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18 December 2013, Gateway House

The return of the Left in Chile

The return of the Left after four years, with the election this week of Michelle Bachelet as the president of Chile, will not mean any drastic change of direction. Chile has the most stable democracy and dynamic market in Latin America, and its Left can become a model for other countries, including India

Former Distinguished Fellow, India-Latin America

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The leftist coalition candidate Michelle Bachelet was elected as the next president of Chile in the second round of elections held on 15 December. She got an impressive 63% of the votes, while her right-wing rival, Evelyn Matthei, got just 37%. In the first round held on 17 November, Bachelet had got 47% and Matthei got 25%.

Two more candidates to the far Left got 10% votes each, taking the total votes for the Left to 67%. Since the Chilean Constitution requires the winner to get 50% of the votes, the top two candidates had to go for a second round.

This means the return of the Left after a gap of four years. The Left ruled Chile for 20 years when democracy was restored in 1989 after the Augusto Pinochet military dictatorship. Bachelet was the last leftist President (2006-10) and she could not seek re-election since the Constitution does not permit two consecutive terms. The centre-right coalition government of Sebastian Piñera, which came to power in 2010 on the platform of change, has not been able to sustain the brief Right turn beyond a single term.

In the elections to the Congress, held on the same day as the presidential elections, the centre-leftist coalition won 50% of the votes and the rightist coalition got 38%. The Left has won a majority in the lower house with 68 seats out of the total of 120, and 21 of the 38 senate seats. The Communist Party, which is a coalition member of the Left, has doubled its representation in the lower house to six. Four former leftist leaders of the student agitation, including the charismatic Camila Vallejo – an icon of the protest movement in 2011-12 – have entered the Congress.

The outgoing conservative government of the billionaire-President Piñera, which delivered on the macroeconomic front with an average GDP growth of 5.7% from 2010 to 2012 (according to data of the UN Commission for Latin America and the Caribbean, and the World Bank) failed the middle class and the poor, who felt left out in the growth story. Piñera is ending his term with the lowest popularity rating compared to his predecessors since 1989.

Both candidates in the run-off election, Michelle Bachelet and Evelyn Matthei, are the daughters of Air force Generals, who played together as children while their fathers were friends and neighbours. Bachelet’s father died after imprisonment and torture by the Pinochet dictatorship, and Mattei’s father was part of the regime. Bachelet was also detained, tortured and exiled. But she had not let her personal suffering influence her dealings with the military when she was Defence Minister in 2002-04.

With Bachelet’s win in the second round of elections, Latin America has the distinction of electing three leftist female presidents (Bachelet, President Cristina de Kirchner of Argentina and Dilma Rousseff of Brazil) who were all victims of the military dictatorships in their countries.

The return of the Left does not mean any drastic change of direction in Chile. It will be just course correction and more inclusive growth. In her election manifesto, Bachelet has promised free higher education, an increase in taxes, and constitutional reforms. But Bachelet will be able to implement only limited educational and tax reforms. She will find it difficult to change the Constitution (a vestige of the Pinochet era) because her coalition does not have the required two-thirds Congressional majority. She could still try to negotiate with her right-wing colleagues, since the moderates from the right won and the hardliners lost in the November elections.

Chile has already established its distinction as the Latin American country with the most stable and sober democracy, and a dynamic and growing market. It stands out in the region as the country with the least corruption, crime, and violence. The economy has sound macroeconomic fundamentals where inflation, fiscal deficit, unemployment and external debt are low, foreign exchange reserves are high, and income per capita is around $15,000.

Chile ranks ahead of other Latin American countries in credit ratings and the World Bank Index of ease of doing business. It has one of the best pension systems in the world and a solid sovereign wealth fund created from windfall profits made from the high prices and demand for its copper exports in recent years. It has one of the most open markets in the world and has signed free trade agreements (FTAs) with a record number of 60 countries. It has reduced the dependence on copper exports and diversified its exports and economy. Besides having attracted substantial foreign direct investment (FDI), Chile is also a leading Latin American investor in other countries.

Credit for these indicators should be given to the leftist governments, which laid a solid foundation of democratic practices and a sound economic model of growth with egalitarian values in the 20 years of their rule after the end of military dictatorship in 1990. They achieved these without revolutionary rhetoric, threat to capitalism, or division of the society.

On the negative side, about 15% of Chileans are still poor and Chile remains a country of high disparity in income and opportunities. The student protests in 2011-12 were against the high fees in universities, unaffordable for many even from the middle class.

The victory of the Left in Chile is part of the Left turn in many countries of Latin America in the last three decades. These countries suffered rightist military dictatorships in the last century and the neoliberal policies of the post-dictatorship governments, which worsened the problems of inequality and poverty – eventually causing the “Lost Decade” of the region in the 1980s.

But the Left that emerged was of two kinds: the radical group led by the late Hugo Chavez; and the moderate and pragmatic group which has come to power in Chile, Brazil, Uruguay, Peru, and Mexico. The Chavista model stands discredited as evident in Venezuelans suffering from the highest rate of inflation, rampant crime, and corruption, combined with a scarcity of essential and consumer items, foreign exchange, power shortages, and mismanagement of the economy.

Venezuelan President Nicolas Maduro, who imitates Chavez, continues the policy of class warfare. The Venezuelan Left is divisive and confrontationist and portrays the private sector as capitalist enemies of the people. It pursues its polarising approach in foreign policy too. It thrives on outmoded anti-imperialistic rhetoric, dividing the region. The other radical Left regimes in power in Argentina, Ecuador, Bolivia, Nicaragua, and Cuba have also stunted the progress of their countries by divisive rhetoric and policies. President Cristina has taken Argentina back to the bad old days with her policies of irrational import and foreign exchange controls.

On the other hand, the Chilean Left is more enlightened, respectful of opponents, and seeks to make changes in a conciliatory and gradual manner. It speaks a civilized language, respecting the dignity of opponents. It follows a balanced mix of pro-poor and pro-market policies with as much emphasis on the creation of wealth by the private sector as on the distribution of wealth among the poor. The Chilean Left has pursued a sensible foreign policy of making friends all around and opening markets for their exports. It has signed FTAs with the U.S. as well as with China.

Latin America, which has suffered the worst consequences of extreme ideological polarisations in the past, looks to the Chilean Left as the role model. This is good for the long-term health of democracy, inclusive economic growth, and the prosperity of 21st century Latin America, where 28% of the people still living below the poverty line must be lifted out of poverty.

The Chilean model could also be the example for leftist parties around the world, including in India, who are trying to position themselves in the contemporary political landscape.

Ambassador Viswanathan is Distinguished Fellow, Latin America Studies, Gateway House. He is the former Indian Ambassador to Argentina, Uruguay, Paraguay and Venezuela, and Consul General in Sao Paulo.

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