Constanza San Juan is feeling optimistic. She sits on a committee of Chile’s constitutional convention that on Feb. 1 voted to nationalize the country’s mineral wealth—its deep veins of copper, lithium, magnesium, and silver—a notion that has mining companies and markets hyperventilating. The idea is sufficiently radical that few believe it will be endorsed by the required two-thirds of the full convention. But San Juan, a 36-year-old historian, not only hopes it will—she wants it to go further.
In her view, the problem isn’t that Chile, dubbed the cradle of neoliberalism, is contemplating state control of resources. It’s that people still envision its future as based on mining rather than green endeavors. Her wish list also includes better pensions, health care, and education. Asked during a break between sessions where the money for all that would come from, she said, “We’ll have to see. The reason I came here is to bring structural changes to our economic model.”
Chile has embarked on a nearly unparalleled voyage of self-discovery that will serve either as a template or a warning for countries trying to tackle climate change and inequality. It’s elected 155 delegates to write a new constitution, and some three-quarters of them lean left—though perhaps not as much as San Juan.
Among other resolutions that have passed committee votes: annulling existing water-use rights, banning mining and forestry on Indigenous lands, ending free-trade agreements, and eliminating the Senate. Almost 80 proposals have arrived from outside the convention with 15,000 signatures each, meaning they must be considered. They include legalizing cannabis and enshrining constitutional rights for animals and glaciers. The most popular, which protects individual retirement pensions, is called “Don’t mess with my money.”
All of this is happening just as the country’s most left-wing government in half a century, a coalition of socialists and communists, is about to take office. Its central figures—President-elect Gabriel Boric and his closest aides—are in their mid-30s, as are the two top figures at the constitutional convention. It’s not just an ideological shift, but also a generational one—and with a better gender balance. The head of the convention and many of Boric’s most powerful ministers are women.
When the new government takes office in March, Chile will once again, despite its remoteness, thrust itself into the global consciousness. It has abundant natural resources, an economy that’s avoided the booms and busts characteristic of South America, and a population of 19 million that says its future should be based more on government-assured justice and equality than the free market. “It’s clear that what’s under way is a remaking of the Chilean economic model,” says Aldo Mascareño, a sociologist at the Center for Public Policy, a Santiago think tank. “This radicalism is happening precisely because of the success of our current model, which came with too much inequality, and also there was a failure to listen to the population.”
From the outside, Chile has long been admired as a country that slipped the cruel bonds of dictatorship three decades ago and built a healthy democracy underpinned by a sound economy. But in late 2019 a small increase in public transit fees sparked a shocking explosion in street violence that played out against the backdrop of an historic “megadrought.” It suddenly became evident that President Sebastian Piñera and the elite he represented were out of touch. The population was increasingly disgusted at the way unregulated markets had contributed to an unequal distribution of resources, whether wealth or water, while issues like climate change and minority rights were neglected.
To defuse tensions, the government organized a referendum asking Chileans whether they wanted to craft a new constitution to replace the one dating from the dictatorship. That document enshrined neoliberal economic principles propagated by Milton Friedman and his band of “Chicago Boys.”
Now there’s fear the country will lurch too far in the other direction. Chile’s peso has weakened 16% against the U.S. dollar since the makeup of the assembly was announced on May 16. Many of the delegates are neophyte activists; as a result, some Chileans say they hope the new president and his youthful ministers can be the grownups in the room and impose some restraint. Boric, who won election promising gradual change, has sought to allay market fears by appointing as finance minister the seasoned former head of the central bank, Mario Marcel.
The irony in the convention’s antimining sentiment is that Chile’s copper and lithium reserves—among the world’s biggest—are very much in demand to help move humanity away from fossil fuels toward renewable energy. The government forecasts that investments in mining projects could total about $70 billion this decade. Last year, copper accounted for more than half the value of Chile’s exports.
Some investors are worried. “The market hadn’t considered that the initially approved proposals would be this radical,” says Klaus Kaempfe, portfolio solutions director at Credicorp Capital. “Looking ahead to the final votes, we really hope to see a little sanity.”
At a time when many Chileans are enjoying their summer holiday, the convention is working at full tilt. The goal is to have a complete draft of the constitution ready in July, followed by a popular referendum before the end of the year. Delegates gather daily at the former Congress building in downtown Santiago. There are a few suits, but dress is mostly casual. At times, it can feel like a university debating society. There’s applause at the end of some votes. During deliberations on the mining proposal, members of the convention held up signs that read “Stop the looting.”
Conservatives are a frustrated minority because their proposals hardly ever make it out of committee. One of them is Bernardo Fontaine, 57. “A Pandora’s box has been opened, where the spirit of the constituents is very radical,” he says.
Fontaine, an economist who’s held senior management posts at several big companies, is among those hoping Boric and his aides will be a voice of moderation, even though the convention is technically independent. “We need Boric’s political group to exercise leadership and set limits on the debate to direct the rules toward a path of common sense,” Fontaine says. He worries that the radical proposals that do get through might pass in the referendum.
Boric will have to step carefully. He’s supported the constitutional process since its beginning and also wants to put Chile on a path to greater equality and a green future. He’s pledged to raise taxes, boost spending on social services, and reintroduce a state-run pension system. The former university student leader allied himself with Chile’s 100-year-old Communist Party to win the presidency, but he’s not a leftist of the old school. Like green politicians in Northern Europe, his preoccupations include human rights and government transparency.
Some analysts say Boric could become the face of Latin America’s new left, inspiring other candidates in the region. Gustavo Petro, a leftist who’s leading in the polls to win the presidency of Colombia in May, said recently that he’d like to form an alliance with Boric and others to fight climate change and “transition Latin America toward economies that are decarbonized, productive, and based on knowledge.”
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