Chile Unveils Its Proposed New Constitution

Welcome back to Foreign Policy’s Latin America Brief.

The highlights this week: Chile’s constitutional assembly presents its final document to the public, Argentina names a new finance minister, and Nicaraguan police oust municipal opposition leaders.

If you would like to receive Latin America Brief in your inbox every Friday, please sign up here.

On Monday, Chile’s constitutional assembly presented its proposed new legal code to President Gabriel Boric at a ceremony in Santiago. The new constitution—which has been in the works for a year—was borne of demands for political change that shook the country during mass protests in 2019. It envisions a stronger government role in the provision of social services, promotion of gender parity, and protection of Indigenous groups and the environment than does Chile’s current charter, which was written under the right-wing dictatorship of Gen. Augusto Pinochet in 1980.

The 1980 constitution helped make Chile friendly to private business but has long been blamed for perpetuating inequality in the country. In a speech at the ceremony, assembly Vice President Gaspar Domínguez said the new document’s democratic drafting process—in which its authors were chosen in a nationwide election—is based on an understanding that loving one’s country “means loving and respecting the people who compose it.”

Speeches given at the event officially kicked off two months of debate about whether to approve or reject the proposed new constitution in a Sept. 4 referendum. Even before this week, however, some high-profile Chileans voiced their opinions on the working draft. Former center-left President Michelle Bachelet said in May that she hoped it would be approved, while right-wing groups—led by figures such as 2021 presidential candidate José Antonio Kast, who lost to Boric in a runoff—have for months been campaigning for its rejection, as political scientists Jennifer M. Piscopo and Peter M. Siavelis discussed in Foreign Policy in May.

In that time, public opinion toward the proposed new constitution has changed. A poll taken last week by Cadem found that 51 percent of Chileans planned to reject the document, while 34 percent planned to approve it—approximately the inverse of the results of the same poll when it was conducted in January. Cadem’s most recent poll also found that only 55 percent of Chileans had read a draft of the new constitution by the end of June. The first draft of the document was released to the public in May and was repeatedly updated as the assembly deliberated.

Early last month, the right-wing Independent Democratic Union party criticized the draft constitution in a statement, claiming that it “favors a blind faith in the state” and largely fails to deliver “stability or peace.” But the fact that the final draft required a two-thirds majority to be approved within a politically diverse assembly means it already incorporates many compromises. Between May and June, the draft of the new constitution was cut from 499 articles to 388. A proposal to nationalize parts of Chile’s mining sector, for example, did not make it to the final version.

The credit rating agency Fitch Ratings said in May that while some elements of the draft constitution could affect Chile’s creditworthiness, rejecting it could prolong economic uncertainty in the county. Morgan Stanley concluded the draft would not disrupt Chile’s macroeconomic framework.

This week, Chilean newspapers and television talk shows have been abuzz with discussions of the final proposal, while influential political figures have continued to come out with their support or rejection.

On Tuesday, former center-left President Ricardo Lagos tweeted a statement voicing concerns about tenets of both the existing constitution and the proposed new one. On Wednesday, the centrist Christian Democratic Party voted to adopt an official position of support for the proposed constitution.

Lagos voiced reservations about the proposed constitution’s vaguely worded changes to the role of the Chilean justice system and Senate as well as the greater autonomy given to different geographic regions of the country. But if the 1980 constitution remains, Lagos said, it should be changed extensively, including by “incorporating social and economic rights, substantially following the [constitutional assembly’s] proposal.”

Christian Democrat leader Felipe Delpin said that while the proposed constitution was not “perfect,” it “could be perfectible” and called for its approval to “respond to the mobilized people who demanded the deepest change” and “move forward toward a Chile with more justice, dignity, and fraternity.”

Although reforming Chile’s existing constitution on an incremental basis requires the votes of either 60 or 67 percent of Congress, depending on the provision, the standard majority required to reform the proposed constitution was set at 57 percent, with 67 percent for major reforms.

In an interview with Radio Duna last Friday, journalist and assembly delegate Patrício Fernández defended its approval on this basis, saying the proposed new constitution was part of a long process that remained “in construction.”

Because tenets such as gender parity and environmentalism are expressed throughout the new legal code, they cannot be easily replicated by tacking on amendments to the old one, he added. “This constitution that we are proposing now refers to our time and the times to come,” Fernández said. “The other one is very difficult to reform because its backbone is from another time period.”

Women made up one-half of the assembly that created the proposed constitution—a world record—and the charter stipulates that all public institutions have gender parity. In a first for Chile, it also lays the grounds for a national public healthcare system and makes the government responsible for adapting to and mitigating the effects of climate change.

