Latin America’s Leftist Slide
Bad ideas take a long time to die.
Since the start of the 21st Century, the leftward lurch in Latin America has been unmistakable. By early 2008, the nations of Argentina, Bolivia, Brazil, Chile, Ecuador, Guatemala, Nicaragua, Paraguay, Uruguay, and Venezuela, and, to a certain extent, Mexico and Peru, have all embraced center-left political parties or movements. The reason for the tilt is a familiar one: the siren song of government-mandated wealth redistribution and increased levels of social spending have resonated with people with a long history of economic and development troubles.
“I think it’s difficult for conservative candidates to move forward because inequality is such an entrenched issue,” said Ana Quintana, a Latin America expert at the Heritage Foundation in Washington. “And it’s hard to implement free-market, institutional reforms when you need to make sure a significant portion of the population can get enough to eat.”
Yet while the left is ascendant, Raul L. Madrid, an associate professor at the University of Texas at Austin’s Department of Government, explained there is a wide variety of approaches to achieving these aims. He cites the distinctions between the Chavez revolution in Venezuela and its massive expansion of the state apparatus, and countries like Brazil and Chile that have worked largely within existing policy and market-oriented economic models. According to Madrid, the middle ground between those poles is occupied Bolivia’s Evo Morales.
He further divides the left into two distinct models. The first model is the traditional left, which faced intense political and economic pressure to embrace market-oriented policies during the late ‘80s and early ‘90s. In doing so they abandoned their advocacy of state-oriented polices, gravitating towards the political center in the process. As a result of that shift, space was opened up on the far left end of the political spectrum and it became occupied by second model, the far more radical “interventionist” leftism, whose influence grew among voters disenchanted with traditional leftist policy-making.
Thus for example, while countries such as Brazil and Chile maintained center-left policies grounded in maintaining existing constitutions, common ground with the political opposition, and the avoidance of polarizing rhetoric, countries such as Bolivia and Venezuela created new constitutions, swept away existing institutions and demonized their political opponents.
The economic results arising from such varying policies is somewhat predictable. Following an International Monetary Fund (IMF) rescue in 2002, Brazil fortunes increased dramatically. Between 2002 and 2008 exports of iron, oil and sugar boomed and increasing domestic consumption had the nation expanding at a rate of 4 percent annually. Yet growth declined the next four years and currently the nation seems headed for a recession, based on a litany of familiar pitfalls: extended credit, too much debt, wages that have grown faster than the GDP, and over-compensated public sector workers.
Chile experienced an economic downturn in 2014 driven in large part by reforms of their tax, education, labor and energy systems. Growth of 3 percent is expected this year based in large part on the U.S. recovery. Copper prices may be the deciding factor as they accounted for 52 percent of the nation’s total exports in 2013.
Bolivia remains South America’s poorest country, but their fortunes are rising based on relatively high prices for natural gas, the nation’s most important export. President Evo Morales was reelected last year and characterized his win as a “victory of the anti-colonialists and the anti-imperialists.” Yet despite that political stance, he has embarked on fiscal policies described as “prudent” by both the World Bank and major credit agency Fitch Ratings.
Yet there are ominous signs. Morales’ nationalization of key industries has left the nation with less than half the rate of private investment of most other countries in South America, and their gas exports go entirely to Brazil and Argentina, tying a substantial portion of their economy to the fates of these two nations. In other words, what Bolivia is currently experiencing might be nothing more than the boom part of a boom-and-bust cycle that typifies impoverished nations.
As for Venezuela, the hard-left policies initiated by Hugo Chavez and extended by current President Nicolas Maduro is a rapidly unfolding disaster of runaway inflation, economic contraction and rampant crime. Shortages of basic commodities are the norm, and the nation dependent on oil exports for a staggering 95 percent of its export earnings has been battered by the oil price downturn. As of now the fifth largest economy in South America is the worst performing economy in the world.
In contrast to Madrid’s analysis, the Wall Street Journal’s David Luhnow sees the divide as one between a bloc of countries that “faces the Atlantic Ocean mistrusts globalization and gives the state a large role in the economy,” and a bloc that faces the Pacific Ocean and “embraces free trade and free markets.” The Pacific Alliance, as the latter group is called, has outperformed the former group and the rest of Latin America since 2011, but they are currently facing headwinds engendered by falling commodity prices, political volatility in Peru, Colombia, and Mexico, and the Chinese economic slowdown. Yet Atlantic bloc countries were hit even harder.
The other divide is political. Pacific bloc countries have endeavored to maintain ties with the United States, while the Atlantic bloc views America with suspicion or outright hostility.
