SPECIAL - POPULISM AND ECONOMY

THE GLOBE AND MAIL. FEBRUARY 9, 2018. OPINION. What's driving populism? It isn't the economy, stupid

Countries around the world have been gripped by an incoherent, rage-fuelled nihilism that rejects elites on the left and the right. It's not income inequality, as many think, but a fear of immigrants undermining culture and a way of life , argue Darrell Bricker and John Ibbitson

DARRELL BRICKERAND JOHN IBBITSON, are the authors of The Big Shift: The Seismic Change in Canadian Politics, Business, and Culture and What It Means for Our Future and the forthcoming book Empty Planet: The Shock of Global Population Decline.

In November of last year, at the Halifax International Security Forum – the gathering of about 300 politicians, military leaders, diplomats and other experts that has emerged as perhaps the most influential annual conference on global security – a single, oppressive topic dominated the talk in the hallways and over drinks in the bars: the rise of populism.

The finest minds in the fields of defence and foreign affairs from around the world grappled with the alarming reality of populations gripped by an incoherent, rage-fuelled nihilism that rejected elites on both the left and the right. A whole lot of people simply want to blow it all up, sink it, drain it, be done with it and be done with them – them being the people at the forum.

The smart minds that gathered in Halifax believed they knew the cause of the rage that threatens to undermine the architecture of the Western alliance: economic inequality. Lower-middle-class white men and women in Rust Belt states who voted for Donald Trump or unemployed industrial workers in the English Midlands who voted for Brexit or working-class Poles who voted for the Law and Justice party wanted to get back at the people in the corner offices who had sacrificed their welfare by offshoring their jobs to cheap foreign labour.

These assessments were all more wrong than right. Yes, there is some correlation between the economic insecurities of voters in economically depressed regions and support for populist causes.

But the greater source of combustion is nativism: a fear of foreigners coming into your community and undermining your culture and way of life.

Populist reaction "is about ethnic shifts," said Eric Kaufmann, the B.C.-raised political scientist at the University of London and the author of the forthcoming book Whiteshift: Immigration, Populism and the Myth of Majority Decline.

He believes cultural, not economic, insecurity is the driving force behind populism. He does not view people worried about immigration as white supremacists or ethnic nationalists. "But they are looking to slow down the rate of ethnic shifting."

Peter Loewen agrees. The director of the School of Public Policy and Governance at University of Toronto has been researching the drivers of populist sentiment in nine countries. The dominant driver? "It's the perception of immigrants taking away jobs, it's not about economic uncertainty, rising inequality, whatever." And not just jobs. "It's about threatening a way of life. In a word, it is nativism."

Some people believe Canada is more enlightened than other countries, more accepting of new arrivals, and, in the main, we are. But this country, too, remains vulnerable to a demagogic politician who ignites nativist resentment for his own political gain.

To douse the kindling that could feed such a flame, Canadian elites need to address fears of cultural dilution by nativists. And although this may seem counterintuitive, conservatives may be better able to make the case than progressives.



An analysis conducted by Emily Ekins for the non-partisan Democratic Fund Voter Study Group found that, of the five voting types who cast a ballot for Mr. Trump, the two groups who were his most loyal supporters – American preservationists and staunch conservatives, representing half of all Trump voters – disagreed on economic issues but shared their dislike for high levels of immigration.

Similarly, numerous studies showed that resentment toward immigrants, not simply economic insecurity, fuelled the vote to take Britain out of the European Union.

"Immigration unified traditional and more affluent social conservatives on the right with blue-collar, left-behind workers on the left, and in 2016 this … found its full expression in the vote for Brexit," wrote Matthew Goodwin, a political scientist at the University of Kent and author of Brexit: Why Britain Voted to Leave the European Union.

And since the referendum, he added, "voters have been subjected to an almost daily avalanche of economic forecasts of the kind that appeared to make no real difference to public opinion … and yet we have not had a comparable discussion about what a future immigration policy might look like and how this could be built around a public consensus."

Opposition to immigration is a constant in developed countries. Forty-eight per cent of Americans agree with the statement "there are too many immigrants in our country," according to Ipsos Public Affairs polls. Forty-five per cent of Britons agree, as do a majority – 53 per cent – of the French and 50 per cent of Germans.



Canadian governments have been able to promote robust immigration with minimal social disruption because successive federal governments over the past three decades always made sure that our immigrant selection process favoured candidates who are poised for successful integration. They have also embraced multiculturalism as a national project.

Nonetheless, about 35 per cent of Canadians say Canada is letting in too many immigrants. If one Canadian in 10 switched to that view, we would be no more tolerant than Americans on immigration issues.

