The Billionaire Running Chile

A right-wing businessman was elected president of Chile this week, flouting the region’s recent shift to the left. Antonio Castillo analyses the victory of Sebastian Pinera.
If you are planning a holiday in Chile this year, it’s likely you’ll fly with an airline owned by the newly elected Chilean president Sebastián Piñera. A right-wing tycoon — whose businesses include LAN, the airline that flies between Sydney and Santiago — Piñera was winner of Sunday’s runoff election in Chile.
Piñera, the leader of a right-wing alliance formed by his own party — the National Renovation (RN) — and the Independent Democratic Union (UDI), won 52 per cent of the vote, defeating the candidate of the ruling Coalition for Democracy and former president, Eduardo Frei, who took the remaining 48 per cent of the vote. Piñera will take office in March and serve as President for four years.

With this victory, Piñera has put an end to 20 years of government by the Coalition for Democracy. This alliance of Socialists and Christian Democrats was formed in the late 1980s to tackle the former Chilean dictator Augusto Pinochet and has ruled since.

So who is Sebastián Piñera? For starters, the newly elected Chilean president is a very successful financial speculator. His wealth — principally amassed during the decades of military dictatorship in Chile under General Pinochet — is enormous and makes him one of the wealthiest men in Chile.Forbes magazine ranks Piñera 701st on its list of the world’s billionaires and estimates his net worth at US$1 billion.

The vast financial empire Piñera controls includes the highly profitable LAN airline, a major television network, pharmacy chains, as well as forestry and financial institutions. He also has major stakes in Colo-Colo, the country’s most popular soccer club. That’s right, Piñera is a Chilean replica of Italy’s Silvio Berlusconi.

With the election of Piñera, the Chilean Right is back in power. The last time it occupied La Moneda, the old colonial presidential house in the capital Santiago, was during General Pinochet’s brutal regime. Throughout the 17 years of military dictatorship, the Right was part of the civilian apparatus that upheld and administered Pinochet’s rule. Piñera’s brother — José Piñera — was Pinochet’s secretary of labour and social security.

And while Sebastián Piñera has successfully managed to distance himself from Pinochet’s image and convince the Chilean electorate of his democratic credentials, his right wing political base is crammed with staunch defenders of the former dictator.

His opponent, the defeated Eduardo Frei, was all along the wrong man to run against Piñera. With a charisma deficit that would make Kevin Rudd look highly alluring, Frei served as president from 1996–2000, a period of major economic and social decline.

Indeed, Frei’s campaign was so ineffective that he failed to capitalise on the 80 per cent approval rating enjoyed by the current president, the Socialist Michelle Bachelet. Frei, as many commentators agreed, had nothing new to offer the electorate.

Nothing new to offer was also the main problem faced by the ruling Coalition. After two decades in power, it had become a tired and divided alliance. In the 1990s, during the first years of the post-dictatorship transition to democracy, the Coalition was unified by the fear that the country would return to dictatorship. As democratic institutions were consolidated, this fear faded and ideological differences and individual party ambitions began to emerge within the Coalition. Its defeat this month is also the response of a society fed up with increasing levels of governmental corruption, infighting and nepotism.

By contrast, Piñera skilfully maintained cohesion and discipline throughout the long campaign. Some of his ultra-right wing supporters even had to quieten down and swallow some of the more progressive statements he made about issues like gay rights as well as his belated criticism of the human rights violations committed by Pinochet.

Piñera successfully constructed a progressive discourse that appealed to the political centre and to the middle class which was badly hit by the global financial crisis, and while the Government implemented social welfare programs to help the poor, the middle class was, foolishly, neglected.

Piñera was also able to grab key votes from Frei’s core supporters, mainly from members of the Christian Democratic party who were unhappy with a parliamentary deal made by the Coalition with the Communist Party.

While the Coalition has been defeated it would be unjust not to recognise its substantial achievements. It was responsible not only for the successful transition from dictatorship to consolidated democracy in Chile but also supervised the transformation of Chile into an economically successful and stable society. And while income inequality remains a major problem, Chile is one of Latin America’s most prosperous nations.

The return of the Right to power produces a significant degree of uncertainty. The Chilean Right has historically shown a deep aversion to democratic norms and practices. Each time it has been in power it has introduced laws whch have seriously restricted democracy and it has been equally averse to state sponsored social-welfare programs like the initiatives introduced by the Coalition government to alleviate poverty. There are genuine concerns that the newly elected right-wing government will scrap them at the first opportunity.

The election of Piñera will be closely watched by Australia’s federal government. Chile is one of Australia’s most important commercial partners in Latin America and it was the first Latin American country to sign a Free Trade Agreement with Australia.

Sebastián Piñera’s victory will reverberate not only in Chile but also, of course, in the rest of Latin America. The return of the Right to power in Chile effectively reverses the convincing shifts to the Left apparent in other Latin American countries. Just a few weeks ago, Uruguay elected a former left-wing guerrilla, José Mujica, and Bolivia’s Evo Morales — the first Indigenous leader in that country — was convincingly re-elected in December.

It’s too soon to predict what the effects of Piñera’s election will be on other countries in the region, but as the new President’s term in office gets underway, observers alert to the prospect of an ideological swing back to the right in Latin America will surely be keeping a very close eye on Santiago.

Posted in New Matilda

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