Can Latin America Achieve Fiscally Sustainable and Egalitarian Social Citizenship?

By Fernando Filgueira*

Uncertain Future

Photo Credit: Jan Tik / Flickr / Creative Commons

Latin America is undergoing a profound transformation of its social policies and of the very concept of social citizenship, but the outcome of this process is far from certain.  Electoral democracy, urbanization, increased educational attainment, and increased exposure to new and broader consumption patterns have destroyed the political foundations for conservative modernization.  The turn of the century has witnessed advances in social outcomes and public policies that for the first time provide a true window of opportunity for achieving more productive and egalitarian societies.

  • Decreasing poverty, lower income inequality, improved and expanded employment, and access to transfers and services to popular sectors were made possible by five critical factors: booming prices for Latin American commodities fueled economic growth and employment; stable prices – a positive legacy of the Washington Consensus era – meant that wages and transfers were not undermined by inflation; increased state fiscal capacity and commitment to social policy enabled a doubling in 15 years of real social per-capita expenditure; a demographic dividend, when combined (the young and the elderly) dependency ratios are lowest as a percentage of the population; and improved education access, completion, and credentials, which facilitated enhanced opportunity and increased productivity.

Yet these five advantages will lose steam in the next couple of decades.  Growth will wither as the commodity boom ends and expansionary monetary policy is limited.  Most Latin American economies are facing increased inflationary pressures. Existing tax structures and in some cases productivity levels will not permit social expenditure to increase at the rate of the last 15 years.  The easy phase of the demographic transition (when dependency rates are going down) is or will be over in most countries towards 2025.  Some countries in the region will face the European dilemma of an aging population, but they will do so with a lower GDP per-capita, weaker fiscal capacities of states, and a significantly more unequal income distribution.  While the soft targets of expanded education – primary school and expansion of lower middle school – have been achieved, the tough ones remain: extended coverage in early childhood, completion of high school, quality improvement, and true reduction of inequality of outcome in learning.

  • Five fault lines in Latin American social regimes make these problems a major threat to the sustainability of both social and economic development. A) Women’s incorporation into the labor market remains low (50 percent) and is highly stratified.  B) The absence of a robust state-led care system for early childhood and the persistence of a patriarchal distribution of care burdens undermines a route to development that is both more efficient and egalitarian.  C) Stark contrasts between insiders and outsiders in informal and formal labor markets and access to social protection and cash transfer  systems contribute to an expansionary monetary and fiscal policy that mainly benefits insiders unwilling to be taxed for redistributional public and collective goods and insurance. D) The region’s middle class and new emergent class, moreover, are not willing to increase taxation, since they do not perceive the quality of public goods and collective social services as adequate. And E) the pattern of fertility shows some of the worst patterns in social terms, including that most biological reproduction is left to the poor: Latin American governments do not equalize opportunity early on and through the educational system – which in the most unequal region of the world with diminishing but non-convergent fertility rates – leads to a productivity failure since underinvesting in the poor is underinvesting in the frontier of productivity enhancement.

These challenges will condition the possibility of a new social citizenship and a social investment model based on robust public goods, expansion of merit goods, and universality of entitlements.  It is not enough that elites are no longer able to control the political and economic game through status enclosure and authoritarianism.  In order to craft truly universal social policies conducive to providing inclusion for all, societies must confront narrow corporatism and restricted targeting – and the political economy they sustain.  Contributory models based on formal wages and targeted social policies based on need will not disappear, but they have to take a back seat to a model of basic universalism where access to quality public and collective goods is truly universal, and entitlements in transfers and services are not dependent on need or labor formality.  There have been important advances, such as a marked increase in non-contributory systems of cash transfers in terms of pensions and child-family transfers, but the commodity boom and the rise of the emergent and middle classes that drove them are not permanent.  A coalition that is willing to forgo private spending power in order to enhance quality of life through collective services is needed.  Such a coalition is made conceivable by these political, economic, and social epochal changes, but it is by no means guaranteed.  If reforms do not make it a reality, the promise will be shattered, and the pendulum between failed populism, with state-led “Robin Hood” incorporation attempts, and a technocratic closure of democracy and state bashing, will remain the central and tragic dynamic of the region.**

July 18, 2016

*Fernando Filgueira is a Senior Resarcher at the Centro de Información y Estudios del Uruguay (CIESU) and Collaborating Researcher the Economic Commission for Latin America and the Caribbean.  He is a member of the International Panel for Social Progress led by Amartya Sen.

