CHILE UPDATES #18
Chile’s Presidential Election
Chile’s Presidential Election
Chile held its first round of the presidential election last Sunday and as earlier polls had indicated, Michelle Bachelet is on her way to becoming the country’s next president. Of the 9 presidential candidates, the top four were; Bachelet (46% of the vote), Evelyn Mattei (25%), Marco Enrique-Ominami (11%), and Franco Parisi (10)%. While there’s still a second round that takes place in mid-December, there isn’t much doubt in anyone’s mind as to who is going to win.
Sebastian Piñera, who is the country’s current president and belongs to a more business oriented right leaning party, will be stepping down in 2014 and with Michelle Bachelet being from a more left leaning party, some are beginning to wonder if Chile will maintain its status as one of Latin America’s most stable and attractive markets.
The Wall Street Journal even published an article recently that mentioned how a serious shift towards socialism or even communism might be in the cards for Chile.
Working with investments here, you can believe that I’ve been watching all of this closely and today, I thought you might like to hear a little bit more about the situation.
So first, some background.
Michelle Bachelet, orginally educated as a doctor, has already served one term as the president of Chile from 2006 to 2010. Overall, she enjoyed a high approval rating during her last presidency, however, she was widely criticized for her involvement in the public transportation initiative known as “Trans Santiago”. Even with more emphasis on “social welfare”, she managed the country’s budget fairly well during her years in office.
More dramatic parts of her past include her father being killed during the military take over in 1973 and her being exiled from the country for several years during the dictatorship.
Her Current Platform
Bachelet currently draws support from political groups ranging from the far left leaning Communist Party to the much more moderate Christian Democrats and her platform for this election has focused on three things; more funding for schools, tax reform, and a new constitution. Certain reporters are now claiming that because of this, the country is set to become the next 1960's Cuba and that foreign investors and entrepreneurs are no longer safe in Chile.
While I'm sure that these predictions make for a good news story, I have a hard time believing that's how things will play out.
My take is that the new constitution is definitely something to pay attention to but, frankly, it doesn’t worry me very much. Bachelet draws her support from a wide range of smaller political parties and isn’t likely to go too extreme in one way or another. They’re supposed to be drafting new proposals over the next couple of years and while I’m quite curious to see what they come up with, I highly doubt it’s going to change the trajectory of the country all that much.
While it’s true that raising taxes and increasing spending on social services will make the country less competitive than it is today, the fact that the country’s current financial situation is in such good shape means that growth isn’t just going to dry up here overnight. The government is well funded and the middle class is growing which means stability and respect for private property are still going to be much more likely to be found here than in most other places around the world.
Sebastian Piñera, who is the country’s current president and belongs to a more business oriented right leaning party, will be stepping down in 2014 and with Michelle Bachelet being from a more left leaning party, some are beginning to wonder if Chile will maintain its status as one of Latin America’s most stable and attractive markets.
The Wall Street Journal even published an article recently that mentioned how a serious shift towards socialism or even communism might be in the cards for Chile.
Working with investments here, you can believe that I’ve been watching all of this closely and today, I thought you might like to hear a little bit more about the situation.
So first, some background.
Michelle Bachelet, orginally educated as a doctor, has already served one term as the president of Chile from 2006 to 2010. Overall, she enjoyed a high approval rating during her last presidency, however, she was widely criticized for her involvement in the public transportation initiative known as “Trans Santiago”. Even with more emphasis on “social welfare”, she managed the country’s budget fairly well during her years in office.
More dramatic parts of her past include her father being killed during the military take over in 1973 and her being exiled from the country for several years during the dictatorship.
Her Current Platform
Bachelet currently draws support from political groups ranging from the far left leaning Communist Party to the much more moderate Christian Democrats and her platform for this election has focused on three things; more funding for schools, tax reform, and a new constitution. Certain reporters are now claiming that because of this, the country is set to become the next 1960's Cuba and that foreign investors and entrepreneurs are no longer safe in Chile.
While I'm sure that these predictions make for a good news story, I have a hard time believing that's how things will play out.
My take is that the new constitution is definitely something to pay attention to but, frankly, it doesn’t worry me very much. Bachelet draws her support from a wide range of smaller political parties and isn’t likely to go too extreme in one way or another. They’re supposed to be drafting new proposals over the next couple of years and while I’m quite curious to see what they come up with, I highly doubt it’s going to change the trajectory of the country all that much.
While it’s true that raising taxes and increasing spending on social services will make the country less competitive than it is today, the fact that the country’s current financial situation is in such good shape means that growth isn’t just going to dry up here overnight. The government is well funded and the middle class is growing which means stability and respect for private property are still going to be much more likely to be found here than in most other places around the world.
