Fortunately it turned out to be mere melodrama, not tragedy. After Colombia's armed forces killed a leader of the Farc guerrillas by bombing a camp just across the border inside Ecuador on 1st March, Venezuela's Hugo Chávez ordered troops and tanks to his own border with Colombia and threatened to unleash his newly acquired Sukhoi fighter-bombers. Ecuador, Venezuela and Nicaragua all broke off diplomatic relations with Colombia—only to promise to restore them days later amid bearhugs and handshakes all round at a Latin American regional summit in Santo Domingo, Ecuador.
On the face of things this episode showed the extent to which Colombia's stern president, Álvaro Uribe, has been isolated in the Americas. George W Bush was the only leader to express unequivocal support for a government to which he gives aid of around $700m a year. Led by Brazil and Chile, the Organisation of American States scolded Colombia for its violation of Ecuador's sovereignty. Yet look more closely, and a more important dynamic is at work in Latin America. It is Chávez who is fast losing ground in the region. Other governments ignored him even as they expressed their solidarity with Ecuador's leftist president, Rafael Correa. Chávez's intemperate mobilisation in response to a squabble that did not involve his country seemed to betray a growing desperation.
Chávez has been fortunate to rule Venezuela during an oil boom unrivalled since the 1970s. On his watch, government oil revenues have more than tripled. Thanks to oil, Venezuela's GDP grew at double-digit rates between 2003 and 2006. Chávez has spent part of his windfall on social programmes known as misiones: these include a government-run supermarket chain called Mercal, a literacy programme and a scheme under which Cuban doctors provide GP services in poor barrios. He has also used his oil wealth to try to buy influence abroad—most visibly in Cuba. Venezuelan aid allowed Fidel Castro to roll back some of the market-based reforms he was forced to adopt in the 1990s after the collapse of his Soviet sponsor.
Yet the important divide in today's Latin America is not between left and right. It is between autocrats such as Chávez and democratic reformers exemplified, in differing ways, in Brazil, Chile and Mexico (one might add Peru and Colombia to this list). The reformers, be they left or right of centre, are trying to use globalisation and democracy to overcome Latin America's extreme income inequality and widespread poverty. The autocrats are reprising old-fashioned Latin populist nationalism in the style of Argentina's Juan Perón, mixed with contemporary antiglobalisation nostrums and anachronistic idolatry of the ailing Fidel Castro. At issue are radically different readings of the region's history: whatever their other differences, Chávez, Castro, Correa and the like all subscribe to dependency theory—the historically questionable notion that Latin America's relative failure is the result of its subordination to the US—while the reformers are trying to build the democratic institutions needed to overcome the region's internally generated failings.
My recent trips to the region have convinced me that this contest has entered a new stage, one in which Chávez's regime is starting to implode. That brings new risks of violent turbulence—the chavista regime still has much money and many guns, including 100,000 Kalashnikovs recently bought from Russia. But it also holds out hope that the authoritarian challenge to liberal democracy in Latin America may prove relatively short-lived.
The turning point in this ideological battle come on 2nd December 2007, when Chávez lost a referendum on constitutional changes that would have turned Venezuela into a quasi-totalitarian state. It was his first defeat in ten national votes and it is hard to exaggerate its significance. He lost because this time, 3m of the 7.3m who had voted for him a year before stayed at home, while a fractious opposition found new vigour and unity.
I spent the week before the referendum visiting poor neighbourhoods in Caracas and along Venezuela's Caribbean coast. The apathy and disillusion among many chavistas was evident. Chávez has mismanaged the oil boom. Inflation is out of control. Price controls and political interference have led to food shortages. Oil production is falling. Corruption is rife, as is violent crime (Caracas is now the most violent capital in South America). And the much-vaunted misiones are failing. Many of the Mercal supermarkets are closed. In February the government had to dispatch 100 troops to Sabaneta, Chávez's home town, to restore order after an angry crowed looted the local branch of Mercal in protest at corruption. In a devastating article in the current edition of Foreign Affairs, Francisco Rodríguez, a former chavista who was the chief economist of Venezuela's national assembly, refutes the government's claims to have abolished illiteracy and says that the fall in poverty is purely a function of the oil price.
Chávez still has five years left in office. But the referendum defeat has set clear limits to his power and permanence. There is an election due in November, and the opposition is likely to break his near-monopoly of state governorships and big-city mayors.
The new limits on Chávez's power have big implications for events in Cuba. It was surely no coincidence that days after Chávez's referendum defeat Fidel Castro gave his first hint that he would step down as the island's president. He duly did so in February, formalising a transfer of power to Raúl Castro, his (slightly) younger brother. Many well-connected sources in Havana say that Raúl, a self-effacing and tidy bureaucrat, is personally disdainful of Chávez's volatile narcissism. But the Cuban regime's chances of pulling off its bet on gradual economic reform as a means of maintaining communist political control are uncomfortably dependent on Venezuelan aid, which totals some $2bn a year, and so on Chávez's survival in power. Raúl is quietly trying to diversify Cuba's economic ties: Chinese buses have replaced ancient Soviet contraptions, while Brazil's Luiz Inácio Lula da Silva turned up in Havana in January to sign trade and investment agreements.
As long as Fidel remains alive, market-oriented reform in Cuba will be slow. Many observers of Cuba point to its exceptional history in the region, its island status, its struggle against past American interference, its almost total lack of democratic tradition and the fact that the more enterprising among its people have gone abroad. They argue that as a result of all this, the regime can pull off a transition to a "Chinese model"—combining state capitalism with political authoritarianism.
But when Fidel dies, Raúl and Cuba's collective leadership will be in uncharted territory. Lacking Fidel's charisma and historical legitimacy, they can command consent only through results. But they face heightened expectations of change. As any visitor to the island knows, Cubans are profoundly demoralised and discontented at low wages, the lack of housing and transport, petty restrictions and growing inequities. Unless Raúl can swiftly create a sense that daily life is about to improve, discontent could yet boil over.
Brazil is the clearest counterpoint to Chávez and Castro. Under Lula and his predecessor, Fernando Henrique Cardoso, it has combined an increasingly vibrant democracy—with many obvious flaws, to be sure—with economic stability. Brazil's economy grew by 5.4 per cent last year, inflation was just 3.5 per cent, and thanks partly to more effective social policy, poverty is falling steadily and incomes are more equally distributed than at any time in the past three decades.
Chávez has made all the noise in Latin America in recent years—but his call for Farc to be recognised has been echoed nowhere, not even Cuba. From London to Massachusetts, he has attracted the loyalty of political ingénues, of whom Naomi Campbell and Oliver Stone are among the latest. But the real story of human progress and a sustainable fight against poverty in the region is to be found, less glamorously, in Brazilian favelas, Mexican villages and Peruvian shantytowns.
