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Analysis
Latin America's shift

Latin America's shift

No-nonsense pragmatism as 2018 polls loom

by David Smith in Buenos Aires

Wed 20 Dec 2017

On the eve of a year when several leading Latin American countries go to the polls, Chile has voted decisively for a right-wing billionaire whose agenda confirms a regional trend away from populism and towards no-nonsense pragmatism.

Sebastián Piñera needs no introduction to his people — he was president in 2010-14. The return to power of the former airline magnate is based on a go-for-growth manifesto, including policies for cutting corporate taxes, spending billions on infrastructure and reshaping labour laws to create a possible 1m new jobs.

And as he never tired of reminding the electorate in the closing days of a bruising campaign, his first presidency saw Chile's economy grow at an annual average 5.3%, largely due to the price of copper, a stark contrast to this year's 1% growth.

'We won this election by focusing on the future, by offering hope tomorrow, rather than trying to solve the errors of yesterday,' to quote one of Piñera's lead advisers as the electoral score emerged on 17 December, confirming a comfortable victory when they had feared a tight finish. 'Latin America cries out for growth, a better tomorrow for your children, not a hand-out from a corrupt government stealing your future.'

Such slogans aside, this election did illustrate the left's growing problem in a region where age-old politics of populism have hit a wall of electoral setback in recent years.

In the weeks since the first round of voting in November, Piñera's opponent, Alejandro Guillier, a former TV anchor and sociologist, united the centre-left coalition that ran Chile, barely challenged, for two decades after Augusto Pinochet's dictatorship ended in 1990.

With polls showing he could win if he enlisted all his political allies, Guillier ran on an agenda of state investment in health, education and welfare and state-controlled job creation. His campaign hinged on reducing poverty and inequality in a country that is more class-ridden than almost any in Latin America.

'We on the left have to read the writing on the wall here,' remarked one of Guillier's strategists, a long-time adviser to outgoing President Michelle Bachelet, seeing the final count a 54%-46% defeat on a stunningly low 48% turnout. 'We are no longer the broad church in Latin America, bound to win if we turn out our vote. The middle ground of Latin America has shifted right. It's about jobs, income, personal growth, not a more equal society.'

That will be music to the ears of the pro-market pragmatists preparing for 2018 campaigns in Brazil, Mexico, Colombia and Paraguay — a series of left-right confrontations in a year of elections in Latin America.

Piñera forms a formidable combination with his neighbour President Mauricio Macri in Argentina. Both are successful corporate leaders turned politicians. Both espouse smaller government and opening their countries for business as never before. Both believe state enterprises, whether mining giant Codelco in Chile or YPF, the Argentine oil company, have to learn to stand on their own without state support.

'To say there is common cause is an understatement,' confided one of Macri's economic team. 'Argentines never admit easily to admiring our neighbours, but with this vote Chile is saying: let's invest in infrastructure, and bring others in to help, let's create not just jobs, but good jobs, and let's give people a future that isn't a hand-out. Latin America has waited so long for that message, and for decisive votes like the one we have just seen in Chile.'

David Smith is a Member of the OMFIF Advisory Board and represented the United Nations Secretary-General in the Americas between 2004-14.

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