If the proposed constitution is approved, its text stipulates that new laws will be needed to enact its principles. These offer a chance to address outstanding concerns about the document. If it is rejected, the demands for deep political change that prompted the 2019 protests will remain unresolved. For now, what appears clear is that the process of reforming Chile’s constitution will continue well beyond September.

Tuesday, July 12: Mexican President Andrés Manuel López Obrador meets with U.S. President Joe Biden at the White House.

Thursday, July 21: Paraguay hosts a Mercosur customs union leaders’ summit.

The commodity dip. Several key commodity futures prices fell in value in June, potentially in light of interest rate tightening by the U.S. Federal Reserve. The high commodity prices of recent months came with a narrow upside for many Latin American economies: While fuel was more expensive—prompting unrest across the region—many countries could also rake in higher prices for their exports of oil as well as other items such as copper and soybeans.

But that silver lining could wane significantly if the prices continue to fall. Already this week, Chile’s peso fell in value to a historic low against the U.S. dollar amid concerns over the falling price of its copper exports.

Ortega’s power grab. Nicaraguan police took over five seats of local governments controlled by the opposition Citizens for Freedom party. The move comes ahead of municipal elections later this year and leaves Nicaragua’s opposition controlling only 13 of the country’s 153 municipalities.

It follows a power grab by Ortega last year, when he locked up several opposition presidential candidates rather than allowing them to run against him in an election. The government also banned Citizens for Freedom at the time, which authorities used to justify this week’s actions.

Kitty Monterrey, the president of Citizens for Freedom, said the takeovers show the government has no interest in “trying to maintain an appearance of legality in the next municipal elections.”

Spanish singer Julio Iglesias gestures during a press conference in Mexico City on Sept. 23, 2015.RONALDO SCHEMIDT/AFP via Getty Images

Meme of the month. The month of July, or julio in Spanish, for many years has brought with it recycled versions of the same meme in Spanish-speaking Latin America: photos of pop singer Julio Iglesias. “Julio [July] arrived,” the meme says and often includes further details playing on current events and themes. A version circulating this month shows Julio Iglesias in an airport, with the caption “They canceled Julio’s flights”—a reference to recent airline travel woes experienced around the world.

Argentine President Alberto Fernández gestures during the swearing-in ceremony of Silvina Batakis as Argentina’s new economy minister in Buenos Aires on July 4.Tomas Cuesta/Getty Images

Argentine economist Silvina Batakis took over Argentina’s finance ministry this week, a post Cenital journalist Iván Schargrodsky described as “the electric chair.”

Its previous occupant, Martín Guzmán, had a highly scrutinized run as the steward of both Argentina’s troubled economy and the successful renegotiation of a $44 billion loan agreement with the International Monetary Fund (IMF) in March.

Argentina’s government is composed of an alliance between the far-left political group of Vice President Cristina Fernández de Kirchner and more center-left figures such as President Alberto Fernández and, until last weekend, Guzmán. They were elected in part due to Argentines’ widespread criticism over the terms of the whopping IMF loan when it was originally negotiated by former center-right President Mauricio Macri. Guzmán successfully pushed back against IMF orthodoxy to allow a repayment plan without heavy austerity requirements, but Fernández de Kirchner’s wing of the party suggested that he push harder. Fernández de Kirchner’s political group also reportedly blocked Guzmán from firing an energy ministry official last year over a disagreement on electricity subsidies.

As inflation ticked upward in recent months, tensions between Guzmán and Fernández de Kircher increased. Writing in Infobae, journalist Nancy Pazos argued that the president’s “zigzagging personality” didn’t make Guzmán’s job any easier. He resigned by posting a seven-page letter to Twitter as Fernández de Kirchner was giving a speech that criticized the government’s economic policies on Saturday. In the letter, Guzmán stressing the importance of the governing coalition’s ability to reach agreements.

Batakis, for her part, is a left-leaning economist seen as close to the vice president. She said she would “continue the economic program” of the government once she took office Monday. On Tuesday, she had a call with IMF Managing Director Kristalina Georgieva, which Georgieva described as “very good,” offering few other details.

Speculation abounds that Batakis will aim to renegotiate the March IMF deal in the coming months and that the Argentine peso may be headed for a devaluation.

In several private meetings, Schargrodsky reported, the vice president has floated the idea of a “proto-dollarization” in Argentina in order to fight inflation. Such a program would be a dramatic economic overhaul of the kind that usually requires a high level of domestic political capital and international trust in order to reap benefits. It is still unclear whether Batakis’s appointment can bring either.

July 8, 2022: This article has been updated to include a paragraph that was mistakenly omitted due to a technical error.