Those leftist governments of Latin America. Now that times are getting harder, will they be able to continue to be leftist?
Now, the financial crisis will press them to prove they can manage and run similar policies when the cash isn\’t flowing into their pockets. Venezuela will get less for petrol, Brazil, Argentina and Uruguay won\’t receive as much from soy and other agricultural exports and Chile could have trouble if copper prices and demand falls.
In the end, the crisis could serve to separate those governments that are committed to change from those who have either jumped onto the progressive bandwagon only for the ride or are so shallow that they will crumble when the first strong winds start blowing against them. Those who continue to treat the fight against inequality as the cornerstone of their policies will probably be called the true Latin American left.
Given that Argentina has already nationalised private pension plans in an attempt to pay the foreign debt, I think we can safely say that no, those who have been following these alternative economic policies won\’t be able to continue to do so.
As the man once said, heterodox economics seems to have higher costs than non-heterodox economics.