Democracy Brings Promise--and Peril--to Latin Countries : South America: The dictators have all fallen, replaced by elected governments. But failure to achieve economic and social progress could bring them back.

One by one, dictators grudgingly gave way to politicians across South America during the last decade. Finally, only Gen. Augusto Pinochet, the prototype of the anti-Communist ruler-general, was left--in a country with the one of the strongest democratic traditions on the continent.

Then, in the last month of the 1980s, Chile joined South America’s remarkable peaceful evolution toward democracy, electing a civilian president for the first time in 19 years.

When veteran politician Patricio Aylwin takes the oath of office here in March, succeeding Pinochet, South America will have crossed an unprecedented threshold. Never before, since they began emerging in the early 1800s, have all of the continent’s dozen independent countries been ruled by elected governments at the same time.

But as that landmark approaches, some skeptics are wondering whether the pendulum could start swinging back and whether more coups lie ahead in the 1990s. Weak governments are being challenged by a relentless economic slide and the popular discontent it has engendered. Politicians themselves are distinctly out of favor. Candidates running as non-politicians and anti-politicians have triumphed in several elections.

The worst-case scenario is that voters in the region will turn to leftists and populists who will open the spending spigots, bring on chaos and prompt another swing back to authoritarian rule. Some are equally afraid of harsh right-wing “shock adjustment plans” that punish the poor to the breaking point, setting off violence with the same result.

Elite, a Venezuelan newsmagazine, commented recently that “social tensions everywhere are on the rise.” It said that the region’s new economic austerity programs may “arouse strong popular resistance and fail, leading to chaos--the situation that Bolivia faced in 1984-86. It is now faced by Argentina and Peru, and may not be far away for Colombia and Venezuela. Even Brazil, which had improved spectacularly after 1982, gives the impression of being adrift.”

Troubled Nation

Peru is South America’s most troubled democracy, with a triple threat of hyper-inflation, guerrilla war and drug trafficking, but others also are under siege, buried by more than $440 billion in foreign debt, declining real incomes and soaring prices.

Bolivia, for example, has imposed a state of siege to try to keep its model economic recovery program on track in the face of worker demands.

Argentina is groping to impose such a program, but resistance from vested interests has undermined President Carlos Saul Menem’s authority barely six months after he took office in July from a predecessor who quit early because of rioting caused by economic woes.

Latin American citizens are bitter and frustrated with the absence of tangible benefits from civilian rule.

“We need a Pinochet,” said Miguel Fernandez, a 50-year-old trucker in Lima, Peru, whose business failed, forcing him to drive his car as a gypsy taxi. With words that find echoes in several countries, he added: “Democracy doesn’t help the worker. The politicians have failed completely. Democracy exists here only in name. The abuse of the people always is the same here, with or without democracy. A Pinochet is the only way to halt this descent.”

Enrique Bernales, a leftist senator in Peru, warns against exactly that scenario. Asked if Peru is in danger of a coup, he replied: “I don’t think so, but the danger is after the (April) election. If the next government doesn’t achieve some basic agreements, it could lead to the destabilization of democracy. And I don’t want democracy in Peru to end like that in Chile in 1973--with the errors of the left leading to the errors of the right.”

Widespread Disgust

Disgust with politicians is widespread in Peru and elsewhere and troubling to those who want political institutions to flourish.

Citizens heavily boycotted municipal elections this month in Venezuela, where an austerity program hit hard last year, setting off riots in February that left more than 200 dead.

Brazil, an unwieldy and poor nation, went through severe jitters in the weeks before its presidential election Dec. 17, with inflation surging and the currency plunging as left-wing candidate Luis Inacio Lula da Silva narrowed the gap with his foe, Fernando Collor de Mello.

Collor narrowly won the election on the strength of his campaign against the government bureaucrats known as “maharajas.” Some political scientists had openly predicted a coup if Lula won and the economic nose dive continued.

Despite such concerns, other observers cite evidence that the transition to democratic rule is taking root in one of the world’s most tumultuous regions. (Bolivia alone has endured more than 180 irregular turnovers of leadership. A little over a decade ago, nine of the 12 independent republics in South America were ruled by the military.)

Appointee Replaced

The Brazilian election was to choose the nation’s first popularly elected president in 29 years, replacing a civilian chosen by Congress in 1985 in South America’s largest country.

Even Paraguay, which has never known genuine democracy, was swept into the democratic tide this year. Gen. Alfredo Stroessner, who ruled for 35 years, fell in a February coup staged by his No. 2 man, Gen. Andres Rodriguez, who stunned everyone by genuinely embracing democratic rule. Rodriguez then was elected president in May, in what many called Paraguay’s first free election ever.

In all, nine nations in South America will soon have made the transition to elected government since 1979: Argentina, Bolivia, Brazil, Chile, Ecuador, Paraguay, Peru, Suriname and Uruguay. Colombia and Venezuela have been ruled by democratic governments for decades, and Guyana, a former British colony, has stayed nominally democratic since independence in 1966.

With less certainty, the trend extends to Central America. El Salvador, Guatemala, Honduras, and Nicaragua have returned to shaky elected government in the 1980s, but Fidel Castro is a fixture in Cuba. What develops in Panama remains to be seen, but for now the American invasion has broken the grip on power of the Panama Defense Forces, whose leader, Gen. Manuel A. Noriega, is in jail in the United States awaiting trial on drug-trafficking charges. Costa Rica remains the region’s exception, a historically stable democracy.

To those who accentuate the positive, Latin America finally is achieving the stability and accountability that will allow it to compete in the world economy, after years of protectionism that universally brought decline. Governments that have proved spineless in the face of powerful lobbies are attempting to assert some authority over what are called “social corporations.” Everywhere, the priority is on fighting the inflation that has pulverized the region.

