Ri Insights

Why Latin America’s Center is Holding

By: Andrés Velasco*

Exclusively published in Kuwait by: Rai Institute

The Viennese writer Stefan Zweig allegedly said, “Brazil is the country of the future – and always will be.” Likewise, centrist politics in Latin America has perpetually been on the horizon – until now.

To outsiders, the region is virtually synonymous with political polarization. Fatigue-clad guerrillas, charismatic populists, and reactionary military junta leaders have long cut much larger figures than moderate politicians in boring gray suits.

But Latin America has a long – if not always fruitful – history of centrist liberal reformers. In the nineteenth century, liberals laboriously separated their nascent states’ institutions from those of the Catholic Church. In the 1930s, politicians of the moderate left, responding to the havoc wreaked on the region by the Great Depression, built the rudiments of a modern welfare state. In the 1960s, centrist politicians of different stripes – many of them Christian Democrats – struggled to find an alternative to the threat of armed revolution and the totalitarian politics of Fidel Castro’s Cuba.

But there were two problems: centrist politics did not always take root, and it seldom lasted. There is truth in the cliché that middle-class citizens tend to be politically moderate; open societies and reformist politics often go together. In Latin America, however, rigid class divisions and deep income inequalities created fertile ground for populism. And when populist experiments collapsed, as they often did, under the weight of unsustainable debt and high inflation, it was right-wing budget-cutters, allied with conservative businessmen, who took over. The center could not hold.

In the last two decades, however, this has begun to change. With some exceptions (a particularly troubling one is Venezuela), democracy was consolidated in the region. Elections have given rise to some capable governments and some mediocre ones, but only the lunatic fringe would advocate political change by means other than the ballot box.

Economic stabilization, plus a decade-long commodity boom, gave Latin America a growth spurt. And, although that growth could not be sustained when commodity prices weakened, as they have now, it, together with enhanced social policies, did lift family incomes, reduce poverty, and sharply enlarge the middle class.

Today, a middle-class family living on the outskirts of Bogotá, Montevideo, São Paulo, or Santiago has an average income that is much lower in dollar terms than that of its counterparts in North America or Europe. But that family likely lives in its own home (which it bought with a bank mortgage). If it has not yet purchased a car, it will sooner rather than later. And the kids have a growing chance of going to university.

Members of the new middle class suffer from the low quality of public services (particularly health and education); fret over job insecurity; are incensed by the persistence of discrimination in the labor market; and fume over jammed traffic and crime. But precisely because they have a hard time making ends meet, middle-class citizens have little patience for leaders who cause inflation and interest rates to skyrocket.

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Sure enough, the children of the middle class have often taken to the street in protest, as they did in Chile starting in 2011 to complain about education, for example, and in Brazil in 2013 to demonstrate against rising bus fares. But critics from the orthodox left are wrong to claim that such protests necessarily aim to overthrow “the economic model.” Many of the marchers simply want the system to open its doors and let them in.

In political terms, this calls for well-executed reforms that last and do not imperil economic stability. And that message is music to the ears of moderates, who understand that middle-class, middle-of-the-road voters are often pivotal in national elections. As populists in the mold of Venezuela’s late president, Hugo Chávez, lose ground, a reform-minded liberal center has gathered strength.

Looking back, prime examples are the two terms of President Fernando Henrique Cardoso in Brazil and the 20 years (1990-2010) of Concertación governments in Chile. Recent Peruvian administrations have all governed from the center, even if they did so under widely differing rhetorical styles and party labels. And in Colombia, President Juan Manuel Santos’s administration has a history on the center-right, but has raised taxes and implemented a reform agenda that some of its ministers like to call “social democratic.”

In the not-too-distant future, politicians of the reforming center could reach power in two of Latin America’s larger countries. In Argentina, Buenos Aires Mayor Mauricio Macri’s party, once conservative and strong only in the capital, has moved both to the political center and the provinces through its alliance with the center-left Radical Party.

And in Brazil last year, Cardoso’s Social Democratic Party, led by Aécio Neves, nearly beat the incumbent president, Dilma Rousseff. If the election were held today, Neves or other plausible candidates from his party would win handily. If Rousseff, plagued by scandals and a stalled economy, manages to complete her term, the social democrats look well-placed to win three years from now.

To seize these opportunities, centrist leaders must overcome at least three challenges. First, they must seize further ground from populists, by delivering reforms that yield tangible short-term benefits. Employment subsidies for jobless women and young people, expanded access to childcare, improved public transport, and effective anti-crime measures are all policies that boost both fairness and efficiency, now.

Second, liberal reformers must continue to lead when it comes to increasingly salient issues – such as the environment, non-discrimination, marriage equality, and drug-policy reform – that politicians of the traditional left and right are unable to address. But they must do so in a way that appeals to broad swaths of the electorate, not only to highly schooled elites.

Last but not least, reform-minded democrats must lead the reform of democracy itself. Citizens are increasingly suspicious of politicians, parliaments and political parties. That is bad news for citizens, not just for politicians. By leading the charge to reinvigorate democracy, centrist reformers can draw on the best of the liberal traditions of the nineteenth and twentieth centuries to ensure Latin America’s success in the new millennium.

Copyright: Project Syndicate 2015 – Why Latin America’s Center is Holding


*Andrés Velasco, a former finance minister of Chile, is Professor of Professional Practice in International Development at Columbia University.


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