A Cabinet to Calm the Ruling Coalition

4:0. This score doesn’t refer to a football match but to the government’s defeat in parliament. Three votes lost in the Lower House and one in the Senate. The president had to try and retake the initiative.

Government palace La Moneda suffered this resounding defeat due to its failure in the discussion around the law that allows individuals to withdraw 10% from their privately managed pension funds, or AFPs. In the last voting round, the bill garnered 116 votes in favor, including 35 from representatives that are members of ruling coalition parties. This was not only an achievement yearned for by citizens – 80% are in favor – but it also showed how relevant the discussion around a new Constitution will be. The threshold for the pension law was so high that in another time in history its success would have been impossible.

But the defeat also sparked a deep crisis among the parties of the Chile Vamos coalition. Requests to replace Interior Minister Gonzalo Blumel, member of the more liberal Evópoli party, grew strongly from the right-wing UDI and RN parties. Attacks on Evópoli, the party that backs the president the strongest, intensified so much that it suffered a heavy blow with the change of cabinet on Tuesday. And war broke out not only between the parties.

Within National Renewal (RN), the factions led by Mario Desbordes (reformist) and Andrés Allamand (orthodox) criticized each other for the pension bill defeat. And within Independent Democratic Union (UDI), the dogmatists, led by party chief Jacqueline van Rysselberghe, and the pragmatists, represented by presidential frontrunner and the Mayor of Santiago’s Las Condes district, Joaquín Lavín, saw eye to an eye.

The Wider Consequences

What’s certain is that beyond the break-up of Chile Vamos, the pension vote threw into question a central pillar of the socio-political model dictator Augusto Pinochet promoted. The AFPs, created 40 years ago by José Piñera – the president’s brother – have been under fire since the return of democracy. One of the biggest demands last year during the social outbreak was to do away with them. In a way that demand raised suspicions of conflicts of interest in the political class. Accordingly, the hard right started fierce opposition to the 10% withdrawal bill. The five UDI representatives who voted in favor were put before the party court, leading three of them to resign.

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Opposition Seeks to Nationalize Chilean Pension System

The president’s poll numbers dropped in line with the approval of the project. Sebastián Piñera reached 12%, compared to 27% a month ago, according to polling firm Cadem. This figure is similar to the one from March 14, the day before Chile entered phase IV of the pandemic, temporarily halting the social outbreak. Piñera could definitely not capitalize on anything regarding the management of Covid-19. While the pandemic has receded a bit for political leaders, it continues to hit important parts of the country, although cases are falling in the Metropolitan Region.

With the wind blowing in his face, due to low citizen support and coalition conflicts, Piñera was pressured by the parties to change the cabinet. He seems to have chosen one to calm the waters in Chile Vamos, while sending contradictory signals to citizens.

Hardliners Against a New Constitution

Víctor Pérez became Interior Minister. He’s been a member of UDI for 30 years and a hardliner, very close to van Rysselberghe. Pérez voted against the 10% withdrawal, has criticized human rights organizations, and advocates for rejecting a new Constitution in the October plebiscite. He’s without a doubt a victory for the UDI dogmatists. In the case of RN, adding Allamand (foreign affairs) and Desbordes (defense) to the cabinet is a Solomonic solution for the party’s internal “war.”

Former senator Allamand has become the benchmark for RN’s most extreme right while Desbordes has become the person that most seeks dialogue. He was even the driving force behind the 10% withdrawal project – and harshly criticized by Allamand – and is a determined “approve” voter in October. Piñera now got these two ex-parliamentarians out of the ring.

The rest are just movements but strengthen coalition leaders that tip the balance toward the government. Yet, that does not solve any of La Moneda’s serious problems. These include the public’s low confidence in the political leadership, the annoyance with the hardline position it took during the social outbreak (which is gradually returning), the errors in the strategy against Covid-19, and the rejection of the 10% project.

This new cabinet is a desperate attempt by Piñera to fix internal problems at whatever cost but does not seem to generate an inflection point. UDI takes the stage in the political team, displacing Evópoli, signaling greater toughness, just as the country will face the plebiscite. Two of the three new key ministers, Pérez and government spokesperson Jaime Bellolio, have already said they will vote ‘reject’ in the October plebiscite. That means they support the 1980 Constitution, the dictator’s last remaining pillar.

Read more:

Opposition Seeks to Nationalize Chilean Pension System

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