On the Perils of Being a Reformist Leader

Former Venezuela Presidential Chief of Staff Beatrice Rangel looks at why change is so difficult in Latin America.

It is quiet disheartening to discuss Mexican politics with Mexicans.

People from all political persuasions, economic strata and educational level seem to agree to give very low performance grades to President Enrique Pena Nieto. When one attempts to determine the underlying arguments for this huge discontent the first charge against President Pena Nieto is corruption.

And while indeed corruption has run rampant in Mexico for many centuries, I would truly doubt that President Pena Nieto is the only leader who has engaged in this practice. When people are pressed to give further explanation for the discontent, pessimism about the future of Latin America sets in.

Teachers indicate that an educational reform demanding them to regularly validate their capability to deliver knowledge and give appropriate contours to student moral fabric is something to be rejected as exclusionary and sided towards the interest of dominant classes.

Owners of Television or telecom assets think that a reform geared towards opening the Mexican market to FDI and competition is profoundly wrong as only Mexicans should be allowed to thrive in this economically “strategic” activity.

Party leaders from left to right believe that foreigners have no business exploiting Mexican oil and gas and that ownership of energy assets should be reserved to the Mexican state for it to give away the spoils to those that buy their way in and are close to the ruling clique.

In short, President Pena Nieto is not highly regarded because he attempted to modernize Mexico and to liberate its institutional framework from corporativism and mercantilism.

As a result, rent seeking elites whether bureaucratic or from the business world experience a reduction on their extraction margins and have thus decided to crucify the offender. Consequently, they have organized to guarantee that the Pena Nieto reforms never leave the conceptual dimension and turn into a platitude with the passage of time.

In the process, they are going after Pena Nieto and his party but also against all those political movements that supported reform. And in the realm of the verbal battle the whole political edifice in Mexico is being delegitimized. This is opening a door to a contesting leader and that seems to be Andres Manuel Lopez Obrador.

Somehow this Mexican drama is a remake of yet another undertaken thirty years ago in Venezuela when Carlos Andres Perez was elected in 1988 for a five-year period and decided to execute a very ambitious reform program aiming at diversifying the economy, controlling corruption and enhancing competitiveness.

He recruited the best and the brightest for his cabinet, including Moises Naim and Ricardo Hausmann.

And while he and his cabinet were busy undoing the most unproductive bureaucratic edifice ever created by any country, Venezuelan elites were also quite busy conspiring to bring that government down. And they succeeded!!

The call to war was corruption. Perez was imprisoned and tried only to be found innocent of embezzlement several years down the road and after he had been impeached.

Meanwhile elites rallied around Colonel Hugo Chavez, who had attempted a coup d’état against Perez with their support. Needless to recount what the consequences have been for Venezuela and the region, as the Chavez-led revolution has given birth to the first unencumbered narco-state en South America.

Were it not because a whole generation of young Venezuelans are raffling their lives on the streets to protest this narco-government, one could laugh at the contention that Perez was brought down because of corruption.

Further, those same business leaders that led the charge against the Perez administration have in many instances partnered with the current government of Venezuela whose leaders are deemed by U.S. and International anti-money laundering squads as liable for taking bribes to the tune of US$35 billion.

Reflecting upon these geographically and temporally distant reform plans in Latin America, one draws the conclusion that reformist agendas are lethal to their creators — mainly because rent-seeking interests in the region will see to it that the culprits end up in oblivion so that no other political leader ever has a similar idea.

And as rent extraction continues to be the source of economic growth, individual freedom will never thrive. Because one of the conditions for a smooth rent extraction to take place is the establishment of effective corporativist ties among the diverse factions of the elite.

These links end up creating a an impenetrable cocoon that protects the leadership from the effects of globalization — which usually breaks corporativism, as it favors wealth creation and competition.

In the end, it seems as if the region is doomed to continue operating under the same political and economic model created by Phillip II of Spain back in the 16th century.

Published by LAHT.com on Sunday May 7th, 2017. 

*The opinions published herein are the sole responsibility of its author.*