What Can Be Learned from the Humala Government?

By Rob Albro

President Humala inaugurating electric power in the rural district of Moro - Ancash Photo credit: Presidencia Perú / Foter.com / CC BY-NC-SA

President Humala inaugurating electric power in the rural district of Moro – Ancash Photo credit: Presidencia Perú / Foter.com / CC BY-NC-SA

As a candidate in Peru’s 2006 presidential election, one-time military coup plotter and current president Ollanta Humala presented himself as an anti-business socialist and nationalist happy to be a member of the “family” of left-leaning Latin American governments led by Venezuela’s Hugo Chávez.  In his second successful bid for office in 2011, Humala sharply changed direction and embraced a combination of pro-business and anti-poverty measures reminiscent of Brazil’s center-left Lula.  Humala’s shifts are a sign of the times in the Andean region:  a non-ideological search for how best to build democracies and grow national economies, while effectively redistributing wealth.

Driven by its mining sector and a commodity export boom, Peru’s economy has tripled in size over the past decade and is currently one of the best performing in the world.  Foreign investment is flooding in, particularly to mining, hydrocarbons, and big infrastructure projects – and Humala is now considered an “investor darling.”  While backing off electoral promises to nationalize water, electricity, mining and other sectors, Humala has created a new Ministry of Development and Social Inclusion and increased the budget for social redistribution and welfare measures to Peru’s poorest by 50 percent.  So far Humala has channeled the budget surplus of Peru’s export boom, including successful negotiation of a $1.1 billion increase in mining royalties in 2011, toward reducing the nation’s poverty rate by 29 percent.  And yet, at present there are more than 250 ongoing social conflicts in Peru, and Humala’s government has been accused of failures of “consultation,” often by grassroots and indigenous protestors opposed to Peru’s mining policies.  In response Humala has reshuffled his cabinet multiple times.  Skeptics suggest that his approval rating – currently 60% – will last only as long as the boom enables his top-down social spending.

Humala’s presidency suggests the limits of viewing current regional leaders through a comparative Chávez-or-Lula lens.  Arguments over the best conditions for “foreign direct investment” in the region often miss the different conditions under which it occurs or purposes to which it might be put.  Humala’s pragmatism demonstrates how distinct parts of government need not reflect a single unifying ideological or normative idée fixe.  Liberal democratic institutions and market freedoms increasingly coexist alongside alternative policies of social redistribution as a part of democratic enfranchisement in the Andes.  When conflict has broken out, however, Humala’s government has been willing to forego consultation with local communities to insure the economic resources it needs to continue its redistributive policies.  The challenge for him to achieve the best balance between competing democratic priorities will continue.  Humala’s government is an opportunity to explore new democratic institutions in Latin America, as with a recent CLALS research project on participatory democracy

Correa’s Second Term

By Rob Albro, CLALS Faculty Affiliate

President Rafael Correa, Ecuador | by: "el quinto infierno" | Flickr | Creative Commons

President Rafael Correa, Ecuador | by: “el quinto infierno” | Flickr | Creative Commons

Little drama accompanied results of the February 17 election in Ecuador, where center-left incumbent Rafael Correa retained the presidency by a wide margin. Correa enjoys the highest approval rating – nearly 80% late last year – of any Latin American head of state. He will be the first Ecuadoran president to complete his term since 1996, and his resounding victory at the polls will in principle keep him in office until 2017. Most pre-election polls had projected Correa to win decisively, and he did just that with 56.7% of the popular vote. The opposition is fractured, with seven different candidates running against him. His nearest rival, banker Guillermo Lasso, garnered only 23.3% of the vote. A testament to Correa’s dominance is that the right-leaning Lasso offered a vision little different from the president’s own policies and even adopted key elements of Correa’s discourse. The title of Lasso’s recent book, Another Ecuador is Possible, references the World Social Forum.

Correa’s political base was consolidated during the anti-neoliberal protests of 2005, and his “citizen’s revolution” represents an unorthodox combination of nationalist populism, robust social welfare spending and rhetorical flourishes in defense of Ecuador’s national sovereignty. Correa’s social spending – increasing the health budget, minimum wage, pensions, and access to medical care; offering micro-credit and free school lunches; providing new housing and anti-poverty subsidies –is highly popular, especially with the urban poor. These programs, dependent upon a commodity-led export strategy, have enabled Correa to marginalize once important political actors of the left and right. Organized labor and indigenous movements on the left, like economic and media elites on the right, have picked fights with Correa, objecting to his authoritarian style, attacks on the press, petroleum policies in the Amazon, poor record on crime, and outbursts directed toward foreign investors. But this has made little dent in his popularity.

If Correa is certain to face resistance to his agenda in his new term, the political fragmentation and lack of dramatic choices evident during the campaign suggest that it will not necessarily be effective.  Despite potential fiscal headwinds, redistributive social welfare policies are likely to continue to expand. Questions do remain: regular social investment has been enabled by ramping up an extraction-based economy dependent on oil, which has also generated some social conflict.  But there is mounting evidence that aside from being popular these policies are also measurably successful. Ecuador’s election comes on the heels of Venezuela’s, where opposition candidates also found it necessary to tout redistributive policies. If the economy turns south, a splintered opposition might find common cause. But as in a number of other South American countries, the redistributive politics of an incipient social welfare state will inform the agenda of Correa’s eventual successor. The long-term management of these policies, and whether the President will seek to alter the Constitution to permit indefinite re-election, are matters that could prove vexing during the coming years.