A sign carried by one of the more than a million Chileans demonstrating on Oct. 25 read: “Neoliberalism was born in Chile; it is dying in Chile.” You’d think the obituary rings true, if you judge not just by protests not just in Chile and Ecuador a few weeks back, but also by election results in Argentina, Bolivia and Mexico. It isn’t the case, but it does point to something real: a new swing to the left in Latin America.
Over the past five years, elections in Argentina, Chile, Brazil, Colombia, El Salvador and Peru have swept conservative, free-market, free-trade, neoliberal parties or leaders into office. The “pink tide” that brought leftist leaders democratically to the presidency at the turn of the 21st century is receding, often in shame. One former Brazilian president was jailed, and another was impeached. Fraud and corruption charges were leveled against Cristina Fernández de Kirchner in Argentina. Peru’s six most recent presidents are either in prison, under investigation for corruption, or dead through suicide.
The socialist leader Evo Morales claimed to have won re-election last month in Bolivia for a fourth term, as a result of electoral tampering, and in violation of a constitution he himself drafted and had ratified by referendum. But protests over voter fraud, an international audit of the elections concluding they had been undemocratic, and the Army’s call for his resignation forced him out of office.
The end of the commodity boom, corruption and sheer fatigue ejected the left out of power, and the so-called neoliberals stepped in to fill the vacuum. With the exception of Venezuela, Mexico and until yesterday Bolivia, supporters of the Washington Consensus, a set of economic policy recommendations backed by Washington for developing countries, particularly Latin America, reigned supreme.
Today, they in turn are being evicted or defeated, either electorally or through pressure from massive street protests. A new shift seems underway. But while there are significant differences in Latin America between the left and the right, or between neoliberalism and social democracy, the leeway for economic change is much more narrow than proponents of each side believe. More important, it is even smaller than what everyday Latin Americans expect.
The left has governed Chile for 24 of the last 29 years. The policies rejected today, through the clamor for less inequality and a more responsive political system, are largely those put in place by the Chilean center-left Concertación coalition. Chile is Latin America’s great success story, even if its citizens disbelieve this narrative, or reject it outright. True, Sebastián Piñera, the right-of-center president, is highly unpopular, but opposition, left-of-center parties, are equally unpopular.
Similarly, the economic crisis that led Argentines to bring back the Peronists, after four years under a pro-business president, is at least partly the making of those same Peronists, who were in office between 2002 and 2015 and have played an omnipresent role in the country’s disputes for power since 1945. Alberto Fernández, who was elected last month, may be the first Peronist leader who is neither corrupt nor a demagogue, but he will be governing in the company of Cristina Fernández de Kirchner, who was both, and a hard-left faction in Congress. Most importantly, though, Argentina owes $57 billion to the International Monetary Fund, and its new president will be forced to negotiate a new assistance package from the financial organization.
Mr. Morales had remained in power until now, partly thanks to the orthodox macroeconomic policies implemented since 2005, regardless of his rhetoric and anti-American grandstanding. His successful efforts to bring Bolivians out of poverty depended on high commodity prices; that era has ended. And Andrés Manuel López Obrador in Mexico is rapidly discovering that markets, budgetary constraints and the United States make many of his promises unviable. He detests neoliberalism, but desperately needs the United States Congress to ratify one of its icons: the 2.0 version of the North American Free Trade Agreement.
The incipient Latin American middle classes are the product of long-term, though modest, economic growth over the past quarter century. They have emerged from poverty, but feel that their life is not what it should be.
Chile is the best example: high per capita income, making it a “poor” rich country, but miserably low pensions for the elderly, exceedingly expensive and useless higher education for the young, mediocre and onerous health care for working adults, meager wages and a shrinking sense of community for everyone.
An insensitive, albeit democratic, political systemic in every nation of the region has fueled the current explosion, fed largely by frustration. Governments come and go, but their concrete policies are similar, or at times even identical. Inequality has diminished to a point, even in Chile, but not sufficiently. The rich grow richer and the middle classes increasingly detect and resent their opulence. The resentment accumulates, especially when economic growth slips or vanishes, as is mostly the case today in Latin America. Anything can spark a revolt: gasoline increases in Ecuador, electoral fraud in Bolivia, higher subway fares in Chile. There seems to be no alternative to the status quo, be it neoliberalism or something else.
Worse still, there seems to be nowhere to look to. Except maybe toward the north, where similar frustrations have also generated a clamor for change. What Latin Americans want, at least in the more middle-class nations, is a welfare state that works: proper health care, appropriate pensions, accessible higher education, decent wages. Does it sound familiar? Perhaps Chileans, Argentines, Brazilians and Mexicans should study the democratic debate currently underway in the United States around how to achieve these goals, and finance them.
The new and old Latin American middle classes are clamoring — at the ballot box, in the streets, on social media — for an end to corruption and violence, but also for the type of welfare state that can reduce inequality, improve public services and raise incomes. This is not so different from what polls show many Americans want today. Surveys show that Americans are willing to pay for these benefits through higher taxes on the wealthy, partly because the rich are also richer than ever before, as is more and more the case in many parts of Latin America. A Chilean welfare state will cost a great deal of money, but the country has the healthy public finances to pay for it. So does the United States. A fortunate and productive coincidence.
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