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Chile's Surprising President: The Bachelet Model

From The Economist print edition

A politician on top of her game

When she was elected as Chile's president in January 2006 Michelle Bachelet promised to be a different kind of politician. A paediatrician and twice-separated mother of three children, she was the first woman to be elected to the top job in a Latin American country who was not the widow of an illustrious husband. She promised a "citizens' democracy" of greater participation. Her first cabinet was selected according to gender as much as party: half its members were women, several were independents and only two had previous ministerial experience.

She quickly ran into troubles, ranging from protests by schoolchildren to transport chaos in Santiago. A year ago, her Concertación coalition lost a municipal election—its first-ever defeat. She is barred from standing in the coming presidential election, yet if the Concertación wins, it will be partly down to Ms Bachelet. She has evolved into one of the most formidable political leaders in Latin America. When The Economist went to see her in La Moneda, the presidential palace, she was relaxed and unhurried, keen to answer questions at length rather than in sound bites.

What explains her change of political fortune? Her consultative method of leadership may have looked like "weakness" to traditionalists, partly because "women speak more softly," she concedes. "There is still a lot of machismo and sexism." But Chileans have come to see her as empathetic, as a mother figure who is protecting them, and who had been "in command" when recession struck, she adds. In practice, however, she has been forced into some compromises, bringing political heavyweights into the cabinet, and delegating more.

A second reason is that, while sticking to fiscal rigour (at some political cost), she opted to make social protection and the promotion of equality of opportunity her main priority. Her government is building 3,500 crèches for poorer children. It has introduced a universal minimum state pension and extended free health care to cover many serious conditions. Its housing policy features better-quality homes, in model neighbourhoods. But its efforts to shake up education have been disappointingly timid.

It will take time and study before it is clear whether these programmes work. Certainly, it was a while before they made their mark in Chile — "" crèche isn't sexy," says Ms Bachelet. But it adds up to one of the most far-reaching attempts to combine economic growth and a welfare state in Latin America. That is a tacit critique of Hugo Chávez's contention that only his revolution can tackle inequality in the region. And it suggests that Ms Bachelet's political career is far from ove >>>>Go to Full Story >>>

 

Featured Story

Politics Versus Trade: Hugo Chávez stamps out regional economic integration

By SAN ANTONIO DEL TÁCHIRA | From The Economist print edition

Business is slack at José Nelson Uribe's tiny grocery store in San Antonio del Táchira, just a stone's throw from Venezuela's border with Colombia. "I'm not selling even a quarter of what I sold before," says Mr Uribe. His woes are a result of the political conflict between his namesake, Colombia's president, Álvaro Uribe, and Venezuela's Hugo Chávez. “Before” means before July 28th, when Mr Chávez declared a "freeze" on diplomatic ties and said he would seek alternatives to Colombian goods. This was officially a response to an agreement formalising American use of seven Colombian bases for anti-drug operations, but it also coincided with questions as to how anti-tank rocket-launchers sold by Sweden to the Venezuelan army ended up in a camp belonging to the FARC guerrillas in Colombia. It is not the first time that Mr Chávez has threatened trade sanctions, but this time he seems serious.

The impact on the border region was swift. For each country, the other is the second-biggest trading partner (after the United States in both cases). Bilateral trade totalled $7.2 billion last year, of which $6 billion consisted of Colombian exports, mainly of food, live animals, clothing and cars. Four-fifths of that trade passed along the twisting mountain road that links San Antonio with the state capital, San Cristóbal. “That represents 50,000 direct jobs and 250,000 indirect [ones]," says José Rozo, a local business leader. Many of these are in transport firms and customs agencies. "Before, the local lorry drivers were doing around 500 trips a day," Mr Rozo says. "Now it's down to about 80." Industry in Táchira has been hit too, since many companies depended on imports from Colombia.

The border is not closed. But few of the 30,000 Colombians who used to cross each day to shop do so now, because Venezuela's National Guard confiscates their goods when they recross the border, says Mr Uribe, the shopkeeper. Venezuela's government has stopped issuing import permits, nor is it providing dollars at the official exchange rate for imports from Colombia (a dollar costs almost three times more on the parallel market).

The main winners in all this are the mafias who smuggle petrol, foodstuffs and other goods across the border. "These gangs involve powerful interests, linked to both civilian and military authorities," says Mr Rozo. "Their capital comes from illicit activities like drug-trafficking and kidnapping." Local people say lorries apparently loaded with smuggled goods are crossing the border nightly. >>>>Go to Full Story >>>

 

LATIN AMERICA: Driving Toward Sustainable Business Advantage

TRANSEARCH International

Like many other regions impacted by the global economic crisis, investors and business executives across Latin America have been forced to recalculate expectations of return on investment and corporate earnings.

Download the complete white paper here: Latin America Executive Outlook

 

Economic Survey of Latin America and the Caribbean

Economic Commission for Latin America and the Caribbean

The publication of the sixty-first edition of the Economic Survey of Latin America and the Caribbean, corresponding to 2008-2009, comes at a critical point in the economic development of the Latin American and Caribbean region.

Download the complete publication here: Economic Survey of Latin America and the Caribbean