Not The Tsunami She Wanted, But Almost

There was a chance that Michelle Bachelet would win Chile’s Presidential election outright in the November 17 round of voting.  In fact there was mention of an election “tsunami” from within her Nueva Mayoría team of advisors, who, besides running what most observers term an errorless campaign, exuded confidence she could win the required majority-plus-one votes against Evelyn Matthei of the right wing Alianza (and 7 other candidates) to avoid a runoff election.  But even though she came close, that did not happen.  She received 46.7% of the votes to Matthei’s 25%, so the two will spend another month campaigning. Bachelet clearly won big, so she only needs to keep her supporters interested enough to return to the polls on December 15, and gather enough additional votes from people who supported the secondary candidates, to maintain her distance from Matthei.  None of these losing candidates has promised to support her and deliver votes of their supporters to her cause, and since she is not in serious need of cutting a deal with any of these candidates to defend her victory in the second round, she will not offer any of them much to join her effort.  

Matthei, on the other hand, must devise a strategy that significantly attracts an additional block of voters to catch up to Bachelet’s comfortable lead, which most observers feel is highly unlikely. One might think that, since only about 50% of the qualified voters actually cast votes in the election, there should be fertile ground “out there” to entice new voters to get in the game and participate in the runoff election.  Difficult, but not out of the question, so Matthei has changed here team to include younger members of her coalition, some who won congressional seats in the first round election and hence have proven access and acceptability to important populations of voters.  But can she change her message to one that convinces enough voters that she and her cohort care as much about normal Chileans and their struggles to feed, house, educate, and keep healthy their families.  Bachelet has done that, but Matthei has not.

So what is likely to happen is that Bachelet will keep her campaign staff in place (why change a winning team, after all!), but try to reach further into the large group of Chileans who did not vote in the first round; skewed towards the young, the poor, and the self-proclaimed “disaffected”, the “indignados”, some of whom just might shelve their skepticism temporarily and join the parade in support of her program of free education for all, tax reform to produce the additional resources needed for this educational reform as well as much needed improvements to the public health system, and a new constitution freed of the trappings of the present constitution that originated in the Pinochet dictatorship.

The Presidential election is only half the story (well, maybe three quarters).  On November 17, Chilean voters also elected Senators to the upper house (Senate), and Deputies to the lower house (Chamber) of what they call their Parliament (Legislature).  If Bachelet is to be successful at implementing her reform-rich program, she will need support in the legislative branch, and this election gave her a majority in both houses.  Candidates from the parties making up Bachelet’s campaign coalition will hold 21 seats in the Senate compared to 16 from the opposition; in the House they will hold a 67 to 49 advantage.  This balance (or unbalance, if you wish), should allow Bachelet to win legislative approval for most of the programs and reforms she has campaigned on, although many of these are still very highly generalized and lacking in a fair, detailed assessment of the costs and benefits (monetary and social) associated with each.

One aspect of the “Pinochet” constitution that is attracting a lot of attention and much criticism from a wide range of constitutionalists, politicians, and segments of civil society is what is referred to as “special quorums”.  These apply with certain types of legislative proposals that require more than a majority vote to pass; some require 60% and others, such as constitutional reforms, require 75%.  It is this latter special quorum that is complicating Bachelet’s campaign promise to create a “new constitution”, because it would allow the opposition to vote en bloc against her proposals for reform.  (Observers of the gridlocked US Congress are all too familiar with this tool of power afforded to the minority to stymie, for better or for worse, the will of the majority.) While it is not a given that the right wing minority would object to any and all constitutional reforms requiring this level of approval, it is certainly likely.  Hence, believing that this special quorum of 75% is a trap that will inevitably lead to failure of Bachelet to produce a new constitution using the present institutional framework (legislative branch), and in the process preclude her from eliminating these special quorums from the constitution, there is an outcry from a broad range of the Chilean public for an alternative approach, the creation of a “constituent assembly”, to draw up Bachelet’s new constitution.

