the war on drugs will be covered in the sections on Mexico, Colombia, Peru and Bolivia.

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Environmental Challenges

The ecology of the New World has long been sensitive to the activities of man. We saw two examples in Chapter 2: the first shortage of brazil-wood on South America’s Atlantic coast, caused by Portuguese loggers, and the terrible epidemics caused by the introduction of Old World diseases. However, the environmental issues in Latin America that attract attention today, like the drug trade, began in the second half of the twentieth century.

Because Latin America is not the most industrialized part of the world, none of its nations are in the list of top ten polluters (though Mexico and Brazil are in the top twenty). Most of their pollution problems, whether smog, acid rain or industrial waste; are local in nature; Mexico City is a notoriously dirty example. There was some concern about overpopulation in the twentieth century, because when modern medicine reduced infant mortality and lengthened life expectancies, populations in the region grew rapidly, but now, as in the countries of the northern hemisphere, population growth is leveling off.(7)

Latin America’s critical environmental issue is the survival of its rainforests. The world’s largest tropical rainforest is in the Amazon basin, and the only Latin American countries that have no land where rainforests can grow are Chile, Argentina and Uruguay. Nowadays we believe that when it comes to land-dwelling plants, rainforest canopies are the world’s foremost oxygen producers and carbon sinks. In addition, the tropics are home to more species of plants and animals than temperate and polar latitudes. We saw how Western civilization was changed by the discovery of two South American trees, the ones that produce quinine and rubber; who knows how our lives might be revolutionized by tropical plants and animals in the future?

Still, we cannot assume that the rainforests will be around forever. Now that we can take pictures of the earth’s surface from space, we can see the stripping of its forest cover, year by year. In Central America and the Caribbean, there are terribly few trees left; Haiti and El Salvador are so poor that they have cut down virtually all their trees for firewood. And as big as the Amazon is, the threat to it and the species living there cannot be denied. We noted in previous chapters that Brazilians have long seen the Amazon as their frontier to exploit; heck, that’s why Brazil’s capital was moved there. Since the 1960s, road-building projects like the Trans-Amazonian Highway have opened up the interior to land development. Fortunately for the Amazon trees and critters, the highway is not completed yet; much of its path is still unpaved.

For Brazil, land development means acreage for landless peasants, more mining, more harvesting of trees, and most of all, more cattle ranches. Demand for more land to grow sugar cane on has increased too, since the Brazilians discovered that they can make enough ethanol from sugar to be self-sufficient in their energy needs. In much of the area, bad land management practices like slash-and-burn agriculture have ruined the soil within a few years, making the land useless. Estimates of the amount of deforestation are debatable; the figure the author is going with declares that 1.4 million square miles of rainforest are left, compared with 1.7 million in 1960. In other words, about 18 percent of the forest cover has been cleared.

Fortunately the forests can be saved, if the nations of the region make a determined effort to protect them. Ecuador and Venezuela have done the best job of that so far; they have set aside 38 and 22 percent of their land respectively as national parks, protecting not only biodiversity but also the indigenous tribes that happen to live in those places.(8) The examples from other parts of the world suggest that people and governments will enforce firm environmental standards when they have a financial stake in doing so. Therefore, an industry geared to protect the environment and make a profit at the same time, like eco-tourism, may be the best hope for the forests that are still extensive -- for now.

Now let’s jump back into the country-by-country narrative . . .

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Cuba: The Revolution Continues


The first three years after the Cuban Revolution (1959-62) were a time when Fidel Castro and his followers consolidated their political position, and decided what course Cuba’s economic and foreign policies would take. Initially they picked Manuel Urrutia Lleó to be the first president of the new regime; he was a liberal and a Christian, not a Communist, and thus it was expected that his presence would keep the United States friendly. The United States welcomed the ouster of Fulgencio Batista, and many Americans, like former president Harry Truman, initially gave Castro the benefit of the doubt. "He seems to want to do the right thing for the Cuban people," Truman said, "and we ought to extend our sympathy and help him to do what is right for them." The Eisenhower administration agreed, recognized the new government on January 7, 1959, and sent a new ambassador because the old ambassador preferred the Batista dictatorship.(9) In February Castro was elected prime minister. At this stage Washington figured that Castro, like previous Cuban leaders, would not bother the business interests that Batista had protected, nor would he try to pull the country out of the US sphere of influence; in addition, he could be easily overthrown if he did these things.

The Washington-Havana honeymoon only lasted a few months.(10) The falling out was probably inevitable. Castro thought so; in a 1957 letter that he wrote to a friend, Castro predicted he would fight the United States someday: "War against the United States is my true destiny. When this war's over, I'll start that much bigger and wider war." In Havana the revolutionary leaders suspended parliamentary democracy, closed opposition newspapers and outlawed labor unions, declaring that all of these things were inappropriate for that time. A series of "people’s courts" were set up, where officials of the Batista regime were put on trial and executed. Loyalty to Castro and the revolution became the primary requirement for all teaching and government positions, the traditional autonomy of the University of Havana was ended, and all radio and TV stations came under state control. Thousands of Cubans became political refugees by fleeing across the strait between Cuba and Florida, beginning the steady exodus of Cubans that has continued to this day. At the same time, Castro began implementing his economic plan for Cuba: land reform, income redistribution, the growing of crops besides sugar, and economic independence from the United States. Those who stayed behind benefitted from a pay raise (the wages of workers and farmers went up 40 percent in the first three years), the elimination of unemployment, free schooling, free health care and social security.

