Update on Chilean Politics

Patricio Navia

March 9, 2003


The much expected cabinet reshuffle was finally announced on February 28. Seven ministers were replaced in a move that disappointed many observers who had bet on a much bigger shake up. Despite the widespread sense of too little too late, there are three important conclusions that cab be drawn from the cabinet reshuffle. First, the president rejected calls for a major reengineering of his government style. Second, José Miguel Insulza, Minister of the Interior, consolidated his power as the most influential minister to occupy La Moneda since democracy was restored in 1990. Third, by bringing in heavy weights to the Education and Justice ministries, and by replacing the controversial Health minister with a low profile physician, president Lagos might have signaled a change of focus from health to education in the government's social priorities.


The disappointment expressed by some analysts was inevitable. President Lagos had resisted making a cabinet adjustment in December 2002, when there was heavy pressure against the government for the corruption scandals that transformed legal proceedings into the main political news for much of the last few months. In fact, to reduce the pressure for an immediate cabinet shake up, president Lagos announced in December 2002 that he would make the adjustments before his third year anniversary. The unprecedented announcement three months in advance of the cabinet reshuffle successfully took pressure off the president's back, but it also effectively transformed many likely-to-be-fired ministers into powerless bureaucrats incapable of pushing the government's agenda. As the March 11 three-year anniversary approach and when the president returned from his short domestic vacation and a trip to Asia, speculations about the new cabinet make-up filled the political press and further paralyzed the government. By finally making the cabinet adjustment, the president can finally put an end to all the speculations about which ministers would stay on and who would go. Unless a new catastrophe hits the crisis-prone Lagos government, this group of ministers should stay in power until after the October 2004 municipal elections. Both, the ministers who stayed on and the new appointees can now concentrate on their assigned tasks and missions and successfully put behind speculations about their future political careers.


In part because the speculations about the cabinet reshuffle had been exaggerated by the 90-day announcement made in December, many expected that Lagos would replace most of his ministers. By bringing in a whole new team of ministers, Lagos could have sent the signal that his criticized style of governing with an excessive presidential presence in daily political affairs would also be reformed. In replacing ministers with little previous political experience with heavy weights and technocrats accustomed to dealing with the opposition and eager to promote their own political aspirations, president Lagos would have signaled his commitment to lower his high public profile. He would have also tacitly given his ministers more decision-making power and initiative space to champion the government policies for their respective areas. Yet, all but one of the new ministers have developed low profiles in their professional careers. With the exception of the new Education minister--more on this below--all the new faces are expected to easily accommodate to the ever-present role President Lagos seems to enjoy on daily government affairs.


Although the president did sack his chief of staff, no other major changes occurred in the controversial team of presidential advisors in La Moneda. A cousin of the first lady with little previous political experience and some questionable ties to some of the corruption scandals that have tarnished the Public Works Ministry, Lagos's former personal chief of staff had come to embody the resentment felt in many ministries about the excessive involvement of the president on their everyday tasks. Yet, rather than diminishing his personal involvement in many of the governments legislative and policy initiatives, the new cabinet make-up seems to point to the opposite. President Lagos will continue to use his high approval ratings to promote and rally support behind the government policies and programs.


The second important conclusion that can be drawn from the new cabinet is the overwhelming control that Interior Minister Insulza has come to enjoy over the government's political affairs. Having successfully survived two cabinet reshuffles, Insulza is the second longest serving minister since democracy was restored in 1990 (current Foreign Affairs Minister Soledad Alvear has served for 13 consecutive years in 3 different posts). After 5 years in Foreign Affairs and 9 months as ministry of the presidency under Frei, Insulza has survived two cabinet reshuffles as Lagos's Interior Minister. Many expected him to go in this most recent shake up. Rumors circulating in the past few months implied that Lagos would not keep him in his cabinet.  Yet, in the end, not only did he stay, Insulza successfully prevented other heavy weights from being appointed to the two other La Moneda ministries. The new Government Secretary General Minister (spokesperson) is a former undersecretary of Insulza. It would have been very difficult to find anybody more of Insulza's liking among PPD potential ministers than Francisco Vidal. In the Ministry of the Presidency (legislative affairs), a respected but low profile PDC 60-year old former deputy, will need to work hard to avoid being isolated by the Insulza-Vidal team. Francisco Huenchumilla was picked as a compromise name, after president Lagos rejected all the names proposed to him by PDC president Adolfo Zaldívar. Huenchumilla will need to work hard to gain Zaldívar's respect and trust and to transform himself into a useful bridge between president Lagos and the PDC. In addition to being the least familiar with president Lagos, Huenchumilla is probably the quietest of the three new political ministers of La Moneda. If he wants to sail those troubled and risky waters with any degree of comfort, he will need to accept the leadership of José Miguel Insulza in the La Moneda palace.


The third lesson that can be drawn from the cabinet reshuffle is the potential shift of focus from health to education in the government's social priorities. After 12 months of having invested lots of resources in positioning former health minister Osvaldo Artaza as the symbol of the government's health reform before public opinion, president Lagos decided to bring new blood to that ministry. Pedro García is a low profile physician who apparently enjoys the support of PDC president Adolfo Zaldívar. García will need to exercise sophisticated bargaining skills with labor unions, physicians associations, private health providers and legislators if he wants the AUGE health reform package to make its way through congress. The appointment of Sergio Bitar in education, on the other hand, might signal a renewed interest by president Lagos on the almost forgotten educational reform. A former senator, PPD president and well-respected intellectual figure, Sergio Bitar will likely transform the Ministry of Education into a platform for a shot at the Concertación's presidential nomination in 2005. Bitar will have little time to show results, but his appointment might signal that Lagos is both thinking about the presidential succession and about putting education higher on his priority list.


The other changes will certainly matter less. The new justice minister is the former head of the Chilean chapter of Transparency International. His appointment is widely perceived as a signal of the president's commitment to fight corruption and as a way to exercise more effective influence over the judicial power. Luis Bates is highly respected among judges and attorneys and he is expected to use his reputation to push forward the also forgotten reform of the Chilean justice system.


The cabinet reshuffle has also generated two concerns among most analysts. First, the changes did not satisfy the leadership of the PDC. Senator Adolfo Zaldívar met with president Lagos twice before the cabinet was announced. Yet, the names circulated as being Zaldívar's suggestions to the president were notoriously left out of the new cabinet. Although the president went out of his way to keep the same number of PDC ministers, none of the new PDC appointees are Zaldívar loyalists. Moreover, the president did remove Francisco Vidal from the powerful under secretariat of regional development as apparently requested by Zaldívar. Yet, Vidal was promoted rather than fired. Vidal's replacement was not an Insulza loyalist, the former Minister of Women Affairs Adriana del Piano, and not a PDC member. Zaldívar did get one of his loyalists appointed as under secretary of Government, but the press widely reported that the PDC president was discontent with the changes made. Unless minister Huenchumilla shows unprecedented bargaining and conflict resolution skills, tensions between president Lagos and Zaldívar should continue to make life difficult for the Concertación coalition.


The second concern expressed by most analysts is that the cabinet reshuffle reflects the government's lack of innovative ideas to get the economy moving again. The economic team remained unchanged and other than the change in education, the perception that the government has ran out of ideas was actually strengthened when the new names were announced. A poll published a week after the new cabinet was sworn in indicated that a majority of Chileans believed that there would not be major changes in the government with the new team. That might have not been the message the government intended to convey, but at least president Lagos can rest assured that Chileans do not see this cabinet reshuffle as a reaction to the corruption scandals that hit the government during the last few months of 2002.