By Elizabeth Gavin
On March 11, 2010, Sebastián Piñera was sworn in as the Republic of Chile’s 35th president in a ceremony at the National Congress in Valparaíso. The new president received a dramatic greeting as a 6.9 magnitude earthquake rocked the inaugural ceremony and all of the celebrants, which included several Latin American leaders. Only two weeks after February’s colossal 8.8 earthquake took nearly 500 lives and cost Chile as much as 30 billion USD, Piñera’s inauguration instantly placed the former businessman and senator in charge of the country’s extensive relief and recovery efforts.
Chile was once again struck with tragedy when a mine collapsed in Copiapó on August 5th, leaving 33 miners trapped a half-mile underground and a rescue effort that reportedly is still months away from securing their freedom. Now, with a giant earthquake recovery to preside over, 33 of his fellow citizens held captive underground, recent controversies over environmentally-unfriendly foreign investments, and an economy that must remain stable as the international community recovers from an economic crisis, President Piñera has a wide range of urgent issues to address. September 11th will mark both the first six-month anniversary of Piñera’s term, and the 33rd anniversary of Chile’s military coup that led to a violent 17-year dictatorship headed by General Augusto Pinochet. Seven days later, the country will celebrate 200 years of independence. As Chile approaches such important milestones, many in the international community are still wondering: who is Piñera, what is he doing for Chile, and what should be expected of him over the next three and a half years?
Meet the President
Sebastián Piñera served as the senator representing East Santiago from 1990 to 1998 after receiving an M.A. and Ph.D. in economics from Harvard University. In 2001, he became president of the center-right party Renovación Nacional (RN), and held this position until 2004. The following year, Piñera became the RN’s candidate for president, but lost to socialist Michele Bachelet in a runoff election.
According to Chilean law, presidents may only serve one four-year term; this left the popular incumbent Bachelet unable to run again. Piñera announced his second candidacy for the presidency in 2008 and from early on was leading in opinion polls. The initial December 13, 2009 election left none of the three major candidates with more than half of the votes, although Piñera was in first place with 44%. In a run-off election on January 17th, 2010, Piñera defeated Concertación candidate Eduardo Frei with 51% of the vote. Though hardly a landslide, the election marked the first time in over 50 years that a candidate from the right had won the presidency.
With an estimated fortune of 1.2 billion USD as of 2009, Piñera was notorious for the extent of his wealth long before he became president. Piñera owned Chilevisión, a nationally broadcasted television channel, and holdings in various Chilean businesses such as LAN Airlines, one of the largest airlines in Latin America. This year, Piñera became the first billionaire to be sworn into the Chilean presidency. He sold the LAN holdings, among others, and the Chilevisión ownership earlier this year. This has not stopped some on the left from nursing suspicions that he is a businessman who cannot be trusted to run Chile’s economy.
Providing the left with a great deal of political fuel, Piñera has a tarnished legal record that begins with an arrest warrant that was issued against him in 1982 when he was accused of violating a banking regulation during his time as general manager of the Chilean Bank of Talca. Piñera spent 24 days in hiding while his lawyers appealed the order, after which the Supreme Court eventually approved a writ of habeas corpus and Piñera was acquitted. In 2007, Piñera was fined nearly $700,000 for failing to withdraw a purchase order after he had received privileged information about LAN Airlines stock in 2006. The politician denied any wrongdoing, labeling the case a political attack. He did not appeal the charge, however, and resigned from the LAN Board later that year.
Different Captain, Same Ship
Although Piñera campaigned on a platform of change, many wondered how drastically the center-right candidate intended to alter policy in Chile. Of the last 20 years during which it held the presidency, the left-wing coalition, the Concertación, sustained 18 years of steady economic growth in the country, eventually earning Chile admission to the Organisation for Economic Co-operation and Development (OECD). Upon taking power in 1990, the Concertación left the free-market economic policies created during Pinochet’s rule largely untouched. In fact, the left’s policies most often deferred to big business over the last 20 years. Hardly any of the Concertación’s policies could be considered “revolutionary,” perhaps due to fear of negative reactions in Chile’s new and unsteady democracy.
Andrés Almeida, a Chilean journalist, explained that Piñera “campaigned on doing the same as Concertación, but better.” If anything, the earthquake recovery will now require President Piñera to expand Chile’s government as it leads the reconstruction effort. The President has in some cases continued the Concertacion’s recent tradition of mixing business with government, with appointments such as Alfredo Moreno, a director of Chile’s largest retailer chain, Falabella, to the post of foreign minister. However, Piñera has surprised some who were expecting him to always prioritize business interests over the interests of the general population.
Most recently, the President shocked the private sector when he intervened in a project that intended to construct a thermoelectric plant near a famous marine reserve in northern Chile. The plant had received a green light when environmental authorities granted permission in August to a French-Belgian company, Suez Energy, to go ahead with the 1.1 billion USD plan near the Punto de Choros marine reserve. The coal-burning plant would emit such massive amounts of greenhouse gasses that it would alter offshore ocean temperatures, which would in turn directly impact the nearby marine and penguin reserves.