The revolution faced opposition not only from former Batista supporters, but also from peasants who didn’t want their land taken away for collective farms, and from revolutionaries who had backed Castro at first, but were later turned off by his Marxist tendencies. The latter included President Urrutia, who resigned after six months and fled to the United States, and Huber Matos Benítez, the Commander of the Army in the province of Camagüey. Matos had supported the revolution by flying a plane loaded with arms and ammunition to the mountain headquarters of the 26th of July Movement in 1958, and led a rebel army column after that. However, he was also violently anti-Communist, and began denouncing the direction the revolution was taking, so in October he was arrested, charged with treason, tortured, and imprisoned for twenty years, before he could also leave the country.(11) Wherever Castro’s opponents came from, they were backed by the US Central Intelligence Agency (CIA), the Dominican Republic under Rafael Trujillo, and Cuban exiles. The most persistent anti-Castro group staged a rebellion in the Escambray mountains of central Cuba, which took until 1965 to suppress. In other words, the Escambray Rebellion lasted longer than the Cuban Revolution did, and involved more soldiers.

By the spring of 1960, Castro had established diplomatic relations with the Soviet Union, to sell it Cuban sugar, to obtain products he could no longer get from the United States, and get Soviet protection from US intervention. Of course, with this being the Cold War era, the United States saw a deal with the USSR as a deal with the devil. Three major oil companies -- Royal Dutch Shell, Standard Oil and Texaco -- owned refineries in Cuba, and when the Soviets started selling crude oil to the Cubans at a lower price than those companies charged, the Cuban government requested that the refineries process Soviet oil, too. Washington told the companies to say no, they did so, and Cuba seized control of the refineries. The United States retaliated by abolishing the quota of Cuban sugar it imported, and Cuba upped the ante by expropriating other US-owned properties on the island, notably those belonging to the International Telephone and Telegraph Company (ITT) the United Fruit Company, Sears, Coca-Cola, and the Moa Bay Mining Company, which owned enormous nickel and cobalt deposits on the north coast of Oriente Province. Altogether, the nationalized US businesses and the properties confiscated from them were worth nearly $2 billion.

Castro flew to New York City in September 1960 to speak at the United Nations. He didn’t like the first hotel the Cuban delegation stayed in, stormed out, and moved to the Hotel Theresa in Harlem, because as he put it, "Negroes would be more sympathetic" to his cause. At the time there were rumors that his entourage included twenty concubines and fifty live chickens; the chickens were supposedly brought along to make sure Castro’s food was fresh and not poisoned. These stories are probably untrue, because no reliable witness saw the chickens or their feathers. Anyway, while staying there, Castro had his first meeting with Soviet Leader Nikita Khrushchev, and gave him a Russian bear hug (see the picture below). Other famous visitors who dropped in on Castro were Polish First Secretary Wladyslaw Gomulka, Bulgarian Chairman Todor Zhivkov, Egyptian President Gamal Abdel Nasser, Indian Prime Minister Jawaharlal Nehru, Black Muslim spokesman Malcolm X, and poets Langston Hughes and Allen Ginsburg.

Castro meets Khrushchev.

In October 1960 all US exports to Cuba were banned; diplomatic relations with Cuba were severed in January 1961. President Eisenhower said that he broke ties in response to "a long series of harassments, baseless accusations, and vilification." After John F. Kennedy succeeded him as president, Washington put pressure on the Organization of American States to suspend Cuba’s membership in that bloc, and made it illegal for US citizens to travel to Cuba or do business with that country. More than half a century later, the US embargo against Cuba has not been completely lifted, though humanitarian trade in food and medicine is now permitted. When the United States realized that Cuba could still trade with other countries, especially Canada, it put pressure on foreign nations and companies to restrict trade with Cuba as well, often forcing them to choose whether they wanted Cuba or the United States -- not both -- as customers.

Before Kennedy became president, the CIA developed a plan to topple the Cuban government, and it was ready in April 1961, so Kennedy allowed it to proceed. 1,400 Cuban exiles had been armed and trained in Guatemala, and the plan was to have them invade Cuba, land on a beach called Playa Girón (the Bay of Pigs in English), join up with anti-Castro militant groups on the island, overthrow the now-Communist regime, and establish "a new government with which the United States can live in peace." The brigade of exiles landed on the beach all right, but that was as far as they got. To most Cubans, Castro had not yet worn out his welcome, and bad memories of the Batista dictatorship were still fresh, so the revolts expected by the CIA and the exiles never broke out. Moreover, the invasion was a poorly kept secret (Soviet KGB agents warned the Cuban government beforehand). The United States promised air support, using planes based in Nicaragua, but nobody took into account the fact that because of a time zone difference, clocks in Cuba are one hour ahead of those in Nicaragua, so when the rebels and the pilots planned their activities together, it meant the planes would arrive over the Cuban beach one hour late. The end result was that the revolutionary army suffered hundreds, maybe thousands of casualties, but once the invaders ran out of bullets they were quickly killed or captured. Most important of all, the "Bay of Pigs invasion" encouraged the Cuban population to rally behind Castro.(12) One month later Castro declared himself a socialist, and the Soviet Union stepped up military aid. By the end of 1961, Cuba’s transformation from a US client state to a Soviet client state was complete. The United States was positively alarmed to see the Soviets gain a base so close to the US mainland, and denounced Castro as a tool of the USSR; Castro replied by claiming that his brand of Marxism-Leninism was "just as Cuban as palm trees."(13)

After the Bay of Pigs invasion failed, the Kennedy administration authorized the CIA to take out Castro by any means possible. This project, Operation Mongoose, tried all kinds of dirty tricks to arm anti-Castro groups, sabotage parts of the Cuban infrastructure, and assassinate or at least discredit Castro. If you’ve seen the old Warner Brothers cartoons about the Roadrunner and Wile E. Coyote, the ideas proposed and tried by the CIA will remind you of them (see this footnote) -- and like the crazy contraptions in the cartoons, all their absurd schemes failed miserably. Operation Mongoose went on plotting for the rest of the 1960s, and well into the 1970s, until it was revealed and investigated by the US Senate’s Church Committee.(14) What it succeeded in doing was justify Castro's paranoia of the US, and set the stage for the Cuban missile crisis.

