Politics

Surf's Up

By, 12/14/2006

You may be tempted to view the recent elections in Latin America as further evidence of a growing red tide sweeping the region. Much of the media certainly has. Indeed, Hugo Chavez and his anti-American populism won handily in Venezuela (with 63% of the vote). Two staunch allies of Chavez also won power in recent weeks, Daniel Ortega in Nicaragua and Rafael Correa in Ecuador. But you'd be wrong if you thought the rest of the region has followed a similar path. In the past year, nearly a dozen Latin American countries held presidential elections. And the results overwhelmingly point to healthy democracy in the region.

Look no further than the victorious moderate center-left candidates in Brazil, Chile and Peru. In another two large countries, Colombia and Mexico, the center-right won. These governments will continue activist social policies to relieve the burden of poverty and inequality in the region, but they are hardly pseudo-democratic dictatorships. Best of all, there is every indication the newly elected governments will continue the free market economic policies that have been so successful in the past several years.

In a recent poll conducted by The Economist, 58% of respondents said that democracy was the best system of government, up 5% from last year. And Latin Americans appear to be more optimistic about the state of the economy. Overall, 18% said their countries economic situation was good (up from 11% last year), 47% said it was "all right" and 35% said it was bad (down from 47%).*

It's safe to head into the water. The red tide is an illusion. While further reform is needed to reach the democratic freedoms enjoyed by the Western world, the recent trend is hardly worrisome.

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* "The Democracy Dividend", The Economist (December 9, 2006), p. 45-46.

*The content contained in this article represents only the opinions and viewpoints of the Fisher Investments editorial staff.

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*The content contained in this article represents only the opinions and viewpoints of the Fisher Investments editorial staff.

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