Chile Politics February 2018


Chile: President-elect Sebastian Piñera announces cabinet

February 7, 2018

President-elect Sebastián Piñera—head of the Chile Vamos coalition—presented the members of his cabinet on 23 January. Key economics-oriented posts will be filled by business-friendly figures with technocratic profiles, and Piñera has largely opted for experience over regeneration, with 6 of the 23 ministers having served during his first term from 2010–2014. Members of his innermost circle will occupy key posts, in an attempt to avoid the reshuffles and cabinet discords which have marked current Michelle Bachelet’s presidency.

The treasury ministry will be headed by experienced economist Felipe Larrain, who will return to the post he held during all of Piñera’s first term. He will likely be seen as a safe pair of hands and be popular with business, having overseen sustained economic growth and job creation during his first spell in office—although the economy’s performance during this time was boosted by cyclically-high copper prices. Since his nomination became public, Larrain has reiterated his desire to overhaul Bachelet’s tax reform to encourage investment; he has also emphasized the incoming government’s intention to trim the corporate tax rate to the OECD average if the fiscal situation permits it. Working alongside him will be José Manuel Valente as economy minister. Valente is an economist, director of consultancy firm Econsult and a close collaborator of Piñera who worked with him during the presidential campaign. He will be charged with removing obstacles to business investment and reducing red tape.

Another key figure in the cabinet will be Gonzalo Blumel, named the General Secretariat of the Presidency. In charge of the executive’s relationship with congress, Blumel’s role will be pivotal given the lack of parliamentary majorities, to ensure the passage of the government’s legislative agenda. He is the youngest cabinet minister and untested on the political frontline, having previously worked as an advisor for the president-elect.

Gaining the support of opposition parties, especially the center-left Fuerza de la Mayoría and centrist Christian Democrats, will be vital to pass laws. In this sense, Blumel’s lack of political baggage and his reputation as one of the more progressive cabinet members could play in his favor; he was one of the founders of the political party Evópoli and has previously stated his support for same-sex marriage. In a recent interview, Blumel gave signs he will reach out to the opposition and assured that the government would have an “open doors” policy with other parties. The future minister also emphasized the government’s social program, including measures such as free pre-school education, which should be welcomed by more left-leaning groups in parliament.

Sebastián Piñera will inherit an economy in recovery mode. The Central Bank sees GDP expanding between 2.5% and 3.5% in 2018. Panelists participating in the LatinFocus Consensus Forecast see the economy growing 2.9% in both 2018 and 2019.

Author:, Economist

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