Bolivia Vote Suggests Pandemic May Fuel Populism in Latin America

RIO DE JANEIRO, BRAZIL – A landslide win by Bolivia’s socialist party at weekend elections may herald a year of dramatic shifts in Latin American politics, as the painful economic impact of the pandemic discredits incumbents and fuels demand for change.

Bolivia’s former economy minister Luis Arce won Sunday’s vote in the Andean nation, pledging to protect welfare spending as he takes over next month from a conservative interim government.

“The pandemic has caused the Bolivian people to suffer and this government did not know how to handle it,” said Nicanor Baltazar, a leader of Bolivia’s largest workers group, the COB. “The people have understood that.”

With Latin America one of the hardest-hit regions in terms of COVID-19 deaths and impact on economic growth, analysts said the outcome in Bolivia could mark a shift towards populism as more elections loom in 2021.

Voters will elect new presidents next year in Chile, Peru, Ecuador, Honduras, and Nicaragua, with major legislative election contests also due in Mexico and Argentina.

Even before the coronavirus struck, violent protests had rocked countries including Chile and Colombia, fueled by anger over inequality and political scandals.

With Latin America’s $5.7 trillion regional economy forecast to contract more than 9% this year and poverty indicators for its 650 million people due to surge back to rates last seen in 2005, tensions are already mounting.

The pandemic’s economic fallout will leave Latin American governments burdened by crippling deficits while facing angry demands from voters for action on poverty and public services, said Benjamin Gedan, director of the Wilson Center’s Argentina Project in Washington.

“The pandemic’s toll in Latin America is a godsend to outsiders and populists, who will promise to repudiate debt, reject budget cuts and fight corruption,” said Gedan.

IMF backlash

With several countries staggering under heavy debt burdens, a backlash against the international financial system as represented by the International Monetary Fund (IMF) is already underway.

In an interview with Reuters on Tuesday, Arce rebuffed the idea of an IMF loan for Bolivia and vowed to dole out social payouts “as many times as necessary.”

In Costa Rica, one of the region’s economic success stories, a proposed IMF loan provoked days of violent demonstrations against the center-left government of President Carlos Alvarado.

And in Ecuador, which will hold presidential elections in February, unions will lead protests against an IMF deal on Thursday, commemorating a wave of protests last year that forced conservative President Lenin Moreno to abandon proposed cuts in fuel subsidies. Would-be candidates for next year’s election are jostling for position by criticizing a loan deal Moreno struck with the IMF.

In Colombia, a national strike is planned for Wednesday, the latest in a series of protests against the social and economic policies of conservative President Ivan Duque.

In Chile, meanwhile, where protests flared at the weekend, conservative President Sebastian Pinera has rolled back austerity measures and will hold a referendum on Sunday on whether to rewrite the constitution, a relic of Augusto Pinochet’s 1973-1990 rule.

Claudia Navas, a Bogota-based analyst at Control Risks, said Arce’s emphatic win in Bolivia could provide a “key reference” for left-wing opposition movements in Latin America, particularly in Colombia and Ecuador where they were already gaining ground.

“Conditions are favorable for left-wing political parties to gain more political space, if not the presidency,” Navas said.

Risk of a backward slide

Yet incumbents of all political persuasions are at risk as anger mounts at declining living standards. In Argentina, leftist President Alberto Fernandez has seen his approval rating slide since April, amid frustration at his handling of the pandemic.

In the region’s biggest economies – Brazil and Mexico – populist leaders were already the electoral beneficiaries of mounting frustration at slow growth and rampant corruption before the pandemic struck.

President Jair Bolsonaro in Brazil, a right-wing populist swept to power in 2018, has preserved his popularity during the pandemic by hiking welfare spending.

In Mexico, President Andres Manuel Lopez Obrador – elected in 2018 amid outrage at graft – has eschewed large-scale government handouts but managed to focus the debate away from his handling of the pandemic and onto past corruption scandals.

Stephen Liston, senior director at the Washington office of the Council of the Americas, warned that anger and mistrust of governments as the economic crisis deepens could open the door wider to populism or an authoritarian backlash in a region with a troubling history of both.

“There is a real danger of a backward slide in democratic governance in the region,” he said.

Source: Reuters