Chile: candidate José Antonio Kast bets on more growth to alleviate social unrest

Two years after a social uprising against inequality in Chile, the new rising star of the presidential race wants to restore order, cut taxes and refocus the government’s efforts on growth, according to his top economic adviser.

Through a reduction in corporate and sales taxes, and a reduction in red tape and legal uncertainties for investors, Jose Antonio Kast aims to return the economy to growth rates of the 1990s, when expansion averaged 6.1% per year, he said Eduardo Guerrero placeholder image In an interview. Growth averaged 3.3% in the last decade.

It is a risky policy in a country divided by social discontent, but one that has allowed Kast to surpass the center-right candidate in the polls and fall short of the leftist. Gabriel Boric.

The first round of the presidential elections is scheduled for November 21. closet, admirer of the military regime of Augusto Pinochet and often compared to the Brazilian president, Jair Bolsonaro, also defends deeply conservative social values.

“We want to resume the growth rate we had during the 90s“, said Guerrero. “We want those elements that depend on public policies to be very pro-investment ”.

The call of closet Giving a more important role to private industry differentiates him from other candidates who consider that a greater role for the State is key to mitigating social unrest.

Tax cuts

closet, son of Germans who emigrated to Chile After WWII, he wants to cut the corporate tax rate from 27% to 17%, and reduce the sales tax from 19% to 17%. At the same time, he talks about phasing out estate taxes, such as inheritance tax.

Even with those lower rates, faster economic growth will boost government revenues and free up resources for social spending, he noted. Guerrero. The use of technologies such as blockchains will also make public administration more efficient.

Improving people’s economic well-being will ease social tensions in the future, he said. Guerrero, 38 years old. Uncertainty and slower growth have hurt confidence, delaying real-life decisions like buying a home.

“There is a growing frustration of many people who got used to the economy growing and the quality of life improving“, said. But since “approximately 2012 to date, real income has stagnated. Economic growth was extremely poor. That generates frustration”.

‘Populist’ policies

Guerrero, who has a master’s degree in economics and another in taxation, said that proposals “populistsAs early withdrawals from pension funds only add to the problems by stimulating inflation. Lawmakers have approved three rounds of recalls since the start of the pandemic and a fourth is currently under review.

People “they realize that bad public policies are affecting them very directly“, Held. “Many who are in Congress today mistakenly think that people don’t understand these things. But nowadays people are experiencing it firsthand”.

Chile, one of the richest nations in Latin America, will grow as much as 11.5% this year thanks to billions of dollars in temporary stimulus during the pandemic. Then growth will hit a wall next year to slow to about 2.5%, according to the central bank.

The rise of Kast

closet, a lawyer and father of nine children, has spoken out against same-sex marriage, opposes abortion in all circumstances and proposes the construction of a ditch in parts of the border of Chile to stop illegal immigration.

At the same time, the message of law and order of closet it has resonated with some voters who are fed up with years of violent protests, as well as an insurgency among indigenous groups that has sparked a state of emergency in areas of the south.

On October 18, demonstrations broke out across the country on the second anniversary of the 2019 social outbreak, leaving two people dead and 450 arrested.

For the team closet, avoiding a return to left-wing politics is a priority while Chile is preparing for the elections, according to Guerrero. If no one receives at least 50% of the votes in the first round, a second round will take place on December 19.

“The stakes are high“, said.