NEW YORK (Reuters Breakingviews) - Latin America’s rightward turn will face serious tests in the next few months. Several countries in the region have shunned leftist populism of late as a reaction to leaders’ economic ineptitude. But if their pro-business successors deliver all the pain of austerity without decent growth, they’ll face renewed opposition, whether at the ballot box or on the streets.
Argentina’s President Mauricio Macri took office in December 2015 on a promise to undo the damage wrought by his statist predecessor, free-spending Peronist Cristina Fernandez. He hasn’t skimped on the pain, lifting currency and trade controls and slashing government spending in a blitz that has sparked regular protests. Growth has not picked up as he promised, however. Economists polled by the central bank in November estimate GDP will shrink 2 percent in 2016. That may flip to a 3.2 percent expansion next year, but Macri needs recovery to be front-loaded: mid-term elections are in October.
His counterpart in Brazil, Michel Temer, has similarly been pushing through a dose of economic orthodoxy since taking over from his impeached leftist predecessor, Dilma Rousseff, in August. He will try to get unpopular reforms to the country’s unsustainable pension system through Congress in 2017, a key plank in his bid to restore investor confidence. Such bitter pills would be sweetened by recovery after a huge downturn under Rousseff, but economists reckon 2017 GDP will grow less than 1 percent. If Temer can’t show results, a like-minded pro-business candidate could struggle in 2018 presidential elections.
Chile may provide the biggest surprise. It boasts a long-running duopoly of fiscally prudent center-left and center-right coalitions. But there’s a risk this may unravel in the country’s presidential and legislative elections in November. If the region’s rightward swing holds, conservative former President Sebastian Piñera will succeed the outgoing Michelle Bachelet, a moderate leftist. But independent parties did unusually well in October’s local polls and Chileans are increasingly disenchanted with conventional politicians of all stripes. That may open the door for an anti-establishment politician like left-leaning Senator Alejandro Guillier.
Populism is harmful, whether of left or right. The passing of Cuba’s Fidel Castro laid to rest a certain kind of self-appointed savior. Latin America, like the rest of the world, needs fewer authoritarian blowhards, not more.
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