2021 - …Out like a bipolar capybara
The region has never seen such a large divide between economic growth and citizen sentiment towards politics.
The first newsletter I wrote this year was titled: 2021 - In like a jaguar, out like a bipolar capybara. Twelve months ago was a dark moment. Coronavirus was spreading quickly and I predicted new cases could more than double in the coming months in Latin America due to new variants. There was also a failed insurrection in the US, the fallout of which we’re still dealing with in the US and the hemisphere.
The best prediction I made all year came regarding vaccines both in that first newsletter as well as in a newsletter on 2 February where I wrote:
“While the vaccination situation feels very slow right now, the situation will look shockingly better by the end of 2021.”
The WSJ wrote earlier this week that Latin America is a world leader in terms of vaccinations. It’s a modern miracle of science and a major victory for the region. We should take a moment to appreciate it while also remembering that vaccines continue to be unequally distributed. That is both due to economic and logistical limitations as well as political will.
Twelve months later, even though vaccinations are doing well and economies are booming, in some cases overheating well beyond anything I expected, the region remains angry. Most presidents remain quite unpopular. Democratic institutions are fragile. Support for key institutions and political parties is very low. The anti-incumbent moment that I described in the final newsletter of 2019 is going into its third year and an election cycle that includes Colombia and Brazil.
As we leave 2021, the disconnect between economic performance and political approval has never been larger. The “bipolar capybara” of a booming economic rebound in many countries and disappointed/angry citizens is being experienced across the region.
If the pattern doesn’t continue into next year, it’s unfortunately due to declines in economic performance, not improvements in politics. Brazil is in a technical recession. Mexico’s growth is stagnating and performing below expectations yet again. Inflation is hitting essentially every country in the region. Leaders who already face tough political environments are unlikely to get a political boost from growing economies next year and some leaders may experience headwinds once the initial post-pandemic rebound fades.
While democratic presidents face instability, authoritarian governments have knocked down threats and consolidated control in the past two years. What happened in Nicaragua this year is truly tragic and sends a terrible message to other authoritarians that repression and rigging elections work and the international community can’t do much to counter it. A new wave of authoritarian-leaning populists hope to find ways to clutch on to power while maintaining their democratic facade. The anti-anti-corruption wave continues to push forward and Biden’s latest anti-corruption push has a lot to do before it even makes a dent.
The region is in a better place than we were when the year started. There is a lot more to do.