Structural Reforms in Chile: Moving Forward in Midst of Political Crisis

By Claudia Heiss*

Bachelet Chile

Photo Credit: Chile Ayuda a Chile / Flickr / Creative Commons

Chilean President Michelle Bachelet has done well pushing her reform agenda despite a series of scandals regarding the illegal financing of political campaigns and abuse of power by her daughter-in-law.  Bachelet started with 58 percent support and the highest electoral margin of victory since Chile’s return to democracy in 1990.  Her New Majority coalition incorporated the Communist Party and replaced the Concertación, the center-left coalition defeated in 2010 at the end of her first period, and after 20 years in power.  Bachelet’s current program reflected a left-turn and an intention to correct perceived flaws of a transition criticized for assuming too many features of the model imposed by the dictatorship.  The program included a tax plan to finance education reform introducing free university in a commoditized market of superior education.  This project was the offspring of massive student protests in 2011.  Another proposal was to replace the dictatorship-era 1980 Constitution through an “institutional, democratic, and participatory” process.

The scandals have hurt Bachelet’s popularity – she ended her first term in 2010 with 80 percent support and is now at historical lows below 30 percent – undermined the legitimacy of the political parties and Congress, and prompted a surge of social mobilizations.  (Slower economic growth, owing to the low price of copper, has contributed to the government’s unpopularity.)  But the President has scored some big wins.  In addition to the tax and education reforms she sought, the government has achieved important advances in the direction of its political program:

  • In 2015, a proportional system replaced the Binomial electoral system, which severely distorted popular will in the election of representatives and granted veto power in Congress to the political heirs of the dictatorship.
  • The campaign finance scandals led to the recent approval of a “Probity Agenda,” including higher transparency, forbidding corporate donations to political campaigns, and establishing a new law to regulate political parties.
  • A bill to make the main regional authority, the Intendente, elective rather than appointed by the President – a major step toward decentralization – has passed the Senate.
  • The decriminalization of therapeutic abortion, currently punished in only five countries, was approved by the Chamber of Deputies.
  • Congress is in the final steps of approving a labor reform meant to increase the negotiating power of workers towards their employers.
  • A complex constitutional reform process was launched last year, and this month the government selected 216 “facilitators” to assist the process and initiated a series of local meetings to discuss constitutional principles, rights, duties, and institutions. The process, the first of its kind ever in Chile, will lead to a presidential proposal to be presented to Congress.

The road ahead will not be easy for President Bachelet and her allies.  The political climate is pessimistic, and China’s economic troubles suggest the commodity bubble is over – to the detriment of the Chilean economy.  While rejected by conservatives, the changes appear as insufficient to those who want more radical reforms.  The labor bill has been criticized by union leaders as not allowing enough collective bargaining, and the proposal for constitutional change falls short of a binding participatory process like a Constituent Assembly or a referendum would be.  Bachelet, however, has deftly channeled anger about the scandals into the constructive reforms of the Probity Agenda, and she changed the perception of what is achievable in Chile in terms of progressive political and social transformations.  While public opinion is currently harsh with the government and with political elites, her second term, which ends in 2018, could in the long run consolidate her legacy as an effective reformer even in the face of adversity.

April 14, 2016

*Claudia Heiss is Assistant Professor at Universidad de Chile’s Instituto de Asuntos Públicos and researcher at the Centre for Social Conflict and Cohesion Studies, COES.

Chilean Watershed?

 

Michelle Bachelet / Photo credit: OEA - OAS / Foter.com / CC BY-NC-ND

Michelle Bachelet / Photo credit: OEA – OAS / Foter.com / CC BY-NC-ND

Sunday’s presidential primaries in Chile – the country’s first ever –reaffirmed former President Michelle Bachelet’s leadership of Concertación and cleared the way for a faceoff in November between herself and the Conservative candidate, Economy Minister Pablo Longueira.  Bachelet trounced challengers within her center-left coalition, winning 74 percent of the primary vote, and seems poised to build on the astounding 81 percent approval rating she had in 2010 when her first term ended.  (Current President Sebastián Piñera’s approval rating now hovers around 40 percent, a two-year high for him.)  Conservative Longueira will have the advantage of Piñera’s incumbency, but his party’s somewhat weaker performance on Sunday – with about 27 percent of all votes cast – and his slim 3 percent margin within the coalition suggest a tough campaign ahead for him.  Most observers deem Longueira’s performance in Piñera’s cabinet to have been competent but unexciting, and they predict an easy Bachelet victory in November.

