She's Back!!

Three years ago the outgoing President of Chile, Michele Bachelet, left the presidency, left Chile, and left behind a disaster not of her doing but one that challenged her country's capacity, and her own, to prepare for, respond to, and recover from natural disasters to which Chile is unfortunately prone. 

Recognized globally as a respectable and effective political leader, she was chosen almost immediately to lead the newly created UN Women program which she ably guided through its formative years of defending and promoting the rights and roles of women throughout the world. Living in New York, Bachelet kept Chile at arms length, staying out of political life in Chile and avoiding the contentious analysis and discussion of her response to the tragic earthquake and tsunami of 2010 and the subsequent Piñera government's rebuilding program in the affected areas.  She did testify in private the couple of times she was summoned before the legal commissions investigating her government's response on that fateful day and the immediate period before her presidential term ended in early March 2010.  Hence, she and her country avoided (postponed, really) the open and surely contentious discussion needed to clear the air regarding her role in that and other controversial moments during her administration.

But during the last week in March 2013, her absence from Chile and her relative silence on Chilean political affairs ended, as she returned to Santiago to a carefully selected welcoming group of her largest support group, women, and began her quest for a second term as President of Chile.  Her return was not a huge surprise, since she had announced that she would make a pronouncement about her intentions in late March and her ground team in Chile has been active for quite some time preparing for a campaign.  She arrived in Santiago just in time to enter the newly established primary election process which is designed to open up the selection of presidential candidates to "the people" instead of backroom selection by party leaders as has been the general approach in the past.

Bachelet will be supported in the June 2013 primary elections by her party, the Socialists (PS), and the Popular Democratic Party (PPD), both key members of the coalition that governed Chile from the end of the Pinochet dictatorship until the election of Sebastian Piñera in 2010 at the end of Bachelet's four-year term.  Another party from that coalition, the Christian Democrats (PDC), is supporting Claudio Orrego, a young mayor of one of the most populous comunas in greater Santiago; Bachelet's effective Minister of Hacienda, Andrés Velasco, will enter the primaries and possibly the subsequent general election as an independent candidate.

For the primaries on the right, the UDI party is entering  a relative newcomer to politics, Laurence Golborne, Piñera's Minister of Mining whose popularity soared when he oversaw the  successful rescue of 33 miners trapped for weeks in northern Chile, and the RN party is entering seasoned politician Andrés Alamand.

Bachelet, knowing that her return to Chilean politics would open the floodgates of pent up criticism of her term as President (unworkable public transportation system in Santiago "TransSantiago", botched earthquake/tsunami disaster response, general distrust of the senior team she had at her side, unkept promises to reform education and health systems) she orchestrated her first public appearances to present herself and her ideas for the future as a movement above and beyond the traditional party support she had in the past; a "New Majority", in her words.  This was in part dictated by the fact that, just like in US politics, political parties are at the low end of the popularity scale in Chile (and like in the US, with good reason). 

In the first few days of campaigning, Bachelet has limited her message to general proposals to reform the educational system by bringing an end to "for profit" educational institutions and provision of "free" education for all, an end to the "bi-nominal" electoral process (deemed highly undemocratic by its detractors and politically stabilizing by its proponents), and a general call for a "new constitution".  Her suggestion that a constituent assembly might be needed to bring a "new face" to Chile has her more left-leaning supporters panting and her more conservative detractors nervously visualizing a Chilean "Chavez".  Most of her announcements, however, have been quite general with few details, leaving lots of room for her to clarify and adjust later, and also plenty of room for speculation and criticism.

But Chile is not the country it was the last time Bachelet began a campaign almost ten years ago. It is a country that is moving relatively fast through a certain modernization process, in fact faster than prior projections indicated.  Chile has joined the OECD community of nations, and continues to strive for "developed country" status.  As Chile transitions towards developed country status, though, it continues to be a society of contradictions.  For example, a recent analysis made by The Economist compared important economic indicators of the Bachelet versus Piñera administrations, all of which were better in the Piñera period: GDP growth double that of Bachelet, unemployment less under Piñera,  and inflation 4% under Bachelet and 3.2% under Piñera.  It is true that Bachelet had to manage the economy during a period of significant global economic downturn, but Piñera had to bring the country back from the devastating earthquake and tsunami of 2010.  Regardless, foreign investment has returned under Piñera to almost double the lowest level in the Bachelet period.  Notable, then, is that Bachelet's personal approval is very high, in the 60% range, whereas Piñera is struggling to get back to an earlier approval level over 50%.

Chile carried out its ten-year census in 2012, the numbers from which are just now being publicised.  They reveal a country about to enter into the period known as the "demographic bonanza" period, where a higher percentage of the population is in the "productive" age group than the total of the "dependent" group made up of young children and the aged.  Total population is 16.6 million, up 1.5 million in the last ten years showing a .97% growth rate, less than what is needed for replacement.  There are 100 women for every 94.7 men, and 8.7 million are Catholics. 

