Southgate on Chavez
Chavez feeling backlash as Latin America takes right turn
Thursday, June 08, 2006
DOUGLAS SOUTHGATE
There is good reason to suppose that the recent wave of leftism in Latin America has crested, with recent elections in Colombia and Peru taking Venezuelan President Hugo Chavez down a couple of notches.
The tide started turning decisively against Chavez on May 28, when his main adversary in the region, Alvaro Uribe, won reelection in Colombia. Uribe’s countrymen hadturned to him in 2002 after several years of fruitless negotiations with narco-terrorists, who receive sympathy and perhaps much more from Venezuela. Although fighting continues in the countryside, violence has diminished in cities such as Bogota and Medellin, much to Uribe’s political advantage.
Peru, which held its election on Sunday, looked to be more promising for theleft. Several years of economic growth and low inflation have had slight effect on the number of Peruvians living in poverty. About half the citizens of the mineral-rich nation subsist on less than $2 a day. Furthermore, the candidate favored by Chavez, Ollanta Humala, was opposed by Alan Garcia, who was hardly an ideal candidate. In his first term as Peru’s chief executive, during the 1980s, murderous Shining Path guerrillas had the upper hand in many parts of the country. Additionally, inflation spun outof control, topping 2,000 percent per annum by the time Garcia left office.
In spite of his shaky record, Garciaprevailed, largely by turning the election into a referendum on Chavez. The Venezuelan would have done well to follow the example of Cuba’s Fidel Castro, who over the years has scrupulously avoidedcriticizing other Latin American leaders. But instead, Chavez was insulting in the extreme, calling Garcia a swine and thief, thus causing Peruvians to rally around him. Without a doubt, much of Garcia’s 10-point victory margin camefrom his backlash against the foreign dictator.
Chavez’s international victories have been few and far between recently, and even they carry significant costs for him. The main victim of the recent nationalization of Bolivia’s natural-gas industry, which the Venezuelan dictator helped toinstigate, has been Brazil. The Braziliangovernment is left-of-center, but it isnot about to neglect vital nationalinterests. Chavez should not expect aticker-tape parade in Rio de Janeiro any time soon.
And having antagonized his neighbors, Chavez cannot point to significant domestic achievements either. Hosting a summit of the Organization of Petroleum Exporting Countries last week in Caracas, Chavez called for all members to cut oil output. His primary motivation is that production has fallen sharply in Venezuela, which happened becausethe state oil company fired experienced professionals who refused to swearallegiance to the current regime.
The OPEC ministers saw no reason to cut production to raise prices, as would have been needed to limit the damage that Chavez’s antics have done to his country’s oil revenues. His proposal was rejected firmly.
The next piece of bad news for Chavez could come from Mexico, which will elect a new president on July 2. His man in the race, former Mexico City Mayor Andres Lopez-Obrador, had been ahead in the polls since 2004. But inrecent months, Felipe Calderon, the candidate of President Vincente Fox’s right-ofcenter party, has overtaken Lopez-Obrador.
Firm predictions might be foolhardy at this point, but here is something to ponder: If Lopez-Obrador really were on track to win and then to rule in Mexico as Chavez has done in Venezuela, Mexico’s stock market would have crashed. One reason it hasn’t might be that Calderon’s chances are pretty good. But it is also likely that even if Lopez-Obrador prevails in the election, his actions will be severely constrained by state governors, all of whom are freely elected, as well as by the national congress.
So Latin America is not falling in behind Chavez. But in a sense, the challenge that he has posed to the political status quo may turn out to be useful. Successful or not, the campaigns of President Evo Morales of Bolivia, Humala and Lopez-Obrador prove that, inplaces with reasonably democratic elections, economic expansion can be jeopardized if a sizable portion of the population remains impoverished.
Maybe Chavez and Co. will scare their opponents into improving education and other public services, thereby helping more people to rise out of poverty and to benefit from market-oriented economic development. If so, the greater good truly will have been served.
Douglas Southgate is a professor in the Department of Agricultural, Environmental and Development Economics at Ohio State University.
