Chile: Between Stability and Uncertainty

By Eduardo Silva and Kenneth Roberts*

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Students protest in Santiago, May 2016. A highly-mobilized Chilean civil society has beset Michelle Bachelet’s second term as president. / Francisco Osorio / Flickr / Creative Commons

With national elections looming at the end of 2017, President Michelle Bachelet’s startling reversal of fortune raises the question of whether the traditional parties’ failure to win broad popular support could give rise to an anti-establishment populist leader.  At the end of her first government in 2010, Bachelet was the most popular president in post-democratic transition Chile.  This go-around, high-profile corruption scandals involving party financing and real estate deals implicating her family (along with both governing and opposition parties) have cut into her support.  Irregularities in the electoral registry before the 2016 municipal elections, an ineffective response to devastating forest fires, concessions over major reforms, and a slowing economy have also hurt her approval ratings, which are hovering near 20 percent, the lowest of any president since 1990.  Her administration has been beset by protests over education reform, labor relations reform, and the private pension system that the military government established in the 1980s.  Tensions and violence flare up continuously over land rights in the south between Mapuche communities and extractive industries.  All of this is occurring in a context of marked secular decline in voter participation and political party identification.

The trend of volatile approval ratings and a mobilized civil society now spans three administrations – Bachelet, Sebastián Piñera (2010-2014), and Bachelet again – from 2006 to 2017.  Unlike in Brazil and Argentina, where “middle class” revolts demanding clean, efficient government and economic growth signified a rightward turn after prolonged center-left rule, most of the protests in Chile come from the left flank, rather than the right.  Moreover, the mainstream parties appear seriously detached from the most active groups in civil society and, as seen in declining levels of party identification, from the citizenry at large.  This raises questions about the future of Chile’s party system, whether its center-left and center-right coalitions can hold together, and the chances for outsider populists.

All things considered, Chile has been a case of exceptional partisan and electoral stability in Latin America since 1990.  The dominant parties and coalitions have won all the elections, without the rise of a major “outsider” populist or a major new “movement party.”  But the next elections may provide a sort of “in between” outcome.  Ex-President Piñera, who has independent tendencies on the right, and a center-left alternative, Alejandro Guillier, are the current frontrunners in presidential primaries scheduled for July.  Guillier is a type of insider, nominated by a small party in a large coalition, with outsider credentials who does not really belong to Chile’s traditional casta política.  At this early point, if Piñera and Guillier win their respective primaries, both would appear to have a shot at winning in November or in December’s runoff – with neither outcome representing a breakdown of the system, nor a widespread electoral protest against mainstream parties.  This suggests, for now, the continuation of a system that is on the surface highly stable in institutional terms, but in reality highly detached from society at large and in particular from youth and the more active, mobilized sectors of civil society.  Neither political coalition shows many signs of significant internal renovation, although Guillier represents at least some change in leadership of the Nueva Mayoría.  However, political systems have been known to limp along under these conditions in the absence of major economic meltdowns, and that may be the most likely outcome of the next electoral cycle in Chile.

February 13, 2017

*Eduardo Silva is Professor of Political Science at Tulane University, and Kenneth Roberts is Professor of Government at Cornell University.

Intense Electoral Year in Latin America

By Carlos Malamud*

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Chilean President Michelle Bachelet with the leaders of her coalition, Nueva Mayoría. The Chilean presidential election of 2017 will determine the legacy of the Nueva Mayoría. / Gobierno de Chile / Flickr / Creative Commons

The new year will be an intense one for Latin American elections.  Although perhaps not as important as those taking place in 2018, this year’s elections will have a significant impact on the countries holding them and, in some cases, the region as a whole.

