Potential economic policy outcomes of 2018 LATAM elections
Brazil, Costa Rica, Colombia, Cuba, Mexico, Paraguay, and Venezuela – a total of two thirds of the 640 million Latin Americans will elect new goverments this year.
Since 2000, Latin America has been flooded by a “pink tide” which means that social democrat or socialist oriented governments focused on reducing poverty while generating economic growth. Initiatially, due to the global economic growth and high oil prices this seemed to be easily achieveable: instead of reforming old systems, revenues were invested in new social programs, thus creating a new middle class in many LATAM countries.
However, since the world economic crisis in 2008, this money is missing whereas the discontent with politicians in light of visible systemic corruption is growing immensely. As a consequence, a political trend becomes apparent which has been observed globally: the rise of the right. Accordingly, the political seperation lines of the LATAM elections are between left and right.
The following paragraphs will shed light on the most promising or actually successful candidates as well as their economic policies:
February – Costa Rica
On April 1st 2018, a run-off decided Costa Rica`s elections which have initally been conducted in February. Carlos Alvarado Quesada (PAC), a member of the ruling party, won against the right-wing, evangelical candidate Fabricio Alavarado Muñoz with 60,8% against 39,2%. Quesada`s economic policy is based on the cooperation of all political parties wherefore he chose to elect several opposition memebers to his cabinet. His goal is to address the country`s high fiscal deficit through economic growth, increased taxes, and reduced spending.
March – Cuba
With the parlamentary elections on March 11th the Castro era has come to an end. However, given the one party system dominated by the Communist party, one cannot view this as a real election. Successor of Fidel`s brother Rául Castro is Miguel Díaz who is known to be a loyal supporter of the Communist Party. Hence, no far-reaching economic reforms are to be expected from him. Given the dire economic situation of the country paired with bad US-relations, stagnating tourism, and the loss of financial support through Venezuela, those reforms would be much needed.
April – Paraguay
In Paraguay the right-wing candidate of the conservative ruling party Colorado, Mario Abdo Benítez, won against his contender Efraín Alegre, who is part of the liberal Ganar coalition. Benítez, who is the son of the former secretary to dictator Alfredo Stroessner, is expected to use a neo-liberal political approach. His goal is to reduce the record poverty rate of 26,4% through increased exports to Argentina and Brazil.
May – Venezuela
On May 21st, the socialist President Nicolás Madurowa re-elected. However, the elections have been criticized as undemocratic by both his opponent Henri Falcón and international election monitoring groups. The election results have neither been acknowledged by the US, the EU, nor other LATAM countries. Due to the biggest economic crisis of Venezuelan history with an inflation of 13.000% as well as lasting shortages of food and medical supplies, millions of Venezuelans have already fled the country.
June – Colombia
As did in Costa Rica, a run-off decided Colombia`s elections between the center-left candidate and former mayor of Bogotá, Gustavo Petro, and the right-wing conservative Iván Duque. The latter, who opposes the peace agreement with the FARC guerilla, won the race. The lawyer, banker and confidant of former President Uribe believes in the power of the free market, privatizations, and the lean state.
July – Mexico
In Mexico three promising candidates were running for presidential office: the leftist-nationalistic two-time election loser and former mayor of Mexico-City, Andrés Manuel López Obrador, the conservative Ricardo Anaya as well as the ruling party`s candidate, José Antonio Maede. Obrador won the race and will start his term in December. The elections took place against the backdrop of severe violence aimed at intimidating the politicians. In terms of economic policies, Obrador has announced a flat-rate pension, the cutting of high officials` salaries as well as fighting corruption. Meanwhile he emphasizes the independence of the Central Bank as well as his respect of corporate freedoms wherefore he denounced expropriations and similar nmethods of social redistribution.
October – Brazil
While former socialist President „Lula“ da Silva is imprisoned for corruption, the Brazilian legal elite discusses his eligibility for candidature. With 35% of the popular vote, Lula is far ahead of his right-wing extremist, evangelical opponent Jair Bolsonaro who is currently rated at 15%. While Lula is beloved by the poorest Brazilians and the working class for his social reforms, Bolsonaro announced a military-based cabinet to fight crimes and violence in case of his election victory. Because of his repeated misogynistic, racist, and homophobic remarks, Bolsonaro is called “Brazil`s Trump”.
Looking at the election results of 2018, the “pink tide” does not seem to have subsised just yet: four out of seven LATAM countries have opted for center-left or socialist candidates, only Colombia and Paraguay have chosen right-wing conservative governments. However, with Brazil`s presidential election ahead, its results could guide the continent`s new political path and define the future economic relations to Europe.