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Chile was a star — until it wasn’t

Why are Chileans in such a funk?

Small, lean and sensibly managed, Chile has long been the standout in an underperforming continent. In a dismal year for Latin America, its economy is accelerating.

Its students are the best-schooled in the region. Despite their sometimes fierce differences, government officials on the right and left have mostly agreed to keep the economy solvent and free of populist profligacy. The World Economic Forum ranks Chile as Latin America's most competitive economy, and despite a nasty kickback and influence-peddlingscandal, one of the least corrupt.

And yet President Michelle Bachelet's approval ratings have slumped to a record low of 29 percent just months after she won the election with 62 percent of the vote.

No doubt the rolling revelations of kickbacks, graft and influence peddling over the last year have soured the mood in this Andean nation of 17 million. A corruption probe into a klatch of conservative legislators accused of taking illegal funds from an investment bank has since spread across the political aisle, implicating Bachelet's leftwing New Majority coalition.

And Bachelet's own son, Sebastian Davalos, is accused of parlaying his influence into a $10 million loan for his wife.

Bachelet has been badly shaken by the charges, and yet her response has been erratic and seemingly improvised. In a dramatic gesture, she fired her entire cabinet — announcing her decision not in the presidential palace but, strangely, to the host of the popular variety show Sabado Gigante. On Monday, she presented a new cabinet: “new faces” for a “new, inspiring, demanding phase,” she said.

“For Bachelet, who is known for her forthrightness, this has been devastating,” said Michael Shifter, president of the Inter-American Dialogue, a Washington think tank.

Bachelet's scandal won't erase Chile's achievements, but it comes as a harsh blow to a land that had prided itself on probity and best practices.

And yet these are hardly Bachelet's only woes. A socialist with a sharp left message,she has introduced a controversial packet of reforms, including stiff tax hikes, new labor laws and generous social security benefits — all of these decisions distinguishing her from her predecessor Sebastian Pinera, a former credit card mogul who was painted as a Chilean Scrooge. She also has called for a new constitution, even though the old one works fairly well, in a move Chilean economist Daniel Birrell likened to “sailing a half-crewed Titanic at full steam at night, in a sea littered with icebergs.”

One of her most divisive proposals is to overhaul the Chilean classroom. This year, she ended tuition for kindergarten through high school, and she is now flogging a bill to make universities free as well.

This was a nod to the streets, where students, justifiably, have swarmed in revolt over the steep cost of a college diploma. They brought Pinera's goverment to its knees in 2011 and 2012.

Two noted education scholars recently backed the rebels' grievances, calling Chile's education “miracle” a mirage. But the students who are marching again to keep Bachelet at her word and demand a greater say in education policyare right that Chile's public-private school system needs to be fixed, not junked. University enrollment has soared almost 10-fold since 1980; from 1995 to 2009, Chilean students improved in math, reading and science at twice the rate of their peers in the U.S., a Harvard University study showed.

Bachelet may be a victim of her country's fading success. Chile shines in Latin America, but it trails the 34 most developed nations of the Organization for Economic Cooperation and Develpment in income inequality, and its students placed a lowly 44th place among 65 nations in reading skills.

“Chileans have seen 20 years of incremental progress and are impatient,” said Shifter of the Washington think tank.

Backers of a returning leader also tend to romanticize the past and bring unrealistic expectations, said Javier Corrales, a political scientist at Amherst College. “Returning presidents, with few exceptions, are likely to be more disappointing than your average new president,” he said.

Chileans want an above-average president, and they want more than incremental progress. No wonder they're in a funk.

Contact Mac Margolis at