Piñera Back, But Chileans Need Convincing

Sebastián Piñera gives a speech days before the end of his first term as president of Chile, March 3, 2014
Sebastián Piñera gives a speech days before the end of his first term as president of Chile, March 3, 2014 (Gobierno de Chile)

Sebastián Piñera unsurprisingly won back Chile’s presidency last week, defeating the governing party’s Alejandro Guillier in a runoff.

Piñera last ruled the country from 2010 to 2014 but was constitutionally barred from serving a consecutive second term.

What was surprising was the scale of his victory following a weak performance in the first voting round, where left-wing candidates got a combined 55 percent of the votes. Read more “Piñera Back, But Chileans Need Convincing”

Chile Shows Better Way to Neighbors in Crisis

Canadian prime minister Justin Trudeau and Chilean president Michelle Bachelet attend a multilateral summit in Lima, Peru, November 20, 2016
Canadian prime minister Justin Trudeau and Chilean president Michelle Bachelet attend a multilateral summit in Lima, Peru, November 20, 2016 (Gobierno de Chile)

Whether change comes swiftly or slowly, a deafness to cries for change can discredit not just politicians or political parties but whole systems of government.

This has already happened in Venezuela. It’s in the process of happening in Brazil. Chile, however slowly, is showing a better way. Read more “Chile Shows Better Way to Neighbors in Crisis”

Scandals Could Derail Chile’s Constitutional Rewrite

Michelle Bachelet
Chilean president Michelle Bachelet visits Guatemala, February 21, 2010 (Gobierno de Guatemala/Luis Echeverría)

Last month, Chile’s president, Michelle Bachelet, announced the beginning of the long-awaited process of rewriting the Latin American country’s constitution.

Before her election in 2014, Bachelet campaigned on three issues: tax reform, education reform and, last but certainly not least, the introduction of a new constitution.

Chile made the transition to democracy in 1990 after seventeen long years of military dictatorship under Augusto Pinochet. Yet the constitution drafted by Pinochet and his junta in 1980 remained in place.

The legacy of the Pinochet dictatorship was one of extensive executive powers, unforgiving neoliberal reform and the loss of thousands of lives. Although his regime brought significant economic growth, through the privatization of state-owned companies and a liberalization of the overall economy, it came at the expense of wages, benefits and working conditions. Over 40 percent of Chile’s population was living below the poverty line by 1990.

Bachelet’s return to the presidency last year arrived on a wave of optimism with over 50 percent of the votes and a feeling that she would bring long-anticipated changes to address the fact that among developed countries Chile remains the most unequal in the world. Read more “Scandals Could Derail Chile’s Constitutional Rewrite”

Ending the Permanent Draw: Chile’s Controversial Constitutional Reform

Sebastián Piñera Michelle Bachelet
President Sebastián Piñera of Chile meets his predecessor, Michelle Bachelet, August 19, 2010 (Gobierno de Chile)

Last month, Chile’s president, Michelle Bachelet, signed into law the first major bill that aims to fulfil her electoral promise of constitutional reform. The bill is designed to overhaul the country’s unpopular binomial electoral system, designed in 1984 by Augusto Pinochet’s military regime, to preserve the power of the right wing after Chile’s transition to democracy.

Chile is currently the only country in the world to use the binomial system, its only other use being Poland’s brief experiment with the process during the 1980s.

Under the binomial model, two parliamentary seats are available per geographical constituency and seats are won by the two political parties with the highest percentage share of votes. Parties must obtain 33.4 percent of the vote to win one seat and 66.7 percent to win both.

The practical result is that Chile’s right-wing coalition has consistently retained half of the available congressional seats, despite only ever winning at most a third of the public vote. Read more “Ending the Permanent Draw: Chile’s Controversial Constitutional Reform”

Chile, Peru Resolve Maritime, Not Land Border, Dispute

Michelle Bachelet
Michelle Bachelet answers questions from reporters outside Chile’s presidential residence in Santiago, January 7 (michellebachelet.cl)

Late last month, an agreement was finally reached between Chile and Peru on a maritime border dispute that dated back to 1985. This followed a ruling by the International Court of Justice in The Hague which gave Peru over 70 percent of the disputed maritime territory. It is hoped that this will usher in a period of reconciliation and signal an end to border disputes in the region. As Peru’s president, Ollanta Humala, said following the ruling, “Peru has closed the book on the border issue.”

The longstanding rift dates back to the late nineteenth century when Bolivia and Peru on one side and Chile on the other fought the War of the Pacific. Bolivia had a coastline at the time that stretched from Antofagasta to Tocopilla, now both in Chile. As Chile was the economically stronger power and had invested heavily in southern Peru’s nitrate industry and Bolivia’s coastal mines, these two countries felt threatened and reacted through nationalizations and increased taxation.

