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Latin America—Which Model?

The region is at a crossroads

I can think of few times when there has been such a broad range of competing political and socioeconomic models in Latin America as there is today.

For starters, there are several left-wing dictatorships with an ideological bent. Cuba, Venezuela, Nicaragua, and Bolivia (in which the despotism is not yet as pervasive as in the other three) make up this ugly group. At the other end of the spectrum is another kind of authoritarianism. El Salvador’s Nayib Bukele enjoys enormous popularity and has emerged as an icon of the law-and-order right. His admirers attribute his success against organized crime to his authoritarian approach.

Then there is the strange case of Mexico. López Obrador is a populist with autocratic ambitions, but he has introduced two novelties in this Latin American tradition. One relates to the fiscal purse and the central bank. Although excesses have been committed, they are not comparable to the fiscal and monetary expansion accompanying traditional populism. This has allowed López Obrador to maintain a popularity of just under sixty percent, unlike his unpopular autocratic left-wing peers.

The other novelty is that he won’t seek re-election in June. Instead, he supports the former head of government of Mexico City, Claudia Sheinbaum, a political crony who owes her commanding position in the polls to him and wants to govern vicariously through her after his tenure is over. Although López Obrador has eroded the republican institutions, he has not gone as far as his dictatorial populist peers; the vicarious autocracy underway owes more to the president’s critics’ resistance than his scruples.

Brazil’s Lula da Silva represents yet another subspecies of the Latin American populist left. He is a corrupt megalomaniac who wants to reshuffle the world order with the help of the BRICS group of emerging countries and has concentrated unhealthy amounts of power, including a very strong influence over a politicized Supreme Court. But he is not a dictator, nor does he let his dirigiste instincts entirely govern his decisions vis-à-vis the business community he is cozy with.

Next are the countries where populism has not overridden republican institutions but where efforts to establish a highly interventionist model (coupled with an ideological anticapitalist discourse) have significantly undermined what was once a mediocre but relatively sane system. Colombia, under Gustavo Petro, is one such country. He would like to join the ranks of Venezuela et al., but reality has held him back. In the case of Xiomara Castro, Honduras’s president and another leader aspiring to replicate the Venezuelan model. It remains to be seen whether her country’s institutions can stop her.

Left-wing populism exhibits one final variant today. I am referring to Chile’s Gabriel Boric. He was one of the leaders who, in 2019, took to the streets and supported violent efforts to overturn the fabled Chilean socioeconomic model. It looked for a while as if Chile’s middle class was ready to support this suicidal effort that hinged on refounding the institutions and adopting a new, statist constitution. Things have regained some sense of normalcy, partly because Chilean society realized things had gone too far, partly because Boric has become more reasonable than many expected. Occasionally, he even takes jabs against some of his left-wing peers. He now embodies a sort of cautious, tentative, left-wing populism.

Then there is the social-democratic kind of president. It is too soon to say whether Bernardo Arévalo, who has just assumed power in Guatemala, will prevail against the entrenched mafia-type interests that tried to bar him from taking office and whether he will be the moderate, European-style center-left leader he seems to want to be.

Next, there is Peru’s Dina Boluarte, a former leftist who came to power when Pedro Castillo, her Marxist predecessor and boss, attempted a self-coup and was deposed, giving way to his vice president, who courageously opposed him. Once she took over, Boluarte successfully stopped a violent uprising by the extreme left (dozens of Peruvians were killed, and the matter is under investigation.) She became a sort of “bête noire” of the left; however, she is anything but a right-winger. She seems torn between her socialist-leaning heart and a head that tells her that private investment is needed to overcome the current recession. The result is neither here nor there, a sort of paralysis that has everyone angry at her.

Then, amid this confusion and chaos, there is Argentina’s Milei. He is attempting to undo decades of Peronist-inspired populism and an economic debacle with some of the most ambitious free-market reforms ever unleashed against Latin America’s status quo. It is too early to tell whether he will overcome the mammoth interests working against him. If he does, his socioeconomic model will become contagious.

Finally, some countries always seem to make modest but steady progress. A long time ago, they established sensible institutions and assumed reasonable mores that were somehow preserved when violence or dictatorship briefly interrupted the flow of things and subsequently resurfaced. Uruguay and Costa Rica are two such countries.

Given all of the above, can anyone doubt that no other region in the world has such a chaotic, confusing, contradictory mix of regimes and political and economic models?

Alvaro Vargas Llosa is a Senior Fellow at the Independent Institute. His Independent books include Global Crossings, Liberty for Latin America, and The Che Guevara Myth.
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