New governments were voted in, others struggled through crises, some economies recovered and one country inched closer to peace; 2017 brings promise to some, stability to others and continued unrest elsewhere.
Recent political events in Latin America have often been categorised in the Western press as the “Death of the Latin American Left” or “Latin America’s Rising Right”, denoting the ebbing of the so-called Pink Tide (a wave of left-wing governments that came to power in the beginning of the 21st century). This was purported to be the case in Argentina, Brazil, Peru and Venezuela.
Tempting as it may be to see these events as part of an emerging regional, or even global, trend marking a preference for right-wing rule, it would be foolhardy to do so. The best explanation for the recent wave of changes is what Harvard professor Steve Levitsky refers to as “desgaste natural” or natural attrition, the political equivalent of the law of diminishing marginal utility – the more you utilise something, the less valuable it becomes over a period of time. This brings about a yearning for change. Such was the case for Argentina, Brazil and Venezuela, where a single party governed the country for 12 years or more. In both Argentina and Peru, the word ‘change’ was in the very name of the party: Cambiemos (Let’s Change) in Argentina and Peruanos Por el Kambio (Peruvians for Change) in Peru. There is a general disdain against the political class in Latin America; according to Latinobarometro, a regional pollster, only 17% of people trust or have confidence in political parties. Additionally, performance rather than ideology continues to determine how people vote in the region. Peru is a perfect example: it is the only country in the world where every election cycle has seen a different party come to power since 2001.
Overall, 2016 has been a mixed bag for Latin America. New governments were voted in, others struggled through crises, some economies recovered and one country inched closer to peace.
It was never going to be easy to end a half-century-old war. After the narrowly-rejected plebiscite in October, the government and the FARC passed a revised peace deal through Congress, and received approval from Colombia’s Constitutional Court to fast-track the deal’s implementation. This is good news, but much remains to be done.
President Juan Manuel Santos, who was awarded the Nobel Peace Prize earlier this year, has put his legacy at stake. Santos and his Unidad Nacional coalition will face just as much difficulty implementing the deal as they did negotiating it. Will all FARC rebels demobilise and successfully reintegrate into society? How will the government deal with the power vacuum in former FARC-controlled rural areas? Will fellow Colombians learn to accept FARC rebels as neighbours and as political representatives in Congress?
The next year will be key to the success of the peace deal, and will also determine how Colombians vote in the 2018 elections.
It has not been a good year for Venezuela – and unfortunately, 2017 does not look much better. The country is polarised, the economy is in tatters, incidents of violence remain high and basic products are in short supply. Inflation is returning to the three- and four-digit levels of the decada perdida (the lost decade of the 1980s); it is already reported to be 476% and may rise further in 2017.
However, all is not gloomy. The global oil market is slowly reviving and with it so will Venezuela’s economy – given that oil accounts for 96% of all exports.
The heart of the problem remains a political deadlock between the Chavistas’ last guard and a fractured opposition. Whether this will reach a denouement in 2017 is anyone’s guess. A number of scenarios could play out – President Nicolas Maduro could stay on to finish his term till 2018; the opposition may force Maduro to resign and call for early elections; another power center from the Chavista camp could replace Maduro; or perhaps, in a stroke of luck for Venezuelans, a resolution can be reached through talks mediated by the Vatican.
Peruvians saw their closest election till date in 2016, with Pedro Pablo Kuczynski (PPK) winning by a razor thin 0.24% margin. But PPK’s opponent, Keiko Fujimori of the Fuerza Popular (FP) party, rules the roost in the unicameral Congress with 72 of the 130 seats. Even the leftist Frente Amplio has three seats more than PPK’s 17. This obviously causes issues while formulating and passing important legislation.
This also has the potential to derail the government – as the resignation of education minister Jaime Saavedra shows. Saavedra was the only minister retained from the previous administration and had achieved notable progress in reforming the education system. The FP, which opposed Saavedra, forced the PPK-led government into a corner, leaving only two choices: that Saavedra resign, or call for a vote of no confidence, which could result in the dissolution of the cabinet and new elections – a gamble that no president would like to take so early in their term.
