A glass 98% full

Oh so close

In an interesting article in the WSJ in January, an analogy was made: Brazil was starting to look like Argentina, Argentina was looking like Venezuela, and Venezuela was resembling Zimbabwe. This metamorphosis was put to the test, when Brazil’s colossal voice resonated across the region as elections were held last Sunday. The continent held its breath to see if change was possible, or if indeed Brazil would continue heading toward Argentina-like status.

Brazil has spoken. The incumbent Dilma Rousseff secured the left wing PT’s hold of Planalto presidential palace for four more years, sixteen in total and counting.

In Latin America, this is business as usual. The incumbent possesses a great advantage, some would say insurmountable. Just 2 incumbents have lost reelection in the Americas. Nevertheless, what should be taken into account is the opposition candidate Aecio Neves’ performance at the ballot box, narrowly defeated by a mere 2% gap.

Neves, in my humble opinion, is the most formidable contender that the deplorable marxist left has faced in Latin America. A grandson of an elected Brazilian president and a successful former Governor of Minas Gerais, Neves tried to parry off the PT’s hegemony, particularly claims that he would curtail popular social programmes in Brazil, and pointing directly at the PT’s eyes accusing them of the rampant corruption in state-run firms while blaming Rousseff’s administration for an economy that is in doldrums amidst growing concerns of increasing inflation (to our eyes a 6% annual inflation rate is peanuts).

Unfortunately, neither these accusations nor Marina Silva’s support were enough for a coup de grâce against Rousseff or the PT for that matter.

Regardless of what happens in the rest of this decade, the next years could mean a lot for the fight against incumbents, for while Rousseff won, it was an ugly victory, too close to celebrate. Not only do reasonable politicians stand to bridge the electoral gap in Brazil, but a chance to finally overcome the populist wave in the Americas is right there. Here’s why:

1. Populist reelection models in the Americas are underpinned by a growing economy where jobs are plenty and the bonanza finds its way to consumers. There’s a strong link between consumption and political approval, and if the former stagnates, the latter vanishes. In a world economy in which demand for commodities is declining, a negative shock with respect to these countries’ terms-of-trade means less fiscal revenue to spend to keep the party on top.

2. Unlike Venezuela, Brazil is not a hybrid regime, nor is it a dictatorship. Brazil still benefits from a somewhat decent institutional framework that enables it to live in a democracy. Still, a shift in power at the end of this decade could very well mean a shift in Brazil’s influence in the region. This would translate into a Brazil less tolerant of human rights abuses and more staunchly against Venezuela’s growing repression against dissidents and disregard for the rule of law.

3. Even if the first two things are met, what’s required is a political vanguard that could turn the growing frustrations of the citizenry with the status quo and become sponsors of change in order to transform the political and economic challenges ahead into opportunities. This could be embodied in the likes of Aecio, Leopoldo, Henrique or a coterie that could foster hope, not despair.

As an economist, I tend to be highly pessimistic about our future, especially in a country that looks more and more like a failed-state, and not simply a nation in trouble. Surprisingly enough, this time I strongly believe that this cycle is about to end. It will require sacrifice, courage, and wisdom to lead the way into a more stable future in Venezuela and beyond. Aecio was close, but we will get closer with time.

29 thoughts on “A glass 98% full

  1. isn’t “deplorable marxist left” a little hyperbolic or at least wrong (except in the case of Cuba)? maybe I should ask who those deplorable marxists are. Is “left vs. right” all that useful in discussions about modern-day Latin America?

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      • CastroChavismo is decidedly non-Maxist; like Stalin, Mao and Kim-il-something; Chavez, too, parted ways with Marx. Bolivarian revolution of the 21st is analogous to Juche, Stalinism, etc. in this regard. Academically, authoritarian regimes are considered Stalin-derived. I think you’re doing yourself–and your cause–a disservice by mishandling terms and granting the opportunity to critics to dismiss what you have to see because it’s laced with sweeping generalizations that are diminishing Marxism instead of focusing on the subject.

