The rise of Luiz Inácio Lula da Silva to the Presidency of Brazil it has left the five largest economies in Latin America in the hands of leaders of the left, with great present and imminent challenges, according to experts.
Andrés Manuel López Obrador, leader of the National Regeneration Movement, has governed Mexico since 2018 and Gustavo Petro, from the Historical Pact, has done the same in Colombia since August. Lula da Silva, for her part, will preside over Brazil from January 2023 after defeating the candidate for re-election, the right-wing president Jair Bolsonaro.
Alberto Fernández, hand in hand with Peronism, has governed in Argentina since 2019, while Gabriel Boric, in Chile, and Pedro Castillo, in Peru, won their elections last year.
Brazil, with 1,608,981 million dollars of Gross Domestic Product in 2021, is the largest economy in Latin America, according to data from the Economic Commission for Latin America (ECLAC), a body dependent on the United Nations.
They are followed by Mexico, with 1,296,024 million dollars of GDP; Argentina, with 487,227 million; Chile, with 317,059 million; Colombia, with 314,464 million; and Peru, with 223,252 million, according to the same statistics.
The previous coincidence of leftist leaders in countries with thriving economies in Latin America occurred in the first decade of this century, with Lula and the late Venezuelan President Hugo Chávez Frías at the head, recalls the economist Francisco Monaldi.
“That moment did not include Mexico or Colombia”, then governed by the right-wing leaders Vicente Fox and Felipe Calderón, and Álvaro Uribe Vélez, highlights the voice of america the specialist, with postgraduate and doctorate at Stanford University.
On this occasion, we have Mexico, Colombia, Brazil and Argentina, even Chile and Peru”
Venezuela at that time was around a production of almost three million barrels of oil per year, while crude oil prices exceeded 100 dollars. Today, however, the country presided over by Nicolás Maduro is not added to the list due to be plunged into an unprecedented crisis and with a production that is close to 700,000 barrels per day.
“It’s different from last time. On this occasion, we have Mexico, Colombia, Brazil and Argentina, even Chile and Peru” with presidents from the left, says Monaldi, who also studied economic development at Yale University in the United States.
Monaldi underlines differences in the nuances that each one of the leftist regional presidents imprints on the economy of their country. López Obrador, for example, is evaluated as a president “with a vision of the 70s” in the energy sector, prioritizing the role of the state-owned Pemex, without giving greater preponderance to the private sector, showing “a traditional mentality” in terms of to the exploitation of fossil fuels.
Then, he sees Petro as “a pragmatic statist in some ways”, but who wants to reduce the importance of hydrocarbon production in the Colombian economy.
“Colombia is fundamentally an exporter of oil and coal. Petro wants to get out of them, some pragmatism will prevail. Theirs is a combination of the left with an environmentalist vision, that we have to get out of the fossil fuel industry,” he says.
In the case of Argentina, “there is a greater opening” to private capital, while leaders like Boric, in Chile, want an economic rebound with an environmental approach, he believes.
wishes for change
Alejandro Grisanti, director and founding partner of Ecoanalítica, warns that Latin America went through a decade of “very low economic growth” and little social welfare, between 2010 and 2020, to later face a “strong recession” due to the COVID-19 pandemic. .
This phenomenon and its respective social impact, he believes, has marked an electorate that votes against the current government, without political ideologies being decisive.
It is not correct to think in the axes of right and left”
That punishment vote against the political establishment has occurred in 24 of the last 25 major elections in Latin America, emphasizes Grisanti, who has postgraduate studies in economics.
“It is not correct to think of the axes of the right and left, but rather of a Latin American population that is thirsty for change and that seeks precisely to vote against the government in power,” he points out in conversation with the voice of america.
Monaldi, for his part, agrees and recalls that there were shifts to the right in the recent presidential elections in Ecuador and Uruguay. “It’s a wave of anti-government,” he says. The economies of the continent face an imminent challenge, no matter their size, says Grisanti, for his part.
“The challenge is how to satisfy the desire for change when, after the pandemic, you ended up with highly indebted countries in order to expand their fiscal spending and reduce taxes. This happens in a world with great fragilities”, he indicates.
The specialist specifies that his consulting firm contemplates a recession in 2023 in large global economies, like those of Europe and even the United States.
“Another great challenge in the region is how to grow and meet the demand of the population with such an adverse external environment and with very few possibilities of resorting to debt again. What is coming is more tax retention, which brings again low economic growth and, consequently, more demands for change”, he concludes.
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