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News ID: 15937
Publish Date: 12:42 - 19 November 2017
TEHRAN, November 19 -In the country’s elections, expect a grudging endorsement of the political establishment

Chile’s voters are in no mood for reckless radicalismTEHRAN, Young Journalists Club (YJC) -A WEEK before national elections, Chileans would normally be cursing the billboards and posters cluttering up their cities. On the eve of this year’s presidential and congressional elections, scheduled for November 19th, there is much less to complain about. Restrictions on campaign spending imposed in 2016 after a party-financing scandal have kept much of the pesky propaganda off the streets.

This has not cheered up voters. “People are very disappointed with politicians,” says Beatriz Díaz, a teacher of English in Pirque, on the outskirts of Santiago. “They keep stealing.” The crackdown on campaign hoopla, meant to curb such behaviour, may deepen voters’ apathy. Pollsters expect turnout to be low.

Yet voters are likely to endorse the political establishment that has governed since the 17-year dictatorship of Augusto Pinochet ended in 1990. The strong favourite to win the presidency is Sebastián Piñera (pictured left), a billionaire businessman who was president from 2010 to 2014. He leads Chile Vamos (Let’s Go Chile), a coalition of centre-right and rightist parties. His main challenger, from the centre-left, is Alejandro Guillier, a popular television journalist (shown on the right). He proclaims himself a political outsider but is also running as the heir of Chile’s president, Michelle Bachelet. The confusion that causes is one reason he is likely to lose, probably in a run-off on December 17th. Ms Bachelet cannot run for re-election.

If voters were really angry they could choose one of six other contenders, most plausibly Beatriz Sánchez, a journalist with a radical plan for taxing the rich to ramp up spending by the state. Ms Díaz, the teacher, says without enthusiasm that she will probably vote for her. But pollsters give Ms Sánchez little chance. Chileans do not want to break with the liberal economic model set up under Pinochet and refined by his elected successors.

The centre holds

That is because it has largely worked for them. The economy has more than trebled in size since 1990 and the poverty rate has fallen from nearly 40% to less than 10%. More than half of Chileans are now middle class (on the World Bank’s income-based definition); 84% of high-school students get further education, and most of those belong to the first generation in their families to get that much education.

Although the economy still depends largely on the price of copper, which provides nearly half of export revenues, its management is steady. An independent central bank holds down inflation; a “fiscal rule” requires governments to balance budgets over an economic cycle. This has given Chileans reasons for optimism. Most parents think their children will be better off than they are, says Harald Beyer of the Centro de Estudios Públicos, a polling firm.

Yet grievances have built up. Chile’s hybrid welfare state, in which citizens often partly pay for services provided by private firms, is a disappointment to many. Newly middle-class Chileans fear that it does not protect them from slipping back into poverty. Last year tens of thousands of people protested against the privately managed pension system, which pays out lower benefits than some of the pensioners had hoped. “No more AFPs (pension-fund managers),” they demanded. In 2011-13 students held demonstrations against the role of the private sector in education.

Chile’s distribution of income is more unequal than in any other member of the OECD (a grouping of mostly rich countries), bar Ireland. Taxes and benefits do little to correct this, in contrast to most other OECD nations. Chileans think their country is crime-ridden, even though its murder rate is among the lowest in Latin America.

In Ms Bachelet’s second term, which began in 2014, the country entered a funk. Chile’s potential GDP growth rate has dropped over the past two decades from about 5% a year to 3-3.5%, in part because the workforce has aged and regulation discourages investment. Over the past four years growth has averaged less than 2%, partly because of a fall in copper prices.

A series of reforms initiated by the president did not solve these problems. Her plans to change the tax system, give more power to labour unions and hold a national dialogue to revise the Pinochet-era constitution “scared investors”, says Felipe Larraín, a finance minister under Mr Piñera. Fixed investment has fallen for four years in a row. When Ms Bachelet’s daughter-in-law became the centre of an influence-peddling scandal, the president became the focus of anger about corruption. Her approval rating is a dismal 23%.

Yet Ms Bachelet contained the anger that has grown under successive governments. Although she unnerved investors, she calmed voters’ tempers by limiting political spending and introducing free university for students from families in the bottom half of the income scale. Her proposals to raise more money for pensions have quietened demands to abolish AFPs. Ms Bachelet “managed a real crisis of governance”, says Eugenio Tironi of Tironi and Associates, a consultancy. There is less talk of scrapping the “neoliberal” model.

A few years ago a political neophyte like Mr Guillier might have been just what voters were looking for. But he has been an uninspiring candidate, and has had a hard time explaining what he would do as president, aside from adding an extra dash of state protection to Ms Bachelet’s reforms. Supporters of her New Majority coalition are split between him and Carolina Goic of the centrist Christian Democrats.

Ms Sánchez, who has even less political experience than Mr Guillier, himself a senator only since 2014, is more credible as a change candidate. She would transform Chile into a European-style welfare state, with much higher taxes. But support for her has dropped, perhaps because she scares voters. Franco Rodríguez, an engineering student, agrees with Ms Sánchez that the private sector plays too big a role in public services but thinks she is “a populist”. He plans to vote for Ms Goic. Mr Guillier hopes the supporters of both women will vote for him in the second round.

That will probably not be enough to deny victory to Mr Piñera. He is not loved and has been deflecting criticism in recent days of his (legal) manoeuvres to lower his own taxes. A political ally describes him as “an efficient guy”, but “not a dreamer”. Voters remember his first term as president as a time of prosperity, in part because copper prices were high. He is running as a pragmatic centrist who can create jobs and control crime. He will not undo Ms Bachelet’s most popular policies, like free university for the poorer half of students, or reduce the overall tax burden of 20% of GDP.

Rather than make university free for everyone, as Ms Bachelet had wanted, Mr Piñera would spend extra money on pre-school and primary and secondary schools. That is part of a plan to spend an extra $14bn over four years, about 1.4% of GDP a year, on pensions, health, infrastructure and education. Just how he means to pay for that is unclear; half the money will come from “ineffective” programmes and “unnecessary” spending, he claims. He plans to encourage investment by simplifying corporate taxes and cutting red tape.

Even if he wanted to, Mr Piñera could not move Chile sharply to the right. Under an electoral reform enacted by Ms Bachelet’s government, the next congress is likely to be more diverse than the outgoing one, which is dominated by New Majority and Chile Vamos. Whoever the next president is will probably have to seek support from outside his or her coalition, either in a stable coalition or law by law. Chileans may be cranky, but the government they elect will probably not abandon the centre.

Source:Economist

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