On January 27, AEI hosted a panel discussion to consider the political direction of Latin America and how the United States should respond to its reported leftward turn. AEI’s Desmond Lachman introduced the panel by predicting that there could be a majority of left-leaning governments in the region by the end of the year and asking what this means for U.S. policy and for the future of the Washington Consensus, a set of policies advocating market-oriented economic reform in the region of the Americas.

Panelists debated whether the term “Left” had any specific geopolitical significance in the post-Cold War world. Peter DeShazo of the Center for Strategic and International Studies asked whether “Left” refers to economic populism, greater state ownership of enterprise, anti-Americanism, or rejection of the Washington Consensus. AEI’s Mark Falcoff found that being anti-American does not necessarily mean being leftist. Instead, he argued, anti-Americanism in Latin America has been driven by the U.S. failure to give the region a higher priority and by the loss of the region’s geopolitical weight.

DeShazo categorized Presidents Luiz Inácio Lula da Silva of Brazil, Michelle Bachelet of Chile, Tabaré Vasquez of Uruguay, and Néstor Kirchner of Argentina as having traditional leftist backgrounds. Bolivia’s president Evo Morales campaigned as a populist, a nationalist, and an anti-American candidate, so DeShazo contended that it is unclear precisely how he will govern. Falcoff saw in the leftward trend an example of the cyclical nature of politics, noting that the region has shifted from a civilian-military political alignment to more of a Left-Right one. AEI’s Roger F. Noriega added that the region has long been positioned to the left of the United States.

The panelists considered the regime of Venezuela’s Hugo Chávez and its authoritarian tendencies. Noriega noted that while most Latin American countries support policies of free trade and democratic governance, Chávez continues to push state domination of Venezuela’s economy and oppose democratic reforms. Much of the international press focused on Chávez and turned the 2005 Summit of the Americas in Mar del Plata into a full-scale rejection of free trade, but Noriega pointed out that there were only minor disagreements over the Free Trade Area of the Americas. Noriega warned that capital markets have tightened as Chávez has taken firmer control over Venezuela’s economy. Falcoff downplayed the role of Hugo Chávez and advised that the United States pick its fights with the authoritarian leader more carefully than it has in the past so as not to give his views undue significance.

Among the important issues facing Latin American leaders, DeShazo highlighted commitment to democratic rule, wealth creation and open-market economic growth, and security and cooperation with the United States. Noriega proposed creating an “opportunity partnership” that would reward member countries in the Americas for opening their economies and governing democratically with political and material support, trade, and investment through public-private partnerships.

Julia Sweig of the Council on Foreign Relations argued that the United States should be prepared to deal with democratically elected leaders whose policies do not align with U.S. interests and that it should not ignore disillusionment with the Washington Consensus in the face of persisting poverty and inequality in Latin America. She maintained that the ability of left-leaning leaders to govern will depend upon tax revenues and spending on infrastructure and education within each country.