Our political elites play with fire when they argue in vague terms that high levels of immigration promote economic growth or when they appeal to personal compassion or speak of a prosperous nation's duty to help the less fortunate. Such messaging will be taken by those who are concerned about immigration as self-serving and hypocritical. Telling immigration opponents – and we confess that we have done this ourselves in the past – that they don't understand economic realities or are simply bigots is just asking for trouble. All you need is one populist demagogue with a match.

Politicians and political analysts who dismiss or discount opposition to immigration place their societies in jeopardy in two different ways. First, smart people who refuse to acknowledge the depth of anti-immigrant sentiment are not looking for solutions, and we need to find those solutions.

Second, by dismissing nativist concerns, they are proving the argument of local demagogues who claim that the elites are out of touch and only they understand the grievances of "real" Americans/Britons/Canadians, etc.

To be clear: We are fervent proponents of immigration and multiculturalism and have said so separately and together many times in books and columns. But we are forced to confront a difficult truth: Many of our fellow citizens don't agree with us.

Today's populist rebellions are nothing more than the exploitation of gullible voters by politicians who are willing to stoke nativist resentment that other elites ignore and who couldn't care less about how badly they damage their societies in the process. They are the enablers.

But it took years of neglect by more conventional politicians, academics, journalists and other thought leaders to create the conditions that allowed populist politicians to emerge. And still these mainstream elites are in denial. It's time they faced the truth: It isn't the economy, stupid.

Beyond promoting immigration for economic and compassionate reasons, Canadian politicians like to maintain that, as Prime Minister Justin Trudeau puts it, "diversity is strength." The presumption is that a society composed of different languages, cultures, faiths and traditions is stronger for the synergies created by these diverse streams. This may be true when it comes to cultural creativity or business innovation. But it doesn't play out on the street.

In 2007, Harvard University political scientist Robert Putnam published a landmark study, based on a survey of 30,000 Americans, that concluded people living in diverse neighbourhoods had lower levels of trust in their neighbours than people living in homogeneous neighbourhoods and were less interested in voting, volunteering and donating to charities.

Nine years later, two other researchers, Maria Abascal, then of Princeton University, and Delia Baldassarri of New York University, sought to disprove Prof. Putnam's study. Using the same data, they concluded that this lack of comfort with diversity only applied to one group. As Scientific American described their findings, "when it comes to distrust and diversity, most of the distrust is expressed by whites who feel uncomfortable living amongst racial minorities."

Diversity, whatever its other strengths, weakens social cohesion. In the United States, it led to endless white discrimination against African-Americans that continues to this day, abetted by resentment toward Latino immigrants – legal and illegal.

In Canada, linguistic and cultural divisions led to two referenda on sovereignty for Quebec that could have wrecked the country. The Western alienation that stoked the Reform Party in the 1990s had an anti-immigrant component that its leadership only partly managed to suppress.

And lest we forget, Canada produced Toronto mayor Rob Ford long before the United States elected Mr. Trump or the anti-immigrant Nigel Farage helped lead the Leave side in Britain to victory.

Refusing to acknowledge the cultural fears of many voters can lead "to worse rationalization – terrorism, crime," Prof. Kaufmann said. Practically the first words out Mr. Trump's mouth, when he announced his bid for the presidency in 2015, was a warning that immigrants from Mexico were dangerous. "They're bringing drugs. They're bringing crime. They're rapists."

"Surely it's better just to say you want to preserve your culture," Prof. Kaufmann said.

So what is a better approach than simply dismissing the cultural insecurities of voters? First, leaders in politics and journalism and the academy and other fields need to respect where people are coming from – even when they profoundly disagree with where people are coming from.

"If people have concerns, and their concerns are being expressed in anti-immigration sentiment, then you've got to ask: Are these people just straight-out opposed to immigrants or do they have something else they're fearful of or concerned about?" Prof. Loewen said. "And you've got to speak to those concerns in an even-handed and honest fashion."

Second, play down the grand theories about the advantages of immigration, globalization and economic diversification. It'll all be labelled fake news. And do not appeal to people's compassion. There is little of it about. Instead, show – don't tell, show – how immigration is making things better on your street, in your neighbourhood. Make it positive and make it personal. Micromessage.

In these conversations, conservatives have one advantage over progressives. Conservatives share the same attitude toward economic issues as most middle-class immigrants from places such as the Philippines, India and China, Canada's three top source countries.

Conservatives and many immigrants favour business over government, the private sector over the public sector. They want fewer regulations and less bureaucracy, more freedom and greater personal responsibility, including responsibility for protecting the family and community.

