The Chilean alternative


Kimber Shearer is deputy director for Latin America programs at the International Republican Institute.

Chile has been one of the most developed countries in Latin America for the last 25 years, with a dynamic free market economy. As a role model for economic reform, Chile has seen strong growth rates coupled with sound monetary policies to limit the deficit and balance the national budget. The Global Competitiveness Report for 2009-2010 ranks Chile as the 30th most competitive country in the world and the most competitive in Latin America. While these economic characteristics help Chile stand out among its neighbors, they’ve also contributed greatly to sustaining what really separates Chile from its neighbors – democratic governance.

Chile has strong democratic institutions and processes that have supported its stable government structure, one that is representative and accountable. It has a healthy multi-party system that allows for competitive policy debate and undeterred scrutiny in the media. For more than two decades, the people of Chile have participated actively in free and fair elections followed by the peaceful transfer of power. Meanwhile many of Chile’s neighbors in recent years have attempted to manipulate institutions to retain or expand power by limiting constitutional, judicial and legislative restraints.

On April 12, newly elected President Sebastian Piñera spoke at the Brookings Institution about his administration’s plan to lead his country. When questioned about the Chilean economic model versus the model aggressively pushed by President Hugo Chavez of Venezuela, Piñera offered, “My impression is that one system or one model is the right one and the other one is the wrong one. That’s my opinion, that’s why I’m pursuing the model that has been followed in Chile for [many] decades. And I think that the results will prove this impression and that the results are already proving this.” Yes, the results are evident, so why aren’t more countries following Chile’s model?

Chile’s regional neighbors share many characteristics. Latin American countries have long struggled with periods of authoritarian rule. In 1988, Chileans peacefully rejected General Augusto Pinochet’s continued hold on power, paving the way for elections and a return to a democratic system of government. The political opposition united for a common purpose, allowing for a smooth transition after 16 years of repression.

Likewise, many Latin American countries derive significant portions of GDP from extractive industries, yet the example of Chile’s sovereign wealth fund helps keeps Chile’s natural resources from becoming a curse as has happened in other countries.

As the roots of socialism run deep throughout the region, Chile counts the last five years under the guidance of center-left President Bachelet. Bachelet’s administration provided a mix of free-market economic policies with the expansion of social protections.

It is because of these successes that the International Republican Institute (IRI) has worked with experts from Chile to participate in professional exchanges to other countries in the region, sharing experiences, best practices and building the core skills of various political and civil society stakeholders. On a global level, IRI conducted an exchange for government officials and political opposition leaders from Zimbabwe to discuss best practices and the institution of economic reforms with their Chilean counterparts. A common topic was the inherent value of economic liberalization − for everyone on the political map.

President Piñera’s engaging demeanor, private-sector successes, ministerial appointments of free-market focused policy experts, and his country’s enduring economic model, makes him poised to be more than a leader by example. While Chileans – including Bachelet – have been exceedingly modest about their success and progress, many hope that Piñera recognizes that in many ways he has a responsibility to share Chile’s experience with other countries in the Americas.

In a region where elected officials are manipulating constitutional processes and weakening democratic institutions to retain and consolidate power, Chile offers an alternative path, economically, socially and politically.