Summary
Chileans go to the polls Nov. 17 for a presidential election that will likely prove cathartic for a country that experienced significant social unrest during the preceding administration. Former Chilean President Michelle Bachelet of the center-left Concertacion coalition seems poised to win in either the first round of elections or the second, which is scheduled for Dec. 15.
The election is notable for several reasons. It is the first time voters will choose between two female candidates and also the contest in which voting is no longer mandatory. From a historical perspective, this election signals a pivot point for Chile, which, more than 20 years after the fall of the Pinochet dictatorship, is in the throes of a divisive national debate concerning the role of the government in social welfare.
Analysis
Though there are seven presidential candidates, Bachelet's only real competitor is Evelyn Matthei, a former labor and social security minister and candidate from the center-right Alianza political coalition. Alianza has had a rough election season. The initial coalition favorite for the election was former business executive Laurence Golborne, who was backed by the Independent Democratic Union party but was forced to drop out ahead of the party primaries because of a financial scandal. Pablo Longueira, a former economy, development and tourism minister, narrowly won the coalition primaries in June but left the race a month later due to mental health issues. Matthei assumed the coalition's leadership soon thereafter but has been burdened by both her late entry and the low popularity of a fellow Alianza politician, Chilean President Sebastian Pinera.
Pinera entered office at a time of change in Chile. The country has a comparatively young representative government, having moved out of dictatorship and into a democratic system in 1990. Although neoliberal economic policies and rigid political structures promoted growth and stability, Santiago has faced a wide range of social challenges over the past two decades. Chile has achieved very consistent growth on the back of strong copper exports, making notable progress in reducing poverty. However, there remains a wide gap in income distribution; in fact, Chile is one of the most economically unequal nations in Latin America. In short, not everyone has benefited equally from economic growth.
In the wake of the dictatorship, there was a small population boom, the outcome of which was an upsurge of people who are now between the ages of 15 and 30. This new generation is composed of Chileans who have no living memory of the dictatorial regime of Chilean President Augusto Pinochet and grew up in an increasingly open social environment that permitted the development of a protest culture. This, combined with the economic challenges facing society, has produced a sustained period of public unrest that began under Bachelet's last administration and has intensified under Pinera.
In many ways, the election of Pinera was an odd swing to the far right at a time when social pressure was building in Chile, seemingly pulling the political system to the left. Though Bachelet's administration had seen many protests as well, her approval ratings were high at the end of her presidency in 2009. Nevertheless, the Chilean constitution limits presidential terms, so that while a president may serve unlimited terms they cannot be consecutive. Though about 50 percent of voters chose a center-left or leftist candidate in the first round, they split the vote. Amid a campaign characterized by rhetoric about change from the old system -- which had been dominated by the Concertacion coalition since the end of the dictatorship -- Pinera, the right-wing candidate, won the majority of votes in the second round of elections.
Pinera's first challenge was to deal with the aftermath of the devastating 2010 earthquake that left hundreds dead and more than a million displaced. Soon after, 33 Chilean miners were trapped underground for more than two months as a result of an accident at the mine they were working at. Their successful rescue in October 2010 was a brief respite for Pinera, but his presidency did not get much easier after that. A businessman elected on the promise to run Chile with fiscal responsibility, Pinera has spent his presidency fighting against increasingly loud populist demands for higher government spending amid a global economic meltdown that has produced extreme uncertainty in the copper markets. Pioneered by students, the protests enveloped workers unions as the years progressed.
The Call for Reform
Chief among the demands facing the presidency is the call for free, public college level education for all Chileans. Bachelet is receptive to this demand and has promised to take steps in that direction if elected. To pay for it, Bachelet has pledged to raise the corporate tax rate from 20 percent to 25 percent. While still competitive with the rest of Latin America, the promise is a sign that Chile's approach to foreign and private investors is changing.
In addition to addressing social demands, Bachelet and many other politicians are pushing for political reform that would change the nature of the constitution. The core challenge facing Chile's political system is the binomial election system, which almost guarantees one seat per district to the two largest parties. The system ensures a politically divided national legislature, incentivizes coalition building and makes it very difficult for third parties to access power. Constitutional changes have been frequent over the past two decades, all accomplished under the congressional system, which requires a supermajority to put through any changes. There is a chance that Bachelet, faced with a divided congress, will push for a constitutional assembly to circumvent the fractious congressional process.
Bachelet would also be entering office at a time of volatile global economics, when Chile's own energy security is in flux. Chile is highly dependent on copper exports, and China's insatiable appetite for the commodity has helped keep prices high during the global economic downturn. However, China's growth is slowing, and while development of the interior should help keep demand for global commodities relatively high, Chile remains vulnerable to sharp fluctuations going forward. At the same time, Chile has become increasingly reliant on external supplies of energy. The failure of energy mega-projects due to regulatory or social barriers has left the country with an inadequate electricity grid, unable to deal with increasing demand. The next presidential administration will face strategic questions about the type of energy Chile will invest in, and how quickly.
Though Bachelet may be poised to win the elections, she faces a very challenging presidency ahead of her. Despite high levels of popularity, she will experience at least as many of the same difficulties as her predecessor as the global geopolitical and financial environment continues to change. Chile is undergoing a generational shift, and the social demands on the political system may have only begun.
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