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=== Latin America === The Washington Consensus resulted with the ''[[La Década Perdida]]'' or "The Lost Decade" in Latin America, when many nations in the region faced [[Sovereign debt crisis|sovereign debt crises]].<ref name=":Lampa">{{Cite journal |last=Lampa |first=Roberto |date=2014 |title=Venezuela and the Economic of Upheaval: A Preliminary Balance (1998-2013) |journal=Il Politico |publisher=[[University of Pavia]] |volume=79 |issue=2 |pages=129–132}}</ref> It has been argued that the Washington Consensus resulted in socioeconomic exclusion and weakened [[trade unions]] in Latin America, resulting with unrest in the region.<ref>{{cite book|last=Mason|first=Mike |url=https://archive.org/details/developmentdisor0000maso_m7r9/page/428|title=Development and Disorder: A History of the Third World since 1945|publisher=University Press of New England|year=1997|isbn=0-87451-829-6|location=Hanover |page=[https://archive.org/details/developmentdisor0000maso_m7r9/page/428 428]|url-access=registration}}</ref><ref name=":203">{{Cite journal|last=Rovira Kaltwasser|first=Cristobal|date=2010|title=Moving Beyond the Washington Consensus: The Resurgence of the Left in Latin America|journal=Internationale Politik und Gesellschaft|publisher=[[Friedrich Ebert Foundation]]|volume=3|pages=52–62}}</ref> Countries who followed the consensus initially alleviated high inflation and excessive regulation, though [[economic growth]] and poverty relief was insignificant.<ref name=":0">{{Cite web |date=23 February 2007 |title=Chávez builds his sphere of influence |url=https://www.nbcnews.com/id/wbna17294595 |archive-url=https://web.archive.org/web/20211208103035/https://www.nbcnews.com/id/wbna17294595 |url-status=dead |archive-date=December 8, 2021 |access-date=2021-04-09 |website=[[NBC News]] |quote=Backing such economic principles as privatization and trade liberalization, the consensus rooted out bloated bureaucracies and helped tame hyper-inflation. Yet even those countries that have run their economies along Washington consensus lines have generally seen disappointing rates of economic growth and deepening poverty. The electoral success of such leftist leaders as Chávez, Ortega, Bolivia's Evo Morales and Ecuador's Rafael Correa is in part the result of the failure of previous policies to generate growth and raise incomes, economists say.}}</ref> The consensus resulted with a shrinking middle class in Latin America that prompted dissatisfaction of neoliberalism, a [[Pink tide|turn to the political left]] and [[populist]] leaders by the late-1990s, with economists saying that the consensus established support for [[Hugo Chávez]] in [[Venezuela]], [[Evo Morales]] in [[Bolivia]] and [[Rafael Correa]] in [[Ecuador]].<ref name=":6" /><ref name=":203" /><ref name=":0" /> ==== Argentina ==== {{See also|Argentine debt restructuring}} [[File:Menem con banda presidencial.jpg|thumb|Argentine President [[Carlos Menem]]]] The [[1998–2002 Argentine great depression|Argentine economic crisis of 1999–2002]] is held out as an example of the economic consequences said by some to have been wrought by application of the Washington Consensus. In October 1998, the IMF invited Argentine President [[Carlos Menem]], to talk about the successful Argentine experience, at the Annual Meeting of the Board of Governors.<ref name="menem">{{cite web|author=Menem, Carlos|date=October 1998|title=Intervención del Excmo. Sr. Carlos Saul Menem, Presidente de la Rerpublica Argentina, ante las Juntas de Gobernadores del Fondo Monetario Internacional y del Grupo del Banco Mundial en las deliberaciones anuales conjuntas|url=https://www.imf.org/external/am/1998/speeches/PR05S.pdf|access-date=2009-06-07|publisher=IMF|archive-date=May 6, 2011|archive-url=https://web.archive.org/web/20110506073026/https://www.imf.org/external/am/1998/speeches/PR05S.pdf|url-status=live}}</ref> President Menem's Minister of Economy (1991–1996), [[Domingo Cavallo]], the architect of the Menem administration's economic policies, specifically including "convertibility", said: {{blockquote|On the second semester of 1998 Argentina was considered in Washington the most successful economy among the ones that had restructured its debt within the Brady's Plan framework. None of the Washington Consensus' sponsors were interested in pointing out that the Argentine economic reforms had differences with its 10 recommendations. On the contrary, Argentina was considered the best pupil of the IMF, the World Bank and the USA government.