BOGOTÁ – In 2005, during the fourth Summit of the Americas, the host, Argentine President Néstor Kirchner, along with Venezuelan President Hugo Chávez, scuppered US President George W. Bush’s hopes for a free-trade area in the Americas. Though a free-trade area is no longer on the agenda when Latin America’s current heads of state meet again in Panama on October 17-18, the mood will undoubtedly be less hostile. But regional understanding will still be hard to achieve.
Latin America in the first decade of this century were fertile ground for left-wing populism, especially in the eight member states of the Bolivarian Alliance for the Peoples of Our America (ALBA). ALBA leaders were typically authoritarians who raged against foreign imperialists, suppressed opposition at home, controlled or intimidated the media, overspent, and generally distrusted free markets and free trade.
Today, with both Kirchner and Chávez out of the picture, that period of leftist populism is drawing to a close. Chávez’s successor, Nicolás Maduro, lacks experience and influence in foreign affairs. Kirchner’s successor, his widow Cristina Fernández de Kirchner, is struggling. She recently suffered a heavy defeat in her Peronist party’s recent primaries, weakening its chances in the upcoming midterm Congressional elections and undermining her authority during her remaining two years in office. In addition, she is now facing a legislative election in poor health, following surgery to remove a subdural hematoma in her brain.
None of Latin America’s other leftist leaders – including Ecuadoran President Rafael Correa, Bolivian President Evo Morales, and Nicaraguan President Daniel Ortega – has the charisma or international influence to fill the void.
Moreover, weaker economic conditions, in the region and globally, will limit the scope for crowd-pleasing spending plans. After nearly a decade of rapid, export-led expansion, fueled by high commodity prices and foreign investment, average GDP growth in the region fell from more than 5% annually during the boom years to 3.6% in 2012. As Guillermo Perry, former chief economist of the World Bank, succinctly put it: “The party is over.”
Hopes that a US economic recovery will boost demand and investment in Latin America are likely to be dashed; US investment will probably flow elsewhere. China’s economic slowdown will also dampen prices for exports, including commodities. All of this implies that Latin American governments can no longer spend with little regard for the domestic saving rate.
But the decline of the populist left does not necessarily mean the rise of the free-market right. Over the next 14 months, new governments will be elected in eight Latin American countries, starting with a probable victory for the center-left Michelle Bachelet in Chile’s presidential election. Public-opinion polls show center-left parties leading in most of the region’s other campaigns as well.
Furthermore, a recent wave of social protest in Brazil, Chile, Mexico, and Colombia has been fueled by a new middle class whose members fear for their living standards, all but ruling out the implementation of fiscal discipline or policies that might lead to job losses in the short term. Brazilian President Dilma Rousseff and Colombian President Juan Manuel Santos have already lost considerable popular support; their re-election in 2014 is now far from certain. Public opinion will not be sympathetic to fiscal discipline or neoliberal orthodoxy.
Relations with the US will be slow to improve as well. Latin American governments have been unimpressed with Barack Obama’s failure to pass an immigration bill that would create a pathway to citizenship for the more than 11 million undocumented immigrants in the US, many of whom are from Latin America. Meanwhile, Rousseff canceled a state visit to Washington in protest over the US National Security Agency’s alleged spying on Brazilian political and business leaders, including Rousseff herself. Latin America in the twenty-first century is no longer the backyard of the US.
Tensions have also risen following moves by Latin American governments to soften their anti-drug policies. Last July, for example, Uruguay’s lower house of parliament passed a bill that would legalize the production, sale, and consumption of marijuana. If, as expected, the bill passes the Senate and is signed into law, it could derail the US-led decades-long effort to present a common front in support of prohibition.
A return to neoliberal economics and a pro-US foreign policy in Latin America seems a long way off. But the region’s conservatives can find consolation in the likelihood that the socialist demagogy of Chávez has lost both strength and popular sympathy.
Rodrigo Pardo, a former foreign minister of Colombia, is the news director at RCN Television, Colombia.
Copyright: Project Syndicate, 2013.