Update on Chilean Politics

Patricio Navia

July 11, 2002


After a rapid response to the usual wintertime heavy rains that caused floods in many lower and middle class dwellings (built without the adequate infrastructure to channel large amounts of water out of the streets), president Lagos's popularity consolidated well over the elusive 50% mark. Emphasizing that this was the worst winter rainstorm in over 7 decades, president Lagos rallied the country to provide relief to those most widely affected by the flooding. The usual television fundraising specials and the volunteer drives to build temporary housing for the affected families helped the government built on the idea of a nation united to face inevitable crises.


The same tactic has been tried, less successfully, to rally the country behind the government as the regional neighborhood economies undergo severe financial and political crises. The government has repeatedly cited the instability in Argentina, Brazil and most recently Peru and Bolivia to contrast it with Chile's solid macroeconomic fundamentals. Yet, the population seems to be more concerned with the contrast between the high growth experienced by Chile in the previous decade with the low growth observed since 1999 and, most importantly, since president Lagos took office in March of 2000.


As president Lagos moves swiftly to complete his first three years in office (March 2003) and surpass Salvador Allende's 29-month tenure length (he will do that in January 2003), many of the ghosts that were anticipated as haunting president Lagos have all but disappeared. The comparisons with Allende (1970-73), the last socialist to occupy the presidential palace, are now widely considered extemporaneous and irrelevant. The previously excessive and uncomforting presence of former dictator Augusto Pinochet in the country's political life is also part of history. After 8 years as Commander of the Army (1990-98), a few months as a lifetime Senator, 17 months under house arrest in London and two years of judicial proceedings generated by more than 200 lawsuits for human rights violations, Pinochet has finally retired from political life. After a recent Supreme Court decision that ruled him unable to stand trial for mental health reasons, Augusto Pinochet resigned from the Chilean Senate pressured by the government, the army and the conservative opposition. Nobody wanted Pinochet around and as soon as the Supreme Court was ready to guarantee him legal immunity, even his ardent supporters agreed to his withdrawal from political life based on the same health reasons. The strategy was so successful and public opinion was so much in favor that his resignation letter had to fight for news coverage with the aftermath effects of the performance by 4,000 Santiago residents who posed nude for the famous American photographer Spencer Tunick in an early Sunday public display of tolerance, immorality or art, depending on one's views.


Were it not for the remaining authoritarian deadlock provisions still in place in the Chilean constitution, everyone would agree in that the transition to democracy has been completed. The negotiations to reform the constitution to reduce the tutelary role of the armed forces over democratic constitutions, eliminate non-elected senators and reform the Constitutional Tribunal and other national institutions has made much progress in the evenly divided Senate. The one issue that has slowed down talks is the proposed electoral rules reform. The much-debated 'binomial system' (proportional representation with two seats per district) is the one issue where there is no agreement. President Lagos has publicly conditioned much of the entire constitutional reform process to its replacement by a more permissive proportional representation system. The conservative parties have vowed to defend the binomial system and many within the Concertación are worried about adopting a more permissive proportional representation system. Although most analysts believe the president will eventually be contempt with getting all his constitutional reforms except the electoral rules, it remains to be seen how long the negotiations will take. The Senate should begin voting on the agreed reforms before the end of the year and if the president accepts to drop his demand for an electoral reform change, the entire package could be approved and the constitution amended before president Lagos completes his third year in office.


After having passed a tax reform during his first year, a labor reform on his second year in office and after having recently sent a package of legislative initiatives designed to overhaul the national health system (the third and most popular promise of his presidential campaign), Lagos should be well headed for a successful tenure as president. Yet, there are two reasons for concern for the president right now, the economy and the Concertación. If we can successfully deal with both of them, he will be in a position to claim a successful president. If, instead, he fails to deal effectively with either one, his legacy will be inevitably tainted by that failure. The developments in the upcoming months will make it clear if the economy will eventually pick up and whether the president will successfully implement an strategy to help the Concertación out of its current crisis.


Although most people have already accepted that Chile will not grow again by an average of 7% during the Lagos period (as then candidate Lagos promised during his campaign), the difficulties faced by the Chilean economy are taking a heavy toll on the president's popularity and on his ability to adopt aggressive social spending initiatives. Although the president has better than 50% approval rating, the economic slowdown accounts for at least 10% fewer approval points for his administration.  The entire country would benefit with an economic recovery, but the president would certainly benefit most. Unemployment has remained high and job creation has not picked up. Talks and negotiations with entrepreneurial groups and business leaders have often ended up in mutual accusations and declarations of bad faith. Yet, the situation is by no means dramatic or critical. The president continues to hold regular meetings with key business leaders, but at the end of the day, the responsibility for the economic slowdown is attributed to the government by public opinion. Despite the government's efforts to show that, given international conditions, Chile is doing as good as it could, the sense of disappointment and concern among the unemployed (9%) and those who fear losing their jobs or have seen their income stagnate in recent years (according to polls, a large majority of the population) has remained stable at high marks. Chile's recent entry into a Trade Agreement with the European Union will likely create new business opportunities and stimulate job creation, but the general perception is that because of the crises in Argentina and Brazil, things might get worse before they get better.


