Socialists defeated by free-market conservative in Chile election

Story from Investors Business Daily.


Amazingly, Concertacion’s center-left candidate, Eduardo Frei, lost the election… to pro-free-market Sebastian Pinera, a self-made billionaire who vows to expand free markets even more. Following his exuberant 52%-48% victory Sunday, Pinera vowed to make Chile “the best country in the world.”

Saying he meant to be an “entrepreneurial president,” Pinera promised to cut red tape, improve investment, make it easier to hire and fire workers, make bureaucrats accountable and improve the climate for Chileans to start businesses.

He wants to partially privatize state copper giant Codelco to attract investment. He also wants to get tough on crime. Because he’ll have to work with the Concertacion congress, he may not achieve all of it. But given the political winds, he’s sure to achieve some of it.

[…]So instead of the 3%-range economic growth seen lately, Pinera vows to grow in the vicinity of the 7.2% pace Chile racked up in the first heady years after Pinochet’s dictatorship, when economist Milton Friedman’s Chilean Chicago Boys were in charge.

Instead of producing just wine, fruit and fish, Pinera wants new measures to encourage new industries to enrich Chile and its buyers around the world.

Can a billionaire like Pinera lead Chile? His past suggests he won’t rest on his laurels. As a businessman, he liked introducing new things to Chile; during the ’80s he introduced credit cards when these were barely known and made them a fact of life.

He also has a knack for rescuing failing industries and transforming them. In the 1990s he bought Chile’s battered state airline and turned it into LAN Airlines, now South America’s biggest carrier.

Chile’s markets are optimistic. The stock market rose 1% to its highest level ever on news of Pinera’s election.

Although Chile was being run by socialists, they were actually really good on fiscal issues.

I blogged before about how a pro-free-trade economic policy had produced so much economic growth that Chile received an invitation to join the prestigious OECD, an organization of 30 economic super-powers! Well, Chile accepted the invitation – they are the first South American nation to ever be in the OECD!

The Wall Street Journal has the new rankings for the freest economies in the world. Chile is #10! Talk about punching above your weight!

Rank Country Year Score Change
1 Hong Kong 2010 89.7 -0.3
2 Singapore 2010 86.1 -1
3 Australia 2010 82.6 0
4 New Zealand 2010 82.1 0.1
5 Ireland 2010 81.3 -0.9
6 Switzerland 2010 81.1 1.7
7 Canada 2010 80.4 -0.1
8 United States 2010 78 -2.7
9 Denmark 2010 77.9 -1.7
10 Chile 2010 77.2 -1.1

Chile is the number one place I would like to live if I could choose to live anywhere. But they have these terrible earthquakes! I don’t know what to do about that. I have this crazy idea to live in an earth-sheltered house, just to save money on utilities and to lower maintenance costs, so that I have more time for pets and friends. I wonder if they have those in Chile?

I also like Honduras (#99) and Colombia (#58). I was showing off my Honduras-made shirts today at work to one of the atheist-Democrat guys who is suspicious of free trade. I explained the difference between between foreign investment and foreign aid. I prefer foreign investment. The clothes are well-made, and I like to help poorer nations to grow their economy by trading with them – so that they have jobs they can be proud of. Today, clothes, tomorrow, LCD monitors! My parents were born in a poor country, just like Honduras or Colombia.

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