In China and Latin America: Development, Agency and Geopolitics, Chris Alden and Álvaro Méndez examine Latin America and the Caribbean region’s interactions with China, revealing how a complex, evolving set of bilateral economic and political relations with Beijing – from Buenos Aires to Mexico City – have shaped recent development. Mark S. Langevin contends that the book is a noteworthy contribution to an understanding of China’s footprint in the region but does not offer a robust framework for comparative analysis.  

China and Latin America: Development, Agency and Geopolitics. Chris Alden and Álvaro Méndez. Bloomsbury. 2022.

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China and Latin America offers a thoroughly researched account of China’s economic and political impacts in Latin America and the Caribbean (LAC). Alden and Méndez pivot on China’s centuries-long presence in LAC to weave an analysis of trade, investment and migration patterns, detailing a thick description of economic and political relations with the region’s governments and stakeholders. Their historical examination and assessments of national government responses to China are appropriately framed by the unfolding geopolitical rivalry between Beijing and Washington. The book details China’s underlying logic and overwhelming importance to LAC, providing a valuable contribution to the growing literature assessing Beijing’s role in the region’s economic development and international relations.

China is not new to LAC; its longstanding ties with the region provide an economic and social foundation for the massive trade and investment flows in recent decades.

In the introduction, Alden and Méndez remind readers that China is not new to LAC; its longstanding ties with the region provide an economic and social foundation for the massive trade and investment flows in recent decades. In chapter one, the authors tell an intriguing story of China’s dependence on “New World silver,” European and LAC elite thirst for Chinese-produced silks and ceramics during the fall of the Ming Dynasty in the seventeenth century, and the enduring impacts of the flow of indentured Chinese workers to the region in the eighteenth century. Accordingly, Chinese working-class immigrants settled in “cities like Lima, Tijuana, Panama City and Havana…” providing a human bridge to China while suffering through waves of xenophobia and anti-Chinese repression. China and Latin America documents the economic and social linkages tempered through centuries-long trade, investment and migration – a neglected foundation for understanding LAC’s economic development in recent decades.

The book raises several leading questions. In the introduction, Alden and Méndez explore the “interests, strategies and practices of China,” questioning whether Beijing’s approach to LAC is similar to its role in Africa (14). They ask what motivates Beijing’s interests in the region and how LAC governments, firms and social actors have responded to China’s “deepening economic and political involvement in the region” (15).

Although the book is thick on economic and historical detail, its thematic analytical framework does not guide comparative explanation within LAC and across developing regions, including Africa.

Although the book is thick on economic and historical detail, its thematic analytical framework does not guide comparative explanation within LAC and across developing regions, including Africa. Alden and Méndez offer three “broad themes” for narrating their analysis: development, agency and geopolitics. These dimensions can guide examination of Beijing’s underlying logic and regional economic and political relations but are insufficient to explain the variable regional results that could stem from Chinese policies, trade and investment or even geopolitical endeavours. Consequently, Alden and Méndez emphasise “diplomacy and statecraft” and “sub-state and societal actors” as conceptual references but without the formal specification for selecting cases, testing explanations and comparing outcomes at the national and regional levels.

For example, the book explores several groups of Latin American nations and case studies of Brazil and Mexico. Chapter three’s treatment of Chile, Peru and Argentina, chapter four’s analysis of Venezuela, Ecuador and Bolivia, and chapter seven’s assessment of Central America and the Caribbean reflect similar patterns of development and diplomacy. However, these chapters do not present a systematic comparative analysis between these cases. Moreover, the authors’ slim selection method excludes Paraguay and Uruguay without assessing these nations’ participation in the Common Market of South America (Mercosur) along with Argentina and Brazil. Indeed, Uruguay’s recent proposal to ditch Mercosur and negotiate a bilateral trade treaty with Beijing makes it an interesting case for comparison with Mexico, given its longstanding ties to Canada and the US through the North American Free Trade Agreement (NAFTA) and its successor pact (USMCA).

