Regional Outlook : Latin America Insiders Back on Winning Track : Reformers once proved popular. But improving economies have ushered back the Old Guard, who now promise stability.

The pendulum of power is swinging again in Latin America. No, the generals are not coming back. The political pendulum of the 1990s moves between civilians--insiders and outsiders.

Just a few years ago, the label of political insider could be a serious handicap for a Latin American presidential candidate. Electorates in many countries seemed disillusioned, even disgusted, with politicians from parties that had inhabited the halls of power.

Outsiders and newcomers were on the rise. They challenged insiders with surprising new strength, and they won the presidencies of Brazil and Peru.

A major reason was economics, said Peter Cleaves, director of the Institute for Latin American Studies at the University of Texas.

“Latin America went through enormous economic changes over the last 15 years,” he pointed out, “and just at the time when the economic crisis seemed deepest, and the population had the least respect for the political system, you had an opportunity for a lot of outsiders to come in.”

But lately it has been the other way around. As a series of elections puts the region’s politicians through their paces, insiders, standard-bearers of the political Establishment, are claiming victory in country after country.

“Now the economic situation is picking up a bit,” Cleaves said. “The incumbents and those who sort of promise stability are going to do better.”

Stronger and increasingly well-organized party systems also favor insiders in many Latin countries, analysts say. A prime example is Chilean President Eduardo Frei, who was elected by a landslide and took office March 11.

Frei is this country’s second Christian Democratic president in a row, a former senator and party chairman. He also is an insider by heredity, having lived in La Moneda, the presidential palace, when his father was Chile’s chief executive in the 1960s. A Christian Democratic alliance with the Socialists was a key to Frei’s victory.

“The Chilean case is the consolidation of a political system and a party system,” said Manuel Antonio Garreton, a political scientist with the University of Chile.

Presidents inaugurated this year in Colombia, Costa Rica, the Dominican Republic, El Salvador, Honduras and Panama are also vested insiders from parties in power or ones that had held power in recent years. Presidents with similar Establishment credentials took office last year in Bolivia and Paraguay.

On Dec. 1, President-elect Ernesto Zedillo of Mexico’s ruling Institutional Revolutionary Party will take over in Mexico. “El PRI” has been ushering its insiders into the presidency without a break for 65 years.

Political analysts say Mexicans want political and social reform but have opted for change from within, fearing an outsider might bring disarray.

Zedillo, a former budget minister, belongs to a new generation of party insiders who stand for moderate reform. Although he won with the lowest majority ever tallied by the ruling party, 48.7% of the votes, his ballots almost doubled those of outsider Diego Fernandez de Cevallos, the rightist runner-up.

And insiders are now favored to win other Latin American elections in the coming months:

* In Brazil, Fernando Henrique Cardoso, a former Senate leader and Cabinet minister, is expected to finish ahead of outsider Luis Inacio (Lula) da Silva, a leftist former labor leader, in the first round of presidential elections Oct. 3.

Cardoso’s Brazilian Social Democratic Party has never produced a president, but he held the posts of foreign minister and finance minister in the current Brazilian administration, and his rivals for the presidency call him “the government’s candidate” and “the official candidate.”

Economics has been the key to Cardoso’s success in opinion polls. As finance minister, he pushed through an economic reform plan that has reduced inflation from an alarming monthly rate of more than 45% in June to less than 2% in August.

* In Uruguay, former President Julio Sanguinetti of the Colorado Party is widely seen as the likely winner in presidential balloting scheduled for Nov. 27. The Colorados and the now-governing Blancos, or National Party, are Uruguay’s traditional insiders.

In 1989, when many Latin American outsiders were on the rise, Tabare Vazquez won election as mayor of Montevideo, the national capital and home of more than one-third of all Uruguayans. But this year, Vazquez and his outsider coalition of leftists and Blanco dissidents are lagging behind Sanguinetti and the Colorados in polls.

* Alberto Fujimori, the former outsider who won Peru’s presidency in 1990, is now the No. 1 insider and the favored candidate for April elections. Fujimori gained in popularity in 1992 when, backed by the army, he suspended the constitution and shut down the Congress, which was dominated by old-line insiders who opposed him.

A new, pro-Fujimori Congress was elected later in 1992. Fujimori’s main rival so far for the 1995 contest is Javier Perez de Cuellar, who is well-known as a former secretary general of the United Nations but is an outsider to Peruvian politics.

* Argentina’s flamboyant Carlos Saul Menem is favored to win a second term in May elections, thanks to a recent constitutional reform that eliminated a ban on reelection. Menem is the leader of the Peronist Party, founded by the late President Juan D. Peron in the late 1940s.

Menem and Fujimori took office amid tidal waves of hyper-inflation, and both have tamed spiraling prices with drastic cuts in government spending, privatization of state-owned enterprises and other policies favoring a free market. Their policies have brought brisk economic growth but also increased unemployment and hardship for their countries’ poorest people.

Like Menem’s supporters, Fujimori’s have pushed through a constitutional amendment that allows his reelection. In most Latin American countries, constitutions prohibit the immediate reelection of a president--a provision aimed at keeping insiders from becoming too entrenched in power. The military coup has been the other notable way of removing Latin American insiders from power. Then, in the 1980s, the pendulum made an almost complete swing to democracy--and there it has stayed, with the notable exceptions of Cuba and Haiti.

But at the end of the 1980s and the beginning of the 1990s, civilian insiders seemed vulnerable in many Latin American countries. Debt crisis, recession and high inflation had beleaguered the region during most of the 1980s, dubbed Latin America’s “Lost Decade.”