After Bolivia failed to honor its obligations under an 1874 treaty that had seemed to stave off war, Chilean forces assumed control of the coastal areas and advanced on the Peruvian capital, Lima. Read more “Chile, Peru Resolve Maritime, Not Land Border, Dispute”

Chile’s Bachelet Pushes Ambitious Social Reform Agenda

Michelle Bachelet answers questions from reporters outside Chile's presidential residence in Santiago, January 7
Michelle Bachelet answers questions from reporters outside Chile’s presidential residence in Santiago, January 7 (michellebachelet.cl)

Since her inauguration ceremony last month, Chile’s president, Michelle Bachelet, has announced a series of policies aimed at proving to the public her desire for change.

Bachelet’s election campaign was based on an ambitious social reform agenda, focused on issues such as gender inequality and social welfare, as well as tax, education and constitutional reform. Her aims are similar to those of her first term in office, between 2006 and 2010, although she acknowledges that her previous government failed to bring about the change it sought. This was particularly the case for education and poverty, issues that led to mass protests and the eventually the downfall of the previous conservative government.

Bachelet’s first major step on taking office was to announce her “fifty measures in one hundred days,” an impressive list of commitments on issues ranging from education and health care to women’s rights and the environment. Legislation implementing these changes has already swept through Congress, the first bill signed into law creating new March and winter bonuses, aimed at assisting Chile’s poorest families during the toughest periods of Chile’s financial year.

A former director of UN Women, gender issues have always been close to Bachelet’s heart, and her first weeks in office resulted a bill proposing the creation of a Ministry for Women and Gender Equality. This body will oversee the implementation of a number of her gender policies, including access to secular sex education, reproductive rights, birth control and the decriminalization of therapeutic abortion. She also seeks to legalize gay marriage, building on the civil unions for gay couples introduced by her predecessor, Sebastián Piñera.

However, the most important aspect of her reforms is education, a sensitive issue that led to the “Penguin Protests” during Bachelet’s first government, as well as unprecedented levels of civil unrest under the Piñera administration.

In response to public outrage over the education policies of the previous government, Bachelet has promised an end to profit making universities, in addition to free university education within six years. She has also set herself the ambitious target of making university education available to Chile’s 70 percent most economically vulnerable students within four years.

To finance these initiatives, Bachelet proposes radical tax reform, raising the corporate tax rate from 20 to 25 percent, a figure more in line with other developed countries. She has also announced plans to clamp down on tax evasion and end the unpopular Taxable Profits Fund, a mechanism introduced by the military dictatorship to allow wealthy businessowners to register personal income as a corporate asset, thereby avoiding tax.

Despite the popularity of these initiatives, there are many on the Chilean right who question the viability of Bachelet’s reforms. The new socialist president is expected to spend more than $15 billion on her reforms, with only $8.2 billion generated by increased tax revenues.

Furthermore, although Chile stands out among Latin American economies for its growth and stability, the copper industry that has made it a success is flagging, due to a decline in Chinese demand. Even prior to Bachelet’s election, growth had started to slow, though the central bank still expects growth between 4 and 4.5 percent this year.

Bachelet’s plans have been met with feverish enthusiasm from a public visibly demanding change. Although she has always been a staunch advocate for social justice, reforms during her first term were noticeably more modest. However, it is clear that modest reform will no longer satisfy the Chilean public.

Under Bachelet’s predecessor, fuel prices, economic inequality and limited access to education resulted in protests and a national strike, supported by 70 percent of the population. Piñera’s image as a billionaire concerned only with big business cost his coalition government the election. Thus Bachelet cannot afford to be perceived as timid. She must be seen to be breaking from the past and demonstrate an unequivocal commitment to social justice to maintain public support. As such, many of the activists responsible for the protests under the last government have been co-opted by Bachelet, with the national union of students working directly with the new administration on education reform.

In a move designed to welcome Bachelet’s new government, and highlight the public’s demand for change, tens of thousands of Chileans marched through the streets of Santiago last month, in a rally dubbed “The March to End All Marches.” The event gathered together a variety of social groups keen to make their voices heard. Advocates for gay rights, indigenous groups, environmentalists and women’s rights united under one banner to show their support for social reform. Their message was clear: Chile expects change. But with expectations so high, it remains to be seen if Bachelet can deliver.

Resignations Cloud Bachelet’s Return to Chile’s Presidency

Michelle Bachelet
Chilean president Michelle Bachelet visits Guatemala, February 21, 2010 (Gobierno de Guatemala/Luis Echeverría)

Between protest marches and resignations, there has been no discernible honeymoon period for Chile’s new president, Michelle Bachelet. Riding high after her December election, drawing 62 percent of the vote, and  inheriting a thriving economy, Bachelet’s difficult first month has taken both her and the Chilean public by surprise.

Even before she entered La Moneda, Chile’s presidential palace, Bachelet’s fledgling government was rocked by the student activist movement whose protests helped her defeat Chile’s conservative coalition last year. As far back as January, weeks before Bachelet formally took office, Claudia Peirano, her nominee for education undersecretary, had come under fire. Within 24 hours of her nomination, there were calls from senior members in Bachelet’s own party urging Peirano not to accept the post, due to criticism from Chile’s powerful student movement. Read more “Resignations Cloud Bachelet’s Return to Chile’s Presidency”

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

Sebastián Piñera Michelle Bachelet
President Sebastián Piñera of Chile meets his predecessor, Michelle Bachelet, August 19, 2010 (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. Read more “Chile’s Piñera Leaves Presidency with High Growth, Low Ratings”

Leftist Bachelet Wins Chile’s Election But Faces Runoff

President Sebastián Piñera of Chile meets his predecessor, Michelle Bachelet, August 19, 2010
President Sebastián Piñera of Chile meets his predecessor, Michelle Bachelet, August 19, 2010 (Gobierno de Chile)

Chile’s former president and social democrat leader Michelle Bachelet emerged as the clear winner from a presidential election in the Latin American country on Sunday but will have to beat her conservative challenger Evelyn Matthei in a runoff next month before taking office.

