Latin America has suffered more than its fair share of economic crises, but the global recession of 2008–2009 was supposed to be different. Because this crisis was triggered not by fiscal mismanagement in Latin America but by a combination of risky lending and lax regulation in the United States, some experts and politicians in the region proclaimed it a moment of “de-linkage” from the North. Yet early predictions of a soft landing—following a six-year economic bonanza for the region, which was largely driven by China’s thirst for natural resources—proved incorrect.
Indeed, the prognosticators’ pendulum has now swung in the opposite direction. We hear warnings about a long, slow, painful recovery in many of the region’s nations. Reductions in poverty, unemployment, and inequality are not expected to be achieved until long after economic growth returns. Many expect to see populist, autocratic leaders once again pushing protectionism and resource nationalism.
In reality, though, Latin America is likely to muddle through the current economic turbulence. The bigger story in the region is an unfolding, longer-term crisis of democracy.