Stephen Harper's decade-long tenure as a Conservative prime minister depended in part on his party's ability to coalesce immigrant voters in suburban ridings in greater Toronto and Vancouver with traditional rural and Prairie conservatives.

Not only can that coalition be politically advantageous, it creates a space where people who might be tempted to embrace nativist sentiments can find themselves talking and agreeing with like-minded new arrivals. For social cohesion, such conversations are precious.

Some would say the best way to address concerns over immigration would be to scale back the number of people coming in, especially from countries whose cultures are far removed from Canada's Christian, European settler heritage. We can't endorse that view. We know how important immigration is to smoothing the curve of an aging society with low fertility rates. And personally, we adore the multicultural ferment of our big cities.

But we must understand and accept that cultural insecurity affects millions of our fellow citizens. We must address those concerns by celebrating the best of what they cherish and by showing how immigrants cherish the same things – perhaps even more than some of the more progressive of their fellow citizens.

We need to remind ourselves that we are all in this together, old stock as well as new, and we all need to listen to each other with respect.

Otherwise, the next Donald Trump, the next noxious referendum, the next wall of exclusion await us all.

FT. FEBRUARY 7, 2018 17. The Big Read Latin America. Latin American elections: a year of living dangerously lies ahead. Populists on the left and right are riding high in what will be a stiff test of the region’s democratic mettle
John Paul Rathbone, in Miami

If the road to hell is paved with good intentions, it recently took a Kafkaesque detour through Brazilian Federal Court TF4. There, on January 24, a panel of three judges upheld the conviction of former president Luiz Inácio Lula da Silva on corruption charges. The decision, the latest to flow from Brazil’s huge anti-graft probe that has reverberated around Latin America and tarred leaders from Argentina to Mexico, blew Brazil’s presidential election wide open.

Despite presiding over a two-term government that even one of his ministers described as Brazil’s most corrupt, the former head of the Workers’ party (PT) is the leading candidate to win the October election. But the court decision could effectively bar the leftist icon from running. As Mr Lula da Silva says he will campaign anyway, the outcome is chaotic. “Lula is our candidate . . . There is no Plan B,” vowed Gleisi Hoffmann, current head of the PT.

Similarly heady dramas will play out across Latin America this year. In a remarkable alignment of electoral calendars, six countries — including the most populous, Brazil, Mexico and Colombia, plus Venezuela’s socialist regime — will hold presidential elections. Far from being celebrations of democracy, though, the votes will be the region’s biggest test of its democratic mettle since the transitions from dictatorship in the 1980s.

The elections take place at a time of popular rage over corruption probes. These have held to account previously untouchable figures. In Brazil alone, the current president, Michel Temer, four former presidents and 100 federal politicians are either in jail or under investigation. But the revelations of financial skulduggery have also infuriated citizens, sapped their faith in institutions and destabilised entire political systems, without offering solutions on how to put the pieces back together. If 2016’s presidential campaigns reshaped US politics, 2018 could see the same in Latin America.



Populists, riding the angry mood, stalk the land. In Colombia, where corruption is a prime concern, scandals have unsettled voters already on edge after a peace deal struck with Marxist rebels last year. Two former guerrilla leaders will even run for president in June — unprecedented for a country that has spent 50 years fighting them. Hyperinflationary chaos in neighbouring Venezuela adds to the jitters. “I moved to the US last year for family reasons,” says one Colombian financier. “But in Bogotá, all my friends asked me: what is it you know that we don’t?”

Next on the calendar is Mexico, where maverick leftist Andrés Manuel López Obrador, a nationalist who wants to stamp out corruption but believes that Fidel Castro was a hero, leads polls ahead of the July election. Compounding the uncertainty is US president Donald Trump, who threatens to build a wall and end the North American Free Trade Agreement. “Mexico faces a perfect storm,” says Jorge Castañeda, a former foreign minister.

As for Brazil, there is Jair Bolsonaro, a rightwing congressman and former army captain who thinks gun ownership should be widespread and homosexuality beaten out of gay children. Campaigning as the “anti-Lula”, he is second in the polls. “There’s a vacuum of hope . . . a sense of unhappiness,” laments Fernando Henrique Cardoso, the former president. “It’s a disaster.”

By the end of the year, two out of three Latin Americans, from countries producing $4tn of economic output, will have new presidents. Costa Rica and Paraguay have elections. Venezuela, in default on about $60bn of international bonds, will hold what promises to be a sham election before April 30 (the US, much of Latin America and Europe say they will not recognise the result). Even communist Cuba will get a new president when Raúl Castro steps down on April 19, the first time in 60 years that a Castro brother has not held the post.

