Chile’s Piñera Leaves Presidency with High Growth, Low Ratings

Chile’s conservative leader has made the economy stronger but leaves office with low approval ratings.

A guard of honor welcomes President Sebastián Piñera of Chile at La Moneda Palace in Santiago, January 27
A guard of honor welcomes President Sebastián Piñera of Chile at La Moneda Palace in Santiago, January 27 (Gobierno de Chile)

Chile’s outgoing president, Sebastián Piñera, leaves office this week with the unwelcome distinction of leading the most unpopular government in the Latin American country since the fall of strongman Augusto Pinochet. The first right-wing president since Chile’s transition to democracy, Piñera leaves behind a stable and growing economy, with unemployment at just 6 percent, and a treasury rich with profits from the nation’s lucrative copper industry. So where did it all go wrong?

The third son of a middle-class family, Piñera rose to become a multibillionaire after stints in academia at Harvard and various Chilean universities. His $2.4 billion fortune is mainly the result of his introduction of credit cards to Chile in the late 1970s, profits he subsequently invested into a number of companies, including LAN Airlines, Chile’s popular Colo-Colo football team and lucrative media enterprises.

An advocate for compassionate conservatism, throughout his business career, Piñera created a series of charitable organizations, aimed at assisting young women from low-income backgrounds, obtaining justice for the victims of the dictatorship and preserving Chile’s national parks and nature reserves.

Piñera also took the courageous step of openly declaring that he had voted against Pinochet staying in power in the 1988 plebiscite, refusing to hide behind the secret ballot.

Despite these credentials, his numerous attempts to become a candidate for the Chilean presidency over the years were unsuccessful. A 1992 bid ended in scandal, after a wiretapped conversation between himself and a friend revealed a plan to have his rival for his party’s nomination discredited during a television show. The episode became known as “Piñeragate.”

Piñera also condemned the 1998 arrest of Pinochet in London, something which proved damaging to his 2005 bid for the presidency, won by Michelle Bachelet, herself a victim of the former regime.

After Piñera was finally elected in late 2009, his presidency had an inauspicious start, partly because of the electoral process.

Chile’s voting system was designed by the Pinochet regime to skew the 1988 plebiscite in its favor. This worked to Piñera’s advantage in the 2009 elections when the leftist vote was split between two candidates who overall won more votes in the first round than Piñera did on his own.

The former businessman’s presidency quickly became synonymous with bad luck. His inauguration was disrupted by an earthquake that damaged hundreds of thousands of homes and killed 525 Chileans. A few months later, the government was rocked by the 2010 mining accident and a fire in Santiago’s largest prison. More natural disasters followed: a volcano eruption in 2011 and forest fires in 2012.

The widely publicized mining accident in 2010 initially helped  Piñera’s popularity. Images of the president embracing the miners as they emerged from the rubble, after spending weeks underground, caused a surge in his approval ratings. This was partly due to the fact that Piñera had previously been an advocate of industrial regulation to improve mine safety — an issue that had been largely ignored by his political opponents.

Piñera also sought to allay comparisons to Italy’s former prime minister Silvio Berlusconi by selling his television channel as well as his shares in LAN Airlines and Colo-Colo. But as inequality increased in Chile, in part due to its steady economic growth, social unrest — previously a rare phenomenon due to the repressiveness of its political past — began to undermine Piñera’s administration.

The unrest began over a 17 percent hike in natural gas prices throughout Chile’s Magallanes region in the south.

The area, close to the Antarctic, depends heavily on natural gas to cope with icy conditions. Strikes, protests and road blocks led to thousands being stranded in the region and protests were met with a heavy handed response involving mass arrests.

Those arrested were immediately released by judges and the government was forced to increase the price of gas by only 3 percent, in addition to providing subsidies for the poorest families in the region.

Later that year, protests also erupted in relation to the HidroAysén project, a deeply unpopular proposal to build five large dams in Chile’s northern Aysén region. The project would affect 14,579 acres of nature reserves and national parks, in addition to restricting the lands of Chile’s indigenous Mapuche population.

Conflict of interest charges were also filed against a number of regional officials. Despite Piñera’s green credentials, his government’s endorsement of the project led to a widespread belief that the administration, largely made up of former businessmen, was too closely linked to Chile’s economic elite.

On the back of these protests came the 2011 student protests, dubbed the “Chilean Winter.”

Education has long been a sensitive issue in Chile which spends less than 4.4 percent of its gross domestic product on schools, far below the 7 percent the United Nations recommend for developed nations. Indeed, protests over education, dubbed the “Penguin Protests,” after the black and white school uniforms of the protesters, began as far back as 2006, under President Bachelet.

The funding model of Chile’s education system has not changed since the days of the dictatorship which privatized higher education and withdrew state funding from secondary schools. Government loans cover 70 to 80 percent of students’ university fees, causing high dropout rates among students from poor families. Such unequal access to education only strengthened the perception that Piñera’s government mainly benefited the economic elite.

The most recent round of student demonstrations — the largest since Chile’s return to democracy — were triggered by the discovery that Piñera’s education minister, Joaquín Lavín, was seeking to increase government funding for a number of universities using loopholes to make profits. This practice was illegal at the time but one which Piñera’s government sought to legalize. It was also discovered that Lavín had personally invested in one of the universities making such profits.

Polls showed 70 percent of Chileans supported the student protests, and a two day national strike was organized. Piñera’s approval rating sank to 22 percent, the lowest on record for any democratically-elected president.

The government’s response was widely seen as heavy handed, with the use of tear gas, water cannons and beatings of the movement’s ringleaders, a number of whom were hospitalized. Some were subsequently elected to the Chilean Parliament in a show of public support.

Piñera’s popularity also suffered due to his government’s use of counterterrorism measures, first introduced by the Pinochet regime, against the Mapuche.

In response to increasing restrictions on their traditional lands, the Mapuche have recently escalated their ongoing protests, organizing marches, hunger strikes and roadblocks and occupying public buildings. The government’s response to these protests has prompted requests from UN officials to refrain from using counterterrorrism laws and to investigate police violence in the Mapuche region.

Despite the cloud under which Piñera leaves La Moneda, Chile’s presidential palace, he can take comfort in his economic record — which has garnered sympathy from an unlikely source. Bestselling author Isabel Allende, cousin and goddaughter of Chile’s former socialist president, Salvador Allende, commented in a recent interview:

Piñera did a good job with the economy and maybe he deserves better popularity ratings. The unfair distribution of wealth, resources and opportunities in Chile is an endemic problem. Public education and health care, which caused so many protests during his government, are longstanding issues which the coalition of parties of the left and center-left did not fully tackle before Piñera.

It remains to be seen whether the eternally popular Michelle Bachelet, elected president for the second time last year, is able to tackle the issues which led to the fall of Chile’s first right-wing government in half a century.

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