  • In Ecuador’s presidential and legislative elections on February 19, the PAIS Alliance will run a slate of nominees for the first time without Rafael Correa heading its slate. The President said he’s stepping down for family reasons, but Ecuador’s economic problems, aggravated by the decline in oil prices, apparently convinced him to seal his legacy on a high note now rather than end his time in office in defeat.  The party’s presidential candidate, former Vice President Lenin Moreno, has a 10-point lead in polls over his closest competitor and has the advantage of facing an opposition divided among seven candidates, but his leadership remains uncertain.
  • In Mexico, the state governors of México, Nayarit, and Coahuila and mayor of Veracruz are up for election on June 4. The race in México state will measure the popular backing of the four parties in contention – PRI, PAN, PRD, and López Obrador’s new Movimiento Regeneración Nacional (Morena) – in the 2018 presidential election.  The older parties will begin to weed out the weaker pre-candidates.
  • Elections for half of the Argentine Congress and a third of its Senate in October will define the second half of President Mauricio Macri’s presidency. The government is confident that economic recovery will strengthen its election prospects.  A weak showing will strengthen the Peronista opposition and complicate Macri’s agenda.  The Peronistas are currently divided into three big factions – that of Sergio Massa; the “orthodox” wing headed by some provincial governors, and corruption-plagued Kircherismo grouping headed by former President Cristina Fernández.  Open, simultaneous, and obligatory primaries (known by the Spanish acronym PASO) in August will be an important test for all.
  • Chile will elect a successor to President Michelle Bachelet on November 19. Primaries in July will reveal whether the country’s two big coalitions – the center-left (including the President’s Nueva Mayoría) and the center-right – are holding, as well as the presidential candidates’ identity.  The names of former Presidents Sebastián Piñera and Ricardo Lagos are in the air, but it’s too early to know how things will play out in the environment of growing popular disaffection with politics and politicians.
  • Honduras will hold elections on November 26. Due to a Supreme Court decision permitting reelection, incumbent President Juan Orlando Hernández could face a challenge from ex-President Manuel “Mel” Zelaya, who was removed from office by the Army in June 2009, running as head of the Libertad y Refundación (Libre) Party.
  • Also in November, Bolivia will elect members of various high courts, including the Constitutional, Supreme, and Agro-Environmental Tribunals and the Magistracy Council. These elections will reveal the support President Evo Morales will have as he tries to reform the Constitution to allow himself to run for yet another term in office.

These elections in 2017 have a heavy national component but will shed light on the region’s future direction.  The success or failure of the populist projects in Ecuador and Honduras, or of President Bachelet’s Nueva Mayoría in Chile, will tell us where we are and, above all, help us discern where we’re headed.

January 17, 2017

*Carlos Malamud is Senior Analyst for Latin America at the Elcano Royal Institute, and Professor of Latin American History at the Universidad Nacional de Educación a Distancia (UNED), Madrid.  This article was originally published in Infolatam.

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. 

Chávez’s Passing: In the Hemisphere’s Words

"Chavez" | by Donmatas1 | Flickr | Creative Commons

Chavez | by Donmatas1 | Flickr | Creative Commons

Below are excerpts from statements made by leaders of the Western Hemisphere upon learning of the passing of Venezuelan President Hugo Chávez.  The tone of the U.S. President and Canadian Prime Minister’s remarks is different from the Latin Americans’.

Barack Obama (U.S.A.)
“As Venezuela begins a new chapter in its history, the United States remains committed to policies that promote democratic principles, the rule of law, and respect for human rights.”

Stephen Harper (Canada)
” I would like to offer my condolences to the people of Venezuela on the passing of President Chávez.

“Canada looks forward to working with his successor and other leaders in the region to build a hemisphere that is more prosperous, secure and democratic.

“At this key juncture, I hope the people of Venezuela can now build for themselves a better, brighter future based on the principles of freedom, democracy, the rule of law and respect for human rights.”

Enrique Peña (México)
“Lamento el fallecimiento del Presidente Hugo Chávez. Mis más sentidas condolencias a su familia y al pueblo venezolano”.

Ollanta Humala (Perú)
“Adiós Comandante y amigo Hugo Chávez. Mis sentidas condolencias a su familia y a todo el pueblo venezolano”.

Ricardo Martinelli (Panamá)
“Deseamos expresarle nuestro pésame al Pueblo Venezolano y a la Familia Chávez por el sensible fallecimiento del Presidente Hugo Chávez”.

