The Populist Revival, the Emergence of the Center,

and U.S. Policy in Latin America

Hal Brands

A decade ago, nearly all Latin America seemed to be converging toward democracy and free-market economics. Ten years later, misery, instability, corruption, and public insecurity remain rampant, giving rise to sharp public frustration and producing intense political and ideological ferment. The electoral results of this ferment are frequently described as a “lurch to the left.” Such characterizations are misleading. Latin America is not experiencing a uniform shift to the left; it is witnessing a competition between two very different political trends.
The first trend is radical populism. Leaders like Hugo Chávez, Evo Morales, Rafael Correa, Nestor Kirchner and Cristina Fernandez, and Daniel Ortega angrily condemn the shortcomings of capitalism and democracy and frame politics as a struggle between the “people” and the “oligarchy.” They promote prolific social spending, centralize power in the presidency, and lash out at Washington. This program is, in some ways, strategically problematic for the United States. Populist policies ultimately lead to authoritarianism, polarization, and economic collapse, and certain populist leaders have openly challenged U.S. interests in Latin America.

Yet it would be a mistake to overestimate the dangers posed by radical populism. There are limits to the more threatening aspects of populist diplomacy, and despite their anti-American rhetoric, populist leaders in Ecuador, Nicaragua, and Argentina continue to cooperate with Washington on certain issues. More important, taking too dire a view of the current situation risks ignoring the second essential trend in Latin American politics: the rise of the center.

On both center-left and center-right, leaders in Chile, Brazil, Uruguay, Mexico, and Colombia have responded to the present crisis in Latin America by emphasizing moderation rather than radicalism. They mix market-oriented economic policies with creative social reforms, protect democratic practices, and confront the longstanding shortcomings of the Latin American state. They pursue pragmatic foreign policies, stressing cooperation rather than confrontation with the United States.

While the political climate in Latin America presents challenges for the United States, it also offers opportunities. Going forward, U.S. interests will best be served by a strategy that limits the fallout caused by populist diplomacy, empowers moderate leaders, and supports a longer-lasting campaign to address social and economic conditions conducive to political radicalism.

I

The current ferment has its roots in the unfulfilled promise of democratization and neoliberal economic reform. In 1978, there were only four Latin American countries that could plausibly be termed democratic; by 2001 only Castro’s Cuba remained indisputably authoritarian. Over roughly this same period, Latin America embraced the market. In an effort to break away from the distortions caused by import-substitution industrialization (ISI), countries slashed tariffs, privatized industry, cut spending, encouraged exports, liberated currency flows, and courted foreign investment.

Free elections and free markets were touted as the antidote to Latin America’s traditional ills. These expectations were not entirely unwarranted. Human rights violations fell as elected governments replaced repressive military regimes, and democracy made Latin American politics a less deadly game. Neoliberal reforms led to increases in trade and investment, declines in inflation and foreign debt, and a slow but steady revival of growth after the disastrous contractions of the 1980s.¹

For ordinary Latin Americans, however, the results have been less satisfying. Neither democracy nor neoliberalism has done much to alleviate corruption, drug trafficking, organized crime, a weak rule of law, or crushing poverty and social injustice. Poverty statistics remain appalling: 213 million Latin Americans (40.6 percent of the population) live in poverty; 88 million earn less than one dollar per day. Basic health services elude 150 million Latin Americans; 130 million lack access to clean water. In some ways, this situation was actually exacerbated by neoliberal reform. Cutbacks in social spending hurt the poorest, the sell-off of major industries to the wealthy led to a further concentration of income, and increased capital mobility compounded financial crises that fell hardest on the poor and the middle class.²

The resulting popular disillusion has been striking in its intensity. More than 50 percent of Latin Americans “are willing to sacrifice a democratic regime in exchange for real socio-economic progress.”³ Protests against market-oriented policies are frequent and strident. The “Caracazo” in 1989; the Zapatista uprising in 1994; the “water wars” in Bolivia; these and other incidents testify to the crisis of neoliberalism and democracy in Latin America. Across Latin America, this crisis has pushed issues of poverty and exclusion to the forefront of regional affairs and given rise to two competing models of politics and governance.

II

The first model might best be described as radical populism. Populism is a political strategy that centers on the mobilization of those dissatisfied with the current socio-economic and political order. It typically involves several characteristics: a charismatic leader who asserts a Manichean conflict between the virtuous people and the venal oligarchy; social and economic policies designed to create clientelistic ties between favored constituencies (normally the downtrodden, but also the middle classes in some cases) and the regime; and a distaste for liberal democracy in favor of more personalistic, “direct” forms of representation.⁴

Populism has a distinguished pedigree in Latin America. During the 20th century, leaders like Juan Perón and Jose Velasco Ibarra catalyzed lower- and middle-class discontent to forge powerful political movements based on the mobilization of mass grievance. Unfortunately, populist leaders were better at politics than governance. Their divisive rhetoric fostered febrile social polarization; their indifference to democratic institutions left massive institutional wreckage. Promiscuous social spending led to inflation and macroeconomic disaster, and by the 1980s, the traumas of the debt crisis—which discredited the interventionist, protectionist economic model favored by populists—made it seem as though Latin America had turned away from populism.

Yet populism has recently experienced a revival. Economic crises and public disillusion have created new opportunities for charismatic leaders who thrive on confrontation and have a penchant for radical solutions. This tendency is most marked in Venezuela, where Chávez uses quasi-Marxist language to describe a quintessentially populist project. Since 1998, Chávez has cultivated historically marginalized groups and others who saw more pain than gain from neoliberal reform to overthrow the discredited Punto Fijo regime. He exploits popular anger at democracy and neoliberalism and uses the rents gained by nationalizing industry to finance expensive social projects aimed at the poor. As part of an effort to create “participatory” democracy, Chávez has mobilized his supporters through government-sponsored groups like the Bolivarian Circles, resorted to referenda to outmaneuver his rivals, and significantly expanded executive authority. He has made the armed forces explicitly loyal to “Bolivarian socialism,” filled the legislature and the courts with his allies, seized direct control of PDVSA, and done away with presidential term limits. Chávez frames Venezuelan politics as a struggle between the downtrodden and the oligarchy; his enemies, he claims, are “enemies of the people.” ⁵

