We are now less than two weeks away from an election that could either save or destroy what remains of Venezuelan democracy.

Hugo Chávez has already acquirednear dictatorial controlover Venezuela’s public institutions. He has already established aniron gripover most broadcast media content. And he has already created a heavily armed pro-governmentmilitiathat is tasked with defending his Bolivarian revolution.

Yet despite all these obstacles, opposition presidential candidate Henrique Capriles has been able to mount a serious challenge. As of late August, the 40-year-old Capriles led Chávez by roughly 2 percentage points (48.1 percent against 46.2 percent) inpollingconducted by the Caracas-based firmConsultores 21. “If we were to make a linear projection for the election,” Consultores 21 president Luis Christiansentoldan audience in New York last week, “it would be that Capriles will maintain an advantage of 2.5 percent over Chávez.”

Of course, even if Capriles garnered a majority of the vote, Chávez might simplypull an Ahmadinejadand steal the election—in which case, Venezuela could easily descend into post-election street violence. “The closer the race, the greater the temptation for Chávez to cheat,”writesHeritage Foundation scholar Ray Walser.

Concerns over possible election fraud are well founded. In 2010, Henry Rangel Silva, a fierce Chávez loyalist and the current Venezuelan defense minister,declaredthat “the armed forces are not going to accept” an opposition-led government. Meanwhile, Barinas state governor Adán Chávez, Hugo’s brother, has emphasized that there is more than one way to preserve the Bolivarian revolution: “It would be inexcusable to limit ourselves to only the electoral and not see other forms of struggle, including the armed struggle,”

saidlast year. Venezuela is already among the “top four or five” most murderous countries in the world, according to astudyby Venezuelan criminologistLuis Bravo, and senior military officials are heavily involved in thedrug trade.

A Chávez victory would be a devastating setback for democracy and the rule of law, and it would push Venezuela closer to a financial catastrophe. Indeed, Morgan Stanley analyst Daniel Volberg hasprojectedthat Chávez’s economic and fiscal policies “may be taking Venezuela towards a crisis and potentially even a debt event that could come as early as the second half of 2013.”

Venezuela is not the only large Latin American nation that is entering a critically important period. In Colombia, President Juan Manuel Santos has launched peace negotiations with the FARC, a narco-trafficking terrorist organization that has been at war with the Colombian state since the mid-1960s. His predecessor, Álvaro Uribe, has warned that these negotiatons carry a high risk: “We all want peace, but there can’t be a negotiation while the terrorists are continuing their criminal activities,” Uribe recentlytoldReuters. “It creates investor panic and in turn creates difficulties in financing social policy.”

The last major peace talks between Bogotá and the FARC began in 1999 and ended disastrously in 2002, with the guerrillas ramping up their violent attacks. If the current talks fail, Colombia could encounter a fresh wave of bloodshed. But if they succeed, the nation would receive a massive economic boost. In aninterviewlast week with Bloomberg News, Colombian finance minister Mauricio Cárdenas predicted that a successful peace deal with the FARC could enable his country to grow at an annual pace of 6-7 percent “for decades.” Even without such a deal, Cárdenas said, Colombia could still achieve a long-term growth rate of 4.5-5 percent. After all, the FARC has been greatly weakened since 2002, and its ongoing activities have not prevented Colombia from enjoying an economic boom. (There is a good reason why investors view the South American nation as a potential “tiger economy.”)

In Mexico, President Felipe Calderón is set to leave office in December, and he will be replaced byEnrique Peña Nieto, who represents the same party that ruled Mexico autocratically for 71 years. Many Mexicans are nervous that the Institutional Revolutionary Party (PRI) hasn’t really changed its political character since losing power in 2000. They will be looking forPeña Nieto to affirm, unequivocally, the PRI’s commitment to democracy.

As Iwrotein this space before the July 1 presidential election, the PRI ofPeña Nieto is not the same PRI that ruled Mexico for most of the 20th century. It is “truly different,” in thewordsof former U.S. ambassador to Mexico James R. Jones. Yet many PRI dinosaurs are nostalgic for the old system, in which a “perfect dictatorship” made corrupt deals with drug cartels. We will soon find out whetherPeña Nieto, 46,is serious about continuing President Calderón’s security policies in hopes of reducing drug-related violence. We will also find out whether he is serious aboutreforming Mexican labor marketsandopening up the state oil monopoly. Such reforms would improve Mexican competitiveness and help close the GDP gap with Brazil, a country that has been celebrated for its economic rise but is now dealing with asharp slowdown. (Last month, President Dilma Rousseff introduced a$66 billion stimulus package.)

Finally, there is Argentina, where President Cristina Kirchner seems determined to wreck Latin America’s third-largest economy. It is experiencing25 percent inflationandenormous capital flight, and the government’s strict currency controls are causingmajor economic distortions. Argentine GDPshrank by 0.8 percentin the second quarter of 2012 (compared with the first quarter), and the International Monetary Fund hasthreatened to censure the countryunless Kirchner stops doctoring official economic data.

“Even as evidence of economic crisis continues to mount—the latest sign being that supermarket shoppers are limited to one bottle of cooking oil per customer—the government gives no indication of concern,”writesinvestorSin-ming Shaw.Kirchnercontinues to embrace Chávez-style economic policies and wage war on the opposition media. For example, her government hastoldGrupo Clarín, the country’s biggest media conglomerate, that December 7 is the deadline for selling most of its broadcast outlets to comply with a2009 lawthat dramatically reduced press freedom. She is increasingly unpopular, and Argentines have beenfilling the streetsto vent their frustrations.

Unless Kirchner changes course—and soon—it is hard to imagine how Argentina will avoid disaster.

Jaime Daremblum, who served as Costa Rica's ambassador to the United States from 1998 to 2004, is director of the Center for Latin American Studies at the Hudson Institute.

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