Michelle Bachelet: Hurtling Toward 100 Days
COHA MEMORANDUM TO THE
Council On Hemispheric Affairs
MONITORING POLITICAL, ECONOMIC AND DIPLOMATIC ISSUES AFFECTING THE WESTERN HEMISPHERE
Wednesday, June 7, 2006
COHA MEMORANDUM TO THE PRESS
Welcome Madam Chilean President to Washington
Michelle Bachelet: Hurtling Toward 100 Days
• Chile’s first female president will meet with President Bush amidst growing tensions in Santiago over education reform and tough words in Washington
• Michelle Bachelet has proved effective in her first three months in office even as Chile experiences its biggest popular demonstrations since the Pinochet-era
• Chile remains one of the world’s most unequal societies. While increasing social spending, she will maintain neo-liberal economic policies, thus leaving Chile’s poor uncertain about their future
• The foreign policy of ‘Open Regionalism’ seems to have somewhat soothed Chile’s historic unpopularity amongst other Latin American nations, but many do not welcome Santiago’s economic model
As she approaches her first 100 days in office, and the beginning of her Washington visit, Michelle Bachelet’s success should be seen as something of a miracle. This is because the 54-year old pediatrician presents a rarity in what must be seen as the highly conservative country of Chile, as she is a twice divorcee with three children from two fathers, as well as being a self-proclaimed agnostic, which is at odds with the mores of this staunchly Catholic nation. These personal aberrations have not, however, reduced her popularity, as a recent Centro de Estudios de la Realidad Contemporánea (CERC) poll has shown a 65 percent approval rating for Chile’s first woman president.
It is not entirely clear if this popularity is directed toward her or rather at the policies of the center-left Concertación de Partidos por la Democracia alliance which first took power when democracy was restored in 1990, and has led Chile down the path of neo-liberal economics ever since. This coalition consists of Bachelet’s socialists and the more conservative Christian Democrats, as well as two smaller leftist parties.
President Bachelet will be meeting with President Bush tomorrow at the White House. As the largest mass demonstrations in over a decade continue in Santiago, the trip to Washington could be viewed as a bit of a relief for the Chilean President. That may not be so as relations with Washington recently entered one of their more intriguing phases, noticeably different from the love-fest where they usually are to be found. A meeting between Chilean Foreign Minister Alejandro Foxley and U.S. Secretary of State Condoleezza Rice took place recently as a preliminary to the event. At this meeting, Rice, no longer the nice guy or artificer of gobble-de-gook, veritably threatened the Chileans, stating that if they did not withdraw their support for Venezuela’s bid for a seat on the United Nations Security Council (Venezuela is eying the seat currently held by Argentina who will leave at the end of the year), “Chile could fall into a group of losers…” Undersecretary of State, Robert Zoellick who was also in attendance, suggested that any attempt by Chile to campaign for a UN Security Council seat for Venezuela would “decisively damage” bilateral relations between Santiago and Washington. The State Department’s blatant attempt to openly bully a sovereign ‘ally’ in such a dismissive manner is not the most effective way for the grossly unpopular Bush administration to hold on to the few remaining friends it has left in the increasingly anti-American region.
During this year’s presidential elections, Michelle Bachelet won 53 percent of the vote in a runoff with center-right candidate, Sebastian Piñera, thus prolonging the reign of Concertación. Since entering La Moneda, Bachelet has addressed many of the most serious problems facing the country, particularly those within the social sphere. She has, however, made it clear that the Pinochet-initiated free-market system will remain, even as it is evident that such polices led to the vastly unequal society.
100 Days Program
While campaigning for the presidency, Bachelet boldly proclaimed that her government intended to tackle many of Chile’s most serious problems within her first hundred days in office. Of the thirty-six reforms she set out to undertake, it appears that over one third have in fact been successfully implemented. The 100 Days Program is made up of a variety of measures which include tackling poverty and social inequality (Chile is one of the most unequal societies in the world), implementing labor market reforms, revamping the ill-performing pension system and eliminating gender discrimination. To fulfill her campaign promise, Bachelet has awarded 10 of the 20 cabinet seats to women; however, this statistical progress has not been achieved nationwide, as only 36 percent of Chilean women hold jobs outside the household. Bachelet has in her first three months in office been able to push her gender policies in other areas, specifically by establishing a women’s abuse hotline and by multiplying support shelters, no small achievement in a machismo-charged culture. While campaigning, Bachelet, publicly acknowledging the conservative nature of Chile, making it clear that there would be no legislation legalizing abortion and gay marriage. She did, however, promise to make the ‘morning-after pill’ more accessible to Chilean women. This subtle move is a positive starting point for Chile’s progression toward social modernity.
