Latin America needs better leaders after Covid

Latin America needs better leaders after Covid

14:38 - Populists of the left and right will not help the world’s worst-hit region. Editorial

Latin America is the region worst hit by the combined human and economic devastation of coronavirus, according to the World Bank. Jair Bolsonaro, Brazil’s president, is one of the world’s most prominent pandemic denialists. But while Bolsonaro’s dismal handling of the pandemic explains much of Brazil’s suffering, it does not tell the whole story. Other Latin American nations have fared even worse. 

Peru, Ecuador, Nicaragua, Bolivia and Mexico occupy the top spots in a global table of excess deaths since the start of the pandemic, compiled by the Financial Times. The response of their presidents has not always been ideal, especially in Nicaragua, but the problems go well beyond the leadership.

What the pandemic has exposed in Latin America is a longstanding affliction: a lack of effective state capacity. All too often, when governments pull on the levers that should operate health, law and order or welfare systems, not much happens. 

Peru and Argentina ordered long lockdowns last year and offered generous welfare payments to those unable to work. Enforcement was patchy: economies were crippled but infections soared. Even in Chile, long a regional paragon, the government is battling a second wave of infections despite one of the world’s speediest vaccination programmes; a premature relaxation of restrictions, as well as less effective Chinese vaccines, is blamed.

Better quality and more affordable public services are part of the solution, but there are also questions to answer about the efficiency of state spending. During the “Pink Tide” of socialist governments in the region early this century, social spending increased sharply but without a commensurate increase in the quality of public services. Much of the money generated by the commodities boom was spent on payments which lifted millions out of poverty but proved hard to sustain when debts spiralled and raw materials prices fell.

Too little was invested in infrastructure. Latin America’s average annual spending in this area was just 2.8 per cent of national income from 2008-2017, according to the Inter-American Development Bank, barely half of what east Asia managed. Despite 14 years of Workers Party government this century, nearly half of Brazilians lack proper sewage services. Argentina spends about the same share of national income on education as France, but with very different results.

Amid the devastation wrought on lives and livelihoods by the pandemic, international institutions offer a clear prescription: Latin America must build back better. The region should invest heavily in infrastructure, improve the quality of education and healthcare, pursue tax reforms to reduce inequality and seek greener development.

Much of this advice has been offered for decades. The political class appears not to be listening. In the first stages of a major regional election cycle, populist candidates peddling failed recipes abound; Pedro Castillo, the far-left activist who won the first round of Peru’s presidential election last weekend, wants sweeping nationalisation.

So as a result, Latin America risks relapsing into the familiar political habits which have already cost it dear: rampant populism on the left and the right, tinged with authoritarianism and tainted by corruption.

If the region is not to fall permanently behind the rest of the developing world, it must begin by renewing the political class, bringing forward a new generation of leaders who understand how to build a national consensus around sustainable, inclusive growth in fairer societies powered by globally competitive economies. At present, that seems a distant prospect.

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