In Bolivia, Evo Morales has seized upon both longstanding and more recent resentments to forge an “ethno-populist” model.⁶ He has tightened control over the extractive industries and uses social spending and selective political empowerment to mobilize trade unions and indigenous communities. The president’s Movement for Socialism (MAS) gained approval of a new constitution that expands government control of the economy and executive control of the government, limits the size of landholdings, extends special rights to indigenous communities, weakens presidential term limits, and “refounds” the country as a “plurinational” republic. Morales clearly prefers conflict to consensus; he calls his enemies “fascists,” “racists,” and “terrorists,” and used legally dubious maneuvers to moot the new constitution. ⁷

Correa has used similarly abrasive tactics to bring about a rupture with the partidocracia, Ecuador’s dysfunctional political system. Like Chávez and Morales, Correa thrives on popular anger and promises to wage class warfare as official policy. He has tightened government control over the banks and the energy sector, using the proceeds to fund subsidies for the poor, pensions for the elderly, and public works projects. He waged a “hyper-plebiscitary” campaign that shattered the existing institutional framework and allowed him free rein in drafting a new constitution that extends greater executive control over formerly autonomous institutions, allows the president to abolish the National Congress, and potentially permits Correa to remain in office until 2017. According to the International Crisis Group, “Power is becoming ever more concentrated in the person of the president.” ⁸

The populist revival has also been felt in Argentina. Nestor Kirchner harnessed mass outrage stemming from the economic crisis of 1999-2002 by establishing ties of patronage to the piqueteros (effectively government-sponsored protest groups), and reestablished Peronism’s populist roots by implementing price controls, tax cuts, wage hikes, and subsidies. The Kirchners have renationalized Aerolineas Argentinas, attempted to take control of the private pension system, and asserted greater presidential control over the national budget. Since roughly 2005, Nestor and his wife have embraced more profligate spending policies, and they have used the weakness of competing institutions like the legislature and the judiciary to expand executive power.⁹

Daniel Ortega is the most idiosyncratic of Latin America’s neopopulists. Ortega began his career as a Marxist guerrilla; he is now a corrupt caudillo. Ortega uses personal charisma, his lingering revolutionary credibility, strident denunciations of “the genocide produced by global capitalism,” and tightly controlled patronage to keep a critical mass of Sandinistas ready to take to the streets in his defense.¹⁰ He has skillfully utilized his “pact” with ex-president Arnoldo Alemán and hundreds of millions of dollars in Venezuelan aid to co-opt, paralyze, or simply ignore competing institutions. Once in office Ortega greatly expanded executive authority over the armed forces, the police, the budget, and the courts. He now calls for “direct democracy” in the form of Sandinista-controlled Citizens’ Power Councils and a transition to a one-party system. Political authority has become so personalized that it is common to remark that Sandinismo has given way to Danielismo.¹¹

III

The revival of radical populism poses two principal challenges for U.S. policymakers. First, radical populism is prejudicial to good governance and long-term stability. While expanded social spending has led to lower poverty rates (and greater presidential popularity), the long-term consequences of populist rule are usually pernicious. Nationalizing the energy sector permits high levels of social spending, but it also scares away foreign investment, impedes diversification of the economy, and creates incentives for corruption. In Venezuela, inflation is above 20 percent, the industrial base has contracted sharply, and an entire class of businessmen (“Boligarchs”) has grown rich through cronyism.¹² Similar—if less pronounced—problems are emerging in Bolivia, Ecuador, and Argentina.¹³

With respect to social policy, populist spending has put more resources into the hands of the poor, but often in ways that are more patrimonial than empowering. There are political strings attached to populist social programs—the Venezuelan government conducts voter registration drives through its programs; the MAS strongly “encourages” aid recipients to participate in pro-regime rallies—and groups like the Bolivarian Circles and piqueteros have been used to ensure that assistance flows only to government loyalists. The counterpart to government support for these organizations is an expectation that they will mobilize to intimidate or defeat the president’s political enemies—as they have, in numerous cases.¹⁴

In the political realm, populist policies are likely to exacerbate failures of governance and democracy. The personalization of power and a plebiscitary style of rule are useful for effecting rapid change, but are ultimately corrosive to those practices and institutions that are crucial to governmental accountability and the rule of law. A tendency toward impunity is evident numerous occurrences: political intimidation in Venezuela, Morales’ support for violent protest and acts of “community justice,” Ortega’s electoral tampering and repeated attacks on press freedom, and others.¹⁵ Insofar as these leaders trample democratic procedures, they risk deepening the political decay they inherited.

Finally, the combination of rapid political change, quasi-authoritarian measures, and Manichean rhetoric frequently results in polarization. Violence punctuated constitutional reform debates in Ecuador and Bolivia. In Nicaragua, the clashes that followed the fraudulent elections of November 2008 elicited fears that a recrudescence of political bloodshed might be in the offing.

The diplomatic ramifications of Latin American populism are also troubling. Populist diplomacy invariably features virulent anti-Americanism. Chávez, for instance, warns that a U.S. invasion is imminent and referred to George W. Bush as “the devil” in 2006. ¹⁶ This rhetoric is intended primarily for domestic consumption, but it nonetheless perpetuates the old trope of blaming Latin America’s ills on U.S. malevolence and thereby exerts a negative effect on the overall climate of hemispheric relations.

In some cases, this rhetoric is indicative of policies that complicate the U.S. strategic posture in Latin America. Several populist leaders have looked to forge ties with extra-hemispheric powers as a way of offsetting U.S. influence. Ortega recently inked a deal for Iranian financing of a $350 million ocean port and a new hydroelectric plant, and has bought arms from and increased military cooperation with Russia. Correa has announced plans to buy weapons from and strengthen energy ties with Iran. Morales touts his arrangements with Russia and Iran as counter-weights to American power.¹⁷

Chávez has been even more energetic in this regard, assiduously courting extra-hemispheric powers. He has purchased military and strategic communications equipment from China, hosted Russian bombers and warships, and used oil revenues to purchase a slew of Russian weapons.¹⁸ These weapons include tanks, advanced fighter jets, anti-aircraft systems, and other arms meant to defend Venezuela against the U.S. invasion that Chávez purports to fear. “Russia is an ally of Venezuela’s,” he has declared. “Russia is with us.”¹⁹ This is doubtful (see below), but Venezuelan arms purchases have spurred fear of a brewing regional arms race.

