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22 January 2022

Challenges Facing Chile’s New Government

Tag(s): Foreign Affairs, Politics & Economics
On December 19, 2021 Chile conducted the second round of its presidential election in which the left-wing former student protest leader Gabriel Boric won a comfortable majority against the conservative José Antonio Kast. The contest was basically a rerun of the debate about Chile’s past and its remarkable transformation from a country that under President Allende from 1970 to 1973 had shocking deprivation to a country that after the return of democracy in 1990 became the best performing economy in Latin America. This is both a generational issue and an issue of technology. It is generational because while people of my generation can remember what it was like to live under the socialist government of Salvador Allende the younger generation represented by the 35-year-old Boric have no such memories and instead get their information through the bias of social media.
However, some of the concerns of Boric and his supporters are no doubt genuine in that the development came with significant costs that include injustices, inequalities and groups excluded from that growth and prosperity such as Indigenous communities, women and more recently those who identify as LGBTQ. These people complain that the 1980 constitution brought in by Pinochet not only preserved political and economic entitlements for the military, but also the power of Chilean economic and social elites and it would seem a range of problems even after the transition to democracy. There are massive flaws in this argument as I will demonstrate, but the argument at least to date has been won. After a series of popular protests in October 2019 a political agreement between parties with parliamentary representation led to a national referendum on the proposal of writing a new constitution and the mechanism to draft it. That was held in October 2020 resulting in the approval of drafting a new fundamental charter, as well as choosing a Constitutional Convention fully elected through popular vote to fulfil this objective. The members of the Convention were elected in May 2021, and the Assembly first met in July 2021. Political newcomers dominate this Assembly, with only 37 members of the 155-member body representing the Piñera government’s centre-right Vamos coalition, compared to 47 independents, including 17 representatives of Chilean indigenous groups. The Assembly is led by Elisa Loncón, a Mapuche scholar, who has pledged that the document will re-found Chile’s pluralistic nation.

This document is due from the Assembly in July, followed by a mandatory vote by all eligible Chileans in October. It is possible that the new Constitution will be rejected by Chileans, and at this stage that is difficult to judge as the Constitution itself is not yet ready. On the other hand, if accepted the Constitution may determine whether the new president continues in office until the end of his four-year term and whether he is eligible for re-election. This could create a scenario like populist states such as Venezuela, Bolivia, and Ecuador in which a new Constitution creates the conditions to perpetuate a far-left president in office.

It is a myth that the Chilean constitution introduced by President Pinochet in 1980 remains in force unaltered. Firstly it only entered into full force on March 11, 1990 with the transition of democracy and it was amended the first time in 1989 (through a referendum) and afterwards in 1991, 1994, 1997, 1999, 2000, 2001, 2003, 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2017, 2018, 2019, 2020, and 2021, these last three with relation to the current constituent process. In particular in September 2005 under Ricardo Lagos’ presidency a large amendment to the constitution was approved by parliamentarians, removing from the text some of its more antidemocratic dispositions coming from Pinochet’s regime, such as senators-for-life and appointed senators, as well as the Armed Forces warranty on the democratic regime.

Chile’s transition back to democracy was in part made possible by the country’s 1980 constitution, which guaranteed special privileges for the Chilean military and made it easier for these officials to gradually give up power. It is further important to recognise that part of Chile’s success has been the strength of the military which in Chile includes the Carabiñeros.  In the Constitutional Convention there have been proposals to eliminate this institution. Some people on the left talk about transforming it into a much less military-oriented structure, but this institution is one of the country’s most effective law enforcement establishments. Eliminating or transforming the Carabiñeros, particularly during a moment of heightened political tension and growing pressures from illegal immigration, drugs, and other transborder crime and terrorism could seriously impede the government’s ability to manage such challenges, leading to more lives lost and expansion of violence and polarisation.

Independent of Chile’s political unrest and Covid-19, the country continues to face challenges from illegal flows of people and goods across its northern border. The use of Chilean ports to move drugs has expanded significantly in recent years particularly in the North as Bolivia and Paraguay, without direct access to the coast, are increasingly involving narcotraffickers from Ecuador, Colombia and elsewhere. In 2020, the Chilean military was making record-sized seizures of drugs. But such flows have also fed the local market with Chile’s consumption of illicit drugs growing 680% since 2017.