<ref name=cavallo>{{cite web | author = Cavallo, Domingo | title = Clase N° 6. Argentina hasta la crisis brasileña | publisher = Harvard University | year = 2004 | url = http://www.cavallo.com.ar/wp-content/uploads/C6.pdf | access-date = 2009-06-07 | quote = Hacia el segundo semestre de 1998 Argentina era considerada en Washington la economía más exitosa de todas las que habían reestructurado su deuda en el marco del Plan Brady. Ninguno de los patrocinadores del "Consenso de Washington" se preocupaba por destacar que las reformas económicas de Argentina diferían de sus 10 recomendaciones. Por el contrario, Argentina era considerada como el "mejor alumno" del FMI, el Banco Mundial y el Gobierno de los EEUU. | archive-date = August 16, 2009 | archive-url = https://web.archive.org/web/20090816053909/http://www.cavallo.com.ar/wp-content/uploads/C6.pdf | url-status = live }}</ref>}} The problems which arise with reliance on a fixed exchange rate mechanism (above) are discussed in the World Bank report ''Economic Growth in the 1990s: Learning from a Decade of Reform'', which questions whether expectations can be "positively affected by tying a government's hands". In the early 1990s there was a point of view that countries should move to either fixed or completely flexible exchange rates to reassure market participants of the complete removal of government discretion in foreign exchange matters. After the Argentina collapse, some observers believe that removing government discretion by creating mechanisms that impose large penalties may, on the contrary, actually itself undermine expectations. Velasco and Neut (2003)<ref name="VELASCONEUT">{{Cite journal|last1=Velasco|first1=Andres|last2=Neut|first2=Alejandro|year=2003|title=Tough Policies, Incredible Policies?|doi=10.3386/w9932|doi-access=free|s2cid=6764956}} NBER Working Paper No. 9932. National Bureau of Economic Research, Cambridge, Massachusetts</ref> "argue that if the world is uncertain and there are situations in which the lack of discretion will cause large losses, a [[precommitment]] device can actually make things worse".<ref name="WBreport">{{Cite web|url=http://www1.worldbank.org/prem/lessons1990s/|title=Server Error|website=www1.worldbank.org|access-date=December 1, 2008|archive-date=May 15, 2008|archive-url=https://web.archive.org/web/20080515222713/http://www1.worldbank.org/prem/lessons1990s/|url-status=live}}</ref> In chapter 7 of its report (''Financial Liberalization: What Went Right, What Went Wrong?'') the World Bank analyses what went wrong in Argentina, summarizes the lessons from the experience, and draws suggestions for its future policy.<ref name="WBreport"/> The IMF's Independent Evaluation Office has issued a review of the lessons of Argentina for the institution, summarized in the following quotation: {{blockquote|The Argentine crisis yields a number of lessons for the IMF, some of which have already been learned and incorporated into revised policies and procedures. This evaluation suggests ten lessons, in the areas of surveillance and program design, crisis management, and the decision-making process.<ref name=FMIIEO>{{Cite web|url=https://www.imf.org/External/NP/ieo/2004/arg/eng/index.htm|title=Independent Evaluation Office (IEO) of the IMF -- Report on the Evaluation of the Role of the IMF in Argentina, 1991-2001|website=www.imf.org|access-date=June 5, 2022|archive-date=March 28, 2022|archive-url=https://web.archive.org/web/20220328120816/https://www.imf.org/External/NP/ieo/2004/arg/eng/index.htm|url-status=live}}</ref>}} While President [[Néstor Kirchner]]'s reliance on price controls and similar administrative measures (often aimed primarily at ''foreign-invested'' firms such as utilities) clearly ran counter to the spirit of the Consensus, his administration in fact ran an extremely tight fiscal ship and maintained a highly competitive floating exchange rate; Argentina's immediate bounce-back from crisis, further aided by abrogating its debts and a fortuitous boom in prices of primary commodities, leaves open issues of longer-term sustainability.