Restoration of Democracy in Latin

AmericaArgentina, Brazil and Uruguay

Why did the Military junta relinquish power by 1983?• Crippling economic problems:• Wages reduced by 40% between 1981-2• Inflation increased to 500% by 1982 (from 300% in 1976)• Huge international debt- $43 billion with high interest rates (Argentina could just

about afford to pay interest)• Record number of bankruptcies

• International and domestic focus on human rights abuses:• Les Madres de Plaza de Mayo

• Defeat in the Falklands (Malvinas) war

Return to Civilian Rule- Raul Alfonsin• Although he successfully prosecuted crimes committed during

the ‘Dirty War’, his willingness to compromise by not prosecuting Isabel Peron and ordinary soldiers angered many.

• To curb inflation, Alfonsin replaced the peso with the austral (1000 pesos= 1 austral) and initiated price controls

• Avoided war with Chile over Beagle Islands- Argentine population voted for a diplomatic solution to the dispute in a referendum

• Despite advocating government economic intervention earlier his administration, he later espoused laissez-faire policies

• Exports began to decline in the late 1980’s, the country entered recession as GDP decline, inflation increased and austral lost value

• Lost 1989 election to Carlos Menem

The Ups and Downs of the ‘90’s-Carlos Menem

• Elected largely due to the electorate’s disappointment with Alfonsin’s perceived leniency on ‘Dirty War’ prosecutions and economic chaos• Attempted to deal with inflation by replacing the

austral with the peso (10,000 austral= 1 peso) and stabilizing its value by pegging it to the US dollar• Enacted austerity and initiated privatization of

state-owned enterprise. • Used over 300 emergency decrees to dramatically

expand presidential authority at the expense of the legislature• During the early ’90’s there was strong economic

growth and low inflation, although unemployment doubled

Economic Meltdown: 1998-2002• Argentina was affected by the Mexican peso crisis in 1995 as foreign investors lost confidence in

the ability of Latin American economies to maintain a stable currency• Therefore, the benefits of participation in the MERCOSUR trade agreement declined significantly• In 1999, Brazil devalued its currency, making Brazilian products more affordable and Argentine

products more expensive. This led to a dramatically increased trade deficit in Argentina• Consequently, Argentina’s national debt rose to $155 billion• The new President, Fernando de la Rua, (elected in 1999), introduced harsh austerity measures

(in order to meet IMF and World Bank lending conditions) at a time when the number of citizens in poverty rose to 1 in 5

• Public anger at the severity of the austerity cuts and government corruption led to social unrest • The high levels of government debt, failed attempts to maintain Argentine peso’s parity with the

US dollar and capital flight caused Argentina to default on its foreign debt• When the government decided to allow the peso to ‘float’ (end the pegging to the dollar),

currency value plummeted, inflation increased rapidly and the number of bankruptcies soared. This was accompanied with a surge in unemployment.

Argentina summaryAlfonsin (1983-89)

initial optimism increasing discontentprosecution of War criminals recession

avoiding war with Chile replaced by inflation and currency devaluation

inflation curbing measures compromises over prosecutions

Menem (1989-99)economic repair economic collapseneoliberal policies increased government debt

strong economic growth replaced by trade deficit

expanded presidential authority public apathy with politics

Why did the Military junta relinquish control?

• By the late 1970’s, it was clear that the Junta’s economic policies had failed- 75% lived below the poverty line, inflation was at 200% (later to rise to 500%) and foreign debt was $85 billion

• There remained huge disputes over agricultural land between large landowners and small farmers, which often led to violent confrontation

• Increasing discontent with military rule forced the military to keep promises of a return to democracy

The return of Civilian rule

• When the military did restore elections, they were indirect ones. A special electoral assembly voted opposition candidate Tancredo Neves against the wishes of the military

• Neves died before taking office and was succeeded by his vice-president, Jose Sarney• Sarney attempt land reform but could not prevent attacks on small farmers by militia employed

by wealthy landowners• Sarney also introduced austerity measures to improve economic stability, including wage and

price freezes, some tax increases and a new currency

Dealing with political problems and economic challenges

Fernando Collor de Mello was strongly influenced by the IMF• He reduced government spending, reduced trade union power and

initiated privatization of state owned companies• He was forced to resign in 1992 following a corruption scandal

