Political Crisis in Chile – When Defeat is Ideological

Some analysts and political leaders were right: the pandemic provided Chile’s government with an opportunity to regain support it lost during the social uprising. But a less favorable scenario emerged. And today, reality even shakes the right’s ideological basis.

Although it is true that a communication strategy that projected a well-prepared government to face the arrival of Covid-19 enabled officials in government palace La Moneda to rise in the polls – the president had only 6% at the end of last year – that effect also evaporated once we entered the most critical phase.

Confusing figures, late decisions, especially regarding the quarantine in the Metropolitan Region, and provocative and little empathetic statements from former Health Minister Jaime Mañalich sharpened the contrast between the excessive triumphalism that led the president to declare a “new normality” and Chile becoming one of the countries with most cases.

Leading the Economy – Without Support

President Sebastián Piñera has now 17% citizen support, similar to the mid-March figure, when phase IV of the pandemic started. The change of the Health Minister, which generated high expectations, has been diluted over time and did not even help much. In addition to an evident change in tone, Enrique Paris has not made a big difference in the strategy that Jaime Mañalich defined. And the president’s approval is among the lowest of all international leaders that have managed the crisis. For perspective, in Argentina – which is enduring one of the longest confinements – President Alberto Fernández has dropped to 49%, which has generated controversy in that country.

Hence, a very critical panorama is looming for the Chilean president, considering that he will have to lead a country almost in ruins. For this year, GDP is estimated to drop 7.1%, after recent monthly economic activity indices registered drops of 14% and 15%. To the projected social-economic crisis must be added a possible resurgence of the social outbreak the health situation put on hold.

Nothing But Crises

But if managing Covid-19 became a headache for the president, the defeat suffered in Congress during the discussion of allowing savers to withdraw 10% of their pension savings unleashed a deep crisis between the ruling parties. The defeat – which included 13 representatives from the ruling Chile Vamos coalition voting with the opposition – was a blow to the heart of the economic model the president’s brother and economist José Piñera helped create in the 1980s. Chile Vamos’ leadership strongly resented the blow. The setback reinforces the “No + AFP” (No more AFP) movement which started years ago and played a strong role during the social outbreak.

The curious thing is that the official narrative has focused on defending the business model that supports the system. This model allows pension funds to obtain great profits by investing savers’ contributions in Chilean and foreign companies rather than in alleviating the cost retirement carries for citizens.

Consensus is that the main responsibility for the government’s defeat was its late response. Leaders neglected the middle class, leaving it to its own devices during these difficult months when unemployment skyrocketed to 11%. Some estimates put it at 20% by year-end. However, La Moneda announced an aid package – considered insufficient even by Chile Vamos parties – a few days after the first vote. But by then, the 10% withdrawal had already generated great citizen support.

Read more:

The Pension System in Chile: “A Reform is Not Enough”

More than a Withdrawal

The right-wing parties immediately began to press hard so that when the project is voted the second time, “dissidents” change their position. The government presented a second package of measures to avoid the votes. But whatever the fate of the project – if it passes the second round, it would go to the Senate – Chile’s right has reached a very difficult crossroads, or what psychologists call “double bind,” that is, any of the two available paths lead to unwanted effects.

If the right saves the situation in Congress and aligns its supporters, it will surely suffer punishment from the citizenry. This will not just have immediate consequences for Piñera’s approval, but will become an essential point on the political agenda of the plebiscite on a new Constitution – if it moves ahead – and in the several elections in 2021. On the other hand, if the project is approved, the coalition will face terminal breakdown, triggering a reordering of the right’s political map.

In that scenario we will have a hardline group – including Pinochet admirer José Antonio Kast, who has maintained a planned and intelligent distance so far – and a pragmatic wing that can approach center and center-left parties such as the Christian Democrats, Radical Party or the PPD.

Without a doubt, the right has suffered a profound ideological defeat which will have a second part, regardless of the result of the retirement savings project. Very difficult times are coming for the government. What a contrast to the “Better Times” Piñera promised during his 2017 campaign and with which he won 54% of the votes in the second round.

More from Germán Silva:

Unrest in Chile Vamos: The Coalition Break-up

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