Chávez has also launched a campaign to expand Venezuelan power and undermine U.S. influence. He has supported populist candidates in Mexico, Peru, Nicaragua, Bolivia, and Argentina and funneled arms and money to the Revolutionary Armed Forces of Colombia (FARC). After the United States and Colombia announced a plan to set up a U.S. counter-narcotics base in Colombian territory in 2009, Chávez reacted by warning of war and moving thousands of troops to the Venezuelan-Colombian border. Though few observers believe that the Venezuelan president intends to launch an armed conflict against Colombia, these measures have nonetheless ratcheted up diplomatic tensions in the region.

Elsewhere in Latin America, Venezuelan oil wealth funds PetroCaribe, an aid initiative for petroleum-poor countries, and assistance aid to Nicaragua, Ecuador, Bolivia, and other nations. One recipient was Manuel Zelaya of Honduras, who exploited Venezuelan support to fund populist social programs and move his country to the left politically. In 2004, Chávez launched the Bolivarian Alternative for the Americas (ALBA) as a response to U.S. proposals for a Free Trade Area of the Americas. He now argues that this organization should become a military alliance against the United States.²⁰

Elements of populist diplomacy constitute sources of regional instability and a barrier to security cooperation with the United States. The three Andean populists have restricted counter-drug cooperation with Washington, and Chávez’s arms buildup and support for the FARC increases regional tensions. Correa’s ultra-nationalist rhetoric has sometimes impeded bilateral collaboration with Colombia, and Ortega’s antagonistic diplomacy has resulted in fruitless spats with Bogota.²¹ Finally, Hezbollah has exploited Tehran-Caracas relations to establish a presence in Venezuela, and there is reason to worry that populist diplomacy may create an opening for terrorist groups to move into Latin America.²²

IV

As a result of these factors, descriptions of the populist revival are often quite hyperbolic. In 2006, Secretary of Defense Donald Rumsfeld loosely compared Chávez to Adolf Hitler and described Venezuela and Bolivia as a “Latin American Axis of Evil.”²³ As discussed above, concerns about the strategic impact are hardly groundless. All the same, there is reason to believe that the situation is not as dire as certain as this comment would indicate.

With respect to Chávez, it is clear that his ambitions are grander than his capabilities. The Chinese have been cool to the idea of a strategic partnership with Chávez, and Russian leaders have also shown a degree of restraint. Within Latin America, Chávez’s efforts to bring his allies to power have not been particularly successful. Peruvian voters responded badly to Chávez calling Alan Garcia a “thief” during the 2006 campaign. Much the same dynamic was present in Mexico, where Andrés Manuel López Obrador could not shake suspicions that he was a Chávez proxy. ²⁴ And in Honduras in 2009, perceptions that Zelaya was moving into Chávez’s camp provided a powerful impetus for conservative elites and the military to unite against the president. Similarly, Venezuelan solidarity with the FARC has not prevented Álvaro Uribe’s government from dealing the guerrillas a series of staggering blows, and when hard evidence of the Chávez-FARC link surfaced in early 2008, it caused Chávez considerable embarrassment.

Chávez’s petro-diplomacy has also resulted in as many frustrations as successes. Venezuelan largesse was not sufficient to win Chávez a seat on the UN Security Council in 2006, and even countries that benefit from Chávez’s generosity have refrained from fully reorienting their diplomacy along chavista lines. The impoverished Caribbean and Central American nations that constitute one of Chávez’s core diplomatic constituencies have offered expressions of friendship and occasional trade and political benefits in exchange for Venezuelan oil, but they have also maintained diplomatic independence and, in some cases, continued to have strong relations with the United States. ²⁵

Nor are Chávez’s dealings with other populist leaders free of tension. Morales evinced annoyance after Chávez sided with a Chilean candidate for secretary-general of the Organization of American States (OAS) only shortly after announcing his “wish to swim someday in a deep Bolivian sea.”²⁶ Chávez then further undermined his relations with Bolivia threatening to intervene militarily amid the unrest that accompanied the constitutional reform.²⁷ Rifts have also emerged in Chávez’s relationship with Correa. The Ecuadorian president has been cool to ALBA, and Correa dismissed out of hand Chávez’s attempt to label the FARC as a legitimate “belligerent force” rather than as a terrorist group.²⁸

There is thus a degree of nuance to populist diplomacy. This characteristic is also evident in populist relations with the United States. While Chávez and to some extent Morales have demonstrated a decided hostility to Washington, other leaders have adopted a more variegated strategy. Correa, Ortega, and the Kirchners all recognize the value of anti-American rhetoric and the allure of cooperation with Chávez, but they also appreciate that selective cooperation with Washington does bring certain benefits.

This ambivalence is certainly present in Argentina. On issues important to the United States, Argentine cooperation has actually been quite good throughout the Kirchner years. The Kirchners have strengthened bilateral and multilateral efforts to impede terrorist activity and illicit economic traffic in the Tri-Border Area between Argentina, Paraguay, and Brazil. They have also participated in the ongoing UN stabilization mission in Haiti, as well as in anti-terrorism programs like the Container Security Initiative.²⁹

Ortega is playing the same game. He acknowledges that trade and investment are crucial to the economy, and has remained faithful to the Central American Free Trade Agreement (CAFTA). Military-to-military contacts with Washington have also continued, and Ortega, who confronts a growing problem with drug-related violence, has maintained strong counter-narcotics cooperation with the United States. It remains to be seen whether Ortega will swing toward Chávez more substantively as his authoritarian rule closes off U.S. and European development aid, but beneath a surface hostility, Nicaraguan diplomacy has so far been something that Washington can live with.³⁰

Correa has also sought to win the benefits of a sharply nationalist foreign policy without sacrificing those of a more responsible diplomacy. Even as Correa used the March 2008 blow-up over a Colombian raid into Ecuadorian territory to stir ultra-nationalist sentiment, he extended feelers to Washington and Bogota on ways of improving security in the region. Correa deployed more troops to the border in order to limit the FARC presence, and despite his decision not to renew the U.S. lease on Eloy Alfaro Air Base, American officials generally concede that overall cooperation on narcotics issues has been good.³¹ Similarly, Correa’s government has so far destroyed more FARC camps than its predecessor, and the president places a high value on maintaining Ecuador’s status as a beneficiary of the Andean Trade Preferences program.³²

In Ecuador as in Argentina and Nicaragua, the negative implications of populist rule are somewhat balanced by continuing opportunities for constructive U.S. engagement. Viewed in this light, the consequences of the populist revival are perhaps not as threatening to the United States as is sometimes assumed—a theme further underscored by an analysis of the second essential movement in contemporary Latin American politics.

