In Oliver Stone’s documentary, South of the border from 2009, the director describes the previous ten years as if Simón Bolívar´s dream had been realised. By 2009, left-wing leaders had been democratically elected across Latin America, the populations were behind them, and the economies were doing well. But in 2015, this no longer seems to be the case.
In Brazil, Dilma Rousseff’s approval ratings are at a record-low, the lowest since the re-establishment of democracy in Brazil in 1985, and she is facing impeachment. In Venezuela, Hugo Chavéz’s successor, Nicolas Maduro, is massively unpopular, with approval ratings at about 20% and a recent loss in the legislative elections. In Argentina, the recent election of Mauricio Macri could mean a significant warning for the Latin American left.
Until a couple of years ago, the latter scenario was wishful thinking for the liberals of Latin America, but times have changed.
Ten to 15 years ago, a so-called ‘pink tide’ broke on the coasts of Latin America. The political left consolidated its power in the region. Hugo Chávez in Venezuela (the first to be elected, in 1999), Evo Morales in Bolivia, Rafael Correa in Ecuador, Daniel Ortega in Nicaragua, José Mujica in Uruguay, Nestor Kirchner in Argentina, and Luiz Inácio da Silva, better known as Lula, in Brazil. Progressive parties were in power in Latin America and were implementing their policies.
Professor in Latin American politics at Oxford University in the UK, Diego Sánchez-Ancochea, believes there were two specific reasons for the success of the left. “First, major discontent with the poor economic results of the neoliberal reforms in the late 1990s. Second, the consolidation of democracy, which naturally results in alternation of power,” he says to The Argentina Independent.
Steven Levitsky, professor in Latin American history at Harvard University in the US, also identifies the consolidation of democracy as one of the causes of the left wing’s success. “It was a combination of unprecedented stable democracy, the first time the left wing could consistently compete for power everywhere, except Cuba, for multiple decades. There was also a context of extreme social inequality, which favours the left a bit over the right. And three, there was the economic downturn of 1998-2002, which hurt right-of-centre incumbents and eroded support for neoliberal policies,” Levitsky says.
Professor Ancochea explains that what tied the movements across Latin America together was a common goal of fighting inequality and neoliberal economical policies, as well as moving the trade streams away from the US, towards China, Russia, Iran, and other Asian economies.
The Chinese market in particular was a reason for prosperity in Latin America for years -Brazil especially- adds Levitsky. Now, however, the Chinese economy is slowing down, and, the academic says, that puts the Latin American economies under pressure.
Professor Ancochea emphasises that the overall process has been a victory for the left. “Most countries spent more on social policy than in the past, and also introduced new social programmes and reformed old ones. Some of the reforms, such as the unification of the health system in Uruguay or the creation of a universal non-contributory pension in Bolivia were particularly exciting. At the same time, they were able to do this without increasing their levels of debt,” Ancochea says.
Political consultant Carlos Fara agrees. “The continent has a noticeable stance supporting state intervention in the economy, and an ever longer agenda of greater wealth distribution. In the last 15 years the global market allowed better prices for exportable commodities. This revived the issue of wealth distribution in the political agenda, which obviously favoured the current centre-left in the ten most important countries, except in the case of Colombia. On the other hand, in addition to the improved global conditions for exporting, there was the reminder of the social consequences, derived from the economic reforms of the ’90s, known as the Washington consensus,” Fara says.
Levitsky says that since then, the economy has turned in the Latin American countries. He points out that the governments of these countries are not necessarily to blame, but that the circumstances have changed. “With the exception of Venezuela, which is a disaster, it really hasn’t ‘gone wrong’. In part, the left wing is suffering from an economic slowdown. A worsened economy brings popular discontent.,” says Levitsky.
Cynthia Arson from the Wilson Center does not believe the left has failed either. “The left-wing parties have maybe revealed that they are as vulnerable to certain things as the right-wing, like commodity prices.. Latin America is also less dependent on the continent’s surroundings than it used to be. But a lot of countries are still too dependent on other economies. And they are increasingly met with higher and higher demands of better quality in social services, due to the growth of the middle class, like in Brazil, to name one example,” she says.
Although Rousseff has lifted millions of Brazilians out of poverty, she is now struggling with a faltering economy hit by recession, massive corruption scandals and as a result, the mistrust of her own people and voters.
