The Economist 14Dec2019

38 The Americas The EconomistDecember 14th 2019

2

Bello A decade with no heroes

T

hink backto the start of 2010, when

Latin America was awash with opti-

mism. The region rode out the global

financial crisis with only a brief eco-

nomic dip and no damage to its banks. In

Brazil Luiz Inácio Lula da Silva, preparing

to step down after eight years as presi-

dent with an approval rating of 75%,

proclaimed that his country had shed its

inferiority complex. The commodity

boom had lifted tens of millions of peo-

ple out of poverty. The 2010s, declared

Luis Alberto Moreno of the Inter-Ameri-

can Development Bank, would be “the

Latin American decade”.

As these years come to an end, Latin

Americans might think that they turned

out to be a “low dishonest decade”, to

echo W.H. Auden’s description of the

1930s. It started with a bang, with eco-

nomic growth of 5.9% for the region in

2010, which quickly became a long

whimper. Since 2013 growth has averaged

0.8%, meaning that income per person

has fallen slightly. The unestimates that

31% of Latin Americans are poor, the

same share as in 2010. Income inequality

is continuing to fall, but much more

slowly than it did before 2014. Then there

are political discontents. Polls show that

Latin Americans see their politicians as

corrupt and cynical. More than a quarter

would like to emigrate, according to

Gallup, a polling firm. Popular anger has

exploded in street protests in half a

dozen countries.

No wonder that the 2010s are starting

to be dubbed a “second lost decade” for

Latin America. Yet a comparison with the

1980s, the original lost decade, is in-

structive. In 1982-83 debt defaults rico-

cheted around the region. This led to

years of hyperinflation and austerity. By

1990 income per person was still 5%

smaller than in 1981, the poverty rate had

risen from 35% to 41% and in real terms the

minimum wage was only two-thirds of its

previous level. Politically, the 1980s were

traumatic. Guerrilla wars raged in Central

America, Colombia and Peru, while dic-

tators were still in charge and human-

rights abuses the norm in many places for

much of the decade.

Out of the woes of the 1980s, a better

Latin America was born. Out went statism

and protectionism and in came the mar-

ket-oriented Washington Consensus. With

all its faults (a certain dogmatism, privati-

sation without competition policy and a

tendency for countries to have overvalued

exchange rates) and omissions (an initial

neglect of social safety-nets) it put the

region on a more viable course. The pro-

market shift coincided with a democratic

wave that swept away the dictators, all

except the Castros in Cuba. Social spend-

ing went on to rise, as did people’s access

to education.

In the 1980s almost all countries suf-

fered slumps. In the 2010s the pain has

been concentrated in Venezuela, Brazil

and Argentina, where governments made

macroeconomic mistakes. Elsewhere,

policies are much sounder than in the

1980s. Except in Argentina and Venezuela

debt is manageable. Despite the aberra-

tions of Venezuela and Nicaragua (as well

as Cuba), democracy has shown resil-

ience. Amid recession, Argentina this

week saw an exemplary transfer of power

between political adversaries.

In sum, the 2010s have seen stagna-

tion, rather than a repeat of the cata-

clysm of the 1980s. None of this is to

minimise Latin America’s plight. It has to

find ways to return to growth in a world

where the economy is expanding more

slowly, while taking bolder steps to

reduce the inequality that has scarred it

since long before the 1980s. In the decade

that is starting, it must deal with a de-

mographic shift in which the workforce

will grow more slowly than the pop-

ulation. In countries where farming and

fishing are still important, it will have to

cope with climate change. It must

strengthen the rule of law and rebuild

trust in democratic politics.

Perhaps the biggest losses in the 2010s

were intangible. Latin American politics

no longer has heroes. In the 1980s, to take

two examples, Raúl Alfonsín in Argenti-

na put military dictators on trial and Luis

Carlos Galán in Colombia defied drug

barons, paying with his life. It is hard to

think of any equivalents today. Lula, who

might have been one, is tarnished by

corruption cases. And there is a yawning

deficit of new ideas. The brain-dead

antagonism between “neoliberalism”

(usually undefined) and leftist populism

still looms far too large in academic

debate about the region. Latin America

needs both competitive markets and

more effective states that redistribute

better. In other words, it needs a new

social contract for a new decade.

The 2010s have seen stagnation in Latin America, but not all is gloom

its population since the peak of asbestos

production. The town council voted in fa-

vour in late November.

Yet Mr Grimard expects resistance at a

town-hall meeting with residents sched-

uled for January 9th. His predecessor sug-

gested a couple of new names in 2006

(Trois-Lacs, which means Three Lakes, and

Phoenix). Instead, residents changed the

mayor. “It’s an emotional subject,” says Mr

Grimard. “People are attached to the name

because of our heritage and history.”

Canada is more attached to asbestos

than most countries. The Canadian Cancer

Society did not call for a ban on the carcino-

gen until 2007, when a third of workplace

deaths were caused by asbestos. Canada it-

self promoted the export of “safe” Quebec

asbestos until the early 2010s, when it fi-

nally admitted that any use of the material

is hazardous. The federal government did

not ban asbestos products until 2018. Now

the world’s biggest asbestos mine is Asbest,

in Russia’s Ural mountains.

It may help Mr Grimard’s cause that

townspeople’s memories of work in the

mine are less vivid, says Ms van Horssen.

Other Canadian towns have changed their

names to improve their image. The inhab-

itants of Berlin, Ontario, whose heritage is

largely German, decided during the first

world war to call the town Kitchener, after

Lord Kitchener, the British field-marshal

and secretary of war whose face appeared

on recruiting posters. By contrast the 500

residents of Swastika, Ontario held fast to

the name despite Adolf Hitler’s appropria-

tion of the Hindu symbol of good luck.

They had it first, the locals reasoned. It may

have helped that the Swastika mine, after

which the town was named, produced

gold, not asbestos. 7