**Read the full version of this essay, which is based on research done for the Economic Commission for Latin America and the Caribbean (ECLAC) and for EUROsociAL on social policy, labor dynamics, and demographic change.

Brazil: Sacrificing Anti-Poverty Success?

By Hayley Jones*

Bolsa Familia

Photo Credit: Senado Federal / Flickr / Creative Commons

Brazil’s flagship antipoverty program, the Bolsa Família, faces an uncertain future as the government of Interim President Michel Temer confronts adverse economic and political circumstances.  The program, which provides direct cash benefits to poor households on the condition that children fulfill education and health-related targets, was an important factor in Brazil’s progress on poverty and inequality since the early 2000s – between 2001 and 2013 the poverty headcount ratio declined from 24.7 percent to 8.9 percent, and the Gini coefficient declined from 59.3 to 52.9.  The Bolsa Família (formerly called Bolsa Escola) was a pioneer in the use of cash transfers in social policy in the 1990s.  The idea is enticingly simple: the cash allows families to meet immediate needs, while the education and health conditions ensure poor children are better equipped to lift themselves out of poverty in the long run.  Under Presidents Lula and Dilma, the Partido dos Trabalhadores (PT) put the policy at the heart of its platform, and reaped advantages at the polls with the expansion of coverage and benefits.  The program now reaches about one-quarter of the population.

The social gains made in part thanks to the Bolsa Família may now be at risk.  Brazil has been hit hard by the collapse of commodity and oil prices over the last two years and is currently experiencing what is predicted to be the country’s worst recession since the 1930s.  GDP fell by roughly 4 percent in 2015 and is expected to do the same in 2016.  The deep political crisis gripping the country since earlier this year further threatens the program.  Temer, his party (PMDB), and Finance Minister Henrique Meirelles have stressed the need to cut spending to reduce the deficit.  While many areas of social spending, such as pensions and education, are protected in the budget under the 1988 Constitution,  the Bolsa Família is not.  With the large political constituency benefitting from the program, there is likely little appetite in the interim government to ax the program altogether.  In fact, at the end of June Temer announced a 12.5 percent increase to the Bolsa Família – more than the 9 percent promised by Dilma – to compensate for inflation.  But he also emphasized that benefits should be temporary and that there is a need to focus on exit doors from the program.  Social Development Minister, Osmar Terra, has suggested that the program could be made more efficient and costs cut by 10 percent.

Temer may not be entirely wrong to highlight the need for exit strategies, but they should be exit strategies from poverty rather than from the Bolsa Família itself.  There is so far little evidence that it has done much to change the life trajectories of poor young people that would allow them to move out of poverty. The emphasis on increased school enrollment and attendance as transformative obscures much deeper problems, including poor school progression and completion rates in low-quality schools, a lack of educational infrastructure and resources, poorly trained teachers, and outdated curricula, among others.  If Temer is serious about moving beneficiaries out of poverty and the program, priority will have to be given to correcting regressive spending in public education (which prioritizes higher over basic education); better aligning curricula with labor market demand; and addressing the poor job opportunities for low- and semi-skilled workers. Economic realities and the rhetoric on efficiency and exit strategies do not bode well for such changes.  Under Temer, the Bolsa Família seems likely be limited to a policy tool for risk insurance and meeting basic needs rather than a platform for extending the social gains of the last decade.

July 12, 2016

*Hayley Jones is a DPhil (PhD) Candidate in the Department of International Development at the University of Oxford, United Kingdom.  Her thesis examines long-term poverty reduction in the Bolsa Família program.

Mexico: Repressing Organized Dissent

By Marcie Neil*

Mexico teacher protest

A photo from the protest on June 19. Credit: LibreRed / Google / Creative Commons

The Mexican government’s latest reaction to the country’s largest teachers union’s challenge to education reform is triggering accusations of gross human rights violations at a time that President Enrique Peña Nieto is already under severe pressure over the case of the missing 43 students from Ayotzinapa, even if the union’s reputation – and the government’s historical demonization of it – may undercut the teachers’ cause.  Protesters associated with the Coordinadora Nacional de Trabajadores de la Educación (CNTE) clashed with state and federal police in Nochixtlán, Oaxaca, on June 19, leaving eight dead, more than 100 wounded, and at least 25 detained.  The clashes culminated a series of CNTE-led protests over a 2013 reform that puts the onus on teachers for student success through government-mandated tests and teacher evaluations – akin to the U.S. “No Child Left Behind Act.”  CNTE members consider the reform disconnected from the realities of teaching in Mexico’s underprivileged, indigenous, and rural environments, and view it as a threat to their collective decision-making authority and hard-won benefits from the 1980s and 1990s.