V

The populist revival has obscured another trend in regional politics: the rise of the center. On the center-left, formerly radical parties have embraced a moderate form of social democracy. On the center-right, governments in Mexico and Colombia have maintained market-friendly policies while increasing protections for the poor and addressing longstanding failures of governance. These governments represent a convergence toward what Javier Santiso calls “possibilist trajectories” and a natural counterpoise to the populist revival.³³

The emergence of social democracy in Latin America is most notable in Chile, Brazil, and Uruguay. The policies of these social democratic governments differ in their particulars, but revolve around three common themes. The first is the consolidation of market reforms. The Concertación in Chile has maintained fiscal discipline, courted investment, reduced tariffs, and stimulated growth through multilateral and bilateral trade pacts. In Brazil, Luiz Inácio Lula da Silva has eased Brazil’s regulatory morass, permitted more private investment in public projects, and kept spending in check. In Uruguay, Tabaré Vázquez signed an investment and trade accord with Washington, restrained government expenditures, and repaid Uruguay’s IMF debt.³⁴

Second, social democratic governments use targeted public spending to avoid the pernicious microeconomic consequences associated with neoliberalism. These programs do not replicate the populist model; while they focus on meeting the immediate needs of the poor, they emphasize long-term enablers of social mobility rather than clientelistic, politicized resource transfers. Under the Chile Solidario plan, poor families receive subsidized health care and stipends that gradually decrease over a 2-year period, during which time they also receive vocational training, educational assistance, and psycho-social counseling. Lula has replicated this approach with micro-lending projects and the “Family Stipend” program. Vázquez’s major anti-poverty program is also broadly similar.³⁵

Third, while these governments echo the populists in seeking to improve the quality of democracy for the poor and middle class, they also stress adherence to democratic norms and procedures. Civil liberties and political rights are respected, and opposition parties operate without hindrance. Presidential term limits remain intact, and though a massive corruption scandal in Brazil raised questions about Lula’s democratic credentials, checks and balances remain quite strong in all three countries.³⁶ Within this framework, social democratic governments have enacted measures meant to allow citizens greater access to the political system: labor reforms in Chile, experiments in “participatory budgets” in Brazil, and the creation of labor-government-management forums in Uruguay.³⁷

The social democratic model is best consolidated in Chile. Concertación policies have helped diversity the economy, increase exports 5-fold, average 6 percent growth between 1987-2006,³⁸ and bring poverty down from 40 percent in 1989 to 14 percent in 2006. The strength of Chilean democracy has also improved steadily.³⁹

In Brazil and Uruguay, the results are promising but more tenuous. The shift toward the center has alienated more radical left-wing groups, and corruption, poverty, and crime remain major problems in Brazil. Reconciling targeted social spending with fiscal responsibility is also a challenge.

Nonetheless, the overall trajectory of events in Brazil and Uruguay is positive. The expansion of market reforms has assured these countries of solid macroeconomic indicators and historically low inflation. Growth in Uruguay has been between 6 and 10 percent over the last half-decade, and unemployment is at its lowest since 1993.⁴⁰ High interest rates have limited growth in Brazil, but what growth has occurred has lowered poverty by 28 percent and allowed a majority of Brazilians to call themselves middle-class.⁴¹ Social programs are widely praised by international observers for their promotion of integral development and effectiveness in relation to the Human Poverty Index. Uruguay’s democracy is as robust as ever. Despite some notable lapses under Lula, Brazil’s Freedom House rating has improved since 2002, and the participatory budgets project represents a potential answer to the rampant clientelismo that has long plagued public service provision.⁴² While the social democratic model is hardly a panacea, its consolidation is likely to be beneficial for internal stability, democratic governance, and sustainable development in Latin America.

VI

Social democracy is also conducive to mature, productive relations with the United States. Center-left presidents in Chile, Brazil, and Uruguay all maintain publicly cordial relationships with Chávez and other populist leaders, and their ties to the United States have hardly been unmarred by disharmony. In the main, however, the pragmatism these governments demonstrate domestically is also present in their agenda abroad.

In Uruguay, Vázquez made news early in his presidency by normalizing relations with Cuba, but he has subsequently leaned toward Washington rather than Caracas. Vázquez has been cool to Chávez’s diplomatic and economic initiatives while strengthening commercial ties with the United States. Uruguay is also a reliable partner in counter-terrorism and anti-organized crime initiatives.⁴³

Since the early 1990s, the Concertación has also focused on diplomatic goals—promoting democracy, human rights, greater economic openness, and regional stability—that accord well with U.S. policies. Under Ricardo Lagos, Chile contributed several hundred troops to a UN stabilization mission in Haiti and concluded a free trade agreement (FTA) with the United States. Chilean governments have also quietly worked to limit Chávez’s influence. Though Michelle Bachelet is publicly very polite in her dealings with Caracas, her government opposed Venezuelan interference in the 2007 crisis in Bolivia, and she is addressing disputes with Peru and Bolivia in juridical rather than political channels to prevent Chávez from interposing himself into these negotiations.⁴⁴

When Lula was elected in 2002, some observers expected that he would be a powerful friend to Chávez. While Lula’s efforts to increase Brazilian power and influence—and his outspoken criticism of U.S. agricultural subsidies—have sometimes led to conflict with the United States, his desire to make Brazil a strong, responsible global stakeholder has encouraged a foreign policy largely compatible with U.S. interests. Even as Lula has positioned himself as a spokesman for the Third World, he cultivated a strong working relationship with President Bush, and Brazilian cooperation on counter-terrorism and organized crime has been excellent. Lula also dispatched the single largest contingent of peacekeepers to Haiti in 2004. ⁴⁵ Brazilian officials reacted somewhat negatively to the “reconstitution” of the U.S. Fourth Fleet, but in private they seem to recognize that Brazil shares a common interest with the United States in safeguarding shipping lanes in the South Atlantic.⁴⁶