Matthei and the right parties have been roundly defeated in this election, so far.  The right is not as coherent and disciplined politically as the left, and under Bachelet’s guiding hand the left coalition formed to obtain Bachelet’s election has become more inclusive by welcoming the Communist Party into the coalition while keeping the more centrist Christian Democrats also in house.  It is one thing for a party like the Communists to join the campaign, but another to join her government once she is elected.  It is pretty clear that this time, differing from the first time she was President, Bachelet will form her government with less of a need to succumb to influence from the leadership of the political parties who supported her campaign.  (Polls show that while Bachelet is popular, the political parties that support her are not.) Bachelet probably has her government pretty much staffed and first steps planned, but some observers believe that because of this second round of voting there is still room for Matthei and her Alianza supporters to influence how and with whom Bachelet eventually governs.  This is more apt to occur if Matthei is able to challenge Bachelet's proposed program enough to seed doubts about its effects, and its eventual costs.  There will be at least one face-to-face debate, something that did not effectively happen in the first round, so Matthei has at least that chance to show to the voting public (and the previous non-voting public) what she and the right think are the serious shortfalls of Bachelet's program.

A strong showing in the runoff by Matthei, which would require expanding her vote count considerably, might temper how Bachelet interprets her mandate and influence her choices when she finally names her team to govern and determines her priorities.  On the other hand, a weak showing by the right could result in an even more overwhelming victory in the runoff election and leave Bachelet with the even greater feeling that she has won a clear mandate for her program, and can proceed unfettered. 

One interesting and indicative decision Bachelet made almost immediately after winning the first round election was to enlist the support of four attractive young victors of seats in the Chamber of Deputies to join her in public campaign events.  These are the very attractive past leaders of the student movement, who took to the streets over the past two years to force politicians and public opinion to pay attention to important social issues like education, health care, and equity of opportunity and wealth which have been begging for attention and reform for years.  These leaders of the future campaigned under Bachelet's Nueva Mayoría banner and having parlayed their popularity into electoral victory will join the Chamber of Deputies in March, bringing fresh energy to that often stodgy body.  Three of them have joined the Communist Party, and as such the Party has doubled the seats it holds in that body from 3 members to 6.  These former student protest leaders all were once vociferous critics of Bachelet, and even now openly proclaim that they are joining the legislative branch initially within her coalition, but with only one foot, while the other they are keeping in the street with their comrades of the civil social movement.  Time will tell if they drink Bachelet’s Kool Aid, or she drinks theirs.  It also remains to be seen how independent of their party these young legislators will be.

So are Chileans turning their backs on the policies and practices that have given the country economic progress for the past two plus decades?  Are the Chilean voters indifferent to what it will take to fulfill the recently released OECD projection that Chile’s will be the most dynamic economy in the biennium 2014-15 of all the 34 members of this club of developed and emerging economies?  Will Bachelet, in her drive to make Chile a more “just and equitable” society still be able to deliver economic growth of 4.5% in 2014 and 4.9% in 2015 as projected by the OECD analysts?  To put this in context, compare these numbers to projections for the US (2.9% and 3.4%) or the EU (1.0% and 1.6%).  Some local analysts and commentators are drawing the conclusion that this election may be showing that Chileans are as interested in social growth (equity, participation, environmental health) as they are in economic growth, and while they may still want growth, they are willing for that rate of aggregate growth to be slower than it has been, if by slowing down and limiting the excesses and abuses of their relatively free market economy they can attend to some of their social needs better.

In some ways it all looks a lot like Chile in 1970, when the Allende government raced to socialize the Chilean economy and society, self destructing (with a lot of help from the opposition and other enemies) with the resultant calamity the results of which still infect Chilean society and politics.  This is the outcome of a Bachelet victory that the likes of the Wall Street Journal and other conservative analysts are predicting (or fearing).  But it also looks a lot like Bachelet may in a way be Chile’s Barack Obama.  The reform wave she is riding feels a lot like the vibes around Obama’s victory in 2008.  Even her speeches sound a bit like his, and her endless promises while exciting, add up to an impossible agenda her inability for whatever reason to implement run the risk of leading to high levels of disappointment (like Obama also).  Admittedly, Obama was not proposing the drafting of a new constitution like she is, nor was he a self-defined Socialist like she is. 