In chapter four, Alden and Méndez explain how the “sustained rise in commodity prices” – much of it fuelled by Chinese demand – “enabled these governments to seek rents from export tax revenues and direct them toward development and social programmes,” an approach the authors associate with “neo-extractivism.” Accordingly, the so-called Bolivarian republics of Venezuela, Ecuador and Bolivia sought to replace their dependency on the U.S. with China. Beijing embraced the opportunity, but the growing Chinese footprint “obscured the commercial intent and practices pursued by Chinese firms” (103). In response, these nations’ governments grappled with increasing Chinese debt, among other externalities brought by Chinese firms, including the “willful neglect of the concerns of local communities, environmentalists and labour activists.” Indeed, as the authors point out, even Beijing grew weary of the region’s “high expectations” and the growing “costs of entanglements” (104).

The book’s treatment of Venezuela is pivotal because it details the most extreme case of commodity export dependence and debt-trap diplomacy in the region.

The book’s treatment of Venezuela is pivotal because it details the most extreme case of commodity export dependence and debt-trap diplomacy in the region. This sets an analytical benchmark that sharply contrasts with Brazil’s diversified commodity exports to China and the parallel influx of Chinese goods, foreign direct investment and migrants, along with the incipient pattern of technology transfer through the localisation of Chinese manufacturing firms in Brazil.

On the energy front, Venezuela shifted to government control over petroleum production after Hugo Chavez’s rise to power in the late 1990s, while Brazil partially liberalised the sector during the same period. The authors assess China’s rise and growing demand for petroleum products but do not explain the divergent policy approaches taken by Caracas and Brasilia. Did Venezuela’s deepening authoritarianism and Brazil’s vibrant democracy shape Beijing’s approach to these countries and help determine the different outcomes in the petroleum sector, or are the differences limited to these countries’ respective opportunities for crude oil production for export? Moreover, do these contrasting policy-response patterns explain diplomatic outcomes, including Caracas’ growing distance from Washington? Alden and Méndez contribute to our understanding but fall short of a comparable explanation of Venezuela and Brazil’s two very different paths.

Chapter eight offers a vital perspective of China’s presence in LAC within the emerging geopolitical landscape that pits Washington against Beijing.

In conclusion, chapter eight offers a vital perspective of China’s presence in LAC within the emerging geopolitical landscape that pits Washington against Beijing. The authors explain China’s deepening engagements, becoming an observer to the Organization of American States (OAS) in 2004 and the Inter-American Development Bank (IDB) in 2008, and President Xi Jinping’s trip to Brasilia in 2014 to attend the first Summit of Leaders of China and LAC. Xi’s confident embrace of the region did not initially spark concern in Washington, according to Alden and Méndez. However, as the authors recount, by 2018, the US National Defense Strategy Summary confirmed Washington’s acknowledgment of the strategic competition with Beijing throughout LAC.

Alden and Méndez raise a central question that should frame research and policymaking in the coming years: at what point do the citizens and leaders of LAC search for alternatives to ‘China’s dominant position in their country’s economic and political life?’

China and Latin America concludes, “No longer passive, Chinese diplomacy now looms large in the capitals and boardrooms across the region, leaving the once-unassailable US dominance scrambling to regain its standing” (175). Hence, Alden and Méndez raise a central question that should frame research and policymaking in the coming years: at what point do the citizens and leaders of LAC search for alternatives to “China’s dominant position in their country’s economic and political life?”

This post gives the views of the author, and not the position of the LSE Review of Books blog, or of the London School of Economics and Political Science. The LSE RB blog may receive a small commission if you choose to make a purchase through the above Amazon affiliate link. This is entirely independent of the coverage of the book on LSE Review of Books.

Image Credit: Nadezda Murmakova on Shutterstock.

The mountain in labour (source)

The Summit of the European Union–Community of Latin American and Caribbean States (CELAC, by its initials in Spanish), held in Brussels just concluded.

Representatives of some 60 countries from the Americas and Europe, including President of the European Union Ursula von der Leyen and head of the European Council Charles Michel plus heads of state and government, gathered for the summit, the first in eight years.