Santiago, the capital city, has a slowing growth rate, but is at 6.0 million.  The second largest city, Valparaiso, is growing rapidly, but Concepción, the third largest is not.  Secondary cities like La Serena/Coquimbo, Puerto Montt and Temuco are growing, but Osorno and Valdivia are not.  63% of the population of Chile lives in 15 cities.

Life expectancy of Chileans is 78.5; the average of all developed OECD countries is slightly higher at 80.  The number of persons per home has dropped to 3.38.  In the last ten years, the number of housing units has increase 30%, so while the population grew by 1.5 million, the number of homes increased by over 1.3 million.  Public water and sewage connections have increased from 91% on 2002 to 93% in 2012, and for the same period homes with electricity have risen from 97% to 99%.

Chile is nurturing a growing entrepreneurial class; 24% of the economically active population (between the ages of 18 - 64) have a business that is less than 3.5 years old, double the US average of 12% and three times the OECD average of 8%.  41% of Chileans own a car, but only 9% have domestic help. 

In the last ten years, homes with internet connection rose from 10% to 45%, surpassing the number of homes with a land line telephone (virtually all Chileans have cellular phones).  The number of schools with internet rose from 4,000 to 10,000. However, only 57% of the population know how to use the internet, and only about 10% of Chileans profess to speak English, low for a country determined to grow through the provision of global services, international trade, and tourism.

Everyone in Chile seems to be concerned about the issue of equitable distribution of wealth, since the distribution is notably bad (on a par with the US) for a country with the economic record and aspirations it has, and it has not changed over the last 40 years.  A recent analysis of the average difference between salaries of the top 10% and the bottom 10% of wage earners reported 12.8 times in the Bachelet period, dropping to 9.4 during Piñera's term.  If this is true, it is a promising sign, but my guess is this report will be either challenged as unreal or ignored.

So this next election in Chile will have to face the issue of equitable participation in the benefits of development and equality of opportunity, especially the relationship between economic prosperity and high quality, accessible education. Ultimately, the candidate on the political right will argue for a role in the education sector for private investment, choice of institution for one's children, and yes, even a place for the profit motive in some educational and training institutes.

The left (read Bachelet) will most likely go all in for the State to take back the responsibility for basic education Pinochet gave up to municipal and private control, a situation all subsequent presidents, including Bachelet, left in place.  She will be tempted to promise free education eventually for all if not most Chileans, something the "street" is calling for, especially every time the street is filled with striking students, which will surely be more frequent for the remainder of this election year.

So, while the economic numbers show Chile on a healthy path towards a higher level of development, and while the NY Times publishes articles reporting that many business people who go to Chile to work short term end up staying or buying a second home there because "the streets are clean, public transportation is efficient, and the capital city is close to beaches and ski slopes, and while Peruvian, Argentine, and Spanish workers increasingly move to Chile because of the employment opportunities provided, the miners, the port workers, and of course the students are going increasingly on strike.  An old "Chile observer" friend of mine (I'll call him Bill for purposes of this posting) has always claimed that Chileans love to take to the street to protest, to celebrate, to whatever.  I think this year 2013 is going to prove Bill correct.

Whoever wins the general election in November, he or she will certainly face decreasing proceeds from the copper sector (Chile's costs in water and energy are getting higher than the US, and productivity is decreasing as the quality of mined copper goes down), an education sector badly in need of reform that satisfies the students enough to keep them in classes most of the time but that also produces the leaders and professionals a more developed country requires, and a general dissatisfaction with the distribution of wealth in Chile.

It makes me wonder what motivates Michele Bachelet to give up the UN job where she is most surely appreciated by all and given the red carpet treatment wherever she travels like so many UN officials receive (and usually deserve, by the way). Instead, she comes back to Chile where she will have a tough time convincing enough people that she is worthy of their trust, in an election environment where trust of government officials is at an all time low (and probably deservedly so, by the way).

Maybe it's the empanadas, the pastel de choclo, cazuela de ave, machas a la parmesana, the cueca, Pablo Neruda's and Gabriela Mistral's poetry, the Araucaria pines on the mountains above Lago Caburgua.  Or maybe it's the desire to set some things right that she left undone, like fixing the TransSantiago transportation system she launched before it was ready, strengthening disaster relief organizations that failed her the last time, fixing the education system she promised to fix but postponed, eliminating once and for all the pockets of extreme poverty in the country. 

Maybe, now that she has taken a broader look at international issues and the way conflict can be negotiated and resolved, she is anxious to get back in the driver's seat and reconcile the still bubbling issues Chile has unresolved with its neighbors; maybe she even comes back with a plan to resolve once and for all Bolivia's desire to have clearer access to the Pacific Ocean, a sure slam dunk for regional cohesion!

Maybe. 

But her opposition has had a chance to govern a bit, the country has continued to prosper, and it won't be long before the candidates on the right can run for election and govern without the stigma of the dictatorship.  This election will reveal how close the country is to that moment.

It looks like I need to plan a return trip to Chile for September, October, November this year.  Join me.

Posted in Panama City, Panama, on April 15, 2013.