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        • “Chavez, too, parted ways with Marx.”

          You make Chávez sound like a deliberating intellectual. He was nothing of the sort. Though he pretended to be one when he’d name-drop one book or another, one author or another. Pure BS. He was the type that would buy books by the metre, a saying popular in Vz society to indicate a phoney ‘sin escuela’ but wanting to appear oh-so-intelligent.

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          • “You make Chávez sound like a deliberating intellectual.”

            Your bombastic choice of words, not mine. You do nothing to establish Chavez remotely within the spectrum of Marxism; I’m not sure what your beef is.

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          • Marxist views can take many forms , historically and empirically they are not a pure inmiscible set of ideas , They have spawned many different types of regimes and there may yet appear a Marxist inspired system which differs from those which we identify with the Marxism of the Soviet system . That being said , Castro’s Cuba is universally seen as deliberately modelling itsef on the Soviet Communist Model , a Model which proudly purported to represent a Pure Marxist model . Castro has declared himself a dyed in the wool communist time and again , Chavez loudly professed his admiration for the Cuban Model and what it stands for and his desire for Venezuela to ultimately become a version of the Cuban Model . In that sense one can see Chavez as professing himself to be a Communist . No doubt about it .!!.and yet ……..he was not a serious ideologue, he liked to take on the mantle of a communist revolutionary , profussely used marxist rethoric but basically he was an ignorant megalomaniacal narcicist fancifully pursuing ideas and projects which he felt reflected marxist ideas but which strictly speaking he mixed with notions and fantasies which were not strictly marxist in character and which main virtue was that they made him fee great about himself !!

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            • Marxist? Yes but if the first wave followed Karl’s ideology, this one is more of the Groucho variety or as Marx (the senior) said famously: History repeats itself, first as tragedy, then etc, etc…

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  2. Its very interesting how in the article you refer to “incumbency advantage” as a purely Latin American populist and negative phenomenon, when this is hardly the case. Research in Political Science has shown time and again that, for a multitude of reasons, incumbency advantage is a phenomenon worldwide. Take the US for example out of the last seven presidents only two have lost re-election. Their congress and senate is full of members with more than one electoral victory. The UK, Spain, France, Germany, etc are also cases where incumbents have easily won re-election (even if those are parliamentary systems).
    I disagree with your analysis that we need “reformers” to save us from the malaise that are Latin American re-elected populist leaders. What we need is parties with ideas and ideals that compete in elections; and a well run and fair electoral system. Theories for explaining vote in elections also abound in the PoliSci literature. Partisanship, socio-economic status, patronage, the economy, most important issues, etc. As you say the economy is a big one but it doesn’t work in a vacuum and not everyone gets affected by it equally and at the same time.

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    • Iñaki, I value your insightful demur regarding the post. I concurr with you on the basis that what’s required in Latin America are political parties competent enough to foster resillience among their constituents in order to stonewall any populist’s agenda.

      With regards to the reelectionary affability in the PoliSci literature, while is true that in many countries reelection induces the incumbent to “behave nicely” in their tenures in office, what happens in Latin America is that given a poor institutional framework of checks and balances, there’s certainly little constraints for the incumbents to dispose of fiscal resources and manipulate the business cycle to their advantage (aka they make a fuss with the taxpayers money on election year and after getting reelected they send them the check).

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      • The Political Business Cycle is also in the Political Economy literature, it exists before latin american populists. What I agree with you however is that the institutional system is the big difference if we compare latin american democracies to other western democracies. But the temptation of injecting noney into the economy exists everywhere.

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    • Since 1900, 21 incumbent U.S. Presidents have sought another term of office. Seven have been defeated, four of them in one stretch of six such contests. (Before 1900, there were 16 such contests, and incumbents won only 7.)

