Some pyramids, like those of Egypt and Mexico, are destined to perpetuate the memory of an empire and succumb after centuries of splendor. Others, like that of Albania in 1996, cause a momentary inflation of the economy, create a false, but useful euphoria among the people towards a government friendly to the empire.
In Colombia more than 20 businesses grew up under a "Ponzi Scheme", whose name comes from the Italian Carlo Ponzi (who used the method in 1919) but has a still earlier origin, from Baldomera Larra of Spain, who used it in 1876.
In Colombia's Ponzi scheme, of course, the 20 businesses are not property of Uribe or of the government, but they are at the top of a pyramid of economic speculation built over the past several years by the government. Uribe's government has ridden the global economic tidal wave generated by the war in Iraq that started in 2003. First, the government used as a base public, "internal" debt by selling bonds (called TES) at high interest rates (like all pyramids) above those offered on the international market. The rates attracted high-risk capital - but private retirement pension funds and the public health solidarity funds also bought in.
The second level of the speculative pyramid was built upon the Ralito agreement. This accord unleashed the laundering of dollars and euros of the "demobilized" narco-paramilitaries . By having access to such resources they have been able to maintain their immense power. Just as in the case of the Albanian pyramids, there is an involvement of the Calabrese mafia (Ndrangheta) in the narco-paramilitary bussineses. Under imperial management, mafias and politics seem to get along well. The agreement with the narco-paramilitaries has also provided security from prosecution to the beneficiaries of years of terror. These beneficiaries include not only high-profile paramilitaries like the Macacos, the Mancusos, Jorge 40, and Don Bernas, but also those who financed them to appropiate the lands of the peasants, get oil and mining contracts or destroy the rights of their workers.
In the middle of the upswing in the international economic cycle, and on the escalator of the TES bonds and the Ralito narco-dollars, Colombian stock-markets went through a bonanza of one-thousand-percent profits during the first Uribe administration (2002-2006). The Colombian stock exchange broke the international record for growth.
While the Albanian pyramids were growing, no one could dare to speak against them without the risk of getting lynched. Even the poorest peasant in the countryside sold his cow to invest in them. Meat was cheap in the capital and the party was on. The government was loved by all. Mr. Berisha could imprison social democrats, socialists, and communists and the whole world applauded: Viva Berisha! When the pyramids collapsed the swindle suddenly became evident. Everyone wanted to lynch the swindlers and bring down the government. Among the swindled were thousands of police and soldiers who armed the people. The UN sent a multilateral force led by Italy to reestablish order, starting in the city of Vlora, where a "salvation" committee had established an alternative government.
The first "slip" of the Colombian pyramid occurred in the stock exchange, following the fall of the stock markets in the US and the world. This has already caused massive losses in the pension and retirement funds, which, together, are the second largest investor in the country and whose fate will determine in turn the fate of Colombia's workers in their old age. The effects of this first slip, however, have only been felt so far by stock holders. In the US, Christmas 2007 sales were terrible because of the crisis, but in Colombia they have never been better, streets were still full of middle class people taking advantage of the bonanza (but no so in the slums).
The results of the October 28/07 mayoral elections in Bogota reflect the polarization of this "bonanza". In the areas of highest income levels (4,5,and 6 according to colombian statistical income classification), the Uribista candidate won 65% (with the second place getting 20%). In the areas of lowest income (1,2, and 3) the result was the inverse, with the opposition party Polo Democratico candidate getting 65%. In income level 1 populations, the Uribista actually placed third. This emergence of poor people in the mayoral election is still not reflected in a national political option: people perceive the effects of neoliberal politics locally and reject them, but still believe that Uribe brings more jobs and more business.
Many poor people on the outskirts of Bogota spend every peso they have on the pyramids. At the same time they stand in long lines waiting for the minuscule subsidy provided by "familias en accion" and other welfare programs, financed by public debt. If Uribe's political base is the worship of the wealthy and the fervor of the middle class, he remains tolerated by the poor.
But the economy is merciless and its cycles inevitable. There is now a huge commercial deficit and imports grew much faster than exports during the boom. The economy of Colombia´s principal buyer, the US, has entered a recession. Venezuela buys more than 20% of Colombias exports but the well-known political problems are an obstacle for commerce and the Colombian establishment is desperate and hoping that the crisis will be resolved with a quick fall of Chavez.
The Ralito dollars and euros are in danger because of the decisions issued by the Constitutional and Supreme courts that have prevented labeling the crimes against humanity commited by the paramilitaries as "political crimes" (had they been so labeled, the criminals would have enjoyed more protections). The courts also designated the para-state activities of the paramilitaries as "sedition", itself a major crime. The Supreme Cout also begun penal inquiries on 20 percent of congress members for their links with paramilitaries. Uribe immediately counterattacked the judge who, as President of the Supreme Court, prosecuted his cousin for paramilitary links. Uribe wants to put the judge under a Congress inquiry, which is dominated by para-politicians. Uribe is thus preparing for a coup against the judiciary.
In such circumstances the street-level pyramids have served as a mean of maintaining of the speculative surge of the economy. The Financial Superintendancy finally sanctioned one of the 20 businesses, but the sanction had no immediate legal effects and has already provoked a protest demonstration by clients. Facing scandal, the Superintendency of Societies begun to investigate other cases in early February 2008. All too-late investigations given that it is a globally known swindle and a clear opportunity to launder money because the headquarters of these businesses are, in several cases, in regions where the only economic activity is coca production, and also because, like in Albania, many of the swindled are police and soldiers. In the middle of downtown Bogota a multitude of police men an women wait in line every day to deposit their savings in a pyramid. Who will put the bell on this cat?
The Colombian pyramid will collapse. Without a buoyant economy, Uribe will fall like Berisha. The para-politicians won't always be able to hide their crimes behind mass mobilizations against the crimes of the guerrillas. But the fall of the pyramids cannot by itself lead to any great change. The fall of Berisha only led hundreds of thousands of unemployed workers out of Albania. Later the US/NATO bombed Yugoslavia and supported the Albanians against the Serbs in Kosovo. Albanian nationalism was grateful - Albania is one of the only countries of the world where Bush is well received. Eight years after his fall, Berisha returned to power. Uribe also has a card to play, designating himself as the US champion in the battle with Chavez.
(translated by Justin Podur)