There are parallels with the political reordering in developed countries. Traditional parties are breaking down, outsiders are forcing change and popular anger threatens to rewrite the constitutional order. According to LatinoBarómetro, a polling company, only 53 per cent of Latin Americans believe democracy is the best system of government. Only one in seven trusts their fellow citizens. These are the lowest readings in more than a decade. Such disquiet is true of leading democracies like Brazil or Colombia; it is doubly true of authoritarian Cuba and Venezuela.

Even before this week’s global shake-out, markets have been volatile. “Political risk is key,” says Fitch, the rating agency. “There are major economic and political risks for Latin America in 2018,” adds Marcos Buscaglia of Alberdi Partners, an investment boutique. As for defaulted creditors seeking payment from Venezuela: “Sorry . . . but you no longer matter. The focus of the government is winning the election,” says Russ Dallen of Caracas Capital Markets. “Bondholders are unlikely to see a dime soon.”

Yet for all the political hyperventilation and investor hedging of bets, the past two years have seen something of a turnround in Latin America. A region that almost defined populism has been rejecting its siren call even as the US and Europe seemed to embrace it.

After a decade of often corrupt leftist rule, pragmatic centrists came to power in Brazil, Argentina, Chile and Peru. With the help of more orthodox policies, South American economies, battered by the end of the commodity price boom, began to recover from lengthy recessions. Markets cheered. Between the end of 2015 and 2017, the MSCI’s index of Latin American stocks rose by more than 50 per cent.



Since then, though, the mood has soured. The epicentre of the gloom lies in Brazil’s anti-corruption investigation, called Lava Jato (Car Wash), into kickbacks at state oil company Petrobras. Propelled by pressure from civil society and led by an independent judiciary — unlike politically driven purges in China, Russia or Saudi Arabia — Lava Jato is probably Latin America’s biggest ever corruption investigation. It also showed that Brazil’s consensual or “rainbow” approach to politics and diplomacy, so often touted by Mr da Silva, was bought.

Lava Jato spawned other investigations, particularly into Odebrecht. A Brazilian construction company with multibillion-dollar projects across Latin America and Africa, Odebrecht ran what the US justice department has called the world’s largest foreign bribery scheme. Corruption charges have since been levelled against the former presidents of Argentina and Panama; two former presidents of Peru and the current president; the former vice-president of Ecuador; and both sides in Colombia’s last election campaign.

A year of elections

• FEB 4 - Costa Rican conservative Fabricio Alvarado Munoz won 25% of the first-round vote, against Carlos Alvarado Quesada’s 22% and they go to the second round
• APR 1 - Second round in Costa Rican presidential elections for a four-year term. Neither of the candidates is from the two parties that have controlled Costa Rican politics for more than half a century
• APR 19 - Raúl Castro due to step down and a presidential transition to begin
• APR 22 - Paraguay holds presidential and legislative general elections
• BEFORE APR 30 - Venezuela due to hold presidential elections
• MAY 27 - First round in Colombian presidential election
• JUN 17 - Second round run-off to decide who will serve a four-year term as Colombian president
• JULY 1 - Single-round presidential election in Mexico. The winner serves six years
• OCT 7 - Brazilian presidential and legislative general elections
• OCT 28 - Brazil’s presidential run-off. The winner will serve a four-year term

A notable exception to this remarkable roll-call is Mexico — and not because the ruling Institutional Revolutionary party is lily-white, but because President Enrique Peña Nieto has made only token efforts to fight corruption. In December, the Chamber of Deputies voted to make it illegal for citizens to publish corruption accusations online if the allegations could damage the target’s credibility, even if the allegations turn out to be true.

Purging corruption — the promise held out by the Brazilian and other investigations — would be an undeniable boon for Latin America. State capture and corruption go hand in hand with violent crime and, in a region with the highest homicide rates in the world, that scourge costs some 3 per cent of gross domestic product, equivalent to $236bn a year, the Inter-American Development Bank estimates. But the anti-graft purge has not been without a cost.

The scandals have frozen investment, held back economic recovery, sacked the traditional political order and polarised electorates already furious about recession and shuttered public services. “It is as though the region is trying to do perestroika and glasnost at the same time,” says a senior European diplomat, referring to the 1980s Soviet Union. “We know how well that turned out.”



Social media networks have fanned the discontent. Latin America, according to media consultancy ComScore, spends proportionately more internet time on social media than any other region. From abroad, international solidarity groups have mobilised over the internet to support embattled leftists, such as Mr Lula da Silva. There are concerns too, especially in the US, that Russia may stir up trouble after its alleged hacking of the US presidential election and Catalonia’s independence vote.

