Latin America Swings Right, Not Left

Once in a while, something big happens in Latin America. A few years ago, it was the rise of the political left. Since 2006, a dozen countries have held presidential elections, and, in contest after contest, left-wing nationalists and populists have come out on top. These weren't just mosquito republics or basket cases. Chileans elected Michelle Bachelet, an avowed socialist, and the Brazilians reelected Luiz Inácio Lula da Silva, the hirsute former union man who cut his teeth picketing multinational companies. "Latin America Tilts Left" and "How the U.S. Lost Latin America," yelled the headlines. And just the other day, economist Mark Weisbrot, of the Institute for Economic Policy Research, said confidently: "Left-wing governments have become the norm in Latin America." So much for the Washington Consensus, a decade of gringo diplomacy, and free-market reform.

Or so it seemed. Now, even as recession bites and economic liberalization comes under global attack, Latin American politics is a mixed bag that defies tidy ideological labeling and fogs the pundits' crystal ball. Yes, despite plunging oil prices, the Andean petrocrats of Bolivia, Ecuador, and Venezuela are still slouching toward 21st-century socialism, singing a hymn of anti-Washington invective. Nowhere more than in Venezuela, where Hugo Chávez, channeling Fidel Castro circa 1960, is silencing foes and the media (he just shut down 34 radio stations) and spreading blessings and aid (Russian Kalashnikovs, Swedish missiles) to Colombia's FARC guerrillas. But don't bet on the Cuban revolution 2.0 spreading beyond the Orinoco.

In the new Latin America, party affiliation and ideological inheritance may be heartfelt, but they are lousy compasses to the political future. And while neoliberalism and the Washington Consensus may be still be maldiciones below the Rio Grande, they are hardly dead or even out of fashion. In fact, with the exception of Mexico—whose fortunes are tethered to the faltering U.S. market—the nations faring best in the global financial downturn are those that have hewed closest to the free-market reforms that have proved so politically provocative. If onetime left-wingers are in charge in a dozen Central and South American states, most remain leftists in name only.

In part, this is because Latin America voters are changing. Despite the financial meltdown and for all the lather over neoliberalism, young Latin Americans are still in favor of free-market capitalism. In a PODER/Zogby poll commissioned earlier this year by NEWSWEEK, 63 percent of Latin Americans ages 18 to 29 said they believe that free trade is not only good but "benefits all people." The same number saw Colombia's FARC guerrillas as terrorists or drug traffickers, and two thirds named Chávez as the leader worst suited to lead the region in the future. That doesn't mean that Latin America is veering right again, but it may just be learning to cherish the middle ground.

Consider Alan Garcia, the guitar-playing enchanter who nearly wrecked Peru with his checkbook populism in the late 1980s. Now he's back, but this time as the poster boy of international investors—and reaping the results. Peru's economy is on track to expand by 2.5 to 3 percent this year and 6 percent in 2010; mining stocks have doubled in value on Lima's BVL bourse since January. In Chile, Bachelet's Socialist Party publicly disses neoliberals and the Washington Consensus, but in office she has abided by their rules and kept to the no-nonsense prescriptions of the center-left coalition Consertación. Although she has pumped money into social programs, she has taken care not to rock the broad consensus in favor of the free trade and fiscal conservatism that have kept Latin America's most vigorous capitalist economy on course.

In Brazil, Lula swapped his sweaty denim for tailored suits, broke bread with investors, and paid down the country's debts religiously, and though he is beginning to spread perks and pork again (with an eye on next year's election), his government still boasts one of the most conservative monetary policies on earth. (The central bank's prime lending rate is 8.75 percent a year.) Everyone but Brazil's factory-fitted leftists is delighted. Lula has an enviable 80 percent approval rating.

Even Fernando Lugo, a left-wing priest who was elected president of Paraguay vowing to take land from the rich and give to the poor (and to nationalize foreign firms), has been as quiet as a monk. (Credit here goes, again, to Lula, who bought off the Paraguayans by throwing them more money for the energy Brazil buys from the Itaipu hydroelectric plant.)

Three countries in South America—Chile, Uruguay, and Brazil—will hold elections in the next 17 months, and yet in none is the ruling left-wing party favored to win. In Chile, the frontrunner for December's election is Sebastián Piñera, a conservative billionaire and a harsh critic of Bachelet—though less on ideological grounds than for allegedly mismanaging government. Lula is backing his chief of staff, Dilma Rousseff, as his successor, but she has little political savvy and none of Lula's everyman charisma. In Uruguay, the left is pinning its hopes on socialist candidate José Mujica to succeed the lame duck Tabaré Vázquez in the October election, but pollsters expect the conservative former president Luis Alberto Lacalle to prevail in a runoff.

Why do rivals have the edge if the current leaders are so popular? Part of this is surely incumbent fatigue coupled with the fallout of the economic downturn. Though Latin America is weathering the storm well—commodities prices are climbing again and banks are solid—manufacturing output and employment have plunged. Brazil's industry, for example, is down by more than 13 percent since January, the worst half year on record since 1975.

Another explanation might be that the Latin American left is no longer what it used to be. Or rather, it was never what it was made out to be. For starters, the back story still trumps parties and ideology: Lula, a former shoeshine boy, and Bachelet, whose father was tortured under the Chilean dictatorship, are wildly popular, but they are personalities who levitate in crowds and float above their parties, which are bloated with fellow travelers. Their magic does not rub off on mere mortals.

Still, a compelling biography isn't everything. Even the most charmed leaders have fallen from the balcony because, in the new Latin politics, pragmatism is the new charisma. Alvaro Uribe would know. To the Latin left, there is no leader more reviled than the Colombian president. Smallish, nearly mousy, and ungifted as an orator, Uribe had horse sense. In a move that seemed political suicide, he openly befriended the unloved Bush administration.

Yet, under Uribe, Colombia is a safer and more prosperous nation. Uribe's hardline (sometimes brutal) law-and-order policies worked. He sent the FARC guerrillas in retreat and turned once bullet-riddled cities like Bogotá, Medellín, and Cali into examples for other crime-ridden Latin metropolises. Little wonder that Uribe owns a 70-plus percent approval rating, one of the best in the region, and will likely see his handpicked successor, Juan Manuel Santos, prevail in next year's election.

Make no mistake. Beating the gringo devil and bashing capitalism can still make pulses race in much of the hemisphere, but, when it comes to casting ballots, what appears to move the majority is pragmatism. For Latin America, that is close to a revolution.