Chile on a political precipice

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When we launched the Global Trade Symposium as a sister event to the New York Produce Show and Conference, we knew for sure who we wanted to do the keynote for this event. Mary Anastasia O’Grady, opinion columnist for The Wall Street Journalwho writes The Americas column:

Mary Anastasia O’Grady writes “The Americas,” a weekly column on politics, economics and business in Latin America and Canada that appears every Monday in the Journal. Ms. O’Grady joined the paper in August 1995 and became senior editor in December 1999. She was appointed to the editorial board in November 2005. She is also a board member of the Indianapolis-based Liberty Fund. .

In 2012, Ms. O’Grady won the Walter Judd Freedom Award from the Fund for American Studies. In 2009, Ms. O’Grady received the Thomas Jefferson Award from the Association of Private Enterprise Education. In 2005, Ms. O’Grady won the Bastiat Prize for Journalism, awarded by the International Policy Network for her articles on the World Bank, the underground economy in Brazil and the bad economic advice the United States often gives to countries. from Latin America. In 1997, Ms. O’Grady won the Inter American Press Association’s Daily Gleaner Award for editorial commentary.

Ms. O’Grady holds a BA in English from Assumption College and an MBA in Financial Management from Pace University.

His main presentation for us was titled as follows:

TRADE BARRIERS, PROPERTY RIGHTS AND MONETARY POLICY: THE LATIN AMERICAN JOURNEY AND THE SEARCH FOR PROSPERITY
What we know about the prerequisites for prosperity and how freedom and property rights are the foundation for mobility, trade and success.
Presenter: Mary Anastasia O’Grady/THE WALL STREET JOURNAL

During her brilliant presentation, Ms. O’Grady expressed doubts about Chile’s future.

Chile had become the most prosperous country in Latin America – the development, known as the Miracle of Chile, has been attributed to the Chicago Boys, a group of young economists who studied under Milton Friedman at the University of Chicago and began to liberalize Chile’s economy. Last year, a documentary came out called Chicago Boys.

Tom Tjerandsen, then president of McLure & Tjerandsen and longtime North American general manager of the Chilean Fresh Fruit Association, was furious at his skepticism of chile. He stood up and underlined the huge success achieved by Chile.

She wondered if Chilean culture would support these victories. Recent history has made Mrs O’Grady seem prophetic.

Now Ms. O’Grady writes of Chile’s Do-or-Die referendum:

Chileans will vote on September 4 in what is arguably the most important vote for the nation since its return to democracy in 1989. But the political science tutorial of this exercise goes far beyond the country’s borders.

In an October 2020 referendum, 78% of Chileans voted in favor of writing a new constitution. A specially elected assembly spent the better part of a year drafting the document, which was presented to the nation in its final form on July 4. The electorate is now being asked to ‘approve’ or ‘reject’ it in another referendum scheduled for next week.

Since April, polls have consistently shown that more voters plan to vote against adoption than for it. That “gap” is now around 10 percentage points, but the final tally could be much closer. In a survey published August 19 by Pulso Ciudadano, 45.8% of respondents said they would vote against ratifying the document compared to 32.9% who plan to approve it. But in the same poll, 15.7% say they are undecided. It’s the joker.

Chances are that the final gap between the two sides will be narrow. If so, what was once touted, both by right and left, as a new national bill of rights to make Chile “a home for all,” has instead made about half of the electorate – or more – felt excluded.

Parts of the column remind American citizens of the burning, looting and vandalism that took place during the George Floyd riots in cities like Minneapolis:

A lesson for any country seeking to build a free and just society is that terrorism cannot produce national unity. It is true that the Communist Party and the radical left, including its representatives in the indigenous community, took control of the constituent assembly in the elections of May 2021. But the constitutional project was only introduced because of militants, anarchists and criminals were burning, looting and vandalizing the country in a rampage, begun in October 2019, that the government was struggling to contain.

Under the rules set by Congress for assembly election, independent candidates with vested interests, competing in local constituencies, were allowed to skip the onerous process of organizing political parties, but always come together to run for the proportional representation vote. Even the socialist party admits it was “a big mistake”. In addition, 17 seats were reserved for indigenous activists. These undemocratic provisions skewed the result in favor of fringe radicals who took their victory for broad popular support.

