Bachelet, Piñera redux: dissecting the vote in Chile

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Tuesday, December 19, 2017

Leading up to Chile's December 17th runoff vote between Sebastian Piñera and Alejandro Guillier, almost all analysts expected a tremendously close vote, with many in the international press buzzing about a bitterly divisive election.

In reality, though there were pockets of fiery rhetoric from both camps in the long weeks between the first and second rounds, the election was sleepy and the outcome was what had been expected since the municipal elections of 2016. Center-right billionaire Piñera, the president from 2010-2014, secured a resounding victory, meaning in total it will be 16 years of administrations led by Michelle Bachelet – who first came to power in 2006 and will wrap up her second term on Mach 10 – and Piñera, a stability that while boring, is good for the economy.

The election night demonstrated another key element in Chile's continued success as a democracy: the vote was completely trouble-free, the result was clear, and an hour-and a-half after voting stations closed, Guillier graciously conceded. A bit later Piñera and President Bachelet spoke in a televised call, where both demonstrated a kind of humility and kindness rare in modern politics. (The next morning they met for a long and chatty breakfast.)

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The easy conclusion to make is that Piñera's victory is part of a general turning toward the right in Latin America, following elections in Peru and Argentina (and an impeachment in Brazil) that also brought in market-oriented leaders. It makes sense. The region has been hammered by the commodities downturn; people want a new alternative.

But this was an election won by ideas, hard work and planning. Piñera had a clear vision from the start that hardly wavered. He was going to jumpstart Chile's slumping economy with lower corporate taxes and a massive infrastructure plan. He was going to push for green energy and electric cars, open up the key lithium sector to private participation, and digitize the economy. He was going to keep the pension system in place, with a few tweaks.

And he had the backing of 5% economic growth in his first term as president to show he could do it. (He was helped, of course, by booming prices for natural recourses; but then again, you still have to manage your luck well.)

Meanwhile, the day after the first round was over, Piñera, along with several conservative politicians who backed him, started travelling up and down Chile, proving their dedication on the ground, where elections are won. He moved his campaign a bit more to the center, saying he was now open to free technical education and an option to compete with private pension fund managers (AFPs), without changing his core message.

Guillier was so vague as a candidate that he only released his plans for the presidency a few days before the first round; and then, needing to bring together competing voices in a very fractured center-left coalition, found it difficult to convey clear policies before the runoff.

What would he do with the AFP pension system? Would he really forgive student loans to the most indebted 40% of the population? He tried to move his message more to the left, but the competing positions he had to bring together fractured when the Frente Amplio grouping of leftist parties refused to officially endorse him, though many of their leaders did so.

It's not going to be easy for Piñera. As in the US, Chileans have become very apathetic about their politicians. In both first and second rounds, less than 50% of the eligible population voted (though 300,000 more voters showed up in the runoff, a rarity in Chile.)

Governing will also be difficult, with a highly divided congress awaiting Piñera in March. There will be protests, as we saw in his first term. It takes only a quick glance over to Argentina, or Peru, to see how difficult it has been for market-leaning leaders to govern in the region.

During the call with Bachelet on Sunday night, Piñera jokingly told the outgoing president that he envied her, because "I know how difficult the job is."

She smiled. "It's even more complex every day."