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Chile: Capitalism With a Human Face


The South American democracy has elected its first female president. Socialist Michelle Bachelet is expected to provide continuity to the most successful economy in Latin America.

A Socially Conservative Democracy

Chile's president-elect Michelle Bachelet, defeated her opponent Sebastian Pinera in a Latin American country where the political scene is traditionally men’s domain. Chile is almost 90 percent Catholic and culturally conservative. It has the region's lowest percentage of women in the workforce. Divorce was illegal until 2004 and abortion remains outlawed. But Chile’s new leader is a single mother who says she is not religious and whose successful professional career includes pediatric medicine as well as politics.

Raul Madrid, Professor of Government at the University of Texas in Austin, points out that Michelle Bachelet is the first woman in South America to be elected president without first becoming known through her husband.

“She was the daughter of a general who opposed [one time dictator Augusto] Pinochet and who was sent to prison, was tortured in prison and ultimately died there in the wake of the [1973] military coup," says Professor Madrid. "She was then exiled for a significant period of time, came back to Chile [in 1979] and managed to convert herself into an important politician.”

Chile's Established Democracy

As a member of the Socialist Party, Michelle Bachelet served as Chile’s health minister and was named defense minister three years ago. Professor Madrid says she has been successful in both roles, convincing many voters that she is competent as well as strong – important qualities for a good leader. Ian Vasquez, an analyst at Washington’s Cato Institute, adds that Bachelet’s victory was possible because Chile’s democracy today is the most advanced in South America.

“And this gives Chile an edge, politically, over most of the continent right now, says Vasquez. "It is also true that the country has benefited from fairly sound economic policies and great degree of openness, far more than the rest of the region. And that I think has strengthened democracy there. So yes, even though Chile is a more traditional country than many other Latin American countries it is also a more solid democracy which allows for this sort of outcome.”

Ian Vasquez also notes that Michelle Bachelet enjoys the support of vastly popular outgoing Socialist president Ricardo Lagos, whose six years in office have been some of the most prosperous in Chile’s history. Most Chileans, he says, are content with the general direction in which their country is moving and have voted for continuity.

“Chile really is and has been, for several decades now, the star performer in Latin America and it stands apart. Because it is a country that has introduced and maintained a fairly coherent set of wide-reaching free-market policies, it has also had the highest growth rate for the longest period of time in the region and this has really pushed Chile into a path toward modernization that is notable and noticeable. The market policies have led to economic growth that has reduced poverty, notably, by more than 50 percent since the 1980s. And this is something that no other Latin American country even comes close to having achieved.”

More Reforms Needed

However, Ian Vasquez says, much remains to be done if Chile is to turn from a developing into a developed country. In his opinion, Chile’s heavy bureaucracy and rigid labor laws impede faster economic growth and keep unemployment high. “I think that in other areas, like education, reforms need to be done. One of the big problems in terms of Chile’s society is that there are big gaps in wealth. And we know that some of the best ways to close those inequality gaps are through education,” he says.

President-elect Bachelet has promised improvements as well as continuity. She says she will maintain the economic discipline and respect for the markets that have sustained Chile’s growth under the outgoing President Lagos. But she also promises improvement in education, help for single working mothers, more employment for young people and an overhaul of Chile’s private pension system.

Professor Raul Madrid says the majority of Chileans support this program. He calls it, “capitalism with a human face” – a combination of free-market economics and socialism.

Latin America's Star Performer

“Traditionally, left-wing parties in Chile, such as the Socialist Party, have gradually moved more toward the center, adopted market friendly, market oriented economic policies," says Professor Madrid. "They support free trade, etc. But at the same time, I think, they are more focused on social policies than the more right-wing parties have been. That is, they focus on not just growing, not just on keeping inflation low, but also on redistributing the wealth, insuring that Chile does not suffer from high levels of income inequality as it did under the Pinochet regime.”

Many analysts agree that Chile is a good example for its neighbors in Latin America. But Marta Lagos, Executive Director of Latinobarometro Corporation, a polling organization based in Santiago, adds that Chile is unique. “First of all, it [Chile] never had gold or silver so [rich] people were never rich enough, says Lagos. "The gap between the rich and the poor from the start of the colonial period was smaller. And second is, Chile has very few Indians. The native population in Chile was a very small part. It was a very unpopulated area. So, we have no ethnic cleavages, no religious cleavages that are salient enough to produce this exclusion.”

Still, some analysts contend there is much that Chile’s neighbors can learn from the country’s economic and political model. They say with the election of Michelle Bachelet, there may be even more.

This story was first broadcast on the English news program,VOA News Now. For other Focus reports click here.

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