Georgetown Americas Institute

The year 2023 has been marked by electoral upsets throughout Latin America. From Argentina to Ecuador, political outsiders have burst into the scene as economies grind to a halt and voters grow disillusioned with traditional parties. In the context of macroeconomic slowdown and voter apathy, new and old challenges to liberal democracy have emerged across the continent. In order to address these issues, GAI hosted Tamara Taraciuk Broner, Michael Shifter, and Alejandro Werner to discuss the state of Latin America’s political and economic outlook and to review how recent developments are impacting experts’ assessments for the future.

Threats to Democracy in the Region 

“The most pressing threat to liberal democracy in Latin America is no longer the military coups, but democratically elected leaders who undermine democracy.” -Tamara Taraciuk Broner

Taraciuk Broner started the discussion by reviewing challenges to rule of law in the region. She explained how in many countries, institutions of liberal democracy are being undermined by democratically elected leaders in their pursuit for greater power. The model of mass preventive imprisonments used by Salvadoran president Nayib Bukele is becoming more and more popular as leaders seek to emulate it around the region. However, it presents a flawed choice between security and individual rights.

Many independent judicial systems have acted as the main barrier against authoritarian tendencies, but unfortunately, many challenges remain. The role played by Brazil’s Supreme Federal Court in ensuring free and fair elections despite then-president Jair Bolsonaro’s interference is a clear example of this dynamic. Bolsonaro’s later sentencing over improper use of the media and dissemination of misinformation on the elections further strengthened Brazil’s embattled democracy. 

In Mexico, the justice system intervened to prevent the government from disbanding the country’s independent electoral authority. Meanwhile in Argentina, the Supreme Court barred two governors from running for re-elections that contradicted the spirit of the country’s single re-election constitution. 

Countries like Guatemala and El Salvador are also experiencing threats to democracy. In the former, president-elect Bernardo Arévalo is facing staunch pushback from a political elite that opposes him taking power. Meanwhile in El Salvador, President Bukele continues to extend a state of emergency that violates due process and individual rights.

“What countries need to succeed are transparent judgeship appointment processes, independent justice systems, and for other countries to pay attention to the threats to rule of law taking place in them.” -Tamara Taraciuk Broner

Political Surprises Continue

“It is quite striking the number of political surprises that took place in August from Mexico to Argentina.” -Michael Shifter

Shifter continued the discussion with his analysis of the political state of play in the region, focusing on the rise of political outsiders across the board. The slim-margin victory of the libertarian Javier Milei in Argentina’s presidential primary elections shocked a system where most assumed that the center-right opposition coalition of Juntos por el Cambio would beat the embattled center-left administration of the Unión por la Patria. The now three-way election could see the October general election lead to a November runoff between Milei and Sergio Massa of Unión por la Patria, a disruptive scenario with unknown ramifications for a traditionally centrist country.

Guatemala also saw the unexpected victory of Bernardo Arévalo in the country’s runoff election. Although the president-elect differs markedly from the far-right-leaning Milei, he still has been challenged by a political elite that fears he may disrupt a system historically dominated by the elites. Similarly, the coming runoff elections in Ecuador between Luisa González, of the left-leaning Movimiento Revolución Ciudadana, and Daniel Noboa, of the center-right leaning Acción Democrática Nacional, could result in the victory of Noboa, another relative outsider, or González, a close ally of the controversial former president Rafael Correa. In Mexico, Xóchitl Gálvez’s surprise nomination as the unity candidate of the opposition has put forth a non-traditional politician into the race which could present a challenge to the ruling left-leaning MORENA government.

Slow Growth Becomes the New Normal

“Whatever bounceback Latin America had after the pandemic is over, and now we have to face a period of lackluster growth across the region.” -Alejandro Werner.

Werner concluded the discussion by focusing on the region’s economic outlook. Latin America has ended its period of economic recovery from historic lows during the COVID-19 pandemic and returned to a 2.5% average growth rate, similar to pre-pandemic rates. Falling inflation and lower interest rates have not led to higher growth. 

“The main story in the region has been inflation, which has now finally declined considerably. Countries like Brazil, Chile, and Peru have started to decrease interest rates, while Mexico is proving to be more conservative in maintaining its higher rate along the lines of the U.S. Federal Reserve and the European Central Bank, which are also being conservative.” -Alejandro Werner.

Werner explained that Latin America came out of the unprecedented commodities boom of 2003 to 2013 with low levels of debt and considerable financial breathing room for regional governments. Now, three years after COVID-19, regional governments are heavily indebted and have no breathing room for aggressive monetary or fiscal policies. Hence, governments have almost no margin to operate in an increasingly tense social environment. 

A full recording of the event is available on the GAI YouTube channel.