The Right Wing Vote Collapses and Bachelet gains an unconvincing Victory - What kind of Left does Chile need?

With 3.4 million votes – 62.16% of the votes cast but only 25.6% of the electorate – Michelle Bachelet has been re-elected for a second term as the President of Chile, an office that she held from 2006 to 2010. Her victory was mainly due to the massive mobilisations that had taken place during the period of the Pinera government as was shown by the election of ex student leaders as MPs – Camila Vallejo and Karol Cariola of the Communist Party, Giorgio Jackson of Democratic Revolution and Gabriel Boric of Autonomous Left.

On November 17th 2013 elections were held in Chile. They included elections to both Houses of the Congress - the Senate and the Chamber of Deputies – as well as presidential elections.

The coalition New Majority won control of both Houses now having 21 of 38 seats in the Senate and 67 of 120 seats in the Chamber of Deputies. However, the presidential elections did not produce a clear winner so a runoff election was held on December 15th where the candidate backed by New Majority, Michelle Bachelet, won 62% of the votes cast and was therefore elected President of Chile. However, the turnout was significantly lower in this ballot.

On December 18th 2013 we published on our website – www.marxist.com - an analysis of the election results in Spanish. What follows is an English translation with additional notes to help readers not familiar with initials, state institutions and organisations in Chile.

The Collapse of the Right

Then Right got its worst election result since the return to democracy. The 1.6 million votes that Evelyn Matthei got in the first round was even less than Union Democratica Independiente (UDI) and Renovacion Nacional (RN) – the parties that made up the Alliance - got separately in the Presidential elections in 2005. In comparison to the previous elections of 2009 the Right lost 46% of its vote in the first round and 41% in the second round. This collapse is an expression of its absolute inability to find any answers, from the point of view of neo-liberalism and the legacy of Pinochet, to the increasingly profound changes that are taking place in Chilean society such as the demands for free public education, social security, democratic rights and so on, demands that had been raised over the past few years by students, workers and social movements.

The electoral campaign of Matthei and the Alliance concentrated above all in creating fear amongst the electorate, and principally amongst the middle class, of the spectre of a Left dominated Bachelet government which would provide free education even to those who could pay for it and this would be financed by rapidly increasing taxation. But it was the Pinera government itself, in which Matthei was Minister of Labour, which not only maintained but also expanded the joint financing of private education out of public funds as well as a taxation system that fell heavily on the working class so that the bosses could avoid paying taxes with the blessing of the law.

Bachelet wins but not convincingly

The Pinera government only had one real “merit”: with its neoliberal measures it contributed to a growth of the struggles that had begun under the previous administration of Michelle Bachelet, freeing these struggles from fear of the Right which had been the main ally in the Concertacion (popular front electoral alliance after the fall of Pinochet made up mainly of the Socialist party and Christian Democracy) during its uninterrupted 20 years in power. This was reflected in the electoral victory of Bachelet who won but not unconvincingly, but who also did not get any blank cheques from the working class, the students and the social movements in Chile.

During the first round of the elections the rate of abstentions reached 51% and in the second round 59%. These figures cannot be explained simply by the automatic registration which increased the electoral register from 8 to 13 million people who were entitled to vote. With 6.6 million votes in the first round and 5.6 million in the run-off, in absolute terms this has been the lowest rate of participation since the return of democracy and on average half a million fewer votes that the previous elections. The victory of Bachelet coincides with the second worst result for the Concertacion in the whole of its history. If you compare the election results that enabled Michelle Bachelet to win her first term in office, she lost 100,000 votes in the first round and 254,000 votes in the second round despite the fact that she now had the support of the Chilean Communist Party (PCCh).

Workers and Youth defend their Autonomy

Before these elections there had been elections in the main organisations that had been in the forefront of the struggles and strikes over the past few years. The CUT (the Chilean TUC) renewed its leadership in August last year in an election that ended 11 years of a socialist leadership that was often called into question. With a relative majority of 324,000 votes (44%) this time the communist Barbara Figueroa of the trade union Colegio de Profesores (Teachers College) was victorious. It was this trade union that had been in the vanguard of the struggles against education for profit. This year too (2013) for the first time in its 91-year history the elections in the Federacion de Estudiantes de la Universidad de Chile (FECH – University of Chile Student Federation) were won by an Anarchist and Libertarian list (Luchar [to fight] with its base in the Frente de Estudiantes Libertarios [Libertarian Student Front]). The current president of FECH, Melissa Sepulveda, laid emphasis on the need to promote “unity with the rest of the social sectors, with workers” as the only way to advance the struggle and “constrain the Michelle Bachelet government”.  

As we said after the primary elections all of these facts show that the candidacy of Michelle Bachelet was used by sections of the working class and Chilean youth as a tool to rid themselves of the Right and the policies they had carried out against the people. Nevertheless, the workers and the students who voted for Nueva Mayoria (New Majority) rejected any possibility of there being a consensus and negotiation of their interests with the interests of the powerful. They defended the independence and/or willingness and ability to fight of their union organisations. Despite the broad social movement that was set into motion, Bachelet was not successful in either creating any enthusiasm or any real confidence within a wide majority of the working class and youth.  

