Chile affected by rains, flooding
June 30, 2023
Chile’s government declared a state of catastrophe in the country’s central and south regions, in response to record-breaking rainfall that provoked flooding and landslides. More than 13,000 people were affected by the phenomenon, particularly in rural areas. At least two people were killed and four missing, earlier this week.
President Gabriel Boric aborted a trip to Antartica and waded through the mud in affected areas, where he promised support for reconstruction and subsidies for those affected.
The rains were provoked by unusually high temperatures in the Andes mountains, which provoked erosion and a rapid increase in river water levels.
Climate change is increasingly driving extreme weather. The rains come months after a period of wildfires and severe drought that destroyed hundreds of homes and left dozens of people dead in Chile.
(Reuters, El País, Al Jazeera, La Tercera, AFP)
Corruption scandal impacts Boric administration
Boric’s administration is under fire for a scandal involving members of the Revolución Democrática, a party that forms part of the Frente Amplio governing coalition. Boric ordered affected officials in the Housing Ministry to resign, in relation to allegations of influence trafficking allegations involving payments of about $530,000 to a foundation run by the boyfriend of an RD lawmaker. (Bloomberg, El País)
Boric called on ministers to “anticipate” potential corruption cases. (El País)
The scandal has further affected Boric’s approval, which tumbled for a third straight week to 28% in the latest Cadem poll. (Bloomberg)
In response to the “Fundaciones” scandal, Chile’s national comptroller requested a pause in all disbursements to foundation, in order to review antecedents in each case. (El Mostrador)
Fiscal Reform bogged down
The scandal could also undermine the Boric administration’s efforts at fiscal reform — critics have said the improper transfer of funds raises questions about mechanisms of control and efficient spending of increased government revenue under the proposed “fiscal pact,” reports El País.
Chile’s government will send its latest tax reform proposal to the Senate within three weeks, according to Finance Minister Mario Marcel. The plan, which comes after a Congressional defeat of a fiscal reform plan in March, not only focuses on taxation, but also areas including spending priorities, fostering growth and creating fiscal efficiencies, Marcel told Bloomberg.
The Confederación de la Producción y el Fomento business association has spoken out against increasing taxes, arguing for an agenda for economic growth. Marcel replied that growth is insufficient for financing government social spending, but also promised an independent study “to identify, based on the comparative analysis of international and local experiences, the effective potential (of the expansion of the economy) for generating fiscal resources.” (La Tercera, Ex-Ante)
Constitution News
June was the month for “citizen participation” in the new constitutional process in Chile, through public audiences, consultations with Indigenous communities and petition proposals. The Universidad de Chile and the Universidad Católica coordinated efforts and also gathered material from earlier citizen consultations under the Bachelet administration and the 2019-2022 constitutional process. (El País)
The Council’s Citizen Participation Secretariat announced that it received 1.292 citizen petitions during the two weeks open for inscription — most of which focused on the second chapter which regulates fundamental rights. Citizens can support proposals until July 7 using an online system, reports CNN.
More Chile News
The U.S.-Chilean tax treaty was ratified by the United States Senate, more than a decade after it was originally signed in 2010. Among other things, the treaty would drastically reduce withholding tax rates on interest payments and royalties paid from Chile and cut the Chilean capital gains tax rate in certain cases. (The Hill, La Tercera)
Investors have responded positively to Chile’s new public-private participation model for lithium during Finance Minister Mario Marcel’s recent trip to New York, reports Bloomberg.
Boric — who is a self-proclaimed Swiftie — has hoped to convince Taylor Swift to add Chile to her upcoming Latin America tour. (Billboard)