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Politics and economy as individual actors

Article by Foreign Policy Centre

April 1, 2009

This, however, hasn’t always been easy to understand by Latin American peoples. As with when the region was under military dictatorships, logic seemed to be overthrown in times of dire economic problems. While the economies of certain dictatorship-led Latin American countries were running solidly and sustainably, political stability was threatened but for a handful freedom fighters. Brazil was a poster child of this era. In the 1960s and beginning of the 1970s the military government cracked down on political activists, which were those with enough education to grasp that certain social values were just as important, or even more important, than certain economic values. The poor, uneducated populace and those living in the backwoods didn’t see a clear distinction between a military regime and any alternative. Elderly people who avoided political involvement in those days now report that cities were safer and the economy worked more or less in order in those years. However, since no establishment will weather economic hardship out, practically every military regime in Latin America collapsed when faced with economic failure and chaos.

After the interlude of the late 1980s, 1990s and beginning of the 2000, many nations managed to “clear the deck” economically-wise. This, of course, was not the case for everyone: many a time we saw Argentina’s inability to keep reins on its own economy, Bolivia’s poor management of issues involving natural gas and the very own case of Venezuela. Brazil, Chile, Uruguay and Colombia on the other hand managed to achieve a level of economic stability that afforded these nations a certain “luxury”. Today the populations of these countries are in position to evaluate the course of political affairs. When I say “luxury” I refer to lower-income, low-class population, those who now fare better economically than ever before in their lives. Not only can they now plan and anticipate because of a somewhat more stable economy, they also have the opportunity to get involved in political affairs more directly.

There are odd situations, such as Peru. Here, in spite of the economy’s best performance ever (which may change or plunge because of the crisis), president Alan Garcia faces one of the worst cases of popularity evaluation across the whole region. In Peru we now witness an overt cleavage between economy and politics that hadn’t been seen in Latin America for a while. The thriving economy has taken the Peruvians to unprecedented wealth levels, yet their president isn’t seem as someone capable of inspiring political and institutional stability.

In Brazil things are somewhat different. Both low-income and low-middle-class populations are now entirely catered for by the country’s economy. Since these ranks of Brazil’s population have subscribed to the notion that “politicians are all the same, they all cheat”, there is nothing to be worried about if the economy is in good shape. It isn’t that president Lula’s administration isn’t a reasonable one, but significant political advancements that are yet to be made (the political, tax and labor reforms) hardly affect the vast majority of the country’s population. This vast majority of people is quite content only to be able to plan ahead the purchase of, say, a household appliance in the beginning of the year, knowing exactly how many installments they will have to pay by December.

The Brazilian upper classes are the ones that care about political issues, specially those that affect them directly, i.e. the battles for the end of the CPMF, lower excise tax for cars etc. Issues such as education, health and crime rate are lost in the political limbo. The upper classes in Brazil can afford private schools, health insurance and safe neighborhoods. Because the low-income population is living their best economic moment ever, coupled to the fact that they lack political organization to demand improvements in such critical areas, things more or less are kept going by way of compromise.

Colombia, however, is a clear example of both political and economic advancement. The country’s economy is growing steadily, foreign direct investments increase year by year, industry leaders are constantly attracted by the country’s infra-structure modernization programs. Furthermore, there has been tremendous advancement in regard to Colombia’s worst political nightmare: the FARC. Nowhere has a government managed to reap good economic and political fruits and appraisals because of good seeds sown. However, it is important to acknowledge the mounting risk that this success can be adversely affected if the Colombian president attempts at running for a third term in office.

Except for countries drowning in social issues, such as Bolivia, in Latin America economic issues have an overriding role as far as a country’s stability is concerned. In Brazil, economic issues go hand in hand with everything else for the low-income population. Because for this part of the population, “if economy is right, then everything else is right, too.” In Peru we witness a dissension in opinion, in that “economy is well regardless of the president”, whereas Colombia as a whole, or at large, in any case, including the upper classes, perceives that both economy and politics are going very well.

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