Chile’s new draft constitution

An example for Pakistan on Independence Day

Next month Chile will hold referendum on a new draft constitution, as pointed out by a July 5 Associated Press (AP) News published article ‘Chile president receives draft of new proposed constitution’, whereb it was pointed out ‘President Gabriel Boric on Monday was presented with the formal draft of a proposed constitution meant to replace the charter imposed by a military dictatorship 41 years ago and usher in fundamental changes for Chile. …“This September 4th, it will once again be the people who will have the last word on their destiny,” Boric wrote on Twitter. …which includes 388 articles…’

The draft constitution categorically made a break from the neoliberal model that was ever so strongly injected into the country during the last four decades, starting from the efforts of ‘Chicago boys’ under General Augusto Pinochet’s rule in this regard. The same article highlighted this break– whereby the draft constitution reportedly made a strong shift towards social democratic model– as follows ‘In the first of the draft’s articles, Chile is described as a “a social and democratic state” as well as “plurinational, intercultural and ecological.” … Among other things, the draft would require a new public health care system and a process to return land to Indigenous peoples. It also lays out new rights, including the right to “adequate and dignified housing” and equal pay for equal work between men and women.’

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Reflecting upon the role played by ‘Chicago Boys’– which literally meant students educated in the neoliberal tradition at the University of Chicago, who later played a significant role in influencing/shaping economic policy in Chile in this direction– an article ‘The complicated legacy of the “Chicago Boys” in Chile’ pointed out ‘Under Augusto Pinochet’s dictatorial regime in the 1970s and 80s, the Chicago Boys conducted the farthest-reaching economic revolution in the history of Chile. …The Chicago Boys’ legacy is a controversial issue in Chile. On the one hand, Chile’s economic growth has been exceptional: its GDP leaped from $14 billion in 1977 to $247 billion in 2017. On the other hand, the country’s economic inequality is astonishing: 28.1 percent of the total income is concentrated among 1 percent of the population, making Chile one of the world’s most unequal nations. While the Chicago Boys’ policies did open some economic areas to real competition, they also concentrated capital among a small group of well-connected magnates. Since their implementation, powerful corporate groups born under Pinochet’s regime have used these pro-market ideas to avoid competition.’

The country has a chance for serious and meaningful change– to move away from the economic and social model forged by Pinochet. It is widely acknowledged that the neoliberal model first took hold not in Margaret Thatcher’s Britain or Ronald Reagan’s USA, but in Pinochet’s Chile. Under the dictatorship, the state was shrunk to the minimum, relinquishing to profit-driven businesses the provision of rights through the privatisation of public services.

As the world suffers from the ravages of climate change, pandemic, global commodity supply shock, and rising and high levels of inequality, and all this, among other reasons, weakening democracies globally, and increasing political instability in general, a common underlying theme for all this has come out as years of neoliberal assault, in a number of causal determinants including weak regulation, unfettered markets, and weakening of influence of voters on public policy in the wake of increasing role of vested interest through their high level of reported campaign financing of political parties.

Given this background, the draft constitution of Chile with strong non-neoliberal inclination has been applauded by a number of renowned economists/social scientists globally, as was highlighted by a recent celebratory letter from a number of noted economists/social scientists. In the letter for instance, it was pointed out ‘We believe that the new constitution sets a new global standard in its response to crises of climate change, economic insecurity, and sustainable development. The economic provisions of the Constitution would represent gradual but substantial advances for the people of Chile. …Taken together, we believe that the constitution creates a legal framework that will succeed to prepare Chile for a new century of equitable growth, with provisions to attract investment, protect financial stability, and promote development for all Chileans.’ As Pakistan celebrated its 75th Independence on August 14, it would make sense that it should also disassociate itself from the strong neoliberal policy leanings, while learning from the draft constitution of Chile.

With regard to the non-neoliberal basis of the draft constitution, and the need to move in this direction, an article ‘Neoliberalism was born in Chile. Now it will die there’ pointed out ‘Now, under 35-year-old Boric, who heads the Frente Amplio (‘Border Front’) coalition, the country has a chance for serious and meaningful change– to move away from the economic and social model forged by Pinochet. It is widely acknowledged that the neoliberal model first took hold not in Margaret Thatcher’s Britain or Ronald Reagan’s USA, but in Pinochet’s Chile. Under the dictatorship, the state was shrunk to the minimum, relinquishing to profit-driven businesses the provision of rights through the privatisation of public services.

Dr Omer Javed
The writer holds PhD in Economics degree from the University of Barcelona, and previously worked at International Monetary Fund.Prior to this, he did MSc. in Economics from the University of York (United Kingdom), and worked at the Ministry of Economic Affairs & Statistics (Pakistan), among other places. He is author of Springer published book (2016) ‘The economic impact of International Monetary Fund programmes: institutional quality, macroeconomic stabilization and economic growth’.He tweets @omerjaved7

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