Generic Hero BannerGeneric Hero Banner
Latest market news

Chile election favors business-friendly constitution

  • : Battery materials, Crude oil, Electricity, Metals
  • 23/05/08

Chile's far-right Republican party and center-right Chile Vamos coalition parties won over three-fifths of the seats in constitutional council elections on 7 May, giving them the votes to approve the articles of a new charter without making concessions to the left.

President Gabriel Boric's left-leaning Unidad de Chile coalition won a third of the seats, less than the two-fifths required to block proposals.

"I want to invite the Republican party, which has won an undeniable majority, not to make the same mistake we did," said Boric, referring to the previous attempt to rewrite the constitution by a left-leaning convention that was overwhelmingly rejected in a plebiscite in September 2022.

The Republicans won 22 (35pc of votes) of the 51 seats, Unidad de Chile 17 (29pc) and Chile Vamos 11 (21pc). An indigenous candidate, Mapuche activist Alihuen Antileo, also got enough votes to win a seat.

The center-left Todo por Chile coalition, which includes parties in the former Concertacion coalition that governed Chile for two decades after the Augusto Pinochet dictatorship ended in 1990, took no seats.

The polarized result, with centrist parties on both sides faring badly, raises the risk of another failed charter-writing exercise, extending investment uncertainty.

Its success may hinge on the center-right's willingness to ensure that moderate left-wing views are incorporated to avoid the draft being rejected for a second time in a plebiscite on 17 December.

The result steepens an uphill battle for Boric, with an approval rating of 28pc, to pass controversial tax and pension reforms as well as to establish a national lithium company to take advantage of bullish lithium markets and Chile's high-quality resources.

Close oversight

Rules are in place to offset factors that led to Chileans rejecting the previous attempt to draw up a new constitution.

Congress has approved 12 minimum constitutional requirements, such as the independence of the central bank, that must be respected. It has also chosen 24 members of an expert committee, reflecting party representation, which is preparing the charter's first draft.

The newly elected constitutional council will use this draft as a basis for its deliberations when it starts proceedings in June. The proposed articles will also be reviewed for admissibility by a technical committee of 14 constitutionalists.

Chile began the process to draft a new constitution to replace Pinochet's market-friendly charter in late 2019 after social protests rocked the country.


Generic Hero Banner

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more