Much of Latin America is thriving — and no country more so than Chile. The economy has grown at an average rate of nearly 6 percent annually over the last three years despite turbulence in global markets and a devastating earthquake at home, putting Chile on track to become, within a decade, the first nation in the region to achieve developed-country status.
The country’s ascendance will be on full display when Chile hosts a summit meeting on January 26 and 27 among 43 heads of government from Latin America and the European Union, including Chancellor Angela Merkel of Germany, Prime Minister Mariano Rajoy of Spain, and presidents Dilma Rousseff of Brazil and Enrique Peña Nieto of Mexico.
President Sebastián Piñera sees the gathering as a watershed in relations between the Old and New Worlds. “The fact that Europe is in recession and that most of Latin America has been growing over the last few years makes this summit quite different from previous ones,” Piñera told Institutional Investor in an interview at La Moneda, the presidential palace in downtown Santiago. “We are no longer asking for aid. We want more free trade. Many Latin American companies are investing in Europe, rather than just the reverse.”
Piñera spoke after a quick trip to Antarctica, where he inaugurated a Chilean research station in –20 degree Fahrenheit weather. He returned to a Santiago that was sizzling in the near 90-degree heat of the Southern Hemisphere summer.
The president is hoping his poll numbers will also warm up. Last year, amid student protests over high university fees, his popularity rate plummeted to the low 20s, figures not seen for a Chilean leader since the waning days of the dictatorship of General Augusto Pinochet in the 1980s. Piñera’s rating has recovered to a range of 31 to 36 percent in recent polls.
His supporters argue that public recognition of Piñera’s government’s economic achievements has been a long time in coming. “I don’t think we have been treated fairly by most people,” says Finance Minister Felipe Larraín. “This is a country where unemployment is going down and wages are headed upward. I mean this country is doing well.”
Part of the problem is that the center-right president and some of his ministers are wealthy entrepreneurs who assumed that business prowess could easily translate into political success. Piñera is a self-made billionaire who turned LAN Airlines, a foundering former state-owned airline, into a successful carrier. “Piñera is terrifically personable on a one-to-one level,” says one businessman. “But he comes across as a know-it-all at larger gatherings and on television.”
The contrast with his Socialist predecessor, Michelle Bachelet, grates with Piñera followers. Chile’s annual growth rate averaged barely 3 percent during her presidency, which, it must be noted, included the global recession year of 2009. Her government was also faulted for not moving quickly enough to warn the populace of the dangers of a tsunami following the devastating February 2010 earthquake, which resulted in at least 550 deaths, mainly from the tidal wave.
Yet Bachelet, who is expected to seek to regain the presidency in November’s election, enjoys a commanding lead in opinion polls. (The constitution bars sitting presidents from seeking reelection.) “Tiene entrada — she connects with people,” says Jorge González, a Santiago taxi owner. “Whenever anything went wrong in her government, people would make excuses for her and blame her ministers. It’s the opposite with Piñera.”
A joke making the rounds among Piñera supporters tells of the president walking across a turbulent sea to save the pope from drowning, only to have newspaper headlines lament: “The president can’t swim.”
The Piñera government certainly hasn’t gained the recognition it deserves for its efforts to rebuild Chile after the 2010 earthquake and tsunami, which destroyed one out of every three schools and hospital beds and flattened ports, airports and bridges only days before Piñera took office. The president vowed a complete reconstruction by the end of his four-year term in March 2014. He’s almost there. At the beginning of this year, 87 percent of schools and 99 percent of hospital beds had been restored.
In the past, the developed world has often showered struggling Latin American countries with advice. In view of Japan’s mishandling of its own 2011 earthquake-and-tsunami disaster and the still-lagging recovery of New Orleans eight years after Katrina, perhaps it’s Chile’s turn to make suggestions — at least on how to better cope with natural catastrophes.
But don’t expect this week’s gathering of Latin American and European leaders in Santiago to be the forum for advice. “We won’t approach this summit offering lessons to anybody,” says Piñera. “We just hope this will be the first Latin America–Europe summit where we will be talking more as equals.”