Evo Morales (Bolivia)
“Duele, pero también queremos decir a los pueblos, fuerza y unidad ahora más que nunca. Estamos destrozados”.

Juan Manuel Santos (Colombia)
“Lamento profundamente la muerte del presidente de Venezuela Hugo Chávez Frías. Nuestras sinceras condolencias”

Dilma Rousseff (Brasil)
“Estamos de luto por la pérdida de un gran amigo. Va a dejar un hueco en ‘la historia y en las luchas’ de América Latina”.

Sebastián Piñera (Chile)
“Fue un hombre profundamente comprometido con la integración de América Latina. …  Sin duda teníamos diferencias, pero siempre supe apreciar la fuerza, el compromiso y la voluntad con la cual el Presidente Chávez luchaba por sus ideas”.

 

Brazil’s Protest: If You Get QE3, We Get Tariffs

Photo by “SqueakyMarmot” | Flickr | Creative Commons

For two years Brazilian voices have complained that U.S. policies of near-zero interest rates and “quantitative easing” have been damaging its economy.  Lax monetary policies in the U.S. and Japan are blamed for the high valuation of the Brazilian real, which further suppresses Brazil’s  languishing manufacturing sector.  Tensions escalated following the September 2012 announcement of the U.S. Federal Reserve’s third round of quantitative easing.  Now the debate has spilled over into discussions about Brazilian restrictions on trade.  As Finance Minister Guido Mantega warns of a “currency exchange war,” Brazil is increasing tariffs on U.S. goods and foresees the imposition of taxes on inflows of foreign capital, which further inflate the Real.  Writing in Folha de São Paulo, Luiz Carlos Bresser-Pereira argues that Brazil is acting in self-defense.  The tariffs Brazil is contemplating are by his account not protectionist but simply an effort to compensate for the unfair advantage that the U.S. seeks to achieve through its monetary policy.

The tension is spreading beyond Brazil, as currency appreciation is portrayed as a drag on manufacturing in much of South America.   In an interview with CNN, Chilean President Sebastián Piñera criticized “QE3,” asserting that “printing money” would not solve U.S. economic woes.  So far, Andean countries are responding by purchasing dollars and cautiously reducing interest rates, but the Brazilians, in particular, present protectionist measures as counter-cyclical tools of their own, necessitated by American attempts to “drive down” the dollar.

The Brazilian and South American claims may be overdrawn somewhat; many experts believe that overvaluation is primarily a consequence of Chinese demand for South American commodities and the decision by most Latin American countries to maintain high interest rates in order to forestall inflation.  But U.S. policies meant to boost job growth are indeed having unintended consequences in the hemisphere.  There has been little thought in the United States of the external implications of Fed policy—beyond a belief that a reinvigorated U.S. economy would be good news for everyone.  Brazil has been the first, and most vocal, challenger of a stance that always frowns on tariffs while presenting monetary policy as a purely domestic matter.  It is a bit much for Brazilians to expect that U.S. monetary policy should be crafted with an eye to its impact on the region, particularly when conventional fiscal policy measures are thwarted by Congressional dysfunction, but Washington should not be surprised when efforts to tamp down its currency – not unlike Chinese policies that Washington condemns  – are seen abroad as aggressive threats to competition.

Chilean Student Protests and Inequality

Photo by Davidlohr Bueso, Santiago, Chile via http://www.flickr.com

Following a year of student demonstrations, Chilean students have renewed their demands for education reform with a massive street protest in Santiago. According to a report from the BBC News, 25,000-50,000 students participated in a march for free education on Wednesday. The protest came despite President Sebastián Piñera’s announcement that a state agency would be created to finance university-level education and that private banks would no longer be permitted to provide loans to university students. Piñera also announced that interest rates on student loans would be reduced from 6 to 2 percent. The student protests are just one of several political issues confronting Piñera, such as the construction of dams in Patagonia and government handling of political protests in the southern region of Aysén. The students’ cause has reverberated throughout Latin America and indicates widespread discontent with high levels of socioeconomic inequality in Chile.