 For Chile’s sake, one can only hope that Bachelet is more capable of setting realistic priorities, corralling her supporters to her side consistently to promote and implement her program, and that the Chilean legislative branch can avoid the costly, divisive partisan gridlock Obama has faced for his entire time in office.

But wait…our work is not done here.  No summary and no conclusions quite yet.  There is more campaigning, another vote on the 15^th of December, and a government to form in March of 2014.  Let’s keep watching.  These Chileans are truly quite entertaining as they struggle to rebuild an economy, a society, and a democracy.

Viva Chile.

 

Posted in Santiago, Chile on November 20,2013

Beef comes from the Jumbo!!

Several months ago I was having a discussion with Agustin, Ximena’s loquacious 6-year old nephew, about a barbeque he had been at the prior weekend, when he surprised me with his claim that he did not eat roast lamb “because it comes from a live animal”.  Well, I know he loves grilled steaks, as do most Chileans, so to get to pursue this apparent contradiction I asked him “But, Agu, where does beef come from?”  “El Jumbo!” he replied.  Right, lamb from a live animal but beef from the supermarket.  Unwittingly Agu was reflecting the disconnect between 21^st century urban dwellers, and the reality of our sources of food.

This disconnect is becoming more and more common to be sure, and it will grow in Chile unless the printed press and other public opinion media inform the public better of the challenges of agriculture development and the provision of safe, nourishing and reasonably affordable food .  One notable source of information on agriculture and food in Chile is the weekly Revista del Campo published in the newspaper El Mercurio.  Consistent with other parts of the world, agriculture development issues get headlines in Chile only when there is a drought, flood, or pest that significantly affects the price and availability of food.  True to that, the recent unusually late period of freezing weather in the Chilean central valley should be reminding policy makers, politicians, and the public how vulnerable their food production system is to the vagaries of the weather and the process of climate change.

As much as 68% of the fruit production may have been affected by the freeze (not necessarily lost, but to some degree affected), and producers and exporters are awaiting a response from the government with actions to minimize the negative effects on exports and farm and agribusiness labor.  The government has the resources to provide financial support to farmers who lost this years production, especially in the fruit sector, so they can get through to the next production cycle.  Temporary labor without work in the more northern regions will probably find work further south where the freeze was not as destructive and where farm labor is often in shortage.  But, this will not be the last time weather causes agriculture losses, and the progressive effects of climate change require more aggressive attention to the changing panorama of what crops can be planted and where they will grow best.  Just like certain field crops like soybeans and wheat are being planted progressively further north in the US, so is the grape industry in Chile moving into new areas of the country because of changes in climate and the availability of water.

So why is this important?  Only fifty years ago Chile embarked on an intensive agrarian reform, the first step in a process that over the years has resulted in Chile becoming a global player in forest products, fresh fruit and vegetables, specialty food products, fish and seafood.  Throughout this period policies were reformed that freed up imports and exports and that directed capital to the agriculture sector.  Important institutions were created to support and promote the sector;  INDAP to provide assistance to the small and medium sized farming sector, CORFO to provide investment for innovative sector projects often in partnership with the World Bank and InterAmerican Bank, and the Fundacion Chile, a semi-autonomous research and development institution set up to promote public-private investments some of which led to the highly sophisticated processing and marketing of Chile's agriculture and food products capable of competing well on the global market.  Throughout the process Chile's universities, public sector institutions, and the private sector all developed strong links with US institutions, especially in California where similar crops (grapes and other fruits) and similar challenges (scarce water, increasing land values, changing demand for agriculture sector expertise and research) contributed to modernization of the sector and establishment of long term partnerships and technology-sharing networks beneficial to both countries.

Over the past two decades, Chile's agriculture exports have grown faster than imports, with recent growth especially in dairy, pork, and poultry in addition to the traditionally strong exports of wood products, wine, and fresh fruits. 

Because of this progress, recent Chilean leaders are convinced that Chile should be a "world level agrifood producer".  To support this, President Pinera is sending to the Chilean Congress a proposal for legislation to reconform the Ministry of Agriculture as the new Ministry of Agriculture, Food, Fisheries and Forest Resources. He states that the country could move up into the top 10 of global food producers, demonstrating a degree of ambition and confidence really quite noteworthy.  But it will not happen without a high level of attention from Chile's future leaders. 

