RECENT DEVELOPMENTS IN LATIN AMERICA: Through an Indian Prism
By: Deepak Bhojwani, Guest Scholar at the Council on Hemispheric Affairs
Recent elections in Central America, after a history of civil war and ideological contention, where governments have alternated between the left and the right, reveal interesting aspects of the political divide and attempts by politicians to arbitrate the sub-region’s destiny. Further afield, in South America, where the stakes are higher, a similar process is in motion. The region’s orientation may well be determined by the success or failure of the different models being experimented, and also by the sheer tenacity of the political parties and personalities that wield power.
On June 1, 2014, former guerilla leader Salvador Sánchez Cerén was sworn in as President of El Salvador, succeeding the moderately left Mauricio Funes. His party, the Farabundo Martí National Liberation Front (Frente Farabundo Martí de Liberación Nacional—FMLN), was founded in 1980, dedicated to bring down the government of the day. On January 16, 1992, he symbolically destroyed his rifle in Mexico, where the FMLN signed an agreement ending the 12-year civil war that cost the lives of 75,000 Salvadorans.
A month after Sánchez Cerén won his election, another left-leaning candidate, Luis Guillermo Solis, beat the conservative National Liberation Party (Partido Liberación Nacional—PLN) candidate by a massive margin. This brought his party, the Citizen Action Party (Partido Acción Ciudadana—PAC), to power for the first time in Costa Rica, which had long been considered a peaceful haven in a turbulent region. Costa Rica had done away with its standing army under the 1949 Constitution. Since 1982, two traditional conservative political parties, the PLN and the Social Christian Unity Party (Partido de Unidad Socialcristiana—PUSC), had alternated in power.
On May 5, conservative Juan Carlos Varela was declared the winner in a closely fought presidential election in Panama. The former Vice President of Panama fell out with his former boss, right-wing President Ricardo Martinelli. Varela’s win was largely unexpected. Panama links two oceans and is vital to business interests within the region and the outside world. The policies of this new presidency will be closely monitored.
In November 2013, Juan Orlando Hernández, the right-wing candidate of the traditional National Party (Partido Nacional—PN), won the presidency of Honduras, a country that has barely emerged from the shadow of a coup. Former President Manuel Zelaya tried to take Honduras into the left-wing Bolivarian Alliance for the Peoples of Our America (Alternativa Bolivariana para las Américas—ALBA), a grouping led by Venezuela and Cuba, but was blatantly deposed in 2009. Orlando defeated Zelaya’s wife in a closely fought contest. Honduras has a history of protest by the poor and dispossessed, and the highest crime rate in the world—over 90 deaths per 100,000 inhabitants.
Another former guerilla leader, President Daniel Ortega, is in power in Nicaragua, a Central American country wracked by civil war in the late 1970s. Accused of political manipulation, Ortega has won elections in 2006 and 2011, and looks set to continue. Despite his leftist stance and extensive redistribution programs, the Nicaraguan economy is being run on more or less conventional lines, attracting foreign capital.
In Guatemala, the most populous of the Central American countries, a former general, Otto Pérez Molina has been President since early 2012, having succeeded the centre-left Alvaro Colom. There are murmurs that Pérez’s supporters want to amend the Constitution to allow him to continue. Guatemala suffered a genocide, mainly of peasants and descendants of its Mayan population, in the course of a civil war that lasted from 1960 until 1996.
To the north of the isthmus lies colossal Mexico. It has been ruled by the Institutional Revolutionary Party (Partido Revolucionario Institucional—PRI) and the National Action Party (Partido Acción Nacional—PAN) for almost a century. These business-friendly parties have managed to keep the left-oriented Party of the Democratic Revolution (Partido de la Revolución Democrática—PRD) at bay; though the current President, Enrique Peña Nieto of the PRI, has reached out to the PAN and the PRD in an effort to achieve consensus in a Congress divided on far-reaching economic reforms. Mexico’s incorporation into the North American-dominated free trade agreement (NAFTA) and its initiative to integrate with Peru, Colombia, and Chile in the market-oriented Pacific Alliance, have determined its orientation.
