Security-first Latin American leaders lose ground as Hormuz and El Niño push up prices

Foreign Affairs, in the analysis that collects these figures, argues that the recent run of elections won by tough-on-crime populists ^[1] is not evidence of a durable turn to the right ^[2]. Voters, it says, are reacting to traditional politicians' failure to solve everyday problems ^[2]. They rebelled over law and order in the last cycle and may push back on rising costs and persistent inequality in the next ^[3]. I think that account is more useful to an operator than a left-right map. It points at the variable that predicts the next swing: whether the government in office can contain prices.

Two external shocks, the prolonged closure of the Strait of Hormuz and this year's El Niño, are feeding inflation across a region whose governments already have limited fiscal space ^[4]. The region depends on imported gasoline and diesel ^[14]. Each government therefore trades its budget against its approval rating. The Dominican Republic, Nicaragua and several small Caribbean states subsidized energy; the analysis calls that "a costly proposition as high prices persist" ^[10]. Chile declined, and Kast's approval paid for it ^[6]. Where governments cannot afford relief, consumers take the hit ^[10]. In Guatemala, soaring gasoline prices brought protests ^[12].

Argentina tests whether macroeconomic repair protects an incumbent. Milei won in 2023 with an outsider campaign against economic mismanagement ^[9]. Higher energy costs have renewed inflation concerns there despite a burgeoning hydrocarbon sector ^[18]. His disapproval rose 14 points between the start of the year and late April ^[1], and the analysis describes his 2027 reelection bid as uphill despite the country's macroeconomic improvements ^[9].

Peru is the caution against forecasting a swing to the left instead. Economic anxiety opened the door to a populist within a single campaign, and the runoff still went to the right ^[7]. The inequality half of the thesis rests on less evidence. The analysis names inequality as a possible target for the next cycle ^[3], but the figures it offers are prices and approval ratings.

The time scales differ. This quarter's questions are subsidies and fuel prices. Over the coming years, the analysis expects more political swings as climate change and geopolitical shifts produce shocks faster than any government can handle ^[15]. It warns that the turbulence could reward populists whose remedies are unlikely to fix the structural flaws holding back growth ^[15]. Its better outcome depends on the region's critical minerals, renewable energy and agriculture, and on closing infrastructure deficits and strengthening the rule of law ^[16]. Otherwise, it says, the region "lurches from crisis to crisis, and from one extreme to another" ^[17].