A New Year for South America
2021 was another eventful year for South America. Politically speaking, discussions surrounding the fragility of democracies rose across the region, and important shifts in power were observed in the recent elections. Economically, the pandemic affected all countries, some of which already suffered from ailing economies, are now looking for ways of resolving the situation.
It is fair to say that last year’s events will not be left behind, and will have an impact on the coming year, which begs the question: what is next for South America?
COVID-19
Most South American countries saw improvements in the pandemic situation, mainly thanks to scientific breakthroughs, that helped to substantially decrease infection and death rates. However, such advancements definitely did not put an end to the pandemic, and while there is optimism for 2022, governments will still need to work hard to suppress the spread of the virus.
To begin with, vaccines played an essential role in 2021 and will keep doing so this year. By January, the subcontinent led global vaccination rankings, with 63% of its population immunized. Such success is explained, mainly, by the development of vaccination infrastructure that started decades ago: as vaccines popularized, leaders of South American developing economies realized they were effective ways to prevent deadly diseases and save massive amounts of money in public health, which made most governments invest heavily in this measure. Thus, health care systems already had years of experience in planning and executing vaccination campaigns, and succeeded in delivering shots; countries like Brazil and Argentina are now even able to produce them domestically.
Still regarding vaccines, health authorities’ years of hard work across the region also paid off by creating trust among the population, ensuring that anti-vaccine movements have no or very little expression.
Consequently, campaigns are expected to keep going and perform well. The next steps are the delivery of booster shots and children vaccination. This January, Chile became the first South American country to offer a fourth dose, and other countries are expected to follow. Immunization of teenagers already began last year, and improvements are expected in 2022, as many states already started offering doses to younger children.
Finally, the fact is that the pandemic is not over yet. Thriving vaccination campaigns and significant reductions in death rates may bring optimism to the coming year, but new variants worry governments and their citizens across the world, and the region. Authorities are expected to take action to minimize the damage of Omicron and other variants throughout the year, while also following a global trend to begin reopening borders and lifting restrictions.
Politics: Newly elected governments
Chile, Peru, and Ecuador held their presidential elections. Chile elected progressist politician Gabriel Boric, its youngest president ever. Peru, like Chile, elected a leftist candidate, union leader Pedro Castillo. Ecuador, however, voted for a representative of the right, former economy minister, Guillermo Lasso.
Chile’s transition to Boric’s government could be an interesting process to observe. The young leader is a critic of the neoliberal economic model that exists in the country, a vestige of former dictator Augusto Pinochet’s government - he claims it is largely responsible for inequality and other social issues. Boric’s efforts to shift the current models is something to watch out for over the next years.
Another point to highlight in Chile is its new, reformed Constitution, which began being drafted last year - after citizens began questioning the effectiveness of Pinocheists policies that defined the country’s social and economical structure - and is set to be finalized by October. The document is expected to address matters linked to the environment, gender inequality, poverty, and indigenous peoples. The full revision of long-existing laws in such a transformative way is an unprecedented event in South America and could be a turning point for Chilean society.
In Peru, despite right-wing candidate, Keiko Fujimori’s efforts to push forward electoral fraud accusations, Pedro Castillo was the winner of a tightly-contested election. Castillo took office in July and carries the burden to lead an extremely polarized country, with a turbulent political recent past; as difficult a job as it is, unsurprisingly, his first months were far from conciliating: he had to deal with corruption allegations, confrontations within his own party, and even managed to dodge an impeachment process in December.
In light of this, the Peruvian president will have an even more challenging job in 2022. His decreasing popularity does not put him out of the woods of another impeachment process, and his alleged involvement in corruption scandals makes it difficult to regain popular trust. Castillo’s next steps are crucial to determine if he will be the one to bring stability to the nation or become the third impeached president in the last four years.
Lastly, Ecuadorians chose businessman Guillermo Lasso to serve as their president. Lasso’s victory was a surprise and went in the opposite direction of the two other countries: he based his campaign on speeches for a free-market economy, against social welfare programs. His term began in May, and there were some significant achievements, scilicet, high vaccination rates, and successful negotiations with the IMF.
The conservative’s hardships, however, cannot be overlooked. Ecuador was put into a state of emergency as drug-trafficking-motivated violence rose by September, with an emphasis on the deadly prison riots that left more than a hundred people dead. Moreover, investigations on a tax evasion scheme possibly associated with Lasso began in October. Both factors can be accounted for the decrease in the businessman's approval rates.
Regardless of the country or political standing, all newly elected governments face diverse challenges that range from rebuilding economies to depolarizing the political scene and guaranteeing safety for the population.
Politics: Upcoming Elections
Politically, South American countries had a relatively easy year, compared to some of their Central American neighbors, but it would be inaccurate to say that 2021 was a calm year. Episodes of human rights violations against Colombian protesters, and hostility towards Brazilian democratic institutions raised questions about the fragility of democracy in both countries, which coincidentally, have upcoming elections this year.
