PREFACE ix
More to the point, after 2002, Latin Americans
elected a wave of progressive nationalist governments in
Venezuela, Brazil, Uruguay, Argentina, Bolivia, Ecuador,
Chile, and Nicaragua. Known as the “Pink Tide,” these
democratically elected governments, despite their many
differences, shared a collective commitment to oppose
neoliberalism and expand the state’s control of market
forces. The resulting combination of state regulation,
outright nationalization, growing regional integration,
relatively high international export prices, and signifi -
cant expansion of state antipoverty programs started
slowly to reverse the social losses experienced during
the neoliberal decade of the 1990s. Our text documents
these conclusions in historical detail, but here we pres-
ent a few telling facts that underline the general collapse
of the neoliberal, modernizationist model and simultane-
ously reinforce the relevance of our revised dependency
perspective.
First, since the early 1980s, when neoliberal ortho-
doxy emerged as the dominant paradigm for promoting
development in Latin America, this region, in effect, has
subsidized wealthy industrial nations. During this pe-
riod, Latin American nations claimed smaller shares of
the world’s income as the U.S. share grew. According to
theAtlas of Global Inequality compiled at the University
of California at Santa Cruz, the national income of the
United States as a percentage of the global mean aver-
age national income doubled between 1980 and 1999,
while it declined for every single Latin American coun-
try, with two types of exceptions: those countries like
Haiti and Honduras, whose national incomes in 1980
already ranked at the lowest level, and those like Pan-
ama, Colombia, and the Dominican Republic, whose
rank remained unchanged. Second, poverty and in-
equality within each of the countries in the region either
remained stubbornly high or grew between 1980 and
- Before the systematic introduction of neoliberal
policies throughout the region, the number of people liv-
ing in poverty had declined steadily from 118 million in
1970 to 82 million in 1982. Thereafter, it rose rapidly,
affecting 148 million in 1987, 159 million in 1998, and
222 million in 2005. Even the World Bank, a relent-
less and enthusiastic champion of neoliberalism, had to
acknowledge that its prescription for national develop-
ment had not solved the problem of poverty. Extreme
poverty, according to the Economic Commission on
Latin America, grew even more steadily, almost tripling
from 36 million people in 1980 to 92.6 million in 2000.
Five years later, however, in response to various state
initiatives, extreme poverty rates fell from 18.1 percent
of the total population to 15.4 percent. The number of
people living in extreme poverty also fell to 84.8 million.
Even more signifi cant than this decade-long growth in
poverty was the stark inequality that the World Bank
reported in its World Development Indicators for 2004. On
average, the poorest 20 percent of the region’s popula-
tion received only 3 percent of their country’s income,
while the richest 10 percent claimed 48 percent. This
made Latin America the most unequal region in the en-
tire world.
Third, by 2004 the region was more dependent on
foreigners than ever before in its history. External debt in
1980 almost doubled from $257.3 billion to $475.4 bil-
lion in 1990, and then it grew to $765.6 billion in 2004.
During the same period, debt service as a percentage of
revenues from exports increased dramatically from
34.4 to 41.8 percent, which meant that out of every $
earned in export sales, Latin America sent 42¢ to foreign
bankers. After the rise of the progressive nationalists as-
sociated with the “Pink Tide” and their collective com-
mitment to reduce foreign debt, it fell sharply to $635.
billion in 2006. This was partly a result of Argentina’s
decision to renegotiate its accumulated debt, which
declined from $171 billion in 2004, when progressive
nationalist president Néstor Kirchner assumed offi ce, to
$109 billion two years later. Brazil also liquidated a sig-
nifi cant share of its debt in the three years after the 2002
election of Lula da Silva, who promised to reverse the
long nightmare of neoliberalism. Except for Venezuela,
Cuba, and Chile, all other nations in the “Pink Tide” also
reduced their foreign debt obligations in the last couple
of years.
Foreign export trade dependency also grew in the
last two decades of the twentieth century. From 1980 to
1990, Latin American exports grew at 4.3 percent per
year, but they rose to 15 percent per year in the decade
ending in 2000. Moreover, the export-oriented nature of
neoliberal development strategies reinforced the region’s
traditional reliance on a few largely agricultural and
mineral raw materials. With the exception of Mexico, all
Latin American nations depended on one or two prod-
ucts for 40 percent of their export revenues. Reliance on
foreign imports also increased faster than export growth,
rising from an average annual rate of 2.1 percent in the
1980s to 17.3 percent in the 1990s. The resulting trade
imbalances, combined with other hidden costs of trade,
produced dramatically larger defi cits in Latin America’s
current account balance, which skyrocketed from $1.
billion in 1990 to $53.9 billion in 2001. Thereafter, ex-
ports skyrocketed, but import costs declined relatively,
transforming chronic payments defi cits accumulated
during the neoliberal 1990s into rising current account
surpluses that peaked in 2006 at $47.3 billion.
Fourth, unemployment, underemployment, and
precarious, low-income “informal sector” employment
all increased steadily throughout the region before