Although the European side offered economic cooperation, one of the main topics on the agenda was to gain CELAC’s support in the NATO war against Russia. China was also part of the agenda.

President Vasily Goloborodko had been scheduled to address the summit.

(source)

Since last November the Ukrainian President has been making surprise appearances at high profile international gatherings. First it was the November G20 Hiroshima Summit, where he delivered a video address.

Then in May Goloborodko unexpectedly dropped by the Arab League’s Jeddah Summit, before travelling to Hiroshima, for the G7 meeting. There he held bilateral talks with Indian PM Narendra Modi. India has a policy of strict neutrality in the Ukraine-Russia war.

A similar meeting with Brazilian President Luiz Inácio “Lula” da Silva – whose country is also neutral in the conflict – did not happen. According to Brazilian news outlets, the increasingly temperamental Goloborodko did not attend the meeting.

Amid concerns a final declaration of the EU-CELAC Summit would not be reached, Goloborodko’s address was cancelled.

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Among motherhood statements about cooperation on climate change and conservation and social justice issues, the main concrete deal reached was the one with Argentina, on clean energy and energy security.

The communiqué makes no reference to China. Instead of a harsh condemnation of Russia for its brutal, illegal, unprovoked invasion of the Ukraine – in the terminology preferred in Western countries – the wording the EU-CELAC Summit agreed on:

We express deep concern on the ongoing war against Ukraine, which continues to cause immense human suffering and is exacerbating existing fragilities in the global economy, constraining growth, increasing inflation, disrupting supply chains, heightening energy and food insecurity and elevating financial stability risks. In this sense, we support the need for a just and sustainable peace. We reiterate equally our support for the Black Sea Grain Initiative and the efforts of the UNSG to secure its extension. We support all diplomatic efforts aimed at a just and sustainable peace in line with the UN charter.

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Pedro Sánchez, Spanish PM and leader of the centre-left PSOE, is a strong supporter of the Ukraine. He had placed high hopes on the summit.

On Sunday Spain will have its general elections and polls show his incumbent Government may face difficulties retaining power. A success in the summit, given Spain’s assumed influence among her former colonies, would not have hurt his chances of re-election.

Alberto Núñez Feijóo, leader of the opposition Popular Party (centre-right) and Sánchez's main political adversary, is no less unconditional in his support to the Ukraine. His influence on Latin American countries is, however, much more questionable.

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Increasingly isolated, uh?

In the wake of Obama’s historic visit, the Cuban Communist Party (PCC) held its 7th Congress on April 16-19 in the Havana Convention Centre. Beneath a backdrop featuring a huge likeness of Fidel Castro, PCC secretary Raul Castro delivered the main report on behalf of the Central Committee.

Fidel being Fidel, many Cubans would have been reassured by his surprise appearance at the closing session on the eve of his 90th birthday. Traditionally, PCC congresses are the culmination of a months-long process of consultation with the Party’s activist base and the wider Cuban society.

By contrast, an air of secrecy and anticlimax hung over the 7th Congress. Fidel’s brief valedictory address, which moved some in the audience to tears and was received with a thunderous and prolonged ovation, served to stamp the Congress with a legitimacy that only Fidel can confer.

While Fidel’s appearance at the Congress and the content of Raul’s report may have unruffled some feathers, the PCC’s central leadership must now strive to reconnect with the Party’s grassroots so that a disconnect doesn’t harden into a dangerous rift. Having received a sharp rebuke from the party base, it seems the leadership has got the message.

Fidel (left) and Raul (centre) at the 7th Congress

Controversy

The disconnect between the Central Committee and the PCC base is evident in the preparatory process for the 7th Congress. The 6th Congress, held in April 2011, was preceded by a three month process of PCC-wide and public consultations on the draft Economic and Social Policy Guidelines.

While critics have noted the democratic deficiencies of that consultation—such as the fragmentary nature of the local debates, which hindered the emergence of possible alternative platforms for the election of delegates—the Guidelines adopted by the Congress bore the imprint of public opinion.

