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  HOME | Chile

Chile President Says Her Reforms Have Done Away with Neo-Liberal Model

SANTIAGO – Chile’s President Michelle Bachelet said on Wednesday in an exclusive interview with EFE that the reforms carried out during her second term in office have ended neo-liberalism in its birthplace.

“There were some vestiges of the neo-liberal model that we’ve gradually gotten rid of through the reforms. Education was perhaps the biggest,” Bachelet said.

She added, however, that Gen. Augusto Pinochet’s 1973-1990 right-wing military dictatorship had had an impact on Chileans’ consciousness and left them with less of a sense of solidarity.

In the mid-1970s, a group of Chilean economists known as the “Chicago Boys” (because they had trained under Milton Friedman at the University of Chicago’s Department of Economics) spearheaded a series of economic reforms in the early years of Pinochet’s rule.

They dismantled the preceding structuralist model, which emphasized state intervention in the economy, and replaced it with a neo-liberal one that removed all restrictions on the free market.

Forty years later, Bachelet took office for a second term in 2014 with an ambitious program centered on transforming the country’s educational model, undertaking redistributionist tax reform and drawing up a new constitution to replace the one that originated during dictatorial rule.

“Chile made a lot of progress, but a great deal of inequality remained. The new stage required taking up citizens’ demands,” said Bachelet, whose approval rating stood at 84 percent at the end of her first term in March 2010 but now has dipped to just above 25 percent.

Chile’s education system was once marred by high levels of discrimination and segregation but that situation is now changing, according to the president, who said tuition-free higher education for students from poor households was one of her administration’s biggest achievements, even though at the moment it only benefits a minority of those students.

Bachelet also noted that Congress in 2014 passed a bill to increase the tax rate on corporate profits from 20 percent to 25 percent. The goal was part of a broader plan to raise an additional $8.2 billion annually to finance the education overhaul, although the government has come up short in that objective.

She said she also was proud that nearly 225,000 people had participated in the debate on a new constitution to replace the dictatorship-era charter.

General elections are scheduled in Chile for November, a contest in which low turnout is expected; center-right former President Sebastian Piñera is currently leading the polls, while the ruling center-left New Majority coalition is divided.

“Going with two candidates (independent Alejandro Guillier and Christian Democrat Carolina Goic in the first round) is completely unprecedented,” Bachelet said.

Amid the complicated international scenario and low levels of consumer spending and business investment, Chile’s economy has grown at an average pace of just 1.9 percent over the past three years.

This is due to Chile’s heavy dependence on the price of copper, the South American country’s main export product, Bachelet said.

“The situation will gradually improve throughout the year,” she added, citing a recovery of mining investment and greater activity in other sectors of the economy.

The president said she still had not decided what she would do after completing her second term in office but was certain she would not remain active in Chilean politics.

“I think I’ll stay in the background, just in case they call me for a council of elders where I can be of assistance,” she joked.

 

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