Wile E. Coyote.
The only thing they didn’t try, because even kids know that won’t work.

The October 1962 Cuban missile crisis was the time when US-Soviet tensions peaked, the most likely time when the Cold War could have turned into a hot war. Up to this point, the Soviets had kept most of their nuclear missiles in Europe, while the US had long-range missiles (ICBMs) at home and in Europe, plus medium-range missiles in Turkey. In May 1962 Cuba secretly allowed the Soviets to bring in medium-range missiles, which the Americans discovered when Cuban exiles reported large amounts of ice being shipped to rural areas, and the U-2 spy planes sent to investigate spotted the missiles at launch sites under construction. The Soviet Union asserted that the missiles were only in Cuba for defensive purposes, but because they could hit targets in much of the continental United States, it was obvious they could be an offensive weapon, too. The naval quarantine launched by US ships and submarines in response to this was not an act to punish Cuba, but an effort to make sure the Soviets would not bring in more missiles. Thus, the crisis was mainly a standoff between the US and the USSR; Cuba was a pawn stuck in the middle. And when Khrushchev decided that he couldn’t win and promised to remove the missiles, Castro had no say in that, either. After the fall of the Soviet Union in 1991, some key facts were revealed, showing how close the two superpowers had come to World War III:

  1. Kennedy agreed to remove the American missiles from Turkey, which was what Khrushchev really wanted.
  2. The Soviet bombers based in Cuba and US submarines offshore also had nuclear weapons. Because the commanders of the bombers and subs did not have reliable communications with Washington and Moscow, nuclear war was averted mainly because those officers restrained themselves; civilization was saved because no one was eager to fire the first shot.
By the fourth anniversary of the Cuban Revolution, it had passed its first tests. But because of the US embargo, Cuba was now the "odd man" in the Caribbean. It missed out on the economic development the surrounding countries enjoyed, many important manufactured goods were hard to come by, and the country needed the help of the Soviet Union and its satellites to keep from collapsing.

One result of the embargo: Cubans could no longer buy new cars from abroad, so they became expert mechanics to maintain the vehicles they already had. These pictures of vintage automobiles on the streets of Havana weren’t taken in the 1950s, but after 2000. Click on each thumbnail to open the picture full-sized in a separate tab.

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Venezuela’s Democratic Interlude


From 1958 to 1999, Venezuela played a different role from what we have gotten used to. Whereas in Chapters 4 and 5 of this work, Venezuela was the place to find caudillos, it now became a haven for democracy. Some historians have gone so far as to mark the 1958 coup as the most important event in Venezuelan history since independence; the country has never fully gone back to the caudillo system, anyway.

Rómulo Betancourt’s second term as president began in February 1959, and he and his partners in the Democratic Action Party (AD) showed they had learned some restraint since the Trienio, their frantic three-year administration in the 1940s. To start with, rather than fight his rivals for the right to rule the country, Betancourt formed a coalition between the AD and two other political parties, creating a centrist government that had something in it for everybody. He placated the military and conservatives by keeping the requirement for all young men to do a term of military service, and by promising to respect private property. In terms of foreign policy he offered the idealistic Betancourt Doctrine, which refused Venezuelan diplomatic recognition for any regime, right-wing or left-wing, that used force to gain power and hold onto it.

Time Magazine cover showing Betancourt.
Rómulo Betancourt.

The Betancourt Doctrine had its first test even before he was sworn in as president. On January 23, 1959, another very successful revolutionary, Fidel Castro, made Venezuela the place for his first official foreign visit. Enthusiastic crowds turned out to greet Castro, but his meeting with Betancourt did not go well. Castro started off the relationship on the wrong foot by asking Venezuela to supply oil to Cuba on nothing but credit -- to help spread revolution around the world, of course.(15) Betancourt responded by declaring that Venezuela’s most valuable product was not free: "Venezuela does not give away its oil, it sells it." Relations took a dive after that, as it became clear that Castro had overthrown Cuba’s dictatorship to establish a new dictatorship for himself; Betancourt grew anti-communist as a result.(16) He supported the expulsion of Cuba from the OAS, and several leftists in turn pulled out of his coalition and formed guerrilla units. Supposedly the leftists were protesting how the government was taking too long to keep its promises of land reform, when what they really wanted was to repeat the Cuban Revolution in Venezuela. These rebels eventually merged to form the Armed Forces of National Liberation (Fuerzas Armadas de Liberación Nacional, or FALN). The FALN caused considerable damage in the early 1960s, bombing targets like oil piplines, a Sears Roebuck warehouse and the US Embassy in Caracas, but it failed to attract support from either the poor or disgruntled elements in the military. In fact, because Castro’s Cuba started giving aid to the FALN, Betancourt and the AD looked like the best choice for anyone who did not want Venezuela to become communist, so after the successful 1963 elections the FALN fizzled out.