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  3. “Surprisingly enough, this time I strongly believe that this cycle is about to end.”

    No, it won’t. Chavismo is stronger than ever was. It’s still popular, it permeates a whole continent.

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    • I agree. For the years ahead, leftist ideology (I don’t call it “Chavismo”) will be alive and resurgent, for 2 reasons: 1) The poor people don’t like the “blood, sweat and tears” message. We understand that message. Not them. And this goes across the continent: poor people in Latin American countries have been living submerged in “blood, sweat and tears”, as far as they can remember. So, this message won’t get their attention. 2) The incoming slowdown in emerging countries. China is getting a landing, and this will have an effect on Latin American countries. You should seek for the Chinese Foreign Affairs Minister statement on Dilma’s victory. And you should read it beyond the lines. After all, China is the greatest foreing investor in Brazil. So, for the next years, the BRICS and Unasur and CELAC countries will be very busy looking for ways to handle a downturn cycle on raw materials prices. This, will reinforce the anti-USA speech and feelings, specially in oil exporting countries, like, for example, Argentina, Brazil, & Vzla. And I’m not mentioning the White House apathy towards Latin American countries, which make things worse.

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      • The so-called ‘oil curse’ does not exist in Brazil or Argentina, as both countries are not oil exporters but oil importers. In these two countries, when private companies start going bankrupt, the governments’ revenue simply vanishes. it’s not like the same it happens in Venezuela, where Maduro couldn’t care less about the economy going to hell, as he just have to take billions of dollars from the Orinoco basin to make the country solvent.

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        • I didn’t mention any “oil curse” on Argentina and Brazil. I know there’s no such thing for them, so far. They can become oil exporters too. But, I did mention anti-USA rethoric. You can read again. And guess: Who’s going to be blamed for the downturn in oil prices? USA. And this is a very large group on countries. It’s not only OPEC countries. It’s Russia, México, even the Islamic State, who sells almost 1 million b/d. That’s the problem. In Latin America, anti USA feelings are at the very root of the political outcomes. The most anti-imperialist a presidential incumbent is, best for him. Do you even remember, Mario Vargas Llosa vs Alberto Fujimori in Perú? It comes from a very, very, long time ago. I hope this clear your mind and ideas and be helpful for you.

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    • “it permeates a whole continent.” Mention also all the friendly but bad regimes on other parts of the planet from N. Korea, Russia, Iran, Zimbawbwe, Cuba, Lebanon, Syria, Gaza, etc.

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    • Communism, Socialism, Marxism (whatever you want to call it) is like a viral epidemic. There doesn’t seem to be any sort of artificial vaccine. Ultimately, it just has to run its course before it burns itself out. In time, with experience, education, and maturity, societies develop some degree of immunity to these self-destructive ideologies.

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  4. Oddily enough, I credit a huge part of this narrow 2% gap to… Venezuela.

    Because everyone here was like “If she gets reelected, we will become like Venezuela, soon there won’t be enough toilet paper available, our supermarket shelves will be empty, the country will turn into a dictatorship.” Unfounded fears or not, the truth is that a huge fear of becoming a failed state kept spreading in all segments of society like fire (it’s stronger than ever now and I don’t see it slowing down) and removing votes from Dilma. Imagine for a second that even the doorman of the building I live in is scared about the Venezualization of the country. It’s as if everyone had woken up to the authoritarian/economic trap that is so close to us.

    And Dilma and her party are about to face the strongest opposition they have ever faced. They will have to drastically curb freedom of speech, improve the economy’s indicators tremendously, and rig the institutions to unprecedented levels (maybe even frauding elections) to remain in power in 2018. They won, but it’s common knowledge that they won bleeding profusely. The Workers’ Party members did not even celebrate, they know that they are done. Specially because Dilma lost in all the more cosmpolitan and rich cities, which are the cities that influence and form the public opinion of the rest of the country. To paraphrase a fallen down chavista hero: las matematicas no fallan!