This reality has had serious geopolitical consequences. The leftward lurch and hostility to the U.S. on the part of some South American countries has benefitted Iran. The world’s foremost sponsor of state terror has made inroads in countries such as Argentina, Ecuador, Nicaragua, and Bolivia. Moreover, Venezuela has provided members of Iran’s Revolutionary Guard Corps (IRGC) with passports, allowing them to travel freely throughout the region. “The Iranian threat comes not from espionage as much, but from influencing the ideology of their host country,” said Rep. Ileana Ros-Lehtinen (R-FL), vice-chair of the House’s Subcommittee on the Western Hemisphere. “That’s what they’re aiming for and penetrating [these countries] so they have a presence in Latin America right at the foothold of the U.S.” It is a penetration the Obama administration “seems to be willing to turn a blind eye towards,” contends Rep. Matt Salmon (R-AZ), a House Foreign Affairs Committee member.
The Obama administration, no doubt in an attempt to downplay anything that might upset their nuclear deal applecart, has insisted Iran’s influence in the region is on the wane. Yet sources contacted by Breitbart News “unanimously refuted” that assessment, and one U.S. Military official told the news site there are “80-plus Shiite cultural centers backed by Iran…currently being operated by Hezbollah and Tehran’s Revolutionary Guards-Quds Force.” Moreover, those centers are “continuously multiplying.”
That Iran remains heavily invested in the region’s leftward shift and the anti-U.S. sentiment it engenders is hardly surprising. Just as unsurprising, but far more distressing, is their latest ally in that effort, namely Pope Francis. The Pope’s trip to South America that began on July 5 and will end July 13 involves visiting Ecuador, Bolivia and Paraguay, three of the region’s poorest nations. Nations where his hard-left political worldview of attacking multinational companies for the “exploitation” of poor nations, criticizing unfettered capitalism for promoting “exclusion and inequality,” and promoting the ultimate redistribution scheme known as man-made global warming, will undoubtedly resonate.
Yet while he aligns himself with the region’s leftists, Pope Francis remained mute regarding the region’s increasing authoritarianism. During his stay in Ecuador he refrained from challenging increasingly embattled Ecuadorean President Rafael Correa. Correa has attempted to stifle a free press and co-opt or destroy many of the nation’s democratic institutions, yet the Pope spoke only in generalities about the problems facing that nation.
Upon his arrival in Bolivia on Wednesday, President Evo Morales presented Francis with a gift that gave the Pontiff pause: a crucifix mounted on Communism’s hammer and sickle, with a crucified Christ on the hammer part. “That’s not right,” the Pope said when he saw it. Prior to the exchange, Francis had praised Morales for the “important steps” that were being made “towards including broad sectors in the country’s economic, social and political life.” And in a subsequent speech to civil authorities in La Paz, the Pope reverted to type insisting that the common good should not be confused with prosperity that had “opened the door to the evil of corruption.” And much like Correa, the authoritarian impulses of Morales, who once referred to the Church as his “main enemy,” remained unaddressed. Pope Francis arrives in Paraguay today.
During his trip the Pope is promoting ”liberation theology.” It was ostensibly founded by Father Gustavo Gutiérrez and it critics, including Francis’ predecessors Pope John Paul II and Pope Benedict XVI, have spurned its overtly Marxist foundation. Former Soviet spy Ion Mihai Pacepa disputed liberation theology’s origin, insisting it was invented by the KGB in 1968, when the “KGB-created Christian Peace Conference, supported by the world-wide World Peace Council, was able to maneuver a group of leftist South American bishops into holding a Conference of Latin American Bishops at Medellin, Colombia,” Pacepa insists. “The Conference’s official task was to ameliorate poverty. Its undeclared goal was to recognize a new religious movement encouraging the poor to rebel against the ‘institutionalized violence of poverty,’ and to recommend the new movement to the World Council of Churches for official approval.”
“The Medellin Conference achieved both goals,” he added.
Hence, much of Latin America remains in the thrall of leftist policies, irrespective of whether they are secularly or religiously motivated. What does the future hold? Madrid believes the survival of traditional and/or interventionist leftist governments “will have to show that they are capable of governing in bad times as well as good. The Pacific/Atlantic bloc outlook? “In the end, the results from the different blocs will resolve the debates,” insists Pedro Pablo Kuczynski, a former Peruvian finance minister, “but bad ideas take a long time to die.” Given the economic upheaval in Greece, Puerto Rico and China—in a world where economic insulation has become a virtual impossibility—death may be closer than one might imagine.