When Betancourt took charge, Venezuela had an empty treasury (Chapter 5, footnote #96 explains why), and was deeply in debt. It could not recover through oil sales alone (what Venezuelans called "sowing the oil"), because oil prices stayed at rock-bottom levels throughout his term. Nevertheless, he was able to improve Venezuela’s financial standing during his presidency. This came about in part through the encouragement of industrial development, and in part through land reform. For the latter, the government redistributed public lands and unproductive private properties; the previous owners of the private properties were compensated generously for what they lost. But Betancourt thought gaining control over Venezuelan oil was the top priority. To do that, his minister of energy, Juan Pablo Pérez Alfonso, established two institutions of great importance in 1960: the Venezuelan Petroleum Corporation (Corporación Venezolana de Petróleos--CVP), to oversee the nation’s petroleum industry, and the Organization of the Petroleum Exporting Countries (OPEC), the famous oil cartel that has overseen the largest peaceful transfer of wealth in history.(17)

The 1963 election can be considered Betancourt’s greatest triumph, because it proved that the 1958 revolution could outlast its founders. Seven presidential candidates ran, and the AD candidate, Raúl Leoni Otero, won with 33 percent of the vote. On March 13, 1964, for the first time in Venezuelan history, the presidency peacefully passed from one elected leader to another; Venezuelans had good reason to be proud of themselves that day. Betancourt spent the next eight years in Switzerland, and though he was politically active for the rest of his life, after he returned he never ran for public office again -- and probably felt he didn’t have to.

Raúl Leoni wasn’t as charismatic as Betancourt, but he believed in the same ideology. During his term in office (1964-69) he successfully continued the high standards set, steering Venezuela past challenges from the right (e.g., an unsuccessful military coup in 1966) and the left (e.g., a flare-up of the Cuban-backed guerrillas in 1967). Meanwhile the economy grew at a healthy rate of 5.5 percent a year, boosted by rising oil prices.

For the 1968 election, the AD split over who would be its presidential candidate, and that allowed another party, the Venezuelan Christian Democratic Party (COPEI), to win. Its candidate, Rafael Antonio Caldera Rodríguez, had run three times before, and this time prevailed by only a margin of 31,000 votes against his opponents. For his first term (1969-74) he governed with just Christian Democrats and some independents; no coalition was formed. Nevertheless, from 1970 onward he had to form a working alliance with the AD to get things done, in the face of student demonstrations and growing intransigence from the other parties. In 1971 he raised the tax rate on the oil companies to 70 percent, and passed the Hydrocarbons Reversion Law, which stated that all of the oil companies' Venezuelan assets would return to state control when their concessions expired. Caldera also rejected the Betancourt Doctrine; feeling that it helped the United States and isolated Venezuela; instead he established diplomatic relations with the Soviet Bloc and the military regimes that ruled most of South America at that time. Finally, Caldera ended the insurgency he inherited from his predecessors, by granting amnesty to the guerrillas.

Twelve candidates ran in the 1973 presidential election. The winner, Carlos Andrés Pérez Rodríguez, was one of the founders of the AD, and had been Betancourt’s Minister of Interior and Justice. Luckily for Pérez, the election coincided with the 1973 Arab-Israeli war and OPEC’s decision to quadruple the price of oil in just two months. As the only non-Moslem member of OPEC, Venezuela saw its annual revenue suddenly increase by $6 billion. This presented a problem that any Latin American government would envy -- how do you spend that kind of money without it causing inflation? Promising to "manage abundance with the mentality of scarcity," Pérez set aside 35 percent of the windfall in the Venezuelan Investment Fund (FIV), where it would be used to make loans to other Latin American and Caribbean nations. Naturally Venezuela’s neighbors thought this was a great idea, and it generated a lot of good will among them. In 1975 Pérez followed up on this by meeting with Mexican President Luis Echeverría Alvarez, and they founded the Latin American Economic System (Sistema Económico Latinoamericano--SELA), an organization based in Caracas that promotes economic cooperation among its members; eventually every Latin American country, except for some of the smaller Caribbean islands, joined SELA. At the same time, however, these activities cooled the traditional good relations with the United States; the US did not like Venezuela supporting OPEC’s energy policy(18), while Venezuela was offended by the discovery of extensive covert activity by the US against the Allende government in Chile, and the Nixon administration’s reluctance to negotiate with Panama over the Panama Canal’s future.

On the domestic front, the temptation was too great for Pérez to keep his promise to be careful on spending. Instead, he slapped price controls on food and other commodities, in the hope that this would be enough to prevent inflation, and then used the oil money to subsidize the hiring of more government workers, wage hikes, and imports of consumer goods that the people wanted. The goods imported at the government’s expense ranged from Japanese televisions to German automobiles to Scotch whiskey. And if that doesn’t sound like a wasteful government expense, consider this: in 1974, $350 million in debts owed to state agencies by Venezuelan farmers were simply cancelled. Undocumented/illegal immigrants, especially from Brazil and Colombia, sneaked into Venezuela to take advantage of the local prosperity, usually by working the menial jobs that Venezuelans were no longer eager to fill. Despite all this, the unequal distribution of oil wealth meant that in 1976 there was a greater gap between the rich and the poor than there had been in 1960, when oil was cheap, and a claim could be made that the poorest folks were worse off than they had been previously.

Like some of his predecessors, Pérez felt the country’s oil supply would not last forever, and used the oil boom to invest in no less than 163 industries and businesses. These included aluminum refineries and a hydroelectric corporation in the Orinoco valley, textile and lumber companies, shipbuilding firms, a national steamship company and an airline. By 1978 the government was spending 50 percent more on these projects than it was on the federal budget. In other moves to increase the national income, the government nationalized the US-owned iron mines in the Guiana highlands in 1975, and it nationalized the assets of fourteen oil companies later in the same year, paying $1 billion for their oil wells, refineries, etc.

Unfortunately for all these plans, Venezuela’s oil income leveled off by 1976, and even declined a bit after that. The Pérez administration had no trouble borrowing money to make up for the shortfall, though, because foreign banks saw Venezuela as a good credit risk. By 1978 the national debt had grown to $12 billion, five times what it had been in 1974. Altogether, it has been estimated that during Pérez’s five-year term (1974-79), the government spent more money than all previous governments put together, in the 144 years since Simón Bolívar’s death. The freespending attitude came back to bite the AD in the December 1978 elections; this time the voters decided enough money had been frittered away, and turned to the COPEI candidate, Luis Antonio Herrera Campins.