• Fernando Henrique Cardoso became President in 1995 and continued with Collor de Mello’s neoliberalism

• Despite slowing economic growth and severe recession in the late ‘90’s (in part caused by Cardoso’s austerity policies which aimed to control Brazil’s overseas debt), Cardoso was reelected in 1999 for another term

Brazil Summary

• Consistent application of austerity and neoliberalism• As in much of Latin American, loyal adherence to the IMF• Also affected by sovereign debt problems in Mexico and other developing nations• Diluted attempts at land reform• Many of the country’s socio-economic issues remained unresolved• In spite of these problems, Brazilians remain in favour of a democratic presidential system

Uruguayan Background

• Uruguay had a healthy democracy prior to military takeover in 1973• There were two established parties- Los Blancos and Los Colorados that had

been in existence since the 1830s• Uruguay is one of the smallest country in South America and was one of the

most prosperous- in the early 20th century it created a complex social system that contributed to standard of living on a par with industrialized European nations

Descent into Civil War

• As an agricultural export-driven economy, it benefitted massively after WWII but struggled hugely when food prices dropped following European and Asian recovery• By the late ‘60’s there was urban guerrilla warfare between Los Tupamaros

(represented by its political arm, the MLN)• There was also left wing coalition known as the Broad front or Frente Amplio• The Military dictatorship had sought to gain an absolute grip on power since and

suppress all dissent • They also introduced neoliberal economic measures

Why did the Military Junta relinquish control?

• Military had largely lost legitimacy • Economy in disarray- real wages very low• Despite 15% of Uruguayan population in exile and many other

opponents in prison, 57% of electorate rejected a new proposed constitution in 1980

Restoration of civilian rule

• As the military handed over power in 1984, they did so while trying to exclude left wing elements from government• In order to ensure this, they compromised by legalizing the Broad Front• The first free elections in Uruguay where held in over a decade (although candidates were

vetted by the military) and Julio Sanguinetti of Los Colorados won the presidency• Sanguinetti returned the country to export-driven growth (which was successful although

inflation remained high)• The military remained out of politics by a 1986 law which granted them amnesty for crimes

committed during the rule of the junta. This law was upheld by a consulta held in 1989• Sanguinetti also released imprisoned Tupamaros and legalized the MLN

Old vs. new political parties

• Blanco candidate Luis Alberto Lacalle won the presidency in 1989 with only 20% of the vote• Lacalle was forced to use consultas to bypass the legislature• Sanguinetti returned to the presidency in 1995 and, together with the Blancos, altered the

constitution (approved by consulta) in order to make it harder for the Broad Front to win the presidency• The new constitution meant that a presidential candidate had to win 40% and a clear 10%

margin over nearest rival to win- no clear winner meant that their would be a run-off of top two candidates• In 1999, the Blancos voted for Colorado candidate Jorge Batlle to prevent popular vote

winner Tabare Vasquez from winning the presidency in a runoff• However, the Broad Front have held the presidency since 2004

Uruguay Summary

• Sanguinetti provided a strong platform for the return of democracy in the late ‘80’s• Consultas were regular feature of decision making on important issues• Despite best efforts of the established parties, the Broad Front have held

power since 2004 as Uruguay was forced to adjust its economy in the aftermath of the Argentine sovereign debt default in 2002 and deal with the legacy of human rights abuses during the time of the junta• Uruguay has displayed all the features of a civil society

Latin America Summary• Uruguay had an orderly and successful return to, even expansion of,

democracy• Prior to the military dictatorship, Uruguay had a tradition of democracy with

established institutions

• Although Brazil failed to resolve existing socio-economic problems, when given the choice through consulta, Brazilians chose to stick with a democratic presidential system• Argentina’s return to democracy was the most troubled, largely due to

exceptional economic problems. However, even after financial crisis of 1998-2002, Argentina did not slide back into dictatorship• Both countries deferred to the IMF on economic policies and experienced periods of

economic growth, although social problems remain largely unresolved. Unlike Uruguay, both nations did not have a strong culture of democracy to fall back on