Friday, January 21

Chile faced with its dilemma: European or Bolivarian socialism

The triumph of Gabriel Boric In the presidential elections in Chile he seemed assimilated yesterday, or at least the figures indicate this. The index of the Santiago Stock Exchange, IPSA, registered a slight rise of 1.33% compared to the fall of 6.18% that sealed the luck of the post-electoral Monday. The same happened with the dollar that, after a very hectic start to the week, where it climbed more than 30 pesos, yesterday it fell marginally and remains above 870 pesos.

The volatility, market analysts say, will remain until Boric announces its economic team, which it will not do until January 22. Chilean economist Sergio Urzúa, professor at the University of Maryland, joined

to the voices that urge the president-elect forward at least the name of the finance minister.

“The big question is whether Boric’s team is going to be prepared for short-term problems,” he said. And these are summarized in an accumulated inflation in 2021 close to 7%, an unemployment rate of 8.1% in November, a structural deficit of 11.5% of GDP and an expansion of public spending as of June of this year of 32 , 3% of GDP.

Boric’s advisers have taken note of this, but caution that it is unlikely to advance names in this area, because they do not want to signal that economics is everything.

Still, concern hangs over the business community. The communist mayor of a commune in Santiago Daniel Jadue, After the results were known, he affirmed that “we are now beginning to dismantle the neoliberal model that the dictatorship bequeathed to us.”

Boric’s speech on Sunday night did not calm spirits either by insisting that growth should be done with care for the environment, and assured that the controversial will not be made viable. Dominga mining project, whose fate is today in the environmental courts.

Yesterday, the largest Chilean employer, the Confederation of Production and Commerce, CPC, announced that it will postpone the elections of directors from March to July; the above, to preserve the leadership of its president Juan Sutil in troubled times. In fact, Sutil had to insist before the Constitutional Convention to be received, an issue that will occur next Monday the 27th, after the first request for a hearing was rejected.

Gabriel Boric was received yesterday by the Convention table, headed by Elisa loncon, accompanied by the communist deputy Camila Vallejo. On that occasion, he said that institutionally he made himself available to the assembly, respecting all the visions that are gathered in it. “I do not expect, in any case, a partisan convention, a convention at the service of our Government,” he clarified.

All the names that have been put on the table are from prominent economists who joined the command of Gabriel Boric in the second half of the campaign and who come from the world of the former Concertación.

The list was headed by the doctor in economics Andrea Repetto, but yesterday this ruled out any possibility of assuming such functions. «I participated in the Advisory Council with enthusiasm, without interest in a position. I will continue helping from the academy, “he said.

Thus, the former president of the Central Bank between 1991 and 1996 continues in the race, Roberto Zahler (73 years old) and the founder of Public Space and PhD from Stanford University, Eduardo Engel (65). Another name that emerged in the last hours is the former superintendent of Securities and later of AFP, Guillermo Larraín (57), but he already recognized that during the development of the new program the insurmountable differences with the Broad Front were maintained in many matters.

The political coordinator Giorgio Jackson highlighted, meanwhile, the socialist senator Carlos Montes (75), but all these names, by age, do not have the generational tune with the Broad Front.

In Boric’s circle they meet the economist Claudia Sanhueza and his advisers Diego Pardow and Nicolás Grau, but the market has been in charge of warning that they do not have the weight or the necessary expertise. An option for inexperienced radicals would bring him closer to the Bolivarian socialist formula; turning to renowned economists would, on the other hand, make their model more similar to European socialism.

Hours pass and Gabriel Boric does not shed any light on how he will convert his program into bills beyond announcing a tax reform and others gradually according to the fiscal accounts. There will be a tax hike for companies and the high assets will be taxed (tax on the super-rich), the mining royalty will be deepened and the AFPs will be ended.

The president-elect also recalled his commitment to bring the minimum wage to 500,000 pesos (about 500 euros) and the Universal Guaranteed Pension (PGU) at 250,000 pesos. The latter was addressed by Boric and Piñera in their meeting in La Moneda on Monday. Yesterday, the outgoing government presented the bill that creates this PGU and that six of the 7 presidential candidates placed in their programs. The initiative, which already has broad and transversal support, includes providing a pension of 185,000 pesos to all those over 65, whether they are retired or not, and who have continuously resided in the country for 20 years.

The Piñera government will also try, before the February legislative recess, to approve a series of initiatives that are related to security such as arms control and others.