Chile: Business as Usual Under Michelle Bachelet

A year ago Michelle Bachelet came to power and promised to change Chile. Women would take the center stage in the first country to have gender parity at both ministerial and senior civil service levels.

The old-boy networks that have long divided up the spoils of office were to be marginalized and a new generation of younger, more in touch and less corrupt faces brought in. "No one gets second helpings," said Bachelet underlining her pledge that ministers who had served in any of the three previous Concertación governments wouldn’t get a place in her cabinet.

Above all Bachelet promised a new style of "participatory government", divorced from the businessmen, military chiefs and priests who long wielded de facto power in Chile and "closer to the citizens" who had chosen Bachelet as their candidate.

One year, and a disastrous transport reform – the Transantiago – later, things have changed, radically. On March 26 – with the average passenger in Santiago spending two hours more a day getting to and from work; 560 thousand people left off the buses; and a collapsed metro system advising young mothers and the elderly not to risk entering the scrum to get aboard brimming carriages – Bachelet gave up her plans of changing Chile and announced her second major cabinet reshuffle.

Whereas in her first shake-up, last July, the President was careful to preserve the equilibrium between men and women in her government, this time, the demands of the party elites trumped gender parity. Paulina Veloso, the presidential general secretary, was ousted and replaced by José Antonio Viera-Gallo an old baron of the Socialist party now reinvented as a figurehead of the liberal left. The defence minister, Vivianne Blanlot, also lost her job which was given to José Goñi, an economist and career diplomat with no experience of military matters. "The truth is I don’t really know the motive" for my departure, said Blanlot who stonily faced down jeers from Pinochet supporters in December as she alone represented the government at the former dictator’s funeral.

The transport minister, Sergio Espejo, was also sacked and a debonair business friendly Christian Democrat called René Cortázar put in his place. Cortázar has nothing of Espejo’s charisma and his only real qualification for the job seems to be his high level contacts in the business world. Lastly, and unexpectedly, the justice minister, Isidro Solís has been exchanged for the architect of the recent legal reform, Carlos Maldonado. Solís let the cat out of the bag by telling journalists that his removal responded to Christian Democrat’s demand that one minister from each of the coalition parties be purged so that it didn’t look as if they were taking the brunt for the Transantiago debacle.

In short, two women and two men left and four dour men took their places. Meanwhile the division of ministries between the four parties – Socialists, Christian Democrats, Radicals and Party for Democracy – that make up the Concertación coalition that has ruled Chile since democracy returned seventeen years ago, remains unchanged. The creation of two new ministerial posts – one occupied by a woman, Ana Lya Uriarte, who will preside over the National Environment Commission, the other by a man, Marcelo Tokma, who will head the National Commission for Energy – does nothing to compensate for the shortfall in female representation and looks like a bow to gender stereotyping.

One winner from this week’s reshuffle is the Concertación old guard. The mainstay of the coalition’s first three governments was the backroom alliance between the Christian Democrats and those Socialists who had previously been members of MAPU: the Movimiento de Acción Popular Unitaria which broke away from the Christian Democrats in 1969, declared itself Marxist and went on to participate in Salvador Allende’s Popular Unity government.

A year ago it looked as though Bachelet had broken this mould and brought previously excluded secular socialists and more centrist Christian Democrats into the fore. But with José Antonio Viera-Gallo now in one of the most powerful positions in the country – the presidential general secretary is the bridge maker between legislature and executive in Chile – the officially defunct MAPU are back with a vengeance. Viera-Gallo has over ten years experience in parliament and his appointment was warmly welcomed by Chile’s rightwing opposition who see him as a man they can deal with.

But predictably the people who stand most to gain from Bachelet’s troubles are the businessmen who own most of Chile and the liberal economists and technocrats who represent their interests. The political scientist Patricio Navia wrote in Tuesday’s Tercera: "The arrival of René Cortázar is evidence of the victory of those that want to work with (not against) the private sector, in order to give the capital a decent transport system." The arrival of another liberal economist, Marcelo Tokma, to the government is also seen as evidence that the Finance Minster and former Harvard economist, Andres Velasco, is consolidating his power within Bachelet’s cabinet.