Relief from economic problems seemed slow in coming, and official corruption began cropping up. Voters almost everywhere were open to leadership from sectors outside old-line political elites and main-line party machines.

In the past, leftist movements might have been an alternative to traditional parties in Latin America, but the collapse of international communism and democratic gains around the world discredited revolutionaries and militarists alike. It was as if there were a vacuum waiting for outside forces to fill.

Fernando Collor de Mello, a telegenic but obscure politician from one of Brazil’s smallest states, started the outsider trend, launching a campaign for the presidency with a newly created party that had no national structure. He lashed out at political insiders, promising a new era of clean and efficient government.

The message caught on, and Collor rose from obscurity to victory, beating another outsider, Lula da Silva, in a runoff vote.

Then, in 1990, the even more obscure Fujimori repeated the feat in Peru.

Outsiders, it seemed, were on a roll. On the eve of his runoff victory, Fujimori told The Times: “If I win and am successful, this will be contagious for all of Latin America.”

Although the pendulum never made a full swing across the region, the trend toward outsiders looked strong for a while.

Mexico’s Cuauhtemoc Cardenas with his new Democratic Revolutionary Party had become a powerful force, as was television talk-show host Carlos Palenque and his new party in Bolivia. Other outsiders were emerging by winning races for mayor in such important cities as Montevideo; Lima, Peru; and Sao Paulo, Brazil. Skillful use of television helped them. TV was an increasingly effective vehicle for political mobilization in Latin America.

In many cases, voting for an outsider was less a vote of faith or allegiance than a “punishment vote” against political elites or a desperate gamble on someone new.

In Brazil, the voters lost their bet on Collor. Little more than two years after his election, a Congress dominated by political insiders impeached him on charges of corruption.

Now, as economic conditions across the region improve, voters seem more inclined to stick with familiar politicians than to take a chance on new ones.

Since mid-1993, insiders have taken office in these countries:

Bolivia--Gonzalo Sanchez de Lozada, a former planning minister who led the conquest of Bolivian hyper-inflation in the mid-1980s, assumed his country’s presidency in August, 1993. He belongs to the Nationalist Revolutionary Movement, which has held power several times.

Paraguay--Juan Carlos Wasmosy took office in August, 1993. A former Cabinet minister, he is the country’s first civilian president in four decades and a member of the Colorado Party, which supported military President Alfredo Stroessner until the general was deposed in a 1989 coup.

Honduras--President Carlos Roberto Reina was inaugurated in January. Reina, a professional politician most of his life, comes from the social democratic wing of the Liberal Party, which held power during most of the 1980s.

Venezuela--With the economy a shambles and corruption scandals raging last year, voters picked longtime political insider Rafael Caldera as president. Caldera, inaugurated Feb. 2, ran as an independent and beat candidates of Venezuela’s two main old-line parties. But as a former leader of one of those parties, the Social Christians, and as a former president and senator, he also has solid old-line credentials.

Costa Rica--Jose Maria Figueres became president on May 8. Like Chile’s Frei, Figueres is the son and namesake of a former president.

El Salvador--Armando Calderon Sol took office June 1. Calderon Sol is a member of the conservative Nationalist Republican Alliance, or Arena, the party in power when he was elected.

Colombia--President Ernesto Samper took office Aug. 7, keeping the traditional Liberal Party in power.

Dominican Republic--President Joaquin Balaguer, dean of the region’s elected insiders, took the oath of office Aug. 16 for his seventh presidential term. Balaguer, 87 and now blind, has governed his Caribbean nation for 20 of the last 28 years. But his victory this year, tainted with fraud charges, was a narrow one--possibly because of persistent economic problems.

Panama--Ernesto Perez Balladares took office Sept. 1. He was an aide to the late Panamanian strongman, Gen. Omar Torrijos, and his party has dominated Panamanian politics in recent decades.

Perez’s Democratic Revolutionary Party was the political arm of Gen. Manuel A. Noriega, the dictator ousted from power by the U.S. military invasion of Panama in 1989. Noriega is now serving time in the United States for drug trafficking. Perez, who was temporarily jailed by the Americans after the invasion, is accompanied in government by some of Noriega’s staunchest cronies.

Many insiders now holding office are leaders of a new generation within established parties.

Figueres in Costa Rica took office at age 39, Calderon Sol in El Salvador at 45, Perez in Panama at 48, and Samper in Colombia at 43. Zedillo in Mexico is 42 and will be his country’s youngest president this century.

Most promise change and reform, and to some extent, all of them advocate free-market, lean-government policies. Said Mark B. Rosenberg, a Latin America specialist at Florida International University in Miami:

“I think it’s now common wisdom that countries only have one option, and that is to open their economies and be competitive in the global commercial environment. And they’re all trying to find ways in which they can attract foreign investors. And heck, in the old days, that was anathema.”

Insiders

* Fernando Henrique Cardoso

Presidential candidate in Brazil

Age: 63

Marital status: Married

Past offices:

National senator, 1983-92

Government leader in Senate, 1985-86

Foreign minister, 1992-93

Finance minister, 1993-94

“I can provide continuity because I already have been an integral part of the government. I know the programs, I don’t have to stop, I can advance.”

* Alberto Fujimori

President of Peru

Age: 56

Marital status: Separated

Past offices:

Rector (president) of the National Agrarian University, 1984-1988

President, 1990-present

“The answer, as always, is more schools, more health centers, more roads, more of everything for the Peruvian people.”

* Eduardo Frei

President of Chile

Age: 52

Marital status: Married

Past offices:

National senator, 1990-1993

President of Christian Democratic Party

“I believe one of the reasons I received that tremendous vote was that I was very loyal to my government during the term of President (Patricio) Aylwin.”