<ref>{{Cite web |url=http://www.petersoninstitute.org/publications/papers/mussa0406.pdf |title=Global Economic Prospects 2006/2007<!-- Bot generated title --> |access-date=March 13, 2007 |archive-date=March 3, 2016 |archive-url=https://web.archive.org/web/20160303192214/http://www.petersoninstitute.org/publications/papers/mussa0406.pdf |url-status=live }}</ref> ''The Economist'' has argued that the Néstor Kirchner administration will end up as one more in Argentina's long history of populist governments.<ref>See, e.g., The Economist. April 12, 2006. Latin America—The return of populism.</ref> In October 2008, Kirchner's wife and successor as president, [[Cristina Kirchner]], announced her government's intention to nationalize pension funds from the privatized system implemented by Menem-Cavallo.<ref>{{Cite web|url=https://www.wsj.com/articles/SB122516435782975265|title=Argentina's Pension Plan Presses On, Driving Down Markets and the Peso|first=Michael J. Casey and Matt|last=Moffett|date=October 28, 2008|work=The Wall Street Journal|access-date=August 8, 2017|archive-date=November 13, 2017|archive-url=https://web.archive.org/web/20171113113024/https://www.wsj.com/articles/SB122516435782975265|url-status=live}}</ref> Accusations have emerged of the manipulation of official statistics under the Kirchners (most notoriously, for inflation) to create an inaccurately positive picture of economic performance.<ref>{{cite news|last=Forero|first=Juan|date=August 16, 2009|title=Doctored Data Cast Doubt on Argentina|newspaper=The Washington Post|url=https://www.washingtonpost.com/wp-dyn/content/article/2009/08/15/AR2009081502758.html|access-date=May 27, 2010|archive-date=November 8, 2012|archive-url=https://web.archive.org/web/20121108161909/http://www.washingtonpost.com/wp-dyn/content/article/2009/08/15/AR2009081502758.html|url-status=live}}</ref> ''The Economist'' removed Argentina's inflation measure from its official indicators, saying that they were no longer reliable.<ref>{{cite news|date=February 25, 2012|title=Official statistics: Don't lie to me, Argentina|newspaper=The Economist|url=https://www.economist.com/node/21548242|access-date=January 21, 2013|archive-date=January 20, 2013|archive-url=https://web.archive.org/web/20130120120727/http://www.economist.com/node/21548242|url-status=live}}</ref> In 2003, Argentina's and Brazil's presidents, Néstor Kirchner and [[Luiz Inácio Lula da Silva]] signed the "Buenos Aires Consensus", a manifesto opposing the Washington Consensus' policies.<ref>Massaldi, Julian, [http://www.zcommunications.org/buenos-aires-consensus-by-julian-massaldi "Buenos Aires Consensus: Lula and Kirchner's agreement 'Against Neoliberalism'"] {{webarchive|url=https://web.archive.org/web/20120927070907/http://www.zcommunications.org/buenos-aires-consensus-by-julian-massaldi|date=September 27, 2012}}, Znet, November 20, 2003</ref> Skeptical political observers note, however, that Lula's rhetoric on such public occasions should be distinguished from the policies actually implemented by his administration.<ref>See, e.g., Financial Times at following link: [http://www.ft.com/cms/s/d62ca1a2-c219-11db-ae23-000b5df10621.html Left turn ahead? How flaws in Lula's plan could condemn Brazil to lag behind its peers]{{registration required}} {{Cite web |url=https://www.ft.com/content/d62ca1a2-c219-11db-ae23-000b5df10621 |title=Application Error |access-date=June 5, 2022 |archive-date=June 5, 2022 |archive-url=https://web.archive.org/web/20220605122737/https://www.ft.com/content/d62ca1a2-c219-11db-ae23-000b5df10621 |url-status=bot: unknown }}.