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Chile Sticks With Free-Market Constitution After Years of Debate – WSJ

A polling station for Sunday’s constitutional vote in Chile’s capital Santiago. Esteban Felix/Associated Press
Chile Sticks With Free-Market Constitution After Years of Debate. A polling station for Sunday’s constitutional vote in Chile’s capital Santiago. (Esteban Felix/Associated Press)

Ryan Dubé, WSJ

SANTIAGO
EnergiesNet.com 12 18 2023

Fifteen months ago, Chileans resoundingly rejected a constitution that would have upended the country’s free-market economy with far-reaching reforms, from increasing environmental oversight in mining to guaranteeing new social rights that would have boosted taxes.

On Sunday, dogged by economic stagnation and worsening crime, Chileans rebuffed another proposal for a new constitution that would have reinforced safeguards for private property, this time drafted by conservatives. They instead opted to keep the current, dictatorship-era charter, which economists credit with helping turn the country into Latin America’s most affluent country through its protections for foreign and local investors.

With nearly all the ballots counted, 56% of Chileans rejected the new constitutional draft, according to the state election agency.

“After four years of discussing the content of the new constitution and the direction that Chile should go in,” said Patricio Navia, a Chilean political scientist at New York University, “Chileans are like, well, the constitution we have is not that bad.”

Chileans celebrated the rejection of a constitution draft in a 2022 referendum. Photo: Martin Bernetti/Agence France-Presse/Getty Images
Chileans celebrated the rejection of a constitution draft in a 2022 referendum. (Martin Bernetti/AFP)

Sunday’s referendum puts to an end, for now, a constitutional debate that began in 2019 after mass protests over grievances ranging from low pensions to shoddy schools led to more than 20 deaths and billions of dollars in damage. The results of the referendum reaffirmed Chilean support for its market-friendly economic model, which is enshrined in the current constitution and would have been maintained in the conservative proposal.

“There is a big part of society that does not want radical changes,” said Arturo Fermandois, a Chilean constitutional expert and former ambassador to the U.S.

That is a relief for investors. The upheaval in 2019 seemed to signal that the country of 20 million people was ready to ditch the economic model upheld in the 1980 constitution and go with a more left-leaning, progressive charter that would give the state a bigger role in a country that is home to some of the world’s largest copper and lithium mines. 

Chile responded with a constitutional assembly that sought to tackle inequality, give priority to the environment over industry, give sweeping rights to indigenous people, and ensure gender parity in state agencies.

Proponents of the process argued that the current constitution is illegitimate because it was written during the military dictatorship of Gen. Augusto Pinochet, even though it has been amended dozens of times and purged of provisions that banned Marxist parties and restricted union activities.

But recent polls show Chileans are far more concerned about tackling a rise in violent crime and reviving an economy that used to be a star in Latin America but more recently has been battered by the highest rate of inflation logged in three decades.

With concerns about crime at record highs, about 60% of Chileans want the government to focus on improving security, according to pollster Cadem. About 35% of Chileans say the government should focus on the economy. Just 2% say the government’s focus next year should be on gender equality and the environment. Virtually no one wants to resume the constitutional debate, Cadem said.

“Chile is in a very different moment than it was in 2019,” said Robert Funk, a political scientist at the University of Chile. “There is a much more reactionary mood in the country than four years ago.”

Manuel Rodríguez, an engineer in Santiago, took to the streets in 2019 to protest inequality but watched how his work later dried up. He backed the proposed constitution, hoping its approval would conclude the wrangling over a charter that economists say has stoked investor unease.

“I want us to be economically stable again,” said Rodríguez.

Gabriel Boric, Chile’s unpopular leftist leader, held a draft of the new constitution last month. Photo: Esteban Felix/Associated Press
Gabriel Boric, Chile’s unpopular leftist leader, held a draft of the new constitution last month.(Esteban Felix/AP)
Chileans elected a council to write a new constitution that was dominated by conservatives led by José Antonio Kast. Photo: Cristobal Olivares/Bloomberg News
Chileans elected a council to write a new constitution that was dominated by conservatives led by José Antonio Kast. (Cristobal Olivares/Bloomberg News)

Chile’s shift back to the right after the failed attempt at a progressive charter reflects a backlash against the leftist establishment elsewhere in Latin America.

In Argentina, libertarian economist Javier Milei was elected president after pledging to dismantle the welfare state and has begun to implement tough austerity measures to tame inflation now at 160%. In Colombia, voters in October elected centrists and center-right politicians to run the biggest cities in a blow to leftist President Gustavo Petro. And in Venezuela, the authoritarian regime faces a serious challenge from an opposition politician chosen in a primary to challenge President Nicolás Maduro in an election that may take place next year.

Chile’s latest rejected constitution was a sharp reversal from the initial attempt to rewrite the current constitution.

That proposed document was drafted by an assembly of left-wing independents whose prescriptions for governing the country included closing the Senate, weakening judicial independence, and granting indigenous people the right to run their own judicial systems. They also proposed granting rights to nature.

The proposal was seen as too radical by many Chileans and prompted a backlash, particularly from conservatives who said their input was ignored. It was rejected in September 2022, delivering a blow to President Gabriel Boric, a leftist former student protest leader whose disapproval rating is now more than double his level of support. 

A few months later, voters elected a new council to draft another constitution. This time, the council was dominated by members of the right-wing Republican Party led by José Antonio Kast, a conservative who lost to Boric in the 2021 election.

But the conservative proposal swung too far to the right, many analysts said, failing to draw the needed support.

“It’s clear that the majority of Chileans are tired of these processes that don’t provide real solutions to their problems,” Kast said Sunday night.

The draft constitution was distributed this week outside a metro stop in Santiago.(Esteban Felix/AP)

The 50,000-word proposal would have provided protections to the unborn, which some experts say would have further restricted abortion in Chile, which is already hard to secure. The text had a strong law-and-order focus, stipulating the constitutional right to safety and creating a national ombudsman’s office to represent crime victims. Immigrants who commit crimes or enter Chile illegally would have been expelled, according to another proposed article.

The charter voted on Sunday would have also cemented protections for the private sector’s existing role in healthcare, education and pensions. Property taxes on the primary home of taxpayers would have been eliminated.

Claudia Heiss, a political scientist in Santiago, said that maintaining the current charger was the best option for Chile’s political stability as the conservative proposed charter would have provoked a backlash.

“People now see with a more benevolent eye the constitution that we have,” said Heiss.

Michelle Bachelet, Chile’s left-wing former president, openly campaigned against the proposed constitution, arguing it would have set back women’s rights. “I always prefer something bad over something worse,” she said Sunday.

The Broad Front, the leftist coalition that Boric helped found, assailed the proposed charter, calling it an “extreme text” that would increase inequality and injustice.

Sunday’s referendum put left-wing Chileans in an awkward position. Many cast ballots to reject the proposed constitution, in essence voting to preserve the current charter they have railed against for years.

“It’s a lot better to maintain what we have now,” said Luz Mary Galaz, a psychology student who protested in 2019.

The government says it won’t launch a third attempt to change the constitution, since polls show Chileans are tired of the debate.

“We embarked on a big experiment that was really the wrong answer to the problem at the time,” said Funk, the political scientist. “The constitutional debates ended up being responses to the political moment, rather than proper discussions about what the country is about, what the political system should be.”

Write to Ryan Dubé at ryan.dube@wsj.comwsj.com 12 17 2023

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