"When the United States sneezes, Latin America catches a cold." This old maxim proved true in 2008 and 2009, when the U.S. financial crisis deeply affected countries throughout the Western Hemisphere. Yet while the U.S. economy has been struggling through a painfully weak recovery, Latin America's rebound has been remarkably strong. After posting robust growth rates prior to the global recession, the regional economy handled the downturn fairly well, and it is now projected to expand by around 5 percent this year.
"Economic growth is going hand in hand with social progress," notes the Economist. "Tens of millions of Latin Americans have climbed out of poverty and joined a swelling lower-middle class." A region that was once notorious for its chronic economic mismanagement is now drawing the attention of multinational corporations across the globe. As Bloomberg reports, 30 percent of the 300 U.S. companies that participated in a recent HSBC survey believe that "Latin America offers the best opportunity for growth over the next six months," compared with only 25 percent who think China does. To borrow from Ronald Reagan's famous line, it is morning in Latin America.
But not everywhere. The one economy that has yet to emerge from recession is Venezuela's. Indeed, the South American country continues to suffer from sky-high inflation, a longstanding problem that got even worse after President Hugo Chávez devalued the national currency last January. Ángel García Banchs, an economist at the Central University of Venezuela, recently predicted that the inflation rate would hit 32-33 percent by year's end.
For some time now, the news from the "Bolivarian Republic" has been almost unremittingly bad, as Chávez has wrecked the economy, bludgeoned his political opponents, and worked to build a socialist dictatorship. But the September 26 parliamentary election offered a hopeful sign that Venezuelan democracy isn't dead yet.
The anti-Chávez opposition, which boycotted the previous National Assembly election in 2005, was more united than ever before, having formed an alliance known as the Democratic Unified Panel (MUD). According to official figures calculated by the Chávez-controlled National Electoral Council, the MUD won 48 percent of the vote and captured 65 (out of 165) parliamentary seats, enough to deprive the ruling United Socialist Party (PSUV) of the critical two-thirds supermajority that has allowed it to push through legislation at will. According to MUD spokesman Ramón Guillermo Aveledo, the alliance really won 52 percent of the vote.
Regardless of which figure (48 percent or 52 percent) is correct, the MUD's vote share was much higher than its share of parliamentary seats (40 percent). Americans may find this baffling: If the MUD and PSUV garnered roughly the same portion of the national vote—with the MUD probably winning a higher share—how come the PSUV won so many more seats? As Venezuelan journalist Francisco Toro explains, the National Electoral Council has "managed to create a system that retains the appearance of proportional voting, while yielding entirely disproportional results." It has done so by gerrymandering the legislative districts and tinkering with the voting rules. The system has effectively been doctored to give the PSUV a huge advantage over its opponents.
Which makes it even more impressive that the MUD was able to claim 65 seats. Indeed, given the rigged electoral system, the relative dearth of opposition media outlets, and the persistent harassment of anti-Chávez political figures, the alliance's performance in the September 26 election must be considered a resounding triumph. Venezuelans have long been frustrated by power outages, food scarcity, runaway inflation, pervasive corruption, and soaring crime rates. (According to a recent New York Times article, the murder rate in Caracas, Venezuela's capital city, is now nearly nine times higher than that of Bogotá, Colombia, and more than 14 times higher than that of São Paulo, Brazil.) Now they have expressed their frustration by handing Chávez a humiliating setback.
It's unclear how the Venezuelan strongman will respond to his party's losses. He may well increase repression and find new ways to reduce the opposition's political strength. That's always been his strategy in the past. But whereas the opposition used to be bitterly divided, today it is unified, and thus much stronger. By supporting the MUD in such large numbers and denying PSUV a two-thirds supermajority, the Venezuelan people have given their country a chance to preserve its democracy.
Chávez isn't the only Latin American autocrat who had a rough month of September. In Cuba, government officials announced that they would be laying off nearly 500,000 state workers to cope with the deep economic crisis. The Communist regime is increasingly desperate, and is thus taking small steps to expand private enterprise. It has also agreed to release political prisoners in hopes of convincing the European Union to normalize relations.
Of course, the Castro brothers and Hugo Chávez remain in control of their respective countries. But the underlying story from Cuba and Venezuela is the same: Latin America's dictators are losing, and the forces of freedom and progress are winning.
Just look at Honduras, a true Latin American success story, whose remarkable democratic achievement is sadly underappreciated by many journalists and politicians here in the United States. Not so long ago, it appeared that Honduras would become another Venezuelan satellite. Manuel Zelaya, elected president in 2006, had brought his country into the Chávez-led Bolivarian Alternative for the Americas, and he was gradually steering it toward authoritarianism. In June 2009, Zelaya attempted to hold a referendum that the Honduran supreme court had rejected as illegal. It was a thinly veiled power grab, representing a direct challenge to the country's constitutional order. The supreme court responded by authorizing Zelaya's removal from office.
Foreign governments cried foul, labeling his ouster a military coup. But a subsequent U.S. Law Library of Congress study concluded that: "The judicial and legislative branches applied constitutional and statutory law in the case against President Zelaya in a manner that was judged by the Honduran authorities from both branches of the government to be in accordance with the Honduran legal system." Indeed, the country's democratic institutions rose to the occasion and prevented a would-be dictator from using mob tactics to subvert the law.
Last November, Honduras held its 2009 national elections right on schedule. The victor in the presidential contest, Porfirio Lobo of the conservative National Party, has since worked to assist the post-Zelaya reconciliation process. "President Lobo has done everything he said he would do," Secretary of State Hillary Clinton declared in June. "He was elected through a free and fair, legitimate election. He provided political amnesty. He set up a truth commission. He has been very committed to pursuing a policy of reintegration." As a result, many Latin American governments have reestablished formal diplomatic relations with Honduras.
The triumph of Honduran democracy was an embarrassing defeat for Chávez, who had angrily demanded Zelaya's return. Now he has suffered an even bigger embarrassment on his home turf. It is way too soon to make any long-term predictions about the future of Venezuela's "Bolivarian Revolution." After all, Chávez is a brutal autocrat who has recovered from earlier setbacks. But the 2010 election may one day be seen as a turning point.