  • The CNTE denounced Nochixtlán as another example of excessive police force, and press reports and citizen testimony have refuted the President’s claim that police met protesters unarmed. The administration subsequently offered to meet with union leaders to discuss the reform, but it was seen as offering too little too late.

The CNTE is not the country’s most respected institution, but its complaints about the brutal police reactions to its protests have merit and have stimulated a national debate on Mexico’s commitment to human rights.  The union’s reputation has been tarnished by repeated disruption of school schedules, internecine strife, recent arrests of leaders on corruption charges, and a recently eliminated, but oft-cited, benefit that allowed union members’ children to inherit their jobs regardless of merit.  But the state’s implicit culpability in the disappearance of the 43 students in Ayotzinapa and the death toll on June 19 seems to have tipped the perceptions of its dispute with the state momentarily in favor of CNTE.  That dispute and others with popular organizations have deep roots – going back to mobilizations in the 1960s, including the Tlateloco Massacre in 1968, and the brutal repression of a 2006 teachers strike in Oaxaca.  The historical pattern is one of state abuse against mostly harmless citizens who feel denied democratic participation.

The Peña Nieto administration’s reactions thus far do not suggest a desire to break with that pattern, even in the face of public outrage over this month’s killings.  The Mexico representative of the United Nations High Commissioner for Human Rights and others have called for an independent investigation into the Nochixtlán violence, but the government’s stonewalling of the Ayotzinapa investigation suggests these attempts at overcoming impunity face dim prospects.  Education Minister Aurelio Nuño’s statement the day after the confrontation confirming the government’s commitment to uphold the education reforms further fueled public anger.  Absent an independent evaluation, the bloody events of June 19 could remain as evidence that the Mexican government is simply unwilling to overcome its historical tendency to attack those it considers subversive. 

July 1, 2016

* Marcie Neil received her Masters in Latin American Studies at American University in 2015 and served as a Graduate Assistant at the Center for Latin American and Latino Studies.

Colombia’s Last Day of War?

By Aaron T. Bell and Fulton Armstrong

Peace Signing Colombia

Photo Credit: Presidencia de la República Mexicana / Flickr / Creative Commons

Colombia’s half-century-old war entered its final stages yesterday as President Juan Manuel Santos and leaders of the Fuerzas Armadas Revolucionarias de Colombia (FARC) signed a ceasefire agreement in Havana, but the successful implementation of a comprehensive peace accord still faces several uphill battles.  The five key agenda items of peace talks that began in 2012 have now been agreed upon, and the final details are expected to be hashed out by the time Colombia celebrates its independence day on July 20.  The FARC has pledged that its 7,000 soldiers will enter “Temporary Hamlet Zones of Normalization” once a final accord is signed and finish turning over their weapons to a United Nations mission within 180 days.  After signing the ceasefire, a teary-eyed “Timochenko” – the FARC’s top commander – proclaimed, “May this be the last day of war,” while President Santos celebrated that “We worked for peace in Colombia, a dream that is now becoming reality.”

One major hurdle that remains to a final peace accord is the fulfillment of President Santos’s pledge to subject it to a plebiscite.  In an interview last week, the president cautioned against any notion that a “no” vote will produce a better deal and instead warned that such an outcome would mean a return to war.  Recent polls show that 60 percent of the population says that they’ll vote yes in support of a peace accord, but the Centro Nacional de Consultoría reports that Colombians’ worst fear, which could sink approval, is that one or both sides will fail to meet its commitments.  Another poll suggests that 77 percent of Colombians do not want the FARC to participate in politics, a suggestion that Timochenko has rejected.  Former President Álvaro Uribe and his Centro Democrático party have led the charge against peace talks under the slogan “Yes to peace but not like this,” and they are unlikely to stop now despite Uribe’s pledge yesterday “not to react to the impulse of first impressions.”  Uribe and his supporters have accused Santos in the past of “handing over the country to the FARC,” and 37 percent of Colombians have reported feeling that the government is conceding too much.  They are not entirely alone in this estimate, as even generally neutral observers like Human Rights Watch have suggested that the transitional justice provisions – which will provide reduced sentences to those guerrillas who confess their crimes – let the FARC off the hook.

