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Boric to face uphill struggle to pass reforms

Bnamericas
Boric to face uphill struggle to pass reforms

President-elect Gabriel Boric will have a short time window to pass any significant reforms, as Chile will likely be readying its new constitution by 2024. Furthermore, the lack of a majority in congress will force him to compromise, particularly on economic policy, experts say.

“Boric has essentially a two-year window to implement the reforms that he wants to do, and from then on everything is going to be focused on implementing the new constitution,” said Robert Funk, professor at the public affairs institute of the University of Chile.

Leftist lawmaker Boric secured 56% of the vote in Sunday’s runoff, comfortably beating conservative José Antonio Kast. Boric and the new congress members will take office on March 11. 

The constitutional assembly, which was spearheaded by Boric in congress, is expected to finish drafting a new Magna Carta next year, and while the text will be put to a referendum, it is widely expected that voters will back the proposals.

Funk argues that Boric and the constitutional assembly represent a shift toward the left that is less focused on attracting investments and GDP growth, as were the center-left governments in Chile after the Augusto Pinochet dictatorship ended in 1990, and more concerned with social and environmental issues. 

“The bet is that we’re sufficiently modern, sufficiently wealthy to be able to give up some investments in favor of these other values,” he adds.

Some of Boric's proposals include green taxes on CO2 emissions and additional royalties on mining, as well as ending coal-fired power generation by 2025, something widely seen as implausible. 

The market, Funk added, will see this as a trade-off, since investors in areas such as mining and energy will now be facing stricter regulations regarding social consultations, water management and environmental protection, among other issues. 

The academic adds that Boric will be under pressure to prove that this new left can properly manage the economy and guarantee governability. If it does not, then there’s a good chance conservatives will return to power in 2026. 

Funk was speaking during a webinar discussing the election results organized by the Canadian Council for the Americas.

During the same event, it was emphasized that Boric will also have to deal with short-term economic challenges stemming from the pandemic, such as inflation and unemployment among women.

However, the biggest obstacle to reform will come from the relatively small size of Boric’s Apruebo Dignidad coalition, according to Cristina Bitar, president of consulting firm Azerta.

In the November 21 vote, Apruebo Dignidad obtained 37 seats in the chamber of deputies and four in the senate, and while no single party will have a majority in either chamber, right wing groups will control half of the upper house. 

“The tax reform that Boric proposes is probably not going to end up exactly the same after going through congress,” Bitar said.

She said that will be reflected in Boric’s first cabinet. 

“Apruebo Dignidad does not have enough people or experience to fill all positions in government, so maybe Boric will have to go beyond his coalition,” she said.

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