Since a democratic political system was restored in Chile in 1990, poverty has gradually decreased. When the Pinochet dictatorship ended that year, 40 percent of Chileans were living in poverty. Today, this figure has dropped to 18 percent, a very significant achievement. However, this success does not embody the true face of Chilean society, which is marked by great economic disparity and injustice while its present economic structure emphatically favors the upper and middle classes. Bachelet has tried to address this problem in two ways since taking office. Her first approach was to offer a one-time government handout of $35 to approximately 1.2 million low-income families. The second proposal was a program offering subsidies to employers who hire ‘at-risk youths.’ The subsides would cover 50 percent of their salaries during the first year of employment. Bachelet regards the plan as an excellent opportunity for disadvantaged youth to make their initial entry into the workforce but would ultimately like to see more businesses get involved.
Chile is also marked by great disparities within its health and education sectors. For example, most new medical investment technology goes into the private sector. The resulting high prices found in private clinics directly translates into a 15-20 year lower life-expectancy for those who cannot afford them. A similar scenario characterizes the education sector, as privileged children in Santiago are able to attend private schools, while poorer families are forced to send their children to often failing public schools. On both issues, President Bachelet has taken steps, with mixed results, to help Chile’s most needy citizens. Within the health sector, she added 30 new family clinics, and announced that any person over age 60 could receive free medical care in public facilities. She also signaled her support for the importation of generic drugs.
While successes in the health sector are clear, education reform is seen as Bachelet’s greatest challenge thus far. Approximately one million students, teachers and parents haven been involved in a nearly one month-long standoff that has led to massive demonstrations in Santiago and elsewhere. The secondary-school students have demanded that the government strengthen its commitment to grant better educational opportunities; specifically requesting free transportation to school, a repeal of expanded school hours, the elimination of college entrance exam fees and the transfer of control of schools from municipalities to the central government. Bachelet has communicated her willingness to hear such concerns, stating that the overall goal of the two sides is a shared one. In fact, on June 6, Bachelet sent a bill to the Chilean Congress which would constitutionally guarantee ‘quality education’ as a right of all citizens. This measure was taken after her original offer to provide free school transportation to the needy students and government grants for the college entrance exams was rejected by the despondent students. These steps demonstrate Bachelet’s longing for a stable social environment, where secondary education plays a critical role. This desire was exhibited during her State of the Union Address on May 21 when she said, “I am convinced that inequality starts in the cradle.” This thinking has granted her notably success at the other end of the educational ladder, beginning with her opening up of over 30 new daycare centers and her efforts to make access to pre-school education easier by expanding the number of free public school seats.
Sky-high Expectations for ‘Open
After nearly completing her first 100 days, Chileans and foreigners alike have high hopes for Bachelet’s full four-year term. Venezuelan President Hugo Chávez has declared himself a close ally of President Bachelet and has praised her Allendista credentials. At the same time, President Bush feels that Chile, under the Bachelet Government, could be a constructive partner on the continent. Some are even calling on her to act as an interlucator between the feuding Bush and Chávez camps. She has adamantly rejected this role, suggesting that taking on such a responsibility could be seen as an act of ‘arrogance.’ Bachelet has, however, called upon Western governments, namely the State Department, to stop degrading such countries as Venezuela and Bolivia, declaring that every country is different and that democratic-elected leaders should be respected. Chile’s foreign policy can be described as an ‘open regionalism,’ which calls for the respect of multilateralism, regional integration, UN reform and cooperation with the EU and the U.S.
Chile’s policy regarding foreign trade matters faces several major challenges. Nearly 70 percent of Chile’s economy stems from foreign trade which makes regional stability a subject of the highest concern for Santiago policy makers. Since 1990, the Concertación Alliance has made only very small changes to Pinochet’s free-market economic policies and has benefited from the policy of expanding the economy with the poor paying much of the price. This, coupled with President Bachelet’s pronouncements that globalization is a necessity for any country to grow and that IMF guidelines should be followed, have proven very provocative for some of the continent’s most doughty leftist leaders. In addition, Chile’s new president has proclaimed that the U.S. is a ‘strategic ally’ (even though the aforementioned diplomatic spat may alter this relationship) and has backed the Free Trade Area of the Americas (FTAA). At the moment, Chile has Free Trade Agreements (FTAs) with several countries, including China, the European Union and the United States. These deals were the result of initiatives put forth by the previous Ricardo Lagos government. Chile remains the most favored investment site for foreigners seeking to invest in Latin America due to its willingness to abide by the World Bank, IMF and WTO guidelines. Many Latin American leaders, however, do not see Chile as the appropriate economic model for their respective states because of the inequalities that such neo-liberal policies spur and the not always attractive manner in which Chile achieved its economic miracle. President Bachelet addressed this concern by stating, “I do not support global trade where half the workers of the world-1.4 billion people-are trapped in poverty and unable to earn more than two dollars a day per family unit.” It is apparent that Bachelet, in her time in office, intends to place a greater emphasis on social justice, thus creating a more level playing field within Chilean society and the global marketplace as a whole. Another important symbolic act is Bachelet’s proposed prevention of further privatization of the remaining state industries.
