July 28, 2014
Bachelet back on moderate path
For the Herald
Chileans want reform but no changes to economic model
NEW YORK— After the intensity of the honeymoon period gave way to the reality of the daily life of government, the Michelle Bachelet Nueva Mayoría (NM) administration has sent powerful signals that, despite the more radical rhetoric of the past few weeks, it will head a moderate government, more in tune with previous Concertación governments in Chile.
In the presidential campaign in 2013, candidate Bachelet repeatedly claimed that her second administration would depart from her first term (2006-2010) in that she would push for radical transformations and refoundational reforms. The promise of a comprehensive tax reform aimed at raising three percent of GDP to fund free university education and the insistence on the need for a new constitution pointed to Bachelet wanting to make a drastic turn to the left. The fact that the presidential candidate successfully lobbied to change the name of the centre-left Concertación coalition to NM underlined the dominant notion that Bachelet wanted to depart from the roadmap of four successive Concertación governments (1990-2010).
After assuming power, Bachelet continued to feed radical expectations. She sent a controversial tax reform to Congress. Using the NM majority in the Chamber of Deputies, the bill was swiftly passed without the usual procedural debates and room for friendly amendments. The Bachelet administration also sent controversial educational reform legislation aimed at weakening the role of voucher and privately-owned schools. Although Bachelet had made free education a central campaign promise, the decision to start the educational reform by undermining private education (rather than strengthening public education) weakened support for the reforms among middle-class parents, who overwhelmingly send their children to government-subsidized but privately-owned institutions. As if the tax and educational reforms were not enough, Bachelet also sent an electoral reform bill to Congress and announced that the government would sponsor a therapeutic abortion bill. More than the range and depth of the bills themselves, the fact that Bachelet simultaneously attempted so many reforms confirmed the suspicions that the new administration was determined to abandon the long-held view that reforms in Chile require consensus-building and gradual implementation.
After a devastating defeat in the 2013 election, the rightwing opposition was left with little power in Congress. Although the mass media, especially newspapers, are controlled by rightwing business interests, fierce competition among television networks and radio stations has mitigated the otherwise militant opposition to the reforms displayed by the business elite. Also, because Bachelet won campaigning on radical transformations, her decision to push forward with the reforms was justified by government officials on the grounds that people voted in favour of those reforms.
Unfortunately for Bachelet, some of the more moderate voices within her coalition, including the centrist Christian Democratic Party, began to voice their concerns over the depth and direction of the reforms. Discrepancies over the effects of the tax reform on investments and future economic growth eventually turned public opinion in favour of a tax reform conditioned on negotiations with moderate forces to secure wider support in Congress. As the details of the educational reform are socialized, concerns over negative short-term externalities of the policy change have increased resistance to the reforms.
In short, although Chileans were in favour of the declared objectives of the reforms, the mechanism through which the Bachelet administration has sought to push the reforms through Congress has generated resistance and anxiety. When discussing the reforms with a college student who voted for Bachelet and aspires to benefit from free university education before he graduates three years from now, the student told me: “We want a revolution, but with a guaranteed positive end result.” The student’s comment summarizes the contradiction behind Bachelet’s victory. Chileans want to have access to affordable (and preferably free) quality education, but they do not want to undermine the deeply engrained market-friendly and socially-oriented economic model in place for more than two decades.
As she enters the fourth month in her four-year second administration, President Bachelet seems to be coming to terms with the fact that, at the same time as Chileans want a stronger state with an expanded social safety net and increased opportunities for the growing middle class, people also want to be reassured that her administration will continue to privilege the gradual and incremental approach to social and political reforms adopted by previous administrations. The government has already announced that the tax reform will introduce changes proposed by the opposition and independent actors. As it makes its way through the Senate, moderates are amending the tax bill to widen its support. The government has also backtracked somewhat in the educational reform, putting the focus on strengthening public education rather than attaching privately-owned voucher schools. In the abortion debate, the government has quietly moved the issue to the back-burner.
As the country develops, Chileans have bigger and more ambitious dreams. They want to expand their rights and widen the set of opportunities available to them. Yet, they want to achieve all that without abandoning the mechanisms of gradual and incremental reforms underlying the progress Chile has made since the restoration of democracy in 1990.