“If Russia truly wants to damage the US and weaken the western world order, Mexico’s elections . . . offer a rewarding and vulnerable target,” says Shannon O’Neil of the Council on Foreign Relations, a US think-tank. “No other country influences the US as much as its southern neighbour [and] Russian intelligence has a long history in the Aztec nation [from the cold war].”

By the end of 2018 the region will know whether its anti-corruption drive is a sign that its democracies are strengthening or has dealt them a fatal blow. History offers cold comfort.

Italy’s mani pulite, or “clean hands” movement of the 1990s, inspired Brazilian judges and prosecutors. But while it helped clean up Italian government, it also led to the rise of arch-populist Silvio Berlusconi.

Early signs are ominous. In Honduras, amid allegations that senior officials have links to drug trafficking, former president Juan Orlando Hernández was last month reinstated for a second term after a contested election that led to riots and left more than 30 dead.



But it is also too early to know what might happen in other countries. Judging from markets, which seek to price in future trends, it also may not turn out all bad. After steep drops last year, Latin American stock markets have powered ahead, helped by a broader emerging markets rally, while currencies have rebounded. So far, too, their response to the global sell-off has been mild, reflecting a belief that it is more a result of stretched US valuations than global economic slowdown.

In Brazil, more moderate candidates may emerge as the polarising figures of Mr Lula da Silva and Mr Bolsonaro fade. Third in the polls is Marina Silva, an environmentalist on her third presidential run. Others include Geraldo Alckmin, a centre-right governor of São Paulo state, and Jaques Wagner, a leftwing former governor of Bahia.

In Mexico, businesses have sought comfort in Mr López Obrador’s record as mayor of Mexico City, where he enlisted former New York mayor Rudy Giuliani to help stamp out crime, and Carlos Slim, the telecoms tycoon, to rebuild the city centre. At the same time, centre-right candidate Ricardo Anaya is nipping at his heels in the polls, and Mr Trump has softened his rhetoric about Nafta.



Meanwhile Colombia may swing left but with Venezuela as its neighbour is unlikely to plump for an extremist. Polls remain unreliable, as final candidates have not yet been declared, but near the top of all surveys is Sergio Fajardo, a centre-left former mayor of Medellín, who would be considered a sensible social democrat anywhere else.

The optimistic view is that this year’s election marathon will see a further democratic deepening in Latin America, allowing the promise of the Brazil-led excision of corruption to continue. The pessimistic counter is that this surgery, while necessary, may kill the patient.

“I tend to think that the anti-corruption drive shows the region’s democratic strengths,” says Alejandro Salas, regional director of corruption watchdog Transparency International. The year will put that theory to the test.

Diplomacy and investment: China moves in as the US loses focus

Whatever might happen in Latin America’s elections this year, two things seem clear: Washington is diplomatically unprepared and China is gaining ground.

Rex Tillerson, secretary of state, last week embarked on a five-nation tour to argue the case for stronger US relations in a region rattled by President Donald Trump’s anti-immigrant invective and disdain for trade. “Today China is getting a foothold in Latin America . . . The question is: at what price?” he said.

But Mr Tillerson’s initiative also got off to a bad start when he touted the return to a 200-year old US policy, called the Monroe doctrine, often used to justify armed intervention in the region. His predecessor, John Kerry, said in 2013 that the era of the Monroe doctrine was over.

The gaff came as the US continues without an assistant secretary of state for the region and the department haemorrhages top talent. Thomas Shannon, a senior diplomat with lengthy experience in Latin America, resigned last week; John Feeley, ambassador to Panama, resigned last month; and Roberta Jacobson, ambassador to Mexico, is due to move on after 30 years of service.

Meanwhile, China is moving in. It is already the region’s biggest trade partner. It is now a leading investor and not just in commodity sectors but also technology, hitherto dominated by Silicon Valley companies. Brazil is Uber’s and Facebook’s second-biggest market. Didi Chuxing, with $4bn to fund expansion, last month bought Brazilian ride-sharing company 99. Beijing-based Ofo, a bicycle-sharing company backed by Alibaba, is looking at Mexico.

Chinese epayment and ecommerce companies are expanding in the region as well. “Latin America is ripe for [Alibaba’s] Alipay and [Tencent’s] WeChat to replicate the models they successfully deployed in China and South East Asia,” says Serge Elkiner, chief executive of Yellowpepper, a Latin American financial technology company.

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LGCJ.: