Approximately 70 percent of the seats in Chile’s constituent assembly, which will be tasked with writing a new constitution, will go to left-leaning groups and independent delegates, most of whom would likely align with leftists, according to analysis of results from the May 16-17 vote. The country’s stock market plunged more than 10 percent following the announcement, and the Chilean peso fell approximately 2 percent against the U.S. dollar. What do the results signal in terms of the most likely and significant changes to the constitution? To what extent is uncertainty lowering investment appetite in Chile, and how might expected changes affect the country’s business climate in the longer term? How will the recent vote influence the presidential election, which is scheduled for November, and conversely, how might the country’s next president influence the constituent assembly’s work?
Verónica Figueroa Huencho, associate professor at the Institute of Public Affairs at the University of Chile: “Chile is experiencing an unprecedented process. For the first time in our history, the constitution will be written by women, Indigenous peoples and citizenry representatives, not by a political and economic male elite. Chileans have voted in the majority for independents and left-wing parties. Undoubtedly, this generates uncertainty for this elite that, until Oct. 18, 2019 (when the ‘social outbreak’ occurred), had assured that Chile was an ‘economic oasis.’ However, that does not represent the majority of Chilean society. There is hope for issues such as inequality, exclusion and the asymmetries of power experienced by more than 80 percent of the population to be modified given the composition of the constituent assembly, where one of the critical issues to be discussed will be the role of the state. A state of social rights that is intercultural and in which natural resources such as water and minerals will be declared public goods seems to be the tendency. In addition, the state would have a new productive role that leaves behind the current subsidiary role but would remain in dialogue with private sector. Moving toward a fairer society requires a new social agreement and a new economic structure. This does not imply going back to the 1960s, but rather identifying a development model consistent with the innovation needs that are required today. The business class has to understand that in this new governance structure, its role is not only to invest but also to create value, aligned with the priorities set by the state. It is imperative that we diversify our productive matrix. We cannot continue to depend on extractivism if it will not be environmentally or labor sustainable. The constituent assembly must function independently of the presidential election. Whoever is elected must align his or her program with the Constitution’s mandate. We should look at this process with confidence and not jump to conclusions.”
María Cristina Escudero, member of the 2019 technical committee to launch the constitutional process: “From an ideological perspective, the composition of the constituent assembly is indeed progressive, but there is great diversity within it. There are radical leftists, moderate or social democratic positions, reformist liberals and ecological feminists, among others. The right, as any other group, does not have enough seats to garner the one-third of the votes needed to veto proposals, which need a two-thirds majority to be approved. The truth is that nobody has a third of the votes, and nobody is assured to get two-thirds support. If a sector decides not to engage in dialogue, it runs the risk of being excluded. However, there is a clear predominance of political and social forces that seek to significantly alter the status quo. It is not clear at all whether the different groups have homogeneous positions on the different constitutional issues. However, as discussions progress, the role of the state and the protection of social rights will be rethought. We will make a decision regarding the plurinational state, the incorporation of participation mechanisms, a review of the presidential system and an emphasis on the protection of the environment, among other issues. There are specific topics, such as water rights, that will also be part of the debate. If the constituent assembly manages to establish good mechanisms for dialogue both among its members and with citizens, the Chilean constituent process has the opportunity to respond to the problems that triggered it in the first place. The ideological and social diversity of the assembly’s members do strengthen the left’s options, but it has nowhere to grow if it does not succeed in seducing the traditional center-left sectors. This faction has not yet managed to propose a candidate, and consequently, the right has a chance in the November elections, depending on who it selects in the July primaries. The electoral scenario is open, but it runs the risk of becoming polarized.”
Patricio D. Navia, clinical professor of liberal studies at New York University and professor of political science at Universidad Diego Portales in Chile: “The election for the constitutional assembly in Chile confirmed the suspicion that Chileans are writing a new constitution for the wrong reasons. Candidates who promised an expansion of social rights overwhelmingly won. The leading concern among voters was pensions, health care and other safety net issues. Unfortunately, constitutions are much more than social policy. The big risk ahead is that Chileans focus exclusively on expanding social rights and not enough on how to pay for those new social rights. Moreover, as people are more concerned with the expansion of social rights, the constitutional convention can introduce a number of new institutional changes that might undermine prospects for long-term growth. Chileans want a constitution that promotes more equality, but they might end up getting one that makes everyone equally poor. Since the new constitution is likely to be long and full of additional protections for social rights, the likely scenario for after the constitution comes into effect (if Chilean voters approve it in the second half of 2022) is one of additional uncertainty. A long constitution is inevitably a contradictory constitution. That means that there will likely be an intense judicialization process after the new constitution is in effect in order to determine which of the many contradictory constitutional principles should take precedence. Constitution writing processes always generate uncertainty. This time around, the uncertainty should remain after the new constitution is written.”
Lucía Dammert, professor of international relations at the University of Santiago: “Due to Covid-19, the constituent assembly will be in full debate while a presidential campaign is taking place in Chile. Electoral times are the worst for sound political discussions and engagement in profound negotiations. A president with limited support, a government incapable of setting the political agenda and traditional parties still under the shock of the evident crisis are the core elements of a constitutional debate that will need to root its legitimacy on a direct relationship with citizens, ample levels of transparency and evident efforts to enhance community involvement. Despite the important achievement on vaccines, the president will be almost irrelevant for the next election since his coalition’s candidates are moving as far as possible from his legacy. But the constituent assembly will likely influence the election by stating a narrative of political debate on four different levels: 1.) consolidating the need for a more prominent role of the state in issues such as education, health care and pensions; 2.) defining a plurinational state that would give voice to traditionally excluded Indigenous groups; 3.) emphasizing the need for a more environmentally conscious juridical framework and 4.) including a broader definition of social rights. The political and economic elite will need to revise its current practices and frameworks and accept a wide-ranging group with leadership roles as well as better venues to build legitimacy. The business climate is no longer an indicator of democratic health; the business community will have to be also transformed to tackle the challenges ahead.”