Initially, the PCC leadership gave every indication that there would be a comparable consultation prior to the 7th Congress. Soon after the 6th Congress, the Central Committee began work—behind closed doors—on two strategic and programmatic documents to be presented to the 7th Congress.

These two documents, the 2016-30 Plan and the ‘Conceptualisation of the Cuban socio-economic socialist development model’, would complement the Guidelines. As a set of concrete objectives based on certain principles, the Guidelines are neither a programmatic vision nor a socialist plan.

As the 7th Congress approached, it became apparent that the drafting process was well behind schedule. Either the anticipated public consultation would have to be abandoned, or the Congress would have to be postponed. As late as February 23, the Central Committee’s Tenth Plenum reiterated its commitment to a public consultation on the draft documents prior to the Congress.

On February 14, Esteban Morales, a prestigious and outspoken Cuban intellectual whose party loyalty is beyond reproach, circulated an acerbic commentary on the Congress process. In 2010, Morales’ PCC membership was suspended—one step short of expulsion—for warning that high-level corruption (and not US-sponsored ‘dissident’ grouplets) was “the real counterrevolution” in Cuba. He was eventually reinstated after receiving numerous public gestures of solidarity.

Morales complained that “for months” he’d been asking for the Congress documents, to no avail. This would be a congress of party functionaries rather than the grassroots “which I consider to be the real party”, he added. He suggested the PCC was regressing in terms of party democracy, and described the mood among the party base as justifiably “indignant”. That perception was anchored in his “broad and continuous contact with Cuban society” as an intellectual and an ordinary citizen.

In a similar vein, on March 27, PCC activist Francisco ‘Paquito’ Rodriguez published an Open Letter to Raul Castro on his personal blog. Rodriguez is an academic, a journalist for the Cuban trade union confederation’s Trabajadores newspaper and a prominent gay rights activist. As a gay rights activist he is said to be close to Mariela Castro, Raul Castro’s daughter.

Rodriguez objected to “the lack of discussion of the key Congress documents—which are still shrouded in secrecy—in both the grassroots Party committees and among the rest of the citizenry”.

He proposed that the Congress be postponed till late July to allow for a PCC base and public consultation during April and May. He noted that Raul Castro himself had often insisted that the reform process underway in Cuba must proceed ‘without haste’, and “I see no reason to rush so decisive a political process … if its preparation has not yet reached maturity”.

Granma responds

Also on March 27, the PCC daily, Granma, acknowledged the controversy in an editorial: “The Granma editorial board has received, through various means, concerns of Party activists (and non-members) who question the reasons why, on this occasion, no public discussion process has been planned, such as that carried out five years ago on the Economic and Social Policy Guidelines.”

Granma made no mention of the Central Committee’s earlier commitment to a public consultation. Its core justification for not holding such a consultation was that only 21% of the 2011 Congress Guidelines had been fully implemented, so the 7th Congress would be effectively a continuation of the 6th. The implication is that this is for the Central Committee, not the party as a whole, to decide.

The Granma editorial, which expressed the opinion of the Central Committee, did not discuss the possibility that that same statistic (21%) might call into question the viability of the course set at the 6th Congress, or the party leadership’s approach to its implementation. It suggested the leadership can assume an indefinite popular mandate until it decides a new course is desirable:

[R]ather than launch a new society-wide debate process in the throes of implementation, we need to finish what we have begun, continuing to carry out the popular will expressed five years ago and advancing along the course set by the Sixth Congress.

The 1000 Congress delegates elected by the Party base, the 612 National Assembly deputies and some 3500 other selected consultants had contributed to the elaboration of the two key documents, Granma stressed. Put another way, less than 0.05% of Cuban citizens had access to them prior to the Congress. No timeframe has been announced for their wider availability.

As usual, readers submitted comments to the online version of the Granma editorial. Most touched on the controversy. A reader identifying themselves as ‘Leandro’ argued that a dangerous precedent is being set: a new generation of PCC leaders that lack the legitimacy of the historical leadership “would feel they have the right to hold Congresses without popular participation”.