With respect to inter-American diplomacy, Lula clearly views Chávez’s president’s exclusionary trade deals, erratic nationalism, and support for movements like the FARC as threats to Brazilian interests. This being the case, Lula has subtly worked to check Venezuelan diplomacy. He signed bio-fuel agreements with Honduras, Nicaragua, Panama, and other Latin American countries, seeking simultaneously to increase the Brazilian export market and make these countries less dependent on oil imports from Venezuela. Lula has not publicly opposed Chávez’s plans for a transcontinental pipeline, a “Bank of the South,” or Venezuelan membership in Mercosur, but he has privately delayed or undermined these initiatives. More broadly, Lula has cast himself as the voice of the moderate left in Latin America, an alternative to Chávez’s populist vision.⁴⁷ In Brazil as in Uruguay and Chile, social democratic diplomacy is broadly congruent with U.S. interests.

VII

This trend toward responsible governance is also evident in the policies of center-right administrations in Mexico and Colombia. In Colombia, Uribe has continued his country’s sound macroeconomic policies and concluded an FTA with the United States while undertaking rural development projects—infrastructure-building, financial and technical assistance programs—meant to incorporate the poor into the formal economy and undercut coca cultivation. ⁴⁸

These development projects are part of a broader attempt to build a strong, democratic state. In the early 2000s, Bogota exercised no real authority in much of the country, and the FARC controlled 40 percent of Colombian territory. In response, Alvaro Uribe’s government has not simply launched a vigorous counter-insurgency; it has also undertaken a massive state-building project. The Colombian government has strengthened the tax collection system, demobilized 30,000 paramilitary fighters, and extended a government presence into areas that were previously beyond Bogota’s control. The armed forces and the police have worked to reduce human rights violations, and the government has introduced mechanisms for alternative dispute resolution in the countryside.⁴⁹

The counterpart to this agenda has been a close alliance with the United States. Between 2000 and 2008, the United States provided roughly $7 billion in security, development, and other aid to Bogota. U.S. contractors, civilian officials, and uniformed military have been deeply involved in counter-insurgency, counter-narcotics, and development programs in Colombia, to the extent that the Colombian conflict is sometimes referred to as America’s “number three war.”⁵⁰ This relationship is crucial to counter-insurgency and state-building in Colombia, and it has also given the United States a strategic alliance in the most volatile part of Latin America.

This partnership has helped Colombia make enormous strides. Human rights violations are down; confidence in government is up. There is now a police presence in all of Colombia’s municipalities, murder rates have fallen dramatically, and development programs and economic growth have helped more than 2 million people escape extreme poverty.⁵¹

Nevertheless, negative trends persist. The FARC still controls large swaths of territory. Paramilitary influence remains strong, poverty is widespread, and Uribe’s government has been tainted by corruption scandals and a dislike for term limits. If these challenges are not overcome, they will hinder consolidation of recent gains.

Mexico has followed a similar trajectory of late. Since 2000, Presidents Vicente Fox and Felipe Calderón have combined the progressive liberalization of the economy with innovative social initiatives. The Oportunidades program promotes “co-responsibility” by providing free health care and a monthly wage to the extremely poor on the condition that they send their children to school and attend regular medical appointments. Oportunidades has helped reduce extreme poverty as well as the incidence of sickness and low birth-weight among the poor.⁵²

The Fox and Calderón governments have also worked to increase the credibility, effectiveness, and institutional capacity of the state. In some areas, progress has been glacial; in others, reform has proceeded more expeditiously. In 2007, Calderon overhauled a weak tax system that forced the government to siphon off funds from the state oil company, thereby corroding the long-term health of both entities. Calderon then launched a thoroughgoing reform of the judiciary, which is so weak that only 1-2 percent of crimes are punished. In 2005, the government began an offensive against drug cartels that, abetted by rampant “narcocorruption,” were increasingly challenging the authority of the state.⁵³

This program has accelerated the recent evolution of Mexican diplomacy. In late 2007, Calderon and Bush announced the Merida Initiative, a multi-year counter-narcotics program. The initiative entails an unprecedented level of U.S. assistance for counter-narcotics, public security, and institution-building in Mexico. Mexican officials say that the main theme of the program is “co-responsibility,” and a joint U.S.-Mexican statement refers to the Merida Initiative as a “new paradigm” in bilateral security relations.⁵⁴

That said, the ultimate success of Calderon’s efforts is yet to be determined. The positive results from his program have so far been overshadowed by massive police corruption and a bloody drug war that took nearly 6000 lives in 2008. Military deployments have helped tamp down on violence in some areas, but there are fears that prolonged use of the military in a domestic policing role may lead to human rights abuses and increased corruption.⁵⁵

Across Latin America, however, social democratic and center-right governments cut a sharp contrast with the populist revival. To the extent that these possibilist trajectories can be strengthened, the consequences should be beneficial for both Latin America and the United States.

VIII

The United States should pursue a three-pronged policy for managing the current political ferment in Latin America. First, the United States must take measures to mitigate the diplomatic fallout from the populist revival. Second, the United States should deepen its support for centrist governments as a means of promoting responsible domestic policies and fortifying the U.S. diplomatic position in the region. Third, over the longer term, the United States must help Latin Americans find creative, sustainable solutions to extreme poverty, weak and corrupt governance, public insecurity, and other issues that breed instability and radicalism.

With respect to the first of these goals, any strategy based on confrontation with populist governments is unlikely to succeed. Leaders like Lula and Bachelet have little love for the populists, but they will resist any policy that sharpens ideological cleavages in the region. Moreover, leaders who trade in anti-American rhetoric welcome the hostility of the United States. It lends substance to their accusations and provides them with a whipping boy for their own failures. Finally, to the extent that Washington effectively declares its opposition to a certain category of governments, it risks driving them together, thereby encouraging a more cohesive anti-U.S. coalition.