The signing of a peace agreement between the two sides is indeed historic, but Santos and Timochencko affixing their signatures to the document is just the beginning of another arduous process.  Winning the referendum will require Santos to show vigorous political leadership and enforce greater discipline on his own cabinet team, some of whom have been less than enthusiastic in support of an accord.  Even approval in the plebiscite will of course not immediately resolve the many security challenges facing Colombia.  Zeid Ra’ad Al Hussein, the UN High Commission for Human Rights in Colombia, has noted that the FARC’s demobilization and disarmament could create a power vacuum in rural areas.  Turf wars over coca cultivation, cocaine processing, and the drug trade in which the FARC has been deeply involved since the 1990s are likely to continue, while neo-paramilitaries will likely to fight for a bigger piece of the pie.  In addition, government negotiations with the smaller Ejército de Liberación Nacional (ELN) have been slow to start.  The international community can help with some of these issues, as it has in supporting the years-long peace process, but the real work will need to be done by Santos and his supporters.  Santos’s presidency and the long-term success of any accords rest on his ability to ensure public support, not only now but in the future, as he enters the final years in office.

June 24, 2016

Latin America Sees Little That’s “Great” about U.S. Caudillo

By Aaron T. Bell*

Trump Latin America

Photo Credit: Maialisa/Pixabay/Public Domain (modified) and NASA/Wikimedia Commons/Public Domain

Donald Trump’s presumptive nomination as the Republican Party’s candidate for president is raising fears among Latin Americans that the United States could close the door on them, while also provoking self-reflection about the region’s own potential to produce a Donald of its own.  Mexico has borne the brunt of Mr. Trump’s hostility for “beating us economically” and “sending people that have a lot of problems.”  He has proposed imposing steep tariffs on Mexico, restricting its access to visas, and forcing it to pay for a border wall.  Gustavo Madero, former president of the Partido Acción Nacional, denounced him as a “venom-spitting psychopath,” while members of Mexico’s Partido de la Revolución Democrática organized a social media campaign – #MXcontraTrump – to rebut Mr. Trump’s attacks.  Mexican President Peña Nieto has pledged to stay out of U.S. electoral politics and work with whomever is elected, but he rejected any notion that Mexico would pay for a wall and compared Mr. Trump’s rhetoric to Adolf Hitler and Benito Mussolini’s.  In addition to initiating a public relations campaign to promote the positive effects of U.S.-Mexican relations, Peña Nieto replaced his ambassador to the United States, who was criticized for soft-pedaling Mr. Trump’s comments, with Carlos Sada, an experienced diplomat with a reputation for toughness.

Other nations have joined in the criticism while looking inward as well:

  • Latin American critics have compared Trump’s populism to that of Venezuelan Presidents Hugo Chávez and Nicolás Maduro, and former Argentine President Cristina Fernández de Kirchner. In Colombia, a member of the Partido Verde described former President Álvaro Uribe’s call for civil resistance to peace negotiations with the FARC as a “Donald Trump-like proposal.”  In Lucia, Prime Minister Kenny Anthony accused opposition leader Allen Chastenet of “fast becoming the Donald Trump of St. Lucian politics” for resorting to the “politics of hate and divisiveness.”
  • While worrying what might happen if immigrants to the United States are forced to return home, the editorial page of Guatemala’s La Hora has raised the issue of the long-term wisdom of relying on remittances. Meanwhile Argentina’s Nueva Sociedad used attention to Trump’s immigrant comments to analyze restrictive immigration policies within Latin America.
  • Some political observers see Mr. Trump’s rise as a warning of the danger of divisive politics. In Colombia’s El Tiempo, Carlos Caballero Argáez wrote that polarization and anti-government discourse in Washington paved the way for a “strong man” like Trump, and cautioned that something similar could happen in Colombia.  In El Salvador, Carlos G. Romero in La Prensa Gráfica attributed Trump’s success to his ability to connect with the working class, and warned that his country’s own parties risk facing a Trump lest they make similar connections.

Much of Latin America’s take on Trump mirrors that of opponents in the United States: they recognize that his support reflects the frustration of those who feel cut out from the benefits of globalization and ignored by political elites of all stripes; they reject his anti-immigrant and misogynistic comments; and they fear that someone with seemingly little depth on global politics may soon be the face of a global superpower.  While the region hasn’t exactly surged in its appreciation for President Obama’s leadership over the past seven years, Trump’s popularity reminds them that many Americans have less appealing values and principles, which could result in policies harmful to the region.  Latin Americans know of what they speak.  One need not look too far into the past to see the catastrophic effects of simplistic, nationalistic, strong-man policies on the people of Latin America.

 June 21, 2016

* Aaron Bell is an adjunct professor in History and American Studies at American University.

Correction 2016.06.22: Gustavo Madero is the former president of Mexico’s PAN, currently headed by Ricardo Anaya.

