A new Constitution in Chile: Elections for the Constitutional Convention
In 2020, after a year of mass protests and social discontent, Chileans decided through a national plebiscite to draft a new constitution.
With that objective, elections took place on May 15th and 16th to choose the members of the Constitutional Convention tasked to write the new text. Results showed a defeat for the ruling party, with more than half of the elected constituents coming from independent lists and the opposition. Some of them have proposed radical changes to the Constitution, already causing volatility and uncertainty in the economy.
Why change the Constitution?
Chile’s current Constitution was written in the 1980s under General Pinochet’s military regime. Despite being amended in 1989 and 2005 to eliminate remnants of the dictatorship, a majority of Chileans still believe the Constitution to be illegitimate given its origin.
However, what mainly drove protests in 2019 was the state's minimum intervention in guaranteeing basic social rights. In Chile, education, health, and social security are all privately handled and minimally supervised by the state, making it expensive for low- and middle-income families to access quality services.
Pinochet's Constitution also created a presidential system where the head of the executive became disproportionally more powerful than both legislative cameras. Consequently, political parties are weak and institutional rigidity hinders any change the President does not favour. One of the goals for the new constitution is to regain balance between branches and promote collaboration between them.
Lastly, elected members could also attempt to modify articles related to extractive industries and water management. The military regime gave great importance to the mining sector and its development without addressing its environmental impact. Today, copper is Chile’s main natural resource, which attracts significant foreign investment. Profound changes to the constitution could have detrimental effects on the sector and spill over into other industries.
The 2021 Elections
In an effort to promote equality and increase participation, several innovative mechanisms were implemented in these elections: mandatory gender parity, 17 seats reserved for indigenous people and, most importantly, independent candidates were allowed to compete. Results showed that these initiatives turned out to be at least partially effective.
Approximately 30% of the elected assembly members do not have any political affiliation. Additionally, a coalition of relatively new left parties obtained 18% of the seats and the indigenous people received a little over 10%. These numbers describe clear discontent with traditional parties from both the right and left, and with the current government. The list “Vamos por Chile” that represented President Piñera’s centre-right coalition obtained only 37 of the 155 seats. However, participation numbers were not as high as expected, with only 42% of Chileans voting. This is relevant because to approve the new Constitution citizens have to agree to it by a referendum in which voting will be compulsory.
A two-thirds majority is required to pass the new Carta Magna in the Assembly. Given that neither the government nor any opposition coalition managed to capture enough votes, compromise will be needed. The same rules apply for passing any article, so a political tug-of-war is to be expected. Members of the Constitutional Convention will have nine months to write and agree on the text. During that time, economic instability is a risk, considering possible changes to privately-owned public services and the mining industry.
What to expect
After results started to arise, Chile's stock market closed down 9.3%, the biggest decline since the pandemic started. Additionally, the Chilean peso experienced a fall of 2.3%. This was caused by the government’s poor electoral performance and the victory of more radical candidates that could try and reverse the Constitution's market-friendly regulations. With only 23% of seats, the centre-right parties will be unable to block any of these modifications, causing uncertainty for business.
Nevertheless, no party has a clear way to make changes on their own and compromises will have to be made. Additionally, reformers have disagreements over the depth of these changes and may not present themselves as a unified front. However, this also entails the risk of causing more social unrest. Given the high expectations put into this new Constitution, if those expectations are not met, discontent and protests could reappear.
Finally, no matter how different this new constitution turns out to be or if it actually addresses some of society’s key demands, these elections gave candidates a way into politics outside the traditional path. With more representation for indigenous groups and women, Chilean politics are undergoing renovation, and it is up to mainstream parties to evolve or fall behind.