According to professor in macro economics at the Pontifical University of Rio de Janeiro, Monica de Bolle, the recession could be the worst the country has experienced in 25 years. “The unemployment rate is going up, and the people’s incomes are eroding as inflation is running wild,” she says.
The Brazilian people have lost confidence in the former guerrilla soldier Rousseff, and her key issue, the fight against inequality. Brazilian journalist Christiane Lebelem, from Brazil News, thinks the population has abandoned Rousseff’s project. “She has lost the people’s trust. They are disappointed and tired,” she says.
Perhaps the biggest defeat Rousseff has had to suffer, has been the need to turn to more orthodox policies.
De Bolle believes both Brazil and Argentina have benefitted from Russian investments, but the cash flow from China is decreasing. However, that is not the only thing causing problems. “The recession is a result of a host of factors: policy mismanagement, the commodity price reversal, and the paralysis that has gripped the country following the eruption of the Petrobras bribery scheme. Although the government has frequently referred to hostile external conditions —the Chinese slowdown, the fall in commodity prices— policy mismanagement is the crux of the problem. Brazil’s fiscal deficit currently stands at over 6% of GDP, and is likely to rise to about 8% by year-end. The lack of a coherent fiscal strategy was the key reason for the country’s recent ratings downgrade by S&P.”
Rousseff recently announced a number of austerity measures, and according to De Bolle, those measures will hit her key voters in full force. “Taxes will rise along with the reintroduction of a financial transactions tax (CPMF) which falls on all bank transactions. They have also announced cuts to social programmes and public investment programmes, as well as a rescheduling of salaries and wages of civil servants. The objective is to reach a primary surplus target of 0.7% of GDP,” De Bolle says.
According to the academic, the poor and the vulnerable middle class will suffer the most. “These groups have been the hardest hit by the recession and the rise in inflation and unemployment. There’s an increasing chance that some of the recent social gains over the last decade will be reversed.”
According to Fara, the problem does not only lie in the economic difficulties, but in the solutions as well. “The global conditions that no longer seem to be promising mean that everyone has to make some kind of adjustment. This solution doesn’t sit well with the left parties,” he says.
Levitsky agrees with Fara. According to the Harvard proffesor, several conditions challenge the left wing. “Weak economies, declining commodity prices, and the fact that the left has become the establishment, the ‘oficialismo‘, which often erodes what the left stands for,“ he says.
According to the experts, the surroundings are causing the unprecedented pressure. “The conditions have changed and we have two models: A social-democrat one, as in the case of Chile, Peru, Uruguay, Brazil, and a more leftist one, such as Bolivia, Ecuador and Nicaragua. The shift in the economic global cycle, together with more qualified social demands, force an update in the political parties’ agendas to keep these parties as advocates of change,” says Fara.
In Argentina, this cycle came to and with the defeat of Peronism in the November election. With a campaign built around the idea of a need for change, Mauricio Macri ended 12 years of Peronist government and defeated the establishment —the progressive forces within in.
The victory of Mauricio Macri in Argentina opened up a window of hope for the right, and was closely followed by a victory of the Venezuelan opposition in legislative elections. Analysts have compared the two, and highlighted the transformation that the South American right-wing has undergone over the last few years. One thing the established progressive leaders will have to learn, is how to deal with this ‘new right’ which claims to be democratic, moderate, and aiming for a centrist consensus.
Despite this peaceful rhetoric, the new right has a great potential to destabilise the progressive consensus achieved over the last decade and a half. Macri’s main announcement in terms of international policy was his intention to expel Venezuela from Mercosur —though the recent legislative defeat of the Venezuelan government has prompted him to backtrack on this measure which had been met with opposition by Uruguay and Brazil. A realignment towards the Pacific Alliance and the US could also weaken the South American institutions built and supported by the progressive governments, and with them, revert some of the progress made in terms of continental integration.
As they prepare for the backlash, left-wing leaders will have to learn to be in opposition if they want a chance to revive their golden years in the future. They have been learning from each other how to win in recent years, but they might want to start looking to Argentina and Venezuela to learn how not to lose. With Mauricio Macri’s change-focused campaign, they cannot say they were not warned.