The painful modernizing now under way in most South American countries is the only hope, economic experts say, to win public faith in the democratic system as a purveyor not only of freedom but of well-being.

Chile’s President-elect Aylwin and that country’s new legislators, a majority of them from the opposition alliance that defeated Pinochet, are well aware of the burden.

Strong Growth

Pinochet will leave them a country that enjoyed economic growth of 7.4% in 1988, the fifth straight annual rise. Inflation is less than 20% annually, below the monthly rate in many countries. Exports have soared, and the foreign debt is actually falling. The budget balances.

The strong military government was able to achieve such growth in part by suppressing wage demands. The trick for the new elected government will be to sustain that growth while contending with voters’ expectations for a larger piece of the pie.

Aylwin said during the campaign: “To those skeptics who don’t believe that the Third World can manage democracy and prosperity, we will prove them wrong.” But he cautioned, “Democracy is not a panacea. All that we want will not fall into our hands from the sky. We must advance gradually, step by step.”

Bolivia, the poorest country on the continent, was unsettled in 1989 after its second consecutive election since democracy returned in 1985. Yet a successful Bolivian austerity plan, erasing the 20,000% inflation of the mid-1980s, remains an example for other democracies.

“We shouldn’t look to the Chilean model, but the Bolivian model, because they did it in a democracy,” said Jorge Batlle, a Uruguayan conservative who was defeated in the presidential race in November.

The victory of Uruguay’s rival National Party in the presidential race, and of the leftist Broad Front in Montevideo, underscored another aspect of the maturing of Latin democracy: Countries not only are holding elections for the second or even third time, as in Ecuador and Peru, but defeated ruling parties are handing over power to their elected rivals.

Julio Sanguinetti, Uruguay’s articulate outgoing president who managed to sustain a modicum of growth and economic stability, noted that financial markets didn’t even budge during the campaign, even with the prospect of new parties replacing ruling parties.

“This demonstrates that the system can withstand political changes, renewals,” he said.

He is among politicians across the continent who cite the rapid changes in Eastern Europe both as an example and a warning sign for Latin America.

The example lies in the East Bloc’s newfound ability to compromise and acknowledge the need for pluralism and market-oriented economies rather than protectionism.

At the same time, concern has grown that industrial countries will divert investment to the emerging East European markets, leaving Latin America on its own just when its equally fragile democracies most need help.

The uniformity of political systems on the continent, when Chile joins the club, could give a boost to regional integration as a counterbalance to the potential for neglect by the developed world.

Raul Carignano, secretary of Latin American affairs in the Argentine Foreign Ministry, said: “It is impossible to imagine a process of real integration if the countries involved do not follow stable and predictable political processes, and simultaneously.

“This does not mean a single political ‘color’ for all, but rather that the institutional system, in the framework of law and justice, is inviolable. In this sense, democracy is the best system for integration.”

Tensions among jealous armed forces also are likely to subside. Military governments in Argentina and Chile nearly went to war over a South Atlantic channel in 1978, a scenario hard to imagine under elected civilian presidents.

Peer pressure is an acknowledged factor in discouraging coups. Any general who seized power now would have no friends across the border to rely on. But if one government were to fall, it would become easier for the same to happen elsewhere.

Atilio Boron, a prominent Argentine political scientist, said that changes in U.S. policy toward Latin America also have been important in discouraging any new coup attempts.

“To the degree that the United States continues believing in the interest of Latin American democracies, any potential interventions by coup-mongers will be put off. The problem will come if the democratic experiments, as they are evolving today, become exhausted. At that point, Washington might stop exercising its veto.”

THE PASSING OF THE GENERALS

One by one, South America’s dictators have been succeeded by elected governments during the last decade, and some countries have since held more than one free election. A look at the last military regime in each country:

ARGENTINA

Gen. Leopoldo Galtieri’s regime, shaken by 1982 Falklands war with Britain, gave way to interim military governments that yielded to popular pressure for national elections. Vote in 1983 produced civilian leadership.

BOLIVIA

With at least 180 coups in its history, Bolivia last had a military leader, Gen. Guido Vildoso Calderon, in 1982. Economic crisis forced his junta to hand over power to previously elected Congress, which chose civilian president.

BRAZIL

Military governments, some of them elected, ruled from 1964 to 1985, when Gen. Joao Baptista Figueiredo’s regime was succeeded by civilian government chosen by electoral college.

CHILE

Military under Gen. Augusto Pinochet overthrew elected Marxist President Salvador Allende in 1973 and ruled until civilian Patricio Aylwin was elected last year. He takes office in March.

COLOMBIA

Last dictator was Gen. Gustavo Rojas Pinilla, overthrown in 1957 by military junta, which gave way to elected civilian government.

ECUADOR

Junta under Vice Adm. Alfredo Poveda Burbano took power in 1976 promising a return to civilian rule. After delays, a civilian leader was elected in 1979.

GUYANA

Former British colony has been nominally democratic since independence in 1966.

PARAGUAY

Gen. Alfredo Stroessner took office 1954 and was deposed by a coup in February, 1989. His successor, Gen. Andres Rodriguez, was democratically elected president in May.

PERU

Gen. Oscar Molina Pallochia took office in 1978. Two years later, the first civilian government since 1968 was elected.

SURINAME Lt. Col. Desi Bouterse, who had aided a 1980 military coup, assumed office in 1985, then arranged for 1987 elections that led to civilian rule.

URUGUAY

Lt. Gen. Gregorio Conrado Alvarez Armellino took office in 1981 to preside over return to civilian rule. Elections were held in 1984.

VENEZUELA

After more than a century of political instability, the regime of Gen. Marcos Perez Jimenez was overthrown by a military-backed popular movement in 1958. Elected governments have held power since.