Low tide for South Amer­ica’s pink tide?

Left­ists on de­fen­sive af­ter long reign

The Washington Times Weekly - - Geopolitics - BY AN­DRE F. RADZISCHEWSKI

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.

Rouss­eff

Fer­nan­dez

Maduro

Mo­rales

Cor­rea

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