The Programme of the Nueva Mayoria Government

During the election campaign Michelle Bachelet was very skilful in side stepping any of the more controversial issues and at the same time giving a nod and a wink to her Left, to the labour and student movement and their demands. Her programme lays particular emphasis on reforming education, the tax system, the State, social security and relations with the trade unions, but says nothing in relation to the renationalisation of the copper industry, a demand that has the support of 83% of the Chilean people according to a recent opinion poll. At the present time the privately owned mining industry, which is mainly in the hands of multinational corporations, is producing more than the state owned industry and enjoys one of the lowest tax rates in the world. In addition, there are a number of things that are tax deductible. The notable silence on this issue can only be explained by the wish that is expressed in Bachelet’s programme to “ratify the institutional stability of Chile for foreign investment”, that is to carry on legitimising the plundering of our resources.  

All the other reforms that were announced have either been put back or they end up being watered down when you go into detail. The reform of education will take 6 years. As regards taxation it is being proposed that company tax be raised from “20 to 25% over a period of four years”, a reduction in personal tax from 40 to 35% and the abolition of the Fondo Utilidad Tributario (FUT – Taxable Profit Fund) which is a mechanism by which profits that are not taken out of the company are exempt from taxation (See link at bottom of article for further information).

Nevertheless, this cancelation of company taxes “seguirá operando como un anticipo de los impuestos personales”, will continue in operation as a down payment of personal taxes” thereby maintaining a system of possible tax evasion which benefits the Chilean bourgeoisie. As regards social security it is correctly stated that “the credibility of the system of individual capitalisation is being reduced by the existence of the extra-normal profits of the Administracion de Fondos de Pensiones de Chile (AFPs – Pension Fund Management Companies – see note at end for more information) but the reform of the system has been postponed indefinitely leaving only some vague outlines: there won’t be any nationalisation of the AFPs – a reform that has happened in Bolivia – but rather the creation of a State AFP that would “allow greater price competition” and the contribution of a Basic Solidarity Pension for those over 65 who do not have access to any other pension. All of these are examples of what is happening.

The Unknowns of the Economy

The reforms announced in the programme will cost an estimated $15,000,000,000. They will be paid for by a reform of the tax system which, as we have pointed out, will have some contradictory effects even if it is carried out according to the plans and there are also the “uncertainties of economic growth”. Nevertheless, it is here that we find the main unknowns. 2013 closes with a public deficit of 1% of GDP and an expected deficit in the balance of trade of $1,600,000,000. The foreign debt has increased by 18% since April 2013 and now stands at $120,000,000,000, some eight times bigger than what the programme of Bachelet foresees.

Copper makes up 57% of Chilean exports. In total, mining accounts for 62% of exports and 45% of investments in the country (figures from 2012). International finance capital profits from its mining operations and what it pays in taxes is more than made up for the interest it gets which the State has to finance out of the public debt. In a situation where the price of copper has fluctuated widely, international financial institutions have forecast a fall in Chilean economic growth from 4,5% to 4% and at the same time warning of further possible falls because of risks that are associated with “a slowdown of the economy in China which will affect the price of copper” (Economic Analysis from the BBVA [Banco Bilbao Vizcaya Argentaria], November 2013). In the context of a world crisis that that sees no end, this slowdown that everyone is afraid of is already becoming more evident.

Words and Deeds

This is all very clear that the Chilean bourgeoisie and Imperialism hope that New Majority will be far more able to contain and divide the social struggles in a situation where significant concessions will not be possible. Given this objective situation the bourgeoisie and Imperialism will count on the right wing of the victorious coalition (mainly the Partido Democrata Cristiano [PDC - Christian Democratic Party] which is organically linked with the interests of the bourgeoisie and Imperialism), but also on the “responsibility” of the leaders of the Socialist Party.

We even had an example of this before the elections with the appointment of Michelle Bachelet’s economic team that includes the Christian Democrats Jose de Gregorio (ex President of the Central Bank) and Rene Cortazar. At the height of the election campaign the former had expressed his opposition to free education thus obliging Bachelet to publicly refute what was said. The appointment of the second person, Cortazar, a member of the boards of directors of some of the major companies in Chile, was even criticised by one of Bachelet’s fellow party members, the vice-president of the CUT, Nolberto Diaz. These are the facts, the personalities and the interests that New Majority will have to deal with in relation to its mild reforms, watering them down even more.  

The Chilean Communist Party (PCCh) in New Majority

It is inevitable that the contradictions that New Majority will face will not only make Michelle Bachelet lose sleep but above all will create difficulties for the party that makes up the Left flank of this coalition, that is the PCCh. The PCCh is one of the biggest and most deeply rooted communist parties in the Americas and the only party on the Chilean Left that has party members in the leaderships of the working class and student movements. It came to be part of the Concertacion, which justly became known as New Majority because of the inclusion of the PCCh, in order to overcome the isolation that was a product of the antidemocratic binomial system (see link below which explains this undemocratic election system introduced during the Pinochet era) and brings to this coalition the dowry of the authority of some of the main leaders such as Camila Vallejo.

