Chile's Dictator-Toppling Coalition Splits as Elections Loom

(Bloomberg) -- The coalition that brought back Chilean democracy and a quarter-century of political stability and economic prosperity is breaking apart.

The seven-party Nueva Mayoria coalition can’t agree on a candidate for November’s presidential election, with the two bickering factions each planning to field their own contenders. Worse still for the center-left bloc, it may go into the congressional vote with two separate lists of lawmakers, ending any chance of a parliamentary majority.

The infighting leaves the door open to billionaire and former President Sebastian Pinera to win back the presidential palace. As Pinera pledges to overturn Bachelet’s flagship reforms in education, labor relations and taxes, the president is fighting back, using her last state-of-the-nation address to call for unity within the coalition to defend her legacy.

“Nothing of what we have achieved is assured forever,” Bachelet said June 1. “I want to ask, especially to the progressive democrats of Chile, who have accompanied me in this government, unity in action and loyalty to the principles that brought us together.”

Click here, for more on the coalition’s long road to division

Bachelet, a socialist, highlighted the reforms that brought free higher education to more than 50 percent of students and removed fees from almost half of primary and secondary schools. The reform, financed by higher corporation taxes, would help ensure a level playing field for those at the bottom, she said.

Economic Woes

Bachelet’s call to arms comes as 35 years of rapid growth falters and pressure mounts for further reforms to both revive the moribund economy and boost equality in South America’s wealthiest nation. Chile is currently enduring its fourth consecutive year of sluggish growth, the longest such period since the early 1980s.

The president said her reforms would help diversify an economy that has been dependent on copper and other raw materials for the past half century.

“We can’t continue doing more of the same to reach a new stage of development,” Bachelet said. “Not even to sustain the level we have reached so far.”

Chile can’t blame the slowdown of the past few years on copper alone, but on the exhaustion of a raw materials dependent model of growth, Bachelet said.

End of an Era

The coalition was formed in the late 1980s to challenge the then dictator Augusto Pinochet in a referendum over the future of his rule in 1988. They won that plebiscite and the subsequent election, ushering in 20 years of uninterrupted rule that oversaw economic growth averaging more than 5 percent and bringing stability to a country racked by political and civil conflict.

“The dissolution of the Nueva Mayoria symbolizes the end of the transition to democracy,” said Kenneth Bunker, a Chilean political researcher at the London School of Economics and Universidad de Diego Portales. “For the most successful political force since the 1980s to come to an end can only be understood as a break in history.”

The coalition includes the Christian Democrats and the Socialists, and since 2013 the Communist Party.

Election Time

The country’s first round of voting takes place on Nov. 19, with a run-off on Dec. 17 should no one candidate win more than 50 percent.

Pinera had the backing of 25 percent of voters in May, according to a poll by GfK-Adimark. That compares with 21 percent for Alejandro Guillier, a former TV pundit and favorite among the left in the Nueva Mayoria, and 3 percent for his rival Carolina Goic, the Christian Democrat candidate.

Whoever wins the vote is unlikely to gain a congressional majority. Yet, that doesn’t mean the paralysis of the legislative agenda, said Patricio Navia, a political scientist at New York University. The government will be able to cajole elements of the opposition to back their proposals -- rather than having to persuade the entire bloc, he said.

“There will be more actors willing to negotiate their votes in congress in exchange for specific concessions,” Navia said. “The price tag of the negotiations for the government will actually be lower, not higher.”

-- For more stories on the presidential election, see the articles below:-

Billionaire Unleashes Chile’s Animal Spirits as Election Nears
Chile Presidential Hopeful Looks to Old Trick to Revive Growth
Insulza Says He Is the Man to Restore Chilean Business Sentiment
Kast’s Radical Plan to Transform Chile; Overhauling the Overhaul
Chilean Candidate Ossandon Backs Free Markets With an Iron Fist
Chile’s Moderate Radical Who Wants to Dismantle Neoliberalism
Former TV Pundit Looking to Lead Chile Says Forget the Populism
No Antiestablishmentarianism Here, Please, We’re Chileans

To contact the reporters on this story: Javiera Quiroga in Santiago at jquiroga5@bloomberg.net, Philip Sanders in Santiago at psanders@bloomberg.net.

To contact the editor responsible for this story: Vivianne Rodrigues at vrodrigues3@bloomberg.net.