The center-right in Chile opposes the project because it undermines property rights, freedom of expression and the rule of law and expands the role of the state in the economy. But the Republican opposition is not enough to explain the unpopularity of the work of the assembly. The support of far-left president Gabriel Boric does not help. His tenure is best known for its high rates of violence criminalityeconomic faintness and inflation exceeding 13% per year. Yet it is perhaps the objections of the country’s social democrats that best demonstrate why support for the draft constitution has plummeted.

Former President Eduardo Frei, a Christian Democrat, is in favor of a new constitution. But in July he announced he would vote to reject the project. Among his declared is an inadequate “balance and distribution of powers”, such that an elected majority in control of the executive and the legislature could lead the country “toward a dictatorial regime” similar to “those which are becoming frequent in the world”.

Translation: Let’s not go in the direction of Venezuela, Bolivia and Nicaragua.

Mr Frei also feared the proposal ran the risk of judges becoming “politically controlled”. He again cited the experience of neighbors: “The independence and non-politicization of [the judicial branch] is crucial as more and more dictatorships are launched and then consolidated by the capture of the judiciary”. Other prominent centre-left opponents include Chilean economists René Cortázar, Rodrigo Valdés and José De Gregorio.

Perhaps more than any other aspect of the project, it is the establishment of a plurinational Chile – creating nations within the country and a variety of legal systems applying to different groups – that angers the electorate the most. From the elites of Santiago to humble working-class Chileans in remote parts of the country, plurinationalism is seen as an attack on the very idea of ​​Chile. Mr Frei called it a potential “threat” to “the unitary state and equal rights for the people of the country”. Like Mr. Cortazar Explain“instead of contributing to a more united nation, [the draft constitution] proposes to divide us into several nations.

The natives of Chile don’t seem to be fans either. In a investigation of Chileans who identify as Mapuche – surveyed earlier this year by the Santiago-based Center for Public Studies – 70% opposed independence for their community and only 12% favored a plurinational state.

Thanks to the survival of institutions like freedom of speech and public debate, there is a chance of defeating this proposal. Less certain is Mr. Boric’s commitment to modern liberal democracy and the eradication of terrorism that spawned this disastrous constitutional experiment.

The proposed new constitution for Chile is 54,000 words long. The United States Constitution, including the signatures of the 39 delegates who signed, is 4,543 words long. In other words, what has happened is that the writing of a new constitution has lost the idea of ​​being a framework within which a people can govern themselves.

Instead, it became a time for trying to work through a bunch of specific desires. The Economist put it like this:

Voters are expected to reject Chile’s new draft constitution. It’s a fiscally irresponsible leftist wish list. But overall, the draft is a confusing mess, full of woolly language that more or less guarantees decades of bickering over what it actually means. “Nature” would have rights. The project mentions “gender” 39 times. Court decisions, the police and a national health system will have to operate from a “gender perspective”, which he does not define.

The document is far less favorable to business or growth than the current constitution. It gives unions the exclusive right to represent workers, guarantees them a voice in company decision-making and allows them to strike for any reason, not just work-related. He says that everyone has the “right to work” and that “any form of precariousness is prohibited”. This could make it quite difficult to fire anyone. Landowners, such as farmers, could potentially lose water property rights on their land. Compensation for expropriated land would not be at market price but at whatever Congress deemed “just”.

The project creates a portfolio of socio-economic rights that could blow the budget. This requires setting up several new bodies, such as an integrated national health system and cradle-to-grave care, without thinking too much about how they would be funded. The state would oversee the provision of housing, which it says every person is entitled to. Real estate speculation would be prohibited. The same would be true for for-profit education.

Government legal checks and balances would be watered down. A new council would have power over all judicial appointments; previously, the Supreme Court, the President, the Court of Appeals and the Senate all had a role to play. The bill upends the budget process by giving Congress new powers to propose spending bills, although the president can veto it.

The document is ridiculously vast. He says the state should “promote Chile’s culinary and gastronomic heritage” and recognize “spirituality as an essential element of being human.” Everyone has a “right to sport”. Non-humans are also interested in it: the state will promote “an education based on empathy and respect for animals”.

The Pundit’s family has a long history in Chile. We were selling onions from Chile even before the country started shipping grapes. We have many good friends in the country.

Let’s hope the people of the country step back from the precipice and act to reject this plan.

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