The election of non-Marxist Presidents in Peru and Colombia (provided they are allowed to take office) reinforces a remarkably upbeat series of election results in Latin America. Cumulatively, those results give the whole continent a new hope of success, alas with the notable exceptions of Mexico and Brazil, still mired in hard-leftism. The question I would like to address in this column is where the new Latin American right must work together and what policies they should follow, to achieve economic growth and social stability sufficient to have a good chance of perpetuating their rule.

This column looks closely at Latin America about once a year. Its attitude depends crucially on Latin American electoral trends; the continent is like many countries in the 2020s in having a very wide ideological spread between its better governments, who are competent and occasionally more, and its worst governments, who are destructive Marxists, with a tendency to cement themselves in power indefinitely (see Chavez, Hugo). In 2023, the run of elections had been so bad (and I was dispirited by the Biden administration) that I seriously suggested we might see a Latin American Comecon, an association of Communist countries that blocked any democratic impulse to escape and cemented the continent in utter Stalinist poverty, albeit with less efficient secret police with more colorful uniforms.

Then last summer, I was more optimistic, seeing the chances for electoral change ahead and wondering whether Latin America could make history run backwards, towards a destiny of small governments and free markets.

Intellectually, there have been two leaders of the recent rightist Latin American renaissance, Javier Milei of Argentina, elected in December 2023, a year ahead of other rightist successes and Nayib Bukele of El Salvador, in office since 2019 and bidding next year for a third term in power. They have followed different paths, so much so that many supporters of one object to the other, but in the complex situations of Latin America a mix of both approaches seems optimal.

Bukele has concentrated on reducing the appallingly high crime and homicide rates in El Salvador, due to the prevalence of drug gangs and the tendency of previous administrations to be on the drug gangs’ payroll. By building prisons, increasing police forces and disrupting gang finances he appears to have conquered El Salvador’s crime problem, making the country one of the safest in the hemisphere. His economic policy has been less notable, pursuing a moderate free market policy, notable for adopting Bitcoin as the Salvadoran currency (the country has been dollarized since 2001). Internationally, he supports the reunification of Central America, which was united in the Federal Republic of Central America from 1823 to 1841; he also refuses to recognize Communist regimes, such as the Maduro regime in Venezuela but also in Nicaragua and Peru.

Javier Milei in Argentina has governed with free market even Austrian principles more rigorous than any other leader of recent years, even President Reagan – not since Calvin Coolidge and Neville Chamberlain has there been a leader so fully committed to free markets. In economic principles, he is the reincarnation of Ludwig von Mises, not just the wimpy partial sellouts Milton Friedman and Friedrich Hayek. Milei’s “Long Live Freedom, dammit” is a breath of fresh air the world has long needed, particularly at the time of his inauguration, when it appeared that the dead hands of President Biden and the EU bureaucracy were subjecting the world to authoritarian socialism, under the heel of China on calm, cloudy days when the windmills did not work.

In practice, Milei has no secure majority in Congress, so cannot reliably pass his preferred policies into law. Nevertheless, in his time in office, he has cut Argentine government spending by 30% in real terms, the most important reform that was needed on his advent to power. He has also achieved important macroeconomic victories by abolishing rent controls, and has seen the real price of Buenos Aires apartment rents substantially decline. He is now attempting to move to a U.S.-type system in which the government shuts down if no agreement is reached on a budget, instead of the current Argentine system whereby last year’s budget is extended. The latter is a recipe for continued government bloat once inflation has been reduced to moderate levels, which is by far Milei’s greatest success, in the eyes of the Argentine public.