For anyone who doesn’t know Chile that must seem odd. Government insiders say that Velasco convinced President Bachelet to go ahead with the launch of the Transantiago in February when she was inclined to postpone until later in the year. Furthermore the free-market ethos behind the ill fated plan – which involves individual bus companies operating different services around the city while the state is left to coordinate but not to subsidise the melee – bears Velasco’s hallmark.

Of course, no one can argue that Santiago – one of the earth’s most polluted cities long overrun by unregulated, unsafe yellow buses that hurtled around belching out black smoke – was not in desperate need of a transport overhaul. Clearly the idea of integrating the highly efficient state owned metro with periphery bus services was a logical step in the right direction.

However, the initial plan drawn up by Ricardo Lagos’ government in 2004 estimated that the reform would need 6,500 new buses to replace the estimated 9,000 then on Santiago’s roads. After the government imposed caps on fares and the finance ministry refused to subsidize the scheme the number of buses that private operators agreed to field fell to 4,600. This figure had in theory risen to 5,600 prior to the plan’s launch in February. There are presently only around 4,800 buses on the streets, however, and weeks of fighting between the companies and the government have not clarified who is responsible for the shortfall. Meanwhile the plan envisages fare increase of 20 per cent.

Velasco, who sits on a huge war chest thanks to record copper prices, is unrepentant and insists that the reform doesn’t require state subsidies. "It’s a system designed with a financing mechanism and that mechanism is operating," he said at the beginning of March as millions of weary Santiago residents waited hours to get home to loved ones.

Benito Baranda the social director of the catholic charity Hogar de Cristo says: "The Transantiago has been the worst humiliation for the poor in a long time." Chile has one of the worst income distributions in the world and repeated surveys find that Santiago is one of the cities were people work the longest hours. Yet, despite the promises that the new transport plan would improve the quality of life, the lot of the poor is now even worse. "People in the periphery are getting home an hour later and leaving the house an hour earlier," says Baranda. "Evidently the family life of the poor is being seriously affected." In the last three weeks there had been 193 protests organised by angry residents throughout the city.

In the face of this storm, former president Ricardo Lagos, eyeing the 2009 presidential race, has continually defended the plan’s "design" and tried to shift blame onto Bachelet’s government. "The way that the design is implemented is now the job of the current government," he said recently. Unfortunately for Lagos a recent poll by the Mercurio newspaper fond that 42% of Chileans held his government responsible for the crisis against only 17.2% who see Bachelet’s team as the culprits.

However, Michelle Bachlelet’s popularity ratings have also fallen sharply in the last month. Although she initially blamed the bus operators – saying in March that, "the private sector has not come up with the goods" – her tone was more resigned this week as she announced her cabinet reshuffle. "The people of Santiago, particularly the poor, deserve an apology from all of us," said an evidently tired president. "I accept governmental responsibility for the defects in the implementation of the Transantiago and the problems related to its design."

But is Bachelet really to blame? The irony of Chile is that a country that boasts the most efficient public enterprises in the world – the metro, the state run copper firm CODELCO, and the state bank – is dominated by a free-market fundamentalism that insists that private capital be free to invest how and where it chooses. The 1980 constitution actually limits the state’s role in the market and forbids it from intervening in areas of interest to private capital. The day after Bachelet’s reshuffle, Chile signed yet another Free Trade Agreement with an economic giant, this time Japan.

There is, of course, overwhelming evidence that the Transantiago would have worked perfectly had the state been left to plan and implement it in accordance with the needs of Santiago residents and not in accordance with the demands of private investors. But in a country where businessmen see the state as a threat, academics preach and teach neo-classical economics as dogma and a doctorate from Harvard is a condition sine qua non for the post of finance minister, such an alternative was always out of the question. Bachelet may have changed her cabinet. However, her dream of changing Chile into a meritocracy where people come before vested interests and quality of life comes before profit has, alas, come to naught.