Latin America Steering To The Right: From Colombia To Brazil, Things Are Changing Fast

Anyone paying even the slightest attention to Latin America knows that the region has been experiencing a shift away from left-wing governments toward center-right-wing ones — which are considered full-blown right-wing down there. Left-wing presidents in Argentina, Brazil and Peru have been replaced by market-friendly, right-wing figures in less than a year's time.

However, the turn did not end with the replacement of left-wing governments. In fact, policy adjustments seem to have just started. Last weekend was a particularly hard one for leftist movements, as Colombians voted against its (still left-wing) president’s proposed peace agreement that would have ended a 52-year-long war with the FARC (the last Marxist guerilla group standing in the region), and the PT (Workers Party, leftist) delivered a very poor performance in the Brazilian municipal elections.

Steering The Wheel

In a recent New York Times article, Simon Romero attributed this shift to the right to several factors. “The sharp drop in commodities prices has eroded economic growth around Latin America and the support leftist governments once drew from it. The clout of evangelical Christian megachurches is expanding, and they are confronting socially liberal policies and channeling widespread dissatisfaction with the status quo.

“But in one country after another, the results are the same: Leaders embracing market-friendly policies are eclipsing the leftists who exerted sway around the Americas in the previous decade.”

Related Link: Exclusive: Leading Latin American Economist Shares Insights On Politics, Bonds, Mining & Stocks

However the trend is framed, the reality is that the region has been witnessing such oscillations for decades now. Left- and right-wing governments alternate in power every 10 to 12 years. Check out Guillermo O’Donnell’s books for a more developed explanation of the phenomenon.

This Weekend

The turn toward the right in Latin America has been widely discussed. But, what happened this weekend? Why did Colombians reject a peace treaty? Why did Brazilians vote against the leaders they loved not long ago?

In Colombia, people believed the deal proposed by President Juan Manuel Santos was too lenient on the FARC, as it allowed most of its members to walk. However, the vote against the president can be read under the lens of a wider trend of defying the status quo, prevalent in Latin America, specialist Michael Shifter explained. For more detailed views of the event, check out these Daily Beast and The Guardian articles.

In Brazil, people turned toward the right after former president Dilma Rousseff was impeached on the back of allegations of mis-handling of public funds. For further information on the issue, check out this article illustrating 4 ways Brazil has changed since former President Dilma Rousseff was impeached.

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Disclosure: Javier Hasse holds no interest in any of the securities or entities mentioned above.