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The Pink Tide: Socialism and Latin America

The phenomena of left-wing leaders being democratically elected in Latin America, which began in the 90s, shows the region’s potential for massive social reformation.

By Hector Miranda Plaza, 26 September, 2021

During the 80s and 90s, as a part of the third wave of democratic expansion that started with the Carnation Revolution in Portugal and the end of the Francoist Dictatorship in Spain, Latin America saw the largest expansion of representative government in its history. Before 1980, only three countries, Colombia, Costa Rica, and Venezuela, could be considered democracies.

By the year 2000, over twenty countries in the region saw a change to democracy. During the Cold War, the United States sought to consolidate its ideological hold in the Americas. To this end, any leftist governments which came to power democratically or which were not fully sympathetic to the American capitalist order, such as Salvador Allende’s Chile, Jacobo Arbenz’s Guatemala, and many more, were overthrown with the help of the US.

Many times these governments were replaced by dictatorships which brutally repressed dissent and especially leftists; once again these were also backed by the US. As a consequence, left-wing ideologies and groups saw a decline in activity, with many being driven underground.

With the democratization of the continent and the end of many US interventions against socialism, however, the Latin American left has had a golden opportunity to bounce back. At first, the new democracies kept in place and expanded the neoliberal economic policies that had dominated them before.

These policies of slashing social spending, privatizing many government services, and flooding counties with foreign spending resulted in mass inequality, material insecurity for a majority of most people, and widespread discontent with the current system.

During the 90s and 2000s, this manifested itself in a wave of electoral victories for leftist parties and candidates throughout the entire region. Leaders such as Hugo Chavez in 1999, Lula da Silva in 2003, Evo Morales in 2006, Rafael Correa in 2007, and many more on the state and local levels came to power under the promise of redistributing wealth not seen by the majority of the population.

For a time, they were actually able to achieve this goal. Driven by a massive commodities boom in global markets around the same time, many of these countries were able to fund their welfare policies and redistributive actions by exporting raw minerals at high prices.

During this period: Venezuela’s GDP grew tenfold during the 2000s despite US embargo and its Gini coefficient dropped by 3 points, Bolivia’s GDP grew from $8.1 billion to more than $30 billion and its Gini coefficient dropped by 10 points, and Brazil’s GDP grew four times to more than $2 trillion with its Gini coefficient dropping by more than 5 points. Welfare programs such as Brazil’s Fome Zero, minimum wage increases, child support programs, and the re-empowerment of unions saw great success, with millions across the region being lifted out of poverty and hunger.

As the price of raw materials such as oil began to dip during the beginning of the 2010s, however, many left wing governments found their budgets were hamstrung by a lack of funds for welfare programs.

In Venezuela, following the crash of oil prices, mismanagement of the country’s oil company, suffocating sanctions, and the death of Hugo Chavez, economic downturn and hyperinflation began, and Nicolas Maduro consolidated power under an illiberal democracy.

In Brazil, the massive corruption scandal of Dilma Rouseff exposed by a government operation paved the way for the far right authoritarian Jair Bolsonaro to win the presidency. And, in Argentina, the presidency was narrowly won by the center right Mauricio Macri. By 2016, many gains made by the left had been rolled back, and it seemed like the pink tide would roll back forever.

In recent years, however, the left has seen a return to some prominence. In Mexico, Andres Manuel Lopez Obrador won the presidential elections, Evo Morales was restored to power after a coup in 2019, and Pedro Castillo narrowly won the Peruvian presidential election against Keiko Fujimori, daughter of the Peruvian dictator Alberto Fujimori. In Ecuador, the socialist party, UNES, is still the largest party in the government; the country’s former socialist president, Rafael Correa, ruled for 10 years and is still among one of the most popular presidents in Ecuador.

Although they have had many successes, the socialist projects in Latin America can also teach us many lessons. In Venezuela, for example, a big culprit for the economic collapse was an inability, or rather unwillingness, to diversify economic activity outside of oil and to properly manage their oil company.

During Chavez’s presidency, he fired many workers that were a part of the Venezuelan state oil company, Petróleos de Venezuela, S.A. (Petroleum of Venezuela/PDVSA), and replaced them with inexperienced party loyalists. Additionally, since Venezuela’s oil reserves are made up of the hard to refine heavy oil, a large capital investment was required to properly process them.

Instead of providing this, the Chavista government opted to funnel revenue from the PDVSA into welfare programs, much of which ended in the pockets of corrupt officials. These factors resulted in oil production crashing in 2015 from nearly 3.5 million barrels a day in 1999 to just over 500,000 a day. 

Outside of the Venezuelan government’s own incompetence, American sanctions have also taken a heavy toll on the country’s economy. Venezuela has lost anywhere from 17 to 34 billion dollars in trade revenue due to an embargo against the country. The value of imports the country relies on has also declined, with its value being cut in half in 2019, and then by half again in 2020. This tracks closely to an especially sharp decline in oil exports formerly used to cover necessities, which the sanctions only worsened at their introduction in 2017.

As a new pink tide seemingly re-surges, we must take these lessons and apply them to what comes next. So far we have had many successes, with the election of left wing leaders having mostly resulted in the uplifting of millions of people from poverty. However, as the first wave has shown, there is still room for improvement.

The resurgent Latin American left, if it will succeed, must make sure to not fall into the trap of reliance on resource exports. The coming administrations cannot rely on welfare policies as they did during the 2000s, nor succumb to corruption and nepotism, but make concrete steps towards a lasting democratic socialism. Bolivia is a great example of a government following this track; nearly 40% of their economic output comes from the public sector, a great leap in comparison to the country before Evo Morales.

The international project of systemic change cannot succeed without Latin America, and the triumph of socialism here would mean a lasting step towards a greater economic justice worldwide.

Hector Miranda Plaza is an author for and co-founder of Young Patriots Magazine.