All you need to know about Iberian America

The Uncertainty on Chile’s Future Stability for Foreigners

Over a year ago or so, massive protests happened in Chile with the biggest march in Chile’s history occurring.

The reason?

Well, technically it was because the price to use the metro in Santiago increased by 4 cents.

However, it’s more than that.

In reality, the price increase was more of a representation of issues that has made life difficult for a lot of people in Chile

Large socioeconomic inequality.

Rising cost of living while wages remain relatively low.

And as the protests grew large and destructive…

It brought about a vote ultimately to change the constitution or not.

Especially as there are many other issues that many Chileans feel the need to address like issues that indigenous communities face.

To, above all else, get rid of the legacy of the Pinochet dictatorship by replacing the constitution that was drafted during that era.

Now, as I have written elsewhere on this website like in my very first article here, I entertained different things to consider before choosing a Latin country to live in…

As I wrote in that article, Chile has always been a top choice for me one day.

However, given the great changes that Chile is going through these days, it does make me wonder if that country will always remain a good choice to settle down in.

In my mind, I’ve always considered this changing of the constitution as likely to produce 1 of three outcomes:

  • Chile becomes like Argentina (relatively wealthy compared to the rest of Latin America but with immense economic problems every decade or so).
  • It somehow becomes like a Nordic country (less socioeconomic inequality, most people seemingly living a great life, much safer than how it already is, extremely boring but very beautiful, much more expensive to live in, seemingly a place everyone references as a model country).
  • No noticeable changes.

Granted, maybe there are other ways things will go about.

But before we get into more of my thoughts about how things could change along those 3 paths mentioned above…

Let’s at least try to find whatever facts I can online regarding what has been going on so far with the constitutional changes.

Fact Finding Mission

On October 24, 2020, 78% of Chile voted to change the constitution.

The same people also voted on having the new constitution being drawn by an assembly that is 100% voted in by the people instead of an assembly that is 50% made up of Congress.

The 155-member constitutional assembly has to consist of half men and half women with 17 of the seats being reserved for indigenous people.

People to be on the assembly are voted in each district as voters choose among a list of candidates.

It is in charge of drafting up the constitution that has to be voted on.

On May 15 and May 16 of 2021, a second vote was held electing the specific people that are now on that assembly.

And what were the results of that vote?

Well, here’s a quote from this article here:

“The ruling center-right Chile Vamos coalition had its worst showing since the country’s democratization three decades ago, failing to achieve the one-third minority needed to veto any proposed constitutional articles. Further, a left-wing coalition including the Communist Party and the progressive Frente Amplio coalition obtained more seats than the coalition that includes the traditional center-left Concertación coalition.”

Effectively, you need two-thirds of the assembly to pass any bill to be included in the final draft of the constitution.

So while the establishment coalition can’t veto any bill with more progressive intentions from being included…

This also doesn’t mean that every progressive measure will be included necessarily because it still needs the high threshold of two-thirds.

But it does make it all the more likely that the final draft will include a lot more progressive bills in it.

A third vote to accept or reject the new constitution will be now held as late as September 2022.

A large part of the issue that many folks have had with the current constitution is, from my understanding, its relationship with Pinochet and also the privatisation of education, pensions and healthcare.

That last issue is particularly troublesome for some of the citizens in Chile.

Though many folks argue that Chile’s constitution has made it a more attractive country for investment that has helped bring poverty down and development up….

Others argue that limits in the constitution make it difficult to direct public funds to address issues like socioeconomic inequality.

The reason being is that to address specific sectors like education, pensions or healthcare, you have to get a supermajority in parliament to pass any changes because of the constitution.

After the recent massive protests happened in October 2019, conservative President Piñera felt enough political pressure to bring the topic of changing the constitution to a vote.

And so the vote passed.

At any rate, it’s obviously difficult to predict what exactly the new constitution will look like.