Whichever candidate wins, Chile faces an evolving set of challenges.  Its commodities-driven economy is slowing down, and a stubborn gap between rich and poor is fueling demands for tax and education reforms.  Chile is ranked the most unequal country of the 34-member Organization for Economic Cooperation and Development (OECD).  Widespread demonstrations by students, teachers and professors have been demanding free tuition from preschool through university, and key labor unions are increasingly joining these mobilizations for reform.  Accepting her primary victory on Sunday night, Bachelet said voters were motivated by a desire for tax and education reform as well as a new constitution to replace the one created under dictator Pinochet in 1980.  She has also said that if elected she will halt the controversial HydroAysén project, which would build five mega-dams on two of Chilean Patagonia’s rivers.  Despite this rhetorical shift leftward and her role as the leader of the Socialist Party, such statements are not expected to lead to significant policy shifts; Chilean observers say she will continue to hew closely to the market-friendly policies that helped make Chile one of the region’s most stable countries during her first term.

Bachelet’s and Longueira’s competition may fail to excite the electorate in November, when voting will not be obligatory for the first time, and low turnout could deprive the victor of the mandate needed to lead thorough change, an arguable requisite  to increase the credibility of democratic institutions.  Empowered by two years of protests, student leaders are not leaving things entirely up to political elites.  Many are also running for office and aspire to bring a new perspective and direction to reforms in Chile.  International attention has focused in recent weeks on popular mobilizations in Brazil, but as recently as last week, tens of thousands of Chileans marched through the streets of Santiago and other major cities, challenging the credibility of the existing political order.  Bachelet has made deals with some of the protest leaders – agreeing, for example, not to run a Concertación candidate against one of them in a congressional race – but their demands are unremitting and strategic, and the winner of the upcoming election faces  a real challenge in trying to satisfy them. 

Mexico: A hard road for reforms

By Tom Long

Enrique Peña Nieto by Edgar Alberto Domínguez Cataño | Flickr | Creative Commons

Enrique Peña Nieto by Edgar Alberto Domínguez Cataño | Flickr | Creative Commons

During the campaign, Mexican President Enrique Peña Nieto proclaimed in thousands of advertisements, “Me comprometo y cumplo” – I make a promise and I keep it.  Offering a list of potentially transformative reforms – regulations, security, telecommunications, energy, and more – he began with one of the most intractable:  the struggling public education system.  In December, at his instigation, the Mexican congress passed a constitutional reform to create stricter standards for teachers and move hiring authority from the teachers’ union to the government.  Enough states had ratified the amendment by the end of February to make it law.  After years of stagnation and interest-group politics, education reform suddenly became politically expedient, passing with support from the PRI, PAN, and PRD.  Last week, the government put an exclamation point on the reform by arresting the teachers’ union boss, Elba Esther Gordillo, on charges of using her post for illicit gains surpassing $100 million.  A PRI apostate whose opposing alliance was credited with helping former President Felipe Calderón win his razor-thin victory in 2006, she was not just expendable, but an obstacle.

According to OECD education data, just 45 percent of Mexican students complete their secondary education, though the rate has improved over the last decade.  Mexico spends 3.7 percent of GDP on primary and secondary learning, — less than Chile, Argentina, and Brazil but in line with the OECD average.  Experts believe that Mexico’s educational  problems are largely political, not budgetary.  A full 97 percent of spending goes to salaries, feeding a teachers’ union that has a history of patronage and graft.  The problem has deep roots in the clientelistic structure through which the old PRI governed during its 70 years in power before losing in 2000 – and with which the PAN governments coexisted for 12 years.

The storyline shares certain similarities with PRI President Carlos Salinas’ sacking of the head of oil workers’ union in the 1990s, presaging limited reforms in that sector.  Peña Nieto probably intends the removal of the most visible representative of old-style patronage politics as a clear signal that the PRI will not bring back the bad old ways – despite the possible appearance of the firing and arrest being driven by revenge – but the reform legislation is widely seen as a positive step forward.  Rhetorically at least, the major parties have agreed to a multi-pronged effort for more reforms in the “Pact of Mexico.”  However, forging consensus on further reforms will be more difficult, as entrenched PRI politicians at the local level are already resisting many of the president’s proposals.  The PAN and PRD are already criticizing Peña Nieto for being too cozy with media barons and for handling telecommunications reform behind closed doors.  Security policies and proposed energy reforms are more contentious still.  Reforming other sectors will require going after harder targets than Gordillo and will pose greater tests of Peña Nieto’s ability to win votes in the Mexican Congress.