Wednesday, April 23, 2014
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The Return of Bachelet

SANTIAGO – Michelle Bachelet’s landslide victory in Chile’s recent presidential election represents a mandate that many political leaders could only envy. But her return to the presidency comes with a crucial caveat: record-high abstention calls into question the claim made by some within her coalition that voters want a profound shift away from the market-friendly policies that have made Chile Latin America’s most stable and successful democracy.

In 2010, Bachelet completed her first four-year term as president with an 80% approval rating. Her fiscally responsible economic policies, combined with a strong focus on poverty-alleviating social programs, allowed her government to weather the global financial crisis of 2008. Still, after 20 years in power, her left-wing Concertación coalition was defeated in the presidential election that year by the center-right candidate, Sebastián Piñera.

Now, after a single term of an economically successful but unpopular Piñera government, Chileans have returned Bachelet to power. In addition to being Chile’s first woman president, Bachelet is the first president since 1938 to be elected to a second term, and her margin of victory – 62% to 38% – over the right-wing candidate, Evelyn Matthei, set a new record. But the high abstention rate in this election – the first with automatic registration and non-mandatory voting – also means that Bachelet will become President with fewer votes than any of her predecessors since democracy was restored in 1990.

Bachelet will not have the luxury of a honeymoon. During the presidential campaign, as the candidate of the New Majority coalition – the old Concertación plus the Communist Party and other small leftist groups – she made specific commitments that helped raise expectations. Though the government’s program is likely to be less ambitious and qualify many of her campaign promises, the poor and lower middle class – her main electoral base – expect that she will move swiftly, for example, to end for-profit elementary and secondary education and offer free universal tertiary education.

Bachelet has also vowed to reform the tax system to reduce inequality, strengthen the state’s role in the pension system, and improve the quality and coverage of the health-care system. She has even promised a new constitution.

But, though Bachelet’s coalition has a clear majority in Congress, supermajority requirements will force her to bargain with the right-wing opposition to pass her reforms. In addition, because her own coalition includes parties from the far left to the center, Bachelet will need to broker compromises with her allies.

Moreover, hard times will mean hard choices. After four years of rapid growth and almost full employment under Piñera, the economy is slowing. The falling price of copper, Chile’s main export commodity, suggests what lies ahead. After campaigning on a promise to redistribute wealth, Bachelet will have to focus on fostering growth and job creation.

As the economic outlook worsens, voters’ priorities will shift from broadening access to high-quality education and health care to promoting employment. Bachelet’s own commitment to replace the constitution – an authoritarian holdover that she compares to a house that no longer fits the national family’s needs – will now compete with other urgent priorities. After all, even if you need a new house, it makes no sense to demolish the old one just before a storm.

In her first term, Bachelet adopted draconian but fiscally responsible policies, generating huge government surpluses that were earmarked for an ambitious pension reform and a rainy-day sovereign wealth fund. She implemented gradual and pragmatic reforms in education, pensions, health care, and competitiveness, but worked hard to build consensus and promote dialogue and popular participation.

In her second term, Bachelet will have to weigh her promise of radical reforms with her past experience (her only radical reform in her first term – a new public transportation system in the capital city of Santiago – backfired badly). In her victory speech, she reiterated some common campaign themes, including the new constitution, improvements to the education system, and gender parity in her administration. But she also insisted on her commitment to responsible and sustainable reforms.

Some critics have warned that a hard left turn awaits Chile under Bachelet. But, given the country’s strong neoliberal foundations, consistent market-friendly policies, and widespread support for moderate change, Bachelet will most likely change course only slightly. Chile will remain further to the right than most Latin American countries and, indeed, than most OECD members – the group of countries with which Chile has grown accustomed to comparing itself.

Chile also remains one of Latin America’s least egalitarian countries. In recent years, social movements have demanded that the state play a stronger role in redistribution, and Bachelet’s mandate will be to reduce inequality. If she accomplishes this through moderate and gradual reforms, Chile’s democracy will grow stronger and more inclusive. If, however, she signals a preference for an alternative path, democratic institutions, public opinion, and economic pressure will remind her that Chileans do not favor changing the approach that has made their country the envy of Latin America.

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