As Populists Rise, Latin America’s Economies Will Fall
In the space of a year, populists with autocratic tendencies have taken office in Mexico and Brazil, and laid the groundwork to return to power in Argentina. With the three largest economies in Latin America destined for further mismanagement, the prospects for growth in the region are dim.
LONDON – Though US President Donald Trump tends to grab most of the headlines, he is hardly a global exception. Populist autocrats have enjoyed a breathtaking rise to power in countries around the world, and nowhere is the trend more pronounced than in Latin America following the elections of Mexico’s leftist president, Andrés Manuel López Obrador (AMLO), and Brazil’s right-wing president, Jair Bolsonaro. Americans are right to complain about Trump’s autocratic tendencies, but, as former Chilean Finance Minister Andrés Velasco would remind them, Trump is a mere apprentice compared to Latin America’s populists.
To be sure, this does not mean that the Mexican and Brazilian economies will share the same fate as that of Venezuela under Hugo Chávez and its current strongman, Nicolás Maduro. Chávez and Maduro managed to take Latin America’s richest country – home to one-quarter of the world’s proven oil reserves – and turn it into a basket case with inflation over 1,000,000% and a poverty rate over 90%. At least four million of Venezuela’s 32 million people have fled the country, and forecasts suggest that number could double this year if Maduro remains in office. Venezuela owes its plight not so much to Trump-era economic sanctions as to its own populist leaders. The country has been declining for years, with most of the drop in its social and economic indicators far predating the Trump administration.
AMLO, like the charismatic Chávez two decades ago, was swept into office last year on the promise that he would improve the lives of ordinary people. One of his first official acts was to abort construction of a desperately needed new airport in Mexico City – even though the project was already 30% complete – on the grounds that airlines are for the rich. He then launched a new airport project in an impractical, mountainous location farther away, where it stands even less chance of being finished.