From a short-term perspective, the best way of handling Latin American populism may be through selective engagement rather than overt containment. Washington needs the cooperation of populist governments in dealing with issues ranging from counter-terrorism to counter-narcotics to regional stability. Washington won’t get much help from Chávez, but so far Correa, Ortega, and the Kirchners have been willing to preserve these aspects of their relations with the United States. Where possible, the United States should maintain these partnerships and seek out additional avenues of mutually beneficial cooperation. Possibilities include support for Plan Ecuador (Correa’s initiative to strengthen security and development in the border region), counter-gang initiatives in Nicaragua, and measures to stem the growth of drug trafficking and drug-related violence in Argentina. Expanded collaboration with these leaders will not diminish their rhetorical antipathy to the United States, but it will somewhat lessen the damage to important U.S. security initiatives and the negative strategic implications of the populist revival.

Just as important, this approach holds the possibility of exacerbating divisions between populist governments in Latin America and thereby reducing the effectiveness of Chávez’s diplomacy. If leaders in Ecuador, Nicaragua, Argentina, and perhaps even Bolivia see continuing value in their relations with the United States, they are less likely to join the Venezuelan president in his more thoroughgoing assault on U.S. interests. There are already signs of friction in this regard; Chávez has shown frustration with Correa’s ambiguous diplomacy and Ortega’s efforts to keep a foot in both camps.⁵⁶

To be sure, conciliation should not be the only aspect of U.S. policy. Washington should not remain silent if populist leaders blatantly trample democratic practices or if they engage in behavior that is seriously injurious to U.S. security or diplomatic objectives. In defending its interests, however, Washington must be mindful of two factors. First, a total breakdown in relations is not desirable, simply because of the transnational nature of many security threats in Latin America and the corresponding need for international cooperation in addressing them.

Second, any scenario is which the United States finds itself in a one-on-one confrontation with a populist leader is likely to turn out badly for Washington. Shrewd leaders like Chávez or Morales will simply seize this opportunity to claim that they are standing up to the empire. Accordingly, a carefully calibrated response and broad multilateral coordination through bodies like the OAS will be essential. In this sense, the U.S. response to the 2008 electoral fraud in Nicaragua was appropriate. The Bush administration froze Nicaragua’s Millennium Challenge Account and called for an impartial recount, but acted in concert with the European Union and other foreign aid donors and left other aid initiatives involving Nicaragua in place.

Support for centrist governments should be a second component of U.S. policy. If the United States can strengthen its ties to moderate administrations in Brazil, Mexico, Chile, and elsewhere, it will firm up the U.S. diplomatic position in the region and encourage the consolidation of responsible alternatives to populism. This support should be substantial but not overbearing; even for Latin American leaders who are friendly to the United States, too chummy a relationship with Washington can be a liability.

So far, U.S. officials have done fairly well in this regard. The Bush administration concluded FTAs with several Latin American countries and lent firm verbal backing to governments of the moderate left. The United States has been deeply involved in counter-insurgency and state-building in Colombia over the past 10 years, and the Merida Initiative represents an unprecedented commitment to Mexican security.

At the same time, there remains a perception that the United States has failed to make good on its promises. Congress has refused to ratify FTAs with Colombia and Panama or address Brazilian concerns about U.S. agricultural subsidies. There have also been delays in releasing funds and equipment related to the Merida Initiative.

President Obama and the Democratic majority in Congress would do well to address these issues. The rejection of the FTAs with Colombia and Panama would raise serious doubts as to the value of cooperation with the United States. This outcome would be particularly damaging at a time when these countries greatly need freer access to foreign markets to mitigate the domestic effects of the global recession, and when the region as a whole faces a choice between two opposing economic philosophies. Similarly, a failure to follow through on existing commitments to Mexico risks squandering recent progress in U.S.-Mexican affairs. If the United States seeks to promote constructive alternatives to populism, it needs to show that responsible choices will bring real benefits for Latin American governments.

This also means thinking of creative ways to strengthen partnerships with center-left and center-right governments. Analysts have recently floated a number of such proposals, including expanded bio-fuel arrangements with Brazil, incorporating “social cohesion” funds into future FTAs, and addressing broken immigration policies. To this list we might also add restoring military-to-military contacts that have frayed since the 1970s, increased diplomatic coordination on regional stability issues, and other initiatives.⁵⁷

This need for innovation is directly related to the third imperative of U.S. strategy—a campaign to combat the ills that breed cynicism, resentment, and radicalism. This means crafting and supporting programs that offer creative, holistic approaches to issues like public insecurity, extreme poverty and a lack of human capital, governmental corruption, and inadequate provision of essential services.

Offering a fully detailed blueprint for improving social policy and human security in Latin America is beyond the scope of this essay. It is worth noting, however, that examples of successful policy entrepreneurship are already evident. The Oportunidades and Family Stipend programs; participatory budgets in Brazil; community policing initiatives in Central America; professional exchanges between U.S. and Latin American law enforcement agencies; proposals to create social investment funds and provide mortgage guarantees to Latin American families: These programs demonstrate the sort of effort that will be necessary to make more Latin American citizens stakeholders in stable, democratic systems. In the coming years, these types of initiatives will need to be expanded, refined, and partnered with projects that increase the availability and quality of primary and secondary education. It may also be wise to consider ways of helping Latin American countries weather the impact of the current global recession, as political radicalism and economic instability have historically been mutually reinforcing.

Latin America is at an important watershed. Old labels like left and right are no longer adequate to describe the political scene; the real divide is now between those who strive for good governance and those who focus on the mobilization of mass grievance. The United States can turn this situation to its advantage and promote a more stable, secure, and democratic Latin America. It can only do so, however, with the proper mix of policies, a willingness to be creative, and a sense of enduring commitment.

Notas

1. Thomas Skidmore and Peter Smith, Modern Latin America, New York: Oxford University Press, 2001, p 60-61, 135.

2. Gabriel Marcella, American Grand Strategy for Latin America in the Age of Resentment, Carlisle Barracks, PA: Strategic Studies Institute, 2007, 7-8; Juan Forero, “Latin America Fails to Deliver on Basic Needs,” New York Times, February 22, 2005; Kenneth M. Roberts, “Latin America’s Populist Revival,” SAIS Review 27 (2007), 9.

