Pink Tide 2.0 – Lula’s victory in Brazil broadens Latin America’s leftist coalition

Pink Tide 2.0 – Lula’s victory in Brazil broadens Latin America’s leftist coalition

As of 2023, one-third of the Latin American and Caribbean (LAC) countries will be ruled by left-wing presidents. Seven of these 11 nations are the region’s largest economies. The G7-LAC – Argentina, Bolivia, Brazil, Chile, Colombia, Peru, and Mexico – accounts for nearly 85% of the GDP of Latin America and the Caribbean.

Unlike what common sense usually indicates, Pink Tide does not necessarily translate into cohesion. In addition to distinct worldviews shaped by their different backgrounds, these new left-wing leaders preside over their countries in circumstances very different from those of 20 years ago.

Domestically, almost all G7-LAC presidents face political polarization and low social trust in the democratic regime. And even though their economies are gradually improving, high inflation rates and low economic growth continue to be a concern

At the international level, the war between Russia and Ukraine, the rise in the basic interest rates of the world’s main economies, and China’s economic slowdown also create an adverse scenario for Latin America and the Caribbean.

This does not mean that LAC lacks potential for integration. Suffice it to say that 44% of the trade agreements signed by the members of the G7-LAC were with other Latin American and Caribbean countries. The Pink Tide 2.0 is thus a good opportunity for its members to seek greater regional convergence. This is especially true for the biopharmaceutical, energy, and technology sectors.

Nonetheless, the most likely scenario remains one of low regional convergence. Be it political (ideological), such as that of the 2000s, or pragmatic, integration will continue to be done on a case-by-case basis, through bilateral negotiations.