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The Leftist ‘Pink Tide’ in Latin America Is Receding

The Leftist ‘Pink Tide’ in Latin America Is Receding

Leaders who promised to lift the poor have been brought down by corruption and dismal economic performance

Yawar Copana was giddy with delight when Evo Morales, an Aymara Indian like himself, became Bolivia’s president in 2006. It seemed to usher in an era for the country’s most marginalized people to feel they finally had a voice in the presidential palace.

Nearly 14 years later, with the president forced to resign last month after a vote-rigging scandal, Mr. Copana called Mr. Morales’s recent leadership a “period of decadence, of depravity.” The 32-year-old high-school teacher spoke with disdain about his former hero’s authoritarian rule. “People feel cheated,” he said.

The departure of Mr. Morales has helped to end a powerful but damaging chapter for the left in Latin America. He was part of a generation of socialist leaders who took charge in the early and mid-2000s, each drawing strength from the rise of the rest. At the height of the trend in 2009, presidents making up the so-called “Pink Tide” led 11 countries and some 300 million people.

Early on, they offered hope for millions. A dramatic run-up in the prices of commodities from Argentine soybeans to Brazilian iron-ore, fueled by Chinese demand, led to heady economic growth and big declines in poverty —from 45% before the 2003 start of the boom to 28% at its end 11 years later. That helped to make many of the presidents hugely popular. “I had more and more work and only saw growth, progress and hope,” said 38-year-old Argentine electrician Carlos Fe.

But even before the Chinese economy slowed and commodity prices came back to earth in 2014, it was clear that the Pink Tide leaders had two fatal flaws: a love of power that led to growing authoritarianism and corruption, and a lack of ideas for how to generate economic growth without relying on a resource boom or borrowing. “It was a moment of euphoria—but then came the process of governing,” said Moritz Akerman, a Colombian columnist and former Communist Party power broker. “It all became about subsidizing the poor and creating dependency. This is not sustainable.”

During the 11 years of the boom, the key Pink Tide countries of Argentina, Brazil, Ecuador, Bolivia and Venezuela posted a respectable 4.3% average annual rate of growth. But their peers to the political right, the commodity exporters Peru, Colombia and Chile—the latter led by a center-left government that was a careful economic steward—did even better, at 5% growth.

Since then, the economies of the two camps have diverged significantly. While Peru, Colombia and Chile have continued to grow annually since 2015 at a more subdued average of 2.7%, Venezuela’s economy has collapsed, losing more than half its value, while the other Pink Tide states have eked out less than 1% average growth per year. Countries that weren’t swept up in Pink Tide populism had stronger public finances and robust private sectors when the boom ended. In other words, they had saved some of the money from the party to spend when times weren’t so good, said Javier Corrales, a scholar on Latin America at Amherst College.

Populist Socialism in Retreat

Of the generation of leftist leaders and their successors who led as many as 11 Latin American countries a decade ago, only three remain (shown in bold) — soon to be two.

The left’s setbacks across the region also followed the 2013 death of its de facto leader, Venezuela’s bombastic and radical president Hugo Chávez. Since then, Brazil’s Dilma Rousseff was impeached, and term limits or voters ended leftist rule from El Salvador to—most recently—Uruguay, whose leftist leader Tabare Vásquez is scheduled to step down next March after the first center-right victory there since 2000. At that point, the Pink Tide’s direct heirs will remain in just two countries, Venezuela and Nicaragua, whose leaders are widely considered dictators presiding over broken economies.

It’s not that the left is shut out of politics in Latin America now. The populist Peronist movement in Argentina returned to power on Dec. 10, having bested the country’s market-friendly president in October’s election. Mexico, which resisted leftist rule during the Pink Tide era, has now been led for a year by an antiestablishment nationalist, Andrés Manuel López Obrador. But in both countries, hard economic realities mean tight constraints as compared with their free-spending predecessors, and there’s little opportunity for a like-minded regional alliance.

The original socialist wave stemmed from a grim decade of weak growth in the 1990s, which in turn fueled disappointment with U.S.-supported policies that emphasized fiscal discipline, privatization and free markets. Economic crises in all three of the region’s biggest countries—Brazil, Mexico and Argentina—left many Latin Americans suspicious of Washington’s prescriptions.

By 2005, it was clear how much U.S. influence had waned. At a Summit of the Americas in Argentina attended by U.S. President George W. Bush, the region’s three leftist presidents at the time—Mr. Chávez, Brazil’s Luiz Inacio Lula da Silva and Argentina’s Nestor Kirchner—buried a hemisphere-wide free trade deal promoted by Mr. Bush. “So shortsighted,” said Monica de Bolle, a senior fellow at the Peterson Institute for International Economics. “There was all this talk about south-south trade, and trade between developing countries, [that] we don’t need the U.S. But this was all pie in the sky.”

A year later, in a ceremony at a Bolivian archeological site just before his inauguration, Mr. Morales wore a replica of a 1,000-year-old tunic like those worn by wise men in a pre-Incan civilization. He pledged “to end the colonial and neoliberal model,” adding, “We are in a time of triumph, a time of change.’’

Not all of the leftists were alike. Uruguay’s Mr. Vásquez and Chile’s Michelle Bachelet governed like European-style social democrats. In Brazil, Mr. da Silva, a former rabble-rousing union leader, worked with big business while focusing on poverty reduction. Mr. Chávez nationalized hundreds of companies, installed stringent currency controls and seized courts and the military.

What many of them had in common was charisma and an ease with the lower classes who had felt ignored by previous leaders. “For the first time, those majorities—in Venezuela in the case of Chávez, in Bolivia in the case of Morales, in Brazil in the case of Lula—they were seeing people who were not coming from the upper middle classes,” said Rubens Ricupero, a former economy minister in Brazil. “Those people brought something more than purely economic aspirations.”

But the Pink Tide populists never modernized their economies. During the boom, the size of the public sector in both Argentina and Ecuador roughly doubled to about 43%, according to International Monetary Fund figures. Argentina’s private sector has just 9 million workers supporting 15 million people who are either employed by the state or receive pensions or welfare payments, the IMF estimates.

Instead of using the boom to diversify, the leaders doubled down. Oil, for instance, made up 69% of Venezuela’s exports in 1998, the year Mr. Chávez was elected. In 2012, Mr. Chávez’s last full year in office, oil accounted for 97% of Venezuela’s exports.

Though Bolivia logged growth averaging more than 4% over Mr. Morales’s term, the country has run through half of its international reserves and now has a fiscal deficit of more than 8% of GDP, which most economists call unsustainable. Meanwhile, as in Venezuela, Nicaragua and Ecuador, the government did all it could to stay in power. Mr. Morales changed the constitution and had a court override the result of a referendum on term limits so that he could run for a fourth term.

He’s now in exile. Still, like other regional leaders out of power, he spoke about a possible return. “Sometimes, the people make a mistake,” he said in an interview last month. “I’m pretty sure that from now until the near future, at the moment in which the rightist government begins to cut handouts and the social conquests, the people will rise up.”

 

—Ryan Dube contributed to this essay.

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