But, from my understanding, many of the protesters wanted to put new things in the constitution that guarantee “rights” for women, indigenous people, other types of social rights and more.

Of course, that’s all extremely broad.

From what I can tell, demands include “easier access to education and healthcare.”

So, if I had to guess, I’m pretty sure they want a public option then or more government spending on things like that.

Probably more government spending on a public pension system if I had to guess.

Perhaps legalized abortion in the constitution when it comes to “women’s rights” and perhaps “better land right guarantees” for indigenous people.

So on and so on.

Those are just obvious guesses since so much of what I’m seeing online is relatively vague.

There is this article though by the Washington Post that provides a poll saying the following:

“A survey taken in late 2020 showed that 69% of Chileans want a new constitution to guarantee social rights in pensions, health care and education, with 23% seeking better salaries and quality of life and 18% looking to change the country’s economic model. More recently, a separate poll identified crime, unemployment and poor health care as the three main problems facing the population in general.”

Of course, there is no guarantee that this constitution will pass.

First, even before the final draft is presented, it should be remembered that the largest voting bloc in the assembly drafting the constitution are independents and they might not provide enough votes on every progressive bill to get the two-thirds vote needed.

After that, it gets voted on obviously.

And if not passed, it’ll simply be rejected and Chile might very likely then have more protests in the future until another shot is taken at the thing.

Given that only 40% or so of the population even went outside to vote on the measure to change the constitution or not…

And given that everyone is required to vote on the final draft when it is presented, that does imply some risk for it not being accepted.

Plus, not everyone will be in agreement with the more liberal ideas that some want to put in the constitution…

In short, It could prove difficult to get a more progressive constitution passed.

If it includes too much compromise, it might piss enough people off to not vote in passing it.

Either way, those are the main facts that I could find regarding what has happened so far.

If you have anything to include that you feel is important or any information in this section of the article that you feel is misleading….

Please let me know in the comment section and I’ll fix it!

But this is what I’ve come to understand so far based on what I could find online.

Now let’s get to my thoughts on the matter.

Final Thoughts

As I said before, my thoughts really break down into Chile turning out into one of the 3 scenarios:

  • Chile becomes like Argentina (relatively wealthy compared to the rest of Latin America but with immense economic problems every decade or so).
  • It somehow becomes like a Nordic country (less socioeconomic inequality, most people seemingly living a great life, much safer than how it already is, extremely boring but very beautiful, much more expensive to live in, seemingly a place everyone references as a model country).
  • No noticeable changes.

After going through the information online, my opinion is even stronger now on Chile going down one of those 3 paths.

If you had to ask me which I think is more likely, I’d guess maybe number 3.

But this is from a completely novice opinion of someone who is not very familiar with Chilean politics.

The reason why I argue for number 3 is that I’m willing to bet that maybe the constitution draft doesn’t get the necessary votes to pass.

First, while the establishment is not able to veto any individual bill alone, you still need two-thirds for those individual bills to pass.

With independents making up a decent portion of the assembly, there’ll have to be some compromise I’d imagine.

Second, you still need a significant portion of Chile’s citizens to approve the final draft.

As I said before, only about 40% or so of the people left to vote on changing the constitution.

I’d imagine that many of those individuals were likely those that were very pissed off protesting.

With the remaining 60% of the population forced to vote on the final draft, it’s left unclear if they will bring enough votes in favor of whatever “progressive” bill that passes.

Third, if enough compromise is made on the draft of the constitution and what bills are included, I can see enough voters who are more to the left becoming pissed off and voting against the constitution from passing if it isn’t “progressive” enough.

This would be similar to Bernie Sanders voters saying “fuck Hillary Clinton” during the 2016 election.

Which, as a side point, isn’t to blame them solely for her loss but more to demonstrate that there are some progressives who simply won’t vote in favor of something if it isn’t progressive enough for them.

