With oil leading the way, the drop in world commodity prices has had a a politically destabilizing effect, particularly strongly on South America’s most politically progressive regimes, including Brazil, Venezuela, Argentina, Uruguay, and Ecuador. Although oil is the most prominent of these commodities, falling mineral and agricultural products prices, like soybeans native to South America, have accentuated the economic stress.
Throughout the West fiscal austerity measures, either self-imposed by right wing government policies or imposed externally by the IMF, have served to dampen consumer spending and reduce manufacturing growth. While China’s falling exports resulting from the weak Western demand has had a strong effect on reducing oil consumption and hence prices, it is likely that Saudi Arabia and the Gulf State oil kingdoms have refused to cut production in order to hurt Iran and to undermine the US shale oil boom.
These are big-time economic headaches for not only countries but also for a little guy who blew the whistle on many government’s lies and secret plans. Julian Assange, of Wikileaks fame, has sat in a small room in the Ecuadorian Embassy in London for almost four years and the announcement below, brought on by this mega commodity meltdown, signals that his days under Ecuadorian protection may be numbered:
Rafael Correa (President of Ecuador) will not compete for re-election, in the context of an uncertain economic outlook for his country. (From an article by Raul Zibechi, Upside Down World)
When a new, right wing government, or, indeed, any new president who wants to make nice with the U.S., comes to power, Assange will be unceremoniously kicked out or the Ecuadorian embassy into the hands of the US CIA.
Besides the drama around Assange, another side effect of the depression in oil and commodity prices involves Venezuela and its relations with Cuba. Already the popular revolution under Chavez is in trouble because of the economic problems brought on by the 50% collapse in oil prices. Cuba has been a beneficiary of favorable price treatment on Venezuelan oil which could be reversed with the end of Madura’s presidency and replacement with a right wing government. He has already lost the parliament to the opposition in the recent election.
Change is coming and it doesn’t look good.