A Leader for the 21st Century

Wednesday, January 18, 2006

SOUTH AMERICAN neighbors Chile and Bolivia have recorded groundbreaking presidential elections within weeks of each other. Last month Evo Morales became the first indigenous leader to take power as president of Bolivia; on Sunday, Michelle Bachelet was elected to become Chile's first female president. Both leaders call themselves socialists, and thus represent a Latin American movement that for decades was forcibly excluded from government. Yet in political substance, Mr. Morales and Ms. Bachelet could hardly be more different. The contrast between them illustrates how Latin American nations, unlike developing countries almost everywhere else in the world, remain mired in confusion over economic models.

Though his presidency symbolizes the expansion of Bolivian democracy to fully include the country's poor, indigenous majority, Mr. Morales is a throwback to Latin America's past. His "socialism" is the populist statism that first appeared in the region more than half a century ago. Mr. Morales promises to nationalize Bolivia's oil and gas reserves, reverse the sale of state companies to foreign investors, and defy the international financial community. Like Hugo Chavez of Venezuela, his mentor, he expects to raise living standards through statist pump-priming; foreign trade and investment are regarded with suspicion. That these policies have led repeatedly to catastrophe, and were long ago discredited elsewhere in the world, is trumped in these Latin countries by the politics of class resentment, anti-Americanism and, more often than not, authoritarian muscle.

Chile, by contrast, increasingly looks and behaves more like a European country than one of its neighbors. Ms. Bachelet -- an agnostic, a single mother, urbane and well-traveled (she attended middle school in Bethesda) -- would be at home in the social democratic parties of Western Europe. Like them, she favors steps to improve economic equality, which still lags in Chile. But she doesn't question the foundations of her country's growing prosperity -- which are the very free trade, foreign investment and free markets that elsewhere in the region are demonized as "neo-liberalism." Chile, like Mexico, has a free-trade agreement with the United States; it also has trade deals with the European Union, China and India. All were signed by its outgoing, highly popular socialist president, Ricardo Lagos.

One of the paradoxes of contemporary Latin America is the slowness, even among elites, to absorb the lessons of Chile's success. Its trade, as a percentage of its economy, is twice the regional average; so was its growth rate through the past 15 years. Since 1990, Chile's poverty rate has dropped from 38.5 percent to 18.8 percent; extreme poverty stands at 4 percent. In Venezuela, poverty rose from 43 to 53 percent during Mr. Chavez's first six years in office. Mr. Chavez seeks to extend his leadership, and what he calls his "socialism for the 21st century," across the region. Yet if Latin Americans can look beyond his hoary caudillo antics and simple-minded demagoguery, they will see that the real socialism of the 21st century is espoused by the very modern woman who was just elected president of Chile.

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