Latin America's Race to the Middle: Has Humala Renounced Chávez?

| Jun. 7, 2011 |

Published by TIME

Tim Padgett and Girish Gupta

For the past five years, Peru's economy has had one of the most remarkable runs in Latin America. With the exception of recession-smothered 2009, the Andes nation has generated remarkable annual economic growth above 7% and as high as 10%. But even so, a third of Peruvians still live in poverty (although that's down from an appalling 54% a decade ago). And as the esteemed Peruvian economist Hernando de Soto said recently, they're “knocking on the door of the public's conscience. [They're] saying, ‘I am not happy because I am not participating'” in the Peruvian party.

They did, however, take part in Peru's June 5 presidential election, and not surprisingly they voted in the guy who they believe can help them get a bigger scoop of all that wealth. The fact that the guy is Ollanta Humala – a leftist who led a failed coup in 2000 as an army officer and has been an acolyte of Venezuela's socialist President Hugo Chávez – sent Peru's stock market plummeting this week, as expected. But what Humala-phobic investors didn't quite catch is that there's another big reason a majority of Peruvians elected him: they realize that poverty can't be reduced if prosperity declines as well, and they're convinced that Humala has renounced Chavista leftism for a more pragmatic, Third Way approach – the same development strategy they've seen work so impressively in neighboring Brazil and Chile.

We'll see if Humala's conversion – see his interview with TIME's Lucien Chauvin – is genuine and not just an election ploy. But the hyperventilating notion that his victory means a shift to the left in Latin America is wrong. If anything it continues the region's welcome race to the middle, away from the leftism Chávez revived in the 2000s but also from the conservative neoliberalism of the 1990s that Chavismo was reacting against. Before Humala, for example, there was Salvadoran President Mauricio Funes, of the leftist Farabundo Martí National Liberation Front (FMLN), the party of El Salvador's former guerrillas, who won election in 2009 by moving to the center.

Since getting trounced as a Chavista in Peru's 2006 election, Humala has had time to realize, as Funes did, that the Latin left's most viable model today is former Brazilian President Luiz Inácio Lula da Silva. He and his successor, President Dilma Rousseff, who was Lula's chief of staff, crafted the fusion of free markets and social projects – emulated as well by conservatives like Chilean President Sebastián Piñera – that has added millions to the middle class and made Brazil and Chile Latin America's first real contenders for the developed nations club. “By now it is clear that Chávez's brand of leftism doesn't work,” says Michael Shifter, president of the Inter-American Dialogue in Washington, D.C., “so it is hardly surprising that any Latin American political figure who comes from the left makes a conscious effort to get distance from him.”

Chávez, who to his credit has reduced poverty levels that were inexcusable in a country with the western hemisphere's largest oil reserves, is still Venezuela's most popular political figure. But not by much. His approval ratings consistently fall below 50% today, largely because under his “21st-century socialism,” Venezuela is wrestling with the region's highest inflation rate, one of its worst violent crime rates, as well as food shortages and frequent power outages. Though he's been democratically elected three times, opponents accuse him of authoritarian rule, exemplified by his systematic efforts to disqualify popular opposition candidates on often arbitrary corruption charges.

Nor, despite his petro-largesse, is Chávez any longer a standard bearer for either Latin America or the Latin left – as he was in 2006 when he called then U.S. President George W. Bush “the devil” at the U.N. and a large share of the region, including more than a third of Venezuelans polled, applauded him. The cachet of his five-nation bloc of left-wing governments in Latin America is dwindling, and even affronts by his “imperialista” nemesis, the U.S., don't seem to give him the confrontational bounce they once did. When the Obama Administration last month imposed sanctions on Venezuela's state-run oil firm, Petróleos de Venezuela (PDVSA) for continuing to do business with Iran, Chávez per usual angrily invoked Latin American independence hero Simón Bolívar on Twitter – but it hardly sent Venezuelans out to the streets en masse to protest.

All that said, however, Humala's election isn't just a repudiation of Chavismo. It's also a rejection of the well worn, ideological conservatism that Latin Americans have learned to equally distrust – especially the orthodox capitalism of the 90s that widened the region's epic gap between rich and poor. Roger Noriega, a former U.S. Assistant Secretary of State for Western Hemisphere Affairs and a right-wing cold warrior on Latin America, had accused Humala's campaign of receiving $12 million from Chávez. But while Chávez's government has been suspected in the past of funneling cash to kindred-spirit candidates in the region, Noriega offered up little if any proof, and few Peruvians listened. Nor did they pay much attention to attempts by Peru's business elite to discredit Humala.

Instead, Peru's voters seemed to tell that elite: We're looking for the closest thing to Lula or Piñera we can find, and you aren't offering it. A guy (or gal) who can produce economic growth and more fairly distribute its fruits. A leader who can throw a great party – and invite us to it.