The second reason for concern for president Lagos is the stability of his Concertación government alliance. In March of 2000, after 10 years of holding the presidential chair and a majority of the cabinet appointments, the Christian Democratic Party witnessed a socialist become president and appoint socialists and PPD ministers to key posts previously occupied by PDC militants. Although the PDC had an electoral drop in the 1997 parliamentary elections, the blow received by that party in the 2000 municipal elections and, more importantly, in the December 2001 parliamentary elections produced an earthquake in that party's leadership. PDC rightwing leader, and a Lagos foe, senator Adolfo Zaldívar became PDC president with a strategy to reposition his party. By claiming his party's need to confront the conservative UDI's effort to capture the political center (an effort largely successful in the 1999 presidential election) Zaldívar has adopted a more confrontational position with the Lagos government. He has made it a point to criticize all of Lagos's initiatives as left-wing attempts to create a bigger government and as attacks on the middle class. Arguing that the socialists and PPD used exactly the same strategy to criticize the Frei and Aylwin administrations (accusing them of being too centrist, or even rightist), many within the PDC have joined that strategy. Yet, others have seen it as an effort to destroy the Concertación and recreate the right-center-left divide that characterized Chilean politics in the years before 1973. Lack of discipline within the party and individual efforts launched at positioning themselves as presidential candidates for the 2005 presidential election have also weakened Adolfo Zaldívar's strategy. In addition, the PDC has been unable to shrug off the image and perception of a mob of politicians more concerned with government posts than with political idealism. The indictments of prominent party leaders in corruption scandals has helped fostered the image of a corrupt-prone, rent-seeking party that threatens the very survival of the formerly largest and most influential political party in Chile. Yet, overall, since his election early in 2002 as PDC president, Zaldívar has transformed his party into a quasi-opposition party and yet has failed to stop the UDI growth among those in the self-defined centrist electorate.


A demise of the PDC would certainly weaken the Concertación. The other Concertación parties, PS and PPD have failed to make real gains among voters who previously supported PDC candidates. The PS has fallen into an identity crisis. Seriously affected the loss of Jospin and the French socialist in the recent elections, many in the PS have underscored the need to make a move to a 'real' left and to avoid a deadly away from the left towards a improbable center. Without even analyzing the merits of such a strategy, we can safely suggest that the PS will give up the opportunity to capture the political center being vacated by the PDC.  The PPD might have a better chance of converting itself into the largest and leading Concertación party, but that group's inexistent party structure, limited party identification and lose ideological affinity among its members makes it more a party of disorganized factions than a disciplined group of career politicians with common goals and objectives. The crisis in the PDC becomes all the more damaging for the Concertación because none of the other Concertación parties is in a position to successfully take on as the leading centrist party in the country.


Together with that Concertación crisis, the UDI has continued its quest to capture the political center. After securing the support of the conservative loyalists and all but eliminating RN from political competition, the UDI has launched a campaign to capture the political center and secure the ground for a presidential election victory in 2005. With symbolic and practical moves to link the UDI with the spirit and ideals of the old PDC in the 1960s, the UDI has made inroads into the centrist electorate. With stints like a March of a Just Nation (a play of words reminding Eduardo Frei's March of a Young Nation in 1964, the year the PDC first won a presidential election) and an effort to change the party's name from UDI to Popular Party (the name of many Christian Democratic parties in Europe, most notably in Spain), the UDI has made important inroads into capturing previously strongly held PDC territory.


If the PDC fails to hold on to its traditional voters, the Concertación will inevitably lose its electoral majority and president Lagos will go into history as the third and last Concertación president, the socialist who passed on the presidential sash to a Pinochet loyalist. Strengthening the Concertación and helping identify and position a Concertación presidential candidate for 2005 looms in the horizon as Lagos' biggest and most complicated challenge.  Yet, before he can concentrate on that monumental task, he will need to achieve some basic level of organization within the Concertación and a good effective working relationship with the PDC. The recent process by which the government transformed its legislative initiative aimed at a major overhaul of the health system in Chile is a good example of how the PDC has vowed to fight the government to position itself as the party for the middle class and how the president has been willing to compromise to help the PDC achieve that purpose and strengthen the Concertación even at the expense of his own socialist party.


The PDC outspokenly opposed the initial finance plan for the government sponsored health reform. After negotiations, the government agreed to incorporate some PDC demands and drop some of the initial financing provisions in the health reform. Although the entire package of reforms will take more than a year to make its way through the legislative, the way in which it was negotiated should indicate how the political landscape will look like in the next two years. The government's proposals will be criticize by the PS for being too centrist, the PDC will initially opposed them precisely on the opposite grounds and after much negotiations the Lagos government will make concessions to the PDC and send the initiative to the legislature where a new negotiation will take place with the UDI and RN to secure passage in the evenly split Senate.


The success of all governments is held hostage by uncontrollable economic crisis. The fate of president Lagos will largely depend on Chile's ability to avoid contamination from the Argentina and Brazil crisis, but even if the economy improves, the Concertación crisis might still derail president's Lagos route to a successful six-year term. The need to take care of the political crisis within his coalition, as much as to worry about ways to get the economy moving away, should dictate the president and government's efforts in the coming weeks. Improvements in the economy should make it easier to solve the political crisis within the Concertación, but a good economy is by no means a sufficient condition to get the Concertación working again as a viable, responsible and efficient electoral,  government and political coalition.