Chile’s New Constitution ‘Will Bring Certainty to Investors’

Gaspar Domínguez, VP of the constituent convention drawing up the new magna carta, talks about the debate process

Photo: Comunicaciones de Gaspar Domínguez/@periodistafurioso
January 31, 2022 | 01:15 PM

Santiago — Created following the social unrest 2019, the Constituent Convention, charged with drawing up Chile’s new constitution, may pave the way for profound economic reforms, but its debates have aroused the concern of the business community.

Those concerns arose especially when some of the convention’s commissions recently rejected a proposal that enshrines the right to free economic and entrepreneurial initiative and promotes free competition, while also approving a transitional rule that would annul mining exploration and exploitation concessions in indigenous territories.

Gaspar Domínguez, vice president of the Constituent Convention, has attempted to clear up some of the uncertainty surrounding the debates, explaining that they are in their initial phases in order to definitively approve certain articles. And he believes that the final result will bring greater certainty to investors, as it will settle discussions that, in his opinion, led the country to the deep political and social crisis two years ago.

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“We are going to leave the rules clear, established in a text with broad citizen support and written by a democratic body,” he told Bloomberg Línea in an interview.

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He explains that, since he took on his role in July 2021, he has met with representatives of various sectors, including agricultural, business and mining groups, to listen to their concerns, and accepting “100%” of their invitations to talk. “There are no vetoes”, everyone is listened to, the 33-year-old doctor says, and who together with María Elisa Quinteros, president of the Convention, will guide the work of its members over the next five months.

Photo: Comunicaciones de Gaspar Domínguez/@periodistafuriosodfd

He says that his mission is to write a proposal for a constitution that, if ratified in a plebiscite, would replace the one in force since the 1973-1990 military dictatorship of Augusto Pinochet.

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Asked if they will achieve it by the deadline of mid-2022; Domínguez said: “There is no serious reason to doubt the possibility that we will not reach the deadline”.

Bloomberg Línea: What are the big themes up for debate during the next few months, and in which the greatest consensus is needed?

A: Fortunately, in the case of most of the problems, the diagnoses are shared. In Chile, the left and the right share the view that the political regime is “hyper-presidential”. All the proposals seek to distribute the powers of the president to other institutions, such as parliament. Even the classic left and right dichotomy is also broken in the convention’s political regime commission. The UDI party, which is right-wing in our political agenda, is aligned with the Communist Party, from the left, and they support the same proposal: an attenuated presidential regime, versus other groups that share the desire for a presidential regime with the figure of a prime minister. The diagnoses are shared and, sometimes, in the solutions or answers we have nuances.

Another fundamental problem is the relationship between human beings and the environment, where there are shared diagnoses that the environmental institutional framework in Chile is weak and needs to be improved. Also with regards to the water crisis and how we need to change water management, because practically all of us think that it should be considered a human right, and that water’s use for human consumption should be prioritized. In the details we may have differences, but the diagnoses are broad and shared.

And finally, social rights. In Chile, attain the greatest number of social rights depends on capacity of payment, and there is a consensus too that that has to change.

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Q: What most worries the market and investors is a drastic change in the Chilean economic model as a result of the Convention’s decisions. Some were concerned about the rejection of free competition and property rights during discussions by the Convention’s commissions. What is your opinion on this?

A: I would explain to the business leaders who are expressing concern how the rules are made: first they are discussed in committee, where there are many rules, and what is debated first are the very general aspects. For example, freedom of entrepreneurship and other matters that may be relevant; there are many different proposals on the same subject, and one may be rejected, but it does not mean that it will not remain in the text, such as freedom of entrepreneurship. It could be that one of the multiple positions that existed was rejected and, in addition, it was rejected in general, because later there are parts are added or modified. And after these rules are approved in the commissions - with a simple quorum, that is to say, with a majority - they must pass to the plenary, to the full group of Convention members, where they must be approved by two thirds. If they are not approved by two thirds, the proposal goes back to the commission, where some positions are eventually softened and it may return a second time to the plenary, so anyone who is concerned about the votes in general of discussions that are just beginning, I would say: check how the rules are, there is no reason to express concern about a discussion that is just beginning.

Q: One of the commissions approved the annulment of concessions located on indigenous lands. Have you estimated how much copper, lithium and forestry production would be affected and what this means in terms of jobs and tax revenues?

A: That is one of the multiple discussions that are still open, are just beginning and must go through multiple phases that require reaching a broad consensus in order to end up in a constitutional text. What I would say to those who may be concerned about this democratic, representative discussion, with mechanisms of popular participation that we have never had before, is that what it will achieve is to install a new institutional framework with greater legitimacy that will give more certainty to investors than the certainty they had two years ago, when the country was in the midst of a political and economic crisis.

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Q: When you weigh the environmental benefits of restricting mining, do you also consider the downside of producing fewer materials that will replace fossil fuels?

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A: All of the advantages and disadvantages are considered in the discussion.

Q:Among the most voted-on popular initiatives in the Convention, and one that stands out, is the one defending pension savings and, among other points, the freedom to choose who manages pensions. Is there consensus on changing the Chilean pension model? What should the new constitution aim at?

A. There is broad consensus that the Chilean pension system has not met the needs of the elderly. This is evident if we consider that more than half of the elderly are living below the poverty line, and that pensions in Chile do not allow them to live in decent conditions to meet their basic subsistence needs.

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There is consensus that this should be changed as soon as possible. Now, on the way to do that, there are popular initiatives in many matters, and many that are contradictory or opposed to each other, because this mechanism of participation does not replace discussion, but rather puts the issues on the agenda, on the table, so that they can be discussed, and the number of signatures that an initiative has or the time it takes to gather the signatures is not necessarily related to citizen support, but to the organization of the people who subscribe.

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Q: When you were named vice president of the Constituent Convention, you thanked your mother, and said that she lived without water. What should the new Constitution contain in terms of water rights?

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A: Firstly, to establish that access to water is a fundamental human right, and that it is the duty of the state to guarantee, promote and respect the execution of this right; and secondly, that the prioritization of the use of water, considering that it is a scarce resource and will become increasingly scarce, is for human beings, and the maintenance of ecosystems; and secondly for other productive uses.

Water cannot be used for productive sectors if people have nothing to drink.

This conversation was edited for reasons of length and clarity.

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