More than a hundred days have passed since the inauguration of the sixth elected President of the re democratization period in Brazil, Mr. Jair Bolsonaro. Time enough to observe that a few words of this first sentence appear not to fit together in the current governmental term, namely, “President”, “redemocratization”, and “Jair Bolsonaro”. In this brief article, I explain how those words are being settled apart, through an overview of what has been at the center of media and academic debates. Then, I show what has been the most problematic aspect of those debates, and how they are, consequently, reinforcing the Government’s strategy of resignifying Brazil’s history and reality. Finally, I define what I have termed anti-presidentialist regime, erected upon such strategy which, I argue, is the concluding part of the project presented to the population by the Legislative and Judiciary in 2016, with Dilma Rousseff`s impeachment. My intention here is not to assemble what several political scientists, journalists, economists, and also the political opposition have been expressing to the local and international presses. Instead, I aim to make sense of a broader change regarding the way Brazilians became to recognize themselves: how is such a shift taking place, who is it favoring, and what is the likely outcome?
At first, it is paramount to understand what Mr. Jair Bolsonaro is. He is more a “something” than a “somebody”, and I explain this point: Bolsonaro has made his path as a Congressman as a means through which to assure to his family and his surrounding community of friends and employees safe positions in politics. He is an instrument toward such goal and had succeeded. This becomes clear when one analyses his performance over near thirty years in the House of Representatives: polemic discourses in plenaries; offensive statements directed against homosexuals and women Deputies; a poor record of accepted propositions by his peers (two projects); and a wide range of ideas and proposals oriented to militaries – 53% out of the total, although none was approved in the House. While such performance appears to be low, it happened to be enough for assuring a loyal part of the electorate who had constructed a reliable identification with his “authentic and spontaneous” way of talking.
After his premature retirement from the Army with a granted military patent of captain, the politics turned out to be a space of opportunities to safeguard the economic future of his people. Aware of being a kind of “spokesperson” of the conservative strand of the society that, by this time (the 2000s), was enclosed in itself, Bolsonaro would escalate his style and convert it into a “label”. Although not yet taken seriously by many in the House and within the society, one of his sons was elected Councilor of Rio de Janeiro in 2000 with seventeen years old, under the minimum lega lage to assume the position, replacing his mother, Mrs. Rogéria Bolsonaro. Not by chance, this was the son who most quickly understood and reproduced the label: still a teenager, Carlos Bolsonaro held an active discourse in favor of the civilian armament and the reduction of the criminal age in his campaign. The Brazilian media evaluates that, currently, he is the one who has the most influence over the President – what was underpinned by the unexpected dismissal of Mr. Gustavo Bebbiano, the then Ministry of the General Secretariat of the Presidency and the President of Bolsonaro’s political party, the Social Liberal Party. Bolsonaro announced Bebbiano’s removal from office in 18th February, after an episode of disagreements with Carlos concerning a supposed WhatsApp (mis)communication between Bebbiano and Bolsonaro. It is argued that the event in itself might not have rendered Bebbiano’s dismissal if he wouldn’t have been in continuous disagreements with Carlos since the government’s transitional period.
Nowadays, we have Bolsonaro’s three sons occupying positions in the Legislative, throughout different federal spheres (National Congress and City Hall), and none of them is in the first mandate1. Therefore, we have a political clan, i.e., an instance of informal nepotism. Naturally, alongside the core of the clan constituted by the father and sons, there is an extensive network of collaborators, friends, and supporters that has been consolidated over the years. They might recognize themselves as part of a large family, but the core is tight and well defined. If there is something clear so far within the Government is that: how many more raise opposition to the core, how many more may fall out, either removed or resigned. Bolsonaro is then not a politician in the strict sense of acting towards the common good within the public sphere, seeking the most prepared ones to tackle the tasks. Besides the episode encompassing Bebbiano and his second son Carlos, we are collecting demonstrations of how the hierarchy of the government is built up – as an example, the third son Eduardo took part at the first official meeting with the US President Donald Trump, instead of the Chancellor Ernesto Araújo, in 19thMarch.
