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Chile braces for unrest ahead of poll on constitution

Shopkeepers have closed their windows and authorities have taken action to protect targets from possible vandalism as Chile prepared to mark the anniversary of the outbreak of riots and social unrest last year on Sunday.

The milestone comes a week before a referendum on October 25 in which polls predict that about two-thirds of Chileans will vote in favor of drafting a new constitution. It was one of the central demands of protesters angered by issues such as rising prices, inequality, meager pensions and poor public services.

Many are hoping that a second wave of protests – with unrest already escalated over the past week – won’t be as disruptive as in 2019. Then, widespread arson, looting and vandalism caused approximately $ 4.6 billion in damage to public infrastructure.

“An electoral tsunami is approaching which will channel [much of] energy and hope for change through the electoral process, ”said Eugenio Tironi, sociologist in Santiago. He referred to presidential, congressional, gubernatorial and local elections slated for next year, in addition to another vote to appoint a constituent assembly if the majority votes in favor of a new constitution next Sunday.

Mr Tironi expects most protests to be peaceful, even if a frustrated radical fringe poses a continuing threat. “If the constitutional process is seen as legitimate and supported by different political groups, it will help calm things down, but not among small violent groups. They will continue for sure, ”he added.

Claudia Heiss, head of political science at the University of Chile, says Chilean society is moderate. “This is not a time for extremism. Most Chileans just want a more present state.

“The challenge is to put an end to neoliberalism and to move towards a social democrat model. It would be something radically different, but not in the sense of abolishing capitalism or private property rights.

Not only is a radical turn to the left not supported by most Chileans, but there would be strict limits on the content of a new constitution, since all articles would have to be approved by a two-thirds majority of the ‘constituent Assembly. Even so, “the demand for change should not be minimized,” warned Ms. Heiss.

Protesters claim the current constitution – drafted in 1980 by General Augusto Pinochet – does not protect human rights or social well-being, concentrates power within an elite, allows the private sector economic control excessive and lacking legitimacy because it was imposed on the country by the military dictatorship.

“The drafting of a new constitution in Chile consists in trying to put the legitimacy of the [political] system on a new basis, ”said Andrés Velasco, a former Chilean finance minister who is now dean of the School of Public Policy at the London School of Economics.

While Chile can claim many successes over the past 30 years since the end of the Pinochet dictatorship, one of its greatest weaknesses is the credibility of its institutions and the lack of confidence in the country’s elite.

“The conservative establishment in Chile fails to see that if we do nothing to combat the legitimacy of institutions and the poor performance of our politics, the economy will not be doing well,” said Velasco.

But critics say a new constitution itself will lack legitimacy, given that it will have been forced into existence by social unrest just as the current one was imposed on the country by the Pinochet regime.

Critics add that in addition to the uncertainty that could keep investments at bay during the constitutional process, which could take two years, the new document could generate pressure on higher spending – for example, by expanding access to health care. According to them, this could undermine Chile’s famous fiscal discipline and increase the level of debt.

Last week, Fitch Ratings downgraded Chile’s sovereign debt from A to A-, arguing that public finances had been affected by demands for increased social spending after the 2019 protests and undermined by the economic slowdown caused by Covid -19.

Fitch predicted that the public debt burden would rise to 34% in 2020, from 28% in 2019. It would continue to rise, the rating agency predicted, given the challenges of containing spending in the midst of Social pressures and the economy’s outlook are expected to contract 5.8% this year, largely because of Chile’s foreclosure. It would rebound 4.5% in 2021, according to Fitch.

Eduardo Engel, one of Chile’s most respected economists, says the country’s debt level is low enough not to be a major problem.

“If this is a good social contract, it should bring stability for decades to come, and this should help long-term investments,” he said, adding that despite the economic success of the Chile over the past three decades, it was time for a change. , including a significant redistribution of power.

“The goose had already stopped laying the golden eggs. We now need a new one to get out of the constitutional process. We couldn’t continue as we were. ”

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