Can Latin American
electorates hold back the
populist temptation in the
teeth of a recession?
by Michael Reid
Will
Prudence
Prevail?
EFE/CÈzaro DE LuCa
There is certainly cause for concern. For more than
a year after problems first surfaced with sub-prime
mortgages in the United States, Latin America was
in the rare and happy position of being a bystander
in a financial crisis. But after the collapse of Lehman
Brothers last September, along with the aggravation of
the credit crunch and its transformation into a global manufacturing recession of savage intensity, the
region suddenly ceased to be immune.
Only a handful of countries can hope for any economic growth at all this year, and 2010 may be worse.
Unemployment is already rising. The golden half-decade from mid-2003 to mid-2008, in which Latin
America enjoyed economic growth of more than 5. 5
percent a year combined with financial stability, is
well and truly over. There is a serious risk that many
of the social gains of the past few years, including
the reduction in poverty and expanded and improved
provision of social services, will be reversed. That
in turn could trigger unrest that would strain the
democracies that in some cases have yet to command
universal consent. Normally these economic conditions would provide fuel for the populists who have
always derived political strength from Latin America’s deep inequalities of income and power.
Those on the left who argue that capitalism
spring 2009
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