Demonstrations in Colombia began by the end of April after President Iván Duque announced a tax reform to compensate for an increasing fiscal deficit, as well as plans to privatize the country’s public health care system. Unsatisfied with the proposals, the population went out to express their opinions and were met with violence and police brutality. Human Rights Watch confirmed that at least twenty civilians were killed in the demonstrations, and several were injured, as a result of police action.
Although the tax proposals were withdrawn, protests had already shifted their focus. Citizens were now demonstrating their dissatisfaction with the police’s actions, demanding changes in the institution’s structure. Demonstrations have now faded, but many problems are still unsolved and could resurface this year, alongside other matters like the economical crisis, and the increasing violence and criminality.
Needless to say, last year’s events will reflect on the popular vote. Duque’s low approval rates make his reelection highly unlikely. Thereupon, the main frontrunner is the leader of the opposition Gustavo Petró, who runs on an anti-establishment platform; despite Petró’s leading in polls, other names like Medellin’s former mayor Sergio Fajardo, and former mayor of Bucamaranga, Rodolfo Hernández, are also strong contenders. The latter especially is the one with the fastest-growing voting intentions over the last months.
Turning now to Brazil, conservative president Jair Bolsonaro and his allies caused some disturbance to the country’s democracy over the year. The wide militarization of the government and threats of closing the Congress and Supreme Court are among the incidents that raised questions about the stability of the country’s democratic institutions, or lack thereof.
The most notable controversy, however, was Bolsonaro’s attempt to undermine the public’s trust in the voting system. This is a strategic move to prevent a possible defeat in this year’s elections; over 2021, his approval rates plummeted, due to a series of corruption allegations, and questionable management of the economy and the pandemic. Not to mention former president for the Labour Party, Luis Inácio Lula da Silva was cleared of corruption charges and authorized to return to the political scene. He had two consecutive terms with high approval rates and currently leads the polls, being Bolsonaro’s biggest obstacle to reelection.
On many occasions, the right-wing leader tried to discredit the electronic ballots used nationwide for over twenty years and supported a campaign for the replacement of such technology for paper ballots. "If this method (electronic ballots) continues, they're going to have problems. Because one side, which is our side, may not accept the result.", remarked the president and sparked concerns over the legitimacy coming election.
In the end, both Colombia and Brazil have decisive elections coming up. The first will need to choose a coherent leader to deal with last year’s lingering problems, and the latter will need to prove the strength of its institutions while also choosing a candidate to lead the country’s recovery over the next years.
Economy
In economic terms, the past year was not easy for most of the world, and, accordingly, for South America either. And when discussing the monetary hardships of the region, two countries are worth mentioning: Venezuela and Argentina.
Once the fastest-growing country in Latin America, Venezuela entered a deep economical and humanitarian crisis around a decade ago, due to a number of elements, but in brief, some of the most important factors to consider are political instability, price control policies, corruption, sanctions, and mismanagement of public funds. Since then, the population has faced hyperinflation, growth in poverty rates, and decreases in acquisitive power, which even caused a refugee crisis in the region.
Over the past year, however, Venezuela did some progress in the control of its high inflation rates. While in 2020, inflation rates varied by 2.959%, this year, it rose by 686.4%. This happened due to the Maduro administration’s decision to loosen economic restrictions, which fomented international trades, and motivated the use of the dollar as the main currency. Under these circumstances, forecasts point to more improvements in the management of inflation.
The Argentinian economy nonetheless, seems to be going in a different direction. Since 2018, the country has been facing a recession that is the result of many unsolved crises that have been accumulating since the 1980s. In 2021, inflation rates were among the highest in the world, at 50.9%, and throughout the whole year, Peronist president Alberto Fernández has tried to negotiate with the IMF new deadlines for the repayment of 44 billion dollars (19 billion of which were due this year), as it is estimated that Argentinian liquid international reserves are currently under 4 billion dollars.
Only recently, by the end of January, Argentina seems to have reached a deal with the Fund. Details are yet to be revealed, but the main point is that the country will not need to make any new repayments until 2026. The agreement changes a lot of what was expected of 2022 for Argentina, as it takes the country out of risk of another default. While it gives some relief to the economy, it will not alone solve all of its problems. Fiscal deficit and political instability, in addition to the damages provoked by the pandemic, are also obstacles to the country’s recovery.
Conclusions
There is no easy nor right answer to the question “what is next to South America?”, but to put it in a few words, it is possible to say that the long-existing social, governmental, and economic issues, enhanced by the pandemic, will endure - from fragile democratic systems and political polarization to financial instability and external debt.
Regardless of the country, the one thing one can be sure of is the fact that those in power are under pressure, more than ever, to overcome such challenges, and lead the recovery of their nations.
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