Opposition to the project erupted amongst Chileans, and peaceful demonstrations immediately were launched in neighboring La Serena and in other major cities throughout the country. These protests ended in confrontations with carabineros (Chilean police) armed with water cannons and tear gas. Although Piñera expressed his opposition to the plant during the presidential campaign, the approval of the plant came in a 15 to 4 vote by regional authorities, most of whom were appointed by Piñera himself. Pressured by the public outcry, Piñera contacted the owners of the plant on August 26th to agree on a new construction site, away from the reserve.
The Pinochet Connection
As a leader of Renovación Nacional (RN), Piñera has repeatedly been questioned about his connection to General Augusto Pinochet, the country’s tyrannical leader during its violent 17-year dictatorship. Members of Pinochet’s regime murdered upwards of 3,000 and tortured another 28,000 Chileans who had opposed the military coup. The brutal dictatorship cast a shadow over Chilean politics so much so that, until this year, it had prevented any right-wing candidate from winning the presidency since the country returned to democracy in 1990.
Piñera’s party, the RN, forms a political coalition called Alianza por el Cambio with the Unión Demócrata Independiente (UDI), a party known for its liberal economics, social conservatism, and continued respect for Pinochet. In a 1988 national plebiscite that would determine whether Pinochet would continue as leader of Chile or a democratic election would be staged, the RN indicated its support for open elections. In the course of the campaign, Sebastián Piñera insisted he was opposed to the Pinochet regime, despite the fact that his brother was a minister in it. In the government plebiscite which would decide Pinochet’s end, he cast a “no” vote against the continuation of the Pinochet dictatorship.
However, once Pinochet lost the plebiscite, Piñera managed the presidential campaign of Hernán Buchi, a former finance minister of the dictatorship. During his own presidential campaign, he promised to exclude any figures from Pinochet’s regime in his cabinet. Nonetheless, Piñera has appointed Cristián Larroulet, a former Pinochet economic planning advisor, to his team.
Early this summer, Chilean Ambassador to Argentina Miguel Otero made incredibly insensitive remarks in an interview with an Argentine newspaper, saying that without the 1973 military coup, Chile would be like Cuba today. The ambassador ignored the fact that the Chile’s coup overthrew a democratically elected president. He went on to say that “most Chileans were not even affected by the dictatorship” and in reality “were grateful for the order and tranquility under Pinochet.” In a conciliatory move, President Piñera asked for Otero’s resignation, proving that he indeed sought to create a conservative government of the future rather than of the past.
After Piñera’s election, many on the left demonstrated a nervousness that a right-wing president would bring a halt to investigations and prosecutions of the human rights violations so abundant under the Pinochet era. Perhaps to ensure this would not happen, Bachelet presided over the installation of the new Museum of Memory right before she left office. The museum contains exhibits about the crimes against humanity committed under the Pinochet dictatorship. She also created Chile’s National Human Rights Institute and reopened a commission charged with documenting cases of torture. It will now be up to Piñera to continue such projects if he wants to convince the public he intends to make human rights a priority.
After the Earthquake
This past August 27th marked the six-month anniversary of the devastating 8.8 magnitude earthquake that struck Chile weeks before Sebastián Piñera took office. To those in the international community who are unfamiliar with the country, the relatively small amount of damage this caused was shocking, particularly after a 7.0 magnitude earthquake completely devastated Haiti just six weeks prior.
Despite Chile’s incredible earthquake preparedness, the massive earthquake took about 500 lives, destroyed infrastructure necessary for aid delivery, and left the country vulnerable to looting. Overly confident, then-President Michele Bachelet had turned aside offers of international aid. However, Bachelet eventually recognized the severity of the situation and declared a state of emergency, imposing a curfew on the affected region, which reminded many of the forbidding days under Pinochet’s 17-year dictatorship.
As is often the case in comparable natural disasters, victims of the February 27th earthquake disproportionately came from poorer classes of Chilean society. Today, many Chileans in the south remain in temporary shelters provided by the government. However, the Piñera administration has been praised for a productive recovery effort, with 54% of Chileans commending what has been done so far. In addition to promising that the government will provide 8.4 billion USD in relief and reconstruction, the President has called on all sectors of society to contribute to the process of rebuilding southern Chile. On August 31st, Piñera sent a bill to Congress that would raise royalties paid to the government by mining companies to a minimum of 4%. If passed, the bill would raise around 1 billion USD over the next three years. About 300 million USD would be used for recovery.
A Desperate Rescue
After the August 5th collapse of the San Jose mine in Copaiapó, President Piñera made a statement that he would do “everything humanly possible to rescue [the 33 miners] alive.” Gambling on what could have been a major let down to his administration and the country as a whole, Piñera personally plunged himself in the rescue effort. The risk proved worthwhile on August 22nd when the rescue teams located the miners and confirmed that all were still alive. Now the President will preside over the drilling of a rescue shaft to bring the 33 men above ground. Experts estimate that this could take up to four months.