Cuban philosopher Jose Ramon Fabelo opined that the Conceptualisation of the Cuban socialist model aspired to “is not a task for experts and social scientists alone”. The most important congress “is that which takes place in the streets and workplaces of revolutionary Cuba. Let’s not pass up the opportunity to give another lesson in democracy—genuine democracy, Cuban style—to Obama and all those who want to throw their discredited models in our faces”.

Ernesto Estevez stressed the question of representation. How, he asked, can Congress delegates be said to represent the PCC membership when the vast majority of party members are unaware of the content of the draft documents? Delegates’ opinions and votes should “reflect the consensus of those that elected them from the grassroots”. For that, the membership must have the documents.

Estevez urged his party to “learn from the errors of the former Soviet Union”. All party members “should zealously uphold the democratic side of centralism, so that democracy operates in the right way and doesn’t end up being held hostage to centralism, albeit with the best of intentions”. The lack of consultation is a regression, and “there should be no attempt to compensate after the fact”.

Congress shift

Clearly in response to the rumblings of discontent from the party base, Raul proposed in his Congress report that the documents be adopted by the Congress only “in principle” rather than definitively. They would then be the basis for a “profound and democratic process of analysis by the membership of the Party and the Communist Youth, as well as by broad sectors of our society.”

This wider consultation would be aimed at “improving and enriching” the documents. Raul further proposed that the incoming Central Committee be empowered to approve the final versions, which would be subsequently submitted to the National Assembly. Both proposals were adopted.

Like the Granma editorial, Raul’s report did not acknowledge the leadership’s earlier commitment to a broad consultative process. It merely stated that there was no such process “given that what is involved is the confirmation and continuity of the line adopted five years ago”. Incongruously, it also said that given the theoretical intricacy of the draft Conceptualisation of the socialist model “and its importance for the future”, it should not be adopted by the Congress.

What’s missing from Raul’s report is a logically consistent and persuasive explanation for the leadership’s abandonment of the foreshadowed pre-Congress PCC base and public consultation process. That explanation can be inferred from Raul’s account of the drafting process.

Raul reported that the Conceptualisation document had been drafted no less than eight times. Work on the 2016-2030 Plan began four years ago. It was initially hoped a complete draft would be ready for the Congress, but due to its “great technical complexity” only its bases have been elaborated. A complete, final version is not expected till 2017.

In December and January, the Central Committee redrafted the Congress documents on the basis of some 900 opinions and suggestions submitted by Central Committee members, Raul reported. If, as the Granma editorial claims, “the basis of these [two] documents is the content of the Guidelines”, why has it taken the Central Committee five years to draft them?

Divergent visions

In reality, the Guidelines and their implementation open the door to not one, but several distinctly different socialist models and corresponding medium-term plans. They leave unresolved the vital question posed in 2011 by Havana University planning specialist Oscar Fernandez:

From the traditional state socialism that characterises Cuba today, is it moving towards a more decentralised state socialism? An Asian-style market socialism? A self-managed socialism of the Yugoslav variety? To the so-called participatory socialism of the 21st century? There is an urgent need for a debate aimed at a consensus on the key features of the vision of the future society.

Cuba’s Marxist intelligentsia perceives competing poles of socialist thought in Cuba today. Each polarity corresponds to divergent conceptions of the socialist transitional society in general and in Cuba’s conditions. Each is seen as influencing the evolution of Cuba’s emerging socialist model, and each polarity is reflected to some degree in the content of the Guidelines.

Veteran Cuban sociologist Juan Valdes and Cuban cooperatives proponent Camila Piñero both perceive essentially three such polarities: state socialism, market socialism and ‘socialisation’.

The first pole tends to view the socialist transition through the prism of state power; the second, through the lens of economic development, i.e. GDP growth; the third views progress towards socialism in terms of the socialisation (i.e. democratisation) of party-state power and property.

The Central Committee’s glacial progress in drafting the two key documents suggests that it has tried to reconcile, behind closed doors, divergent conceptions of the new Cuban socialist model that is aspired to. They had to be reconciled if the leadership were to present a more or less coherent programmatic vision to the party as a whole—rather than strive to involve the party as a whole in developing that vision from the outset over the five years since the 6th Congress.