In his inaugural address, President Herrera declared that Venezuela could not continue to be a "nation that consumes rivers of whiskey and oil." Accordingly, he did away with price controls, ordered cuts in spending and increased interest rates (to encourage saving). But he did not have to follow austerity measures for long. The Iranian Revolution had occurred just before he took office, and over the course of the next year, OPEC raised oil prices again, from $17 to $28 a barrel. Suddenly it looked like the elusive El Dorado (see Chapter 2) had been found at last. The new revenue was used to pay for more projects: a huge coal and steel complex in the state of Zulia, a natural gas plant with 1,000 kilometers of pipeline, a new railroad from Caracas to the coast, and a bridge from Isla de Margarita to the mainland. All this caused prices to rise, and added another $8 billion to the national debt. What’s more, a worldwide oil glut, caused by new petroleum discoveries in the Gulf of Mexico and the North Sea, reduced the foreign demand for oil, and led to a recession with 20 percent unemployment. In 1983 a retired Venezuelan diplomat told The Miami Herald, "There must be examples of worse fiscal management than that of Venezuela in the last eight or nine years, but I am not aware of them." Herrera did get inflation under control by 1983, but by then his term was almost over, too late to help his party in the next election, so the AD candidate, Jaime Ramón Lusinchi, won by a landslide (nearly 57 percent of the vote), though he was a physician with no previous political experience.

Corruption had been an issue in Venezuela for as long as anyone could remember, but during Lusinchi’s term (1984-89) it became the most important issue. Venezuela had developed a two-party democracy that was now a quarter century old, but it seemed unable to solve the problem of corruption, not to mention its various socio-economic issues. All through his term the country stagnated; by the end of the term it looked bankrupt. And it shows how bad things had gotten in the 1988 elections, when the voters chose to give another chance to the man who had been president when the current economic troubles started, Carlos Andrés Pérez; they brought him back with a majority that was only slightly smaller than the one Lusinchi got last time.

With Pérez’s second term, the bitter medicine of austerity could not be postponed any longer. During the election campaign he had denounced the International Monetary Fund as "a neutron bomb that killed people, but left buildings standing," but in 1989 he accepted the IMF’s proposed austerity measures, in return for a loan of $4.5 billion. Alas, this included an end to price controls on fuel, resulting in rapid rises in the cost of gasoline and fares for public transportation. The people of Caracas immediately launched massive protests, which lasted for three days and were later called the Caracazo. This was crushed by the national guard; estimates of the number of deaths in the riots ranged from 276 (the government’s figure) to 3,000. Though the austerity measures started to work after that, Pérez’s image was tarnished beyond recovery. Because Pérez was rich, right or wrong the people now saw him as the source of the corruption, not the solution. Disgusted army officers, including a paratroop commander named Hugo Chavez, began plotting to overthrow Pérez and the system.

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Brazil: The Death of the Middle Republic


Ambitious liberals continued to run Brazil as the 1960s began; Juscelino Kubitschek was succeeded by Jânio Quadros (January-August 1961) and João Goulart (1961-64). At the same time, inflation began to run wild, going from 12 percent in 1949 to 26 percent in 1959, and 39.5 percent in 1960. The government saw the inflation as a way to finance future growth, because it reduced the value of old debts, without realizing that it was also wiping out the savings of the people. In 1959 Kubitschek applied for a large loan from the United States, and when the Yankees told him that Brazil should first adopt an economic austerity program like the one recommended by the International Monetary Fund, he took their response as an insult and called it interference in Brazilian affairs. At the same time, the Brazilian ambassador to Great Britain explained that his country liked to move boldly, not cautiously: "We are extroverts, impetuous, tropical. We like to march towards the unknown without considering latitudes."

JK was allowed to be a big spender because Brazil’s economy grew rapidly under his presidency. By comparison, Quadros and Goulart were weak and inept. Quadros, the former governor of São Paulo, said he was the man with the "new broom" that would sweep out corruption, but the coalition that got him elected wasn’t strong enough to get his legislation passed. His other policies were even less popular; he tried to outlaw bikinis(19), and he followed a strictly neutral foreign policy, trying to keep good relations with the United States and Cuba at the same time. The foreign policy irritated the military, and they protested; to break the deadlock, Quadros resigned suddenly, after just seven months in office, causing a serious political crisis. He thought the military would call him back because they would rather have him in charge than Vice President João Goulart, a known populist and the former minister of labor under Getúlio Vargas. But the military accepted his resignation, and the people felt betrayed; nobody believed his claim that "occult forces" were at work. For a while there were fears that a civil war would break out between Goulart and the military, until they agreed to set up a parliamentary-style system, with Goulart as president and Tancredo de Almeida Neves, the finance minister of Minas Gerais, as prime minister.

