Argentina coastline

The Tides of Latin American Populism

With Latin American voters turning away from their populist leaders, many speculate that the “pink tide” that has pushed the region to the left over the last 15 years is finally turning. But the defeat of incumbents across the region largely reflects declining commodity prices, not ideological opposition.

MEXICO CITY – Demagogues and populists like US presidential candidate Donald Trump and French National Front leader Marine Le Pen are setting Western politics alight. But in Latin America, populist leaders are losing support: Argentina’s Cristina Kirchner has just been voted out of office; in Venezuela, President Nicolás Maduro’s Socialists suffered a resounding defeat in midterm elections; and Brazilian President Dilma Rousseff now faces the prospect of impeachment. Many are speculating that the “pink tide” of populism, which has pushed the region to the left over the last 15 years, now is turning. But is it really populism that these countries are rejecting?

In fact, citizens seem to be driven less by ideology than by their frustration with burgeoning economic challenges, which have been caused largely by a situation over which their leaders have little control: the end of the commodity boom that began early this century. When that boom, which was sustained by China’s seemingly insatiable appetite for raw minerals and food, came to an end in 2012, sharply falling prices devastated Latin America’s exporters.

Brazil, despite its large domestic market and strong industrial sector, took a serious hit. The situation was even worse for Argentina and Venezuela, both of which depend heavily on commodity exports – mainly soybeans and oil – not only to finance imports, but also as their main source of government revenue. Considering the enormous social programs to which these countries’ governments were committed, it did not take long for the price collapse to take its toll. Venezuela kept spending until the money simply ran out. Argentina’s growing deficits led to inflation, devaluation, and recession.

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