Softer stance could see success for Chile’s reforms

Softer stance could see success for Chile’s reforms

Chile’s President Michelle Bachelet finally succumbed to opposition pressure and calls from moderates within her own governing coalition, the New Majority, to change her cabinet, writes Dr Joseph S. Tulchin.

Most significant among half a dozen changes, she replaced the minister of the interior, Ricardo Penailillo, who was at the centre of the political debate over government reforms, and the minister of finance, Alberto Arenas, responsible for controversial tax reforms. He had been taking most of the criticism for Chile’s economic slow-down. Both were seen as part of the radicals in the coalition.

The new cabinet members, Jorge Burgos (Interior) and Rodrigo Valdes, (Finance) represent the moderate wing of the coalition government.

President Bachelet hopes the changes will reverse the dramatic loss in her popular support - down to 29 per cent for those who think she was doing a good job - and curb the forces which were threatening to tear her governing coalition apart.

Among the most damaging blows were comments from former president Ricardo Lagos (2000-2006) who said in an interview that ‘political crises were solved with leadership and agreements’.

The political crisis was precipitated by a series of corruption scandals which went public at the end of 2014. The most serious was the prosecution of the leadership of the Penta financial group for their roles in funnelling illegal campaign funds to members of the right-wing party, UDI, in the last election. And then her son, Jorge Davalos Bachelet, was found to have helped his wife’s investment firm to land a sweetheart loan from Chile’s largest private bank.

The implications of the Penta fraud are much more significant for the health of the Chilean body politic, but the Davalos loan damaged a government which prided itself on transparency and probity.

President Bachelet appointed a commission to make recommendations for ensuring clean government, recommendations which will benefit her government more than the right-wing parties tied to Chile’s private sector.

What is more serious for her is how to regain the initiative for her other reforms.

In my view, the president should wrap herself in the flag of moderation and dialogue as she insists on basic reforms to the electoral system and the tax code, which are indispensable to consolidating democracy in Chile.

The other major reform - making higher education free to all - can be passed as a contingency matter, approved but waiting for the price of copper to rise so that the government’s sovereign wealth fund will have enough money to pay for the new programme.

Unless President Bachelet comes up with a plan to continue her reforms, even if in a moderate manner with dialogue with all and sundry, she will continue to be in the crossfire from her most radical coalition partners and the obdurate right which has accused her of bulldozing reforms through the legislature.

She should follow the advice of Ricardo Lagos and soften the opposition with a bit of kindness, without losing sight of her target of fundamental reforms.

Related reports:

Chile’s Michelle Bachelet pushes through catalogue of reforms

Polarising politics in Brazil and Chile

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