LATIN AMERICA IN A TIME OF TRANSITION / GEOPOLITICAL FUTURES

 Latin America in a Time of Transition

The political pendulum is swinging left at a time when options are shrinking.

By: Allison Fedirka

The world is in a transition period, leaving the post-Cold War era, which began in 1991, and entering a new era. 

This transition period is characterized by volatility and uncertainty about what’s to come. 

The four main actors governing the geopolitical system – the U.S., China, Russia and Europe – are experiencing dramatic changes that will ripple across the globe. 

No corner of the world will be spared, and this includes oft-overlooked regions like Latin America, where the political struggle between left and right is affecting the region’s alignment with the world powers.

 

In America’s Shadow

Latin America’s worldview is shaped by its proximity to the U.S. and its history of colonization and wars for independence. 

The colonial period marked the moment when Latin America was connected with the rest of the global system, particularly Europe at the time. 

The hierarchical structure of Spain’s colonial system and its exploitation of its colonies’ resources created highly stratified societies, where wealth and power were concentrated in the hands of a small upper class. 

Since the beginning of the struggle for independence, when elites tended to favor the status quo and the poorer populace supported independence, these socio-economic divisions have been cemented in Latin American politics. 

The competition between the wealthy business class and the poorer working class created distinct, opposing political movements and a tendency for political leadership to flip-flop dramatically between right and left. 

Even in the post-Cold War period, characterized by integration and globalization, the region’s two largest trade blocs, Mercosur and the Pacific Alliance, have been shaped and divided by opposing attitudes toward global trade. 

Located squarely in the U.S. sphere of influence and peripheral to most Northern Hemisphere dynamics, Latin America rarely dictates or triggers events of global import. 

However, its actions influence the U.S. to some degree because of its proximity. 

Washington must attend to instability and insecurity anywhere in the Western Hemisphere, lest a crisis emerges that diverts U.S. resources and reduces its ability to project power abroad. 

Conversely, this gives hostile powers an interest in using Latin America to pressure or distract the United States.

Since the start of the 20th century, the U.S. has set the conditions for engagement with the Western Hemisphere. 

This was when the U.S. emerged as the uncontested hemispheric power, with secure borders, a blue water navy, an industrialized economy, accumulated wealth and access to world markets. 

For the first half of the century, the U.S. took an extremely hands-on approach to controlling hemispheric affairs and regulating the presence of outsiders. 

When the Cold War began, Latin America experienced a resurgence of labor unions, socialist parties and popular action coalitions. 

The Western Hemisphere was divided along the same U.S.-Soviet ideological lines, resulting in targeted, covert American interventions in the hemisphere. 

With the Soviet Union’s fall, however, the U.S. was able to divert its attention elsewhere, leaving Latin America largely on its own. 

Eventually, this opened the region to the influence of outside powers, namely China and Russia.

The New Era

As we move into this new era, it’s prudent to consider how Latin America’s left-right political pendulum will manifest and what it could mean for U.S. engagement. 

Many of the region’s political institutions, financial frameworks and political parties emerged from the realities of the Cold War and post-Cold War settings. 

Many of its democracies didn’t come into existence until the late 20th century, after the fall of military regimes. 

This transition phase coincides with political discussion in Latin America about the need to modernize institutions; Chile, for example, wants to update its Pinochet-era constitution. 

It’s also a moment when the first generations born into democracy are making up a larger and larger share of the voting population and are seeking political renovation or reinvention.

Politically, a new flavor of the progressive left appears to be taking root. 

This pendulum swing generated and continues to generate concern in the U.S. and among those on the right in Latin America that the region is falling back into anti-American and anti-market attitudes. 

However, these fears are unfounded. 

The new left faces a fundamentally different reality compared with the left that took the region by storm at the start of the 21st century. 

The previous left was characterized by radicalism, nationalism, rejection of the neoliberal economic order and an emphasis on the struggles of the masses. 

It funded its ambitious government programs with revenues from a commodity supercycle. 

The new left, however, is a product of the region’s political evolution, pandemic fallout and broader geopolitical shifts taking place globally. 

Its focus is narrower: on supporting the youth population, environmentalism, gender equality and tackling wealth inequality through structural reform.

Meanwhile, there’s a general disenchantment with politics throughout the region. 

The old left failed to make good on its promises and struggled with unfavorable economic conditions. 

Countries that followed those years by electing right-leaning governments tried to restore economic balance and prosperity after the commodity boom, but structural changes require time and political capital that are scarce during a crisis. 

Then the pandemic came. 

It wrecked economies and governments that lacked the resources to weather the storm. The region now faces another lost decade, and people are looking for new solutions.

The new left faces an electorate with high expectations for its governments and their ability to improve voters’ material well-being. 

However, slowing growth or recessions and dollar-denominated debt limit the ability of governments to meet their demands. 

The current commodity boom does little to reduce their financial strain. 

Though a momentary influx of revenue is possible, the boom is the result of trade imbalances, supply chain disruptions and geopolitical volatility, all of which make the mid-to-long-term prospects uncertain at best. 

Whoever is in power will need to devise solutions based on a new market reality that is still not clear, and in a way that satisfies public demands.

On the international front, the U.S. is again shifting its approach to engagement, this time focusing on economics. 

It's shifting away from its post-Cold War practice of frequent military interventionism (which paid relatively little attention to Latin America) to a strategy based on economic coercion and cooperation. 

Washington is increasingly engaged in economic warfare, including in its approach toward Latin America. 

The U.S. has also taken note of Russia’s and China’s increased presence in the hemisphere, and is engaging the region economically, where it has the upper hand over its rivals. 

Washington’s goal is to reduce foreign influence and align the region with the U.S. agenda through economic carrots or sticks, depending on the country. 

This strategy complements Latin America’s response to the end of the post-Cold War era, namely, a renewed focus on shared prosperity. 

Instead of pursuing regional agendas or integration, Latin American countries are acting more independently, which opens room for them to redefine bilateral relations with the U.S. and others.

The question is what the intersection of the region’s political shifts and U.S. behavior will look like in practice. 

In the past two eras, their placement on the political spectrum determined whether Latin American countries were pro- or anti-U.S. 

The new left, however, could be different. 

This version is not as radical or ideologically driven as its predecessors. 

It looks to be taking a more pragmatic approach to meeting economic and social needs. 

Further, whichever way a given country goes, its political and economic room to maneuver is small and shrinking at the moment.

The proposal and the implementation of reforms are not the same thing, and early indications are that any emerging left-wing leaders will not radicalize if elected. 

In Chile, the Constitutional Assembly rejected some more extreme government proposals, like stringent environmental protection measures in the mining sector, a major driver of growth. 

Other far-reaching measures risk rejection during an upcoming public referendum. 

Political opposition has blocked Peru’s president, Pedro Castillo, from delivering any major changes. 

Separately, there appears to be a loosening of foreign alignments. 

In Honduras, President Xiomara Castro is improving relations with the U.S. and has opted for continued ties with Taiwan over closer relations with China. 

Argentine President Alberto Fernandez is also showing more openness to doing business with the U.S., despite strong ties with China.

Latin America’s new left is rising as the world enters uncharted territory. 

In many ways, it will have less room to maneuver, but opportunities – especially in foreign alignments – can always be found during transitional periods.