One of Latin America’s main accomplishments in recent years

							                     Fifth Column / Politics
                     Published in AméricaEconomía
                     December 8, 2006

                     The Real Center

                     The conventional wisdom regarding the outcome of Latin America’s recent
                     presidential elections is that they indicate a high degree of political polarization
Susan
Kaufman Purcell      in the region. This conclusion is based on the fact that voters often seemed
Director, Center     more or less equally divided between two very different kinds of candidates.
for Hemispheric
Policy, University
                 On one side was the authoritarian populist who claimed to reject so-called
of Miami.
                 neoliberal economic policies in favor of a return to the statist economies of the
1970s. On the other side was the democratic populist who was more accepting of market
economies, although eager to pair them with social policies that would give the poor a greater
share of the economic benefits generated by such economies. The fact that the poor were
generally more attracted to the authoritarian statist candidates while the middle and upper-
classes tended to support the more market-oriented, democratic candidates, made the
polarization seem even more severe.

The victory of Daniel Ortega and Rafael Correa in the recent presidential elections in Nicaragua
and Ecuador, however, may signal the consolidation of a trend toward less polarized politics in
Latin America. Given Ortega’s background as a former Marxist revolutionary who established a
socialist dictatorship closely allied with Castro’s Cuba, many feared that his victory meant the
destruction of Nicaragua’s democracy and market economy and the country’s return to the
Sandinista policies of the past. Instead, Ortega has promised to respect private property,
encourage foreign investment, maintain the successful economic stabilization policies of his
predecessor, continue Nicaragua’s membership in CAFTA and try and work with the United
States.

Correa, a U.S.-trained leftist economist, has also said that he welcomes foreign investment and
that he will “strictly follow the rule of law.” Unlike Ortega, Correa opposes a free trade agreement
between his country and the United States, but has also said that he is open to a mutually
respectful relationship with Washington.

At the same time, however, both Ortega and Correa plan to pursue independent foreign policies ,
which include friendship with President Hugo Chavez of Venezuela, and both emphasize their
commitment to improving the living standards of poor.

It is still too early, of course, to know whether the new Ortega is for real. If he is, then he will join
the ranks of President Inacio Lula da Silva of Brazil, a former Marxist labor leader, and President
Alan Garcia of Peru, a former left-wing populist whose policies wrecked the Peruvian economy
during his first presidency several decades ago. Both men now regard themselves as presidents
committed to combining market-friendly policies with social policies that will narrow the gap
between the rich and the poor in their respective countries.

These three are not the only Latin American presidents to try and combine economic policies
generally labeled right of center with social policies regarded as characteristic of left-of-center
governments. President Lula’s economic policies represent a continuation of those implemented
by former president Fernando Henrique Cardoso, in the past a harsh critic of market economies
and multinational corporations. Former Chilean president Ricardo Lagos and Chile’s current
president Michelle Bachelet, as well as Uruguay’s current president Tabare Vasquez, all favored
socialist economies and distrusted market economies early in their political careers.

The youthful radicalism of Cardoso, Lagos, Bachelet and Tabare Vaszuez, however, was far
more subdued than that of Lula da Silva, Alan Garcia and particularly, Daniel Ortega. Yet all of
these presidents subsequently moved toward the political center in a very specific way—by
combining more traditionally conservative economic policies with more progressive social
policies. They also did not feel it necessary to prove their devotion to the poor by repudiating the
market-friendly policies of their predecessors, which had begun to stabilize their currencies and
significantly reduce inflation.

Such continuity is an important breakthrough in a region that has been too quick to support
politicians who want to “change the model” if policies do not quickly produce promised results.
Because of such constant policy swings, Latin America too often has taken two steps forward and
one - or more than one - step back. The new willingness of reformist presidents to experiment
with incremental, rather than radical, changes in order to reach their goals is therefore a good
development.

What would be even better, however, would be a greater effort by these and future presidents to
explain to voters why market-friendly policies are not necessarily inimical to the interests of the
poor and why stop-and-go policymaking is inefficient, costly and harmful to their interests. Only by
creating a broad understanding of the benefits of continuity with incremental change can lasting
progress be made in strengthening the political center in Latin America and weakening support
for more extremist policy options. ■