Running in Place

Chile is a case of successful pro-market reform, argues Sebastián Piñera, who stepped down from the presidency on March 11. He is wrong: The Chilean economy has expanded; but growth has had little to do with the former president’s policies – and, worse, it is proving to be unsustainable.

SANTIAGO – A billionaire with a Harvard degree runs for President of Chile promising reforms to enhance productivity and competitiveness, and wins. Once he takes office in 2010, the economy recovers quickly from the global financial crisis, creates jobs, and continues growing until recently. The billionaire, never one to shy from publicity, claims the credit.

Chile is a case of successful pro-market reform, argues Sebastián Piñera, who stepped down from the presidency on March 11. He is wrong. The Chilean economy has expanded, and no one with his or her heart in the right place can fail to celebrate that; but this growth has little to do with the former president’s policies. Even worse, the expansion is proving to be unsustainable, and Chileans will soon feel the consequences of Piñera’s failure to carry out the pro-growth reforms he once promised.

Chile was hit hard by the 2008-2009 financial crisis: foreign loans vanished and the price of copper, Chile’s main export, collapsed. But this time around, the Chilean economy was in shape to withstand massive external shocks.

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