Latin America’s new leftists
Chile’s new president promises to bury neoliberalism
Will Gabriel Boric, a millennial socialist, be as good as his word?
A decade ago Gabriel Boric was a student leader rallying together one of Chile’s biggest protest movements.
He will now become, at 35, the country’s youngest head of state.
Rather than win the presidential election by a small margin, as the polls predicted, he got a whopping 56% of votes while his rival, the far-right candidate José Antonio Kast, picked up 44%.
Mr Kast, who ran on a law-and-order platform that identified migrants, terrorists and narco-traffickers as the source of many of the country’s ills, had won the first round of the competition in November.
A big increase in participation appears to have reversed the right-winger’s fortunes.
More than a million extra voters showed up, bringing turnout to 56%, the highest since voting was made voluntary in 2012.
The result suggests just how much Chile, once considered one of the more stable countries in Latin America, has changed after years of protests and the crippling effects of the pandemic.
Mr Boric’s victory is part of an anti-incumbent trend in the region.
In Peru Pedro Castillo, a peasant teacher allied with the Communist Party, was elected president in July. Luiz Inácio Lula da Silva (or Lula), Brazil’s former president, is leading the polls for the presidential election next year.
In Colombia Gustavo Petro, a former left-wing guerrilla fighter, is currently the favourite for the election in May.
But Mr Boric, who leads an alliance between a party he founded in 2017 and the Communist Party, is in many ways more woke than these leaders.
With a programme focused on social justice, human rights, the environment and feminism, he represents a new millennial left in a region long dominated by populist demagogues.
Yet his plan to create a Chilean welfare state will face serious economic and political challenges, which his team until now has appeared ill-positioned to manage.
Whom Mr Boric chooses to put in his cabinet will send the key signal about how radical his government will be.
When he started out in politics Mr Boric made a name for himself railing against Chile’s economic system and criticising the traditional centre-left and centre-right parties that have governed the country since the end of Augusto Pinochet’s military dictatorship in 1990.
He seemed unlikely to have a broad appeal beyond the far-left, particularly when, in 2018, he secretly visited a former Communist paramilitary exiled in France who is charged with assassinating Jaime Guzmán, the author of the country’s dictatorship-era constitution. (In 2019 he apologised to Mr Guzmán’s family.)
More recently he has appeared to become more mainstream.
In 2019 he signed an agreement with the government that paved the way for the country to rewrite its constitution—an accord many in his current coalition rejected for making concessions to the right.
After Mr Kast’s win in the first round, Mr Boric went to La Pintana, a poor neighborhood in Santiago, where he promised to be tough on crime.
He recruited Izkia Siches, the popular head of Chile’s medical union, to lead his campaign.
She went to the north, where Mr Boric had fared badly in the first round because of his softer stance on illegal immigration.
He convened a team of centre-left economists to evaluate his programme and promised to make his reforms gradual.
And he penned an apologetic letter to a traditional centre-left party: “there is no virtue in novelty and youth per se,” he admitted.
This strategy paid off.
Young people still voted for Mr Boric in droves.
The centre-left lined up behind him.
More surprisingly, so did voters in the north.
Mr Boric was also aided by his rival’s failings.
For a start Mr Kast was unpopular with young people and women voters.
An ultra-conservative Catholic and father of nine children, he had originally proposed to dissolve the women’s ministry and roll back abortion (which is only legal in case of rape, inviability of the fetus, or risk to the mother’s health).
He scrapped these proposals after the first round, but many women were not convinced.
“Kast sees us as second-class citizens,” rails Casandra Franco, a 36-year-old Boric voter.
Mr Kast has also long been riven by accusations of ties to the Pinochet dictatorship.
He has made multiple statements in the past defending the legacy of the military regime, under which his brother was a minister.
Days before the second round of the election, an investigation revealed that his father, a German emigré to Chile, joined the Nazi party in 1942, when he was 18. (Mr Kast had previously insisted his father was a forced conscript.)
Though Mr Kast has distanced himself from Pinochet in recent weeks, the death of the dictator’s widow on Thursday revived the debate about historical memory.
“It took us sweat, blood and tears [to achieve democracy].
A candidate like Kast is dangerous for our country,” says Javiera Fernández, a lawyer from a posh neighbourhood in Santiago who opted for Mr Boric.
Even with his resounding win, Mr Boric faces a tough road ahead.
Following a general election in November, the Senate is now evenly split between left and right.
In the lower house, the new president’s coalition commands only 37 of 155 seats.
He will have to reach broad accords to pass his mooted reforms, which include: raising taxes by 8% of gdp over two four-year terms, abolishing private pension funds, shortening the working week to 40 hours, increasing the minimum wage, creating a universal healthcare system and forgiving student debt.
The economy will also complicate Mr Boric’s plans.
It is overheated thanks to a huge fiscal stimulus package passed during the pandemic, and successive populist policies which allowed Chileans to withdraw 30% of their pensions this year, injecting some $50bn into the economy.
Inflation is now at 6.7%, more than double the central bank’s target for 2021, while the deficit is on track to reach 8.3% of gdp.
Though the economy has roared back to pre-pandemic levels, it is only expected to grow between 1.5-2.5% next year, down from 11% this year.
The draft budget for 2022 would cut spending by over 22%.
Chile’s public debt, though still far below that of most of its peers, has grown significantly, from 4% of gdp in 2007 to 32.5% last year.
Most economists doubt that Mr Boric will be able to reach his tax revenue targets, meaning that there will be limited fiscal space to implement his key reforms.
Though he has promised to stabilise the public debt, pressure to complete his proposals may force him to increase spending.
Rodrigo Valdés, a former finance minister, worries that Mr Boric’s team is too inexperienced to manage the transition from Chile’s current heavily-privatised system of public services to the welfare state they are proposing.
On top of all this, the country is in the process of rewriting its constitution, which will be approved in a referendum in the second half of next year.
The body that is tasked with drafting the charter is dominated by leftists and independents, who will almost certainly enshrine more social rights in the document that the state will be forced to pay for.
“The outcome of the constitutional convention is our greatest uncertainty,” says Leonardo Suárez, the head of research at LarraínVial, an investment bank in Santiago.
Analysts hope that a split Congress and the fact that the constitution must be approved by majority in a referendum will discipline the most radical members of the convention.
Yet many worries remain, not least because the constituents have yet to start writing the document.
On the campaign trail Mr Boric repeatedly promised to bury neoliberalism.
That seems unlikely, for now.
Instead the plan, he says, is to make Chile a social democracy with a welfare state.
His team looks to the Nordic countries and especially Uruguay as examples, not Cuba.
Yet “the road to Montevideo passes through Buenos Aires,” warns Mr Suárez, alluding to Argentina’s infatuation with populism.
If Mr Boric bungles the difficult transition ahead and succumbs to pressures for unsustainable spending, he may end up making history again—and not in the way he hopes.
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