Living On

Armen is heavily missed. His absence left a hole in independent observation of the political and economic risk situation in Latin America. Beyond the merely analytical though his work was wide-ranging from Armenian philanthropy and social observation of Latin and European lifestyles through to being a "fly on the wall" at the Cannes Film Festival every year and reporting back on the more exotic foibles of the international jet-set.

We miss his wit, his sense of history and his bon mots (in French, Armenian and, even, Turkish). Armen was very much a product of the Levant but then, like so many other Levantines, converted to an international stage where they offer insight into all around them. This record tries to humbly accumulate his collected writings for public consumption so they can be preserved and appreciated for the urgency of the moment in which they were written to the timelessness of the observations.

How best to categorise the uncategorisable? Maybe Armen could be described as an Armenian/Anglo/Franco Samuel Pepys for our times.....

It is ironic that ultimately it was the very mediocrity and self-satisfaction of the Chilean "system", which he documented so thoroughly, that brought about his tragic end.

Friday, January 12, 2007

POPULISM, POPULARITY & THE PEOPLE The Fear of Real Reforms in Latin America

The announcement of utility nationalisations by Venezuela's president Hugo
Chávez and his earlier cancellation of a broadcasting licence to a
well-established TV station, were accompanied by a row with the Chilean
Secretary-General of the OAS, José Miguel Insulza. The whole episode,
though it transcends Chilean borders, merits some observations. More than
ever, this report is going to be a counterpoint to fashionable views and
attitudes, and I can even draft myself in advance some of the comments
which I am bound to get. So let it be. I have come to the conclusion that
brains can be circumcised as well, and contrary to the other part of the
body, it does not improve their performance.

WHAT'S IN A WORD? The word "Populism" has acquired a pejorative
significance, from its original meaning of "doing things to please the
people", to which was added the sin that whatever you did "for the people"
had an ulterior motive. Playing with words is nothing new in politics and
sociology. The definitions are not even the same everywhere.

In England, being "an intellectual" is, contrary to France, an insult. When
Prince Charles got engaged to Diana, the conservative British press,
meaning it as a compliment, commented:" and above all, she is not an
intellectual". The English have another way to disparagingly describe
someone intelligent and efficient, "too clever by half". In the USA,
"Liberal" is almost an insult, on par with "Communist", whereas everywhere
else or nearly, it means having a broad mind and tolerant attitudes.
"Neo-liberal", of course, means something completely different, and should
indeed be an insult everywhere.

For centuries, the people of Latin America were successively subjugated by
their indigenous leaders, colonial governors, civilian and military
dictators, and pseudo-democratic governments dominated by the rich and
powerful. Nobody really took care of the majority of the people. Whenever
anyone tried to do something different, all hell broke loose before they
had a chance to show if they were genuine socially-minded reformers or
power-thirsty megalomeniacs. From Jacobo Arbenz of Guatemala (and I could
start earlier in the XXth century), to Salvador Allende in Chile, going
through Fidel Castro, and now Evo Morales, Hugo Chavez and a number of
lesser figures, they were all demonized and satanised. Shaking the tree of
the status quo was unacceptable. Maybe they went about it the wrong way,
but from the earlier pioneers, most were not given the chance of falling
flat on their face by themselves.

No other part of the world has been subjected to as many experiences of
"vivisection economics" as Latin America over the past six or seven
decades. They have been the economic equivalent of the Nazi medical
experiments in the concentration camps. From Left-wing military regimes to
unrestricted Chicago boys appended to dictatorships or pseudo-democracies,
and from collective farms to old fashioned oligarchies, everything has been
tried by the academic Mengeles. However, apart from Black Africa, no other
part of the world has been less successful in developing minds, bodies,
livelihood, production and infrastructure as the countries of Latin
America. One of the region's weaknesses is its lack of a real identity.
Confucianism, Buddhism, Islam, and the Protestant work ethic have fashioned
and consolidated other areas of the world.

Latin America is a badly-made potato salad of a miscellenea of different
indigenous beliefs and traditions, on which was implanted a Hispano-Arab
fusion to which were added, in different proportions, sauces from other
European cultures, from Basque to Italian, and from Germanic to Yugoslav.
After a brief flirtation with the British, who restricted their input to
civilian and military infrastructure, US influence started from the end of
the XIXth century, after which Soviet and other varieties of Marxism also
landed, and polarised regional politics.

