Thursday, May 19, 2022

Populists see opportunity as Latin Americans lose faith in leaders

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The coronavirus has devastated the people and economies of Latin America, with one in four deaths worldwide due to Covid-19 in the region. As backlash over the pandemic intensifies, politicians are in the crosshairs, with a wave of elections this year giving outside populists the chance to topple hesitant incumbents.

“Any crazy guy in these countries who promises great things is going to be elected,” said a senior banker in the region. “People have been through a very difficult time and are likely to make big promises.”

The lengthy lockdowns imposed by most Latin American presidents have failed to reduce the death toll from Covid-19, but have hit the region’s economies, which have shrunk by around 7.4%. last year and are expected to recover by just 4.1% this year, according to a consensus compiled by Citibank.

In the hope of capitalizing on the unprecedented mistrust of a political class perceived as disconnected and corrupt, a series of maverick and marginal candidates are running for presidential elections in Ecuador, Peru and Chile this year.

“They [political leaders] are only slightly more popular than used car dealers, ”said Christopher Sabatini, senior fellow for Latin America at Chatham House. “Anyone having any association with the mainstream political class will be rejected.”

Even before the pandemic, the region was rocked by a wave of social protests that began in Chile in October 2019. Riots and street protests there revealed deep discontent with a system praised abroad as an example of good government but perceived at home as favorable a privileged elite.

Meanwhile, in Mexico, Argentina and Colombia, a majority of citizens have lost confidence and would not vote for their president, according to a poll by the global philanthropic organization Luminate. In Ecuador, President Lenín Moreno’s popularity has dropped to single digits, and in Chile, President Sebastián Piñera is interviewing teenagers.

The exception is Brazil, the region’s largest economy, where far-right leader Jair Bolsonaro has boosted his popularity with cash distributions to the poor and strong opposition to lockdowns.

“In a region where Covid-19 will have lasting repercussions, these results reveal worrying signs for the future of Latin American democracy,” Luminate said. “The tangible decline in the favorable character of democracy, especially among young people, combined with support for protests and growing discontent among the current political class, suggests a period of high political volatility.

Protesters demonstrate against economic measures linked to the pandemic in Ecuador. President Lenín Moreno has seen his popularity plummet to single digits © REUTERS

Arturo Valenzuela, Chile-born former US deputy secretary of state for the region, said the volatility is promoting new faces. “There is a new generation of leaders from civil society organizations who say they are fed up with the status quo,” he told the Financial Times. “They want to change the policy.”

After months of unrest in Chile, Mr. Piñera, a billionaire accused by opponents of being out of touch with the population, bowed to popular demands from an elected assembly to draft a new constitution. Work will begin later this year, straddling the November presidential election.

Mr. Piñera is not running again and the contest will likely be between left and right populists. Daniel Jadue, the Communist mayor of a Santiago suburb, and Pamela Jiles, a famous former TV presenter who bolstered her popularity by sponsoring a law allowing Chileans to tap their retirement savings, are among the first in polls of opinion.

Peru, which holds presidential elections in April, experienced a period of political turbulence last november, three different presidents took office in just over a week. A series of populist candidates are vying for the election.

“None of the candidates appear credible as someone who could step in and fix the country’s problems,” said Nicholas Watson, director of the Teneo consultancy for Latin America. “I don’t see any of them being able to stop the process of dismantling the institutional walls surrounding the Ministry of Finance and the central bank.”

Conservative millionaire and Ecuadorian presidential candidate Guillermo Lasso. Foreign investors are worried about the country’s direction if it loses to left-wing rival Andrés Arauz © AFP via Getty Images

In Ecuador, one of the countries most affected by the coronavirus, the presidential election in February is at the bottom of the wave radical left economist Andrés Arauz against Guillermo Lasso, a conservative banking millionaire.

Mr. Arauz, who leads in some polls and comes close to second in others, is the protégé of Rafael Correa, a left-wing populist who ruled Ecuador from 2007-17. If he wins, he plans to bring back his mentor as an advisor, a prospect that will alarm some foreign investors who remember Mr. Correa’s large borrowing and spending and close ties to China.

In planning the return of an influential former left-wing president to government under a new leader, the Ecuadorian opposition is following Argentina and Bolivia. Cristina Fernández de Kirchner, a fiery populist, was elected vice-president of Argentina in 2019 and Evo Morales, a left-wing brandon, is back in Bolivia exile after his protégé Luis Arce defeated a conservative interim administration in October 2020.

Meanwhile, in Mexico, the region’s second-largest economy, President Andrés Manuel López Obrador has reversed pro-market policies of the past 36 years, curtailing liberal energy reforms and re-establishing the leading role of state-owned oil company Pemex in national economic development.

The prospect of other countries in the region abandoning economic orthodoxy and fiscal prudence and reverting to the heavy spending years of the global commodity boom has investors worried, not least because commodity prices are now much higher. low and more unstable national finances.

“Trump being so populist legitimized populism in Latin America,” said one American business leader who travels a lot in the region. “The 2021 elections are going to be a turning point for many of these countries. We’ll find out how many of them turn. “

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