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Why has Latin America turned away from the left?
January 1, 2018 | 9:59 PM
by Andrés Velasco
Supporters of Chilean presidential candidate Sebastian Pinera celebrate after he won Chile's presidential election, in Santiago, Chile, December 17, 2017. Photo - Reuters file
 
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In Chile’s November election, anti-establishment voting was the name of the game. A new populist left coalition, modeled after Spain’s Podemos, received one-fifth of the vote.

Many long-established figures, including the president of the Senate, lost their seats in Congress. Pundits were quick to describe a sharp turn to the left.

And yet in the second round of voting held on December 17, Chileans sent Sebastián Piñera, a billionaire former president and poster child for the local conservative establishment, back to La Moneda (the presidential palace). How was this possible? And what does this paradox reveal about the state of politics in Chile and the region?

In much of the international press, the standard narrative runs something like this: Because Latin America has the most unequal income distribution in the world, it tends to elect left-wing reformers. When the reformers keep their word and provide generous social benefits, voters love it and rush to the polls to keep the same person or party in office.



If the world worked in this simple way, then Michelle Bachelet, Chile’s socialist president – who raised taxes on the rich, increased transfers to the poor, made university education free, and sent a bill to Congress that aimed to provide more generous pensions – should have been able to handpick her successor. But she could not.

Today, only two Chileans in five approve of the way she carried out those reforms. Her leftist coalition has splintered, traditional socialist and social-democratic parties have lost seats in Congress, and her worst nightmare has come true: once again (it happened already in 2010) she will have to hand over the presidential sash to her conservative nemesis, Piñera.

Chile is not unique in this regard. Voters in Argentina and Peru recently preferred successful businessmen (Mauricio Macri and Pedro Pablo Kuczynski, respectively) to the populist alternatives, whether left or right.

In Brazil, Dilma Rousseff was impeached and removed from office, not defeated at the polls, but the collapse in popularity of her Workers’ Party (PT) and the pro-business administration that followed fit neatly with what seems like a regional trend.

So why are Latin American voters turning away from the populist or semi-populist left? The standard explanation is corruption. In Argentina and Brazil, certainly, one cannot understand recent political changes without reference to the antics of Peronist and PT operatives. The best present the Macri administration ever received was footage of a former Peronist minister trying to stash millions of dollars and euros in a local convent.

But that simple explanation does not fit Chile. True, Bachelet’s son and daughter-in-law were involved in shady real-estate deals. But Piñera is no saint. In 2007, for example, Chile’s securities regulator fined him for insider trading. In many countries, that would have been the end of his political career – and he has had several other run-ins with the law.

So why did Chileans vote for him?

One reason is that Bachelet’s left misdiagnosed Chile. When students took to the street in 2011, and other groups followed, leftist intellectuals interpreted this as a wholesale rejection of what they like to call “the model”: a market-based economy open to the world, with a large role for the private sector in the provision of public services such as health, education, and pensions.

The Bachelet administration moved to curtail voucher-financed private schools, ended for-profit education, refused to build new hospitals via public-private partnerships, and would not allow private firms to manage additional retirement savings.

Some of this was popular, but much of it backfired. Middle-class families that had struggled to send their kids to private schools (nearly 60 per cent of all pupils attend such institutions) did not welcome what they viewed as unwarranted government meddling. Patients facing long wait lists for treatment bemoaned the hospitals that had not been built.

Citizens surely were upset about collusive behaviour, price gouging, and abuses by private companies. But they marched to fix the system, not to tear it down and replace it with something else. They wanted tinkering and evolution, not revolution.

Adding to Bachelet’s woes was an economy that slowed sharply, at least in part because of poorly designed tax and labour-market reforms (low commodity prices in 2014-16 also played a role). In Latin America’s middle-class societies, good jobs at good wages matter. And the left in the region, like the United Kingdom’s Labour Party in the 1980s, does not seem well equipped to produce them.

Piñera ran on the promise of faster economic growth. Many business deals had been on hold until the election, so investment will tick up in 2018. But Chile’s productivity growth has been negligible for nearly two decades, and so has export diversification. What Piñera plans to do about that is not at all clear.

In a country that is much more educated than it was a generation ago, voters have come to expect a minimum level of competence from their leaders. Piñera is a mediocre speaker (his victory speech was so rambling that even his wife and children could be seen chatting while he spoke), but his Harvard economics degree shows in his command of facts and figures. By contrast, Alejandro Guillier, his opponent in the second round, displayed little understanding of even the most basic policy issues.

Piñera was the choice of only 36 per cent of voters in the first round. But in the runoff, enough voters viewed him as the lesser of two evils to enable him to win by a comfortable nine-point margin. He will not have a majority in Congress, and students and unions will likely return to the streets shortly after he takes over in March.

He is hoping to be like Macri, who has remained popular. But he could end up resembling Michel Temer, who replaced Rousseff, and Kuczynski, both of whom lost whatever public support they had after only a few months in office. We will know soon which of the two it will be. - Project Syndicate

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