In uncertain times, Chileans vote with ballots and wallets

SANTIAGO, Chile (AP) – Miguel Torres is the archetype of what you might call the Chilean dream.

A dropout from school, he nevertheless moved beyond his working class roots through decades of economic stability and Asian tiger-like growth to build a successful career as the owner of a small outdoor advertising business.

But as Sunday’s presidential election looms, the 68-year-old has attempted the unthinkable before: sell the spacious house he built with a life of hard work. Although he has no offers, if he is lucky enough to find a buyer, he plans to put the profits overseas and downsize.

“I’m too old to leave the country,” he says, observing the swimming pool and the giant camellias that adorn his home in the Tony Los Condes neighborhood of the capital, Santiago. “But I’m not going to leave the little money I have here.”

Torres is not the only Chilean on edge.

After an intense wave of social and political unrest in recent years, which includes the current effort to rewrite the constitution, Chileans are heading to the polls with a mixture of dread, optimism and above all uncertainty as to what awaits them.

The country has long contrasted sharply with its chaotic neighbors such as chronically defaulting Argentina in the west or, in the north, Peru, which has seen five presidents since 2018.

But there is growing frustration with the free market model and its failure to eliminate stubborn inequalities and provide affordable, quality public services in the country of 19 million people.

Polls consistently show two leaders neck-and-neck ahead of everyone else in the race for seven candidates, though neither has come close to the 50% threshold needed to avoid a runoff in December.

One of the candidates, Gabriel Boric, is a 35-year-old former protest leader who has formed an alliance with the Communist Party and promises to ‘bury’ Chile’s past as a model of neoliberalism – a coup against reforms imposed in the 1980s by Gen Augusto Pinochet.

The other, José Antonio Kast, is a former marginal candidate of the Chilean far right who has long defended the dictator’s regime and attacks what he calls Chile’s “gay lobby”.

As the vote drew near, Chileans like Torres voted with their wallets, opened dollar-denominated bank accounts, and transferred their savings overseas in the tried-and-true manner of their Argentine neighbors.

Capital flight from unincorporated businesses and households jumped to $ 29 billion in the 12 months ending in September, a jump of almost 70% from the outflows reported a year earlier. Bond prices and the peso also fell sharply.

“Seeing political risk driving behavior at this point is very new in Chile,” said Jonah Rosenthal, a Latin American economist at the Institute of International Finance, a Washington-based trade group representing major international banks. “For Chileans with capital, there is no roadmap for navigating uncertainty.

Reflecting the recent upheavals in Chile and the increasingly polarized politics of South America, the two leading candidates are a contrasting study.

Boric, who grew up in the vast region of Patagonia where his Croatian ancestors settled, rose to prominence as a leader of protests a decade ago to demand better and cheaper education. Like a host of other student activists, he was elected to convention in 2014, known for his casual attire, hipster tattoos, and at one point even a Mohawk.

He dismissed criticism that he snubbed protocol, calling such things “a tool of the elites to distinguish themselves from inferior people.”

The Broad Front he leads is inspired by a left-wing coalition of the same name in Uruguay and has proposed to increase corporate taxes – among the lowest in the region – to finance the expansion of public services and the environmental Protection.

He also wants to do away with Chile’s privatized pension system – a hallmark of the Pinochet years that successive democratic governments have been reluctant to touch despite growing evidence that the employee-only scheme is leaving masses of working-class Chileans without enough. to retire.

Kast is the son of a German who served in Hitler’s army during World War II and who emigrated to Chile in the 1950s. An open admirer of Brazilian far-right President Jair Bolsonaro, his newly republican party trained seeks to reduce corporate taxes and government bureaucracy.

He led a campaign focused primarily on law and order that stoked divisions over social issues such as abortion and LGBTQ rights, immigration, and the role of religion in schools.

He also sharply criticizes the outgoing president of Chile, his conservative colleague Sebastian Piñera, for reaching an agreement with his political enemies – including Boric – to rewrite the constitution of the Pinochet era following huge protests sparked by an increase in Santiago metro rates.

If elected, Kast could run up against the left-wing assembly drafting the new constitution and which, in theory, could cut short the next presidential term.

In Chilean fashion, Boric and Kast tried down the home stretch to downplay their past radicalism, hoping to attract moderate voters who make up the bulk of the electorate – a trend that would likely continue in one scenario. second round.

But many Chileans are not convinced, although a late increase in polls from Kast – whose brother was one of the University of Chicago-trained economists who crafted Pinochet’s economic reforms – has calmed the nervousness somewhat. of the market.

“As much as Boric tries to make substantial chances for his campaign platform, he will have the Communist Party by his side and they will not let go,” said Juan Sutil, owner of a large food conglomerate and head of the influential Chamber of Commerce and Production.

Torres, who has already started transferring some of his savings to U.S. dollars, also fears pressing social demands will eventually weaken Boric’s hand with his Communist allies.

“They’re going to steam it,” Torres says.

But others say that Chile, only in a region in turmoil, is properly channeling discontent.

Sergio Bitar, who served in Salvador Allende’s socialist administration which was overthrown by Pinochet as well as several center-left governments since, said the myth of the Chilean “economic miracle” was long dead. In indicators such as household income and poverty, the country lags far behind its peers in the Economic Development Organization, a group of the 38 most advanced countries in the world.

He regrets, however, that Boric and his supporters have chosen to focus much of their outrage on former moderates like him.

“Hopefully young people don’t make the same mistake we do by underestimating the right,” said Bitar, who was forced into exile for years after being imprisoned by Pinochet in the 1973 coup. .

He said that while each generation tries to break the status quo it inherits, political leadership demands compromise as well as idealism.

“Politics is the art of what is possible,” said Bitar, who fears Chile’s best years are behind him and the country sinks into a malaise of mediocrity seen elsewhere in the region. “Without governability there can be no progress.”

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Joshua Goodman reported from Miami.

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Joshua Goodman on Twitter: @APJoshGoodman

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

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