Chile Picks President Between Polar Opposites in Tight Race

(Bloomberg) -- Chileans are electing a new president on Sunday in a race so tight between two candidates of such contrasting visions that a nation long known as stable and prosperous seems thrust into an identity crisis that will shape its economic future and reverberate across Latin America. 

Voters will choose between hard-right Jose Antonio Kast and leftist Gabriel Boric. One is 55, a devout Roman Catholic, fervent free-marketer and advocate of public order and tough measures against immigration. The other is 35, a former student activist who says Chile must share its wealth more evenly, respect the rights of minorities and promote a green economy. 

Recent surveys show it could go either way -- though Boric remains slightly ahead in most polls -- and both candidates have been tacking to the center. But because the followers of each feel aggrieved by the other the battle for the future may not end when the votes are counted. Either will find it hard to govern. 

Polls closed at 6 p.m. local time, with results expected within two hours.

The election spotlights rifts that festered under investors’ noses for years. Boric is tapping into anger among the middle class and youth who demand better public services, a loosening of mores and a bigger share in the country’s mining wealth. By contrast, Kast draws support from the poor and wealthy alarmed over furious protests, growing violence and increased crime.

Boric cast his ballot in his hometown of Punta Arenas in Chile’s southern tip, telling voters that, if elected, his administration will usher in a new type of politics. “We are a new generation that is entering politics with clean hands, a warm heart and a cool head. We are sure that we will make Chile more human, decent and egalitarian.”

Meanwhile, Kast voted in the town of Paine, located outside the capital city of Santiago, telling supporters that his government would assure security and progress. “We have already achieved something very important, that is the recovery of political equilibrium in this nation. I am convinced that we will win.”

Boric and Kast have risen as voters reject the coalitions that have ruled Chile for the last three decades. In a sign of discontent, economist Franco Parisi finished third in last month’s first-round vote, beating contenders who were backed by traditional parties even though he never set foot in the country.

On Saturday, Parisi threw his weight behind Kast, saying his party chose him on an internal vote and he himself supports the right-winger.

Chile’s stock market surged the most in the world after Kast topped the November vote before giving up those gains as surveys showed Boric pulling ahead. 

Government deficit is expected to surge to 8.3% of gross domestic product this year on billions of dollars of pandemic aid, according to the latest public finance report. That compares to a gap of 1.7% of GDP recorded in 2018.

Chile’s benchmark stock exchange has whipsawed in recent days. It jumped 2.8% on Thursday as a poll showing the presidential race as neck-and-neck circulated among traders. On Friday, the gauge fell as much as 2.4% before paring losses and closing down 0.8%.

Boric remains the favorite at this point, according to Mauricio Morales, a political scientist at Universidad de Talca. Still, Kast is capable of pulling off a victory if there’s “strong turnout in wealthy communities, rural segments and the north of the country.”

The winner of Sunday’s vote will preside over the drafting of a new constitution, which will be put to a referendum in 2022. The drafters elected to rewrite it lean left. Kast initially opposed calls to overhaul the charter and has questioned the body that’s writing the document on multiple occasions, while Boric has vowed to support the process.

The next president will contend with economic growth that will slow from a record high near 12% this year to a rate closer to 2%, according to the central bank. Policy makers are raising the interest rates to tame soaring inflation.

Much of Latin America is in pandemic turmoil and the election will set a tone that will influence neighbors with upcoming elections, including Colombia and Brazil. They too are facing polarized politics.

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