If politicians are good at making campaign promises, then they are even better at breaking them. The reason is obvious: it’s easy to make promises in the heat of an election, but all too often those promises confront the hard realities of policymaking once in office. It’s something that you think a two-time elected president would understand and try to avoid.
Unfortunately, Chilean President Michelle Bachelet is now facing that very dilemma—whether to hew to her original promises in the face of mounting citizen dissatisfaction or abandon them altogether.
The massive student-led protests of 2011 became a watershed moment in post-Pinochet Chile. The protests represented the dissatisfaction of the younger generation with an economic model that had provided the country with stable growth and reduced poverty but, by 2011, confronted structural challenges for broader social inclusion and opportunity. At the time a candidate, Bachelet and her coalition—the New Majority—built an electoral platform based on reducing inequality by emphasizing redistribution.
To achieve these goals, Bachelet promised a package of structural changes that included free and universal education for 70 percent of the poorest students, tax reforms to fund the promised free education, labor reforms, and a new constitution that would definitively break with the country’s authoritarian past. (Pinochet instituted the current one in 1980). In hindsight, given Chile’s short presidential term of four years and ban on consecutive re-election, the plan was far too ambitious.
The government has run into numerous major obstacles that have forced it to backtrack on its promises. The first has been a series of corruption scandals that have shaken the country. Reports of illegal campaign funding originally affected the opposition parties, but the trail soon led to other political parties, including members of Bachelet’s New Majority coalition. Today, more than a dozen politicians from across the political spectrum—from the Socialist Party to the conservative Independent Democratic Union—are under investigation for alleged tax fraud. The reports have shed light on the hidden relationship between money and politics that has developed since the country’s transition from the former authoritarian regime.
But more than corruption, what has bedeviled the Bachelet government the most have been the charges of influence peddling. The president found her squeaky-clean image and government in a tough spot after the media revealed that her son, Sebastián Dávalos, and daughter-in-law received a highly questionable loan from the bank of one of Chile’s leading businessmen. A $10 million loan to a company owned by her daughter-in-law—and where Dávalos worked—was approved on December 16th 2013, the day after Bachelet was elected president. The hidden relationships between her son and high-flying elite businessmen stood in contrast to the President’s image of social inclusion and equality, especially after Bachelet appointed her son as Sociocultural Director of the presidential palace, La Moneda. Shortly after the news of the loan became public Dávalos resigned.
Added to these political problems has been the country’s poor economic performance. The downturn has been triggered by a flat-lining economy and the global fall in the price of copper, the country’s main export. According to MIT’s Observatory of Economic Complexity, copper-related products (refined copper, copper ore and raw copper) constitute 52.1 percent of Chile’s exports. In September 2014—when the fiscal budget for 2015 was planned and the estimated price of copper stood at $3.07 per pound—the Ministry of Treasury predicted that GDP growth would amount to 4.3 percent. It was far too optimistic an assessment. Since the budget projections, the price of copper has dropped to a low of $2.31 per pound, as of last month. As a result, the International Monetary Fund (IMF) has adjusted downward its predictions of Chile’s economic growth to 2.5 percent this year and 3.1 percent in 2016. Should the price of copper continue dropping, economic growth could continue to decrease.
Granted, Chile is in a far better position than its regional neighbors. According to the IMF, Argentina’s economy will contract by -0.3 percent in 2015, with only 0.1 percent growth expected for 2016. Meanwhile, Brazil’s economy may—according to some recent estimates—fall by more than 2 percent this year and at best grow by 0.7 percent in 2016. Finally, Venezuela’s economy—heavily influenced by oil prices—is estimated to contract by -7 percent in 2015 and -4 percent in 2016.
The collision of corruption, influence-peddling scandals and economic doldrums has taken a toll on Bachelet’s approval ratings. According to the latest Centro de Estudios Públicos survey, 22 percent of Chileans approve of the president; those who disapprove of her have increased to 61 percent. This is the worst approval rating any Chilean president has experienced since the democratic transition. The decline of support has added further tension to the already fragile ruling coalition of leftists—including communists and socialists—and conservative Christian Democrats in the governing coalition. Member parties have started to distance themselves from the government and President Bachelet’s congressional bloc has become increasingly undisciplined.
In early May 2015, in response to her political difficulties, Bachelet re-shuffled her cabinet, naming Jorge Burgos as Minister of the Interior and Rodrigo Valdés as Minister of Treasury. The new appointments have shifted the government toward the center, similar to the cabinets during the Concertación years of 1990 to 2010, when the country was governed by a stable, consensus-based coalition of Christian Democrats and Socialists.
By now most Chileans have come to realize that not all of Bachelet’s campaign promises will be fulfilled: free education will not be available to everyone promised, the tax reform will not gather all of the money needed, and the government remains ambiguous about writing a new constitution. The government will probably pay a price for abandoning its original promises. With local elections in 2016, voters are likely to punish the governing coalition’s candidates. Yet sooner rather than later, the government has to confront the reality of the challenges ahead. Only grounded, realistic policies by the government for the next three years, and adjusting—if not discarding—the current ones, will improve the political, social and economic landscape for Chile.