The politics is the space that has welcomed Bolsonaro after the Army, in which he could better act to the benefit of his peoples, i.e., professional, economic and material guarantees to his family first, then to the network around them. He has succeeded, as his own plan was just like that personal, simple and clear compared to other politician’s high ambitions. As President, he has been keeping his old discursive style – polemic, controversial, authentic (in his electorate’s words), interventionist and extremist – while strengthening the label Bolsonaro, which was meant to represent conservatism mainly in religious and behavioral terms, and actually represents the most significant far-right authority in Latin America.
Jair Bolsonaro is from the state of Rio de Janeiro, one of the most violent in Brazil. At the same time, one with the highest visibility and popularity, perhaps in the world. The city of Rio de Janeiro (the homonymous state capital) hosted several international mega-events during the last ten years, ranging from religion (the first apostolic journey of Pope Francisco, who is born in Argentina, was to RJ, where he celebrated the World Youth Day in 2013) to culture, sport and business. Alongside them, it had dramatically increased the number of murders, armed repression and forced evictions of poor black people from territories that have turned out to be on the way of those mega-events. Had Bolsonaro been a politician (again, in the original Greek sense of the term), in facing such scenario, and considering his strong discourse on public security – favoring an increase in weapons circulation and military police’s power of action -, he might have been elected Governor of the state of Rio de Janeiro. However, he is not. He is solely the leader of a clan, who has never aspired to be the personification of a national leader.
Here, I argue, lies the most problematic aspect of the debates concerning the last ten months of Brazilian politics, assembling the electoral period, the transitional government and the almost five months of Bolsonaro’s Presidency: the expectation of an Executive that acts according to the coalition presidentialism is indeed wavering. Coalition presidentialism has been the regime since the redemocratization of the country in 1985 with President José Sarney4. There are two irreconcilable logics at play: on the one side, intellectuals and pragmatics struggle to find in Bolsonaro’s Presidency plausible elements to delineate either a strategy or a personality that fits within the overarching framework of the coalition presidentialism regime. Although nothing resembles the other five Presidents of the redemocratization period5, there is still a considered segment of the society committed to explaining the over-reluctant behavior of the President, which inevitably contaminates the Executive, without putting the regime itself into question.
On the other side, the logic of Bolsonaro does uphold the unfolding developments: as the leader of a conservative clan consisted of white middle-to-upper class heterosexual men, since his first mandates at the House of Representatives he plays solely on the customs agenda, openly displaying no sympathy to democratic principles. He was elected in October 2018 precisely due to such biography and, over the empty presidential campaign that did not have debates nor a minimum exposition of a government program, he never held the promise of diversification. After all, he was not interested in politics, but in raising polemics about traditions, habits, norms, and myths. His last frictions with the President of the House, Mr. Rodrigo Maia (of the Democrats Party, which is center-right and part of the government’s support base), make clear his complete apathy concerning politics.
He plays according to his logic, which is instrumentalized by mechanisms able to promote chaos and polarization – social media, ideological discourses, delegitimation of the opposition as an interlocutor, empty promises and doubtful declarations later falsified by the ministers, and a real war against the press. Nonetheless, chaos and polarization are indeed effective methods to misconduct a country with 34.5 million informal workers6, more than 12 million of unemployed7 and 15.3 million people living below the line of extreme poverty8. As long as press and academic debates keep focused on the failures and shortcomings of this sixth elected representative of a supposed democratic coalition presidentialism regime, we all fail.
Therefore, we urgently need to change the focus and the language, to construct a possible resistance. The focus, away of Twitter and the partisan dichotomy left-right, which is in the clan’s usual rhetoric, toward the proper Executive agenda of reforms and public measures. The language, away of personal adjectives and aggressive responses, toward an assertive and confrontational oratory related to the paralysis of the Executive. Here I use the word paralysis referring to the fact that, with more than ten percent of the term of office spent, we have no real program for Health, Education, Environment, Human Rights, Culture, Work and so on. What we have is still a robust ideological plan of action, replicating the ton used during the campaign. The National Congress is still recalcitrant with the Pension Reform, which has just gone through the first round of voting at the Constitution, Justice and Citizenship Commission (CCJ, in Portuguese) of the House.
