As coronavirus ravages Latin America, laying bare the weakness of social and public health provisions in the world’s most unequal continent, the region’s left scents the opportunity for a comeback.
Rafael Correa, Ecuador’s leftwing former president, said the government had scrambled to pay its foreign debt while the bodies of coronavirus victims lay uncollected in the streets of the country’s largest city.
“Look at the contradiction. [The government] has paid foreign debt, which means losing lives because our hospitals don’t have equipment and they have stopped paying salaries and they make us believe that it has to be like that, that salaries . . . can wait, but not capital.”
Mr Correa was speaking with other regional socialist leaders at an online event last week, launching a drive to have the sovereign debt owed by Latin American countries to the IMF and multilateral organisations written off.
The campaign also calls for government debt owed to private creditors to be restricted with a two-year moratorium and no interest to free up resources to fight the coronavirus, which arrived in Latin America relatively late compared with other parts of the world. The first case was confirmed in Brazil on February 26 and Brazil has by far the highest number of confirmed cases in the region so far, at 23,800, while Ecuador and Chile have the highest number of cases per capita.
The IMF estimates total Latin American and Caribbean government debt to be $3.5 trillion.
Dilma Rousseff, president of Brazil until her impeachment in 2016, called for a “drastic reflection” on the role of the state and of public health, saying the coronavirus crisis meant the time had come for “a new financial and economic architecture which is not neoliberal and reduces inequality”.
Both Ms Rousseff and Mr Correa were prominent members of the “Pink tide” of Latin American leaders who governed in the first decade of the century. They used the proceeds of a commodity price boom to fund generous increases in social programmes and to tackle poverty.
Rafael Correa, Ecuador’s former leftwing president, said the government had paid foreign debt, ‘which means losing lives’ because hospitals do not have equipment © Kenzo Tribouillard/AFP Getty
But when the price of raw materials slumped, the region’s economies were hit heavily. Many of the leftwing leaders ended their terms in ignominy, impeached for budget mismanagement like Ms Rousseff, or chased out of office for election fraud, like Bolivian president Evo Morales.
Mr Correa is the latest to fall foul of the law. This month a court found him guilty of taking bribes for public works contracts and sentenced him to eight years in jail. Mr Correa, who is in exile in Belgium, wrote in a tweet that the verdict was “absolutely grotesque”. His defence team is working on an appeal.
Monica de Bolle, a senior fellow at the Peterson Institute for International Economics in Washington, said the coronavirus crisis in Latin America was first and foremost about social protection. She said it would expose who was most vulnerable to the virus — the poorest in society — and how numerous they were.
“Where the Pink tiders have an advantage is that they can say they would have done a much better job at protecting the vulnerable,” she said. “If they focus on the social protection issue, a lot of them could come back [to power].”
Michael Shifter, president of the Inter-American Dialogue, a Washington think-tank, believes that competent government during the coronavirus crisis will prove more important than ideology. “This crisis just highlights how important state capacity is and the competence of leaders,” he said. “I don’t think this will have any ideological implications — it doesn’t help the left or the right.”
Mr Shifter did agree, though, that proponents of free-market capitalism in the region “are going to have a hard time getting traction”.
Workers bury a coffin at Maria Canals cemetery on the outskirts of Guayaquil, Ecuador. © Jose Sanchez/AFP/Getty
Brazil’s economy minister Paulo Guedes, perhaps the most fervent exponent of Friedmanite capitalism in Latin America, has been forced to scale back ambitious plans for privatisation and shrinking the size of the state and instead announce a $30bn stimulus package.
His boss, Brazil’s populist president Jair Bolsonaro has clashed with the country’s governors and congress by playing down the dangers of coronavirus and encouraging citizens to continue with life as normal, even as the infection spreads — as did President Andrés Manuel López Obrador in Mexico until he recently changed course.
Despite being widely criticised at home for a slow and fumbling response to the pandemic, Mr López Obrador said Mexico’s handling of the crisis would be “a model for other countries to follow”.
“The neoliberal model is collapsing,” he said recently. “Coronavirus has speeded up the fall of a failed model.”
By contrast, the pragmatic centre-right presidents of Peru, Colombia and Chile have won plaudits for a fast, and so far effective, response, locking down the population quickly and announcing emergency measures to help the least fortunate.
Moisés Naím, a former Venezuelan government minister and now a columnist and fellow at the Carnegie Endowment, said he believed the coronavirus crisis would exacerbate three key trends in Latin America: populism, polarisation and post-truth narratives.
“The inequality that defines Latin America has an important role in determining how you are affected,” he said. “It is not true that we are all in this together . . . the number of people who die among the poor will be much higher than the middle classes or the upper classes.”
Mr Naím said that if videos like the ones circulating on social media of virus victims’ bodies being burnt in the streets in the Ecuadorean city of Guayaquil became commonplace in Latin America, then the Pink tide leaders might benefit.
“It all depends how many people will die,” he concluded. “But in these situations there is also the possibility of a more Hobbesian kind of scenario, where people don’t believe in anything or anybody.”
Additional reporting by Andres Schipani in São Paulo
Source: Economy - ft.com
