SANTIAGO, Chile — In his first week as president-elect, Sebastian Pinera was already getting into trouble.
When his shares in his airline LAN — the largest in the country — skyrocketed the day after the Jan. 17 elections, he was blasted for not having sold them before then. In just four days, his stocks shot up more than 140 percent, leading the Santiago Stock Market to suspend transactions several times.
Immediately after winning the presidential elections, breaking a 20-year hold on power by the center-left Concertacion coalition, the right-wing billionaire’s business interests were thrown into the spotlight.
A shrewd financial investor, Pinera made his fortune in the 1980s introducing credit cards to an avid consumer market, and was later president of Chile’s first investment bank. He smartly placed the many eggs in his basket across the entire economy and is now owner of LAN airlines, the popular soccer team Colo Colo and the television station Chilevision. He also has minority shares in energy, health clinics, finance, lumber, mining, food, retail, construction and vineyards, just to name a few.
With a bill that would regulate a president’s patrimony still languishing in Congress, Pinera decided last year to hand over the management of part of his property to four different trusteeships, but excluded LAN, Colo Colo and Chilevision from this decision.
He then promised to sell his shares in LAN by March 11 when he takes office, but said he will hold on to the soccer team and transfer the administration of his property in Chilevision to a non-profit foundation. Pinera announced a general shareholder’s meeting on Feb. 5 to decide on the sale of LAN.
“It isn’t normal for him to have been elected president without having resolved this problem before. He has to solve the issue of his shares in LAN and above all, in Chilevision, because this involves him in the congressional debate on digital television. That is already creating a conflict of interest that could have been avoided,” said Senator Carlos Ominami.
This same issue prompted his second blunder in the week. When reporter Ivan Nunez, of the Pinera-owned TV station, went to interview the president-elect with a group of journalists, he was greeted with an order: no questions on LAN allowed. Nunez picked up his things and walked out, but for journalists, this may be a signal of things to come.
“This incident confirms one of the main concerns during the campaign regarding the perils posed by Mr. Pinera’s business interests and his public duties,” said Abraham Santibanez, president of the Journalists Association.
Pinera received a graduate degree in economics from Harvard and then returned to Chile in 1976, at the height of the "Chicago Boys" experimentation with free market policies here. He became politically active in the late 1980s and campaigned on a promise to use his "entrepreneurial" skills to reinvigorate the national economy and create jobs.
His market-oriented approach has prompted plenty of other concerns, including what he plans to do with the state-owned copper company Codelco, Chile’s hen with the golden eggs. Codelco has earned the state between $6 billion and $7 billion in revenues over the past four years, helping the government stash away some $20 billion in reserve funds, mitigate the effects of the recent crisis and finance social programs.
A day after being elected, Pinera announced that Codelco needed “a leap forward” in productivity and suggested that he would “introduce private capital” in the company. Miner unions went up in arms, and Concertacion leaders pledged they would not offer a single vote for privatization, which would require a constitutional reform.
But in the realm of social issues, there seems to be more similarities than differences between Pinera’s campaign promises and the government’s general policies, at least on paper.
Pinera has promised to build on outgoing President Michelle Bachelet’s social protection network and expand it to the middle classes. He said he wants to form a Ministry of Social Development to reduce poverty and create 1 million jobs by his term’s end in 2014, as well as invest in various infrastructure projects. The main difference: the additional 10,000 police officers Pinera wants on the streets to combat crime and drug trafficking.
So what’s the fuss about having a right-wing president? What’s not on paper, said teacher Juan Fernando Silva.
“The right has always been intolerant of people’s demands and demonstrations. When teachers, students and workers start voicing their demands, I’m afraid those extra 10,000 police are going to be on the streets not to go after criminals, but after us,” he said, a scene reminiscent of the repression during dictatorship. The election was the first time since 1958 that Chileans voted a right-wing candidate into office.
Although Pinera has promised not to include Pinochet-era buddies in his cabinet, as the single most powerful party in Congress, his ultra-right, conservative allied party UDI will have a leading voice in all things to come. UDI leaders, many of whom have staunchly defended the Pinochet dictatorship and belong to extremely conservative religious groups, are already vying for some cabinet posts.
“It gives me the creeps to think about having an UDI in the Interior Ministry, or the Women’s Service, for example. It will be like turning back decades of progress in civil, women’s and social rights,” said Teresa Gallardo, owner of a small grocery store.