How Latin America’s Pink Tide turned

The foundations of this vuelta hacia la izquierda (turn to the left) had been laid by the failure of International Monetary Fund restructuring programmes prescribed throughout Latin America in the 1990s. It was IMF economic orthodoxy that led to the collapse of Argentina’s economy in 2001. Similarly, Bolivia, despite following IMF strictures faithfully until the early-2000s, had an economy characterised by sluggish growth and widespread poverty. In Brazil, vast numbers of people languished in poverty while the country was regularly beset by bouts of staggeringly high inflation.

The memory of US interventions in what the Americans referred to as their “backyard” also played a part. During the Cold War, every Latin American country except for Costa Rica at some point languished under an American-backed autocrat. American leaders deciding to visit the region were often greeted with violent protests: Nixon was pelted with spittle and rocks while on a routine trip to Caracas in 1958. Demonstrating characteristic paranoia, the then Vice President blamed the demonstrations on local communists, but the unrest spoke of a wider discontent that persisted beyond the end of the Cold War. In a region-wide survey conducted in 1996, just 38 per cent of Latin Americans had a favourable view of the United States.

The scene was set, therefore, for the rise of the pink tide, which achieved power on the back of the commodities boom of the early 2000s, powered by the developing economies of China and India. It promised social democracy – paid for by the proceeds of capitalist growth – and a break from the Washington consensus.

No one model dominated, though was the bombastic Chavez who made the headlines with his ‘21st-century socialism’ doctrine – built on the notion of eclipsing both neo-liberal capitalism and 20th-century Stalinism. Venezuela looked to Cuba for inspiration, as did Bolivia; though notably neither Chavez nor Morales ever sought to remodel their countries along full Soviet lines.

His first term in office, from 1999 to 2001, was characterised by incremental change and compromise. He visited the United States several times in those early years and followed the conventional strictures laid down by the IMF. As oil prices headed toward $100 a barrel, Chavez launched the ambitious social programmes that would win his government so many western admirers – and that many in Britain continue to hark on about.

But it was following the opposition coup of 2002 (a coup which the government of George W. Bush notably failed to condemn) that the ‘Bolivarian revolution’ adopted a more intolerant aspect toward its critics. Chavez subsequently set about shutting down opposition television channels and placing political allies in charge of state industries. Following his death in 2013, Nicolás Maduro (the handpicked successor) has continued to undermine Venezuela’s democratic structures.

After the ruling United Socialist Party of Venezuela (PSUV) lost control of the National Assembly in elections in December 2015, the pro-government supreme court removed the assembly’s legislative powers. The opposition assembly was subsequently replaced with a rubber-stamping body – the ‘Constituent Assembly’ – which is composed entirely of government supporters. Over 300 opposition figures currently languish in the Venezuelan prison system, according to Human Rights Watch.

Moreover, the Venezuelan economy is a case study in self-inflicted misery, with the level of inflation reaching 454 per cent in the first three months of 2018. The precipitous fall in the price of oil on the world market has certainly played its part in driving down living standards, but the severe shortages of food and medicine that plague the country are largely a consequence of endemic economic mismanagement.

In the broader context of Latin America, however, the trajectory of Venezuela is something of an outlier. The former President of Uruguay, Julio Maria Sanguinetti, captured the spirit of most left-leaning Latin American governments when he told the BBC in 2005 that Uruguay’s newly elected President Vasquez would “follow a centrist economic policy with a traditional leftist rhetoric”.

Bolivia and Brazil combine similar populist rhetoric and pragmatic economic governance. Bolivia was South America’s poorest and most illiterate country at the beginning of Evo Morales’ first presidential term in 2006. Morales has subsequently presided over a government that has blended anti-imperialist rhetoric abroad with social democratic economics at home.

The percentage of profits from the hydrocarbon industry going to the state was dramatically increased during Morales’ first-term, resulting in the elimination of Bolivia’s fiscal deficit for the first time in 30 years. Poverty and inequality declined dramatically, whereas growth rates were higher than the Latin American average between 2000 and 2015. The improvement in the prospects of the country’s poor was down to a redistributive state as much as to higher rates of growth. Peru had the highest rate of economic growth during the same period, yet inequality barely felL.

In Brazil, while former President Lula da Silva was happy to pose for photo-ops with Hugo Chavez and Fidel Castro, his policies created a buoyant private sector, encouraged foreign investment and sustained a consistently low rate of inflation. The proceeds of strong rates of growth were then used to improve the lot of the country’s poor. Between 2007 and 2011 44 per cent of Brazil’s population escaped from extreme poverty. This was thanks in large part to programmes such as the Bolsa Familia, a scheme that provided cash transfers to parents who sent their children to school and got them vaccinated. As the Guardian correspondent Rory Carroll put it in Commandante, his excellent book on the legacy of Hugo Chavez:

While he [Chavez] postured on the world stage and talked of bringing equilibrium to the universe, Brazil built a sustainable economy, took care of the poor and seized regional leadership.

Along with many others, however, Carroll underestimated the extent to which Brazil’s economic success was built on an unsustainable boom in commodity prices. Indeed, the ebbing of the pink tide has more or less coincided with their collapse.

The resulting hit to the biggest economies in Latin America has been compounded by the fact that China had lent vast amounts of money to the region (today it lends more than both the Inter-American Development Bank and the World Bank combined). This has fostered a reluctance on the part of recipients of the cash to protect nascent domestic industries from Chinese imports. Thus domestic reliance on commodity exports in countries such as Venezuela and Brazil has been cemented. When prices were high this hardly mattered, but since prices have fallen back – and since little was put away during the boom years – a lack of economic diversification has impacted several countries hard. From being one of the world’s fastest growing economies in 2010, Brazil is at present emerging from its longest ever recession.

Brazil has also been hit by a corruption scandal, with former Workers’ Party President Dilma Rousseff impeached in 2016 after using loans from public banks to artificially inflate the budget surplus without congressional approval. Former President Lula faces a possible nine-year jail term over a kickback scandal he is accused of being involved in with the state-run oil firm Petrobras.

Despite rallying against corruption in opposition, Latin America’s pink-tide populists have occasionally been as susceptible to the charges of cronyism as their right-wing predecessors.

The catastrophic failure of Chavismo – once the great hope of western leftists from Noam Chomsky to Jeremy Corbyn to Owen Jones – to navigate a successful course between capitalism and socialism betrays a weakness seemingly shared by all populist movements. Once they sit securely in power, political movements that have hitherto blamed everything on ‘elites’ must find a new constituency to rally against.

When things go wrong, this heresy hunt tends to drag in anyone who has ever uttered even a murmur of dissent. The process is no doubt hastened when, as is true of Hugo Chavez and Nicolás Maduro in Venezuela, you take your ideological inspiration from Cuba, the only Latin American country where the leadership still wears military fatigues.

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James Bloodworth is a journalist and author of Hired: Six Months Undercover in Low-Wage Britain, which was longlisted for the Orwell Prize 2019.

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