Empty Wallets Tilt Latins Leftward : Nationalists, Populists Ride the Crest of Democratization

Much has been made lately about the relative homogeneity of political trends in Latin America today. In the United States, on the right and within the Reagan Administration, there are those who frequently speak of the “return to democracy” in the hemisphere, pointing to Argentina, Uruguay, Brazil, perhaps Peru, and, of course, the purported Central American democracies (Guatemala, El Salvador and Honduras) as cases in which there has been a shift from authoritarian regimes to democratic ones during the last few years. Others, more preoccupied with economic policy than with the nature of the governments that implement it, have stressed the growing uniformity of market-oriented, anti-statist, anti-populist economic policies in many of the region’s countries, particularly in Chile, Mexico, Argentina and Brazil.

But the most recent sign of the continent’s moving in one direction is of a different nature. It involves the return or resurrection of the nationalistic, reformist, somewhat statist and populist left that supposedly had been consigned to the proverbial dust bin of history. In country after country ravaged by years of economic stagnation and debt crisis, the sector most accurately described as the center-left is making a triumphant return to power, or is in serious contention for power, as Latin American societies begin to show their resentment over the economic situation that they have had to endure for nearly a decade now.

In Argentina and Venezuela, the present favorites for the forthcoming presidential elections are Carlos Menem of the Peronist Party and Carlos Andres Perez of Democratic Action, Venezuela’s social democratic party. Both men are publicly committed to the so-called policies of the past: populism, nationalism, statism, a strong defense of the welfare state and a tough, quasi-unilateral line on foreign debt. In Brazil, where direct presidential elections are supposed to be held next year, the left-of-center, nationalist, nearly legendary figure of Leonel Brizola is emerging as a leading candidate. In Mexico, Cuauhtemoc Cardenas’ stunning showing (again, on a leftist platform) in the July 6 presidential election--more than 30% of the official tally and a far greater though unspecified share of the real vote--underlined the strength of the nationalist, social-minded mood sweeping this country. And in Ecuador, recently inaugurated President Rodrigo Borja appears to be the quintessential Latin American social democrat.

While few attentive observers of Latin America question the existence of this trend, there is a substantial amount of disagreement regarding its causes. Many have, in somewhat consistent fashion, attributed the shift in mood exclusively to the negative effects of the hemisphere’s foreign debt, above all to the obstacles that the debt presents to economic growth. While that is true to a great degree, it seems that more than just the debt burden is involved. The main reason for the disenchantment with the prevalent economic fashion--Reaganomics with a Latin flavor--is that it has not worked, at least as far leading the continent back to economic growth.

The 1980s are being called the lost decade for Latin American economic growth. After almost six years of reform, structural change and adjustment, the Mexican economy has not grown at all; the Brazilian economy has advanced irregularly, at best, with dramatic peaks and valleys from one year to the next; Argentina and Venezuela have persevered against stagnation, but time is catching up with them. Of the major countries, the only one in which the economy has responded well to “market-oriented” policies is Chile--where, of course, the hemispheric drift toward democratization has not taken hold.

Undoubtedly, many of the “new” policies need more time to bring any benefits, and it is difficult to conceive of any economic policies that could prosper as long as the present debt hangs over Latin America. But when democratization, debt and unproven economic reforms all occur at once, the combination is incendiary. The Mexican example is perhaps the most illustrative: It is virtually suicidal, in political terms, to simultaneously open up a political system, implement unpopular economic reforms that do not bring results, and meet debt payments punctually. Mexico’s present and future authorities have only begun to pay the price of their boldness--or folly, depending on one’s perspective.

Latin American societies will vote their governments out of office as long as elections are held and growth is postponed. The newly touted “policies of the past” may well be outdated, expensive or inefficient, but for a number of years, they had one merit: they worked. That is clearly no longer the case, but the other, more fashionable policies, have not worked either. Their time is running out, as is their popularity among officials, intellectuals, politicians and technocrats.