Copper producer Chile elected leftist millennial Gabriel Boric to the presidency today, portending an expansion of the state's role in the economy.
Boric, a former student activist whose young supporters were celebrating in the streets of Santiago tonight, overcame arch-conservative Jose Antonio Kast, head of a rightwing splinter party who swiftly conceded this evening as votes rolled in for his youthful rival.
Boric has promised to end the country's privately managed pension system, raise the minimum wage and put the state in the driver's seat in key sectors including lithium and green hydrogen that are critical to the energy transition. He has also vowed to review the country's free trade agreements.
He will take over from center-right incumbent Sebastian Piñera in March 2022, the end of a tumultuous term marked by violent protests in 2019 and the Covid-19 pandemic that Chile has combated with one of the world's leading vaccination campaigns.
Market reaction pending
The incoming president comes from the deep south Magallanes region, where green hydrogen projects are starting to take root, driven by a wave of renewable energy.
Chile's stock exchange and peso currency trends could reflect investor disappointment in the outcome when markets open on 20 December. Polls that pointed to a Boric victory had accelerated capital flight prior to today's election.
Moderates in Boric's camp say a divided congress will compel him to forge political agreements in line with the centrist policies that have prevailed since the return to democracy in 1990.
But the economy that relies heavily on copper exports could slide into a recession next year as pandemic-era stimulus measures peter out, posing a big test for the new administration. In a constitutional assembly and on the streets, Boric could also face pressure from the far-left flank of his coalition if he stays true to a more moderate platform adopted in the final weeks of the campaign.
Kast, whose late brother served in the free market cabinet of former dictator Augusto Pinochet, had unsuccessfully painted Boric as a tool of his Communist Party allies, likening the risk to Venezuela. Pinochet took over from socialist icon Salvador Allende in a US-supported Cold War-era coup in 1973.