Immigration has also become a significant political and security issue in Chile, with traditional entry of Peruvians and Bolivians into the country, supplemented in recent years by the arrival of half a million Venezuelan refugees, as well as immigrants from Haiti, Africa, and elsewhere. This has led to violent protests including attacks against some of the immigrants and burning of their belongings.

As mentioned in connection with the Constituent Assembly there is added political visibility of the question of Mapuche land rights and their political role in the new Chile. While there are no doubt genuine grievances of indigenous peoples, some of the more radical elements have periodically killed Chilean landowners in the region and attacked their property and government assets. In two provinces the Piñera government was forced to declare a state of emergency following violence including widespread burning of construction equipment and buildings. In my view a new Constitution with language about Chile as a multinational state is unlikely to resolve the issue but rather could stir up protest and political violence.

The recent period of turmoil beginning with the October 2019 protests and compounded by the uncertainty of the rewriting constitution, the shock of Covid-19, and the possible victory of the most left-wing government in Chile’s post-dictatorship history, has profoundly shaken business confidence in what was once considered the best example of good governance and political stability in South America. Already there has been significant capital flight to the United States, Spain and elsewhere. My wife and I also know people close to us who are considering emigration as the only way forward. Boric has outlined an expansive programme of free university education, improved health service and other elements of the “welfare society” and he intends to pay for this by increasing mining royalties, imposing green taxes and other actions which while they may suit those with an environmental agenda, they are bound to have an impact on the Chilean economy. He’s even talked about increasing the minimum wage and decreasing the length of the workday, both of which would hit small and medium enterprises hard.

Another challenge for the new government is how they manage the relationship with the People’s Republic of China (PRC). Chile’s trade with the PRC has grown 17-fold since 2017. China purchases half of all of Chile’s copper, the nation’s major export, and Chinese demand plays a significant role in the international price for the commodity. The ROC is also a key export market for Chile’s lithium, potassium nitrate, wines, fruits, and other goods. As Western investors become uncertain about these new developments this is likely to increase the leverage of their Chinese rivals in sectors such as lithium, electricity, telecommunications, and retail. Indeed, in the electricity sector, five acquisitions in the past five years by PRC-based firms of companies with assets in Chile have given the PRC control over 57% of electricity distribution in the country. Chile has been a “comprehensive strategic partner” of the PRC since November 2016, and a signatory to China’s Belt and Road initiative since November 2018.

Just as I have met five British prime ministers, Edward Heath, John Major, Tony Blair, Theresa May and Boris Johnson, I have met four Chilean presidents, Augusto Pinochet himself, Ricardo Lagos, Michelle Bachelet and Sebastian Piñera. I also knew Arturo Alessandri Besa, the losing presidential candidate in 1993. Both his uncle and grandfather were presidents of Chile, and he was my trademark lawyer when I ran Mars operations in Chile in the early 1980s. So, I’ve long had an interest in Chilean politics but believe it has reached a very dangerous time for the country.

I’m currently reading an excellent book called The Impossible Job by Sir Anthony Seldon. The impossible job is that of the Prime Minister which in theory has more power than almost any leadership position in world politics. But in practice there are so many challenges to this power that most prime ministers fail to achieve their objectives. But Sir Anthony points out that this is getting worse as increasingly we are electing Prime Ministers with very limited experience. Historically Prime Ministers have generally had considerable experience in government in other roles before they took that office. Blair and Cameron had none while May and Johnson just the one cabinet role.

Chile has just elected as its president a 35-year-old man who has virtually no administrative experience in a traditional job. He also lacks the experience of the responsibilities of a family and children, and even failed to complete his law degree. In Chile’s 50 seat Senate, Boric’s Apruebo Dignidad coalition emerged from the general election controlling only six seats. Even when adding 16 seats of the centre-left New Social Pact, Boric is still short of a legislative majority, requiring him to build any coalition with some of the five seats that will be held by centrist parties or the 22 that will be controlled by the centre-right Podemos coalition. In Chile’s 155-member lower house, Boric faces a similar situation. Its coalition will control only 37 seats, with the New Social Pact controlling another 37 forcing him to reach out to some of the 13 independents or the 53 members of the Podemos coalition to successfully pass any legislation.

I love Chile as a country and its people and, of course, I married one of them. But I fear for its future.

Source: Challenges Facing Chile’s Next Government R. Evan Ellis Global Americans December 14/16 2021

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