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Foreign Policy

Latin America’s Season of Discontent

Dec 03 , 2019

Latin America’s been burning—literally, in the case of the Brazilian and Bolivian Amazon and the Chilean subway system, as well as figuratively, as street protests and violence roil nation after nation. Leaders like Bolivia’s Evo Morales are secure in office one day and are turfed out the next. Former leaders, including Brazil’s Lula da Silva and Argentina’s Cristina Fernandez de Kirchner, return to prominence, further polarizing societies. Security forces are on edge as they attempt to contain mass demonstrations in Bolivia, Chile, Colombia, Ecuador, and elsewhere. Separately, Venezuela is well down the road to self-immolation.

We have not seen such regional unease and discontent in years. One after another, sparked by anything and nothing at all, populations across the region are rising up in frustration against… well, what, exactly? Inequality? Unfairness? Substandard schools? Crime? Corruption? A lack of constitutional process and order? Yes…but all of these have existed across Latin America since well-before the European conquest. So what’s going on now that brings these issues to a head?

In a word, expectations. Or rather, unmet expectations.

After years of economic underperformance, Latin America appeared at the beginning of the century to have broken its traditional cycle of boom and bust development. China’s entry into the global economy and explosive growth underwrote the rapid economic expansion of South America’s commodity exporters, whose populist leaders, once elected, spent lavishly to promote their own rule through public works and giveaways, corruption, and increasingly authoritarian governance. The availability of unheard-of resources brought millions out of poverty and created hope for many who had not previously had it.

Eventually, however, the commodities boom faded, and economies slowed or even contracted. As the tide recedes, it is said, one sees who has been wearing a swimsuit, or in this case, one sees who was shoring up economic fundamentals and preparing for inevitable downturn and who was simply fueling unsustainable consumption-led growth while engaging in breathtaking corruption. Meanwhile, those who were brought from poverty into the middle classes began to demand additional benefits from the state befitting higher living standards: improvements in health, education, infrastructure, and meaningful work prospects, particularly among those newly entering the workforce. But the foundation for such improvements was never, by and large, put into place. As economies have slowed—the IMF predicts Latin America will grow at a miniscule .6 percent this year, after several years already of sluggish growth—and personal circumstances of citizens have threatened to regress, frustration and anger has arisen. Growing anger has been directed at elites, who have been punished severely at the voting table.

Simply put, as governments across the region now struggle to clean up the economic and, in some cases, political detritus of populism, their people have increasingly been asking where all the money went, and, more to the point, who took it? The resulting popular backlash, including street protests, was predictable as commodity prices fell, crime and corruption increased, and spending patterns proved unsustainable. The spark has been different in each case, including allegations of outside meddling from disrupters like Cuba and Venezuela, but the kindling has been a constant of unmet expectations and popular anger against self-dealing elites unable to deliver sustained broad-based results.

The temptation of governments now, of course, will be to look for new income and quick economic wins. Direct foreign investment is key, but Western investors have proven to be somewhat wary of Latin America’s recent instability and tepid growth. Meanwhile, China has entered the region aggressively, and will continue to pursue expanded relations. Economic engagement with Beijing also comes with a wider Chinese embrace, which observers are only now beginning to understand in the context of anticipated behaviors and policy directions bent toward Chinese interests. The threat to regional democracy is potentially profound, but it is a trade-off that nations seem willing to make, especially during difficult economic times.

Such are the compromises that will most likely continue to be made. There may be others as well. As the Spanish proverb goes, the best time to plant a tree is either 20 years ago, or today. The same is true for building sustainable and equitable economic growth. Patience will now be required to implement appropriate reforms and to allow their effects to work through the political economy. But patience is one thing the street may not have. Unless this mismatch can be meaningfully addressed, additional uncertainty for Latin America lies ahead.

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