Most of the new Latin American governments need to adopt a mixture of Milei and Bukele policies, with the mixture varying. In Chile, where leftist unrest is only moderate, Jose Antonio Kast should follow Milei fairly closely – Chile of course has its own proud tradition of imposing free market Austrian economic policies, in 1973-90. Conversely in Colombia, Abelardo de la Espriella faces a situation in which economic policy has deviated only modestly from Colombia’s tradition of fairly small government, but the security situation is truly dire, with drug gangs and a revitalized leftist guerrilla movement, supported by the outgoing President Gustavo Petro. Consequently, Espriella must cut back the bloat in Petro’s budget, which will be difficult since he does not control a solid Congressional majority, but the most important issue is restoring Colombia’s internal security, which will require a strong Bukele-like approach.

Peru’s situation is less difficult than Colombia’s, though drug gangs are strong also, but Keiko Fujimori has the example of her admirable late father’s Presidency in the 1990s to guide her. Alberto Fujimori in 1990-2000 won a civil war and set Peru on the road to free market growth before he was ousted; his policies were more Bukele than Milei, but they worked. His daughter should follow him, ideally with help from an Argentine economic mentor where necessary.

Some other Latin American countries got decent election results but are not yet fully secure. Bolivia elected the moderate rather than the out-and-out rightist last year and is now finding the downside of that approach in that the hard left under former President Evo Morales, are attempting to remove him by force. Ecuador also has a strong revanchist movement from former President Rafael Correa. If Colombia and Peru can be secured, this will hopefully stabilize the positions in Bolivia and Ecuador, which are situated between the two.

That leaves, Brazil, Mexico, Venezuela and Nicaragua, the continent’s basket cases, in all of which it seems unlikely that a sufficiently free election will be allowed for the right to regain supremacy. The most urgent of these is Brazil, because of its economic and demographic size, in which elections are due later this year. Hopefully the U.S. will work as hard to produce a right-wing victory in 2026 as it did to restore the loathsome Lula to power in 2022, an election that was clearly rigged.

The most important thing the U.S. can do to help the process is to defund as far as possible the innumerable subversive Western-funded agencies, NGOs and supranational organizations that do their utmost to destabilize and de-legitimize right-wing governments and entrench left-wing ones. The Trump administration made a substantial move in this direction when it defunded USAID, which had been financially supporting all kinds of subversive Marxist NGOs whose main purpose was to block the right in Latin America – you can see the result of their efforts in Brazil’s 2022 election, after which U.S. funded lawfare has been used to imprison both the main opposition candidate Jair Bolsonaro and his son.

There is much more to be done in this direction. A really rigorous IRS audit of George and Alex Soros and their network of “charities” and NGOs would undoubtedly turn up much of interest, hopefully enough for indictments to be brought. The U.S. should also work to defund the World Bank, the International Monetary Fund and the Inter-American Development Bank. Those organizations were always basically on the side of the Left, but with the radicalization of the worldwide Ivy League equivalent colleges and their graduates in recent years, they have become fanatically anti-capitalist, anti-free market and supportive of all kinds of leftist subversion and wreckage.

The IMF in particular has been run since 2019 by a Communist-trained Bulgarian with good Party connections Kristalina Georgieva. Its new Chief Economist Silvana Tenreyro was on the dovish leftist side at the Bank of England, which of course has form in de-stabilizing rightist governments in the form of the unfortunate Liz Truss. Since the IMF was historically the least manically leftist of the three Washington institutions financing Latin America, we can bet that the World Bank and the IADB are worse.

Supranational institutions are structurally both socialist and authoritarian, as they seek to accrue more power to themselves – they are the clinching argument against a world government, which would be a universal tyranny that would undo the Industrial Revolution and plunge us back into impoverished perpetual warfare. The U.S. taxpayer needs to stop paying for the subversion of the economic system on which the country depends.

Much of Latin America is currently enjoying a new morning of hope, partly because of the superior policies of the Trump administration and its example. Let us help its recovering economic alcoholics to work together, preserve economic and social sobriety and finally lead their people into the prosperous future that they deserve but for so long have been denied.

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(The Bear’s Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of “sell” recommendations put out by Wall Street houses remains far below that of “buy” recommendations. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)