19/08/2020

CHILE AT A TURNING POINT

The depth of the Chilean crisis can lead to a continuing mediocrity, with social division and political polarization, or it can open the door to a new innovative project with greater national unity.

Why this crossroad, if the country was experiencing continuous progress? Indeed, in recent decades democracy took hold, with economic growth and social progress. We experienced a process of political, social, economic and cultural reform, sustained and promoted by a center-left coalition that held an electoral majority for 20 years (1990- 2010) and triumphed again for another four between 2014-18.

Everything seemed to be evolving well for many sectors of the country, despite persistent political and social manifestations of discontent. Then two successive events occurred that shook what had been a long period of progress with stability. The first was a social outbreak of unprecedented magnitude (October 2019), a massive mobilization of citizens that exceeded even the great manifestations that occurred with the return to democracy in 1990. The second was the pandemic that relentlessly struck all human beings, and with greater strength, the poorest.

The first event shook the political institutionality, demanding significant transformations, while applying strong pressure for pro-equality economic reforms.

The social explosion surprised and overwhelmed the government and all political parties, from right to left. The tremendous mobilizations disconcerted, but they also opened a space to break down barriers and open opportunities for change. However, some conservative sectors have maintained their rigidity, arguing that the situation is only temporary and that it would suffice to guarantee the public order. Moreover, since social protests are exploited throughout the world by violent groups, in Chile, violence reached unacceptably destructive levels, making it easier to confuse public opinion.

Then came the pandemic, which generated an entirely new scenario, exposing what the social outbreak had already shown, the vulnerability of large sectors of the population, the high level of informality that increased with unemployment, the incapacity of the State to provide sufficient resources to lower income sectors, insufficient public health and unequal quality of education. The ensuing rapid digitalization made visible the enormous inequality of access to online education.

The previous historical stage has ended. The loss of legitimacy requires a new national project.

What advantages and what shortcomings does Chile have to face the new challenges?

In the political arena, it is certainly favorable to have had decades of relatively well-functioning institutions, as well as the advancement of a strong democratic conscience. However, new phenomena have emerged. The loss of institutional legitimacy, increasing mistrust, and a growing dissatisfaction with regards to the inability to protect the less fortunate can lead to an irreversible deterioration of our representative democracy.

In the economic sphere, Chile has had significantly rapid growth, reaching the highest level of income per capita in the region, has achieved a substantial reduction in poverty -the lowest in the region according to ECLAC-, and a solid fiscal situation. On the negative side, the growth rate has dropped significantly; the capacity for innovation is poor, with low levels of research. On the social and cultural side, the inequality of income, mistreatment, discrimination and abuses have aroused a greater awareness of rights and a rejection of the current situation. These expectations also rose quickly and collided with an economic reality that was unable to respond, and less so taking into account our conservative and elitist government. This has sparked frustration and social protests.

Chile is putting into play a great political capital that was left by progressive democratic governments. It often happens that conformity lulls us, making it difficult to see the new reality arising from those very achievements; the pace of reform slows down, tensions build up in a way that tests our ability to react and to lead.

Three inescapable dilemmas

In the midst of this crisis, the political system functioned, and parties in Parliament agreed in November 2019 to call for a plebiscite to decide on the elaboration of a new Constitution; then, in July 2020, a fiscal package ($US 12,000 million) was passed to protect the most vulnerable, create emergency jobs and reactivate the economy.

But is this enough? How do we govern looking forward?

Until the next presidential elections in November 2021, the country is going through three dilemmas, in full debate.

First and foremost is the reform of the social security system, based on individual capitalization that yields meager results for pensioners. Second is the effective organization of a safe plebiscite in October 2020.

On both issues, the Piñera government has been reluctant, and his cold and distant leadership is not helping matters.

Thirdly, there is the activation of a large scale program to create “bridge-jobs“  to cover the period from 2021 to 2022, while productive activity is being revived.

To these three issues we must add the imperative need for tax reforms that can achieve a greater fiscal contribution from the richest sector of the population.

These three priorities are essential to build a New Social Pact, which is the great challenge that all countries will have to face as a result of the pandemic. Finding common ground with the opposition and giving confidence to citizens is essential in order to peacefully carry out the 8 electoral events scheduled until the end of 2021 (plebiscite, primaries, election of mayors, governors, constituent assembly, congressmen, senators and president of the Republic).

If this packed agenda is derailed, the risk of falling into populist or authoritarian governments will grow. Populism is promoted by those who believe that they can solve problems directly with the citizenry, bypassing the institutions. Authoritarianism is fueled by those who believe that public order and repression can placate social aspirations. One must not be fooled, because in an environment of despair and uncertainty, these authoritarian positions may garner the support of many citizens who prefer security to democracy.

Can Chile start a new path to social justice, innovation and unity?

The key is not to weaken in our readiness to understand each other in urgent matters: health, food and employment. At the same time, we must develop strategic projects for long-term change. It will not be easy, as the Chilean political system has been fragmenting. The government is constrained by conservative sectors, obsessed with preserving what exists. There is dispersion in the opposition and the left, with the more extreme calling for the early termination of the government, while sectors of the center-left are ready to support institutionality and avoid polarization.

In Chile and Latin America we are facing a major crisis, and overcoming it will require a strengthening of the State, strong social policies, tax reforms, new forms of social participation and citizen consultation, and a stimulus for small and medium-sized companies with new technologies. Furthermore, everything will have to be implemented in far poorer economies. We must be aware that this is an enormous challenge of social organization and political leadership.

However, every crisis brings an opportunity. Chile can open up new spaces, but this will require agreements and new ideas. It cannot be business as usual. Achieving progress, even partial progress, requires going past the grievances and the pessimism that floods us, acting with determination and a proactive and hopeful attitude to illuminate new horizons.

Sergio Bitar is a politician and civil engineer. President of the Chilean Council of Foresight and Strategy. He was President Allende's Minister of Mining, Senator, Minister of Education of President Lagos, and of Public Works of President Bachelet.