Almagro’s Freshman Year: Bold Actions or Unnecessary Risk?

By Maria Carrasquillo*

Luisito

Photo Credit: Juan Manuel Herrera (OAS)/Flickr/Creative Commons

Secretary General Luis Almagro’s quest to revitalize the Organization of American States (OAS) seems premised on being an “activist” Secretary General in what could be a make-or-break gambit to assert the organization’s hemispheric leadership.  Only 13 months in office, Almagro has taken an approach that is a clear departure from the low-key, consensus-building ways of former Secretary General José Miguel Insulza.  In his 2015 inaugural address, Almagro laid out his plans for the rejuvenation of the OAS, including internal changes to “adapt it to the realities of the 21st century” and “insert [it] into a world different from the one in which it was developed and has grown and operated.”  Almagro underscored the need for the OAS to promote transparent and inclusive elections throughout Latin America and, in regard to democratic governance, “lend a hand to countries that are going through moments of tension and conflict.”

Almagro has taken a number of positions that confirm his desire to redefine the OAS’s role in the region.

  • In 2015, Almagro took the lead in developing a plan to fight corruption in Honduras, resulting in the formation of the Support Mission Against Corruption and Impunity (MACCIH) – a watered-down version of the successful UN-backed CICIG in Guatemala. The jury is still out on whether MACCIH will have a serious impact, but Almagro has staked his reputation on its credibility.
  • He has claimed that the impeachment of Brazilian President Dilma Rousseff lacked sufficient justification and that accusations against her were politically driven. Almagro also called for anticorruption investigations under Operação Lava Jato to continue as essential for the rule of law.
  • Prior to the Peruvian elections, Almagro warned that the disqualification of two candidates reflected unequal application of the law and raised concerns that the contests would be “semi-democratic.” Following a meeting with disqualified frontrunner Julio Gómez, Almagro called for the reinstatement of both candidates’ right to participate in the elections.
  • Perhaps Almagro’s most controversial action has been his attempt to invoke the OAS Democratic Charter against the government of Venezuela, without a finding by the Permanent Council, as required under Article 20 of the Charter, that the situation there amounts to “an unconstitutional alteration of a constitutional regime.” The Permanent Council implicitly rejected his appeal by urging more dialogue between the OAS and Venezuela.  Almagro then sent a strongly worded letter to Venezuelan President Nicolas Maduro accusing him of lying and “betraying his people,” and calling for the release of political prisoners, restoration of legitimate powers to the National Assembly, and a referendum to recall Maduro in 2016. (The Permanent Council is set to discuss the situation in Venezuela again on June 21.)

Almagro has taken on some very difficult issues, and explanations for his motivations are varied but not mutually exclusive.  Some observers perceive a personal embrace of OAS principles, others detect a desire to avoid the sort of U.S. criticism that plagued Insulza and constrained U.S. support and funding, and still others speculate about his future political ambitions as a reformist on the non-radical left of Latin America.  The democratic principles he is defending are clearly enshrined in OAS documents, but his activism has so far not reversed adverse situations: Rousseff was impeached, the Peruvian candidates were forced to sit out the election, and Maduro has yet to soften.  Being an “activist” Secretary General in the case of Venezuela entails great risks; his predecessors were criticized both for getting too directly involved in the country’s internal affairs and for remaining passive in the face of growing authoritarianism in Caracas.  It seems, moreover, as though Almagro has often acted alone, and the tone of his letter to Maduro was uniquely strident.  A great deal is on the line for the OAS.  If Almagro’s activism works, it will enhance the organization’s leadership on a range of issues confronting the hemisphere, but it may also put the OAS in the middle of future conflicts in which failure would bring a loss of institutional credibility. 

June 16, 2016

* Maria Carrasquillo is a recent graduate of the M.A. Program in American University’s School of International Service and a research assistant at the Center for Latin American and Latino Studies.

Seismic Shift in the Politics of Language in the U.S.?

By Chip Gerfen*

Cruz Rubio Spanish

Photo Credit: Gage Skidmore / Flickr / Creative Commons

Heated words between the two Latino U.S. senators seeking the Republican nomination earlier this year may have been the first time national-level candidates cudgeled each other over their use of Spanish on the campaign trail.  Current party frontrunner Donald Trump set the stage for it in June 2015, when he declared that Mexicans are “bringing drugs, they’re bringing crime, they’re rapists, and some, I assume, are good people.”  In July, Trump promised a crowd in Phoenix that he would build a wall between the United States and Mexico – a trope and applause line that still stands front and center in his campaign.  Seven months later, during one of Ted Cruz’s attacks on Marco Rubio – over the issue of undocumented immigrants – the Texas senator attacked Rubio’s use of Spanish, saying:

“Marco has a long record when it comes to amnesty.  In the state of Florida, as speaker of the house, he supported in-state tuition for illegal immigrants.  In addition to that, Marco went on Univision in Spanish [emphasis added] and said he would not rescind President Obama’s illegal executive amnesty on his first day in office.”

