On 6 November 2013 at the University of Paris, Ecuador president Rafael Correa delivered his views on resolving the European crisis, by drawing upon past Latin-American lessons.
The Latin America of the 1980s would have fallen victim to an imperialist plot, led by the United States, who were hoping to once again take control of the sub-continent through treacherous means. Following the 1970s crisis, the majority of Latin American countries were insolvent. They were denied international loans, but were also suffering from the sharp increase in interest rates from places such as the Federal Reserve in the United States. The IMF “kindly” offered aid by granting loans to pay off their debts, but while eventually imposing conditions as underhand as they were drastic. International institutions have hidden their economic ideology in science. Correa had a mission in going to France, and it was partly to enlighten ill-advised Europeans. At last, Latin America is the one giving advice.
Armed with his economic university education, President Correa reiterated his belief in Keynesian principles. Defending them against “market society”, he talking about how it alienates individuals, and reduces them to mere “goods”. Denouncing “economic aberration” developed by certain corrupted elite policies, he said that budgetary discipline and rectitude are not hopeless, but rather an advent of “the worst of all worlds”, words which he has used to describe the probable Spanish future.
Is austerity the solution? Correa says it is completely absurd to believe in austerity unless you want to repeat past errors and economically reduce an entire continent to dust.
For him, the solution can only come from adequate State intervention, which must set stimulus policies in place and “satisfy human needs”. He challenged the independence and overindulgence of Central Banks, and expressed his desire to see economic decisions no longer being made by the wealthy elite, but by a benevolent State making decisions for the people. Correa is the defender of a renewed economic policy which will replace “the wealth empire”; in keeping with Keynes and his contemporaries, Stiglitz and Krugman, Correa encouraged the abandonment of austerity in order to clean up welfare and education sectors. It is a question of enacting a “new social contract” which would assert policy in power relations and make welfare the cornerstone of future global concerns.
People before economics. Is that not Latin America’s left-wing policy at the moment, and, by the same token, all of Latin America?