3. Alex Fernandez Jilberto, “Latin America: The End of the Washington Consensus, the State of Democracy, and the Two Lefts,” Journal of Developing Societies 24 (2008), 402; Roberts, “Populist Revival,” 10-11.

4. Roberts, “Populist Revival,” 3-6; Mitchell Seligson, “The Rise of Populism and the Left in Latin America,” Journal of Democracy 18 (2007), 82.

5. Jose Pedro Zuquete, “The Missionary Politics of Hugo Chávez,” Latin American Politics & Society 50 (2008), 103; Javier Corrales, “Hugo Boss,” Foreign Policy, January/February 2006, 32-39; “Chávez consolida su socialismo del siglo 21,” Informe Latinoamericano, 8 agosto 2008.

6. Raul Madrid, “The Rise of Ethnopopulism in Latin America,” World Politics 60 (2008), 475-508.

7. “Evo’s Big Win,” Economist, August 16, 2008, 36-37; “Rulers of Bolivia and Ecuador Resort to Mass Action Against Opposition,” Latin American Security & Strategic Review, February 2007; International Crisis Group, “Bolivia: Rescuing the New Constitution and Democratic Stability,” June 19, 2008.

8. Catherine Conaghan, “Ecuador: Correa’s Plebiscitary Presidency,” Journal of Democracy 19 (2008), 46-60; International Crisis Group, “Ecuador: Overcoming Instability,” July 7, 2007, 1-4, 23.

9. A good summary is Steven Levitsky and Maria Victoria Murillo, “Argentina: From Kirchner to Kirchner,” Journal of Democracy 19 (2008), 17-27.

10. “Discurso del Presidente de Nicaragua, Daniel Ortega, en la 62ª Asamblea General de las Naciones Unidas,” 25 septiembre 2007.

11. “Abuse as Usual Means Many Accounts to Settle,” Revista Envío, enero de 2009, www.envio.org.ni/articulo/3935; James McKinley, Jr., “Nicaraguan Councils Stir Fear of Dictatorship,” New York Times, May 4, 2008.

12. “Venezuela: Inflation Still Roaring,” Latin American Economy & Business, April 2008; “Oil and Public Finances: Oil’s Tipping Point,” Latin American Regional Report: Andean Group, October 2008.

13. Forrest Colburn, “Latin America: Captive to Commodities,” Dissent, Winter 2009, 30; “Ecuador: Correa’s Economic Initiatives,” Latin American Regional Report: Andean Group, December 2007; “Monte Reel, “Bolivia’s Irresistible Reserves,” Washington Post, February 10, 2008; Charles Newbery, “Hard Times for Argentina,” Business Week Online, August 6, 2008.

14. Kirk Hawkins and David Hansen, “Dependent Civil Society: The Círculos Bolivarianos in Venezuela,” Latin American Research Review 41 (2006), 118; Ramiro Salvochea, “Clientelism in Argentina: Piqueteros and Relief Payment Plans for the Unemployed—Misunderstanding the Role of Civil Society,” Texas International Law Journal 43 (2008), 306-310; “Con un cerco de violencia, el MAS convoca a 2 referendos,” La Razón, 29 febrero 2008.

15. “The Justice of Crowds,” Economist, March 14, 2009, 40; International Crisis Group, “Venezuela: La Revolución de Hugo Chávez,” 22 febrero 2007; Tina Rosenberg, “The Many Stories of Carlos Fernando Chamorro,” New York Times, March 20, 2009.

16. David Stout, “Chávez Calls Bush ‘the Devil’ in U.N. Speech,” New York Times, September 20, 2006.

17. “Iran Offers Aid to Nicaragua, in a Sign of Deepening Ties,” New York Times, August 6, 2007; “Ecuador Plans to Buy Weapons from Iran,” Tehran Times, December 15, 2008; Alba Gil, “Evo Morales Hace Amigos,” Americaeconomica.com, 5 enero 2006,

18. R. Evan Ellis, U.S. National Security Implications of Chinese Involvement in Latin America, Carlisle Barracks, PA: Strategic Studies Institute, 2005, 4-7, 22; “Venezuela: Unprecedented Visits by Russian Bombers and Warships,” Latin American Security and Strategic Review, September 2008.

19. “Venezuela: Unprecedented Visits by Russian Bombers and Warships,” Latin American Security and Strategic Review, September 2008; “Medvedev Works on Latin American Links Beyond Chávez and His Allies,” Latin American Security and Strategic Review, November 2008; “Venezuela: Adding Tanks to Russian Shopping List,” Latin American Security and Strategic Review, October 2008.

20. Justin Blum, “Chávez Pushes Petro-Diplomacy,” Washington Post, November 21, 2005. “Trying to Discern the Real Aims of Chávez’s Doctrines,” Latin American Security and Strategic Review, February 2008; “The March 1 Raid on Ecuador,” Latin American Special Report, SR-2008-02, 6.

21. Gabriel Marcella, War Without Borders: The Colombia-Ecuador Crisis of 2008, Carlisle Barracks, PA: Strategic Studies Institute, 2008, 23-25; “Nicaragua Breaks Diplomatic Relations with Colombia,” CNN.com, March 6, 2008.

22. Chris Kaul and Sebastian Rotella, “Hezbollah Presence in Venezuela Feared,” Los Angeles Times, August 27, 2008.

23. Arlen Specter with Christopher Bradish, “Dialogue With Adversaries,” Washington Quarterly 30 (2006-07), 24.

24. Daniel Restrepo, “U.S.-Venezuela Policy: A Reality Based Approach,” Center for American Progress, December 2006,6-8; “Peru Recalls Venezuela Ambassador,” BBC News, April 30, 2006; news.bbc.co.uk/2/hi/americas/4959220.stm.

25. Sean Burges, “Building a Global Southern Coalition: The Competing Approaches of Brazil’s Lula and Venezuela’s Chávez,” Third World Quarterly 28 (2007), 1353.

26. Felipe Moreno, “Latin America’s True Colours,” Contemporary Review 288 (2006), 413.

27. “Venezuela and the Region: Chávez’s Comeback Drive Tumbles,” Latin American Security and Strategic Review, September 2008.

28. “Chávez’s ‘Belligerent’ Rhetoric Loses Him Support in the Andes,” Latin American Regional Report: Andean Group, February 2008.