Several years earlier, in a Fox News interview during his 2012 Senate campaign, Cruz refused to debate in Spanish, explaining:

“Most Texans speak English.  If we were in Mexico, if we were in Cuba, we’d do the debate in Spanish.   Here in Texas, we should do it in English.  [My opponent] wants to do a debate in a language where the vast majority of primary voters don’t understand it, because he doesn’t want them to hear about his record.”

Cruz’s attack on Rubio’s use of Spanish was a suggestion that he used the language to deceive non-Spanish speaking voters by saying one thing in Spanish and another in English.  This use of what linguists refer to as implicature – suggesting something in speech (or in writing) without explicitly stating or even openly implying it – is something that we all produce and have to interpret every day.  But Cruz makes a number of implicatures: that Spanish hides the truth from most voters; that the public political language for Texas is English and that Spanish should be used in other countries; and that he himself does not to fully embrace a Hispanic identity.  He also said that his Spanish was “lousy.”  In the February confrontation, Rubio turned the tables on Cruz by mocking his Spanish, asking “how [Cruz] knows what I said on Univision because he doesn’t speak [Spanish].”  (Cruz responded in idiomatic Spanish – “ahora mismo díselo en español, si tú quieres” – that was much better than “lousy.”)

Such attacks are not entirely new.  As the Dallas Morning News reported in February 2012, Cruz stated that the traditional “American dream” was being destroyed by “letting people use their native languages and grow dependent on government aid,” suggesting that non-English speakers are non-contributing members of the society.  He also perpetuated the nonsensical but persistent myth that immigrants actively “refuse” to learn English.  Rubio apparently believes, however, that speaking Spanish is an asset.  Former Florida Governor Jeb Bush – from a white, patrician family – had no difficulty spinning his Spanish skills positively.  But things are different for people surnamed Rubio or Cruz, for whom language use is a political decision.  Whereas Cruz attacked Rubio according to an old playbook – one that conjures up suspicious behavior and a refusal to integrate – Rubio calculated that bilingualism and biculturalism can now be positives in national politics.  With both Latinos out of the race, the baton has been passed back to Trump, who recently asserted that a U.S.-born “Mexican” judge named Gonzalo Curiel cannot fairly oversee a class action suit against him.  Rubio’s portrayal of language as a political asset, however, may be the more accurate bellwether in the long run, even if his party’s candidate continues to embrace the old playbook.

June 10, 2016

* Chip Gerfen is Professor of Linguistics and Spanish and Department Chair, World Languages and Cultures, American University.

Peru’s Election: Close Vote Count, Divided Nation

By Cynthia McClintock*

Keiko Kuczyinski

Photo Credits: Venezualan Government / Public Domain and Diario La Primera / Wikimedia Commons

Peru’s National Office of Electoral Processes (ONPE) will not announce the final results of Sunday’s run-off presidential election until later this week, but the current statistical tie is already setting the stage for serious tensions.  The ONPE’s official count, with about 93 percent of votes counted, puts Pedro Pablo Kuczynski (Peruanos por el Kambio) at 50.32 percent and Keiko Fujimori (Fuerza Popular) at 49.68 percent.  Some local observers say that late-arriving vote tallies from rural areas could give Fujimori the edge, but others point out that recent quick counts have reliably predicted final results.  The campaigns may have aggravated tensions on Sunday night, when Fujimori’s spokesperson proclaimed her victory, and Kuczynski called on loyalists to “defend the vote” and “to be vigilant that they not steal votes from us.”

The campaign underscored the country’s enduring polarization over Fujimori’s imprisoned father, Alberto.  Although Alberto Fujimori was convicted on charges of human rights violations and corruption, and although his 1990s government became increasingly authoritarian, he is still perceived by many Peruvians as the savior who restored order and broke the back of the Sendero Luminoso guerrillas.   Primarily for this reason, Keiko Fujimori won almost 40 percent of the votes in the first round on April 10; Kuczynski was the runner-up with 21 percent, narrowly defeating leftist candidate Verónika Mendoza (Frente Amplio), with 19 percent.

