This content was posted on May 19, 2021 – 21:02.
19.May 2021 – 21:02

(AFP)

Chile’s new political map, following the election of a majority of left-wing independent members to the Convention, which will draft a new constitution, has opened up an economic scenario of uncertainty about projected changes.

Over the course of the year, the Convention will be challenged to counter the modernization of the ultra-liberal model that has boosted Chile’s positive economic performance, leading to talk of a “Chilean miracle” demanding social equality that has driven the population to the streets in recent years.

Since last weekend’s elections, Chile has plunged into a political tsunami after the arrival at the Constituent Congress of a majority of the non-broad-spectrum leftists, to the detriment of the traditional parties.

The unexpected result caused concern in the market, which reacted in the second with a drop of almost 10% in the Santiago stock exchange, although it subsequently normalized its axis while the dollar fell slightly.

The so-called “People’s List”, formed among the participants in the social protests in 2019, included 27 representatives. Governing Law, 37; while the other two rosters of center-left and radical left groups have elected 53 members, to which are added other independents and 17 indigenous members, creating a 155-member congregation that is highly fragmented, with no coalition alone gaining veto power.

The constituent bases are established 2/3 for decision-making by a majority vote.

“Some things will be changed (in the new Constitution) without any debt due to the composition (of the founder) and the lack of veto power,” said Gonzalo Martner, an economist at the University of Santiago. AFP.

“History shows that this dominance of the radical left does not bode well for any economy, not just the Chilean one. This would not be good news anywhere in the world, ”said a scientist from the Faculty of Private Business and Economics. Diego Portales University, Felipe Balmaceda.

– Economic uncertainty and social hope –

Before the vote, the candidates for the Constituent Assembly focused their economic agenda on some points that reflect the concerns of citizens: an end to the privatization of water supplies; end with the private individual pension model, which is highly questionable due to very low pensions; and the way of exploiting various natural resources, especially lithium and copper.

“Interesting things will happen in the economic sphere. Water consumption by people will, for example, be secured, and public property (resource) will be preserved. But it exists all over the world, what kind of drama we are talking about! “he exclaimed Martner, a socialist economist who served in the government of Concerta, the center-left coalition that ruled Chile 20 years after the end of Augusto Pinochet’s dictatorship.

Martner is on the economic team of the preliminary Communist Party presidential candidate Daniel Jadiu.

It is currently not possible to change the autonomous functioning of the Central Bank.

“Reforms that are known to have failed in the world, such as the separation (pension) system, will move forward,” criticizes Balmaceda.

According to Valentin Karril, Chief Economist for Principal in Latin America, “what can cause difficulties is the large number of independent candidates elected and the ability to bring them into line with certain parts of the Constitution. This means a lot of uncertainty as it is not a monolithic block. “, – said in an interview with the Diario Financiero newspaper.

“My baseline scenario is that there will be uncertainty before the end of the Constituent Congress,” he adds, which is expected in mid-2022.