Goulart saw this arrangement as an attempt to turn him into a figurehead, and in 1962 he held a plebiscite that voted overwhelmingly to bring back the system that had just a president at the top. Unfortunately, he also got the idea that this vote gave him the green light to do whatever else he wanted. He alarmed the United States by refusing to support the embargo on Cuba, and he alarmed the officers by not spending enough on defense and tinkering with the organization of the armed forces. Chaos increased as inflation rose to 62 percent a year, the left demanded more reforms, and the right feared that Goulart was taking the country down a path that would end in communism. March 1964 saw a huge pro-government rally in Rio de Janeiro, where Goulart promised agrarian reform, oil nationalization and rent controls, followed by a huge anti-government rally in São Paulo, six days later. When sailors and marines mutinied in Rio de Janeiro, in support of Goulart, he announced he would replace the navy minister instead of punishing them. That was too much. The Rio newspaper Correio da Manhã published a special Easter Sunday edition with the headline "Enough!", and another headline saying "Out!" the next day. To restore order, the military moved to seize power, and Goulart fled to Uruguay. At the time this was called a revolução (revolution), but it was really a bloodless coup, and unlike the coups of 1889, 1930 and 1945, no ideology was introduced or taken away; the new junta was simply better at getting things done than the failed civilian government was. Though the United States was not involved in the coup, it knew what the officers were planning from the start, and approved of their actions.(20) The next twenty-one years (1964-85) would be the period of Brazil’s military republic.

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Weak Radicals and the Argentine Revolution


To refresh the reader’s memory, in the previous chapter we finished the narrative on Argentina by telling how after his ouster, Juan Perón could not run in the 1958 election, but he could influence it. Perón still had many followers, and the trade unions were still on his side, so when he endorsed Arturo Frondizi, the working class voted for Perón’s choice, allowing Frondizi to win with 4 million votes out of 7.3 million cast. As president, Frondizi declared that he would not govern just for his branch of the Radical Party, but for the whole country -- including the Peronistas. He would thank Perón for helping him get elected by bringing the Peronistas back into Argentine politics. Along that line, he ordered an increase in wages, granted a blanket amnesty to everyone who was in jail or exiled for political offenses, and allowed Peronistas to work for the government again. Naturally the military protested these actions, and for the next three years they kept forcing Frondizi to dismiss the people he appointed that they did not like.(21) But Frondizi went too far when he allowed Peronist candidates to run in the March 1962 mid-term elections, and more than half of them won. The military ousted Frondizi in a coup, imprisoned him, and annulled the elections.

But aside from keeping the Peronistas out of public office, the military had no plans for Argentina. Worse, they could not simply hire and fire people for key government positions as they saw fit. That went against the wishes of Argentina’s founding fathers, and also the United States; under the Kennedy administration, US foreign policy now wanted allied nations to be democratic as well as anti-communist. Finally, there was a far right-wing faction in the military that called for direct military rule; they did not want to even pretend that civilians were running the show, and they revolted in April 1963 (the 1963 Argentine Navy Revolt). After that uprising was put down, the military decided to allow new elections, on condition that no Peronistas and no Communists be allowed to run. The winner of the presidential race, Dr. Arturo Illia, came from the Radical Civic Union (UCR), but not from the same faction as Frondizi.(22)

Illia treated Argentina the way he used to treat his patients, with gentleness and dignity. He did outlaw the Tacuara group (see footnote #21) in 1965, but otherwise proved to be too weak-willed for the presidency. His indecisiveness meant he could not solve economic problems like inflation, and it earned him the nickname of "the tortoise." In addition, his center-left tendencies alarmed businessmen and military officers. After two and a half years of this, the military decided that the country needed a leader with some backbone, so it did not surprise anybody when the chief of the army, General Juan Carlos Onganía Carballo, removed Illia from the presidential palace in 1966, and then moved into it himself. The Argentinian people initially supported the ouster of Illia, feeling it was something that needed to be done. Later they would deeply regret it, when they saw what came next.

Whereas most military coups in Latin American coups have established transitional juntas, which were only expected to rule until conditions became favorable for another civilian government, Onganía called his coup the "Argentine Revolution," and announced that the military would be in charge for however long it took to create a new political and social order, one that had no place in it for communism or liberal democracy.(23) The military’s primary goal at this point was to gain control over the sprawling government monopolies and nationalized industries that Perón had left behind, which were designed to get votes for politicians, rather than generate profits. Equally important, they wanted to reverse the decline in agricultural and industrial production, which by now had been going on for more than thirty years. Because true democracy could not be conducted without the Peronistas -- they were clearly the most popular party -- and the Peronistas would not allow the economy to get the overhaul it needed, Onganía and his fellow officers decided to suspend electoral politics indefinitely. He started by nipping dissent in the bud; on July 29, 1966 he had the police clear students and professors who opposed the regime from five campuses of the University of Buenos Aires, an event that was later called "The Night of the Long Batons." However, he did try to win over the support of the trade unions, because the previous twenty years had shown how important they had become.

Onganía's Minister of Economy, Adalbert Krieger Vasena, decreed a freeze in wage increases, and a 40% devaluation of the peso, to attract foreign capital. He also reversed the labor laws, suspending collective bargaining and the right to strike. The overall plan was to stimulate agricultural growth without causing a recession in industry. It did bring inflation down to 7.6 percent by 1969, without hurting exports; at the same time investments in energy and infrastructure skyrocketed. It looked like Onganía's revolution might work after all, especially after the failure of a general strike in 1967, launched to protest his rule.

Despite initial success, the junta never won over the hearts of the people, and that was shown in May 1969, when students and auto workers in the city of Córdoba launched an astonishingly violent uprising, the Cordobazo, which lasted for two days. More riots followed in other cities, and new urban guerrilla movements appeared, both right-wing and left-wing. The most important of these groups, the Montoneros, kidnapped and murdered former president Pedro Eugenio Aramburu in May 1970, as retaliation for the killing of 27 Argentinians in an unsuccessful 1956 rebellion.

Against all this chaos, the formerly ruthless junta wavered and split. In June 1970 the chiefs of the army, navy and air force demanded that Onganía resign, and deposed him when he refused. The general who took over, Roberto Marcelo Levingston, could not restore order, so nine months later he was in turn overthrown by another general, Alejandro Agustín Lanusse.