Although the political horizon is still unclear, the present is so far undoubted: Bolsonaro is not playing by the rules of the coalition presidentialism, neither is personally attached to the principles of liberal democracy. Bolsonaro has no clue about how to balance the distribution of functions, roles and positions among the ministries and state companies, let alone how to manage the amendments in the budget – recently, the House has approved, in a surprisingly fast majority of 448 votes vs. 3, the Proposal of Constitutional Emendation 2/2015 known as the “authoritative budget”, which substantially restricts the government’s power over the allocation of funds. This is seen as a significant defeat of the Ministry of Economy Paulo Guedes. For Bolsonaro himself – who has already publicly declared against the Pension Reform which is, in turn, the main flag of his mandate proposed by one of the two so-called “super Ministers”, Mr. Guedes – it is all under control.
To highlight the challenge to so-called coalition presidentialism, I will call this particular way of managing government, daily affairs, and (anti)politics a regime of “anti-presidentialism”. Through this specific regime, Bolsonaro’s government simultaneously control the government and the opposition mainly through the setting of the agenda – restricted to customs, myths, contentious issues, and random opinions – employing direct communication with the population via social media.
He won the presidential election with 39.3% of the total electorate who went to the poll and currently needs to preserve the rate of 30% of overall approval to move forward with the reforms, according to companies of data surveys and to the economic press. Today, we have 37% of Brazilians that evaluate Bolsonaro Government as “good”. There is a parcel of the electorate that would remain loyal to the label Bolsonaro: openly chauvinist, homophobic, sexist, conservative, interventionist and safeguard of the patriarchal roots of the Brazilian society. During the Workers Party’s terms (Lula, 2003-2011; Dilma, 2011-mid-2016), this parcel of the electorate – composed mainly by white men of middle and high economic classes, former militaries and evangelicals – has seen a double movement going on in the country: on the one hand, the growing and spread of progressive ideas in the fields of social policies, customs and human rights, which were celebrated by the low classes who are generally the target of security forces’ narco-politics. On the other hand, the lowering of purchase power as an effect of the international economic crisis of 2008 that was felt hard by the middle class, which is generally the target of austerity measures.
The welfare policies of President Lula (Bolsa Família, Fome Zero) did not alter the inequality structure of the country, and there are several plausible critics about Lula’s double strategy of making poor people and the bourgeoisie compliant, through providing access to consumer goods and the reconciliation of conflicting interests, respectively. What is relevant to highlight, however, is the social consequences of this political articulation undertaken during the Workers Party’s terms: the rise of gender activism, feminist movements, human rights advocacy, naming and shaming of racist politicians, and a feeling of empowerment among the poor people. The silenced low class has become louder and proud of its color, race, and sexual orientation. The intolerance grew concomitantly, both among the political-economic elite, and the ordinary people eager to have the “normal order” back, i.e., privileges of gender, class, and race.
Political scientists, journalists, economists and also the political opposition have been struggling to keep up with the daily twists promoted by Bolsonaro and his team, to understand them in light of the democratic principles and the coalition presidentialism regime, which normativity is in effect for the last thirty-four years of the Brazilian history. That is where I claim they are reinforcing Bolsonaro’s strategy of resignifying Brazil’s history and reality. Bolsonaro’s team is, on the one hand, made by a majority of militaries already responsible for more than one-third of the Ministries that, together, have a budget more prominent than the Ministry of Health and Education. Naturally, it is inescapable to cope with the old issue of military hierarchy vs. submission to civilians, which has been proved difficult in the negotiations of the Pension Reform.
