The Left Stuck on Repeat — A New Pink Tide in Latin America
The early 2000s was an extraordinary period in Latin America. After decades of nothing but right-wing governments, the left swept over the continent in a ‘Pink Tide’. People’s hearts were filled with hope from politicians’ promises of growth and social equality. Pink Tide governments held power in Latin America until the mid-2010s, as high government debt, and corruption scandals made the leftist wave crash in spectacular fashion. Now struggling with the Covid-19 crisis, the conservative governments that took the left’s place seem vulnerable enough to be swept over by a new leftist wave. This begs the question of whether this ‘new’ Pink Tide will be strong enough to wash the left’s past mistakes.
What was the Pink Tide?
The Pink Tide refers to the election of multiple left-wing governments in Latin America during the early 2000s. If a “Red Tide” would mean a shift to communism, a Pink Tide refers to a milder socialist change. Beginning in 1998, with the election of Hugo Chávez in Venezuela, the Pink Tide went on to notably elect Lula in Brazil in 2002, Evo Morales in Bolivia in 2005, Néstor Kirchner in Argentina in 2007, among many others.
At its core, the Pink Tide was a reaction to unpopular neoliberal policies implemented by most governments in the region during the 1990s. Policies such as privatization and deregulation aimed to foster market-led economic development and clear the large amounts of government debt accrued during the 80s. Despite having successfully decreased government debt and inflation, these neoliberal policies failed to accelerate growth and decrease poverty in Latin America.
While there was significant variation between Pink Tide governments, there were some commonalities between them. One such characteristic is that their supporting base consists mostly of voters in low-income brackets. These governments gain the poor’s support through the redistributive measures they implement. As Mexican politician Jorge Castañeda says in his 2006 paper: “the impoverished masses vote for the type of policies that, they hope, will make them less poor”.
Policy-wise, Pink Tide governments are characterised by sharp increases in public spending, foremost in social security and welfare programs such as conditional cash transfers. In 1990–91, social spending represented 45% of all public expenditures of governments in the region. In 2008–09, this share shot up to 63%.
The Pink Wave Crashes
Pink Tide governments were only able to finance this high level of spending because of the commodity boom. Most commodity industries in Latin American countries were nationalised before or during the Pink Tide. Capitalising on higher commodity prices, these governments could increase their spending without increasing taxes. However, as the commodity boom receded during the 2010s, Latin American governments were forced to turn to foreign capital markets to finance their spending.
Furthermore, as massive corruption scandals involving these governments started to surface, people’s trust in the left soon faded and eventually turned into outright hate. Notable moments that symbolise the ebbing of the Pink Tide were the impeachment of Brazil’s Dilma Rousseff in 2016, and the coup d’état/resignation of Evo Morales in 2019.
After the collapse of Pink Tide governments, a conservative wave washed over Latin America. However, with their poor handling of Covid-19, the region’s new right-wing leaders are already losing steam. The pandemic accentuated Latin America’s perpetual poverty and inequality, highlighting the need for structural social change. As the left rises once again as the alternative to the declining right, Latin Americans are unsure whether to be hopeful for change or sceptical of second chances.
A not-so-new Pink Tide
Despite being 20 years apart in their inception, the old and new Pink Tides arose in remarkably similar socio-political and economic conditions. Just like its 2000s predecessor, the new Pink Tide ascends as a reaction against unpopular right-wing governments. Furthermore, this new wave is rising in a context of high poverty and income inequality. Poverty had already been increasing in Latin America, and the pandemic has accentuated this. Between 2019–2020, the poverty rate in the region rose by 3.2%, meaning that an astonishing 22 million people entered poverty in one year.
Similarly, the new leftist wave is gaining traction in an economic scenario of slow/negative growth, low inflation, and an international commodity boom. According to the Economic Commission for Latin America and the Caribbean’s estimations, the region’s GDP growth, which was already slow pre-Covid, dropped by 7.7% one year after the beginning of the pandemic. Although recently on the rise, the region’s inflation rate remains at a low 3.05%. Lastly, a new commodity super-cycle currently on the rise would allow Latin American governments to use their increased revenue to fund redistributive policies.
Repetition or Redemption?
The original Pink Tide successfully fostered growth and income equality in Latin America. However, it was ultimately unsuccessful in transforming short-run improvements into long-run trends. Most Pink Tide governments did not make strong efforts to diversify their economies, nor did they significantly expand the provision of public services to decrease inequality of opportunity. While social spending on social security measures increased by 3.5% of GDP between 1990–91 and 2008–09, spending on education increased a comparatively meagre 1.8% during the same period. Expenditures in health and housing lagged even further behind at 1% and 0.4% increases.
Three factors point towards the conclusion that the new Pink Tide will also be unable to sustain long-term improvements to growth and equality. Firstly, the new Pink Tide stars the same protagonists as the original, even if they sometimes appear in supporting roles. In Argentina, Alberto Fernández was elected in 2019 with former Pink Tide president Cristina Kirchner as vice president. In Bolivia, Luís Arce, former Minister of Economy for Evo Morales, won the 2020 general elections. In Brazil, after being allowed to run for the presidency once again, Lula seems poised to be re-elected in 2022.
This suggests that the new Pink Tide’s ideas on how to tackle economic growth and inequality are likely to follow the original. For example, despite a promising renegotiation of Argentina’s debt with the IMF, Alberto Fernández has quickly caved in to Cristina Kirchner’s policy ideas. Argentina’s ex-president is already paving the way for higher public spending on social security programs.
Secondly, since the current commodity boom is predicted to be shorter than the post-2008 one, governments must act with urgency. Leaders will need to quickly enact reforms to ensure more sustainable government revenue to maintain large spending in the long run. In line with this current of thought, Bolivia’s government has promised to expand taxes on large fortunes to finance spending. Against this, Argentina’s government has already shown that it will not hesitate to print money to finance its debt once again.
Finally, since the region’s budget deficit is much greater now than in the 90s, governments need to be more selective with their spending. Whereas the original inherited a region with low levels of public debt, the new Pink Tide will inherit a massively indebted Latin America. Due to Covid-19, public debt has risen from 68.9% of GDP in 2019 to 79.3% in 2020. Governments are then more likely to invest in cheaper short-run fixes to income inequality, over more expensive long-term policies such as public healthcare and education.
New Pink Tide governments already show signs of preferring quick fixes over permanent solutions. Abandoning the plan to reduce its $44bn debt with the IMF, Argentina’s government is already sacrificing long-term sustainability to stabilize its popularity through social spending. Similarly, Brazil’s Lula defends expanding the country’s conditional cash transfer scheme from R$190 to R$300, increasing the policy’s cost by 58%, despite the country’s commitment to reduce spending.
At this point, Latin America’s return to the left seems inevitable. Failing neoliberal governments, poverty and inequality worsened by a crisis, and a commodity boom brewed a perfect storm to raise the Pink Tide. In Europe and North America, inequality and crisis have led to greater support for populist right-wing governments. Conversely, this has led to the rise of populist left-wing governments in Latin America. This is namely because the Latin American left appeals to those most affected by inequality and crises — the poor. If these governments can learn from past mistakes and invest in a sustainable future, then there might be reasons to hope for lasting improvements in the region. However, as things stand, the new Pink Tide feels more like repetition than redemption.
Sources and references for my articles can be found on my author page here
