Chile’s election for president tomorrow is being watched closely to see whether the recent trend against Leftist governments in Latin America will continue. In a field of eight candidates, the two top contenders are Sebastian Piñera, a right-leaning billionaire businessman; and Senator Alejandro Guillier, a former news anchor endorsed by current Socialist president Michelle Bachelet.
Piñera is heavily favored in opinion polls, leading Guillier, his closest rival, by more than 20 points, but it is not likely that he will win a 50 per cent majority required for outright victory. But Guillier may be a more formidable opponent if the race is forced into a runoff, which will be held on 17 December. He trails Piñera so badly now because the Left is split, but if the far Left unites behind him in a runoff, he could present a serious challenge.
Beatriz Sanchez, another former journalist, heads the Frente Amplio, or Broad Front, party. Frente Amplio is a newly formed coalition of far-left parties, which originated in the Chilean student movement of 2011. The Sanchez platform is based on classic Marxist redistributionist economic policy, and appeals to Chilean voters who feel that Bachelet’s socialist government did not swing far enough to the left. She also promises free education, a nod to the party’s student roots, and is committed to raising taxes.
Senator Guillier, on the other hand, has been endorsed by President Bachelet and has vowed to continue her policies. His platform includes expanding the welfare state, and includes an expressed desire to boost vertical integration of Chile’s copper industry. Investing in processing plants would allow Chile to export higher-value finished or intermediate products, rather than just copper and ore, providing more and higher-skill jobs for Chileans. Critics of Guillier’s plan, however, wonder where the investment money will come from, as they call into question the ability of a socialist government to attract investors.
The Marxist Problem
Axel Kaiser, a Chilean economist, wrote in Forbes of Bachelet’s government, “President Bachelet has recently declared that she shared the same goals as former Marxist president Salvador Allende who ran the country from 1971 to 1973. Unlike Allende, Ms. Bachelet is not seeking to make Chile a communist regime. But it is no secret that to a large extent she endorses an old-fashioned statist philosophy.”
Bachelet’s legacy may present more than one problem for Guillier, however. Critics on both left and right say that she has lost touch with average voters. For the past two years her daughter-in-law, Natalia Compagnon, has been under investigation for fraud and tax evasion. Compagnon was indicted in January, along with her business partner and several other individuals, and has been barred from leaving the country. Bachelet’s popularity has fallen sharply as a result, and Guillier’s embracing her may be a long-term drag on him.
Piñera promises to make Chile the first Latin American country to be considered a “developed nation” by the OECD, by cutting corporate tax rates and increasing investment.
Because Mr. Piñera served as president from 2010 to 2014, voters already know what to expect from him under another term. (Chilean law does not allow a president to hold consecutive terms, so neither he nor Bachelet could run for reelection.) But voter familiarity with Piñera because of his prior service suggests that his support will stay strong through the runoff.
Piñera’s Promise
Piñera promises to make Chile the first Latin American country to be considered a “developed nation” by the OECD, by cutting corporate tax rates and increasing investment. He has outlined a 4 year, $14 billion spending plan that he estimates will double economic growth as it simplifies the tax code and rolls back many of Bachelet’s reforms. One of his most popular proposals is his planned reform of the pension system, to increase the amounts paid to women and middle class pensioners and delay the retirement age.
Latin America has been turning against Leftist governance in the past several years. Brazil, Argentina and Paraguay all have elected rightist governments in recent years, and Venezuela has become a nightmarish example of what happens under Marxist control. If Piñera wins the presidency, either tomorrow or in the December runoff, it will be yet another blow to the Left, and Chile will once again swing back to a free market and investor-friendly economy.
