Scandals Upend Bachelet’s Reform Agenda—and Chile’s Political Class.
By Eric Farnsworth, May 21, 2015, Briefing
Images on television and social media of students rampaging through Santiago and Valparaiso and reports of injuries and even deaths were not what Chilean President Michelle Bachelet anticipated when she began her second, nonconsecutive term in office early last year. Elected in a landslide on a platform to institute social reforms, most of all on education, Bachelet has instead faced increasing political turbulence: The left demands rapid, far-reaching action, and the right is growing anxious about her political course. On May 6, she announced that she had asked her entire Cabinet to resign in order to breathe new life into her political agenda, including a redrafting of the constitution later this year.
It’s quite a turnaround from Bachelet’s first term, concluding in 2010, when she governed as a moderate leftist reformer. As one of Latin America’s cadre of center-left leaders coming to power in the last decade, she was able to maintain fiscal orthodoxy while strengthening Chile’s social agenda. Her four years in office were marked by robust economic growth buoyed by China’s insatiable demand for minerals, including Chile’s top export, copper, as well as significant capital inflows to expand commodities production.
Implementation of a bilateral free trade agreement with the United States was hitting its stride, with benefits being felt throughout the economy. Poverty continued to fall while the middle class continued to grow. Crime was low; Chile routinely scored better than any other Latin American nation on indicators of corruption and competitiveness; and politics were centrist and stable. When she left office five years ago, Bachelet enjoyed a sparkling approval rating over 80 percent, higher than any other previous Chilean president.
Many observers expected her to pick up where she had left off. But, in the interim, times changed. China’s economy slowed, and copper prices fell. Chile’s economy, like most of its South American neighbors and trading partners, slowed as well. Her predecessor, Sebastian Pinera, a center-right businessman, left several unfinished items, among them education reforms demanded by a politically active, organized student movement. And Bachelet herself was anxious to take several of her own first-term social reforms further during a second mandate.
The result has been a tilt to the left, both during the campaign and in office. Among other things, Bachelet promised to reform the tax code in order to raise additional resources from the business community for her signature education reforms. She promised labor reform and a further reduction in economic and social inequality. She also promised political reforms, including a rewrite of Chile’s Constitution, written under dictator Augusto Pinochet.
Some of these have passed, including changes to the tax code and some education reforms. In January, the lower house of Chile’s Congress agreed to prohibit profits at state-subsidized schools and eliminate their selective entrance policies. Next steps include bolstering teachers’ pay and working conditions, nationalizing public schools and making university education free. But these efforts have been rocky, engendering opposition both from those whose taxes have been raised and those who believe the reforms have not gone far enough. It has required the expenditure of significant political capital without much of a political honeymoon. And it wounded several political advisers, particularly former Finance Minister Alberto Arenas, who was seen as aloof and unresponsive to the business community.
Exacerbating these difficulties have been various corruption scandals. Chile has long been thought by observers and many Chileans to be different from much of the rest of the neighborhood, less prone to the corruption so prevalent elsewhere, with stronger democratic institutions and a greater sense of national purpose and public service among its political class. Recent revelations have shown that this may not be entirely true. According to whistleblowers, numerous politicians have accepted improper campaign contributions, a scandal that threatens to envelop the ruling class. Another scandal has implicated the president’s own son and daughter-in-law.
Coupled with a quickly slowing economy, the national mood turned sour. By the beginning of May, Bachelet’s approval ratings had sunk below 30 percent.
Hence the dramatic step of sacking the Cabinet, which Bachelet announced in an interview with the host of the massively popular entertainment program, “Sabado Gigante” (“Giant Saturday”). Bachelet decided that shuffling the Cabinet would give her the best chance to change the prevailing narrative. It also allowed her to reconstitute her advisers in a manner better suited to fight upcoming political battles.
Reforming the constitution will be especially politically fraught, given the history of the Pinochet era that infuses the existing constitution and which is never far from the surface of Chilean politics. But as one of her electoral priorities, and with the support of a solid majority of Chileans, Bachelet’s constitutional reforms will begin to be discussed later this year.
Similar efforts around Latin America, however, have shown that the process of constitutional reform can quickly become overwhelmed by the political moment, and that political forces once unleashed can be difficult to contain. In Chile, the left, including many of the president’s supporters, view constitutional reform as an opportunity to push forward aggressively on the social agenda, while the right seems not to trust the president fully and will resist a re-engineering of the social contract.
This is more than an academic exercise: If mishandled, constitutional reform could upend Chile’s post-Pinochet political consensus, rather than bring Chileans from all sides together behind a new direction for their country. Since Chile’s return to democracy in 1990, politics have been conducted within a somewhat narrow band of centrist policies, prioritizing incremental social change enabled by fiscal orthodoxy. This has been coupled with a general focus on the future by the political class, rather than crusades litigating or settling scores from the past. Within this political and economic context, constitutional reform—however necessary—was never going to be an easy task for Bachelet, and has been made all the more difficult after the past few months weakened her politically.
In a broader sense, though, Chile’s entire political class is on notice. Citizens are restless and demanding change. Cozy relationships and comfortable assumptions are no longer acceptable. Chile itself must decide on the direction it now wants to go. It isn’t just Bachelet’s legacy at stake, but ultimately that of the entire nation.
Eric Farnsworth is Vice President of the Council of the Americas. He previously served in the Clinton White House, the U.S. Department of State and the Office of the U.S. Trade Representative.
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