Several days ago, as the size of the damage from the freeze was becoming clearer, the candidates in this year's presidential election met in the northern city of Coquimbo for a public debate.   The debate was set up to focus for the most part on regional issues.  It will not escape most who are reading this blog that in a Country like Chile, where about half the population lives in the capital city, and 75-80% are urban dwellers, there is no greater “regional” issue than the growing of food and fiber, and the provision of bioenergy (mostly fuel) in the rural regions from Coquimbo in the north to the Bio Bio in the south, to satisfy the growing demands of the urban population and for export.  But, not one of the candidates even mentioned the issues of agriculture, food and wood production, rural development in general, or even issues related to water and irrigation.  This latter omission is most noteworthy because it is precisely the region between Santiago and Coquimbo (the 4^th and 5^th Regions) where future agriculture development depends on expansion of the irrigation systems, and the availability of abundant water, a huge issue due to several years of drought conditions leading to deficits in all the major water reservoirs in this part of Chile.

You could expect one of the presidential candidates, Michelle Bachelet, to be right on top of the issues of agriculture and food, especially fruit production. Bachelet’s ancestors included pioneers in Chilean agriculture.  Her paternal great-great-grandfather, Luis Bachelet, in 1876 authored a seminal document on the art of cultivating vineyards in Chile entitled “Guia; Vinicultor Chileno”.  He also reportedly brought to Chile some of the first root stock of French grape varieties now the backbone of the Chilean wine industry. 

During a visit I made to the agriculture school of the Universidad de Chile, on the outskirts of Santiago, the dean, Antonio Lizana (whom I had met many years before in Cairo, Egypt, where he was working on an agriculture development project and I an environmental policy project, both funded by USAID), showed me the bust of Bachelet’s maternal grandfather, Max Jeria, that they have set at the entrance to the administration building of the school to note that he was the first Ingeniero Agronomo (agronomist) to graduate from the university.  Antonio also provided me with a copy of Jeria's 1876 publication that I admittedly have yet to read.

With her genes deeply rooted in Chilean agriculture you would think granddaughter Michelle would be steeped in the problematic of rural development and agriculture.  Well, as it turns out, Michelle Bachelet did not attend the debate in Coquimbo last week, so unfortunately her views and positions were not in the mix.  Maybe we will hear more on the subject of agriculture and food production from her and other leading presidential candidates next week when they are invited to speak at the annual meeting of the National Agriculture Society (SNA).  It will be a timely event to gauge the degree to which the next generation of Chilean leaders understands the links between agriculture, the growing global demand for food, the effects of climate change, and the requirements for technological innovation through modern research and education institutions.  If they understand this, they are more apt to attend to the requirements of a modern agriculture sector and accelerated rural development in general.

With the recent climate related emergency in the agriculture sector still fresh in their minds, a serious discussion is needed to detail the national policies and programs required to face the effects of climate change and increased global and national demand for the very foods that Chile produces and exports with excellence.  Chile has always been linked to US and other countries to stay up to date on productivity enhancing technologies, but the public research institutions will need resources and trained professionals to keep Chile's agriculture growing, especially in the face of the complexities of climate change.

Strong presidential leadership is needed now, leadership that knows that beef gets to the Jumbo for Agustin's barbeques only because a modern agriculture invests, produces, harvests, delivers, and profits from working the land, conserving water, and growing the economies of rural towns and villages.

Posted in Santiago, Chile on 10-19-2013.

 

Chile's Election; Down to the Wire

 

We are just a few short days away from the presidential elections in Chile, and most observers are convinced Michelle Bachelet will win large. Her main opponent, Evelyn Matthei, is around 20 percentage points behind in most polls.  There are nine candidates from across the political spectrum vying for the position, since it is so easy to collect the number of signatures (50,000) required to qualify to be on the national ballot. One observer commented recently that a couple of the candidates may actually receive fewer votes in the election than signatures they collected to enter the race! Because of this plethora of candidates splitting the total vote, Bachelet may not receive the “majority plus one” of total valid votes required to win in the first round and thus avoid a runoff election between the two top vote earners. In the case that a second round is needed, it would be held one month after the first, in mid-December, with Bachelet, member of the Socialist Party and supported in the campaign by the modified “Concertación” movement she named “Nueva Mayoría” face-to-face with Matthei, supported by the same right of center coalition, the Alianza, that supports the present and outgoing president Sebastián Piñera.