The result is a total lack of indigenous diagnosis and solutions, because
it has no original spine on which to be hung. Whichever foreign wind (or
fart) is fashionable at any given moment is the order of the day. They need
Norwegian, Irish, New Zealand or Danish solutions, because they think
Western civilisation is the salvation to all ills, and cannot be bothered
to work out a national diagnosis and a national solution.

HUGO CHAVEZ Chileans (many of whom consider Insulza as the best president
they never had-yet), were incensed at his being called the "Viceroy of the
Empire", and a "pendejo", and the calls for his resignation after he
criticised a domestic decision by Chavez. For those unfamiliar with the
vernacular, "pendejo" strictly speaking means pubic hair, and is used as an
insult similar to "jerk" in the Central America and Caribbean countries.

When it comes to insulting foreigners, Chileans are hardly in a position to
throw the first stone. During the military government, admiral Merino
called Bolivians "animals", whereas when he was still commander in chief of
the army, Gal Pinochet made some very disparaging remarks about the
Germans. There is not a lot of love lost between Chile and Venezuela,
after the dilly-dallying on the UN Security Council membership vote and the
cowardly abstention, and the support of the then Chilean ambassador for the
failed anti-Chavez coup, before it fizzled out after a few days.

I would like to start quoting from a report issued earlier this week by the
Wall St. firm of Hallgarten & Co, under the pen of its analyst Mark Turner:
" Chavez has been made out to be a crackpot, a fool and a dictator by the
western news services. We believe that this picture is biased largely by
political interests and does not take into account the reality". Quite. For
an English-language portrait of Hugo Chavez, I recommend Richard Gott's
book "In the Shadow of the Liberator" published by Verso.Though sympathetic
to his subject, Gott, an eminent British expert on Latin America, does not
lose his objectivity.

The man was elected for a third term with around 63 % of the votes, in
elections that no independent observer has doubted in terms of fairness.
That is what the majority of the people want in Venezuela, and another
recent poll showed up that most of the population also feel there is more
democracy now than before. It seems that the quest for democracy is
selective among the critics (viz. what happened to Hamas in Palestine). The
Chilean press, which was classified last year as Latin America's second
most restricted after Cuba's, is hardly in a position to criticise "freedom
of expression" in Venezuela. The Caracas press is full of insulting
articles about Chavez. How many insults to president Bachelet have you read
in the Chilean papers? There are only two ongoing independent and incisive
sources of news and comment in Chile (apart from these papers, of course).
They are both online. One is El Mostrador (, and the
other, which I also strongly recommend, is

Ask about the US academics who lost their tenure for criticising the Bush
administration, before you pontificate on freedom of expression. In Chile,
if you are asked to speak in public, and make even a mild criticism of
anything or anybody important, the least that happens to you is that you
are never invited again. At worst, you are taken to court. If you reveal
corruption or wrongdoing, you are fired or even arrested for "breach of
privacy". If you are a journalist, your editor or programme producer will
get calls from business leaders threatening to withhold advertising. Dejen
de ser tan pendejosŠ

So Chavez flirts with Cuba. He gives them free oil, against the supply of
thousands of teachers and medical staff who provide educational and health
services in parts of towns and the countryside, which a century of oil
revenue could not be bothered to reach. Chavez also set up cheap
state-owned supermarkets in poor neighbourhood shops where previously the
monopolistic stores of the local cacique fleeced the population that did
not have access to the large supermarkets. Such shops are still to be found
in most Chilean "poblaciones". A recent article in Foreign Policy by one
Francisco Rodriguez (formerly a congressional aparachik in Caracas, and now
a lowly lecturer at Wesleyan College), points out the continuingly bad
poverty and social statistics, concluding that Chavez had done nothing for
the poor, and explaining his reelection by "high economic growth".

Can anyone seriously believe that 63 % of the population would have voted
for a guy, just because of an economic statistic, if they did no feel a
positive effect in their daily lives? Do you think that the mass of the
population in Latin America reads the financial pages and identifies
Euromoney's Finance Minister of the Year on the cover? According to the
same Rodriguez, over a million adults are still illiterate in Venezuela, so
they can't even read those statistics. What matters is the "feel good"
attitude. Abraham Lincoln was already aware of it in his Gettysburg address
when he referred to "the pursuit of happiness" as a national goal. At the
end of the day, irrespective of the political label attached to rulers or
governments, the main, neigh, the ONLY criteria of success is that the
majority of the population is, and more importantly FEELS better off than
under the previous guys.

