In her second term in office (2014-2018), former Chile president, Michelle Bachelet, a good friend of India (she made a state visit in 2009, and Chile ratified a bilateral trade agreement under her watch), pushed three major reforms. These included taxes, education and the constitution. Although she partially succeeded on the first two, she failed on the latter. But she did leave a package of constitutional reforms submitted to the Chilean Congress, to be taken up by the succeeding government of President Sebastián Piñera.
Three days after the inauguration of the Piñera government in March 2018, home affairs minister, Andrés Chadwick, addressed ICARE, a major business convention. Referring to these constitutional reforms, he ostentatiously took off his glasses, placed them on the podium, and announced no such reforms would be undertaken. This triggered a rousing, standing ovation from the audience, which included many captains of the industry. Few moments captured the disconnect between the demands of the citizenry and the perceptions of those captains of industry.
Nineteen months later, on 18 October 2019, Chile erupted in protests. Twenty subway stations were destroyed, churches were burned, and supermarkets looted. A small increase in the subway fare (30 pesos, 4 US cents) was the straw that broke the camel’s back. Chileans could not take it anymore, and said “enough is enough”. For a country known for its stability and predictability, this was a shock. The government lost control of the situation, police repression of mass demonstrations did not help (in fact, minister Chadwick was impeached and removed from office because of that), and Chile seemed close to the brink. Yet, on 15 November 2019, leaders of the various political parties got together, stayed up until the wee hours of the morning, and hammered out a deal.
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In return for the opposition applying the brakes on the social mobilisation, the ruling coalition agreed to the unthinkable, i.e., reforming Pinochet’s Constitution. There was something for everybody in this deal, but the basic contours were straightforward: a plebiscite to consult the Chilean people about whether they wanted a new constitution or not was one element; another, whether the body to draft a new charter should be a fully elected constitutional convention, or one made up by one-half of elected delegates, and the other half by current MPs.
On October 25, 2020, 78% of the electorate voted in favour of a new charter, and 79% did so in favour of a fully elected constitutional assembly made up of 155 members, half of them women. The will of the citizenry could not be clearer.
The election for the said convention is scheduled for 11 April 2021. After that, it will have nine months to draft a text ratified by two-thirds of its members, text to be approved by the electorate in 2022. One outstanding issue is whether there will be a quota for elected representatives of Chile’s aboriginal peoples, who form 12% of the population. Another is the role of independent candidates, as opposed to those fielded by political parties.
Overturning an undemocratic legacy
Much can still go wrong in this, but, so far, so good. In 200 years of independent history, Chile has had three constitutions, one from 1833, another from 1925 and a third from 1980. None was the product of a democratically elected body. It was about time to remedy that.
Supporters of the “I Approve” option react after hearing the results of the referendum on a new Chilean constitution in Valparaiso, Chile, October 25, 2020. Photo: Reuters/Rodrigo Garrido
The 1980 constitution, tailor-made to Pinochet’s wishes and to those of the “Chicago boys” that ran the Chilean economy for him, although subjected to many reforms in the past 30 years, has outlived its usefulness. Its driving force is protecting private property and relegating the state to a subsidiary role, much in line with Milton Friedman’s strictures.
The government is thus often unable to promote greater equality or protect the environment, in one of the region’s most unequal societies and one of the countries most threatened by climate change. These principles are strictly enforced by Chile’s constitutional court, a de facto third legislative chamber, which adjudicates more than 1,000 cases a year, exercises ex ante legislative control, and acts as the main enforcer of minority rule in Chile. Hyper-presidentialism is also a problem, with MPs not allowed to initiate any sort of legislation that implies government expenditure.
In turn, hyper-presidentialism does not work well in a highly fragmented multiparty system, making it difficult for the executive to enact its program, while several issue areas require antidemocratic super-majorities for legislation to come into effect.
Duality of opinion
The way to come up with a new charter is precisely through the sort of orderly, democratic procedures that are being followed. One would think that the ditching of the dictator’s charter would be universally welcome. Curiously, that has not been the case. Two equally flawed arguments stand out among the many who voiced concern against this whole process, both in Chile and abroad.
One is that constitutions are not that important anyway, and that this legalistic Latin American obsession with basic charters is a waste of time. Countries should just get on with their business and be done with it. The other, in flat contradiction to the first, is that it is the 1980 constitution that has made it possible for Chile to grow and prosper over the past 30 years, and that it is a document to be cherished, not to be shred to pieces. Obviously, both cannot be true at the same time, though they are often voiced by the same people.
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The underlying question, though, is a different one. Given how well Chile has done in these 30 years, ever since the return of democracy in 1990, multiplying its per capita income fivefold, cutting back the poverty rate from 39% to 8%, and having the highest human development index (HDI) in Latin America, then why the October 2019 uprising?
Vast inequalities
The answer is simple. These 30 years have been the most successful in Chilean history, as shown by the above figures. That said, all good things come to an end. While the so-called export-driven “Chilean model” has been very good at increasing national income and at lifting vast numbers of Chileans from poverty, it has not reduced as much the vast inequalities extant in Chilean society.
These inequalities have led to the following:
- Highly concentrated wealth: The top 1% of Chileans, receive 24% of all national income;
- Low taxation: Tax intake as a share of GDP is 21%, about average for Latin America, although, given its per capita income, in Chile, this figure should be much higher; and
- A regressive tax system: About half of that tax intake is generated by an indirect tax, VAT, the most regressive of taxes (as opposed to a direct tax, like the income tax).
Demonstrators march with flags and signs during a protest against Chile’s state economic model in Santiago, October 25, 2019. Photo Reuters/Ivan Alvarado
Vast numbers of people have left poverty behind, and many workers have joined the middle class, but their precarious living conditions make them feel just one setback away from reverting to their previous status. The old proletariat has been replaced by a new “precariat”. A new generation has new, higher expectations.
Chile’s private pension schemes, on the other hand, were one of the tipping points for the social uprising. In one of the most expensive countries in the region, the average monthly pension for males (it is even lower for females) is around US 200 dollars, while the companies that manage these funds rake in enormous profits and accumulate holdings of US 200 billion, much of it invested abroad. Many Chileans are thus unable to retire, and are forced to continue to work into their seventies and eighties.
Chile is at a turning point. The opportunity to come up with a new constitution and with a different social contract, one based on solidarity rather than on subsidiarity, beckons. The October 25 plebiscite gave a strong mandate in that direction. Let us hope those who are elected to write this new chapter in Chilean history proceed accordingly.
Jorge Heine, a former Cabinet minister in the Chilean government and ambassador to India, is a research professor at the Frederick S. Pardee School of Global Studies, Boston University.