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Commentary

Chile’s Road Ahead


     
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Chile’s steady course will continue regardless of who wins the runoff presidential election this Sunday. That election pits Socialist Michelle Bachelet, the daughter of an Air Force officer who died in Pinochet’s prisons, against Sebastián Piñera, a billionaire businessman who opposed Pinochet toward the end of his rule and managed to defeat Joaquín Lavín, the other conservative candidate, in the first round.

The differences between Bachelet—representing the governing coalition that has been in power for 16 years—and Piñera, who has emerged as the new conservative leader, are not small, especially in relation to civil liberties and ideological roots. But, unlike every other Latin American country, whoever wins Chile’s presidential election will not alter the path that country has been following for a generation. Among developing nations nowadays, that can only be said of central European, Baltic and East Asian countries.

Former communist countries, especially the Baltic and the central European nations, have adopted a model based on free trade and political democracy under the rule of law. Elections revolve around small variations of that basic model. Thanks to this, and even though there is still a long way to go in order to complete the de-socialization of those nations, 40 million citizens have overcome poverty in the last six years alone. Among Latin American nations, the only equivalent case is that of Chile, where more than one million people abandoned poverty in the last decade and where no more than one fifth of the population suffers serious privations.

Many Chilean friends tell me that if a referendum were held, Chilean voters would probably opt for revising the foundations of their free-market model. According to them, what prevents this revision is the consensus reached by the so-called “political class,” including the Socialist Party, which drags society down a path it doesn’t really wish for. Chilean society, they maintain, is to the left of the center-left governing coalition. Maybe. But no political democracy has ever allowed its leaders to take the people in a direction they did not approve of indefinitely (the reason why, incidentally, democracy understood as unrestrained majoritism has gradually chipped away at the foundations of the free society in many nations). And if Chileans were deeply at odds with their own social model they would not have almost thrown the governing coalition from power in the previous presidential elections. The main reason why conservative Joaquín Lavín almost defeated Ricardo Lagos six years ago was not so much a reluctance to give the ruling coalition its third consecutive victory as the fear that Lagos was an old-fashioned Socialist.

Things have now changed because Lagos showed he was more in tune with the prevailing model than his predecessors, both Christian Democrats. But his near defeat in 1999 indicates that Chilean society was—and is—interested in preserving its model. No family having to earn its daily bread likes complacent speeches. But when indicators consistently show that Chile is the only Latin American country that has seen its per capita GDP rise, for instance, as a proportion of the per capita GDP of the United States in the last couple of decades, most Chilean families must have a sense that things are moving in the right direction.

Does this mean that elections are useless? No. For starters, any party or coalition that stays in power too long develops dangerous habits (they were starting to show even under Lagos) and it is important that they feel the pressure. It is a good thing that the center-right has at least caused Bachelet a bit of anguish in the last phase of this presidential campaign even if she is still the favorite in next Sunday’s election. It is also positive that Lavín’s leadership on the right has suffered competitive pressure and ultimately defeat at the hands of Piñera because it is unhealthy for opposition leaders to become untouchable “caudillos.”

Chile has two great challenges ahead. First, it needs to deepen its reforms toward the free society. Secondly, the ruling coalition needs, at some point, to lose to the opposition so that Pinochet’s ghost can dissipate once and for all. Spain’s transition from dictatorship to democracy was not complete until the right, under José María Aznar, showed that it was no longer Franco’s right. Chile’s transition will not be complete until the governing center-right shows it has buried Pinochet.

As for the social and economic model, complacency is the real enemy. Chile is not yet a developed nation or a fully free society. Its per capita GDP, some $7,000, lags behind Israel, Kuwait, Cyprus or Puerto Rico. There are still too many poor people. And many other “emerging” countries are galloping ahead. Even Hungary, under communism a generation ago, has now practically eliminated poverty. Many reforms are pending in Chile, including tax, labor and education reforms. Because they will mean rolling back the dead hand of the state, a consensus will be needed along the lines of the consensus that has accompanied other reforms. Neither candidate has offered further reform along those lines. Without it, Chile will still shine by comparison with its neighbors, but in international terms will be middle of the table. The impressive results so far indicate there is no reason for Chileans to settle for middle of the table.


Alvaro Vargas Llosa is Senior Fellow of The Center on Global Prosperity at The Independent Institute. He is a native of Peru and received his B.S.C. in international history from the London School of Economics. His Independent Institute books include Global Crossings: Immigration, Civilization, and America, Lessons From the Poor: Triumph of the Entrepreneurial Spirit, The Che Guevara Myth and the Future of Liberty, and Liberty for Latin America.

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