Fourth, even if the new constitution passes, there’s still a possibility that it reaches a solid compromise that doesn’t fuck over the economics of the country.

On the other hand, I can see how the constitution can pass:

First, from what I’ve read, there’s been consistent effort over decades to change the constitution. It feels like there’s a lot of momentum to push people to say “fuck it, let’s get it done already and change the damn thing.”

Second, what if not enough progressives get bitchy about it not being progressive enough? What if enough of them are like “OK, it’s good enough” and side with a compromised constitution that also satisfies those not too far to the left.

Third, from what I read, it seems like there is a strong enough “fuck the establishment” vibe coming out of the politics of Chile. From what I read, even the independent bloc of the Assembly has a bit of that supposedly.

In the end of the day, it’s obviously impossible for me to predict how this will play out…

Especially as we don’t even know what specific measures will be included in the constitution.

Of course, there’s risk to all of this.

For starters, there’s political rick as this article from Foreign Policy lays out here:

“But the process has risks. New constitutions forged in the last two decades in neighbors like Bolivia, Ecuador, and Venezuela demonstrate that populist and nationalist impulses can win out.

Without a check on their power, elements within the left may be tempted to try to use the new constitution to vanquish their political foes once and for all by biasing electoral rules in their favor or hobbling political bodies that serve to foster deliberation and due legal process.

Take Venezuela, which is now used as a cautionary tale throughout the region. Its new constitution in 1999 and subsequent revisions in the 2000s eliminated the Senate, weakened the independence of the judiciary and electoral commission, and provided a road map to supplant a duly elected legislature. Hugo Chávez helped craft these changes and then exploited them to aggrandize his power. This set the stage for Venezuela’s subsequent spectacular economic collapse and slide into authoritarianism.”

Is there risk of such similar measures being put in Chile’s new constitution?

Sure – anything is possible.

But what does history show us?

First, in the past few decades, Chile did make political changes to their constitution like removing 10 unelected senators from the upper chamber of their parliament that were put there by Pinochet’s constitution.

They also voted to put the military under the control of the president.

Among others.

But those are changes that sound pretty reasonable and involve making the country more democratic.

Not really the same as “punishing your enemies.”

Second, it seems that, based on what I read, changes in the constitution might be more focused on “social rights” than trying to change the constitution.

At least based on what the voters have been angry about.

However, that’s not necessarily the case if we consider what politicians might try to do with it.

Third, we have the case of what previous Chilean President, Bachelet, wanted.

Though she isn’t in the Assembly, according to this article here, she did have influence in 2018 on bringing the issue forward before the current guy got in office.

When it comes to political changes, what she wanted specifically included the following: “eliminate the supermajority needed to pass some laws and create a better balance between the executive and legislative branches.”

Granted, “a better balance” between those two branches seems a bit broad in my opinion.

Eliminate the supermajority to pass laws?

Well, I’m not Chilean so I’m not sure how good or bad this idea is.

It sounds like, if Chile’s politics are or were to ever become extremely partisan, that it would simply make it easier for any one party to change the laws that the previous party passed.

All around creating uncertainty if you don’t have some bipartisan agreement established to pass anything that is more important.

Still, that’s just how I see it.

On the other hand, some might argue that needing a supermajority for stuff like that creates deadlock on getting things passed like reform on education, healthcare or pensions.

So I get both sides but my opinion leans towards the former than the latter.

Then there is this other article here that claims that Bachelet also wanted these following political changes to be included: “reforming the powers of the Constitutional Court while also introducing new appointment mechanisms for its judges, among proposed changes.”

Which, similar to finding a “balance” between the executive and legislative branch, this also sounds a bit vague to me.

“New appointment mechanisms?”

“Reforming the powers?”

So, while I don’t like entertaining the idea of any particular country becoming “the next Venezuela,” as I wrote about here

I agree with the point of view in that article cited away above that there is precedent from recent South American history to be concerned about the political ramifications of changing the constitution.

