San José, Costa Rica, since 1956

Verdict in on Latin American left-wing leadership

(Screenshot of Social Progress Index)

There’s an enduring myth in Latin America that left-wing populist governments somehow do a better job of promoting economic growth and social development than their political counterparts. For those wedded to that belief the 2014 Social Progress Index should be compulsory reading.

The index has impeccable credentials — Michael Porter, the celebrated Harvard Business School professor and expert in national competitiveness, had a hand in designing it along with Peruvian economist Hernando de Soto. And for those who hold the view that GDP isn’t the sole measure of human happiness, the index also incorporates measures of basic human needs and quality of life. It’s worth noting that the survey didn’t give a pass to U.S.-style capitalism, ranking the country 16th out of 132 countries evaluated, two steps ahead of Slovenia.

The headline here is that Costa Rica (25th), Uruguay (26th) and Chile (30th) are the region’s top three socially progressive countries. Set aside the fact that Costa Rica — a small Central American nation — managed to best much larger economies. Far more significant is that in all three countries center-left politicians have either run things or helped shape economic policy for the last decade or more.

The result is that Uruguay’s economy has grown at roughly 6 percent annually for the past 10 years, according to Moody’s. Chile and Costa Rica have paired strong growth with low debt levels. All have attracted foreign investment, protected private property and score well in health and education. In other words, in these countries the poor can really get ahead.

In contrast, regimes that claim to defend the poor such as Venezuela (67th), Bolivia (71st), Nicaragua (74th) and Cuba (79th), score poorly. President Nicolás Maduro’s Venezuela earned the lowest rating possible in personal safety, offers substandard secondary education and violates basic political rights. The study also found that radical leftist regimes tend to ignore things like proper sanitation and often trample on violate private property rights.

By comparison, Chile’s President Michelle Bachelet was considered a subversive by the right-wing dictatorship of Agusto Pinochet, which tortured her, but in power she has a track record of fiscal conservatism and respect for private enterprise. Likewise, Uruguay’s José Mujica — a former guerrilla fighter — knows what it takes to maintain the country’s top-notch credit record.

The social index study found that economic growth isn’t enough to achieve social gains. But economic development does require sustainable economic policies.

Moreover, the study found that more government spending doesn’t necessarily result in social progress. Tell that to Venezuela, where unchecked state spending has resulted in inflation running at a 56 percent annual rate, a chronically weak currency and shortages of basic goods.

The problem with Latin American populists such as Venezuela’s Maduro or Nicaraguan President Daniel Ortega isn’t so much their commitment to useless ideologies; it’s that their failed economic tinkering is mostly aimed at keeping them in power.

Bloomberg View contributor Raul Gallegos covers Latin American politics, business and finance.

© 2014,  Bloomberg News


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Ken Morris

I have no problem with the study (facts are facts) but the Bloomberg spin is amazingly amateurish.

First, it reverses cause and effect. The lesser ranked countries didn’t become that way because they were governed by leftists, but are governed by leftists because they already were basket cases. In general, if these countries wouldn’t have been run into the ground by the right, they wouldn’t be governed by leftists today.

Second, it ignores the response of the US to leftist leaders. Can anyone say Cuban embargo? It’s easy to fault Castro, and he may merit some blame, but are we forgetting that the US has done and continues to do what it can to hurt Cuba? It has done the same thing to Nicaragua. Rarely have two countries been so savagely and intentionally damaged by the US.

Third, it plays fast and loose with the facts. For example, although Reagan called Nicargua’s Ortega a Marxist, he never was, and you’d be hard-pressed to find much that is anti-business in his policies today. Heck, Nicaragua gets more glowing reports from outfits like the IMF than Costa Rica. Sure, he’s a populist leftist, if we want to throw labels around, but his economic policies are largely market oriented and suprisingly responsible.

Last, note that the article describes the successes as center-left, not right, so even according to it social progress comes from the left, with the only question being how far left.

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This article is really a joke, it spends the whole time talking about how more conservative governments tend to yield better results based on one study. Instead of explaining why the study should be lent cadence, it lets us know that it was done by professors of high esteem, as if that should stop me from asking questions. To top it off, the article ends by making a claim which it does absolutely nothing to back up, hoping that readers are at the point where they’re ready to move on to something else without questioning the baseless statement.

These writers at bloomberg can really just write whatever they please as long as they’re taking shots at Maduro.

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John Morris

Interesting comment on Maduro’s failed economic tinkering being a means to keep him in power. Same can be said for the Obama administration, as well as Pelosi and Reid.

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Niklas Zenius Jespersen

Hmm… Just weird that in Costa Rica, the percent of people living in poverty have stagnated for decades and living conditions have in fact decreased the last 20 years. While in Venezuela extreme poverty have been reduced by 70% since 1998 and poverty in general have been more than halved. Obvious facts that contradict this “survey”. Not to mention, have the hundred of thousands of Nicaraguans illegal immigrants in Costa Rica been counted in the survey? They live often in poverty, with no basic right, neither social nor democratic rights and are used and abused as extreme cheap labour.

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Colin Brownlee

Yeah, that Laura was the worst possible president Costa Rica ever had.

Just think, had she been better, Costa Rica could move up to the popularity of Honduras, Nicaragua , Guatemala etc… Total “rock stars” for the people.

Now, can we look forward to TT reporters to discredit this? Your so- called lefties been a little quiet these days. Guess it’s no fun when Viallta lost and Doña Laura is not here to kick around and make it look like you actually might be intelligent.

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Another stupied Bloomberg story why?

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