Margolis: Argentina’s mess doesn't herald a comeback for Latin America’s left

President Mauricio Macri’s political fortunes are crumbling.

First voters delivered the struggling incumbent an upside-the-head defeat in the August 11 primaries. Then the financial markets piled on, blackening the country’s sovereign credit score and the peso to burnt toast. Now with Argentina’s traditionally profligate Peronists poised to return to power, the International Monetary Fund is deciding whether to throw another tranche of its biggest ever rescue loan into the void. Macri’s announcement on Wednesday of plans to postpone payments on billions of dollars in foreign debt likely only deepened the Fund’s doubts.

Macri’s fall is stark. Yet what will his misfortunes mean for like-minded conservative leaders elected to change course in a region staggered by soaring unemployment, voter discontent and slowing economies?

Conservatives Sebastián Piñera in Chile and Colombia’s Iván Duque have seen their approval ratings fall to below 35 percent. Only 22 percent of Ecuadoreans favour apostate leftist Lenín Moreno. Peru’s business-friendly caretaker President Martín Vizcarra, a reformer, is trying to fight off a populist congress. This week, the share of Brazilians who disapprove of far right-wing President Jair Bolsonaro spiked from less than a third in February to well over half (53.7 percent).

In Latin America’s pendular politics, it’s tempting to conclude that such troubles for the ruling right reflect a popular swing back to candidates across the aisle, such as Argentina’s Alberto Fernández and his Peronist mentor, former president Cristina Fernández de Kirchner.  But hold your beret. There’s little nostalgia for the so-called 'Pink Tide' that rose to power last decade behind Hugo Chávez’s Bolivarian revolution, now in collapse, or the bell jar economy of Brazil’s Luiz Inácio Lula da Silva, whose crony capitalist habits landed him in jail. This isn’t a revival: it’s buyer’s remorse.  

The new right-wing rose on the demands of societies to purge public office of systemic corruption and the political establishment who’d flourished, often on the left’s watch, even as they bent institutions to their appetites. They offered textbook solutions such as good management, transparency and the magic of markets to cleanse the system, restore growth and, in dire cases like Brazil and Argentina, revert economic collapse. Instead, they run the risk of demoralising reformism, and now cling to office as their economies underperform.

As Latin America’s prosperity flags, it’s important to remember that voters have never had so much clout. They are raising the bar everywhere for candidates regardless of their political stripe. Recall that while last decade’s commodities bonanza lasted, it shrank poverty by nearly half and hoisted millions into the new middle class, which swelled to 36 percent of the population. Expectations kept pace and voters turned on leaders who spun tales of plenty and came up short.

Whereas 63 percent of the population in Latin America and the Caribbean reported they were satisfied with education in 2006, only 56 percent did in 2017. Compare that with the Organisation for Economic Cooperation and Development (OECD), where 65 percent were satisfied. Now 64 percent in Latin America and the Caribbean say they have no confidence in national governments and fully three quarters regard governing institutions as corrupt. Mistrust is corroding the social pact: 54 percent said they were justified in not paying taxes. Worryingly, the public funk is underming faith in democracy, not least among the 25 percent of Latin Americans aged 15 to 29 who know no other form of government and are now frustrated by democracy’s scarce rewards.

The souring mood has confounded pundits. An ascendant, discerning middle class was supposed to have strengthened democratic checks and balances and vaccinated the region against authoritarian illusions. However, the persistence of income inequality and the vast informal sector as well as the spectre of slipping back into indigence have shaken that conceit. The danger now is that bottom-feeding candidates and extremists tap such rising insecurity to worsen political polarisation and promote the oldest of Latin American afflictions, the populist fix.

Populism is “the perfect salt, sugar, fat combination” of modern Latin American democracies, says Amherst College political scientist Javier Corrales: Serve up a sugary concoction of slogans (the 21st Century revolution), bulk it up with endless tweets and regulations to create “policy density” (the fat), and then tweak (salt) the mix with an exciting stream of insults and ad hominem attacks on enemies, all to create a political “bliss point” blended to keep the faithful hooked and populists in power.

But demanding voters don’t have to be bad news for democracy. Even a reversal of fortunes can reduce public tolerance for false promises and hold candidates to account. By aggravating polarisation, populism’s excesses create their own “allergic reaction,” as Corrales puts it, so inviting a salutary democratic response. Financial markets can also play a role, punishing profligacy and fiscal incontinence. Argentine presidential frontrunner Alberto Fernández apparently took note and initially sought to cool market fears by keeping a dialogue with Macri, now suspended, and denying that he would press to restructure foreign debt. Now it seems that Macri has gone and done that himself. Tellingly, perhaps, Fernandez said nothing of the plan.

There’s good reason to wonder whether such campaign temperance will last or withstand the populist temptation should the Peronists return to power in December, as Fernandez’s latest broadsides against the IMF suggest. Latin America’s struggling incumbents, on the right and left, will be keeping close watch.