Caribbean Cuba itself is crawling through a transition that its octogenarian President, Raul Castro, hopes will reform its political economy without sweeping away the monolithic Communist Party and all it has stood for.
To the south lies Colombia, where Conservatives and Liberals, the latter essentially centre-right, have shared government for over a century. A marginalised left took to the jungles and its more radical elements have been fighting the establishment for over half a century. The popular right-wing President Álvaro Uribe (2002-2010), was largely responsible for decimating the guerilla leadership and their cadres. His attempt to amend the Constitution to permit a second re-election was struck down by an assertive and independent Constitutional Court.
Colombia’s neighbour, Venezuela seized the baton of the left in Latin America from Cuba, and ran a fair distance over the past fifteen years. The iconic and mercurial President Hugo Chávez managed to guarantee his right to indefinite re-election before cancer led to his untimely death. Nicolas Maduro, Chávez’s anointed sucesor, narrowly won the presidency after Chávez’s sudden death in March 2013. He has been struggling against an opposition that looks increasingly credible, given the precarious condition of the economy.
Elsewhere in South America, President Evo Morales appears to enjoy sufficient popularity to rule Bolivia for the foreseeable future. His radical leftist policies, including nationalisation of foreign business, have been balanced by a sober and honest administration that seeks to ensure that allocation and exploitation of Bolivia’s natural resources redound to domestic benefit. Morales also has the tribal credentials to rule a population that is predominantly indigenous.
In Ecuador, the administration of left-wing economist President Rafael Correa has gathered political traction. This emboldened him to recently back an amendment to the 2008 Constitution, permitting indefinite re-election. “My life no longer belongs to me,” he declared. Several Latin American countries only permit one presidential term, while many others allow one re-election.
In neighbouring Peru, the erstwhile left-wing President, Ollanta Humala has maintained power despite low popularity ratings. Peru is on a high growth trajectory, and fully integrated into the Pacific Alliance, due largely to the initiative of Humala’s predecessor, Alan García, a former leftist who made a 180 degree turnaround in his second presidential term (2006-2011).
A proposal for a second presidential re-election was spurned by the charismatic President Lula of Brazil (2003-10), arguably the most successful and popular Latin American leader of this century. His successor, Ms. Dilma Roussef, a guerilla fighter herself during the period of military rule in Brazil (1964-85), will seek a second term in October. Despite widespread protests against corruption and mismanagement of the economy, she is favoured to defeat her right-wing and centrist opponents, and overcome a challenge from the radical left.
Further south, President Cristina Fernández de Kirschner of Argentina, considered a neo-leftist, lost ground in recent parliamentary and regional elections. Her Peronist movement is expected to hand over to a more business-friendly government next year.
Next door, Fernández’s Chilean counterpart, Michelle Bachelet of the Socialist Party, trounced her opponents in March this year, with the backing of five other parties, including the Communists. The country is racked by protests, largely by youth disillusioned over the fact that they are marginalised in the most prosperous country in Latin America. President Bachelet has proposed robust reforms, including higher taxes on business, and subsidised higher education, but will have to walk an ideological tightrope.
Former guerilla leader, President Jose Mujica, of Uruguay is very popular. The economy has done well and his leftist predecessor, Tabaré Vazquez, is standing for re-election in October to replace him. Next door the right-wing candidate Horacio Cartes, of the traditional Colorado Party, became President of Paraguay in August 2013. A rich businessman, he was accused of embezzlement, but was absolved. His victory has brought the right back. A collusive establishment has virtually buried all traces of the left-wing regime of former President Fernando Lugo, whose vain attempts at land reform led to his ouster in June 2012, in what was considered a ‘legislative coup’.
Latin America has come a long way since the days dictators and demagogues were supported by vested—and U.S.—interests, which regularly emerged to derail democracy. Deference to poverty alleviation and social causes, even if it amounts to lip service in some cases, is unavoidable for successful politics today. These mantras find prominent place in successive Summit declarations of the numerous regional organisations. While the so-called ‘neo-liberal’ school of thought has receded from the limelight, the far-left also has had to tread warily.