  • The last two weeks were a roller coaster. At the time of the first round, Kuczynski had held a slight lead over Fujimori, but only a week ago was trailing her by about five points.  An international economist and banker who had lived for long periods in the United States, Kuczynski lost support in part because, after the first round, he spent eight days in the U.S., exacerbating perceptions that he was more gringo than Peruvian, while Fujimori traveled to remote areas of Peru.  She claimed that, whereas her opponent favored big business, she favored small and medium business.  Also, in the first debate, Kuczynski, who is 77, appeared at a loss to counter Fujimori’s attacks.
  • In the last week, however, it was Kuczynski with the momentum. He effectively communicated integrity and a commitment to democracy just as memories of the corruption and authoritarianism during the government of Fujimori’s father were revived.  A scandal implicating the head of her party, Joaquín Ramírez, in money laundering gradually took a toll, especially when her vice-presidential candidate was believed to have orchestrated the broadcast of a doctored audiotape in an effort to clear Ramírez’s name.  Fujimori appeared to believe that “the best defense is a good offense,” but her increasingly confrontational style and dismissive tone may have been a factor in the decision by third-place Mendoza to strongly endorse Kuczynski.  In the second debate a week ago Sunday, Kuczynski emphasized that Fujimori could not be trusted to keep her key pledge to fight crime when Ramírez and other leaders of her party were under criminal investigation.

The presidential campaign has reflected deep polarization and tensions since at least March, when electoral authorities disqualified two important candidates – Julio Guzmán and César Acuña – for violations of party and electoral regulations. Guzmán’s party had not kept to the letter of its internal party statutes and Acuña handed out cash at a campaign rally.  The disqualifications prompted OAS Secretary General Luis Almagro to label Peru only “semi-democratic.”  A key problem was that the laws were not consistently enforced; most saliently, Fujimori, captured on video passing out prizes at a campaign event, was not disqualified.  Strains are likely to remain high this week, and could grow worse after ONPE’s final announced tally at the end of the week.  Fujimori’s followers, embracing the polls showing her lead prior to election day, may cry foul if a Kuczyinski victory is declared.  Many of Kuczyinski’s and Mendoza’s followers, for their part, intensely fear a return to Fujimorismo.  In this context, it is not impossible that disqualified candidates Guzmán and Acuña and their supporters could call for a total do-over.  Although serious, sustained instability remains unlikely, Peru’s 2016 election is by far its most problematic since the country’s return to democracy in 2001.

(Previous analyses on the Peruvian election are available here and here.)

June 6, 2016

* Cynthia McClintock is Professor of Political Science and International Affairs at George Washington University.

How Sustainable are Latin America’s Advances on Poverty and Inequality?

By Eric Hershberg

Brazil Contrasts

“Projeto Contrastes.” Photo Credit: Gabriela Sakamoto / Flickr / Creative Commons

The significant decline in poverty rates and income inequality in Latin America over the past two decades – driven by a combination of sustained economic growth and intelligently designed social policies – may slow or even be reversed as economic conditions deteriorate across much of the region.  Poverty had begun to drop in most countries even before the commodity boom accelerated growth rates in South America beginning around 2003.  The “Washington Consensus” policies of the 1990s impacted wage income and employment negatively, but other factors diminished their impact on poverty.  By overcoming profound macro-economic instability, which among other things produced hyperinflation that devastated disadvantaged sectors of the population, the economic adjustments of that period were not entirely regressive.  Moreover, a concurrent shift toward targeted social programs – which redirected subsidies away from less vulnerable segments of the population in order to protect the poorest of the poor.  By 2002, the number of people living on less than $1.90 a day had declined 4.6 per cent from where it had been at the beginning of the 1990s, according to the World Bank, while the number living on less than $3.10 stayed flat and actually rose (from 135.6 million to 138.1 million).  Performance varied across countries.  By 2012, after a strong decade of growth and a wave of progressive governments, the progress was much more impressive, with poverty dropping to 33.7 million ($1.90/day) and 72.2 million ($3.10/day).

Inequality declined also – a different challenge in the region that Kelly Hoffman and Miguel Centeno aptly labeled the “lopsided continent.”  Measured by GINI coefficients, income inequality in Latin America, which exceeded that of any other world region at the beginning of the century, grew less pronounced under governments of various ideological proclivities.  A substantial body of research shows that this was a product of two factors.