</ref> ==== Venezuela ==== {{Main|Second presidency of Carlos Andrés Pérez}} [[File:Caracazo.jpg|thumb|A group of rioters attempting to push over a bus during the [[Caracazo]]]] [[File:Caracazo military response.png|thumb|Venezuelan troops responding during the [[Caracazo]]]] [[File:CANTV old logo.svg|thumb|CANTV's old logo, state telecommunications company privatized in 1991]] In the 1980s, a [[1980s oil glut|fall in oil prices]] and the start of the [[Latin American debt crisis]] brought economic difficulties to Venezuela. Additionally, President [[Luis Herrera Campins]]' economic policies led to the devaluation of the [[Venezuelan bolívar]] against the US dollar in a day that would be known as ''[[Viernes Negro]]'' ({{langx|en|Black Friday}}).<ref name="axis">{{cite web|title=On the Anniversary of Black Friday: Venezuela's devaluation and inflation debacle from 1983 to 1998|url=http://www.axisoflogic.com/artman/publish/Article_26069.shtml|access-date=5 April 2019|website=Axis of Logic|archive-date=April 10, 2022|archive-url=https://web.archive.org/web/20220410053343/http://www.axisoflogic.com/artman/publish/Article_26069.shtml|url-status=live}}</ref> Following the oil price crisis, the Herrera Campins government declared bankruptcy to the international banking community and then enacted currency restrictions.<ref name="axis" /> The policies centred on the establishment of an [[exchange-rate regime]], imposing a restriction on the movement of currencies, and were strongly objected to by the then-president of the [[Central Bank of Venezuela]], [[Leopoldo Díaz Bruzual]].<ref>{{Cite web|last=Boon, Lisseth|date=18 February 2013|title=Un día como hoy el bolívar perdió su fortaleza|url=http://www.elmundo.com.ve/noticias/economia/politicas-publicas/un-dia-como-hoy-el-bolivar-perdio-su-fortaleza.aspx|access-date=20 August 2013|website=Sitio web de [[El Mundo (Venezuela)|El Mundo - Economía y Negocios]]|archive-date=September 3, 2014|archive-url=https://web.archive.org/web/20140903062958/http://www.elmundo.com.ve/noticias/economia/politicas-publicas/un-dia-como-hoy-el-bolivar-perdio-su-fortaleza.aspx|url-status=dead}}</ref> The currency controls devalued Venezuelan [[purchasing power]] by 75% in a matter of hours;<ref>{{cite web|date=June 2017|title=The Roots of Venezuela's Failing State: Economic Crisis and the Unraveling of Partyarchy|url=http://origins.osu.edu/article/roots-venezuelas-failing-state|access-date=5 April 2019|website=Origins: Cultural Events in Historical Perspective|volume=10|issue=9|archive-date=April 1, 2022|archive-url=https://web.archive.org/web/20220401094756/https://origins.osu.edu/article/roots-venezuelas-failing-state|url-status=live}}</ref> banks did not open on Viernes Negro, and even the Central Bank did not have many reserves of foreign currencies, causing the government to devalue the bolívar by 100%.<ref name="axis" /> [[Carlos Andrés Pérez]] based his campaign for the [[1988 Venezuelan general election]] in his legacy of abundance during his [[Carlos Andrés Pérez#First term as president|first presidential period]]<ref name="Marquez131">{{Harvsp|Márquez|Sanabria|2018|p=131}}</ref> and initially rejected liberalization policies.<ref name=":2">{{Cite magazine|last=Fastenberg|first=Dan|date=2011-01-10|title=Carlos Andrés Pérez|magazine=[[Time (magazine)|Time]]|url=http://content.time.com/time/magazine/article/0,9171,2040189,00.html|access-date=2021-04-09|issn=0040-781X|archive-date=September 29, 2021|archive-url=https://web.archive.org/web/20210929074617/http://content.time.com/time/magazine/article/0,9171,2040189,00.html|url-status=live}}</ref> Venezuela's international reserves were only US$300 million at the time of Pérez' election into the presidency; Pérez decided to respond to the debt, public spending, economic restrictions and [[rentier state]] by liberalizing the economy<ref name="Marquez131" /> and proceeded to implement Washington consensus reforms.