High stakes in Chile

Chile will hold presidential and parliamentary elections on Sunday December 13, 2009, with a run-off scheduled for January 17, 2010 if no candidate obtains more than 50% of the vote. The winner will succeed current president, Michelle Bachelet. 

Chilean politics are dominated by two main coalitions: the center-left Coalition of Parties for Democracy (Concertación de Partidos por la Democracia), composed of the Christian Democrat Party, the Socialist Party, the Party for Democracy, and the Social Democrat Radical Party; and the center-right, Alliance for Chile (Alianza por Chile), composed of the Independent Democrat Union and National Renewal. [1]

The stakes are very high for this election. The center-left coalition, Concertación Democrática, has governed Chile, without interruption, for almost 20 years since the end of Augusto Pinochet’s rule in 1990. According to recent polls, candidate Sebastián Piñera from the center-right National Renewal (RN) party has a great chance of winning.

 

The Main Candidates

Conservative Sebastián Piñera, born December 1, 1949 is a Chilean economist, investor and politician. He has an undergraduate degree in Economics from Chile’s Catholic University as well as a Master’s and Ph.D. from Harvard University. He is the fourth richest man in the country and number 701 on the Forbes billionaires list. He made his fortune introducing credit cards in Chile, and today his investments include soccer teams, banks, energy and retail companies. Piñera served as a senator from 1990 to 1998 and in 2005, he ran in the Chilean presidential election, losing to Michelle Bachelet in a runoff. [2]

Although Piñera and his political associates have long been aligned with the military, records show that he voted against continuing Pinochet’s rule in a 1988 plebiscite. He has built his career on the premise that he represents a new type of conservatism that is no longer tied to the Pinochet era. [3] His supporters believe that as a successful businessman, he is more capable than the Concertación of guiding Chile out of the current economic downturn and creating jobs, which is by far Chileans’ main concern.

Piñera’s strongest competitor is 67-year-old Eduardo Frei, of the Christian Democratic Party and the governing Concertación coalition. Frei Ruiz-Tagle is a Chilean politician and civil engineer who was President of Chile from 1994 to 2000. As former President, he gained a seat as senator for life in Congress but given that Constitutional reforms in 2005 abolished life senators starting in 2006, Frei ran for an elected Senate seat in the December 2005 parliamentary elections and won. On March 11, 2006 Frei became President of the Senate, like his father, who was also President of the Senate after being President of the Republic. Many expect that if elected, he will likely continue with the policies Bachelet implemented. [4]

A third candidate Marco Antonio Enríquez-Ominami Gumucio (born in Concepcion, June 12, 1973) is a Chilean filmmaker and politician. He has been an independent deputy representing District 10 since March 11, 2006. He is the son of Revolutionary Left Movement’s historical leader, Miguel Enríquez and sociologist, Manuela Gumucio. Enríquez-Ominami is currently running for the presidency of Chile as an independent. He resigned from the Socialist Party in June 2009. [5] He has captured the sympathy of many Concertación supporters who are less than enthusiastic with the idea of another Frei regime and who were not happy when the Concertación didn’t allow Ominami to run, choosing Frei instead.

Then there is Jorge Félix Arrate Mac-Niven (born May 1, 1941), a lawyer, economist, academic, writer and Chilean politician who served as minister under both, President Patricio Aylwin and President Eduardo Frei Ruiz – Tagle. He is running for the Communist Party of Chile. [6] At this point, his chances of winning are minimal.

 

The Elections

Analysts agree that the current political climate in Chile is somewhat unique since there is strong support for president Bachelet (70%) who many credit with strong progress in a region plagued by economic and political instability. Still, Chileans are clamoring for change. Many feel that the Concertación worked well for twenty years, but are tired of the same old politics.

Presently, Piñera has 37 percent of the vote, 15 percentage points ahead of his closest rival, Senator Eduardo Frei (22 percent). Marco Enriquez-Ominami is running third with 15 percent, followed by far-left candidates Jorge Arrate and Alejandro Navarro, 1 percent each, and center-right Senator Adolfo Zaldivar with just a fraction of a percent.

The Concertación has suffered setbacks partly as a result of the candidature of Enríquez-Ominami, a former Socialist Party deputy. His decision to run against Frei has taken votes away from the official Concertación candidate and caused infighting within the coalition.

 

Chilean Political and Economic Outlook

Chile has solid foundations in economic management and democratic rule, which suggest that it will maintain its stability for years to come. Despite the fact that Michele Bachelet belongs to the left, she is considered moderate and pragmatic and has ruled as such. The previous Concertación presidents also adopted conservative policies and also led the country following free market principles. Although her administration’s approval ratings substantially fell for most of 2008, they have again risen as she has shown responsible management of the economy during the current global economic crisis. [7]

By most measures Chile continues to be Latin America’s star performer. Per capita income has increased at an annual rate of 4.1% over the past 15 years, compared with just 1.1% a year in the rest of the region. Chile has actively sought free trade agreements with several partners including Canada, Japan and the U.S. The government officially encourages foreign investment and legislation has been incrementally liberalized since 1974. The country also benefits from a transparent regulatory system and well- functioning bureaucracy. [8] In general, people trust their elected officials and dutifully respect the law.