In response to criticisms that have been made, Camila Vallejo has stated in his blog that the PCCh is not in New Majority “to lose independence but to have an effect”. These are fine words but unfortunately they have very little substance. The PCCh has got six Deputies and no Senators. In strictly numerical terms this grouping will have no influence over New Majority in the Congress. However, the Partido Democrata Cristiano (PDC – Christian Democratic Party) with its 21 deputies and 6 senators certainly will have some influence. Victory in recent elections in the CUT (TUC), for reasons that we have explained above, will be a double-edged sword for the PCCh. If the party were to look for the pressure of the masses to overcome the impasse in the Congress, it would be easily bypassed on the left by the demands of the masses and would therefore have to respond to these demands while supporting Bachelet.

By drawing closer to the Concertacion the PCCh has lost its leading role in FECH, which, as we have pointed out, has turned even further to the left following a line that is independent of any party. In the elections in the district of Camara, which is the main mining area in Chile, the PCCh put forward as candidate for a second consecutive time the miners’ trade union leader Cristian Cuevas. In the elections there were 36,000 fewer votes cast than in 2009 and the vote for Cuevas fell from 22,000 to 12,000. That is to say that in the area where the main copper mines in the world are located, the PCCh lost votes that were mainly those of workers who abstained. The PCCh was punished for being part of New Majority. These examples are very significant as they indicate what can happen to the PCCh: being marginalised in the Congress and facing problems in the movement. All of this is very far from what they yearned for but it is very close to reality.   

The Constituent Assembly

Within its “democratic” perspective for Chile, the PCCh and its leaders think that a success has been achieved because New Majority has included in its programme the need for a Constituent Assembly. It is correct that in Chile at the moment there are some democratic issues that have yet to be resolved, ranging from the recognition of the rights of indigenous peoples and consultation over projects such as HidroAysen (A hydro-power project in Patagonia affecting not only pristine natural reserves but also indigenous Mapuche communities. 74% of the Chilean public oppose the project.) to the abolition of the binomial electoral system which excludes 13% of the voting public from any political representation and the repressive Emergency Laws that are an unpleasant leftover from the dictatorship, etc.

Nevertheless, given the social situation that exists in Chile at the present time the proposal for a Constituent Assembly only serves to take the demands that are being put forward by the concrete mass struggles onto much more favourable ground for the political parties and their bureaucracies. A Constituent Assembly where they may propose to reform the state but which is not supported by the rank and file organisations would of course be dominated by the parties. Therefore for New Majority, and in particular its right wing, the proposal for a process leading to a Constituent Assembly will become a manoeuvre that will distract and divide.

For example, Bachelet’s programme proclaims the need to put an end to the binomial election system in favour of a proportional system. But what will most probably happen is that given the danger of a haemorrhaging of votes and the hammering that the party political machinery has gone through, what we will get from the Partido Socialista (PS) and the PDC is a proposal for a minimum threshold of votes which would keep their coalition united and/or keep the parties to their left out of the Congress.   

What kind of Left does Chile need?

A few days after the first round of voting students from the secondary schools occupied Bachelet’s election headquarters and displayed a huge banner that read (change is to be found not in the Moneda [presidential palace] but in the large Alamedas (main avenue in Santiago therefore, literally, on the streets)”. That is true, but only in part. The strength of the movement also lies in its ability through its own actions to shake up the political leadership and put forward its own representatives and demands. The main political results of the Chilean elections is that the movement was able to make itself felt in the elections but was still not able to find a political voice on par with the strength of the movement and therefore in order to defeat the Right it made use of New Majority without falling prey to any flattery.  

By refusing to put forward any alternative to New Majority the PCCh has prepared for the Chilean masses a whole number of struggles, internal divisions, and individual and collective disappointments which will be the inevitable experience of the mild reformism of Bachelet. All of this will have repercussions among the militants in the party and even amongst the tops of the party where there is a section that is attracted to and flattered by the presence of the party in the institutions of government. These challenges will only be overcome if, starting from today, the activists undertake a serious study of the situation of the class struggle in Chile and on a world scale, break with the “democratic” perspective that casts a veil over the eyes of the present leadership and return to Marxism as the indispensable tool to consolidate the revolutionary Left for the battles that are impending.   

FUT

http://www.bloomberg.com/news/2013-10-16/pinochet-era-investment-lure-at-risk-in-chile-election-taxes.html

AFPs The provision of pensions in Chile is in the hands of private pension fund management companies whose high management fees and therefore profits reduce in turn the amount of money that individuals can save in their pension fund so that on retirement individuals can discover that what they actually get as a pension is far less than they expected. This is a warning to workers in the UK as in the future workers in small and medium companies will be expected to take out a contributory pension scheme that will be operated by private companies whose management fees are already a subject of controversy.

Binominal System

http://www.linguee.es/espanol-ingles/traduccion/sistema+binominal.html

http://en.wikipedia.org/wiki/Binomial_System