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Chile president Sebastián Piñera: ‘We are ready to do everything to not fall into populism’

Chile president Sebastián Piñera: ‘We are ready to do everything to not fall into populism’

Billionaire leader preaches virtues of the market but reform agenda is bogged down

Determined to preserve his country’s reputation as a beacon of stability and sound economic management in a continent not famous for either, Chile’s billionaire president Sebastián Piñera defines himself as a committed crusader against populism. His fight is an increasingly solitary one.

Latin America’s two biggest economies, Brazil and Mexico, are governed by populists of the right and left respectively; neighbouring Argentina looks set to eject Mr Piñera’s close ally Mauricio Macri and return to Peronism in elections at the end of this month; and pro-reform presidents in Peru and Ecuador are fighting for their political lives.

But Mr Piñera is unbowed, invoking classical myth in his fight against the demagogues. “Ulysses tied himself to a ship’s mast and put pieces of wax in his ears to avoid falling for the . . . siren calls,” the silver-haired 69-year-old leader tells the Financial Times during a conversation at the presidential palace in Santiago. “We are ready to do everything to not fall into populism, into demagoguery.”

His vision for Chile is ambitious and wide-ranging: to boost growth after four lacklustre years under his socialist predecessor Michelle Bachelet by building the pillars of a knowledge economy. It means improving the quality of education, increasing investment in science and technology, raising the standard of institutions and modernising the state.

The wider goal is to achieve an objective that has eluded most of the world’s middle-income countries: becoming a developed nation, with gross domestic product per capita almost 50 per cent higher than Chile’s 2018 level of $25,200 on a purchasing power parity basis.

Seated in shirt sleeves at a circular table in his office, and waving printed sheets of economic data, Mr Piñera points out that growth rates under Ms Bachelet averaged just 1.7 per cent. “Today we are at 3.25, double, but we are still a long way off reaching the rate of 5 or 6 per cent,” he admits.

Now 18 months into his second (non-consecutive) term as president, one of Mr Piñera’s biggest obstacles is his lack of a congressional majority. The government’s tax, pension and labour reforms have been bogged down for months as hostile legislators try to amend them. The president’s tactics have been to negotiate and make concessions where needed. Some bankers and investors in Santiago feel he may have given too much ground.

Mr Piñera, who made his fortune introducing credit cards to Chile in the 1980s, waves away the concern, recalling words attributed to Winston Churchill that an optimist sees the opportunity in every difficulty. “We in the government are very optimistic,” he adds with a smile.

The president also hopes to raise Chile’s traditionally low diplomatic profile: he will host the Apec summit of Asia-Pacific economic powers next month and wants to make the case for open markets and try to end the “absurd” trade war between the US and China.

Donald Trump, who skipped last year’s Apec summit in Papua New Guinea, has not yet confirmed his attendance in Chile but Mr Piñera is hopeful that the US president will turn up. “One thing is that he has not confirmed, another is that he has not come,” he explains.

In December, Chile will host another big international meeting, this time the UN climate conference known as COP 25 (it secured the meeting after Brazil’s tempestuous rightwing leader Jair Bolsonaro pulled out) and Mr Piñera sees it an opportunity to tout the nation’s environmental credentials.

Chile was one of the first countries to commit to carbon neutrality by 2050 and Mr Piñera hopes that this year’s UN summit will see “much more ambitious and much more verifiable commitments than those reached [at the last conference] in Paris”. These should include binding pledges to protect the world’s oceans and forests, as well as the activation of global market mechanisms for environmental protection.

Closer to home, Mr Piñera is sympathetic to the electoral plight of his neighbour Mr Macri, who polls say will lose his bid for re-election in Argentina by a wide margin on October 27.

“Macri is a good guy,” he insists. “I have been very good friends with him for many years,” dismissing an aide’s suggestion that the remark should not be quoted.

But he is quick to point out the sharp differences between Chile’s consistently well-performing economy and its sickly Argentine neighbour, as well as the generally unhealthy region of which they form a part.

“Look at Latin America,” Mr Piñera said. “Argentina and Paraguay are in recession, Mexico and Brazil in stagnation, Peru and Ecuador in deep political crisis and in this context Chile looks like an oasis because we have stable democracy, the economy is growing, we are creating jobs, we are improving salaries and we are keeping macroeconomic balance . . . Is it easy? No, it’s not. But it’s worth fighting for.”

Michael Stott y Benedict Mander

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