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Home Financial Markets

Chile’s rightwingers to lead constitution revamp

May 8, 2023
in Financial Markets
0
Chile’s rightwingers to lead constitution revamp


Conservatives will lead the latest attempt to rewrite Chile’s dictatorship-era constitution after winning a clear majority in a vote that dealt another blow to radical leftwing president Gabriel Boric.

The outcome makes it much more likely that Chile’s new constitution will retain many of the pro-market features of the current document, adopted in 1980 under the dictatorship of General Augusto Pinochet.

The hard-right Republican party of José Antonio Kast was the biggest winner in Sunday’s election, picking up 22 of the 51 seats in the council drafting a new constitution. Together with the traditional right, which won 11 seats, conservatives exceed the two-thirds majority needed to pass proposals.

“Common sense ideas have triumphed,” Kast told cheering crowds as the results came in. “Today Chile has also defeated a failed government.”

The peso rose 0.7 per cent in early trading as investors cheered the result.

Kast’s party had defended the existing charter, which has been heavily modified by democratic governments in the South American nation.

Boric’s leftwing coalition won 17 seats, four short of the number needed to veto constitutional proposals. One seat went to indigenous communities.

The president acknowledged the latest setback for his government, which is struggling with a crime wave, a slowing economy, high levels of illegal migration and violence in indigenous areas.

Sunday’s vote was called after voters overwhelmingly rejected last September a first attempt to redraft the constitution. That version, championed by the president and his allies, would have abolished the senate, created separate courts for indigenous justice and vastly expanded the reach of the state.

“The previous process failed . . . because we didn’t know how to listen to those who thought differently,” Boric said. “I call on the Republican party not to make the same mistake.”

The new constitutional councillors will have four months from June to debate, discuss and adopt changes to a new constitution before voters deliver a final verdict in December. If they reject the latest redraft, Chile will keep its existing constitution.

Andrés Velasco, dean of the school of public policy at the London School of Economics and a former Chilean finance minister, said Kast’s party now had a chance to deliver the compromise document Chile needed.

“Chile is not that far from a reasonable constitutional agreement, which could bring to a close a discussion that has already lasted very long,” he said. “The key question now is whether the Republicans will help cement that deal or boycott it.”

The world’s biggest copper exporter and second-biggest lithium exporter, Chile was thrown into political uncertainty when protesters demanding better public services and greater economic opportunities rioted in late 2019, setting off months of sometimes violent street protests.

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The radical left’s fortunes peaked in 2021, when voters elected a slate of far-left representatives to rewrite the constitution and Boric defeated Kast to become Chile’s most radical leftwing president since Salvador Allende in 1970.

Patricio Navia, a Chile expert at New York University, said there was no guarantee that the attempt at constitutional reform would succeed.

“But if far-right politicians manage to keep their head cool, they will seize on the opportunity to draft a text that keeps the valuable tenets of a market-friendly economy in place and, at the same time, introduces reforms to strengthen consumer rights, expand the social safety net and introduce more social, economic and political inclusion,” he said.

Editorial Team

Editorial Team

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