The End of the Latin American Left
Will Hugo Chávez's revolution die with him?
BY ALVARO VARGAS LLOSA
Foreign Policy, February 7, 2013
In explaining the rise of the political left in Latin America over the past decade, Chávez's persona looms large. Politicians like Evo Morales, Rafael Correa, and Cristina Fernandez de Kirchner owe an enormous debt of gratitude to Chávez for laying the groundwork toward a renewed form of populism, Latin America's version of socialism. Chávez's illness has only served to highlight that debt. "The issue of the health of brother Chávez is a problem and a worry not just of Venezuela, but of all the anti-imperialist, anti-capitalist people," Morales said in January, speaking from behind a podium reading, "We Are All Chávez." But Chávez's charisma and ruthless political genius fail to explain why he has been able to achieve such regional clout. Through a canny use of petrodollars, subsidies to political allies, and well-timed investments, Chávez has underwritten his Bolivarian revolution with cash -- and lots of it. But that effective constellation of money and charisma has now come out of alignment, leaving a power vacuum that will be difficult for Chávez's political heirs across the hemisphere to fill.
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Several Latin American leaders would like to succeed him, but no one meets the necessary conditions: Cuba's blessing, a fat wallet, a country that carries enough demographic, political and economic weight, potent charisma, a willingness to take almost limitless risks, and sufficient autocratic control to allow him or her to devote major time to permanent revolution away from home.
What will happen is partly in Cuba's hands. Because Cuba has made Venezuela into its foreign-policy proxy, the Castro brothers need Caracas to remain the capital of the movement for it to retain any vitality. While Cuba is dependent on the roughly 100,000 barrels of heavily subsidized oil Chávez's regime supplies to Cuba daily, the island nation has a grip on Venezuela's intelligence apparatus and social programs. Chávez himself acknowledged last year that there are almost 45,000 Cuban "workers" manning many of his programs, though other sources speak of an even larger number. This strong connection allows Cuba to exercise a vicarious influence over many countries in the region. Caracas's clout in Latin America stems from Petrocaribe, a mechanism for helping Caribbean and Central American countries purchase cheap oil, and ALBA, an ideological alliance that promotes "21st century socialism." The combination of the two gives Caracas, and therefore Havana, some authority over the politics of 17 other countries.
What does this mean for the future of the left? Essentially that Cuba will do its utmost to prop up Maduro. Chávez's chosen man will never be a revered figure -- his talents as a politician are lackluster -- but with Havana's backing and control of the money funneled to the region's leaders, he will retain some of Chavez's stature. In recent months, he and what might be called the civilian nucleus of the Venezuelan government have been a constant presence in Havana, where they have relied on the information supplied to them by Cuba about Chávez's real condition. This clique is comprised mainly of Rosa Virginia, Chávez's eldest daughter; her husband Jorge Arreaza, who is also a minister; Cilia Flores, Maduro's wife and the prosecutor general of the regime; and, finally, Rafael Ramírez, the head of the oil giant PDVSA.
Maduro has made most of his key political announcements from Havana, often flanked by some of these people as a way to consolidate his legitimacy inside the Venezuelan military, where he has rivals, and of course the Latin American left writ large. It seems to have worked for now: The region's left lent him dutiful support through various regional bodies when the opposition denounced the arrangements that have turned him into an acting president indefinitely. In a statement put out by Secretary General José Miguel Insulza, the Organization of American States supported the constitutional arrangements in Venezuela in the wake of Chavez´s absence -- and incurred the ire of MUD, the united opposition.
Critical in all of this is the money at Maduro's disposal. The sales of PDVSA, the state-owned oil cash cow, amounted to $124.7 billion in 2011, of which one-fifth went to the state in the form of taxes and royalties, and another fourth was channeled directly into a panoply of social programs. This kind of management makes for very bad economics, a reason why the company needs to resort to debt to fund its basic capital expenditures, and for decreasing productivity, but it remains crucial for the regime and the Latin American left. Funding social programs at home and subsidizing oil shipments abroad, as well as giving cash to various foreign entities, is in good part what makes Caracas the epicenter of the left. Consequently, the support Maduro enjoys from Cuba and the money at his disposal offsets his lack of Chávez-like charisma.
Although Venezuela's current economic debacle has had a debilitating effect on the system described above, as has Chávez's ill health, China has helped mitigate the impact. The China Development Bank and the Industrial and Commercial Bank of China have lent Caracas $38 billion to fund some social programs, a bit of infrastructure spending, and purchases of Chinese products and services. Another $40 billion has been promised to fund part of the capital expenditures needed to maintain the flow of oil committed to Beijing. The oxygen provided by Beijing gives Caracas some ability to grease the regional machinery despite the domestic crisis.
Cuba's support for Maduro and his oil money notwithstanding, there will still be a vacuum of sorts at the top of the Latin American left after the vice president takes over from Chávez on a permanent basis -- assuming he is able to consolidate his own power internally and fend off his military rivals. Other Latin American leaders will clearly see an opening at least to enlarge their role if not lead the left outright.
Argentina's Kirchner is already trying. As she has further radicalized in response to an acute economic crisis at home and the rise of an opposition both within the ranks of her party and among the large middle class, in looking for a major Latin American role she has departed from traditional Peronismo. In the last year, she has made her country's claim to the Falkland Islands, now under British control, a focal point of her foreign policy, obtaining explicit support at Mercosur (the South American common market) and UNASUR (the Union of South American Nations). Until recently, she limited her rapport with Caracas to business and occasional gestures rather than ideology -- Buenos Aires sold sovereign bonds to Caracas a few years ago and was later able to import fuel cheaply and sign trade deals. Now she makes trips to Havana too and has raised her voice in denouncing the usual imperialist suspects -- certain liberal democracies, foreign investors, international courts, and the IMF. By adopting this tone, she hopes to rally the base at a difficult time. She is currently barred from seeking reelection in 2015 but is aiming to change the constitution to allow her to seek another term, a move laden with certain Chávismo overtones.