Do you prefer the Venezuela of Carlos Andrés Pérez, who not only stole
zillions which he stashed away with the help of his mistress in New York,
but also shot several hundred poor protesters soon after the beginning of
his second term?

So Chavez is going to nationalise utilities. Well, did he say sequestration
without compensation? I have never been to Venezuela, but after living
nearly 16 years in a country where all public services (including some
formerly public urban streets) are privatised, I must say I am less than
impressed by "market forces". Anyway, when he jacked up taxes on oil
companies last year, not a single one of them left the country. JC Penney &
Carrefour left Chile, as did or are doing several utilities, and Occidental
Petroleum left Peru, without anybody nationalising anything in these

So Chavez is going to change the country's name from "Bolivarian" to
"Socialist" Republic. That is going to cause more wincing by the
"bien-pensant", for whom such words are anathema in Latin America. Only in
Latin America, mind you. How come the same people do not wince when
referring to the "People' s Republic" of China. Is it because Chavez's
Venezuela cannot supply them with U$ 60 DVD players or U$ 1 string
underwear for their daughters?

Where is the downside? With his undoubted popularity, Chavez may think that
he can get away with anything, and overstep the mark somewhere. So far, he
has been quite pragmatic, and in fact the business sector has done pretty
well under him. The Caracas stock exchange was a top performer in 2006.

Probably his weakest point is the financial situation. Paradoxically, many
people consider that as his principal strength. They are wrong. Despite the
huge increase in oil revenue, expenditure has risen much faster than
revenue. Public debt has quadrupled during his tenure, and he increasingly
has to resort to budgetary acrobatics such as raiding the Central Bank to
pay his way. Nationalisation also requires resources, both in acquiring the
assets, and then to provide the investment needs. The recent sharp drop in
the price of oil to a 20-month low obviously does not help. Any financial
squeeze may take some time to be felt by the public, and faced with such a
situation, various assistance programmes to third countries may be the
first to be curtailed rather than domestic social expenditure. More
perceptible by the public are the continuing bad situation of criminality
and corruption, for which Venezuela has been notorious much before Chavez
even joined the army.

RAFAEL CORREA & OTHERS With Ecuador's new president Rafael Correa taking
over on January 15, his rapprochement with Chavez, calls for suspending
debt service and going for a constitutional assembly, have already earned
him the ire of the mercenary commentators. Unfortunately, his oil resources
are too modest to allow profligacy of any sort. Far from being a Communist,
he is in fact a Catholic with a social conscience (something Chilean
Christian Democracy once was). His Belgian wife, Anne Malherbe, comes from
a very conservative family, and her brother Michel is a senior official at
the Foreign Ministry in Brussels. Correa himself has a Masters in Economy
from Belgium's Louvain university, and did voluntary work for the Salesian
order in his youth.

Other regional leaders have handled their situation in different ways. Lula
has reneged his metal worker militancy and background, forgetting almost
everything he stood for during several campaigns. He still managed to get
re-elected. Probably the cleverest has been Argentina's Nestor Kirchner. He
reneged on most of the debt, and obtained special powers that allow him to
do a lot without even consulting congress. He has not held a single press
conference or even cabinet meetings since he came to power. His popularity
is as high as ever at home, his economic statistics largely stupendous, and
hardly anyone even attempts to demonise him. He or his wife are almost
certain to be re-elected in October.

Mexico's PRI was once able to be all things to all men with hardly any
repression, but lost its way when some of its technocrats forgot about the
pendulum principle, ran away with the ball in a single direction and ended
up losing the game.

Nicaragua's re-elected Daniel Ortega is not really up to scratch, being the
second choice to originally lead the Sandinista movement. His rambling
inauguration speech on January 10 tried to be all things to all men, from
embracing the Church into which he miraculously became reconverted during
the campaign, to the closing singing of El Pueblo Unido and the Palestinian
flag flying behind him all the time. The recently defrocked bishop in
Paraguay is a man to watch for the 2008 polls (another "populist").
Uruguay's once militant president has hardly made waves once he assumed

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