Meanwhile, Krieger Vasena’s economic austerity plan had been abandoned, and as the 1970s began, the economy was clearly going to crash and burn; deficit spending was out of control and the rate of inflation approached 60 percent in 1972. And then there was the growing problem of the guerrillas. Within two years Lanusse gave up. He had to admit that Argentina was ungovernable; every leader and every government in the seventeen years since Perón had failed. At the beginning of 1973 he announced the first elections in a decade, and this time the Peronistas, though not Perón himself, would be allowed to participate.

Next section on Argentina.
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Colombia: The National Front


When we last looked at Colombia in Chapter 5, we saw it undergoing a ten-year-long civil war called La Violencia. It ended in 1958 when Conservative and Liberal leaders realized that for Colombia’s democracy to survive, cooperation was needed, not polarization. The arrangement they set up, called the National Front, lasted for sixteen years (1958-74), and split all seats in the government, both elective and appointed, between the Conservative and Liberal parties; in addition, all legislation required a two-thirds vote in Congress to get passed. For the presidency, they agreed to alternate that position between the two parties every four years. The liberal candidate, Alberto Lleras Camargo, won the 1958 election, so he was president for the next four years, and then a conservative president succeeded him in 1962.

The National Front succeeded in defusing the political tensions that had caused the War of a Thousand Days and La Violencia, and all four of its presidents were effective leaders. But aside from land reform and promoting economic growth, it didn’t get much done. The main problem was that bipartisan support was needed for everything; there was also the tendency for an incoming conservative politician to undo the actions of his liberal predecessor, and vice-versa. What’s more, the system encouraged apathy among the population, because they knew in advance which party was going to win each seat. Consequently voter participation fell from 68.9 percent in 1958 to 36.4 percent in the 1972 congressional election. Finally, this system restricted political power to the Conservative and Liberal parties; other parties, like the Christian Democrats and the Communists, were left out completely. The poorest in the country saw this, and felt the government had become a "good old boys’ club," to perpetuate the rule of those who were already in charge, at their expense.

The Cold War provided an outlet for those disenfranchised folks. Colombia’s poor land distribution(24), its oligarchy and the impoverished underclasses made it fertile ground for Marxist activity. In the 1960s, about a dozen left-wing guerrilla organizations formed and established bases in the Colombian countryside. Of these the three largest were the Revolutionary Armed Forces of Colombia (Fuerzas Armadas Revolucionarias de Colombia, or FARC), the National Liberation Army (Ejército de Liberación Nacional, or ELN), and the Popular Liberation Army (Ejército Popular de Liberación, or EPL).

Gustavo Rojas Pinilla, the populist dictator from 1953 to 1957, ran for president twice, in 1962 and 1970. In the 1970 election, a more conservative candidate, Misael Eduardo Pastrana Borrero, came out narrowly ahead in the votes, and was declared the winner. Those who opposed Pastrana called the election fraudulent, and formed an additional guerrilla group, the 19 April Movement (M-19); it would be active throughout the 1970s and 80s; Rojas Pinilla disavowed any connections to the group, though. Despite the kidnappings, murders, robberies, assaults on police and military targets, and destruction of important buildings, the guerrillas did not gain the upper hand at this stage; the government kept them on the defensive during the National Front years.

Because the 1970 election was disputed, the government decided it should try something else for 1974. This effectively ended the National Front. Fortunately a new civil war did not break out, because the parties involved were now more concerned about the guerrillas than about each other. The main change was that nontraditional parties were now allowed to participate, along with the two big ones. They also made sure that the party which came in second place in elections would be allowed a share of participation in the government, because the 1886 constitution called for it. The Colombian constitution was replaced in 1991, and while the new one does not have this requirement, Colombian governments since 1991 have out of habit included some members of opposition parties. If the opposition refused to participate, only then could the president appoint whomever he liked.

Next section on Colombia.

This is the end of Part I. Click here to go to Part II.


1. In the early 1970s, several foreign banks provided financial bailouts to the countries with the worst problems of inflation and debt, because they figured the trouble would not last long. Instead, this turned out to be a temporary solution, until the financial crisis of the 1980s.

Junta boardgame.
2. If you imagine the typical Latin American president as a uniformed general wearing sunglasses and a mustache, well, that's a stereotype that is no longer accurate (the above picture shows it on the box of a 1980s boardgame). Likewise, today’s Mexicans wear sombreros about as often as today’s Gringos wear cowboy hats (meaning not a lot, unless they’re real cowboys or they come from Texas).

But the Latin American stereotype that offended the most people has to be the Frito Bandito. His commercials ran on TV in the late 1960s. Eventually the Frito-Lay company pulled them, because even back then, the Frito Bandito was considered politcally incorrect.


4. "When I give food to the poor, they call me a saint. When I ask why the poor have no food, they call me a communist."--Dom Helder Camara

5. Colin McGlashan, The Observer, April 12, 1970.

6. LAFTA is still around today, though other organizations like Mercosur perform the same function. In 1980 it was renamed the Latin American Integration Association (Asociación Latinoamericana de Integración, or ALADI in Spanish). Cuba joined in 1999.

7. Latin America’s population grew fastest in the 1960s, at an annual rate of 2.9% for the region. Compare this with 1.7%, the growth rate between 1900 and 1930. With Mexico, Brazil and Costa Rica, the growth rate could get as high as 3.8%.

8. For Ecuador, this means giving up potential profits. Yasuni National Park, in Ecuador’s easternmost province, has been called the most biologically diverse spot on earth, for the number of animal species found there, and it is the home of two uncontacted indigenous tribes, the Tagaeri and the Taromenane. However, 20 percent of the country’s oil reserves are underneath the park, too. An attempt by Ecuadorean President Rafael Correa to get the outside world to subsidize the park -- in effect paying Ecuador not to drill for oil there -- has so far failed.

