SANTOS WINS IN COLOMBIA…..CHAVEZ SULKS

Colombia’s Success

http://www.investors.com/NewsAndAnalysis/Article/538161/201006221919/Colombias-Success.aspx

Colombia’s president-elect, Juan Manuel Santos, meets with President Alvaro Uribe in Bogota on Tuesday. Santos takes office on Aug. 7. Colombia’s president-elect, Juan Manuel Santos, meets with President Alvaro Uribe in Bogota on Tuesday. Santos takes office on Aug. 7.  View Enlarged Image

Democracy: After vowing war on Colombia if Juan Manuel Santos were elected president, Venezuela’s Hugo Chavez is singing soprano. Santos’ big win Sunday is part of a wave of free market leaders sneaking up on him.

It was almost comical to see Venezuela’s dictatorship put on its best manners and offer congratulations to Colombia’s new conservative president, who won the election in a 69%-27% landslide.

“The Bolivarian government extends its congratulations for the victory of President-elected Juan Manuel Santos, and wishes him success in the exercise of his new responsibility,” a Venezuelan foreign ministry statement read.

During the campaign, Chavez had christened Santos “Saint Demon,” declared him “a threat to the region” and warned Colombian voters “there will be war” if they dared cast their ballots for him.

Given what is known about Chavez, that change of language can’t be attributed to a change of heart.

Truth is, Santos and his pro-free-market plans pose a threat to Chavez, whose socialist failures are mounting. His sudden sweet words signal a recognition that he is being outnumbered in a hemisphere he seeks to rule, amounting to an admission of defeat.

Venezuela in fact is now being encircled by nations that are electing responsible leaders who place their hopes for the future on free markets. Those markets will inevitably succeed and dominate the continent in coming years, leaving Chavez as irrelevant as Cuba in bringing prosperity and winning the hearts and minds of voters.

For Santos, that means supporting “the market as far as possible” and reliance on the state only “to the extent necessary.”

That echoes what leaders up and down the Pacific coastline say, all of whom have shown a private-sector orientation. Sebastian Pinera of Chile, Alan Garcia of Peru, Ricardo Martinelli of Panama, Porfirio Lobo of Honduras, Felipe Calderon of Mexico and Stephen Harper of Canada have all acted on their free-market instincts and shown above-average economic growth as a result.

But Santos is probably most dangerous for Chavez, because Colombia’s rags-to-riches success story is so dramatic — showing that any beat-up nation can drag itself out of misery through markets — and because Venezuela and Colombia are such close neighbors. Word gets out about how well things are going in Colombia and it spreads fast in Venezuela. Santos need never fire a shot at Venezuela to slay Chavez’s revolution because the power of the markets will do it for him.

Santos as president now targets 6% growth rates for Colombia, single-digit unemployment, tax cuts, privatization, free trade and other market-oriented instruments that are known to work.

He’s also planning something that is likely to give Chavez — and for that matter, President Obama, something to think about — a forging of a more assertive Pacific alliance with free-market Chile and Peru, as well as the nations of the Pacific Rim. Given Obama’s dithering on free trade — and the fact that Canada on Tuesday, has just finalized its pact, and it’s obvious Colombia is going to prosper with or without its friends or enemies.

Chavez knows he can’t beat these growing numbers of free-market leaders in the hemisphere, nor the building success of their programs. He can only hunker down and pretend to play nice. But the reality is, they are casting him into irrelevance.

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