We must not read too much into this political tussle: politics is always on edge in Peru. Even so, the county remains socially stable with one of the fastest GDP growth projections in Latin America for 2017.
Argentina began teetering back to normalcy in 2016, after President Mauricio Macri took office in December 2015. Some much-needed reforms, such as the lifting of currency controls, were implemented rather quickly. Most people are happy with the change from a decade of Kirchnerismo but obstacles remain. Average annual inflation is high at roughly 40% and GDP is expected to contract by 2% in 2016.
What lies ahead for Argentina? Macri, who belongs to the Argentine equivalent of a family-owned conglomerate like the Birlas or Mahindras in India, will continue to follow a pro-business approach. However, his success will be determined by his ability to negotiate deals with a large opposition.
It is said that a week is a long time in politics; Brazil is testament to this.
In about one week, Brazil approved a 20-year austerity package fixing public spending to the inflation rate; ex-president Lula da Silva was named a defendant (for the fifth time) in a corruption case that could taint his candidature for president in 2018; the Superior Electoral Court, yet again, indicated the possibility of removing President Michel Temer from office; and Brazilian conglomerate Obedrecht pled guilty to bribing politicians and will pay a $632-million fine.
So much has happened that it is difficult to keep up – see for yourself and take the News Quiz: Did It Happen in Brazil or “House of Cards?”
The current situation reminds one of a Brazilian saying: se correr o bicho pega, se ficar o bicho come, roughly translated to mean, damned if you do, damned if you don’t.
Then again, Brazil is such a large country that its economy can recover even amidst such staggering political crises. After two years of contraction (-3.8 in 2015 and -3.6 in 2016), GDP is expected to grow 0.4% in 2017. What’s more, the falling Brazilian Real has rewarded exporters handsomely; Brazil posted its largest recorded trade surplus of $43 billion in January-November 2016.
Brazilians are also yearning for change in the 2018 presidential elections. Time is ripe for an outsider like Marina Silva, but it is too early to call; whoever wins would certainly not have it easy.
The death of Fidel Castro, who led Cuba for over half a century, marks the end of an era. Few, if any, in the past century have commanded as much control over a country as Fidel did. He shaped every aspect of local life and even Cuba’s image to the outside world.
Fidel’s brother Raúl Castro announced he will step down as president in 2018; his vice president Miguel Diaz-Canel is expected to take his place. Cuban socialism will certainly go through some gradual but inevitable changes. The reduction in Venezuelan oil shipments (part of a barter-like exchange for Cuban doctors, teachers and the like), the slowing economy and the potential opportunities from an elimination of international sanctions signal at least a partial opening of the economy. The US will also play an important role, though the gains made under US President Barack Obama could stall or be reversed under a Trump administration.
The Castro regime will remain in firm control in 2017. Nevertheless, the post-Fidel era will see numerous changes in the Cuban social, political and economic landscape.
Daniel Ortega’s reelection as president in November meant the region saw some political continuity, but it also raised some questions, in no small measure driven by Ortega’s decision to field his wife, Rosario Murillo, as his running mate.
Some have said Ortega’s victory made a “farce of democracy”, particularly because there was no credible opponent. But one only need look at the numbers to dispel this notion – Ortega won 72% of the vote and enjoys a 70% approval rating; his socialist policies are also well accepted. The economy has also grown steadily at an average of 5.16% over the past five years (2011-2015), over double the regional average of 2.08%. We can expect continuity in socio-economic policies in Nicaragua through 2017.
As the year draws to a close, it would be prudent to remember two maxims that continue to describe Latin America.
First, there remains a strong correlation between commodity prices and economic growth in the region. Even though manufacturing and services have grown considerably, commodities like petroleum, copper, soybean, gold and agricultural products continue to be the mainstay of most economies.
Secondly, the changing wave of left- and right-wing governments in Latin America is nothing new, but only part of recurring ideological cycles in the region. Rosario Queirolo, an Uruguayan political scientist, argues that the left and right have alternated in power since 1945, and that the recent ‘pink tide’ only signalled the beginning of another cycle. The lesson? The left and right are here to stay in Latin America.
Hari Seshasayee is a Latin America analyst and tweets at @haricito. Preeti John is assistant editor at The Wire.