Chile’s Constitutional Referendum Could Result in Chaos

Augusto Pinochet’s legacy hasn’t aged well in the era of cancel culture (and for good reason). However, it’s fair to say that Chile’s current, pro-free market constitution, drafted in 1980 during his regime, has served the country well, bringing staggering economic success by Latin American and even global standards. But in an October 2020 referendum, 78 percent of Chilean voters chose to ditch the constitution altogether, a damnatio memoriae by unequivocal popular decree.

It seemingly mattered little to voters that, for years, Chile has had one of the region’s highest per capita GDP. As Chilean writer Axel Kaiser points out, the country has led Latin America in terms of access to university education and poverty reduction. Poverty, in fact, decreased from 45 percent in 1982 to a mere 8 percent in 2014, according to Chile’s Commission on National Productivity. The country (which is the world’s leading copper exporter and was the second largest lithium producer in 2020) also reduced inequality and led The Organization for Economic Cooperation and Development in social mobility in 2018. Not bad for a nation whose economy between 1950 and 1970 was, according to a Library of Congress country study“the poorest among Latin America’s large and medium-sized countries.”

Chile’s progress is not all due to Pinochet’s original 1980, which was often amended subsequent center-left, democratically elected governments, most thoroughly by former President Ricardo Lagos, who served from 2000 to 2006. Some critics even refer to the current arrangement as the “Lagos ConstitutionThe question now, however, is whether Chileans will approve or reject a new constitutional draft in another referendum, which will be held on September 4.

Curiously, this year’s constitutional referendum may be a consequence of the December 2011 election for the University of Chile Student Federation (FECH), which set off a student movement against”unacceptable inequality” and other causes and eventually took over the national government.

Usually, the vote for student body president of a South American public university is an obscure, somniferous proceeding that involves Che Guevara iconography, anti-capitalist slogans, and unfiltered cigarette smoke. But that year’s FECH election, which was decided by fewer than 8,000 ballots, was featured in the global press. The BBC consulted political analysts and marketing specialists to dissect its results. The New York Times lamented the narrow defeat of the incumbent, Camila Vallejo, a 23-year-old geography student and Communist Party member, who the headline described as “the world’s most glamorous revolutionary.”

During the previous seven months, student protestthe largest since the end of the Pinochet era—had caused havoc across Chile. Vallejo and other student leaders demanded free tuition, a ban on private education profits, and an end to school choice, which is a main feature of the Chilean system. Sebastián Piñera, the then-recently center-right president, caved in pressure and began talks on educational reform with the opposition, Concertación (an alliance of left-wing parties that had ruled the country from 1990 until 2010). The FECH leadership, however, insisted that the social democratic suits in parliament had no right to represent the students.

When the hipped FECH election came around, Vallejo lost to Gabriel Boric, a law student and hardliner who claimed that his rival was indeed negotiating with politicians. He became a national figure and used his platform to gain a seat in Congress In 2013, as did Vallejo and two other student leaders: Giorgio Jackson of Chile’s elite, private Pontifical Catholic University and Karol Cariolathen-general secretary of the Communist Youth of Chile.

“Revolutions,” philosopher Nicolás Gómez Dávila once reflected, “are perfect incubators for bureaucrats.” In Chile, the fledgling saboteurs of 2011 are now running the country: Cariola is poised to become the speaker of the Chamber of Deputies. Vallejo and Jackson are cabinet ministers: Jackson is the general secretary and Vallejo acts as the equivalent of the chief of staff. A 36-year-old Boric became Chile’s sitting president last March. Arguably, the 2011 FECH election was the most important in the country’s recent history.

How did these sanctimonious, sophomoric malcontents end up in charge of Latin America’s most successful economy? For one thing, they wasted no chance to strike, figuratively and literally. In 2017, during the second presidency of socialist Michelle Bachelet, who veered much to the left in comparison to her first term in 2006–10, Boric and company led a new wave of street protests, this time against Chile’s landmark private pension system. In 2019, once Piñera was back in office after winning a second term, the government announced mild fare hikes for the Santiago metro, the most technologically advanced in Latin America. There followed some of the most violent protests in the region’s recent history, euphemistically labeled a “social outburst” in the media. Smelling political blood, the student protesters of yesteryear went after the Chilean Constitution itself.

