You might forgive people puzzling over the political turmoil that has overtaken Peru. By standard economic metrics, the country was an undisputed regional success. Its economy grew by 4.5 percent a year, on average, in the decade before being walloped by COVID-19. That is almost four times the average across South America.
Until the COVID-19 pandemic, poverty declined consistently and even inequality abated somewhat. Although the economy suffered a disastrous 2020, it rebounded sharply last year, growing by 13.6 percent.
Yet former Peruvian president Jose Pedro Castillo is sitting in prison, having been impeached and removed from office by a congress that he had tried to dissolve just hours before. Police have been deployed to suppress street protests by Castillo’s supporters while his successor and former vice president, Dina Boluarte, has put the country under a state of emergency.
It is the “Peruvian puzzle, very high growth rates combined with rock-bottom levels of trust in institutions and political leaders,” said Georgetown University’s Michael Shifter, former president of the Inter-American Dialogue.
“Politics are totally uncoupled from the economy,” said Sebastian Edwards, a professor of economics at University of California, Los Angeles and former World Bank chief economist for Latin America. “There’s an attempted coup d’etat and the stock market goes up.”
The upheaval is reverberating across Latin America, not always as one might expect. The presidents of Argentina, Bolivia, Colombia and Mexico — Alberto Fernandez, Luis Arce, Gustavo Petro and Andres Manuel Lopez Obrador — lamented the “anti-democratic harassment” of Castillo, a rural teacher and union leader from Peru’s hinterlands who 16 months ago joined the crop of self-described presidents of the left that has come to power in the region.
Neither Brazil nor Chile, leading members of the Latin American left, joined in the condemnation.
Former Brazilian president Luiz Inacio Lula da Silva said that Castillo’s removal hewed to Peru’s “constitutional framework.”
He wished Boluarte well in the pursuit of national reconciliation.
Perhaps Peru’s remarkable upheaval is not a harbinger for what awaits the broader Latin American left. The country has endured six presidents in four years. Castillo, a political neophyte, was clearly a victim of the racism and classism of Lima’s political class.
He was also a fairly incompetent authoritarian, running through Cabinet ministers like water, incapable of articulating a national project and prone to monarchical outbursts.
“His multiple mistakes and corrupt behavior made the situation unsustainable,” Shifter said.
What is cause for wider concern is the broader story that ultimately led to Castillo’s ouster, a story that does resonate across Latin America. It has been decades — centuries — in the making. It is the story of an abysmal, impenetrable inequality that has cleaved Latin American societies in two and destroyed the legitimacy of political systems which — whether of the right or the left — have done next to nothing to fix it.
It is a story of economic models that failed to deliver broad based prosperity — from the inward-looking import substitution strategy of the 1960s and 1970s to the push for market solutions under the banner of the “Washington Consensus” that followed.
Edwards left the World Bank in 1996. Other than runaway inflation, which was pretty much tamed across the region, he said that “the problems are the same since I was there.”
Intractable inequality helps explain the rise to power of populist Brazilian president Jair Bolsonaro and populist Lopez Obrador in Mexico. Discontent with inequality fueled the unrest that coursed through Chile in 2019, which propelled student leader Gabriel Boric to the presidency two years later. It helped deliver the Colombian presidency to Petro, a former left-wing guerilla, this year.
Peru suffers perhaps the highest concentration of income in Latin America, one of the world’s most unequal regions. Its economy grows, but “it’s not the kind of growth people see in their quotidian experience,” said Gaspard Estrada, executive director of the Latin American Political Observatory at Sciences Po in Paris.
Why is frustration cresting now? The wallop of COVID-19, perhaps, or maybe it is the litany of corruption scandals that have raked the region’s political classes over the past five years or so. It is surely cresting. Although it might have delivered some of the most recent left-leaning governments into power, it now represents a threat to their permanence.
As Estrada has pointed out, of the 14 presidential elections in Latin America since 2019, 13 have gone to the opposition. This time, the shift favored the left. Next time, it would favor the right.
Political systems have been blown up. In Colombia, where liberals and conservatives divided power for decades, there are now 13 parties in congress. In Peru there are 10, even after excluding 16 — including those that governed the country from 2006 to 2018 — for not reaching minimum vote thresholds.
Eighteen candidates showed up for Peru’s first round of presidential elections last year. Ecuador’s first round featured 16.
This partisan efflorescence complicates governance, setting big political hurdles for policy reform, whether from the left or from the right.
“Majorities are what is most scarce in the region today,” wrote the editors of Latinobarometro, the pan-regional polling consortium, in a report last year. “Minorities flourish in Latin America and majorities are not to be found.”
Most worrisome is the hit to democracy itself, which was only established more or less firmly in the region three decades ago. Latinobarometro polling finds that support for democracy has fallen to 49 percent since peaking at 63 percent in 2010.
“The biggest democratic deficit in the region is among the young,” the Latinobarometro report said, adding that support for democracy among those younger than 25 is 15 percentage points less than among people older than 65.
“Living in democracy is not producing democrats in Latin America,” it said.
The unseating of Castillo in Peru is unlikely to strengthen the case for democratic governance in Latin America. Leaving him in place, to suspend congress and rule by decree, would not have done so, either. The fate of democracy in Latin America rests on the ability of the democratically elected political classes to deliver. So far, they have not.
Eduardo Porter is a Bloomberg Opinion columnist covering Latin America, US economic policy and immigration. He is the author of American Poison: How Racial Hostility Destroyed Our Promise and The Price of Everything: Finding Method in the Madness of What Things Cost.
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