Yes, there are reasons to believe that if they –the gradualists- win the first phase against the oligarchic domestic capital, it will only whet their appetite for more. It would seem that we have also been bitten by leftist bug. “Putting People First’’ might have been quite convenient then as a catch-phrase for the time of a political campaign- a mere populist slogan- but some of its proponents also tried to anchor in a more revolutionary ideology with a tinge of alternative models of democracy and economic development. Is it too far-fetched to assume that ? Under the circumstances, the timing could not be more auspicious for an analysis of the position of both camps in the context of the reform.
Today that the
rents generated by trade preferences are disappearing fast, the socio-economic
model that has served us in the past is no longer suitable to move us from
dependence on trade preferences to open competition in the global economy. The phasing
out of the Multi-Fibre Agreement, and the erosion of our trade preferences,
underpinned by macroeconomic and international financial volatility, demand the
necessary reforms that can turn these short-term challenges into long-term
successes. Both camps are convinced of the need for reform but there are
important differences among them. The neo-liberals are reformists opting to
pursue reform through market -led growth –an adherence to the Washington
Consensus that prescribes a mix of
painful fiscal austerity , tax reform,
trade and market liberalisation,
and privatization
of state enterprises. The left-leaning
group, on the other hand, believes that the Washington
Consensus will have to be reformed for, they believe, it has only intensified
income inequalities and produced increasing levels of poverty . The emphasis on price stabilization, fiscal austerity, and
market-friendly policies ultimately favor international financial markets and
the local elites who benefit from a more
open financial environment. In their more extreme version, a tiny
white elite is depriving the majority of its fair share of the fruits of the
reform and whose poverty has been
exacerbated by the free-market reforms imposed by the IMF and the World Bank.
Why this global
revolt against neoliberalism ?
“They
are disillusioned with the market economy. But rather than socialism, they want
a fairer distribution of income and a state that gives greater social
protection.” concludes the latest
Latinobarómetro poll taken in 18 countries across the Latin American region and
published exclusively by The Economist. The global economic pie has
been expanding but the rich are eating most of the new slices.
Thomas
Piketty in his latest publication points out that “people are still transiting
out of poverty . In spite of the massive reduction of inequality between countries
there has been a significant rise of within-country inequality:” This wealth
gap is partly attributable to the forces of globalization and technological
change but it has also been reinforced by the neoliberal market friendly
policies. The less than progressive tax regimes, privatization policies and a
lack of basic protection area tiling the balance in favor of the powerful.
These very market forces are behind the growing unease in the high performing
Asian economies. “Millions who once had upward mobility are stuck in neutral,
struggling not just to do as well as their parents but to make a decent living
at all” as it is pointed out in a special report of Time magazine on the top
performing Asian economies. In Brazil, however, the well targeted cash handouts
going directly to the poorest households and a series of other measures at
proving greater opportunities for the poor together with greater commitment to
macroeconomic stability and low inflation has brought down both poverty and inequalities.
The Latinobarómetro
poll does not show a demand for a fundamental change in the economic system but
rather a desire for a more protective state.
The "positive left" or antis believe in using the centrifugal
forces of globalization to achieve growth with equity. They support macroeconomic austerity as the
necessary prerequisite for sustainable growth, while emphasizing the
redistribution of the fruits of prosperity to the less privileged. They believe
in building market mechanism that democratize the economy, that create
stakeholders in national economies-make loans to the little guy or give workers
an equity stake in the businesses or open up universities to the
underprivileged. Markets favor the strong. Growth does not necessarily
translate into greater equity,
Our reform
agenda
The leftist
wing has not been of much help in boosting the willingness to face tough
economic decisions. They are aware that
shedding or rolling back the whole reform agenda will not be expedient. But
they have continued gnawing at it depriving it of much of its gist. They have
succeeded in watering it down, sidelining its main proponents, and many of the
recent decisions are not based on economic first principles- the neo-liberal
reform is gradually giving way to a more risk-averse strategies driven by
popular sentiment.
However much the reformist wing continues claiming that the time of
reform is now and we are not moving fast enough, there will be now few
followers tagging along proudly displaying the pro-reform banner. The lack of a proper communication strategy by
the neo-liberal side to project their vision of inclusion and opportunity and
why change would be good for them has left the fields open to the opportunists;
the potential beneficiaries were not told what they were in for, that the
reforms will be tough; there has never been straight talk on the hard to
swallow reform which would have earned them a little trust along the way. It will important now to gauge how skin-deep the
country’s first dose of reforms has been before we move to the more serious
business of reforming the welfare state, a competitive education system and a
health care system that is capable of meeting the challenges of maintaining the
provision of free health care, from primary health care to hospital care,
including the delivery of high tech medicine, to an ageing population. The
final denouement of this tussle between the two wings will be crucial for the
future direction of the reform. Will we continue to see a retreat from what
they perceive as too risky positions and a readiness to trade reformism for
populism as political pressures mount within government to backtrack on the
reform agenda ?