29. “Fantastic U.S./Argentina Bilateral Relations,” Mercopress, December 14, 2006; “Argentina-U.S.: Keeping Alive the ‘Triple Border’ Threat,” Latin American Security and Strategic Review, February 2004.

30. Clare Ribando Seelke, Nicaragua: Political Situation and U.S. Relations, Washington, D.C.: Congressional Research Service, March 17, 2008, 2-6.

31. “The March 1 Raid on Ecuador,” 3, 7; Marcella, War Without Borders, 26-28.

32. “On Ecuador’s Border, the FARC Visits Often,” Christian Science Monitor, March 10, 2008; “Colombia and Ecuador Take Steps To Accommodate Each Other’s Demands,” Latin American Security and Strategic Review, January 2009.

33. Javier Santiso, trans. Cristina Sanmartin and Elizabeth Murry, Latin America’s Political Economy of the Possible: Beyond Good Revolutionaries and Free-Marketeers, Cambridge: Massachusetts Institute for Technology Press, 2007, 94.

34. On social democratic economic policies, see Francisco Panizza, “Unarmed Utopia Revisited: The Resurgence of Left-of-Center Politics in Latin America,” Political Studies 53 (2005).

35. Julieta Palma and Raúl Urzúa, “Anti-Poverty Policies and Citizenry: The Chile Solidario Experience,” Paris: UNESCO, 2005, unesdoc.unesco.org/images/0014/001402/140240e.pdf, 20-22.

36. See the Brazil, Chile, and Uruguay country reports in Freedom House, Freedom in the World 2008, www.freedomhouse.org/template.cfm?page=21&year=2008.

37. Brian Wampler and Leonardo Avritzer, “The Spread of Participatory Democracy in Brazil: From Radical Democracy to Participatory Good Government,” Journal of Latin American Urban Studies 7 (2006), 37-52; Panizza, “Social Democratisation of the Latin American Left,” 99-101.

38. Michael Reid, Forgotten Continent: The Struggle for the Soul of Latin America, New Haven: Yale Press, 2007, 179-181; United Nations Development Program, 2007/2008 Human Development Report, “Chile.”

39. Freedom House, Freedom in the World 2008, “Chile Country Report.”

40. See “Uruguay: Tougher Times Ahead,” Latin American Economy & Business, February 2009; “Uruguay: Government Forecasts 2.5% Growth in 2009,” Latin American Economy & Business, January 2009; “Uruguay: Some Fiscal Slippage,” Latin American Economy & Business, November 2008; “Desempleo 2007 en Uruguay cae a mínimo desde 1993,” Reuters América Latina, 7 febrero 2008.

41. Nilson Brandão Junior and Marianna Aragão, “Miséria no Brasil Cai 27,7% no 1º Mandato de Lula,” O Estado de Sao Paulo, 20 setembro 2007; “Brazil: Half the Nation, a Hundred Million Citizens Strong,” Economist, September 13, 2008, 43-44.

42. Leonardo Avritzer, “New Public Spheres in Brazil: Local Democracy and Deliberative Politics,” International Journal of Urban and Regional Research 30 (2006), 623-637.

43. “Uruguay: Pese a la oposición interna, Vázquez firma el Tifa,” Informe Latinoamericano, 2 febrero 2007; Raúl Zibechi, “Argentina-Uruguay: The Paper War,” CIP Americas Program, March 15, 2006.

44. “Chile: Putting Bilateral Disputes in Insulated Channels,” Latin American Regional Report: Brazil and Southern Cone, November 2007.

45. Max Manwaring, “Of Interest,” SSI Newsletter, September 17, 2007; Jonathan Katz, “U.N. Peacekeepers in Haiti Turning to Development,” Miami Herald, April 26, 2009.

46. Nicolas Kozloff, Hugo Chávez: Oil, Politics, and the Challenge to the United States, New York: Palgrave Macmillan, 2007, pp. 109-111; “Brazil: Taking Advantage of the ‘4th Fleet Syndrome,’” Latin American Security and Strategic Review, August 2008; Max Manwaring, “Of Interest,” SSI Newsletter, September 17, 2007; Jonathan Katz, “U.N. Peacekeepers in Haiti Turning to Development,” Miami Herald, April 26, 2009.

47. Burges, “Building a Global Southern Coalition,” 1348-1356; Sara Miller Llana, “Brazil, Venezuela Vie for Energy Clout,” Christian Science Monitor, August 10, 2007.

48. USAID Data Sheets, www.usaid.gov/policy/budget/cbj2005/lac/pdf/514-009.pdf.

49. Vinay Jawahar and Michael Shifter, “State Building in Colombia: Getting Priorities Straight,” Journal of International Affairs 58 (2004), 143-154.

50. Thomas Marks, “A Model Counterinsurgency: Uribe’s Colombia (2002-2006) vs. FARC,” Military Review, March-April 2007, 41.

51. Marcella, American Grand Strategy, 36-37.

52. Theresa Braine, “Reaching Mexico’s Poorest,” Bulletin of the World Health Organization 84 (2006), 592-593; Sarah Barber and Paul Gertler, “The Impact of Mexico’s Conditional Cash Transfer Programme, Oportunidades, on Birthweight,” Tropical Medicine and International Health 13 (2008), 1405-1414.

53. Mark Sullivan and June S. Beittel, Mexico-U.S. Relations: Issues for Congress, Washington, D.C.: Congressional Research Service, December 18, 2008, 3-4; Laurence Iliff and Alfredo Corchado, “2 Mexican States Trying Out New Justice System,” Dallas Morning News, August 18, 2008.

54. Mario Vázquez Raña, “‘No vamos a fallar,’ compromiso del secretario de Seguridad Publica” El Sol del Bajío, 6 Julio 2008; Department of State, “Joint Statement on the Merida Initiative: A New Paradigm for Security Cooperation,” October 22, 2007.

55. John Sullivan and Adam Elkus, “State of Siege: Mexico’s Criminal Insurgency,” Small Wars Journal, August 19, 2008.

56. “Ecuador-Venezuela: Chávez y Correa esquivan la burocracia,” Informe Latinoamericano, 5 septiembre 2008.

57. See Jorge Castañeda, “Morning in Latin America,” Foreign Affairs, September/October 2008.