Bachelet, who was the clear frontrunner going into the first round, won just over 46 percent support, less than needed to stave off a second round. Matthei, the candidate for incumbent president Sebastián Piñera’s right-wing coalition, got a quarter of the votes.

The woman who previously led the world’s top copper exporting country between 2006 and 2010 promises to undertake an ambitious education and tax reform program next year to reduce the inequalities that the left says have gone unaddressed through Piñera’s boom years.

The billionaire was Chile’s first right-wing president in two decades when he took power in 2010 and pursued a liberal economic program, as a result of which inflation and unemployment both dropped significantly. Growth averaged 5.8 percent during his administration but Chile’s income distribution remained the most unequal in the developed world.

Bachelet proposes to raise the corporate tax from 20 to 25 percent — it was raised last year from 18.5 percent — and double a stamp tax on borrowing operations to .8 percent, largely to finance free college education.

Early results from congressional elections on Sunday night showed Bachelet’s bloc on track to secure the legislative majority needed to carry out those reforms.

During her last four years in power, the former doctor and socialist activist added a minimum pension for poor Chileans to the nation’s otherwise privately funded retirement system that was introduced under Augusto Pinochet’s dictatorship in the 1980s. She also raised the minimum wage but resisted calls from her own coalition to spend surplus revenue on income redistribution schemes. Instead, Bachelet set up a sovereign wealth fund that accumulates fiscal surpluses which were first used in 2009 to finance economic stimulus programs when the economy contracted .9 percent.

Bachelet, who became the first director of UN Women when it was founded in 2011, is also expected to take a more liberal approach to social issues. She supports legal abortion when a mother’s life is in danger as well as gay marriage. Both could irk voters in a country that is 70 percent Roman Catholic although polls suggest a majority now supports equal rights for gay couples.

Leftist Bachelet Likely to Reclaim Chile’s Presidency

Chilean president Michelle Bachelet visits Guatemala, February 21, 2010
Chilean president Michelle Bachelet visits Guatemala, February 21, 2010 (Gobierno de Guatemala/Luis Echeverría)

Chile’s former president and social democrat leader Michelle Bachelet is likely to return to office in November when she would succeed the incumbent, former businessman Sebastián Piñera, who is legally barred from seeking a second consecutive term.

Bachelet won the overwhelming backing of Chile’s left-wing parties last week in a primary election. Her opponent, the current economy minister Pablo Longueira, eked out a 51.4 percent victory in his primary, by contrast.

A survey conducted late last year put Bachelet’s popularity near 75 percent while only 21 percent of Chileans said they supported Longueira. His numbers may yet improve while Bachelet will also have to contest with independent, far-left candidates. But absent a major upset, her return to power seems all but certain.

As president between 2006 and 2010, Bachelet added a minimum pension for poor Chileans to the nation’s otherwise privately funded retirement system that was introduced under Augusto Pinochet’s dictatorship in the 1980s. She also raised the minimum wage but resisted calls from her own coalition to spend surplus revenue on income redistribution schemes. Instead, the government set up a sovereign wealth fund that accumulates fiscal surpluses which were first used in 2009 to finance economic stimulus programs when the economy contracted .9 percent as a result of the global financial crisis.

Throughout Bachelet’s presidency, Chile’s growth averaged 3.3 percent. She left office with an 84 percent approval rating.

Piñera broke twenty years of uninterrupted left-wing rule when he took power in 2010 and pursued more liberal economic policies. Growth averaged 5.8 percent during his administration while inflation and unemployment fell. The distribution of income in Chile, however, is the most unequal in the developed world.

Longueira would continue Piñera’s policy while Bachelet has promised to tackle the Latin American nation’s inequalities by raising the corporate tax from 20 to 25 percent — it was raised last year from 18.5 percent — and doubling a stamp tax on borrowing operations to .8 percent, largely to finance free college education. Longueira opposes this but would finance schooling for poor students.

The former president, who became the first director of UN Women when it was founded in 2011, is also expected to take a more liberal approach to social issues. She says she wants to decriminalize abortion under certain conditions, for instance when the mother’s life is in danger, and legalize gay marriage. Both might irk voters in a country that is 70 percent Roman Catholic although polls suggest a majority now supports equal rights for gay couples. Piñera’s liberals favor civil unions.

If she wins the presidential election, Bachelet must hope that her allies do well in parliamentary elections that are due to take place on the same day. During much of her first administration, the left did not command a majority in Congress while Piñera currently lacks one in the Senate.