More advanced than any other country in Latin America, the Chilean government and energy sector have already put together a plan to diversify energy sources, and promote infrastructure investment to minimize medium-term implications. This is due to the systemic problems in Argentina’s energy sector, which have serious implications for Chile. Argentina’s government has repeatedly restricted gas shipments to Chile to ensure adequate domestic supply. Some of these plans have already been implemented, but equilibrium between energy demand and supply is yet to be achieved and forecasts predict this will take another two years to accomplish. [9]

 

Swing to the Right?

Consensus among Chileans is that while the free-market formula has served Chile well over a quarter century, the model needs more work. Chile has nearly 800,000 people jobless, the highest figure in the history of the country. Foreign investment has leveled off and although the poverty rate has been halved since 1990, it still stands at 18%.

Polls show that businessmen and young entrepreneurs worry that the economy is no longer the most dynamic in South America. There is also an urgent need to improve the quality of education and invest more in innovation, research and development if Chile is to become more prosperous. [10] The discourse of the Concertación seems to have nothing new to offer and uncharismatic Frei has been unable to rally support even among the party’s base.

Today, innovative ideas are coming from the center -right, and candidate Sebastian Piñera’s energized campaign has drawn much support from younger voters who have become tired of the same old faces.  According to him, "We’ve gone from the Chilean miracle to the Chilean siesta (nap)." He adds that he would keep the same fiscal policies and the social-protection net, and says that the Concertación is, in essence, killing entrepreneurship. Pointing to falling productivity, he blames rigid labor legislation and the mismanagement of public investment (where $10 billion has been wasted in the past four years due to the botched overhaul of the railway network and Santiago’s public transport). His economic adviser, Felipe Larraín, says that a Piñera government would raise the annual rate of growth to 6%, boosting productivity through tax breaks for investment, a more flexible labor market and civil-service reforms. [11] His innovative and diverse economic plans offer plans for creating new jobs, which is what people most need.

Even though Chileans believe that on the domestic front the country has made great progress in terms of democracy, political and economic stability, and knows they fare better than many neighbors in the region, a majority disagrees with the ideological direction the country has taken. This is especially true since the Bachelet regime began cozying up to Hugo Chavez. Recent polls show that Chileans and Latin Americans in general favor free-market capitalism and in a PODER/Zogby poll commissioned earlier this year by NEWSWEEK, 63 percent of Latin Americans ages 18 to 29 said they believe that free trade is not only good but benefits all people and two thirds named Chávez as the leader worst suited to lead the region in the future. [12] So it is no surprise that people in the South American nation have grown increasingly weary of the closeness of some local leaders to the Venezuelan dictator.

In addition to Bachelet, OAS Secretary General Jose Miguel Insulza, also from the Chilean Socialist Party, has favored Chavez’s agenda so openly, that many locals have become suspicious of the driving force behind his actions. In general, Chileans have become tired of seeing their leaders stop short of supporting the revolutionary plans of Chavez and the Castro brothers.

One major reason Piñera is holding a steady lead is that many know that the National Renewal candidate has more affinity with respected conservative leaders such as Alvaro Uribe from Colombia, Jose Maria Aznar from Spain and Mauricio Macri from Argentina than with the revolutionaries and Chavistas of Bolivia, Ecuador, Nicaragua and Argentina. Chileans, especially the young, see in Piñera a new fresh face in politics, capable of injecting politics with new ideas and a new sense of excitement.

Indeed, if Piñera is elected in December, it will mark a comeback of the right in Chile, at the same time as many other Latin American countries are shifting toward the left.

In regional terms, if Piñera wins, Chavez will lose an important political ally in the region and it could also be the beginning of a swing to the right for the region; with Honduras on a new path after the ouster of Manuel Zelaya, the possible re-election of Uribe in Colombia and Alan Garcia in Peru and with elections in Uruguay and Brazil set to occur within the next 17 months, where center – right candidates are expected to win.

Even though Chile has advanced immensely in terms of democracy, economy and the rule of law, it is vital for a full functioning democracy that alternation of power takes place. It could be that after twenty years the time is now ripe for Chileans to break with the taboo of voting for a center – right candidate. This could invigorate the political spectrum, promoting the discussion of new ideas and objectives for the nation’s future. 

 

Nicole M. Ferrand is a research analyst and editor of "The Americas Report" of the Menges Hemispheric Security Project. She is a graduate of Columbia University in Economics and Political Science with a background in Law from Peruvian University, UNIFE and in Corporate Finance from Georgetown University.

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[1] Chile’s Democratic Restoration. Latin America EconoMonitor. Manuel Alvarez Rivera. October 6, 2008.

[2] Sebastian Piñera: Politician in Poll. Elections Meter. December 2008.

[3] Is Chile Heading to the Right? GlobalPost. May 15, 2009. Pascale Bonnefoy.

[4] Chile’s Democratic Restoration. Latin America EconoMonitor. Manuel Alvarez Rivera. October 6, 2008.

[5] Ibid.

[6] Ibid.

[7] Chile: Economic Overview. EDC. June 2009. Jorge Rave.

[8] Ibid.

[9] Ibid.

[10] Chile’s Presidential Elections. The Strange Chill in Chile. The Economist. September 17, 2009.

[11] Ibid.

[12] Latin America isn’t tilting left, it’s tilting right. Newsweek. Mac Margolis. August 2009.