Saturday, December 03, 2005

The year ahead in Latin America

The Economist looks at the forthcoming elections in Latin America. Here is the current situation:
(Click to enlarge)

[W]ith no less than a dozen presidential contests and 13 legislative elections over the coming year. Involving Brazil and Mexico, the region's two giants, and four out of the five mid-sized South American republics (see table above), these elections will colour the region's political map for years to come.

Many onlookers predict that Latin America will move further left. That is possible. For the first time, one or two unabashed admirers of Venezuela's Hugo Chávez, who nowadays defines himself as a “21st-century socialist”, could be elected. Noisily as Mr Chávez would gloat over such triumphs as defeats for the influence of the United States in the region, they are almost certain to be confined to small countries, such as Bolivia and Nicaragua.

Despite the region's enamourment with left-leaning politics, the Economist points out that Democracy has been "putting down roots" in the region, but that further reforms are required if growth is to start cathching up with liberalising Asian countries.

The bigger picture is broadly one of continuity—for better or for worse. The moderate left has done well in Latin America since the late 1990s. That is partly because popular enthusiasm for the inflation-busting free-market reforms of the “Washington consensus” (ie, sound macro-economic policies, free trade, privatisation and deregulation) was undermined by a severe regionwide recession in 1998-2002. But it is also because democracy has finally become a habit in Latin America and, with it, the normal healthy alternation of power. The end of the military veto against the left encouraged it, in turn, to adopt more responsible policies.

The result has been that, instead of dismantling the reforms of the 1990s, most of the region's politicians cleave to a new “post-Washington” consensus, combining (more-or-less) sound macro-economic policies with a greater emphasis on social spending, and some tinkering with further liberalisation. In most places, this new consensus is likely to survive electoral examination. That is because the region's economies have been coasting along on the back of a commodity-price boom, and many incumbents are fairly popular.


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