Boric confirms his turn to the center before the fearful Chilean business community

Aware of the fear that his alliance with the Communist Party arouses in the markets, the president-elect of Chile, Gabriel Boric, confirmed his turn to the center and promised “profound” changes to the local business community, but with “dialogue” and “fiscal responsibility”.

“My words regarding gradualness and fiscal responsibility were not a campaign disguise, but a deep conviction,” said the former student leader.

At the closing of Enade, the most important business forum in the country, Boric indicated that his government will undertake “a path of profound changes”, but these “must be carried out with a broad dialogue and without exclusions”.

“The best examples of when societies get ahead is when they come together and I am going to insist on that speech,” added the former student leader who, at only 35 years old and with more than 4.6 million votes, became the president on December 19. youngest elected president and most voted in the history of Chile.

He won almost 12 points over far-right José Antonio Kast, the business candidate, and won the support of great figures of the center-left such as former presidents Ricardo Lagos (2000-2006) and Michelle Bachelet (2006-2010 and 2014-2018).

His overwhelming victory made the main index of the Santiago Stock Exchange fall by 6.18% the next day, while the dollar registered an increase of almost 4%, its highest daily rise since the financial crisis of 2008, reaching 876 Chilean pesos.

“The status quo holds back development”

A defender of the constituent process in which the country is immersed and a staunch critic of the neoliberal model installed during the military dictatorship (1973-1990), Boric wants to expand the role of the State towards a welfare model similar to that of Europe.

“Our current status quo slows economic development and deepens social unrest. Growth and distribution of wealth have to go hand in hand,” he said.

The still deputy for Magallanes is in favor of a new pension system that replaces the current one, of individual capitalization and inherited from the dictatorship, and defends an ambitious tax reform that includes greater burdens on the super-rich and mining companies.

The reform, he explained, cannot be seen “as a confrontation between social classes” and should point towards “a regime more similar to that of most OECD countries, both in terms of collection and progressivity.”

“Let’s reach an agreement that is good for the country,” urged the future head of state, who will take office on March 11 and will be the first not to be part of the two traditional center blocs that have governed since the return to democracy. .

Who will occupy the Treasury?

Boric’s intervention in the business meeting took place days after he officially presented his future cabinet and with countless cabals about who will occupy the key positions, including the Ministry of Finance.

Recurringly asked about the formation of his future team, of which no name has been leaked, the deputy usually answers that this “will grant certainties” and will be “equal” and “diverse”.

Boric will inherit an economy that collapsed 5.8% in 2020, the biggest drop in forty years, but that has recovered faster than expected: the Central Bank estimates growth of between 11.5% and 12% in 2021 and between 1.5% and 2.5% for this year.

The economic aid provided by the Chilean government to mitigate the impact of the pandemic, as well as the three early withdrawals of 10% of the pension funds approved by Parliament also to face the crisis, are considerably boosting consumption, but also having repercussions on inflation.

The leftist leader promised businessmen to maintain a structural deficit of around almost 4%, a goal that will not only contribute “to the stability of public finances, but also to the reduction of inflationary pressures.”

Chile closed 2021 with accumulated inflation of 7.2%, the highest in 14 years, after prices advanced an unexpected 0.8% in December.