In 2011, Piñera had yielded ever so slightly to the agitators. In 2019, with 80 metro stations completely or completely destroyed, dozens of toll booths incinerated, and even churches set ablaze, the former president capitulated. He met Boric, among other left-wingarians, and agreed to hold the referendum on whether to summon a new constitutional assembly.

Once Chile’s Constitution was stripped of all legitimacy, Boric’s path to power was clear. In July 2021, he upset Daniel Jadue, a Communist Party veteran and mayor of a Santiago district, in the presidential primary of the Chilean left, which had assembled under an alliance called Apruebo Dignidad, a name that expresses support for the new constitution. In November, Boric came in second place in the first round of the presidential election with 26 percent of the vote, whereas the Concertación’s candidate came in fifth place with a mere 12 percent. The student radicals, backed by the Communist Party, had swept aside the old, moderate left.

In the December 2021 runoff, Boric comfortably won against José Antonio Kast, a Catholic conservative whom the global press compared to former US President Donald Trump and Brazil’s Jair Bolsonaro. Boric was helped by his opponent’s political incompetence—Kast came out in Pinochet’s defense and appeared not to know his own government program during a debate. Boric entered La Moneda, the presidential palace in Santiago, last March. The revolution had triumphed, or so it appeared during Boric’s ephemeral honeymoon with the electorate.

The day after Boric’s election, Chile’s currency dropped by 3.5 percent against the dollar and the country’s dollar-denominated stock index fell by 10 percent. Investors were alarmed by his promises to nationalize the private pension funds, a cornerstone of the financial system, and raise taxes, particularly on the mining sector. As part of his aggressive environmentalist agenda, Boric oppositions A new $2.5 billion iron, copper, and gold mining project by privately-owned Andes Iron that was approved by a regional environment commission last year. And on June 1, he announced the creation of a state-owned lithium company.

Boric named Mario Marcel, a former president of Chile’s central bank who was close to the Concertaciónera governments, as his finance minister, thus helping to ease investor sentiment. The stock market has rebounded somewhat in recent months; The iShares MSCI Chile exchange-traded fund, for instance, is up over 10 percent year to date at the time of writing but is still down over 20 percent from early May 2021 when the constitutional assembly produced its draft text. None of this has helped Boric’s approval ratings, which stood at a dismal 24 percent in May according to one poll.

Boric’s dive in public approval is not only due to the threats against private property, rising inflation, and skyrocketing gas prices but also to rampant in security. Homeicides increased by 29 percent during this year’s first six months, and, for the first time in recent history, carjacking in broad daylight has become common. In the southern region of Araucanía, indigenous Mapuche organizations have launched a string of terrorist attacks. To put it mildly, Boric faced no problems of this caliber in his previous career as a college campus bigwig. And voters have taken notice.

The unpopular president is not allowed to campaign in favor of the new constitution. In recent weeks, however, he claimed that if the “reject” side wins the September 4 referendum, the process should begin anew with the election of yet another constitutional assembly.

Most opinion polls suggest that the “reject” side has a considerable advantage. Buyer’s remorse seems to have kicked in; the new constitutional assembly, elected in May 2021, came up with a 388-article document that The Economist described as “a fiscally irresponsible left-wing wish list.” With its prohibition of “job insecurity” and limitless welfare programs, justified under a plethora of fabricated “social” rights, the new constitution brings to mind the political platform of the adolescent presidential candidate who promised his electorate an indoor, Olympic-size swimming pool and a European grand tour if he is made to preside over the student council.

As Boric indirectly throws the government’s full weight behind the “approve” campaign, voters may still ratify the new constitution. If they don’t, however, months and perhaps years of constitutional chaos can ensue, with no small levels of economic turmoil and uncertainty. Chileans bought left-wing student pipe dreams in haste, and they might end up repenting at leisure.

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