Change in chile

Change in chile

Its new president faces a tough economic task amid demands for a new Constitution

The election of the centre-right Sebastián Piñera as Chile’s President in a run-off over the last weekend comes at a critical juncture, with the country’s political boundaries in the post-Pinochet era being redrawn. The two-party dominance characteristic of the past three decades has effectively ended, thanks to the system of proportional representation brought in by the outgoing President, Michelle Bachelet. A direct fallout of the electoral reform is the emergence of the left-wing Frente Amplio, which counts among its supporters the new middle classes that shot to prominence during the South American commodities boom of the previous decade. It romped home as Chile’s third largest political force in recent legislative elections, surprising pollsters. Among the front’s priorities is the establishment of a constituent assembly to draft a new Constitution, and thus break completely from the Pinochet years. To be sure, Mr. Piñera’s victory raises expectations of the country’s return to the robust economic performance of his previous term during 2010-14. An immediate challenge before him is Chile’s meagre growth rate, of below 2%, which is ascribed to the failure of Ms. Bachelet’s welfarist economics.

A particularly ticklish issue for Mr. Piñera, a former airline magnate, would be fulfilling his poll promise to roll back labour reforms and enact corporate tax cuts. The sizeable presence in Congress of the Frente Amplio as well as of splinter groups from the centre-left coalition could limit room for manoeuvre. Any curbs on access to higher education, for instance, would run counter to the prevailing mood among the middle class, which wants further improvements to the overall standard of living. Chile’s mining lobby meanwhile wants regulations on permits to be eased, in order to capitalise on global demand for copper, which accounts for a large share of the country’s exports. In his second term, Mr. Piñera will have to walk a tightrope between the competing demands of the business community and the upwardly mobile sections of the population. Along with the 2015 election of the business-friendly Mauricio Macri as President in Argentina, Mr. Piñera’s return signals a further consolidation of the centre-right in Latin America. The rightward swing is expected to spread across the region, as governments scheduled to face the electorate in the coming months are mired in corruption scandals. Economic consolidation is a critical priority in Latin America, still reeling under the effects of the plummeting commodities markets in recent years. But governments may not be able to ignore demands that the fruits of growth be distributed evenly.

Courtesy : The Hindu Editorial