Chile's unhappy success

Business Times

2 days ago

LET'S play a political parlour game.
First question: Which developing country has, since 1990, consolidated a thriving liberal democracy, with free elections and a free press; almost trebled its real income per capita; sharply reduced its Gini coefficient (a measure of income inequality); and climbed up the ranks of the United Nations Human Development Index, so that it is now classified as enjoying Very High Human Development?
Second question: Which developing country had massive protests and riots in 2019; suffers from very low reported trust in institutions; has just elected a member of the Communist Party as the standard-bearer of the ruling centre-left coalition; and, if polls are right, is likely to choose a far-right Trump wannabe in the presidential election later this year?
If your answer to both questions was Chile, you win. The country is successful, yet its citizens are unhappy. Its democracy is the envy of Latin America, yet Chileans do not seem particularly proud of it.
The country's volatile mixture of flourishing and fury holds lessons that apply far beyond Chile's neighbourhood.
The centre-left primary held on Jun 29 illustrates what is at stake. The early favourite was Carolina Toha, an accomplished social democrat who has been a congresswoman, mayor of Santiago, Chile's capital, and, most recently, interior minister in President Gabriel Boric's government.
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Also in the running was Gonzalo Winter, a moustachioed hipster who, like Boric, went from student activist to national leader in just a few years.
In the end, the voters were unimpressed by both of them. Instead, they voted overwhelmingly for Jeannette Jara, a charismatic Communist former labour minister.
Chile's Communists are not any old leftist party. Nearly 40 years ago, when Chile's centre-left unseated dictator Augusto Pinochet in a referendum, the Communists refused to participate; the only way to overthrow the regime, they argued, was by force.
More recently, in late 2019, when almost all political parties signed a pact for constitutional reform in an effort to end street protests, the Communists again stayed away.
They have sided with Vladimir Putin in Russia's war against Ukraine, and have praised Cuba and Venezuela for developing supposedly novel forms of democracy.
It is not an exaggeration to call Chile's Communist Party Stalinist. Yet 60 per cent of primary voters preferred its candidate.
Things are not much different on the conservative side of the political spectrum. The centre-right candidate, Evelyn Matthei – who, like Toha, has been a congresswoman, mayor and minister – is sinking fast in the polls.
Rising fast is the far-right Jose Antonio Kast, who, unlike Donald Trump, speaks in soft and measured tones but who, like Trump, campaigns on a populist, anti-immigrant and anti-woke agenda.
What is irking Chileans?
What ails Chileans? Why are they voting for populists? The conventional wisdom points to crime and immigration. Chile's foreign-born population has risen to nearly one in 10, a change which has brought a predictable backlash. And yes, violent crime, often perpetrated by Venezuelan gang members, has been on the rise.
But that cannot be the whole story. By Latin American and even developed-country standards, Chilean cities remain comparatively safe. And dissatisfaction with politics and politicians was on the rise long before the surge in legal and illegal migration over the last decade.
The other conventional answer is an economic slowdown. The Chilean economy, once the wonder of Latin America, has barely been growing in recent years, and the investment boom of the 1990s and 2000s is long past.
But again, that cannot be the whole story. Chile has escaped the economic instability of other countries in the region, real wages have continued to rise (albeit more slowly than in previous decades), and so has private consumption.
The truth about what ails Chileans is both deeper and more elusive. It begins with a generous helping of anti-elitism. Anything that reeks of the establishment, whether political or business, is automatically suspect.
Jara's appeal springs from her working-class roots, which signal she does not belong to Chile's political establishment.
Populism, whether right or left-wing, amounts to a kind of identity politics: It is always us against them. Chile is no exception. Tribal and divisive politics has turned a few citizens into angry talking heads and has turned off the rest, who cannot stand the noise and the vitriol.
The rules of the political game also bear some of the blame. Chile combines a US-style presidential regime with a European-style proportional electoral system. The result is that presidents seldom have a majority in parliament, leaving them unable to achieve via legislation what they promised on the campaign trail.
You can see why citizens increasingly believe politicians are liars, all talk and no action.
Issues not isolated to Chile
Anti-elitism, tribal politics and frozen democratic decision-making help explain Chile's recent surge in extremism and polarisation. But similar trends are taking hold elsewhere in Latin America, North America, Europe and parts of Asia. The temptation to identify exclusively local causes for global phenomena must be resisted.
Leo Tolstoy was wrong in his opening line of Anna Karenina: Unhappy families can be unhappy in very similar ways. The same is true for unhappy countries.
The shared unhappiness is mostly political, and therefore calls for political solutions. The technocratic illusion – increase growth a bit, reduce inequality some, and all will be fine – must also be resisted.
As Chile shows, countries can grow prosperous while also growing grumpy. It will take more enlightened political leadership than Jeannette Jara and Jose Antonio Kast can provide to reverse that worrying trend. PROJECT SYNDICATE
The writer is a former finance minister of Chile and currently dean of the School of Public Policy at the London School of Economics and Political Science