Santiago, the capital of Chile, once a model of Latin American economic success, is still recovering from an explosion of anti-government protests in October 2019, when the army was ordered back into the streets for the first time since the dictatorship of General Augusto Pinochet, which ended in 1990.
The unrest, sparked by a small subway fare increase, quickly turned into mass protests over inequality and the high cost of living, and episodes of arson, looting and violence unsettled Chileans accustomed to decades of order and stability.
"It was not possible to govern the country," says Claudia Heiss, head of the political science department at the University of Chile, about that period. "Churches and state buildings were destroyed. Schools had to close ... the daily life of Chileans was completely disrupted - and a few months later came the pandemic, which created new levels of instability," she told the Financial Times.
Chile is a country that has changed socially at breakneck speed and has become a more open and progressive society. But conservatives are sick of it
Protests against economic inequality eventually fueled the process of changing the decades-old constitution. It should be completed by July and could reduce the president's powers.
In today's second round of the presidential elections, the forces will weigh two men with diametrically opposed views.
A young former student leader, leftist Gabrijel Boric, is running against ultra-right conservative Jose Antonio Casto, amid the deepest divisions since the South American country of 19 million people returned to democracy.
"What we're seeing is a debate stuck in the trenches of the Cold War, about communism versus fascism," Kenneth Bunker, director of the Tresquintos consultancy, who believes the "viciousness and polarization" could turn some voters away, told Reuters.
"It's the old divide between the left and the right."
It is not only the immediate future of Chile, the world's largest copper producer, that is being decided, but also the four decades of free market economic policy on the basis of which the country has achieved growth for decades and which has been imitated around the world.
Many Chileans support it, but a growing number of citizens want to address deep inequalities. Income inequality in Chile remains among the worst in the OECD, although similar to most of Latin America.
Massive protests erupted in 2019 against an economic model that many see as the cause of problems - from meager private pensions to expensive healthcare and education
Some of the more vocal demands stem from anger over abysmal pensions that critics blame on Chile's highly privatized pension system, while others criticize the high costs and sometimes questionable quality of privatized education, as well as the gap between public and private healthcare.
Conservative voters have raised questions about increased immigration, and there are law and order concerns sparked by protests in the capital and violent clashes between police and indigenous Mapuche groups in the country's south.
The election divided families and caused heated arguments between friends.
Supporters of Jose Casta, who won the first round on November 21, fear that Boric will follow in the footsteps of Hugo Chávez in Venezuela, become radicalized when he takes power and build an authoritarian socialist state. Borić's supporters are upset that Kast is defending the economic legacy of Pinochet, whose bloody military rule overthrew socialist Salvador Allende in a coup. They also worry that Kast will roll back social reforms like gay marriage and limited abortion.
Borić (35), whose ancestors emigrated from Croatia in the 19th century, was ahead in most polls. He is backed by a coalition that includes the Communist Party and has promised to adopt a program of street protests: higher taxes, more public spending, a shorter working week, the scrapping of private pension schemes and a long list of reforms meant to empower women, indigenous groups and minorities.
Kast, 55, a father of nine and a devout Catholic, vowed to defend economic freedom, law and order and traditional family values. He promised to dig a three-meter-deep canal along northern Chile to divert migrants from as far away as Venezuela and Haiti. That initiative became popular in border areas.
Change, freedom, order and peace
"Democracy itself is at stake in Chile right now," housewife Julija Acevedo (80), who attended Borić's final rally in the capital, told Reuters. "The country needs change and he, who is young, can make a difference."
Supporters of Kast, a former congressman, want stability. They say Borić will undo decades of growth and stability and criticize his alliance with the Communist Party.
"I will continue to support freedom," declared Margarita Noguera, waving a Chilean flag with Casto's picture on it. She said she lived under the "leftist dictatorship" of democratically elected President Allende in the 1970s.
"I suffered a lot, just like many Chileans".
Angela Marambio (53) said that she supported the center-right candidate in the first round, but that she will vote for Kast today.
"Chile needs stability, order and security," she told Reuters.
Marija Jorge Godoj (30), who inherited a stall at the La Vega market in Santiago three years ago from her mother, says she will vote for Casta.
"I can accept some of my rights as a woman being challenged, but I can't accept poverty," she told the FT, noting that Kast had promised to cut taxes and support small businesses.
Both candidates moved toward the center ahead of Election Day, trying to attract large numbers of undecided voters.