Leaving the realm of speculation, opting for secrecy over transparency relegated the vast majority of the PCC’s 680,000 members to the role of spectators rather than participants in the 7th Party Congress. Having won the right to be consulted on the socialist model that is aspired to, the party base has—consciously or instinctively—shifted the balance of forces a little towards the socialisation pole.

***
This commentary was written for Australia’s Green Left Weekly. It draws together the threads of my previous blog posts on the Cuban Communist Party’s 7th Congress and also appeared on Cuba’s Socialist Renewal.

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With oil prices nearing historic lows, a new round of introspection about the pitfalls of oil-based development has kicked off in the media and development policy circles. The arguments, as to be expected, rehash some version of the ‘resource curse’ thesis, which holds that resource richness, in particular in oil, represents not a blessing but a curse, with a host of negative effects, from corruption engendered by unproductive rent revenues, to the Dutch Disease. Venezuela features prominently in this discourse, given its reliance on oil revenues to power the ‘Bolivarian Revolution’ under Hugo Chávez and Nicolás Maduro over the past 17 years. With the country facing shortages of basic goods, widespread corruption and political polarisation, resource curse advocates seem to have no shortage of evidence to illustrate their thesis.

However, as I argue in a recent book chapter entitled “A Different Kind of Magic? Oil, Development and the Bolivarian Revolution in Venezuela”, the situation is much more complex. The resource curse thesis offers a one-sided account of the failures of oil-based development, which essentially boils down to the absence of capitalist modernity in oil-producing nations. Yet these failures cannot be understood as resulting from endogenous factors alone. Any analysis must also examine the larger question of the dependent insertion of oil-producing nations into the global economy, and the role played by foreign oil capital in perpetuating this dependence. Likewise, any attempt to use oil to achieve sustainable development must address this dependence if it hopes to succeed.

In this context, Venezuela’s past and present offer a perfect case study of oil-based development and its pitfalls. Its post-war development model was closely aligned with the West, seeking to ‘sow the oil’ by capturing a ‘fair’ share of revenues from foreign oil companies, to invest them in creating a modern, capitalist, industrial economy. This model represented oil as a means to Western modernity, without the need for revolutionary change in a country riven with racial and class cleavages. As the late Fernando Coronil argued, this was ‘magical’ thinking, with Venezuelan leaders acting like ‘magicians,’ claiming that oil wealth enabled them to pull a modern Venezuela out of the proverbial hat, without radical change and social upheaval.

However, despite periodic achievements, by the 1980s this model was failing, precisely because it failed to confront Venezuela’s dependent insertion into the global economy, and its social structure build on centuries of exclusion and exploitation. Internally, the oil economy skewed class relations, promoting the middle and skilled working classes, while marginalising the vast masses confined to the informal sector. On the other side, easy money doled out to local capital fuelled corruption, and meant that national industry never became competitive.  Externally, Venezuela remained reliant on foreign corporations, which defined the terms of production to suit their own needs, refusing to increase refining capacity or diversify export markets. Even nationalisation in 1976 failed to change much, with the management of the new national company Petróleos de Venezuela, SA (PDVSA) retaining an international focus, and the oil price collapse of the 1980s crippling hopes of a revenue boost.

As a result, Venezuela entered a long and painful period of economic crisis and stagnation, with 81% of the population living below the poverty line by 1998. Far from delivering modernity, oil had produced a flawed development model which reproduced internal domination and intensified external dependence.

It was in this context that Hugo Chávez came to power in 1998, attacking the post-war model precisely for its failure to confront Venezuela’s internal class cleavages and external dependence. In its place, Chávez offered a different kind of a magical project, one which also celebrated the oil wealth of the nation, but which sought to use that wealth to explicitly challenge dependence.

