Low tide for South America’s pink tide?
Leftists on defensive after long reign
BUENOS AIRES | A wave of discontent has suddenly put the leftist governments that have dominated South America’s political landscape for more than a decade on the defensive, struggling to retain their grip on power in the face of scandals, shifting economic winds and voter fatigue.
The latest example came when voters here defied the polls last month and refused to rubber-stamp longtime leftist President Cristina Fernandez’s handpicked candidate, instead forcing Daniel Scioli into a Nov. 22 runoff with Buenos Aires’ center-right Mayor Mauricio Macri. In Brazil, the explosive mix of a sputtering economy and a massive corruption scandal have sent President Dilma Rousseff’s poll numbers plummeting, sparked impeachment talk and raised questions about the durability of the coalition headed by Brazil’s Workers’ Party, in power since 2003.
And if Venezuela’s opposition holds on to its big lead in opinion surveys to defeat socialist leader Nicolas Maduro’s ruling coalition in that country’s Dec. 6 congressional elections, the confluence of events would likely clinch an ideological sea change, said Rosendo Fraga, the director of the Buenos Aires-based Nueva Mayoria think tank.
“It could mark an inflection point,” Mr. Fraga said, “the course changes from the center-left to the center-right.”
Many of the hemisphere’s long-unchallenged leftist governments are now feeling the heat because of a combination of factors, most notably their struggling economies, falling global commodity prices and rejuvenated center-right alternatives, said researcher Facundo Cruz, who teaches political science at the University of Buenos Aires.
Left-wing leaders such as Argentina’s Nestor Kirchner — Ms. Fernandez’s late husband and predecessor — and Brazil’s Luiz Inacio Lula da Silva first came to power in the early 2000s as voters blamed the so-called “Washington Consensus” of market-based policies for the severe economic crises affecting their countries.
“They were able to take advantage of a commodities boom” to significantly increase government spending without depending on international creditors,” Mr. Cruz said. But “that model has come to its limit; another period begins.”
Flush with funds, leftist leaders had moved to inject vast sums into consumer subsidies and social welfare, an approach that, at least initially, helped invigorate their economies. Between 2003 — the year of Mr. Kirchner’s election — and 2011, when Ms. Fernandez was reelected to a second term in an unprecedented landslide, Argentina’s GDP grew by an average of more than 7 percent annually, according to World Bank statistics.
Led by Mr. Lula da Silva and his handpicked successor, Ms. Rousseff, the much-larger Brazilian economy likewise defied the U.S. financial crisis and global economic headwinds to mark gains of about 4.5 percent during the same period. The boom helped contain abject poverty and boosted the purchasing power of an emerging middle class, in turn consolidating leftists’ claim to power at a level previously unseen, said Igor Fuser, a former Folha de S.Paulo editor who now teaches at the ABC Federal University outside Sao Paulo.
“These governments showed themselves to be very stable — proof of that are the reelections,” Mr. Fuser said, listing the unprecedented four successive victories Mr. Lula da Silva and Ms. Rousseff scored between them. “Since the beginning of the 20th century, there had been nothing of that kind.”
End of the boom
But by the end of 2011, the economic heyday, fueled by the boom in commodities ranging from soybeans to natural gas, came to a crashing halt, and both the Argentine and Brazilian economies have been averaging growth of just around 1.5 percent since then.
Unwilling to cut into spending needed to sustain its populist policies, Buenos Aires turned to tight import and currency controls to prop up local production and protect the Central Bank’s dwindling reserves. Brasilia, on the other hand, soon adopted billion-dollar austerity measures that proved similarly unpopular.
Both Ms. Fernandez and Ms. Rousseff saw inflation rise to new heights, and high-ranking officials of their governments became entangled in headlinegrabbing corruption scandals, leading to fatigue among swing voters who once backed them. “We are beginning to feel the wear of a much prolonged political process,” Mr. Fraga said.
The Brazilian leader felt the popular discontent during her 2014 campaign for reelection, when she came within 3 percentage points of losing a runoff to her center-right challenger, Aecio Neves. Those were “traumatic months” during which the ruling Workers’ Party went through a “moment of panic,” Mr. Fuser said.
Scandalizing her party’s hard-liners in Congress, Ms. Rousseff then kicked off her second term by appointing Joaquim Levy, a University of Chicago-trained economist and former International Monetary Fund official, as her new finance minister.
“Dilma [Rousseff] and Lula [da Silva] believed they had to calm the markets,” Mr. Fuser said. “She is applying the program of the [center-right opposition] in a partial way,” underlining that “elections are not necessary for the course to change.”
A similar dynamic may be playing out in Argentina, whatever the outcome of the Nov. 22 runoff between Mr. Macri and Mr. Scioli, who represents the more moderate wing of Ms. Fernandez’ Peronist coalition. The winner is likely to implement limited changes — at least at first — to give markets new confidence in Argentina, Mr. Cruz said.
“If [Mr. Scioli] manages to adapt himself with pragmatism to the [new economic reality], he will have no need to undo what has been done previously,” he said.
The Scioli campaign, though, is aggressively countering that narrative, stoking fears that a Macri victory would mean a return to the Washington-backed 1990s policies many here feel caused the catastrophic 2001 collapse of Argentina’s economy — a strategy that plays into lingering anti-American sentiments often exploited by Mr. Kirchner and Ms. Fernandez.
“Populists always need an enemy,” Mr. Cruz said.
Taking on the socialists
Just how far South America’s newfound conservative pivot may reach, meanwhile, will be seen in countries that have embraced a more hard-line socialism — such as Ecuador and, most notably, Venezuela — where the ballot box may no longer serve to convey the popular will, Mr. Cruz said.
Unlike its more moderate allies, the governments set up to carry out the late Venezuelan populist leader Hugo Chavez’s “Bolivarian revolution” have “changed the rules of the game [to ensure] that the ruling parties continually win elections” by altering their countries’ constitutions and forcing electoral oversight bodies into line, he added.
In spite of a dire economic situation, marked by triple-digit inflation and chronic shortages of basic goods, the United Socialist Party of Venezuela under Mr. Maduro, Chavez’s protege and hand-picked successor, still stands a chance of prevailing in the coming congressional vote despite the unfavorable polls.
Venezuela “is still stuck in what perhaps was more widespread in Latin America 20 years ago,” said Christine Balling, a senior fellow for Latin American affairs at the American Foreign Policy Council. “It’s a much more closed society. It’s not a functioning democracy.”
Mr. Maduro himself seemed to underline that point last week when he threatened to govern in a “civil-military union” and “at any cost” if the opposition were to take the majority in the country’s National Assembly.
“Venezuela would enter into one of the most turbulent and poignant phases of its political life,” the president said. “We would defend the revolution. We would not turn over the revolution, and the revolution would pass into a new phase.”
And if the coming elections in Argentina and Venezuela do confirm a continental shift to the right, analysts say leaders in Washington should also be careful not to overstate the ideological shift among voters.
“I don’t think it signifies in any way a lessening of influence of leftist politics,” Ms. Balling said.