Latin America is going through one of the most dramatic situations in its history. The pandemic persists and some of its countries are among the most affected on the planet. The lack of state services capable of meeting the enormous demand for health has become evident due to the reduction and, in large part, the privatization of social security mechanisms. This has resulted in the acute social and political processes in several countries in the region that were experienced before the pandemic.
Openness, deregulation and privatization
During the last decades, most Latin American economies had reorganized themselves on the basis of the recipe for openness, deregulation and privatization. And one of the most notorious consequences has been the downsizing of the state and the transfer of many of its functions, including education, health and welfare, to the private sector.
The arrival of leftist or social democratic governments has sometimes contained this process through redistribution through the budget. But that was largely based on the increase in fiscal resources provided by the commodity boom at the turn of the century. In the middle of the second decade, economies began to calm down and tensions reappeared.
In 2019, Ecuador, Chile, Colombia and Bolivia experienced convulsive social explosions. Parts of Peru’s interior have resisted several mining projects approved by the Lima rulers, and outrage has grown at the corruption of their elites. Argentines suffered an economic collapse that year, with high inflation and more severe devaluation, which resulted in unpayable debt to the IMF. The elections served as an escape valve and the government of Alberto Fernández emerged.
Brazil and Mexico were experiencing the first moments of Bolsonaro and AMLO, each in their own style, channeling the accumulated social protest. Venezuela continued in crisis and expelled migrants who began to saturate the capacities of neighboring countries. And in Central America, between the eternal crisis and the threat of “maras”, caravans of migrants to the North have emerged.
In such a scenario, as always, Republican Uruguay and Democratic Costa Rica remained the only strongholds of stability in the region.
The start of the pandemic
In March 2020, the first case of Covid-19 appeared in Brazil. Within weeks, quarantines, economic meltdowns and fear gripped Latin Americans. According to ECLAC, in 2020, exports decreased by 13% while imports fell by 20%. The region’s economic contraction was about 8%, the strongest in 120 years.
Accumulated anger mixed with job uncertainty and threat to health. Societies have sought protection and eyes have turned to the state. But most countries lacked public services capable of meeting the huge demand for health.
The economic growth of previous years has, in many cases, increased informal work and household indebtedness through the expansion of private credit. Thus, quarantine and confinement have found millions of Latin American workers without formal income, dependent on their daily lives and in debt.
It is difficult to mark the end of the tunnel when most people are still painfully in “the alley of bitterness”. In countries where the outbreak of the health crisis, added to the pre-existing social discontent, coincided with an electoral process, the energy has been channeled or is channeled in this way, as in Argentina, Ecuador, Peru. And in Chile, agreements have been reached to carry out far-reaching institutional reforms.
On the other hand, where there are no institutional mechanisms to deal with social demands and where the elections are a little distant, the conflict has set in, as in the Colombian case. The point is that most Latin American societies demand basic social protection mechanisms which today are either scarce, simply do not exist, or have been dismantled by the fever of privatization.
The construction of a basic social security network will change the foundations of the subsidiary and privatizing state that prevails in the region. Obviously, this is a question of political and social priorities, rather than a strictly technical one. As such, it must be defined according to the opinion of the citizens of each country.
Of course, regimes that place the social protection of citizens at the center tend to raise the quality of their democracy. The extreme liberalism that we know has also generated a large demand for participation, transparency and citizen control that curbs corruption and the reproduction of political bureaucracies that monopolize the state.
The welfare state in Latin America
Can Latin American economies support a welfare state, however elementary it may be? There are countries in better conditions than others, but there is also a lack of effective multilateral mechanisms that make it possible to build minimum consultation instruments in the face of common challenges: from negotiation to vaccine production. If a country the size of Cuba can do it, why not bigger countries?
If we look at the political map close to South America, we see that in Brazil Lula is emerging, in Colombia Petro, and in Peru in a few days the second round will define if Fujimorismo returns or if the Professor Castillo becomes president. The Chilean elections are still several months away, but it is clear that the right will not stay in power.
The construction of benefactor states in Latin America, so as not to become a bottomless barrel, requires a development strategy to support it. In South America, the increase in demand and prices for its export products is helping this, but it is obviously necessary to boost infrastructure, increase productivity, diversify the export supply and, of course, a jump in exports. human ressources. In addition, it is necessary to act in a coordinated manner against organized crime and to reform the State to clean up corrupt and patronage practices.
It is neither little nor easy and much slower. But these are challenges that must be met. Perhaps now is the right time for most of the countries in the region to undertake the formation of new social pacts, for which it is necessary to constitute majorities of citizens who support the process.
* Translation from Spanish by Maria Isabel Santos Lima