On the other hand, the team is made by several people who were entitled due to their consent and conviction concerning the conservative customs agenda — nothing beyond that. The Ministers of External Relations, Human Rights & Family, Environment and Education are the most notable examples of what is at stake for Bolsonaro: to ideologically resignify the frontline channels of telling Brazil’s history and reality, inside and outside the country. This agenda has been featured “anti-intellectualism” by the opposition, denoting precisely the denial of facts, statistics, studies, and historiography. The ambivalence is that, even though such denial is already identified, the opposition insists on the intellectual language to confront such an agenda. That is, while Bolsonaro speaks his own truths and manifests his conception of the facts (not the facts themselves), the opposition complains about the lack of accuracy with numbers and narratives about the trending-topics selected by Bolsonaro himself.
As an example, the order launched in the last 31st March to celebrate the Military Coup of 1964 that has initiated the twenty years of the barbaric Brazilian dictatorship, has prompted a massive reaction within the national and international societies 9 . We are witnessing an entire miscommunication that, in the end, has been monopolizing the opposition toward raising a reaction against nothing with the wrong toolkit, as Bolsonaro does not recognize the sound of intellectualism. In other words, would not be the national opposition an echo of Bolsonaro’s anxieties, reverberating his desires and perspectives, they will start to see a backlash before whom he cares about, the international market.
I wrap up this article with the questions concerning the broader change upon the way Brazilians came to recognize themselves: how is such a shift taking place, who is it favoring, and what is the likely outcome? I claim that Bolsonaro is a by product of such change and that it is crucial to highlight the path, the conditions of possibility for his election and continuous support among still 30% of voters. I already mentioned above few concrete facts of the Workers Party’s period in power that contributed to catalyze changes on Brazilians perspectives about themselves. And I would say that, by no means, we are alone: such changes are following an international trend of conservatism. However, Bolsonaro is conservative, to say the least. To be precise, he is located at the far-right part of the political spectrum, what is an unthinkable image for Brazilians historians, social scientists and anyone else who has been thinking of the country since 1985.
Notwithstanding the traditional assumption of Itamaraty that Brazil is a successful example of multiculturalism and harmonious coexistence of differences, Brazilians are carving a deadly version of racism and persistent racial and economic inequality, as “Black Brazilians earn, on average, 57 percent less than white Brazilians. They make up 64 percent of the prison population. Brazil’s Congress is 71 percent white”10. Jair Bolsonaro spurs these numbers. His vocabulary is ideological, and his agenda is no longer part of the progressive path of emancipation that Brazilians were experiencing. He reinforces an illiberal democracy in the country, cheating people’s hope of better days and boosting actual crusades against intellectual discussions and teaching on race, gender, and sexual orientation. Simultaneously, he speaks out in favor of economic liberalism, which is a promise to re-establish the pre-2008 living conditions of the middle class through the privatization of vital national companies.
I named anti-presidentialism regime all this configuration that encompasses an original label shaped over Bolsonaro’s years as a Congressman under which his clan currently acts; a specific language, vocabulary and “functional ignorance” that works to silence substantiated critics; an exacerbated use of personal social media as the official communication channel of the Government; an ability to shape a customs agenda and to monopolize the public engagement around it; and, lastly, a profound lack of knowledge and skills to employ the instruments of the coalition presidentialism regime, which he calls “the oldpolitics”.
We are then reinforcing such anti-presidentialism regime by interacting with its elements, either misunderstanding or complaining about them, or even being sick of delusion. Bolsonaro has won more than sixty thousand new followers on Twitter during Carnaval through the promotion of chaos and polarization with a given video he posted. In Brazil, there is an elected Congressman who resigned from his third mandate and is living abroad in 2019; a Councilor who was a relentless human rights defender brutally murdered in 2018; and uncountable number of politicians who have occupied high positions in the national or local governments in prison due to corruption and support to militias. Liberal democracy is crumbling in Brazil at least since August 2016, with Rousseff´s controversial impeachment, and civilian restrictions are in a fast track of enlargement. The latest measure announced by the Minister of Education was to significantly “decentralized” public funding for superior studies of philosophy, sociology, and social sciences, as “they do not give an immediate return to taxpayers”, according to Bolsonaro.
