Sur­pris­ingly, sup­port for cap­i­tal­ism in Latin Amer­ica on rise de­spite left­ist lead­ers

Stabroek News - - LETTERS -

This may come as a sur­prise, but sup­port for the free mar­ket is reach­ing record highs in Latin Amer­ica. And what’s even more amaz­ing, cap­i­tal­ism is most pop­u­lar in coun­tries where left­ist lead­ers lash out against it on a daily ba­sis.

In the­ory, this could pave the way for a golden era for for­eign and do­mes­tic in­vestors in the re­gion.

The star­tling in­for­ma­tion about the rise of pro-cap­i­tal­ist sen­ti­ment in Latin Amer­ica is part of soon-to-bere­leased fig­ures from Lati­no­barometro, an an­nual re­gional sur­vey. Ac­cord­ing to the data, the percentage of peo­ple in the re­gion who agree with the premise that “the free mar­ket is the only path to de­vel­op­ment” reached a record 69 per­cent in 2017, up from 57 per­cent when the ques­tion was first asked 14 years ago.

The fig­ures were pro­vided ex­clu­sively to the Mi­ami Her­ald and el Nuevo Her­ald by Lati­no­barometro direc­tor Marta La­gos.

La­gos said she was “sur­prised” by the fig­ures show­ing a sig­nif­i­cant rise in sup­port for free mar­ket poli­cies.

“In the past, there was a his­toric re­sis­tance to the free mar­ket and pri­va­ti­za­tions in Latin Amer­ica. And now, sud­denly, we are see­ing this spike,” she said.

The re­gion’s most pro-cap­i­tal­ist coun­try is Nicaragua, a coun­try run by left­ist rad­i­cal Pres­i­dent Daniel Ortega. Yet fully 79 per­cent of Nicaraguans say the free mar­ket is the only way for a coun­try to de­velop.

Hon­duras comes in sec­ond, with 78 per­cent sup­port for the free mar­ket, fol­lowed by Bo­livia, Ecuador and Venezuela, with 76 per­cent. By com­par­i­son, 67 per­cent of the peo­ple say they agree with that idea in Ar­gentina, 66 per­cent in Mex­ico, 64 per­cent in Brazil and 59 per­cent in Chile.

When I first saw th­ese fig­ures, my re­ac­tion was that the num­bers re­flect the ups and downs of pop­ulism in the re­gion.

The an­nual poll shows that sup­port for the free mar­ket in the re­gion reached its low­est point in 2007. That was when left­ist pop­ulist lead­ers in Venezuela, Ecuador, Bo­livia and Ar­gentina ben­e­fited from eco­nomic booms fu­eled by record world com­mod­ity prices, and gave away huge amounts of money in sub­si­dies.

But when the com­mod­ity boom came to an end around 2010, most of th­ese economies tanked. Peo­ple re­al­ized that their lead­ers had wasted their eco­nomic bo­nan­zas in pop­ulist fi­es­tas, and left their coun­tries vir­tu­ally bank­rupt. A new gen­er­a­tion of cen­trist and rightof-cen­tre lead­ers won elec­tions or in­her­ited the pres­i­den­cies in Ar­gentina, Peru, Brazil and other coun­tries, and seem to have con­vinced their peo­ple — at least for now — that no coun­try can achieve sus­tain­able growth with­out pri­vate in­vest­ments.

Will Latin Amer­ica’s new love af­fair with — or tol­er­ance of — the free mar­ket last? His­tory tells me not to bet on it. Latin Amer­ica’s pol­i­tics tends to swing like a pendulum every 10 or 15 years. When world com­mod­ity prices go up, au­thor­i­tar­ian rulers and state-cen­tred poli­cies thrive. When com­mod­ity prices go down, pri­vate in­vestors are courted like kings.

But op­ti­mists can find some rea­sons for hope in the new data. In Ar­gentina, sup­port for the free mar­ket has risen from 51 per­cent in 2003 to 67 per­cent in 2017, while in Colom­bia it has grown from 57 per­cent to 67 per­cent over the same pe­riod, and in Venezuela from 51 per­cent to 75 per­cent, the Lati­no­barometro sur­vey shows.

In an ideal world, this would be a per­fect time for the United States and Latin Amer­ica to forge new eco­nomic al­liances, and com­pete more ef­fi­ciently with China. They could fi­nally cre­ate a hemi­sphere-wide free trade zone that has been pro­posed by all re­cent U.S. pres­i­dents, from Ge­orge H.W. Bush to Barack Obama.

Un­for­tu­nately, now that the United States has its big­gest chance in years to im­prove eco­nomic ties with the re­gion, it is ruled by an ig­no­rant iso­la­tion­ist who threat­ens to slash the free trade agree­ment with Mex­ico and Canada, and has just in­creased U.S. tar­iffs on Ar­gentina’s key biodiesel ex­ports.

As this sur­vey tells us, this is a great op­por­tu­nity to im­prove U.S.-Latin Amer­i­can eco­nomic ties. But it is be­ing wasted, while China con­tin­ues mak­ing in­roads in Latin Amer­ica.

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