  • Investments in primary and secondary education, which accelerated during the neo-liberal years, meant lower wage premiums for those with more than basic skills: near universal attendance in secondary school reduced the significance of gaps between workers who had secondary education and those who had little schooling.
  • Innovative social policies – particularly conditional cash transfers – meant that the lower rungs of the income ladder received meaningful transfers from the state, enabling them to narrow the income gaps vis-à-vis less disadvantaged sectors. Less frequently acknowledged was the positive impact of reforms on minimum wage policies and the creation or expansion of non-contributory pensions, both of which were pushed aggressively by several governments associated with the “Left Turns.”  Non-contributory pensions were especially important since the most vulnerable of Latin American aged populations, having spent their working years toiling in the informal sector, had previously lacked any sort of retirement pension.  (Read further analysis of pension reform.)

The region’s slowdown in economic growth and the pressure on public finance brought about by the end of the commodity boom – and the infusion of cash into state coffers that it afforded – raise questions about the sustainability of these advances.  The benefits of investments in education will endure for some time.  Even if education budgets decline, the costs in terms of lower educational achievement would take years to become evident, and it is not at all certain that the funding will decline.  However, the social programs are much more vulnerable, as are the ambitious efforts to increase minimum wages and labor protections more broadly.  Should the economic contraction underway in some countries and on the horizon in others generate an increase in informality, the labor market achievements of recent years could be quickly eroded.   This would impact inequality, and it might soon exacerbate poverty as well.

June 3, 2016

Trumping GOP Resistance to Strengthened Ties with Cuba

By Eric Hershberg

Malecon Twilight

Nighttime on the Malécon in Havana, Cuba. Photo credit: William Beem / Google Images / Creative Commons

One wild card on the horizon in the normalization of U.S.-Cuba ties looks unlikely to materialize.  As pointed out in several CLALS publications (such as here and here), ever since Presidents Obama and Castro announced on December 17, 2014, that they intended to improve relations, there has been a sense of uncertainty regarding whether their successors might roll back the advances they make.  This was particularly so when several Republican politicians seeking their party’s presidential nomination campaigned against President Obama’s “coddling” of the Cuban Communists and his “unilateral concessions” to Havana.  Marco Rubio (Florida) and Ted Cruz (Texas) – two of the Cuban-Americans in the U.S. Senate –made particularly aggressive statements indicating an intention to reverse all or parts of the Obama administration’s executive actions affecting Cuba policy, which, unlike legislation, can be reversed by a subsequent administration.  But they have dropped out of the race as presumptive nominee Donald Trump defeated them and former Governor Jeb Bush, whose Florida political base, family background, and public statements also indicated opposition to normalization.

Trump and the leading Democratic candidate, Hillary Clinton, have very significant policy differences on many issues, but apparently not on Cuba.  Clinton in her memoirs about her tenure as Secretary of State, like Trump in his public statements, appears inclined to sustain the current direction of Washington’s engagement with Havana (although Trump claimed last year that “we should have made a better deal”).  The two likely nominees share noteworthy characteristics, including, remarkably, that they are the least popular candidates that either major party has nominated since polling data have been collected. Advocates of full normalization cannot take either candidate’s leadership on the issue for granted. Clinton’s challenger, Senator Bernie Sanders, has pushed her to the left on some domestic issues, but recent press profiles on her indicate that she remains wedded to a hawkish approach to foreign policy.  The endorsement of several key Washington Neo-Conservatives further suggests she could swing to the right on foreign policy matters.  On the other hand, Trump’s zigzagging on Cuba – 15 years ago he was a staunch proponent of the embargo – and his impulsive decision-making style leave open the possibility that he also could reverse Obama’s executive actions and call on the Congress to keep embargo legislation unchanged.

Although mistakes can occur and various wildcards can slow, or even break, the current momentum, the twists and turns of the U.S. primary election season seem to have diminished substantially prospects that a new President sworn in next January would significantly change Obama’s winning formula on Cuba.  Clinton will have no incentives to abandon a policy that she takes some credit for promoting.  Trump has, if anything, proven that he revels in taking on GOP orthodoxy – and will presumably continue to do so on Cuba policy.  His sympathies align much more clearly with the pro-business Chamber of Commerce, an aggressive opponent of the embargo against Cuba, than with the ideologues on the right of his party, and he will give a green light to the many members of Congress who want full trade with and free travel to the island to change the law.  Concerns that a new U.S. president could reverse Obama’s executive actions on January 20, 2017, can now be assuaged, and Congressional proponents of lifting the embargo likely will have time to build momentum to pass legislation rendering the executive measures moot.  One can imagine that the Donald’s criteria of success for Cuba policy begin with the glare of a gaudy neon Trump sign on a casino along the Havana Malecón, but it’s reasonable to wager that the Cuban government will negotiate a better deal.

May 31, 2016

 

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