Eduardo, his third son who is conducting Brazilian foreign policy, seeks for inspiration among the Hungarian Viktor Órban, the Italian Matteo Salvini, the Israeli Benjamin Netanyahu, and the North-American Donald Trump. Each manifestation from those countries’ peoples of non- acceptance of topics of the world far-right agenda is, after all, an engagement. In Brazil, due to the notorious unpreparedness of the President, resistance might be more successful by firstly ignoring posts and tweets of the clan that holds no other goal than to spawn social chaos. Resistance must require liberal democracy, constitutional rights, the rule of law and public policies, with expected outcomes and data. We must pressure the Executive parliamentarians and the media to focus on the democratic agenda. We must organize ourselves around specific flags such as funding for superior education and the combat to narco-politics as it is currently undertaken in favelas, where the state forces drive the genocide of black people. We cannot engage anymore with Bolsonaro’s strategy that is constructed, daily, through a discourse of normality. We need to urgently recover people’s power to shape conceptions of the normal.
Some False Statements Made in the Trump- Impeachment Hearings
In the December 4th statement that was made by Stanford University law professor Pamela Karlan was this:
We have become the shining city on a hill. We have become the nation that leads the world in understanding what democracy is. One of the things we understand most profoundly is it’s not a real democracy, it’s not a mature democracy if the party in power uses the criminal process to go after its enemies. I think you heard testimony, the Intelligence Committee heard testimony about how it isn’t just our national interest in protecting our own elections. It’s not just our national interest in making sure that the Ukraine remains strong and on the front lines so they fight the Russians there and we don’t have to fight them here.
It’s also our national interest in promoting democracy worldwide, and if we look hypocritical about this, if we look like we’re asking other countries to interfere in our election, if we look like we’re asking other countries to engage in criminal investigations of our President’s political opponents, then we’re not doing our job of promoting our national interest in being that shining city on a hill.
She said: “We have become the shining city on a hill.” Here is a list of just a few of the democratically elected presidents and prime ministers in foreign countries whom the U.S. regime overthrew, by coups, in order to install brutal dictatorial regimes there that would do sweetheart deals with America’s international corporations. Also, unsuccessful, merely attempted, U.S. coups are discussed there.
Furthermore, the scientific studies of whether the U.S. Government is controlled by the public (a democracy) or is instead controlled only by its very wealthiest (an aristocracy) are clear: this country is an aristocracy, not a democracy at all, except, perhaps, in the purely formal senses of that term — our great Constitution. Far-right judges have recently been interpreting that Constitution in the most pro-aristocratic, anti-democratic, ways imaginable, and this might have something to do with why the scientific studies are finding that the U.S. is now a dictatorship. And this fact, of America’s now being a dictatorship, was blatantly clear in America’s last Presidential election, which was actually a s‘election’ by Americas’ billionaires — not by the American public.
How, then, can Professor Karlan be respected about anything, if she lives in a dictatorship (by its aristocracy) and is deluded to think that it’s still (which it never was completely) a democracy?
Furthermore: her statements about Ukraine are equally deluded. She is obviously unaware that the Obama Administration started planning its coup against Ukraine in 2011 and started implementing it in the U.S. Embassy in Ukraine on 1 March 2013, and started in June 2013 soliciting bids from U.S. companies to renovate at least one building in Crimea for use by the U.S. Navy to replace Russia’s main naval base — which Russian naval base was and is in Crimea — by a new U.S. naval base to be installed there.
The craziest thing of all about Karlan’s statement, however, is this part: “It’s not just our national interest in making sure that the Ukraine remains strong and on the front lines so they fight the Russians there and we don’t have to fight them here.”
Imagine if someone said, “It’s not just our national interest in making sure that the Mexico remains strong and on the front lines so they fight the Americans there and we [Russians] don’t have to fight them here.”
If a Russian were to assert that, would the statement be any more justifiable than what Karlan said regarding Ukraine? Of course not! Even an idiot can recognize this fact. But Karlan can’t.
