Former TV Pundit Looking to Lead Chile Says Forget the Populism

  • Presidential hopeful Guillier spoke in interview in Santiago
  • Guillier is second only to former President Pinera in polls

Chile’s presidential hopeful Alejandro Guillier has a message for JPMorgan Chase & Co. and foreign investors in general -- chill.

Two months after JPMorgan said investors were shunning Chile because of Guillier’s populist stance and his rise in the opinion polls, the candidate says the business community would have nothing to fear from his administration.

Alejandro Guillier

Photographer: Cristobal Palma/Bloomberg

“I have never been characterized by extreme policies,” Guillier said in an interview in Santiago. “I am an eternal negotiator.”

Increased tax burden? Not under my administration, he said. An end to private pension fund managers? Not one of my proposals. In fact, much of his speech is so uncontroversial as to be commonplace. His government would boost efficiency, encourage innovation, diversify the economy and promote more value-added goods, Guillier says. There is no mention of dismantling Chile’s free-market economic model that has helped sustain three decades of growth averaging more than 5 percent.

For more on Guillier’s impact on the market, click here

The only time Guillier sounds even slightly angry is when he talks of punishing abuses by private industry. Any company caught making illegal campaign donations or damaging the environment would lose the right to bid for government contracts, he says. It’s not the stuff of a firebrand.

After the administration of President Michelle Bachelet put the focus on narrowing Chile’s inequality gap, Guillier didn’t mention the words equality or inequality once during the 90 minute interview. Still, he did call for greater negotiating powers for workers to revert the “concentration of wealth” in Chile.

TV Pundit

The former TV pundit and current senator for Antofagasta puts the suspicion of his candidacy down to the fact he is an outsider, having gone into politics only five years ago, and isn’t a member of any of the major political parties.

“Economic groups get scared when someone appears who doesn’t belong to the establishment,” Guillier said. “The alarm will go down a few decibels as we make our proposals known.”

Guillier announced his candidacy on Jan. 7 and plans to run in primaries for the center-left ruling coalition in July, ahead of the presidential election in November. For now, opinion polls show he is second only to former president and de-facto leader of the opposition Sebastian Pinera.

Some of his comments could come straight out of Pinera’s play book. Asked whether Chile needed another tax reform to raise more funds for the state, Guillier said the system could be simplified and changed to encourage more investment, but that there was no appetite for increased taxes.

“Investors don’t like the rules of the game to be changed every five minutes,” Guillier said.

Still, he draws a sharp line between himself as an outsider and the billionaire Pinera, many of whose ministers swapped between the corporate world and government. “How are they going to defend the public interest if they are inside businesses and are shareholders?” he asks.

Pension Reform

Guillier fueled concern about populism last year when he described the $181 billion private pension-fund system as “ruinous,” saying it forced many people into poverty, sparking speculation that he backed elimination of the privately managed funds.

The comments came as some in the business community blamed the government’s decision to raise taxes and empower labor unions for the slowest three years of growth since the earlier 1980s. Guillier seemed to threaten a deepening of those reforms.

His tone has now moderated. Far from calling for the elimination of private pension funds, Guillier merely said they should face more competition to cut costs for clients. Whatever the final reform to the pension system, the government must look for a consensus, he said.

His rhetoric has toned down as he puts together a team of economic advisers, most of whom have post-grad degrees from the U.S. or the U.K.

Guillier’s constant refrain now is long-term planning and investment. Education should be designed for the needs of the economy 25 years down the line, developing the skills for new industries. Pension funds should invest more in long-term projects in Chile and stop “bleeding the country” by taking their money abroad.

And if local industry remains convinced he is a populist, “then we’ll give the first steps to foreign investors until the locals realize that sense and seriousness still reign in Chile.”

-- This article is part of a series of interviews with Chile’s presidential hopefuls. For more on the other candidates, see the stories below:-

Chile Presidential Hopeful Looks to Old Trick to Revive Growth
Insulza Says He Is the Man to Restore Chilean Business Sentiment
Kast’s Radical Plan to Transform Chile; Overhauling the Overhaul
Chilean Candidate Ossandon Backs Free Markets With an Iron Fist
Chile’s Moderate Radical Who Wants to Dismantle Neoliberalism

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