Pinochet legacy: Inequitable privatized pensions
The most publicized reform that the new president has undertaken has been the overhaul of the Pinochet-era pension system. Just after taking office, President Bachelet set up a Pension Reform Advisory Council in order to mend the severely flawed Pinochet-era pension fund that was privatized by the dictator in 1981. The pension-fund only works for those who could afford to make contributions to it, a task which only about half of Chile’s 16 million could undertake. Many come to see the system as grossly defective. While employers can make tremendous profits from its operations, pensioners are likely to receive only minimum payments. The alternative to this patently unjust status quo is the also flawed Minimum State Pension System which doles out a mere $150 monthly. Some good news came, however, on April 12, when the Chamber of Deputies (Chile’s lower house of congress) passed the Pension Readjustment Bill that was backed by the Bachelet administration. This measure will raise the supplementary and minimum pensions by ten percent and will grant low-income seniors universal access to supplementary pensions.
The social programs that Bachelet proposed under the 100 Days Program will be financed by the country’s most profitable commodity, copper, a resource that presently accounts for 45 percent of Chile’s exports. Chile is the world’s leading supplier of copper
and the state-owned Codelco is the world’s largest copper mining firm. The price of copper today has reached record levels and is currently around $4 a pound. These elevated copper prices have blessed Chile with a huge budgetary surplus. As a result, Chileans have confidence that Bachelet will be able to deliver on her promise to increase funding for social programs that target areas such as education and healthcare. Though, the recent student demonstrations may have diminished Bachelet’s capacity to achieve educational reform. In her State of the Union address on May 21, President Bachelet stated that her government will continue the conservative fiscal policy of retaining a one percent budget surplus for a five-year period. She also stated that Chile will nurse its copper profits to guard against the market volatility of the commodity, producing a rainy day fund.
Dealing with its rotten past
Since taking power in 1990, the Concertación alliance has failed to exert indisputable control over Chile’s powerful military establishment. This reality was due in part to an electoral law decreed by the former Pinochet regime that was designed to restrict the political left from playing an effective role in Chilean politics. The ‘Binomial System,’ as it is called, grants right-wing politicians 35 percent of the votes and 50 percent of the seats in the Congreso Nacional. President Bachelet has promised to rid Chile of this Pinochet remnant, but has yet to gather enough political steam to force the change, even as the far-left stridently demands for her to act.
Regarding retribution for past human rights violations committed by the Pinochet regime, the new president has shown quite clearly her desire to obtain ‘truth and justice.’ She has stated that her government will not accept any law that gives reprieve to human rights abuses committed by the dictatorship. She also announced her desire to create an Institute for Human Rights, which would directly counter Chile’s right-wing forces that have time and again fashioned laws that protect the rank and file of Pinochet’s death squads.
For many years it has been recognized that Pinochet-era amnesty laws, meant to shield suspected human rights violators, are still blocking any final form of truth, reconciliation or justice, leaving the perpetrators responsible for about 3,000 deaths free of judgment. Bachelet, who was herself a victim of torture from the period of military rule, feels that human rights should be the centerpiece for any morally- constituted government. She is also committed to ratifying major human rights treaties, particularly the Rome Statute which created the International Criminal Court. Most refreshingly, Bachelet seems to be leading her nation away from the grim past as she insisted that, “the country of hate and enemies…is now behind us.” The effectiveness of this approach is yet to be seen, but for the sake of nearly 16 million Chileans, reconciliation is desperately needed.
Neither Lagos nor Chávez
It is obvious that Michelle Bachelet is not part of the same category of leftist leaders known as the ‘pink tide’, which have emerged in South America over the past several years. An example of her contrasting governing style is, the three percent royalty that presently is paid by foreign mining companies operating in Chile, a much lower rate than that of Venezuela and Bolivia. Bachelet, for her part, has not hinted at raising this meager tax. Therefore, it is safe to say that at an end of her first 100 days in office, her policies have markedly followed the free-market context of her predecessor, Ricardo Lagos. There are, however, several differences between the two administrations. Bachelet’s increase in social spending, specifically in education and healthcare, her legitimate effort to reform the pensions system and a commendable undertaking to eliminate gender discrimination distinguishes the two presidents.
Michelle Bachelet’s presidential style and thrust differ from that of Ricardo Lagos, with regards to her social policy but not in terms of Chilean economic framework. She comes on the scene just as the country seems to be drifting away from its militaristic past and heading toward a more transparent and just society and is intent on not simply following the free-trade guidebook. As Bachelet tries to refashion Chilean society, she must be sensitive to the fact that often for security reasons, Chileans have had a larger-than-life capacity for self-appreciation. The fact is that the moderate center of the nation’s political life, led by the Christian Democrats, actively counted on the military to rid the country of Allende rule. As the recent student protests in Santiago have shown, there are still many lingering social problems facing Chile, including the need to display as much care and concern for its more humble citizens as it does for its highly valued investors.
June 7, 2006
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