In which, as we know, said political ramifications would obviously have great economic consequences.

But what if a new constitution is passed and it gets a lot of what the progressives want?

Well, in that case, obviously option 3 of “no changes” would not be reality.

In my opinion, we see either a country that might look more like Argentina (though the pessimists would say Venezuela) or maybe something out of a more developed European country.

The quote from this article here summarizes it nicely:

“And yet, if Chile succeeds in preserving the positive elements of its model and addressing its major shortcomings in an orderly manner, it could become an inspiration for the rest of Latin America, which faces similar challenges. Achieving this would likely entail, for example, transitioning to a genuine social market economy with better public services, universal social protections, and mechanisms to reduce extreme inequality.

If Chile fails, it is bound to create a deeply worrisome precedent for the future of the entire region, where structural weaknesses were brutally exposed during the pandemic and where democracy can be expected to come under significant pressure.

After all, Chile is, in many ways, well-positioned to find a solution, given the relative strength of its institutions, vibrant civil society, free media, and decent economic performance in recent years.”

That’s obviously a nice way to put it.

A broad enough conclusion that you allow both possibilities to happen so you don’t have to take a firm opinion on something and tell us definitely what will happen.

Though, to be nice, it really is the best opinion we can get here from my perspective.

Until we even know what the hell they’ll include in the draft of the constitution, we can’t say for sure what it’ll do necessarily.

Or even if it passes all together.

But, as I said, a part of me just feels like Chile is more at risk of becoming another Argentina than some country like Norway.

Though Chile is one of the few Latin American countries in the OECD and one of the most competitive economies in Latin America…

That doesn’t mean it can’t fall.

In recent years, Chile has been falling in terms of competitiveness according to the World Bank and the Global Competitiveness Report.

And while proposals to be included in the new constitution like reinforcing the workers right to strike could arguably make the country even less competitive…

You also have the issue of being able to afford the increased government spending that proponents of the new constitution want.

Keep in mind, a lot of Chile’s economy comes from the selling of commodities like copper for example.

Which makes up 53.6% of Chile’s exports.

With the price of commodities fluctuating a lot more

You have risk of some future government having to increase spending a lot because of changes in the constitution…

Then, let’s say during a commodity boom like we saw during the Pink Wave, the new government can afford all of the spending.

But then the commodity boom crashes and Chile has to spend less.

Though what if there is a progressive party in office that can’t decrease spending because it’ll piss off the same people who elected them?

Economic issues like inflation, greater debt to GDP ratio, etc.

Or you have a right wing government in power that cuts the spending needed through austerity measures and privitization policies like we've seen in other countries...

And then massive protests among poor people like we saw with the simple 4 cent price increase using the metro that sparked all of this constitutional change to begin with.

Simply put, you need a more competitive economy that isn’t as dependent on commodities or at least not just one commodity dominating half of your exports to afford the increased spending in my opinion.

Both scenarios having happened plenty of times in numerous other Latin American countries in recent history.

Consequently, you run a greater risk of economic issues like going default on your debt like Argentina has done as you can see here.

Once a “top 10 economy” in the world….

And a hundred years later, for numerous reasons (and not just economic), has fallen quite a bit.

Despite the risk though, I do agree that socioeconomic inequality is a problem in Chile and that something needs to be done to address it in whatever the most economically sound way going forward.

Plus, the constitution of Pinochet is illegitimate from a democratic value point of view and I’d agree with letting voters change it.

Again, this is all just my opinion.

I could be wrong.

Hopefully, Chile becomes a much more successful country with a better constitution…

And we can all enjoy life in the prosperous Andes mountains and all of Patagonia before us.

With Chilean wine or something and maybe some empanadas or whatever.

Anyway, that’s all I got to say.

Enjoy this video below here of some Chilean rock band to finish this article with.

Got any comments yourself?

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Thanks for reading.

Best regards,


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