This year, there will be presidential elections in Chile, Peru, Ecuador, Nicaragua and Honduras, as well as legislative elections in Mexico and Argentina. In financial and diplomatic circles, there is a growing consensus that the upcoming electoral season could tilt Latin America further to the left.
If that happens — though it’s far from a sure thing — it would be bad news for the incoming Biden administration. Biden likely would have to deal with a Latin American political climate that’s less friendly to the United States than President Trump had to.
While Trump largely ignored Latin America and visited the region only once during his term,. he coincided during much of his time in office with pro-American presidents in Brazil, Mexico, Argentina, Colombia, Chile, Peru and Ecuador. Biden might not be that lucky.
Alejandro Werner, the top International Monetary Fund (IMF) official in charge of Latin American affairs, did not go so far as to predict a rise of the left in Latin America when I interviewed him recently. But he told me that the upcoming election cycle is creating political “uncertainty” in the region, which could inhibit private investments and slow growth.
Other regional watchers are more explicit. They say that the ongoing economic recession because of the COVID-19 pandemic has pushed millions of people into poverty. That, in turn, will translate into an anti-establishment sentiment that will hurt ruling centrist and right-of-center parties in several countries.
Latin America’s economy fell by an average of 8.1 percent last year, more than that of any other region in the world. It is projected to grow by only 3.6 percent this year, according to the IMF.
Daniel Kerner, head of the Latin American department of Eurasia Group, a New York-based political-risk consulting firm, says the current political climate in Chile, Peru and Ecuador will help anti-establishment candidates.
“Since there was a kind of shift to the right in recent years, we may now see voters shifting to the left,” Kerner told me.
Likewise, Marta Lagos, head of the Santiago, Chile-based Latinobarómetro polling firm, told me that this year’s elections will be fertile ground for “populist, anti-establishment candidates.”
Ecuador, Peru, Chile and Honduras currently have centrist or right-of center governments. They are scheduled to hold elections, respectively, on Feb. 7, April 11, Nov. 21 and Nov. 28.
Nicaragua will also have presidential elections in November, but leftist dictator Daniel Ortega has refused to allow a fair electoral process and — unless the opposition unites behind a strong candidate — his re-election is almost a foregone conclusion.
To be sure, there are also reasons to argue that the much-anticipated leftist tide in the region won’t materialize.
First, Chile and Peru have second-round elections. While a leftist populist candidate may win the first round, he or she may be defeated by a centrist or center-right one in the runoff..
In Ecuador, an ally of former leftist leader President Rafael Correa is leading in the polls, but may have to go to a runoff if he doesn’t win the first round with 40 percent of the vote and a 10 percent margin over his nearest rival. Correa has been convicted in absentia to eight years in prison for massive corruption.
Second, much of the region’s political future will depend on the economy, and we may see a more rapid economic recovery than anticipated a few months ago.
The COVID-19 vaccines are coming, and world prices of most South American commodities, including oil, are rising more than what economists had predicted. And a likely weakening of the U.S. dollar will make it somewhat easier for Latin American countries to pay their foreign debts.
Third, leftist parties in Chile and Peru are more divided than right-of-center parties, which could hurt them in second-round votes.
But one thing is clear: Biden will have to deal with a whole new set of Latin American leaders. And some of them may not be as friendly to the United States as the ones who are leaving.
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