Who’s Boss of Chile’s Foreign Relations?

By Christian Scheinpflug

This post appeared elsewhere in a slightly different version on April 7, 2017.

In March, the High-level Dialogue on Integration Initiatives in the Asia-Pacific took place in Viña del Mar. Throughout, the spectre of Trump the enemy of free trade made the rounds. Paradoxically, all parties committed to a trade paradigm that contributed to bringing Mr Trump to power, Brexit about, and neo-fascist right-wing populism into the mainstream. Thus, for Chile holding on to the corpse of the TPP, a prime example of a “conspiracy against the public” Adam Smith already warned about, seems crazy.

Over-protected bureaucrats like Paulina Naval, head of the Directorate for Economic International Relations (DIRECON), prescribe as remedy for the social costs economic globalisation generates easier small-business creation. But this would leave the losers of global competition to confront even fiercer competition on their own, and it would enable decision-makers to evade accountability.

Under this scenario, most small-business owners had to compete in Chile’s bogus free-market economy (the economist Fernando Leiva Letelier calculated that in 2013 20 conglomerates controlled 53% of GDP), fighting to land contracts with the Paulmanns, Angelinis, Mattes, and/or Luksics, whose businesses will save social security and administrative costs. Their conglomerates, on the other hand, win big from free trade as they can count on DIRECON because, according to the directorate foreign trade carries a positive image of Chile’s economy into the world.

Therefore, Chile’s moneyed class, in Leiva Letelier’s words, had been able to launch “an intensive effort to internationalise operations.” This take-off came about in Chile’s Faustian post-dictatorship democracy, when oligarchs did statecraft and somewhat agreed to the post-1989 regime in exchange for politicians’ promise to keep neoliberal capitalism.

The country’s richest man, Andrónico Luksic, most successfully aligned policy-making with special interests. In 2014, he initiated a propaganda campaign to distract from his Antofagasta Minerals or Banco de Chile, whose business models involve depleting water resources or driving citizens into debt. On his initiative, intellectuals worked out 95 proposals, which mostly have served as the current government’s programme, and many of which — sometimes implicitly — call for greater international engagement for economic sake.

Meanwhile, Mr Luksic, the not-so-ordinary citizen, grows bolder and openly lectures Bolivia on Twitter. And this smartass attitude potentially strengthens the Morales administration’s strategy of aggressively painting Chile as imperialist, dominated by unelected billionaires. Mr Luksic and foreign-policy makers might be delusional about it, but a prominent super-rich lashing out against another country hurts Chile’s national interest.

Oligarchic influence runs deeper yet. The former entrepreneur-president Sebastián Piñera entrenched in 2012 their power in ENSYD, Chile’s defence strategy until 2024. ENSYD promotes pursuing national interests via international cooperation, and Mr Piñera allowed to include a mechanism that enables special interests to execute such prerogative of the state through a public-private working group. In it public servants and entrepreneurs “debate…solution[s] to specific security problems,” allowing private power to shape decisions around military deployment or alliance building. Worse, if the group still operates (no reports have emerged), it does so removed from scrutiny, making it impossible for the public to know who acts — or doesn’t — in its interest. The Piñera administration slyly circumvented public participation by creating an extra consultative body for members of civil society. Therefore, civil society is supposed to provide ideas the ‘public’-private group either considers or dismisses.

In such a constellation diplomatic and academic expertise is pitched against private interest, but the silence from learned experts indicates that they are happier cheering a special interest government than speaking truth to power. Strategic blunders like Chile’s Falklands policy thus result.

To be fair, the focus on trade is understandable. Ex-President Lagos, whatever his many faults, brilliantly managed US threats before the Iraq war, while the UK was plotting from the shadows. Mr Lagos deftly wielded the political power of trade deals, because he understood that the EU agreement would cushion a fallout with Washington. With a less skilled leader, Chile would have paid dearly for the US elite’s megalomania. Given that experience, the current push into the global economy seems nonetheless reckless, as leaders clearly know about the potential political implications of deals — and still, they allow Chile sleepwalking into a genocide in Myanmar.

Ex-President Eduardo Frei, personifying Chile’s trade interests in the Asia-Pacific, is enthusiastically paving the way for Chilean capital into Myanmar, although he certainly knows that there ‘A Genocide [is] in the Making.’ The minority Rohingya people face extermination at the hands of the army and with silent approval of democratically elected President Aung San Suu Kyi, as well as the majority of the country’s inhabitants. The Rohingya are disparaged in the media and victims to systematic rape and killing. A trade deal wouldn’t only funnel more resources into the genocide, it would also create a screen to cover up the corpses.

Neither Chile’s entrepreneurial class nor their political enablers tackle the strategic, political, and philosophical questions economic globalisation raises, because oligarchic influence frames international relations to serve profit-making. Until it makes boom.

Christian is a columnist at Chile Today. He’s also director at the Chilean Association of International Specialists (ACHEI) and co-editor of E-IR’s book on International Relations Theory. Follow him on Twitter: @ChrScheinpflug

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