FAES Analysis Chile choses the path of change


José Herrera Antonaya is director of International at FAES

Sebastián Piñera has obtained an overwhelming victory in the second round of the presidential elections with around 3.800.000 votes, 54,57% of the total. This represents the highest number of votes ever obtained by a candidate since 1993. The left candidate, Alejandro Guillier, in a gesture which does him credit, has classified it as “a relentless and solid triumph”, at the same time announcing a constructive opposition.

Piñera achieved 700.000 votes more than in the first round, coming not only from the conservative sector which supported José Antonio Kast, but also from most part of the 300.000 voters who voted only in the second round. Moreover, it has had the support of many former voters of the Christian democracy who do not understand the interest on keeping alliances which emerged in the times of the Concertation and which are obsolete now. Such political leaders will need to decide now whether to support in the Parliament the reforms of the new government or be set aside in a marginal position of the Chilean political space.

After an electoral campaign in which it has been confirmed the deep ideological differences between the sectors, the center-right comes out very strengthened and now has the historic responsibility of carrying out its electoral proposals. Chileans have supported a reformist agenda aimed at modernizing the economy and transforming the inefficient public systems of pensions, health and education.

In the economic area, the new government hopes to attract investment trough a liberal agenda which advocates for a gradual tax cut, more labor flexibility, more competition and less bureaucratic obstacles and interventionism of the administration.

In the education field, it suggests reforms against state interventionism, oriented to give more support to families and civil society, more autonomy to teachers and new evaluation mechanisms and incentives mainly focused in primary education and in the most vulnerable students.

In health issues, it is planned a deep reform of the public assurance system to improve its efficiency, mainly in the field of primary health care. Moreover, it is set as a priority the fight against long waiting lists, by giving the possibility to add the private sector as service provider in the public system. Equally, it will be guaranteed that patients with serious and terminal illnesses receive proper attention.

Regarding the pension system, Piñera urges upon a reform to increase the individual savings of workers (contribution increases until 4%), which mitigates the impact of the rise in the labor cost since it directly benefits the future pensions of the same worker and not of others. Instead of choosing a sharing model, he intends that the system is financed by general taxes and not by taxes on labor. It also introduces improvements to the lowest pensions; the ones of those who, being middle-class, contributed during a noteworthy number of years.

Finally, regarding the constitutional reform promoted by the left, the elected president seems cautious and advocates to maintain the rules and institutions which gave stability and progress to the country during all the democratic period.

In short, it is a major reformist agenda that if taken into practice it would transform the country and will deepen the breach between the two Americas; the one of the development, progress and reforms for the future represented by countries such as Chile, Argentina, Peru or Colombia; and the one of regression and failure embodied in Cuba, Venezuela, Nicaragua or Bolivia.

Translated by María Maseda Varela

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