Chile seeks charter change amid unrest
Country prepares new draft for vote in 2022 following referendum in October
Chile’s decision to rewrite its constitution marks the beginning of an arduous process aimed at tackling structural problems that have created significant social unrest, analysts say.
After almost a year of protests, Chileans voted overwhelmingly on Oct 25 to replace the current charter written in 1980, which critics said benefited the country’s political and business elite at the expense of everyone else.
Juan Pablo Glasinovic, an international relations academic and manager of the Chilean-Peruvian Chamber of Commerce, said: “This result makes evident three main messages from the Chilean people: First, they want a new constitution that better (considers) all their needs, as well as their aspirations; second, they want to make changes using democracy; and third, they don’t want the leadership to lie in the current political parties.”
The referendum, originally scheduled in April, was delayed until October because of the coronavirus pandemic. Chile will now set out to draft a new constitution to be voted on in 2022.
Months of uncertainty may lie ahead, said Pamela Pizarro, executive director of Fundacion Cuide Chile, as radical movements have said they want to change the country’s economic system.
Last month’s referendum to change the constitution is not the first since the current constitution was adopted in 1980. A similar attempt in 2015 failed during the administration of then president Veronica Michelle Bachelet. Nevertheless, about 52 amendments have been made since 1989.
Still, the constitution is seen as a point of contention and one of the triggers for unrest that rocked the country last year, including terrorist attacks in the capital, Santiago.
“The process ( to change the constitution) will be continuously under pressure by radical groups,” said Alexis Lopez, a researcher and
analyst in Santiago.
The pandemic is another cause for concern. Chile has recorded more than 514,000 infections of COVID-19, with more than 14,000 deaths, and the country’s economy has been severely disrupted.
It contracted 14.3 percent during the second quarter of the year, the central bank said. Data on the third quarter has yet to be published, but GDP fell 11.3 percent in August compared with the same month a year earlier. Exports fell 7.9 percent for the year to September, and imports fell 17.2 percent during the first nine months of the year.
The central bank has forecast a contraction in the country’s GDP of between 4.5 percent and 5.5 percent, mainly due to the pandemic.
Chile is counting on foreign investors to revive its economy, but the ongoing uncertainty is likely to engender caution on investment.
The country’s investment promotion agency, InvestChile, said China increased its investments in the country by 167 percent last year to $4.8 billion. That made China the main foreign investor in Chile, followed by the United States and Canada.
China’s main investments in Chile last year included State Grid International Development buying Chilquinta, an energy distribution company, for $2.2 billion. Joyvio Group, part of Legend Holdings, bought Australis, a salmon farming company, for $920 million.
Despite recent unrest, Chile has been one of Latin America’s fastest growing economies over the past 20 years. It has also succeeded in reducing the proportion of the population living in poverty from 30 percent in 2000 to just 3.7 percent by 2017.
In 2018, Chile recorded growth of 3.9 percent, according to the World Bank, but that fell to 1.1 percent last year on the back of social unrest. Much of this growth was derived from trade as it exported to China, the US and Japan and imported from China, the US and Brazil, among others.
China is Chile’s main trade partner, accounting for 33.5 percent of exports in 2018 and 23.6 percent of imports, according to the UN Comtrade database.