    If you want to graphically visualize the Worker’s party current situation: imagine a downward spiral.

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    • But for that PT, Lula and Dilma have a new special adviser that will help turn poor, No-Land movement masses (Movimento Sem Terra) and people from “Las Misiones” (they call it; Bolsa Familia, escola,..) with the help of intelligence work perfectly coordinated by “Los Medicos Cubanos” (they call it; Programa Mais Medicos) in “Los Barrios” or Favelas into vote power machines so in Lula can get back into the throne again in 4 years as Dilma already confirmed in her first speech (Luna endorsement for next election)… The adviser is a very well known and powerful Chavista that has been on the news recently (check the documents he had in the briefcase and forget about the Nani, the gun and PDVSA planes for a bit) https://br.noticias.yahoo.com/blogs/claudio-tognolli/grupo-enviado-por-maduro-ao-brasil-da-aulas-de-163149226.html?utm_source=facebook.com&utm_medium=social&utm_campaign=Postcron.com

      From all this what makes me very sad for Brazil is that how PT and the opposition (mainly) are playing the; blame the poor, brainless northeast region people responsible for reelecting Dilma… It is allover the social media sites so PT is taking advices and using same HCF strategy; “Divide and you will conquer” It reminds me how we got into this nightmare on the first place…

      In my opinion; Brazil is not yet but going to get in troubles very quick if there is no change and if they listen to Chavista advises.

      For Carlos comments on; “Brazil still benefits from a somewhat decent institutional framework that enables it to live in a democracy” I recommend researching on what happened with “Mensalao” case, Petrobras corruption scandals, buying of votes, use of public funds for election,… then you will adjust a bit the “a somewhat decent institutional framework” because it had but now is not the case…

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      • I understand your point. However, Brazil is a little bit bigger than Venezuela, Bolivia or Cuba. You mentioned the ‘Mais Medicos’ and its 14,000 operatives, for example; but that’s probably the amount of people living in my street. What can be the impact of 14,000 Cuban slave doctors – that are fleeing like maniacs to Miami as we speak, I must add – in an overall population of 201,000,000 people? It can’t be much, right? Sao Paulo state alone has 10 million people more than all Venezuelan states combined. then Then again, good luck for the 14,000 Cuban intelligence operatives and the 100,000 Movimento Sem Terra soldiers etc. in whatever subversive activity they engage in, but don’t forget that these people they may influence have always voted for Dilma, so even if they are ‘successful’ in their ‘mission”, they won’t bring any new votes for Lula in 2018, but merely retain what they have always had. And another information, the people in the slums represent only 6% of the Brazilian population.

        I tend to be very gloomy/pessimistic about Brazil’s future, but I feel that since last Sunday the game changed. It’s our turn to push now.

        “From all this what makes me very sad for Brazil is that how PT and the opposition (mainly) are playing the; blame the poor, brainless northeast region people responsible for reelecting Dilma… It is allover the social media sites so PT is taking advices and using same HCF strategy; “Divide and you will conquer” It reminds me how we got into this nightmare on the first place…”

        The Northeast votes overwhelmingly for Dilma since 2002. What else can PT do? The opposition can’t lose what it has never had.

        “then you will adjust a bit the “a somewhat decent institutional framework” because it had but now is not the case…”

        That’s my fear, but the opposition is now empowered by 80 million people who hadn’t voted for Dilma, and it can call out PT in its bullshit for the first time, something that wasn’t possible in the past. Some analysts are saying that Brazil is resembling a democracy for the first time since PT took office back in 2002.

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        • sorry to have to say it, but Lula will be candidate in 2018 and most likely will be elected easily… that is, unless the rumours of his late night visits to Sirio-Libanes prove to be right.