<ref name=":1">{{Cite web|title=Venezuela's Chavez Era|url=https://www.cfr.org/timeline/venezuelas-chavez-era|url-status=live|access-date=2021-04-09|website=[[Council on Foreign Relations]]|archive-date=May 17, 2022|archive-url=https://web.archive.org/web/20220517003924/https://www.cfr.org/timeline/venezuelas-chavez-era}}</ref><ref name=":2" /> He announced a [[Technocracy|technocratic]] cabinet and a group of economic policies to fix macroeconomic imbalances known as ''{{ill|El Gran Viraje|es}}'' ({{langx|en|The Great Turn}}), called by detractors as ''El Paquetazo Económico'' ({{langx|en|The Economic Package}}). Among the policies there was the reduction of fuel subsidies and the increase of public transportation fares by thirty percent (VEB 16 [[Venezuelan bolívar]]es, or US$0.4).<ref name="Marquez132">{{Harvsp|Márquez|Sanabria|2018|p=132}}</ref><ref name="Rivero102">{{Harvsp|Rivero|2011|p=102}}</ref><ref name="margarita_l_m_2003_p120-1">[[Margarita López Maya]], 2003. "The Venezuelan Caracazo of 1989: Popular Protest and Institutional Weakness", ''Journal of Latin American Studies'', Vol.35, No.1 (2003), pp 120-121 (See #Further reading).</ref> The increase was supposed to be implemented on 1 March 1989, but bus drivers decided to apply the price rise on 27 February, a day before payday in Venezuela. In response, protests and rioting began on the morning of 27 February 1989 in [[Guarenas]], a town near Caracas;<ref name="IACtHR">[http://www1.umn.edu/humanrts/iachr/C/58-ing.html El Caracazo Case, Judgment of 11 November 1999] {{Webarchive|url=https://web.archive.org/web/20160604024351/http://www1.umn.edu/humanrts/iachr/C/58-ing.html |date=June 4, 2016 }}, Inter-American Court of Human Rights, accessed 1 May 2007</ref> a lack of timely intervention by authorities, as the {{ill|Caracas Metropolitan Police|es|Policía Metropolitana de Caracas}} was on a [[Strike action|labor strike]], led to the protests and rioting quickly spreading to the capital and other towns across the country.<ref name="Rivero109">{{Harvsp|Rivero|2011|p=109}}</ref><ref name=":2" /><ref name=":1" /> By late 1991, as part of the economic reforms, Carlos Andrés Pérez' administration had sold three banks, a shipyard, two sugar mills, an airline, a telephone company and a cell phone band, receiving a total of US$2,287 million.<ref name="Rivero180">{{Harvsp|Rivero|2011|pp=180–181}}</ref> The most remarkable auction was [[CANTV]]'s, a telecommunications company, which was sold at the price of US$1,885 million to the consortium composed of American [[AT&T]] International, General Telephone Electronic and the Venezuelan [[Electricidad de Caracas]] and [[Mercantil Banco|Banco Mercantil]]. The privatization ended Venezuela's monopoly over telecommunications and surpassed even the most optimistic predictions, with over US$1,000 million above the base price and US$500 million more than the bid offered by the competition group.<ref name="Rivero179">{{Harvsp|Rivero|2011|p=179}}</ref> By the end of the year, inflation had dropped to 31%, Venezuela's international reserves were now worth US$14,000 million and there was an economic growth of 9% (called as an "Asian growth"), the largest in Latin America at the time.<ref name="Rivero180" /> The Caracazo and previous inequality in Venezuela were used to justify the subsequent [[1992 Venezuelan coup d'état attempts]] and led to the rise of [[Hugo Chávez]]'s [[Revolutionary Bolivarian Movement-200]],<ref name="HELLINGER">{{Cite book|last=Hellinger|first=Daniel|title=Comparative Politics of Latin America: Democracy at Last?|publisher=Routledge|year=2014|isbn=9781134070077}}</ref> who in 1982 had promised to depose the bipartisanship governments.<ref name="Marquez124">{{Harvsp|Márquez|Sanabria|2018|p=124}}</ref> Once elected in 1998, Chávez began to revert the policies of his predecessors.<ref>{{Cite web |date=23 February 2007 |title=Chávez builds his sphere of influence |url=https://www.nbcnews.com/id/wbna17294595 |archive-url=https://web.archive.org/web/20211208103035/https://www.nbcnews.com/id/wbna17294595 |url-status=dead |archive-date=December 8, 2021 |access-date=2021-04-09 |website=[[NBC News]]}}</ref>
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