On December 5th, the anonymous “Moon of Alabama” blogger, whose opinions and predictions turn out to have been correct at perhaps the highest rate of anyone on the internet, headlined “The Delusions Of The Impeachment Witnesses Point To A Larger Problem” and he not only pointed out the “delusional” beliefs of Professor Karlan (“One must be seriously disturbed to believe such nonsense. How can it be that Karlan is teaching at an academic level when she has such delusions?”), but he noted that:
How is it in U.S. interest to give the Ukraine U.S. taxpayer money to buy U.S. weapons? The sole motive behind that idea was greed and corruption, not national interest:
[U.S. special envoy to Ukraine] Volker started his job at the State Department in 2017 in an unusual part-time arrangement that allowed him to continue consulting at BGR, a powerful lobbying firm that represents Ukraine and the U.S.-based defense firm Raytheon. During his tenure, Volker advocated for the United States to send Raytheon-manufactured antitank Javelin missiles to Ukraine — a decision that made Raytheon millions of dollars.
The missiles are useless in the conflict. They are kept near the western border of Ukraine under U.S. control. The U.S. fears that Russia would hit back elsewhere should the Javelin reach the frontline in the east and get used against the east-Ukrainians. That Trump shortly held back on some of the money that would have allowed the Ukrainians to buy more of those missiles thus surely made no difference.
To claim that it hurt U.S. national interests is nonsense.
It is really no wonder that U.S. foreign policy continuously produces chaos when its practitioners get taught by people like Karlan. …
The Democrats are doing themselves no favor by producing delusional and partisan witnesses who repeat Reaganesque claptrap. They only prove that the whole affair is just an unserious show trial.
In the meantime Trump is eliminating food stamps for some 700,000 recipients and the Democrats are doing nothing about it. Their majority in the House could have used the time it spent on the impeachment circus to prevent that and other obscenities.
Do the Democrats really believe that their voters will not notice this?
(Of course, they do, and they might be right. After all, polls show that Democrats still believe that Barack Obama was a terrific President, just as Republicans believe that George W. Bush was a terrific President. The fact that both — and Trump himself —were/are among the worst in American history eludes the voters in both Parties. But though I disagree with his opinion on that particular matter, he’s just asking a question there, and I hope that his more optimistic take than mine turns out to be right, and that the voters — in both Parties — are coming to recognize that American politics right now is almost 100% a con-game, in both Parties.)
Why do people pay subscription-fees, to Jeff Bezos’s Washington Post, and to the New York Times, and to other media that are controlled by America’s billionaires, when far higher-quality journalism, like that of “Moon of Alabama” (and like the site you’re reading here) is freely available on the internet? Who needs the mainstream ‘news’-media, when it’s filled with such unreliable claptrap, as respects (instead of exposes) what persons such as Karlan say? Jonathan Turley is to be taken seriously, and he is at the very opposite end from Karlan’s opinions in the impeachment hearings (and regarding much else). (And the hearings-transcript in which both law-professors testified is here.) But the exception is Turley, and Karlan is far more the norm in the U.S.-media mainstream. And virtually all Democratic-Party propaganda-organs (‘the liberal press’) are playing up the Karlan claptrap. So: yes, I do think that “the Democrats [referring to the ones in the House of Representatives, of course] really believe that their voters will not notice this.” Most voters are just as “deluded” (misinformed by the ‘news’-media) as Professor Karlan is.
Two Cases, Minor and Major
News stories have Donald Trump being mocked by France’s Macron at a Buckingham Palace reception for the NATO leaders meeting. A nearby open mic caught the incident. Trump’s response was to call Macron two-faced.
Macron returns to a France paralyzed by the biggest strike in years. Teachers and transport workers are alarmed by his plan targeting their traditional pension scheme. They would now have to retire later or accept lower benefits.
Trump returns to face impeachment. Speaker Nancy Pelosi has asked the House to get on with it and draw up the Article of Impeachment. Trump also wants the same. So he said upon his return from Europe. He wants it over so he can get on with running the country, which he says has a bustling economy, the lowest unemployment in recent history and a booming stock market.