Formations like the Pacific Alliance (Mexico, Colombia, Peru, and Chile), backed by powerful business interests, are gathering momentum in a region awaiting the economic revival of the developed world and China. Free trade agreements are sought to be consolidated, and new ones negotiated by Brazil and its partners in the more protectionist Mercosur. Even Ecuador is not averse to negotiating such terms with Europe, for instance. Globalisation is no longer a bad word, though most regimes in the region feel they need to minimise the negative impact of the surge of foreign capital that is finding its way to their oil and gas fields, mines, plantations, industry, and even the services and financial sectors.
The need to maintain a balance between exploitation of natural resources, which accounts for the bulk of regional GDP, and sustainable development, with emphasis on human resources, equity and redistribution, occupies analysts and governments alike. Nevertheless, the compulsion to attract foreign investment, maintain healthy trade and current account balances, and control inflation, has given pause to even the most radical tendencies. Exceptions include a fossilised Cuban system and Venezuela, which continues to rely on an increasingly insufficient inflow from its oil revenues. Argentina’s populism will also have to give way to a more pragmatic economic model, even if windfall profits from newfound shale gas and other resources bring about a semblance of fiscal stability.
Democracy has taken hold—despite some recent aberrations—and its observance is being monitored by regional leaders. Preference for ‘stability’ can no longer be an excuse to deny free choice and expression. Control over and disposition of national resources and wealth within prudent and accountable frameworks now dominate political discourse. Even market-friendly governments have begun to realise the need to exercise control over domestic and foreign monopolies, and to institutionalise checks and balances.
Diligent negotiations in Havana between the Colombian government and the FARC rebels, underwritten by Venezuela, Chile, and Norway, have dragged on for almost two years now. The peace process, as it is called, was the principal bone of contention between the candidates in this year’s presidential election. At stake is not just the end of the insurgency, but fundamental issues such as agrarian reform, political participation by the guerillas who must effectively disarm and face justice, narco-traffic, and rehabilitation and compensation to victims of the conflict. The Havana negotiations are a distillation of the essential elements of political reconciliation in a region that has been largely ruled by elites for two centuries after independence from colonial rule, stoking fires of popular resentment.
There is understandable concern over the legacy of decades of infiltration of the political economy by narco-networks that now challenge the combined might of governments, the latter aided liberally by the United States and its allies. Another preoccupation is the rising level of criminality in several countries. This has as much to do with the prosperity achieved by most of the region, leading to rising expectations, as with rising levels of inequality, marginalisation, and lack of basic education.
In Chile, President Bachelet may well be betting her second presidency on the centrality of connecting with a disillusioned youth, risking entrepreneurial displeasure through higher taxes. President Rousseff in Brazil is struggling to navigate policy and government without running aground on the Scylla of vested partisan political interests, and the Charybdis of an inflamed public opinion fed up with inadequate delivery of political reform and economic redistribution.
There are several lessons here for India, which prides itself on its democratic tradition. Good governance, while maintaining healthy, even admirable growth rates, is not easy. It is essential that a modern nation state confront structural issues and festering resentments. Different experiences thrown up in recent years in Latin America can shed light on our own failings, whether to address inequality, control corruption, assuage communal resentments, institutionalise checks and balances, or ensure a healthier environment for access to, and accountability of, political power.
India enjoys a positive image in Latin America, where it is perceived as a non-intrusive, non-threatening, ancient democracy. A reliable customer of the region’s resources, it is also a sizeable, tempting market. A higher level of engagement is possible, beyond the meagre levels of trade and low presence of Indian enterprise, relative to other established and emerging economies. This will, however require greater understanding and appreciation of the political process underway, and the consequent economic and social policies the region’s leaders are implementing. Only then can the Indian establishment synchronise its policy to correspond to the priorities of its Latin American partners and avail of the immense potential that region offers.
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