The mine’s collapse led President Piñera to call for the resignation of top officials of the national mining regulatory body, El Servicio Nacional de Geología y Minería (Sernageomin). In a public statement, the President said the organization is responsible for several dangerous oversights and errors, some of which led to the collapse at the San José mine. While some point to Sernageomin’s budget as the reason auditing has been inefficient, experts have suggested that in reality, auditors that work for Sernageomin are closely tied to the private sector. Since the auditors themselves come straight from the mining industry, facilitating business, rather than ensuring safety, is their main priority.
Prior to the collapse of the mine, President Piñera wrestled with an approval rating below 50%. Many began to point to the President’s visible role in the post-collapse rescue efforts as an opportunity for him to recover some of his sagging popularity. On September 1st, the President’s work proved successful, with a reported boost to a 56% approval rate. The timing of the approval surge suggests that the President is receiving higher approval ratings because of the discovery of the 33 miners alive, in which case the boost may be only temporary. Piñera faces majority opposition in Congress, and having public opinion on his side could be particularly helpful in passing legislation. The President could extend his approval hike if he pursues with firmness and integrity an investigation that will illustrate the cause of the collapse and hopefully prevent similar events.
Strong Economy in a Split Country
Though Piñera will have much clean-up work to do over the next three years, Chile’s economic forecast is in his favor. Chile mostly escaped the global economic crisis due to smart fiscal policy, and now Piñera must simply maintain growth. The administration expects to create as many as 250,000 jobs this year. The unemployment rate has already gone down from 8.5% during the April-June period to 8.3% in the May-July period. Yet, surprisingly, only 17% of Chileans view their country’s economic situation positively, yet Chile’s central bank expects GDP to grow 4-5% this year.
The 2009-2010 Global Competitiveness Report ranks Chile as having the 20th most competitive economy in the world, the highest rank of any Latin American country. Despite the country’s relative economic prosperity, the gap between the rich and poor is worse than any other OECD country. Improving Chile’s low education standards will be imperative in changing this. Piñera will need to expand education programs that prove successful in the country over the next few years. Though Chile is already the country with the highest number of inmates per capita in Latin America, crime rates continue to rise. Piñera has promised to lengthen jail terms and put more police officers on the streets. It remains in question how effective either of these measures will be in controlling misconduct.
In terms of social policy, running a divided country will be more difficult. Alianza por el cambio, the coalition that helped Piñera win the presidency, is largely composed of socially conservative Catholics. This powerful portion of Chilean society has prevented the passage of the left’s socially progressive legislation, successfully blocking divorce until 2004. Abortion is still illegal in Chile, and it is doubtful that this will change anytime soon. In August, the left introduced a bill in Congress to legalize same-sex marriage. Such a bill is unlikely to pass in the socially-traditional country, especially without the support of its chief executive. The President has promised to expand the rights of homosexual couples seeking civil unions, but opposes gay marriage.
Chile Looking Forward
Perhaps even more contentious than social legislation is the debate over how to deal with the scars left from the dictatorship. Many from the right are bitter that, while the government has acknowledged the human rights abuses committed by Pinochet’s regime, little to no recognition is given to those who were killed by violent leftist militants during this unstable period. In addition, an internationally criticized amnesty law enacted by Pinochet in 1978 that absolves human rights violators still exists. For the most part, lawyers have found loopholes in the law and have managed to proceed with prosecutions, but as recently as 2007, the law was used in court to argue for impunity.
In a symbolic step last July, Piñera rejected a proposal by the Chilean Catholic Church to grant an extensive pardon to elderly prisoners to mark the country’s Bicentennial this September 18th. The pardon could have been applied to an estimated 35 detainees convicted of violating human rights during the dictatorship. While the Church presented this as a move towards reconciliation, Piñera recognized that the pardon would open painful wounds. The President must take this a step further and pressure Congress to overturn the unjust amnesty law.
The day Piñera was elected, many of his supporters from the far right danced in the streets of Chile while donning posters with Augusto Pinochet’s face, implying they saw this as vindication for the right, which had been systematically denied the presidency for two decades. Fortunately for the rest of the country, Piñera has distanced himself from the far right and resisted any connections to Pinochet. As the first leader from the right since the dictatorship, Piñera has the power to bring a new perspective to his polarized country. To do this, the President’s agenda must go beyond the earthquake recovery and the rescue of the San José miners by pushing innovative, progressive legislation that Chilean society can unite under.
Chile’s future lies in the hands of a forward-thinking youth that recognizes the abhorrent abuses by the right in the past, but also the staleness of the left’s present. They saw a military presence after the earthquake as necessary, rather than only reminiscent of the dictatorship. They also recognize the necessity of a reconciliation that includes the acknowledgment of those killed at the hands of the militant left, and a committed pursuance of justice for those tortured and murdered at the hands of the tyrannical state. The key to Piñera’s success will be in his ability to harness the energy and values of this progressive generation that looks to the future without forgetting Chile’s dark past. If the President is able to channel this sector of society, he will have the opportunity to leave a meaningful impact on his country.
This analysis was prepared by COHA Research Associate Elizabeth Gavin