The source of Trump’s self confidence: a Republican majority in the senate bound to acquit him. Truth be told, this is an unusual impeachment in that it has not managed to obtain the support of a single member of the president’s own party. Prior impeachments of others had more substantial grounds and always some bilateral support.
This impeachment is also unusual for its triviality. Taking together the partisanship and the weak reasons, some legal scholars warn it sets a bad precedent, and the possibility that future presidents might well face the prospect not as rarely as in the past.
To summarize the issue: it stems from Joe Biden’s son Hunter earning $50,000 per month serving on the board of Burisma, the notoriously corrupt Ukrainian gas enterprise, while lacking any professional expertise in the company’s area of business. The clear implication is that it was due to his father being Vice President of the United States. Trump simply asked for an announcement from the Ukrainian president that they were opening an investigation. So what is worse nepotism or an inquiry into it?
From the relatively trivial to the deadly serious. The International Court of Justice (ICJ) will hear the case against Myanmar for the Rohingyan genocide. Aung San Suu Kyi as tarnished as her Nobel Peace Prize remains obdurate. Her country’s claim the genocide case stems simply from the world”s inability to understand the complexities of the issue.
Forget the BBC film clip of one incident where the perpetrators boasted proudly of their handiwork as smoke from a village they had set alight rose in the background. Killing or stealing livestock, destroying crops to make return impossible was another tactic in the event villagers escaped. Rape, mass murder, people being burnt alive locked in their houses are well documented. Later, the UN Human Rights Council’s fact-finding mission confirmed convincing evidence of genocide.
Aung San Suu Khyi will face a legal team from Gambia. Why? Well it’s a story of happen-chance. Last year Gambia’s Justice Minister Abubacarr Tambadou visited Bangladesh for the Organization of Islamic Cooperation’s annual conference. What he saw and heard there recalled for him painful memories of the Rwandan genocide where he had prosecuted cases.
With the OIC delegation he visited Rohingya refugee camps to hear repeated stories of rape, murder and arson, and on his return he was able to convince the OIC to file a case with the ICJ. It is the first of its kind since the 1990s from the then demised Yugoslavia — the case of Bosnia and Herzegovina versus Serbia and Montenegro charging genocide filed in 1993.
And a timely warning to over-enthused promoters of religious nationalism willing to step over the line of human decency and respect for the other. Look where it leads.
Why finance is at the heart of Chile’s crisis
The outsized role of unfettered finance in Chile has only worsened inequality that led to recent uprisings
In September this year, less than a month before frustrated Chileans took to the streets in Santiago, on Chile Day, former finance Minister Felipe Larrain announced new legislation that, it was hoped, would make Chile into a regional financial center. The new bill would contains regulatory changes to facilitate registration of foreign securities in Chile and eliminate tax differences between locals and foreigners that affected the ability of finance to move seamlessly in the domestic economy. These measures were announced to commemorate ChileDay in London, where Conor Burns, minister in the UK government praised Chile’s macro-economic growth and fiscal management under the Sebastian Pinera government.
After years of trying to make the country into a financial regional center, the new bill concretized the government’s intentions. Larrain explained that the initiative meant to relax existing rules of financial regulations through a number of areas, including reduce paperwork for foreign investors, introduce new international practices in the local fixed income market for investors to access liquidity, simplify tax laws and contracts for short-term finance and make mutual funds more flexible. In this way the government sought to enable growth in profits of financial assets, which are primarily held by wealthy investors and high net worth Chileans. Protestors’ move into the affluent Providencia neighbourhood to up the ante a few days ago – known as Chile’s financial district – ironically represent the apogee of this relationship.
After unease spread about the social conditions in Chile after the increase on metro fares, Minister Felipe Larrain, who retained the position from Pinera’s 2010 administration, was sacked. Larrain’s firing is emblematic for several reasons. Much of the recent analysis while rightly focusing on worsening social conditions for the majority of Chileans, few commentators have pinpointed one, if not the most important culprit, of high inequality since Chile became a democracy ended in 1990. Chile’s embrace of financial globalization has been at the forefront of higher levels of inequality in Chile for over the last 2 decades during both left- and right-wing governments.
