Conservative Mania Running Wild in Latin America

Like many parts of Europe, Latin America is experiencing a conservative wave. Country by country, citizens are electing right-wing governments, fed up with decades of incompetence and corruption. The public is taking a chance on the likes of Javier Milei and Nayib Bukele, and the numbers show these bets have been winners.

Turning Right in Latin America

This month, Colombia and Peru held highly anticipated electoral contests. Right-wing candidate Abelardo De La Espriella won a tight race in Colombia's June 21 election. Conservative Keiko Fujimori is expected to win the Peruvian presidency after the June 7 battle following three attempts at the office.

They will now join Argentina, Bolivia, Chile, Ecuador, El Salvador, Panama, and others in moving to the right in recent years, as voter frustration has fueled widespread anti-incumbent sentiment. After America’s regime change operations earlier this year, Venezuela will automatically shift a bit more to the right.

As a result, the only major nation remaining is Brazil. Rio de Janeiro will hold a general election in October. Incumbent left-leaning President Luiz Inácio Lula da Silva will try to fend off a challenge from conservative-leaning opponent Flávio Bolsonaro, son of former President Jair Bolsonaro. Prediction markets suggest Lula has a 54% chance of winning another term.

Given that much of Latin America has been engulfed by left-wing politics for years, the latest trends suggest change is underway in America's backyard. The United States is undoubtedly watching.

Treasury Secretary Scott Bessent has regularly pointed out the “generational opportunity” unfolding in the region. This is why the White House was adamant in extending a $20 billion financial lifeline to Buenos Aires ahead of last year’s legislative elections. Washington insisted that Milei was the right man for the job, and the bet paid off.

"We are supporting a US ally in Latin America, and we want to set the tone in Latin America," Bessent told NBC's Meet the Press in October. "So, we think it is much better to use American economic power up front to stabilize a friendly government and lead the way, because we've got many other governments in Latin America, Bolivia, Ecuador, Paraguay, who all want to follow."

After the ballots were counted in Colombia, President Donald Trump took to Truth Social and committed to "build a powerful relationship" with the new leader.

Economics and Geopolitics of Latin America

Based on the data, it is not surprising that voters have kicked out incumbents. In Colombia, for example, the unemployment rate is nearly 9%, inflation is 6%, economic growth is 0%, and interest rates are above 11%. Neighbors on the continent likely noticed what has been happening in Argentina and El Salvador and want to replicate them.

El Salvador has garnered international attention for its war on crime, but the country's economy has been performing well. Growth prospects are solid, inflation is stable, and unemployment is at record lows. Argentina? Milei’s chainsaw economics and shock therapy have brought down inflation, boosted growth, significantly raised tax revenues, and slashed poverty rates.

These states will inevitably come across bumps, prompting leftists to immediately pounce. However, as Henry Hazlitt wrote in Economics in One Lesson, “The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.”

While voters might be concentrating on domestic issues, the continent, rich in natural resources, is a focus for the United States and China.

Over the last 20 years, Beijing has expanded its influence across multiple countries through its Belt and Road Initiative. The Trump administration has tried to reverse this trend by vowing to enhance trade with conservative leaders. Either way, the world wants what Peru, Brazil, and Argentina have: agriculture, energy, critical minerals, and more.

USAID, What?

Combing through the Xverse, conservative commentators have discussed the correlation between budget cuts to USAID and the political pendulum swing in Latin America. Is it merely a coincidence? The timing is indeed interesting. Still, even if there is no causation, ending the decades-old practice of sending US tax dollars to corrupt regimes, only to have them wasted, is a victory in itself.