There are, however, limits to her potential role as a leader of the Latin American left. The most important one is economic. The statist, populist Argentine model is now bankrupt. Economic growth was minimal in 2012, a year that also saw record inflation and the expansion of capital controls to prevent a stampede of dollars. This would not be an insurmountable political obstacle were it not for the fact that a majority of Argentineans are now opposed to her -- her approval rating is down to 30 percent -- and that her own party is fractured. It is one thing to fight the "fascist right" as the head of a united Peronista front. But it is quite another for Kirchner to be denounced more stridently by her leftist base than by the center-right. Apart from the fact that she lacks the funds to finance regional revolution -- despite running the largest populist economy in Latin America -- Kirchner can ill afford to devote her attention to foreign matters. Last but not least, Argentina is too large and too proud a country for it to accept near-subordination to Cuba, a key condition for leading the Latin American rebels.
What about Bolivia's Morales? Given the symbolism of his indigenous roots, he seems a strong prospective candidate. But he is geographically too far from Havana -- Chávez´s constant pilgrimages to Cuba would be hard for Morales to replicate. He too has mounting problems at home, where his social and political base is now severely split. Unlike Chávez, who has been able to group his different supporters under a socialist umbrella organization, Morales's party, MAS, has become isolated from the myriad social movements that once backed him and now claim he is not delivering on promises of social justice. His main fights have not been with the right but with these organizations, which have paralyzed the country at various times.
Like other populists, Morales has some cash at his disposal through the sale of natural resources. But private investment is tiny in Bolivia, and Morales has doubled the proportion of the economy directly under government control. Because he needs to pour resources into populist economic programs to keep his enemies at bay, Morales cannot afford to fund foreign adventures. In fact, his need for cash is forcing him to charge Kirchner, a close ally, about four times more for Bolivia's natural gas than the going rate in Argentina's own gas-producing region, the Neuquen Basin. Lastly, Bolivia's economy is tiny, amounting to just 8 percent of Venezuela's.
Correa, who as president of Ecuador heads an oil-producing country, is another possibility. He certainly has the ambition and is the intellectual alpha male of the pack. His inevitable reelection this month will give him renewed vigor. But his country produces five times less oil than Venezuela and, with an economy less than a fifth the size, is in no position to command leadership regionally. After tripling government spending since he came to power in 2007, Correa's coffers face a fiscal deficit of 7.7 percent of GDP. And because it defaulted on part of the national debt in 2008, Ecuador is barred from capital markets. If not for the $7 billion-plus lifeline China has thrown Correa in advance payments for oil and credits, the country's financial situation would be dire. Given that 80 percent of Ecuador's oil exports have been pledged as guarantee against these loans, Correa would never be able to subsidize other countries.
That leaves Brazil, the single most powerful Latin American country and a symbol of ideological moderation that may well hold the key to the destiny of the Latin American left -- if only it wanted to. Until now, Brazil has deliberately given Chávez the space to play a disproportionate role in the neighborhood. Since former president Luiz Inácio Lula da Silva had Marxist roots and a radical base to please, he made up for his responsible domestic policies by tolerating, and sometimes encouraging, Chávez's leadership of the regional left. In foreign policy, Lula preferred to spend his time cementing ties with the other BRIC countries and collecting allies in Africa, partly with a view to building up support for a permanent seat at the U.N. Security Council. The rest was spent cozying up to the United States's adversaries, including Iran, and proposing solutions to the Israeli-Palestinian question (an initiative for which he teamed up with Turkey).
Dilma Rousseff, the current Brazilian president and Lula's political heir, has moderated her country's foreign policy but is conscious of the fact that her overbearing predecessor and the party base want close relations with the left. This is a major reason for having kept Marco Aurélio Garcia, a man umbilically connected with the regional populists, as a foreign policy advisor.
But Dilma is not personally interested in leading Latin America's left. Her country's main economic tool in Latin America, the Brazilian development bank BNDES, funds mostly domestic companies investing in the region, not other governments, and its disbursements in Latin America totaled a mere $1 billion last year. An initiative for integrating South America's infrastructure led by Brazil, known as IIRSA, lacks a political or ideological imprint. Dilma also confronts an economic challenge that Lula was spared. Growth has stalled (it barely cracked 1 percent last year), and some serious soul-searching is underway about why the emerging star of the last decade is now facing the prospect of a mediocre future if new reforms are not undertaken.
All of this points to the Cuba-Venezuela connection continuing to play a pivotal role through Maduro. That said, Maduro will have considerably less ability to project influence than when Chávez was at the helm. Presumably, the vacuum partially left by Chávez will see various forces vying for an increased role, including Kirchner as the radicalized Peronista running the largest populist economy, while Morales and Correa, as well as Nicaragua's Daniel Ortega, call attention to themselves without the necessary power to back their chutzpah. Brazil will arbitrate among these leftists and wait to see what emerges before throwing its lot with anyone.
With no viable leader to take up Chávez's mantle, the future portends disarray for the Latin American left. Fearful that this may spell the end of the movement, there is but one miracle the left can cling to -- that Chávez finds a way to rise from his Havana deathbed.
LEO RAMIREZ/AFP/Getty Images
SUBJECTS:
OIL, ECONOMICS, VENEZUELA, LATIN AMERICA
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