The planned growth of the financial sector, while good for investors and those with idle assets, it is not positive for the majority of Chileans. The United Nations Economic Commission for Latin America and the Caribbean shows ownership of financial assets are concentrated in the pocket books of the 1 per cent. In 2017, the net worth of households was extremely distorted. While the poorest 50% of households had an average net worth of US$ 5,000, the sum for the wealthiest 10% averaged US$ 760,000, and the richest 1% owned US$ 3 million. To make matters worse, the richest 10% made a whopping 92.2% of investments in shares and mutual funds, other forms of equity holdings and investment portfolios, and 77.4% of deposits in savings accounts and long-term fixed deposits. In comparison, the lower 50 per cent of the population held just 7.7% of total physical assets like motor vehicles and real estate. As a result, many Chileans are swimming in debt, owing a total of US$116 billion (about 44 percent of gross domestic product) – a significant portion due to mortgages and showing increases by 12 per cent since 2010.
In its 2018 economic survey, the OECD laid out the conditions that have led to the current crisis: as many 30 per cent of Chilean workers engage in informal work or on short-term contracts, with high concentrations among women, youth, low-skilled and indigenous groups, while unemployment benefits are virtually nonexistent. Self-employed workers earn 20% less than a formal waged employee with the same skills and experience. Financial sector employees also make more than twice the average worker and even mining sector workers. Over the years, this wage inequality and labour informalisation have been facilitated by deregulating labour markets whereby workers have less bargaining power of labour unions. Labour unions’ calls to increase their stake in the congress therefore offer some hope for workers to gain more of the share of national wealth. Increases in labour income, as ECLAC shows, have a positive effect on macro-economic growth. Pinera’s obstinacy to these initiatives seem to protect his economic standing rather than promote a resolution in workers’ favour. Government resistance would only encourage further polarization.
Chile’s financial sector has expanded at a rate more than any other economic sector, and realized a significant portion of total income and profits in the country. In terms of asset base as a percentage of GDP, the financial sector (including money bank deposits and of other financial institutions) it has growth from 64% in 1984 to 67% in the late 1990s, surpassing the 100% mark in 2010. In 2016, this ratio reached 117%. After Mexico, Chile has the highest capital penetration of foreign banks in Latin America which has counter intuitively reduced the amount of credit available to small local businesses to finance production in new products and sectors. In the meanwhile, foreign investment has however expanded in areas that do not employ great numbers. Large mining businesses which employ fewer numbers of Chileans also have a disproportionate access to international markets for credit. Chile’s pension system is also privatized and seen as source for financial sharks to make a killing, which fluctuates according to traders’ optimism and can lose as it did in late 2018 when investors lose confidence.
Increased privatization of the state, and narrow industrial policies promoted by agencies like the Inter-American Development Bank bolster the role of finance using a number of instruments and incentives. Compared to years prior to the dictatorship, and for a short period during Pinochet reign after the banking crisis of the 1980s, finance was largely well regulated and credit expanded to sectors that generated a large number of jobs. Now, rather than expanding employment and increasing high-value industrial exports, Chile has since the 2000s suffered becoming more and more specialized in mining. Even as private investment flows increased in copper mining during the 2000s, this has not had a broad effect on re-industrializing the Chilean economy. The opposite is true. In fact, the majority of the country’s lithium is manufactured outside of the country.
While some economists have suggested that that higher inequality was due to the end of the high-price commodity boom in Chile in 2014, the historical record shows that inequality was rampant during Pinochet’s dictatorship and only slightly decreased from the 1990s onwards. Inequality was practically baked into the tax system, as well as the housing and transport policies of successive governments, as Chileans found it hard to seek work opportunities in its capital city Santiago. This has earned Chile the infamy of the most unequal country in Latin America and the OECD as a whole according to certain analyses.
As the world awakens to the reality that the expanding finance do not lift all boats or ‘trickle down’, if there is to be a successful resolution to the current calamity that dates back to the reforms of Pinochet, democratizing finance is critical to return power to the hands of Chileans.
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