Abstract
The purpose of this chapter is to present the presidency of Sebastián Piñera with an emphasis on his economic policy and development plan for Chile. The chapter begins with an analysis of the 2010 presidential elections and the profile of the latest Chilean president. The chapter also presents the economic and political history of the country since Salvador Allende's rise to power in 1970 through the Pinochet regime and the government of Concertación por la Democracia. Furthermore, the milestone events of the presidency of Piñera are identified and their influence on the approval of the presidents is evaluated. The study conducted in this chapter was based on the analysis of books and scientific journals that dealt with the political and economic history of Chile. The current situation of the country was analyzed on the basis of academic articles as well as press releases and reports.
TopPresidential Elections In Chile In 2010
One can perceive 2010 as an important year in Chilean modern history, as on January 17, 2010, the second round of presidential elections were held and brought a change in the Chilean political scene. After 20 years of the government of the conglomerate Concertación para la Democracia which won the 1989 elections and ended the dictatorship of General Augusto Pinochet, the opponent right-wing candidate, Sebastián Piñera from Alianza por Chile, was elected as the 47th President of the Republic. With 51.61% of votes in favor, in the second round of the presidential elections he defeated his counter-candidate, Eduardo Frei from Concertación who gained 48.39% of the votes (Infolatam, 2010). Piñera took office officially on March 11, 2010 and still holds that office as of the end of 2013.
The election results meant an important change in the mentality of the Chilean electorate and started a new generation of political elites composed of technocrats educated and trained abroad, primarily in the United States. The intention of the new elite is to relate to the Chilean electorate in modern ways, not to skew the discourse based on the social conflicts of the past but rather oriented to the future regarding economic development and prosperity (Yocelevzky, 1997). In 2010, the recently elected president seemed to be a model representative of that group.
Sebastián Piñera’s victory and the change of the governing elites reflected the consolidation and maturity of the Chilean democracy. The decision of the electorate was made on the grounds of consciousness and rationality in pursuing the common good and prosperity. The results of the 2010 presidential elections showed that neither the society nor the political elites of the country were afraid of such changes. Today, the 2010 elections and Piñera’s government can be seen as a stabilizing factor marking the end of consolidation of Chilean democracy. In case of the Chilean presidential elections, it is interesting to note that when it came to the competition between the governments of Concentraciónpara la Democracia and Alianzapor Chile, despite the high popularity of Michelle Bachelet’s government (almost 84 percent of support), the candidate from her party, Eduardo Frei, did not have a good position in the pre-electoral ranking. That situation is known as the “Chilean paradox” (Ysart, 2009).
Who is Sebastián Piñera?
Before becoming the President of Chile, Sebastián Piñera was a well-known businessman, investor, and senator for the Republic from 1990 until 1998, and a presidential candidate in 2005 when he lost to Michelle Bachelet in the second round of the elections with 46% of the people’s support (Ketterer, 2010). It is important to note that Piñera was a model technocrat president. Piñera completed his PhD in Economics at Harvard University with his thesis on education in Latin America, and later he was a consultant to the World Bank, the Inter-American Development Bank, and the Economic Commission for Latin America and the Caribbean (ECLAC). In ECLAC, Piñera dedicated his studies to the issue of poverty in the region. He also conducted classes at the Pontificia Universidad Católica de Chile and Universidad Adolfo Ibáñez (Gutiérrez, 2012).
When analyzing Piñera’s political career, one should remember his strong personal economic position. According to Forbes magazine, Piñera was ranked in 2010 as 437th on the list of the richest people in the world with a fortune estimated at US$2.2 billion and important shares in Chilean companies such as the airplane company LAN Chile, the television ChileVisión, and the most popular Chilean football club, ColoColo (Bonnefoy, 2010). According to Gutiérrez (2012), Piñera’s prosperity history can be traced back to 1994 when he purchased 16% of the LAN Chile shares for 80 pesos each. In December, 2011, the price of the shares of that company reached 12,200 pesos when Piñera’s participation stood at 26%. Piñera, also known as a man who brought the company Apple to Chile, was awarded in 2012 the Bravo prize for leader of the year (Gutierrez, 2012).
In 2013, his position on Forbes magazine’s billionaire list lowered to 589th place, but his fortune grew to US$2.5 billion. Piñera now holds the 49th position among the world’s most powerful people (Forbes, 2013). After being elected President, Piñera sold his shares in LAN Airlines and Chilevisión as he had promised in his electoral campaign.
Key Terms in this Chapter
Political Elite: Is a rather small group that is governing and has a privileged status.
Foreign Direct Investment (FDI): Is an investment into production or business in a country made by an individual or a company of another country, that is not passive, i.e. excludes investment in the securities such as stocks or bonds.
Middle-Income Trap: Is a situation in an economic development in which a country that reaches a certain income will get stuck at that level and its economy will stangante, mainly due to low investment ratios, slow economic growth and limited diversification.
Transition to Democracy or Democratization: Is a change from an authoritarian political regime to a democratic one (either semi-democracy or full democracy).
Restoration of Democracy: Is a process in which the political regime, that previously was democratic but went through a change to an authoritarian or semi-authoritarian one, returns to democracy.
Democratic Consolidation: Is a process which effect is the maturity of the democracy and very little possibility of a return of an authoritarian regime. It includes the maturity of both democratic institutions and the society.
Technocrats: Political representatives that are not career politicians, and in some cases are not even members of a political party. They are “experts” in their respective fields and have an academic background in economics and administration.
Countercyclical Policy: Is the economic policy that is aimed at reducing the negative effects of economic cycles. Such policy encourages the creation of reserves during periods of prosperity and high prices of export goods and promotes spendings during economic downturns that should provoke economic growth.
Chilean Paradox: Is the term that illustrates the situation during the 2009/2010 presidential elections in Chile. At that time Michelle Bachelet that was leaving her office had almost 84% of support among Chilean society, while Eduardo Frei, the candidate that was representing her conglomerate Concertación para la Democracia , had very low support in the pre-electoral rankings.