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        • Marc, I used to be very positive and optimistic about Venezuela too like most Venezuelans until I realized I was too innocent about the real intentions and the real agenda of Chavismo… There is a video from a famous reporter (Orlando Urdaneta) call ” No vale yo no creo” or No, I do not believe, that reflects how innocent we all where since day 1; “Venezuela will never be like Cuba no way!” look at it now.

          I recognize all your comments above and share some of them but be careful as you/we are dealing with very unscrupulous people that knows very well the old techniques of manipulating and indoctrinating people… This blog has documented (better than anyone) the decomposition process of Venezuela under Chavismo and if you go back to election times (we have had many in 15 years) you will find some similarities that I do not believe are casualty. Of course we see this because we have been there.

          So many similarities… We have had cases like the ones on below link with electronic vote, people with many ID’s, election documents found on the street and many similar cases I am sure you are aware of; http://www.folhapolitica.org/2014/10/fraude-pessoas-tem-varios-titulos-de.html

          Please keep fighting and do not give up, we share Brazil concerns and look forward for a “Gigante Acordado”

          Um abraco.

          PS: Are u in Rio?

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          • Moder,

            I’m not so sure about that, because I don’t think that the people like him that much nowadays. He is not an unanimity like Chávez was among the masses. Besides, Lula didn’t possess the largest oil reserves in the world, which allowed Chavez to spend billions of dollars during the commodities boom, making the poor people’s dreams come true and transforming them into loyal cattle in a heartbeat.

            For you to have an idea of the difference, the poor in Brazil must pay for all the ‘free apartments’ provided by the Brazilian version of Gran Misión Vivienda. There’s simply no money to make ends meet. Thus, most the people assisted don’t really think that those things were ‘given’ for them for free. A recent poll showed that only 18% of Brazilians believe that the government had helped them in any way in the recent past. What explains so many poor people voting for Aécio.

            And in four years Brazil will be more developed (higher GDP per capita) and well-informed (more people will be connected to the internet, for example). However, I don’t deny that there’s a chance of everything going wrong again, I just think that this possibilty has never been so remote like it is today. For the first time the opposition is united and strong, empowered like never before.

            AP,

            Just to make things clear, I know what those people want since day one and I’ve been reading about the Foro de Sao Paulo for years now. There’s absolutely no ‘casuality’ and ‘coincidence’ when talking about them, they have method: basically Gramsci meets Marcuse; ascend to power through democracy, then get rid of democracy by changing the constitution through an unconstitutional plebiscite, silence media, threat political opponents etc., you know the rest of the story. The ‘new development’ in Brazil is that there are more people knowing what PT really wants now – what is to be in power forever. PT has been exposed, they are naked. And since PT is immoral, they will really do whatever they can to remain in power, no holds barred, what will in turn confirms the people’s fears and increases rejection on the party. Like I said in other post above, even my doorman is afraid of PT – that’s the new thing.

            My point, and there I disagree with you, is that due to the above-mentioned reasons, I don’t believe that PT will really be able to get what they want. And I think that I think that because I live in a city that sets the tone of the rest of the county.

            “Please keep fighting and do not give up”

            Sure, I will keep fighting those criminals until the day that I die, I don’t how to act differently.

            “PS: Are u in Rio?”

            I am.

            Abraço!

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  5. What are the alternatives in LatinAm? Yes, the LatAm Left (soft and hard) are getting old, but let’s see a viable right-of-centre? Off the top my head – Santos of Colombia. Also, don’t dis the Left so fast…. you still have Bachelet in Chile. At the end of the day, both of these presidents suggest that most are trying to hover around the middle. If only the Ven oppo could do the same – the only one trying is HCR and from an outsider’s perspective, sounds like he’s lost traction among his own supporters

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  6. Venezuela’s future looks bleak indeed… falling oil prices means the only chance of chavistas to retain power is a complete embrace of cuban castro-communism… no dollars + forex controls = government sanctioned reduction of consumption… let’s hope that doesn’t happen

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