Che costs Latin America $1.3 trillion in annual GDP

Che costs Latin America $1.3 trillion in annual GDP

Che Guevara was executed 40 years ago on 9 October in Bolivia. The Argentine doctor was an ideologue of Third World Communism. He believed in armed revolution against Western exploitation and advocated North Korea as an economic example.

Che believed in the creation of a “new man" to implement socialism. In a 1965 speech, he proposed that “the socialist countries have the moral duty of liquidating their tacit complicity with the exploiting countries of the West."

That was too much even for Communist Cuba. Fidel Castro sent his revolutionary collaborator to foment revolution elsewhere. The Cuban leader preferred to integrate his economy with the Soviet Union’s Comecon bloc, rather than try out Che’s dream of industrial diversification.

During his life, Che had little direct effect outside Cuba, but his legend has done more than sell chic T-shirts to disaffected rich kids. Che’s economically paranoid anti-capitalist doctrines have considerable appeal among Latin American electorates.

Most countries in the region have elected governments with Che-sympathizers—from Chile’s Salvador Allende in 1970 to Bolivia’s Evo Morales and Ecuador’s Rafael Correa in 2006. The usual result has been rapid economic disaster and electoral reaction.

Morales has a portrait of Che in his office, while Venezuela’s President Hugo Chavez, Argentina’s President Nestor Kirchner, Nicaragua’s President Daniel Ortega and Correa have referred to Che as an inspiration. Chile’s President Michelle Bachelet and Brazil’s President Luis Inacio “Lula" da Silva have not done so. But the possibility of Che-ist government has made property rights thoroughly uncertain, cutting into long-term growth.

Latin American productivity growth was average by world standards when Che met his violent end in 1967.

But it has since fallen far below other countries. Only Brazil and Chile have had a reasonable performance, thanks largely to substantial periods of rightist military rule during which Che-ism was suppressed.

Without the legend of Che, the Latin American annual growth rate might have been one percentage point faster. If so, this revolutionary has cost the region about $1.3 trillion (Rs51 trillion) of annual gross domestic product (GDP). T-shirts are cheap, but Che has been an impressively expensive icon.