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Conservative billionaire Pinera wins presidential vote

Text by News Wires

Latest update : 2010-01-18

Polls closed Sunday in Chile's presidential elections, with leftist candidate Eduardo Frei conceding defeat to centre-right billionaire Sebastian Pinera (pictured).

REUTERS - Conservative billionaire Sebastian Pinera won Chile’s presidential elections on Sunday, ending 20 years of center-left rule in a shift to the right in Latin America’s most stable economy and world No. 1 copper producer.

Airline magnate Pinera won 51.87 percent of Sunday’s vote with more than 60 percent of ballots counted, official results showed. His rival, former President Eduardo Frei of the ruling leftist coalition, had 48.12 percent.

Following is what to expect from a Pinera government in coming years:

FEW POLICY CHANGES, LESS STATE

Pinera is not seen making too many changes to the free-market policies that have cemented Chile as a beacon of economic stability in the emerging world.

The airline mogul has said the private sector will take the lead in spurring economic growth in the world’s top copper producer, vowing to overhaul state enterprises and expand tax breaks to spark job creation.

Still, he has vowed to maintain social programs and bring some of those benefits to middle-class Chileans whom have said the center-left governments abandon them.

He would study the possibility of issuing sovereign bonds, a top economic advisor have said.

In his government program Pinera had promised to sell part of state giant Codelco, the world’s top copper miner, to improve efficiency and better compete with slimmer private miners.

A closely divided Congress will force Pinera to deal with the center-left opposition on key legislation. He could struggle to pass bills aimed at relaxing business regulations or any partial sale of Codelco.

SHORT-TERM MARKET RALLY

His victory will likely give an extra boost to Chilean stocks that are seen extending gains in 2010 after breaking record highs last year on back of higher copper prices and a recovering global economy.

Pinera is considered a favorite of the market and his macro-economic plan banks on the private sector to invest heavily and spur economic growth. His critics say his plan relies too much on the strength of the global recovery.

CODELCO RESISTANCE, UNIONS’ PROTESTS

Pinera is expected to face some opposition from left-leaning unions and students and teachers, who often protest to pressure the government to pour more money into health, education and workers benefits.

Protests could be a nuisance for Pinera, but are not seen posing a risk to its ability to govern.

If he moves ahead with plans to sell part of Codelco he could face fierce resistance from the state giant’s influential unions, which have already threatened to strikes and protests against his government.

The divided Congress is also likely to block his attempts to sell Codelco, which the state main revenue-earner and has financed the stimulus plan to battle the country’s first recession in a decade.

The Harvard-trained economist could still try to overhaul Codelco later in his presidency if he negotiations with the center-left opposition and makes concessions with mining unions.

REGIONAL TENSIONS

Pinera, a conservative in a region dominated by leftists, could have verbal clashes with firebrand Venezuelan President Hugo Chavez, who is a fierce critic of conservative Colombian ruler Alvaro Uribe. However, a verbal exchange with Chavez is unlikely to hurt trade between the two nations.

He could also see tensions increase with gas-producing neighbor Bolivia, whose leftist leader Evo Morales has fiercely demanded an exit to the sea in Chile’s vast Pacific Ocean coast.
 

Date created : 2010-01-17

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