Southgate . 1 @osu.edu
Thursday, June 08, 2006
DOUGLAS SOUTHGATE
There is good reason to suppose that the recent wave of leftism in Latin America has crested, with recent elections in Colombia and Peru taking Venezuelan President Hugo Chavez down a couple of notches.
The tide started turning decisively against Chavez on May 28, when his main adversary in the region, Alvaro Uribe, won reelection in Colombia. Uribe’s countrymen hadturned to him in 2002 after several years of fruitless negotiations with narco-terrorists, who receive sympathy and perhaps much more from Venezuela. Although fighting continues in the countryside, violence has diminished in cities such as Bogota and Medellin, much to Uribe’s political advantage.
Peru, which held its election on Sunday, looked to be more promising for theleft. Several years of economic growth and low inflation have had slight effect on the number of Peruvians living in poverty. About half the citizens of the mineral-rich nation subsist on less than $2 a day. Furthermore, the candidate favored by Chavez, Ollanta Humala, was opposed by Alan Garcia, who was hardly an ideal candidate. In his first term as Peru’s chief executive, during the 1980s, murderous Shining Path guerrillas had the upper hand in many parts of the country. Additionally, inflation spun outof control, topping 2,000 percent per annum by the time Garcia left office.
In spite of his shaky record, Garciaprevailed, largely by turning the election into a referendum on Chavez. The Venezuelan would have done well to follow the example of Cuba’s Fidel Castro, who over the years has scrupulously avoidedcriticizing other Latin American leaders. But instead, Chavez was insulting in the extreme, calling Garcia a swine and thief, thus causing Peruvians to rally around him. Without a doubt, much of Garcia’s 10-point victory margin camefrom his backlash against the foreign dictator.
Chavez’s international victories have been few and far between recently, and even they carry significant costs for him. The main victim of the recent nationalization of Bolivia’s natural-gas industry, which the Venezuelan dictator helped toinstigate, has been Brazil. The Braziliangovernment is left-of-center, but it isnot about to neglect vital nationalinterests. Chavez should not expect aticker-tape parade in Rio de Janeiro any time soon.
And having antagonized his neighbors, Chavez cannot point to significant domestic achievements either. Hosting a summit of the Organization of Petroleum Exporting Countries last week in Caracas, Chavez called for all members to cut oil output. His primary motivation is that production has fallen sharply in Venezuela, which happened becausethe state oil company fired experienced professionals who refused to swearallegiance to the current regime.
The OPEC ministers saw no reason to cut production to raise prices, as would have been needed to limit the damage that Chavez’s antics have done to his country’s oil revenues. His proposal was rejected firmly.
The next piece of bad news for Chavez could come from Mexico, which will elect a new president on July 2. His man in the race, former Mexico City Mayor Andres Lopez-Obrador, had been ahead in the polls since 2004. But inrecent months, Felipe Calderon, the candidate of President Vincente Fox’s right-ofcenter party, has overtaken Lopez-Obrador.
Firm predictions might be foolhardy at this point, but here is something to ponder: If Lopez-Obrador really were on track to win and then to rule in Mexico as Chavez has done in Venezuela, Mexico’s stock market would have crashed. One reason it hasn’t might be that Calderon’s chances are pretty good. But it is also likely that even if Lopez-Obrador prevails in the election, his actions will be severely constrained by state governors, all of whom are freely elected, as well as by the national congress.
So Latin America is not falling in behind Chavez. But in a sense, the challenge that he has posed to the political status quo may turn out to be useful. Successful or not, the campaigns of President Evo Morales of Bolivia, Humala and Lopez-Obrador prove that, inplaces with reasonably democratic elections, economic expansion can be jeopardized if a sizable portion of the population remains impoverished.
Maybe Chavez and Co. will scare their opponents into improving education and other public services, thereby helping more people to rise out of poverty and to benefit from market-oriented economic development. If so, the greater good truly will have been served.
Douglas Southgate is a professor in the Department of Agricultural, Environmental and Development Economics at Ohio State University.
Southgate . 1 @osu.edu
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