In an effort to combat the perception that he was too inexperienced and radical for high office, Borić shortened his beard, cut his hair and began emphasizing fiscal discipline. Kast has somewhat toned down his praise of the Pinochet era and backed away from some of his more inflammatory social policies.
What many observers and voters want to know is how Borić or Kast would behave in office. "Governance will be difficult or impossible in Chile if any of the candidates stick to their manifesto, not compromising and not reaching out to other parties," says Jaime Baeza, a political scientist at the University of Chile.
"Switzerland of Latin America"
Since the end of the Pinochet dictatorship, Chile has consistently outperformed most other Latin American economies, writes the FT. Due to its constant growth, stable regulatory regime and business-friendly government, it has been called the "Switzerland of Latin America".
Center-right governments alternated with center-left administrations, but none fundamentally challenged the free-market model supported by the Pinochet-era constitution.
What we see is a debate stuck in the trenches of the Cold War, about communism versus fascism
Influenced by a group of economists who studied at the University of Chicago under Milton Friedman, Chile pioneered policies such as the privatization of state assets in the 1970s and the introduction of private pension schemes made up of individual pension accounts.
Then, as Chile grew wealthier in the 1980s, its stratified conservative society began to unravel. Access to university education for the first time and less inclination meant that the country's youth were less and less satisfied with the status quo that their parents unquestioningly accepted, writes the FT.
"There is a new generation of young people who did not survive the dictatorship and whose expectations are huge," said Andres Velasco, dean of the School of Public Policy at the London School of Economics and former Chilean finance minister.
"Chile is a country that has changed socially at breakneck speed and has become a more open and progressive society. But the conservatives are sick of it".
Poverty line
The first generation of private pension system beneficiaries found that their savings were too small to finance a decent standard of living in old age.
Cristian Morales, 51, a public official from the southern city of Punta Arenas, says a leftist candidate could finally change things.
"I don't believe he will be able to make all the changes that are needed, but he will speed up that process," Morales told Reuters about plans to spend on pensions and education.
"If I retired tomorrow, I would fall below the poverty line. I have two children, education is expensive. If we want more solidarity in society, the state must get involved".
Less than two weeks before the 2019 protests, President Sebastian Piñera declared that his country was an oasis of stability on a troubled continent.
As the protests intensified, Piñera was forced to make concession after concession, agreeing to an ever-expanding list of costs to fend off calls to resign. When the coronavirus pandemic hit Chile, the government responded with one of the most generous aid programs in the developing world, worth 14 percent of GDP, and the deficit grew.
Government debt jumped from 25,6 percent of GDP in 2018 to an expected 37,3 percent next year, according to the IMF.
After a 5,8 percent decline in 2020, Chile's economy is recovering and growth is expected to exceed 11 percent this year as citizens spend pandemic savings and early retirement money on imported goods from cars to electronics.
"Chile's economy is on drugs," says Robert Funk, a political scientist at the University of Chile. "No one wants to stop the emergency government benefits that were introduced during the pandemic. But someone will have to".
"I am afraid of the strength of the Communist Party"
If they scratch beneath the surface of the shopping frenzy, there are worrying signs, according to the British newspaper. The wealthy have taken more than $50 billion out of Chile since October 2019, according to a central bank official.
Inflation is expected to reach 6,5 percent in 2021, and the central bank has set a target of three percent. That sparked a series of interest rate hikes, but it didn't help the Chilean peso, which has fallen from 711 to 845 to the dollar this year.
It was not only government spending that led to the end of street protests. They calmed down only after Piñera agreed to a referendum on a new constitution in November 2019, to be written by a 155-member Constitutional Convention elected by the public.
The FT points out that the left sees the constitutional change as an opportunity to strengthen its political demands for a bigger state and the introduction of a Scandinavian-style social democracy. The right fears the process could lead to a long list of expensive spending promises, destroy a hard-won reputation for economic competitiveness and deter foreign investment. The convention is dominated by the left.
"I am afraid of the strength of the Communist Party behind Borić," a banker in Santiago told the FT.
"I'm worried about his team, which has a lot of people with very little experience. All this is made difficult by the Constitutional Convention, where the left could try to introduce into the new constitution what it cannot get in the parliament".
Every poll since the first round of the election has shown Borić in the lead in the presidential race, but his lead over Kast has varied widely.
"If a lot of older people vote, the result will be very close," says Velasco. "But omicron (a new strain of covid-19) is not Kasto's friend. If those over 60 stay at home, Borić could win convincingly. So a narrow victory for Kast or a great victory for Borić are also possible".
History does not favor Borić by any means, because since 1999, the winner of the first round of voting has always won the second.
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