9. I was born on the day this happened, so there’s no doubt about it. The government of the Castro brothers is the longest-lasting dictatorship of my lifetime!

10. Castro came to the United States to meet with President Eisenhower in April 1959, but Ike chose to play golf instead. He would. However, Castro did get an audience with the vice president, Richard Nixon. After the meeting, Nixon reported that Castro was either naive or a Communist. US-Cuban relations only got worse from there.

11. The man Castro sent to arrest Matos was another hero of the revolution, Camilo Cienfuegos (see the previous chapter). Matos warned Cienfuegos that he was probably given this mission because he had become quite popular, and Castro may have wanted other anti-Communists to retaliate by killing Cienfuegos. Cienfuegos still carried out the arrest, and a week later, he and his plane disappeared over the ocean while flying to Havana. They were never found, so while there are rumors about what happened, nobody can prove whether an accident or foul play was involved.

12. Che Guevara was not at the Bay of Pigs until after the battle. He thought the landing was a ruse, and that the real invasion would take place on the western tip of Cuba, so he went there instead and missed the action. In August 1961, Che attended an OAS economic conference in Punta del Este, Uruguay, and he gave a note to Richard N. Goodwin, a White House aide, telling him to take it to Kennedy. The note said, "Thanks for Playa Girón. Before the invasion, the revolution was weak. Now it's stronger than ever."

The Bay of Pigs fiasco also showed how much US foreign policy had changed since the "gunboat diplomacy" of the early twentieth century. For both this and the 1954 CIA intervention in Guatemala (see Chapter 5), native troops were used, instead of US soldiers, Theodore Roosevelt would have approved of the Guatemalan coup, but what happened at the Bay of Pigs would have made him turn in his grave.

13. Not really. We saw that in 1959, many Cuban revolutionaries favored either democracy or a mix of democracy and socialism. Presumably they wanted a laid-back, Latin American-style system that favored the poor. Che Guevara, on the other hand, was a Marxist hardliner, who felt that Cuba should have the same form of communism that Russia had, with its emphasis on state planning and state ownership. The Castros agreed with him, and a lot of the inefficiency, hardship and oppression in post-1959 Cuba can be traced to them having their way.

14. After Operation Mongoose was abandoned, the United States broadcast pro-democracy programs into Cuba, starting with Radio Martí in 1985, and adding Televisión Martí in 1990. Both are named after Cuba’s national hero, José Martí, of course. They are still in business today, though funding for them was cut back when the Soviet Union disintegrated, Cuba jams their broadcasts as much as possible, and their effectiveness is controversial.

15. "Tell Fidel Castro, that when Venezuela needed liberators, she did not import them, she birthed them." -- Rómulo Betancourt

16. On the other hand, Betancourt and Luis Muñoz Marin, the governor of Puerto Rico, were great friends. Muñoz Marin’s "Commonwealth" had much in common with Betancourt’s middle-of-the-road approach for Venezuela.

17. Besides Venezuela, OPEC’s charter members were Saudi Arabia, Iran, Iraq and Kuwait. More about OPEC can be read in my Middle Eastern history.

18. Venezuela did not take part in the 1973-74 OPEC oil embargo against the US, though, and actually increased oil shipments during that time, offsetting the worst pains of the first energy crisis. But even this did not help much to repair relations.

19. Brazil would not introduce the string bikini to the world until 1974, but already Brazilian women were competing to see how much epidermis they could show on the beaches. See also Chapter 2, footnote #53.

South American girls in bikinis.

20. When it came to Latin America, it seemed that the new US president, Lyndon B. Johnson, couldn’t do anything right. For the 1964 Brazilian coup, he announced the United States would recognize the military government even before outgoing President Goluart had left the country. On the other hand, when General Onganía seized power in Argentina in 1966, to keep that country from going communist like Cuba, LBJ delayed recognition of that regime.

21. A new trend started at this time as right-wing extremists, not directly affiliated with the military or the government, took matters into their own hands. Besides Frondizi’s actions which the military did not approve of, they disliked his policy of secularization, in which he deliberately ignored the Catholic Church; to devout Catholics, this looked like he was trying to push the Church out of public life. They were also offended when MOSSAD agents from Israel kidnapped Adolf Eichmann, the Nazi leader hiding in Buenos Aires. Between 1960 and 1962 these individuals founded the Tacuara Nationalist Movement, the first urban guerrilla group in Argentina, and engaged in several demonstrations and anti-Semitic bombings. The Tacuara were only active in the 1960s, but they would not be the last such vigilante group.

Illia and Ongania in 1963.
22. For his inaugural parade, President Illia (above, left) rode in a car with General Juan Carlos Onganía (right) and Admiral Benigno Varela (center). Illia had gotten elected with Ongania’s help, so he allowed the general to wear the sash of state, something the president should have worn. That made Ongania the most impressive-looking of the three, and he reportedly told Varela that he "should keep this might be prescient, someday." Source: Crawley, Eduardo, A House Divided: Argentina, 1880-1980, London: St. Martin's Press, 1985.

23. In his book El Estado Burocrático Autoritario (1982), the political scientist Guillermo O'Donnell called this type of government an "authoritarian-bureaucratic state." Other examples of it were the Military Republic in Brazil, Augusto Pinochet's regime in Chile, and Juan María Bordaberry's regime in Uruguay. Other Argentinians simply called their regime the Onganiato.

24. A national agricultural census in the early 1970s revealed that 10 percent of Colombian farmers and ranchers held 80 percent of all farmland. Efforts under the National Front to redistribute land to landless agricultural workers had only helped a little.

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