Chile Elections: Bachelet’s Partial Victory

By Maribel Vasquez and Eric Hershberg

President Michelle Bachelet / Photo credit: Chile Ayuda a Chile / Flickr / CC-BY-NC-ND

President Michelle Bachelet / Photo credit: Chile Ayuda a Chile / Flickr / CC-BY-NC-ND

Elections last Sunday didn’t give former President Michelle Bachelet the strong mandate that she wanted but she appears well positioned to win the second round and the honor of serving a tough second four-year term. An underwhelming number of Chileans headed to the polls to cast their votes for the president of the republic, parliamentarians, and for the regional councilors. Polls had indicated that Bachelet would win convincingly in the first round but, with 46.7 percent of the ballots cast, she fell just short of the 50 percent needed to avoid a run-off election on December 15. Conservative Evelyn Matthei, from the governing right wing Alliance Party, received 25 percent of the vote in the first round and has little chance of winning the run-off: another 17 percent of Chileans voting in the first round opted for candidates running to the left of Bachelet, and observers predict they will either stay home in December or select the former president as a second best option.

A 2012 change in voting law appears to have hurt Bachelet’s percentages. Under the new norm, Chileans for the first time were automatically registered to vote in presidential and congressional elections upon reaching 18 years of age, instantly expanding the electorate from eight to 13 million potential voters. But also for the first time, voting was not compulsory, and that proved consequential. In a country where public opinion polls have long shown high levels of alienation from the political system, particularly among younger segments of the population, abstention reached unprecedented heights. Fewer than seven million Chileans turned out to vote on Sunday, representing only around half of those eligible to do so. Turnout was undoubtedly suppressed by the stubborn persistence of Chile’s binomial electoral system, a holdover from the Pinochet dictatorship’s 1980 Constitution that gives the losing party a bloated presence in Congress (in order to receive both seats in any given district, the winning party or coalition must win double the percentage of the vote received by the runner-up, so frequently even a wide margin between the two top vote getters generates an equal allocation of seats). Bachelet’s center-left coalition, the New Majority, has proposed amending the constitution to make the electoral system more reflective of public preferences. But the newly-elected Congress, selected according to the rules of the authoritarian regime, is unlikely to generate the super-majorities needed to achieve constitutional changes that would alter the system so as to democratize congressional representation.

Getting elected to a second four-year term as Chile’s president might prove to be the easy part for Bachelet.  Harder still will be pushing forward the ambitious policy reforms she has promised. An especially prominent issue in the campaign was the demand of a growing student movement to reform Chile’s privatized education system, and Bachelet responded with a pledge to guarantee free, quality higher education to all Chileans, to be funded by a proposed increase in corporate tax rates and elimination of tax deferrals used widely by Chilean companies. Yet while Bachelet’s bloc secured the simple majority needed to secure modest tax reform, it fell short of the super majorities needed to secure education reform or change the electoral system or constitution, and the rightist opposition is loath to cede ground on either of these issues, which are also legacies of the Pinochet constitution. To enact the key pillars of her agenda, Bachelet’s second presidency will need to calibrate difficult negotiations with Congress with popular pressures to fulfill democratic aspirations for political representation and a more social democratic approach to public services than has been possible to achieve during the first 23 years of post-authoritarian rule.

Cuban National Assembly Takes Modest Steps on Reforms

Photo by Nathan Laurell via Flickr http://www.flickr.com/photos/nglklm/7146331353

Speaking to the two-day semi-annual session, President Raúl Castro reiterated the leadership’s commitment to undertaking the reforms outlined in the Sixth Party Congress last year.  He didn’t explicitly address concerns reported in international media that implementation of the reforms has been halting, but he announced several concrete steps to be undertaken this year.  Among them is the creation of non-agricultural cooperatives – allowing a new form of private enterprise in 222 business areas and announcing government loans for them – and greater decision-making autonomy for state enterprises.  The Assembly passed a new tax law, details of which have not yet been published.

Castro was a little defensive about the lack of an “updating of migration policy” – widely understood to include lifting the requirement for exit visas – while “ratifying the will of the Party and State leadership to carry out the reformulation.”

From the beginning of the current round of reforms, Raúl Castro and the Communist Party have cautioned that the changes will be introduced gradually and adjusted during implementation.  The credible reports of frustration with the pace of change notwithstanding, the National Assembly appears to have validated that getting the reforms “right” is more important than doing them fast.  The government probably calculates that the new cooperatives and tax law are important elements of an infrastructure for change, but slow or partial implementation will undermine them.  The perennial question remains whether the government’s concern with control discourages important energy among the individuals it is counting on building the new limited private sector.

Fiscal Policies Worsen Security Crisis in Central America

From left to right: Aaron Schneider, Maynor Cabrera and Hugo Noe Pino at the June 5 event on Central American fiscal policy.

Economists are warning that Central America – unlike some South American countries and Mexico – has still not rebounded from the 2007 global economic crisis, and that current fiscal policies dim prospects for improvement.  After making progress reducing poverty prior to 2007, the subregion has been stymied by static tax policies, insufficient investment in physical infrastructure, corruption, and natural disasters induced by climate change.  This is the assessment of Hugo Noe Pino, Ricardo Barrientos and Maynor Cabrera, economists from the Central American Institute on Fiscal Studies (ICEFI), and Aaron Schneider, Professor of Tulane University, who presented their work at a CLALS-sponsored seminar at the Woodrow Wilson Center on June 5.

The specialists’ research indicated that political resistance to fiscal reform is strong and comes from both new and traditional political and economic interests.  Elites have not found common ground with the middle and lower class in most of Central America – a key element of Costa Rica’s success prior to the financial crisis.  Absent an enduring fiscal pact, countries in the region are likely to remain plagued by persistently slow growth and unusually skewed income distribution.

Violence and security dominate Washington’s agenda on Central America, but this focus largely misses the underlying dynamic between economic decline and crime throughout the subregion.  Elites favor policies that discourage effective state‑building – including investment in security forces paid well enough that they are less vulnerable to corruption – and that exacerbate social inequalities.  Political fragmentation and low citizen confidence in government institutions have dire consequences for national security, and countries get caught in the Catch‑22 of being unable to attract investment from abroad and encourage development from within as long as fiscal policies fail to promote an educated, healthy and skilled workforce.

CLALS currently has a program investigating how traditional, renewed and emerging elites shape the political and economic landscape of Central America.  For more information click here.  And click here for a video of the ICEFI presentation and discussion at the Woodrow Wilson Center.