As the campaign has progressed over the past few weeks, the positions taken and the personality of campaigns of the two leading candidates present a clear choice to the voters.  On the one hand, Matthei has carried water for the proponents of the position that Chile has progressed remarkably, albeit not perfectly, towards “developed” status after 24 years of gradual escape from the institutions (and lack thereof) left by the Pinochet dictatorship. Matthei points out stridently that this progress must not be impeded by drastic public policy changes that could threaten this pace of development.  Supporting this position are the results of recent polls and analyses from respected Chilean and international institutions. More than 70% of Chileans believe Chile is the best country in which to live in Latin America (Encuesta Bicentenario). Freedom House classifies Chile as fully democratic since 2000. In terms of human development indicated by life expectancy (longest in Latin America with 78.2 years, about the same as the US), Infant mortality at 9 per 1,000, education, literacy and quality of life, Chile is ranked 40 of 183 countries and the highest of all Latin American countries. To wit, obesity is more of a problem than malnourishment.  Unemployment is at its lowest level in 30 years and GDP per capita at its highest, just short of US$ 20,000.  The IMF believes the most optimistic scenarios for economic performance over the near future in Latin America are in Chile, Colombia, Peru, and Mexico (countries which, by the way, are joined in a “Pacific alliance” formed recently to enhance their trade position with the very attractive and growing Asian markets).

On the other hand, Bachelet has clearly crafted her campaign to sync with the opinions of Chileans as reflected in recent public opinion polling that, surprising to some given the situation just described and touted by Matthei, reflects a significant desire to move away from private sector and market solutions especially where “social rights” are involved.  85% of those polled want to reduce salary inequality, 67% support tax reform, usually meaning increase taxes on companies and the rich, 81% believe a government-run retirement fund should be established to compete with the private programs to reduce the costs (read profits) earned by the private funds, 74% agree that university education should be free and universal, 80% are in favor of renationalizing the copper industry, 82% support the creation of a network of public pharmacies, 70% want the government to take over the public transportation system.

The underlying issue is equality.

Bachelet surely respects the economic growth Chile has experienced over the past two decades, but she wants to give more importance to distribution of wealth, not just total growth and per capita averages. (She probably keeps in the front of her mind the classic calculation: Two brothers have two chickens for dinner; one eats both, the other none.  Per capita consumption of chicken: one chicken per brother!).    And on top of this equity issue, or maybe because of it, there is a strong push from many different levels of Chilean society to adopt a new constitution to rid the country of the constitution forced through by the Dictatorship but subsequently amended in a new version signed by then President Ricardo Lagos in 2005. 

The option of forming a constituent assembly to draft a new constitution has been a burning issue during this campaign.  It is an idea that gets most of its support from Chileans who seem driven to erase everything created by the Pinochet dictatorship and by those who see the process of developing a new constitution as a way to bring broad sectors of society, who feel they have been left out and are not represented in today’s decision-making institutions, into the discussion on the future of their country.  Bachelet firmly supports a new constitution, and has not discarded the idea of a constituent assembly.  As with many of her statements and the program she has made public so far, it is hard to tell how far she would actually go to produce a complex, new constitution. At times she appears to be allergic to a constituent assembly, probably the case because the process surely would dominate her entire time in office and possibly not even produce a new constitution.  

Matthei, on the other hand, is openly opposed to calling a constituent assembly, believing it to be a dangerous proposal, even destabilizing, and that it is also unnecessary in that the specific changes needed in the constitution should be debated and agreed upon within the existing institutions established to do just that, especially the Congress.