Externally, Chávez sought to gain control over PDVSA and change its orientation from international to national goals. The first five years of his presidency revolved around the former objective, with the short-lived coup in 2002, the oil industry strike of 2002-2003 and the recall referendum in 2004 all having at their core the question of control over the company. Supported from below, Chávez won these struggles, and set out to transform PDVSA by increasing refining capacity, diversifying export markets, decreasing reliance on the American market, and using oil to promote regional integration through programs such as Petrocaribe. In sum, Chávez sought greater autonomy for Venezuela from the whims of the global economy.

In itself, this was hardly radical. Indeed the government of Carlos Andrés Pérez employed similar policies during the 1970s. However Pérez never sought a radical rupture with the old order. Chávez, on the other hand, sought to use the oil wealth to explicitly challenge Venezuela’s class cleavages by empowering those marginalised under the post-war model. This included, for example, the doubling of social spending from 11.3% of GDP in 1998 to 22.8% in 2011, paid for largely with increased oil revenues, and channelled through a parallel system of ‘missions’ established directly in the barrios where previously the state did not reach, and administered by the communities themselves via newly established Communal Councils. The aim of the government was not simply alleviating socio-economic disadvantage, but also empowering the masses, by using the oil wealth to facilitate self-determination. On a macro scale, the Bolivarian Revolution also sought to utilise the oil wealth to transform the economy, creating a ‘social economy’ enclave, where experiments with cooperatives, co-managed factories and Social Production Enterprises sought to satisfy collective needs rather than considerations of profit. This enclave was surrounded by a larger state-led economy dedicated to increasing Venezuela’s autonomy and diversifying from oil through measures such promoting agricultural production, implementing currency controls and tariffs, and seeking new sources of investment from the Global South.

For a while, this alternative model seemed to make real strides. Poverty more than halved between 1999 and 2012, and Venezuela moved up nine places on the UN Human Development ranking, as the country became the second least unequal country in Latin America. Moreover, the country experienced the largest increase in support for democracy in Latin America, with 87% of the population sporting democracy in the country in 2013. Importantly, this enthusiasm had a class dimension, with 85% of barrio residents believing that there was democracy in Venezuela, compared with only 55% of residents in middle and upper class neighbourhoods. Likewise, efforts to diversify the economy saw the size of the oil sector as a share of GDP decrease from 19.18% in 1999 to 11.55% in 2009, with services and finance making the biggest gains.

However, over the past couple of years, most of these gains have either stalled or reversed, and the country once again tethers on the brink. For the proponents of the resource curse thesis, this is proof that the Revolution was nothing more than oil populism, spawning corruption and failing to implement the ‘good governance’ measures necessary to make the most of oil wealth.

Yet, whilst corruption undeniably remains a problem, and governance standards often leave a lot to be desired, there are deeper issues at play here, which are ignored by the resource curse advocates. What the current crisis in Venezuela illustrates is the difficulty of transforming a social order shaped by centuries of marginalisation and exploitation, both internally and externally. Internally, the Bolivarian model has found itself under constant attack from domestic capital, which mobilises its economic, political and social power to effectively go on strike whenever its fundamental interests are threatened. This is especially true since Chávez’s death in 2013, with an investment strike coupled with the political opposition’s regime change strategy paralysing the country and the economy. Likewise, despite efforts at diversification, Venezuela continues to rely on oil for 96% of its export revenues. With international prices plunging, this puts the entire model under threat, especially as PDVSA struggles to find a balance between being a capitalist and a social enterprise, undermining production and refining capabilities. In the face of these problems, the government of Nicolás Maduro seems paralysed and short of ideas on how to confront the economic, political and social crisis now unfolding in Venezuela, especially with a  resurgent opposition using its recent capture of the Congress to try to remove him from power. Thus, while in the 2000s Venezuela represented a powerful example of the possibilities of different paths to oil-based development, it seems that in the end it did not manage to free itself from its internal and external dependencies sufficiently to construct a genuine alternative to the status quo. Despite its undeniable achievements, the Bolivarian Revolution may turn out to be yet another magical illusion.

The post Magical Development or Magical Illusions? Oil, Dependency and Venezuela appeared first on Progress in Political Economy (PPE).