The campaigns so far have not addressed how Chile will continue its march towards the next level of development.  Chile is a member of the OECD (along with Mexico the only Latin American members), but it, along with Mexico and Turkey, is not an industrialized country, making comparisons of socio-economic data with other OECD countries tricky. Chile still relies heavily on income from the mining sector, especially copper.  The outlook for the price of copper, now high but with a tendency to decrease below US$ 3.00 per pound, puts Chile’s economy at risk.  One viable option to decrease the dependency on copper is to shift investment from the mining sector slowly towards forest products, fisheries, fresh fruits and vegetables, and wine, the sectors which have begun to show some degree of efficiency and competitiveness in the world market.  These sectors suffer from the high cost of energy, increasing labor scarcity, and years of indifference to environmental protection of basic natural resources of soil and water.  Neither of the two leading candidates has put forward any specifics nor even shown any indication to be concerned about the investments in education, research, and innovation necessary to continue the modernization of these productive sectors and the addition of new areas of production.  The best example of this is the agri-food sector, where Chile actually has advanced over the recent decade and is potentially a globally important exporter of agriculture products.  However, when the candidates were invited recently to an important annual symposium on Chile’s place in the global agriculture and food economy, not one of the candidates chose to participate.

So as we move to the election with the general feeling that Bachelet will eventually be elected president, with a large margin if she wins in the first round, and probably an even larger margin if they have to go to a second round, the issue now really becomes how she will govern and what happens to the right wing coalition.  It is interesting to note that were a president in the US to win by the margin being projected for Bachelet, it would be termed a very strong mandate for the program being put forward. To a certain degree, the simultaneous congressional elections of senators and deputies will determine the extent Bachelet can govern with support from her coalition to pass legislation.  She seems very close to having that outcome, but these elections are harder to predict.  Another important factor is that at this point, that is, for the campaign, Bachelet is bookended within her coalition by the Communist Party on the left and the Christian Democrat Party on the right.  If she moves too close to the business sector and too slowly on reforms of the tax structure and the health and education sectors,  Communists will rebel; in fact, it still remains to be seen if they will actually join her government.  At any rate, they will have several seats in Congress.  If she moves too far left, especially on certain social issues like same sex marriage and abortion, the Christian Democrats will push back. 

But the elephant in the room, the first and possibly the biggest issue Bachelet will have to deal with that could determine how successful her presidency is, is the issue of forming a constituent assembly to prepare a new constitution.  If she is forced into a constituent assembly-type process by her own party, the Socialists, she will have a very difficult time fulfilling the promises she has made to improve significantly the health and education systems, deal with the Mapuche and other indigenous populations' claims, and develop a national energy policy which addresses the rapidly increasing costs of energy in Chile. 

The right wing Alianza will come out of this election soundly defeated, by Bachelet and by themselves. Bachelet’s coalition is much more disciplined than that of Matthei.  That may not hold past the campaign, but the difference between the two is noteworthy. I heard an interesting comment recently that Piñera had a pretty good presidency but he was a bad president.  And Bachelet had a pretty mediocre presidency (2006-2010) but she was a good president.  I’m not sure who coined this idea initially, but it does seem to come down to the “poetry” and “prose” of running public affairs.  One has to do with running the government (prose) and the other with understanding your people, connecting with the people who have unmet aspirations and needs, and projecting the feeling that you share the ups and downs of daily life of those whose lives are not easy and often precarious. (poetry)  Piñera had little poetry, and Matthei has even less.  To be fair, the right wing coalition in Chile has really only governed for 4 years since 1964, compared to 26 for the left.  The right now has a newly formed reservoir of talent versed and experienced in the nuts and bolts of governance, and new leaders with more finely honed political skills are now available.  My guess is that the temptation for these folks, as they watch their TVs Sunday night, will be (if they haven’t been doing so already) to grab the phone, line up a job in the private sector, maybe overseas as so many talented Chileans do, and bail from the political scene at least for a while.  Maybe.  But maybe not, and if not, the right will be better ready for another chance in the near future to get back in the game.  Bachelet’s well-orchestrated poetry will be a big reason for her winning this election, as is expected, but she will need to deliver the prose of governance much better than she did the last time, or she will again, in four years, deliver the country to the opposition.

Posted in Santiago, Chile, on November 13, 2013.