Chile's president-elect Gabriel Boric has announced a young, diverse and woman-majority cabinet (AFP/Javier TORRES)
Fri, January 21, 2022
Chile's leftist president-elect Gabriel Boric, whose victory at the polls last month unsettled the markets, on Friday named the country's Central Bank governor as his finance minister in a young, diverse and woman-majority cabinet.
Mario Marcel, an independent politician and former member of the Socialist Party, with which he maintains strong ties, had held various roles under center-left governments from 1990 to 2008.
Now 62, he was appointed Reserve Bank governor by Socialist former president Michelle Bachelet for a five-year term that started in late 2016 and continued under her center-right successor Sebastian Pinera.
Marcel was the favorite of the markets, which view his appointment as a sign of moderation in the economic reforms Boric had vowed to implement.
Boric, painted by his detractors as a "communist," succeeded in mobilizing record turnout in the December 19 vote, and garnered nearly 56 percent of votes cast, compared to 44 percent for ultra-conservative Jose Antonio Kast.
In a leftist coalition that includes Chile's Communist Party, Boric campaigned on promises of creating a "welfare state," increasing taxes and social spending.
Kast, in turn, had pledged to protect the neo-liberal economic model left behind by dictator Augusto Pinochet -- credited with Chile's relative wealth but blamed for a yawning gap between rich and poor.
Investors reacted nervously to Boric's victory, with the SP IPSA index closing 6.18 percent down the day after the election, while the Chilean peso ceded 3.4 percent to the US dollar to reach an historic rate of 876.
- Increasing taxes -
Marcel will take over amid expectations of an economic slowdown after growth of about 12 percent in 2021 due in large part to government grants to help with the coronavirus fallout, and individual withdrawals from private pension funds.
Chile's central bank has been increasing interest rates to halt inflation, and grants will stop, too.
Marcel will also have the tough task of implementing Boric's plan to increase taxes to fund social projects.
Analyst Marcelo Mella of the University of Santiago said choosing Marcel was a nod to the markets, as he "has credibility on the right and in the private sector."
This was a good starting point, Mella added, "for making the very difficult decisions the president will have to make this year."
- 14 women -
With a 24-member cabinet of whom a third are independents, Boric is seeking to expand the reach of his leftwing political coalition in a Congress divided near 50-50 between the left and right.
"The general outlook is a positive one in terms of breaking down the walls the president needs to break for a majority project with parliamentary backing," said Mella.
Fourteen members of the new team are women.
For interior minister, Boric chose Izkia Siches, 35, a surgeon who in 2017 became the first female president of the Medical College, a professional association of physicians.
Siches, who led Boric's presidential campaign, will also be Chile's first female interior minister.
The team also includes former student leaders and lawmakers Giorgio Jackson and Communist Camila Vallejo, who together with Boric led protests in 2011 for free schooling.
Maya Fernandez -- the granddaughter of Marxist former president Salvador Allende who died in the 1973 coup d'etat led by Pinochet -- will be defense minister.
The new foreign minister will be 53-year-old lawyer Antonia Urrejola, former president of the Inter-American Commission on Human Rights
"We are accompanied in this team of ministers by people of diverse backgrounds and training, a diverse cabinet," said Boric as he unveiled his team.
The average age is 49. The youngest, at 32, is new Women's Affairs Minister Antonia Orellana. Seven of the cabinet members are in their 30s.
Boric, elected at 35, will be Chile's youngest-ever president and one of the youngest in world history.
He will be sworn in on March 11.
On Friday, Boric named his priorities: managing the coronavirus pandemic, encouraging economic growth with social inclusion and ensuring the success of the process to write a new constitution to replace the Pinochet-era document still in place.
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Chile's Boric unveils centrist Cabinet as markets breath sigh of relief
Chilean President-elect Gabriel Boric speaks during the presentation of his first cabinet in Santiago
Fri, January 21, 2022,
By Fabian Cambero and Natalia A. Ramos Miranda
SANTIAGO (Reuters) -Chile's leftist President-elect Gabriel Boric unveiled his Cabinet on Friday, throwing markets and investors a bone by picking current central bank head Mario Marcel to be the Andean country's finance minister.
Boric also named Izkia Siches, a prominent doctor and part of his campaign team, as the interior minister and his deputy, as well as lawmaker Marcela Hernando for the key role of mining minister, where copper and lithium development will be in focus.
The balanced make-up of the incoming government suggests Boric, a 35-year-old lawmaker and former student protest leader, may look to push gradual reforms rather than abrupt changes some had feared in the world's top copper producing nation.
"Naming Mario Marcel as finance minister is a very good sign of economic stability, seen positively by markets," said Miguel Angel Lopez, a public affairs professor at the University of Chile, adding it was a mix of coalition allies and technocrats.
"It's all linked to a much more centrist, more pragmatic shift in terms of what Boric wants to do in his government."
The new government, which will take office on March 11, was made up of members of parties across the political spectrum, reflecting a fragmented and diverse Congress. Women will lead more than half of the ministries.
Boric pledged during the election campaign to enact major reforms to Chile's market-led economic model, rattling investors, though he has moderated his tone since, boosting Chile's markets and currency.
The peso currency strengthened early on Friday to under 800 per dollar for the first time since November. A select index of Chilean equities also rose more than 2%.
'GREAT REFORMS'
Boric during the campaign pledged to "bury" Chile's market-orientated model, which has driven growth in the South American country in recent decades but has also deepened inequality, triggering months of social protests at the end of 2019.
He has promised to reform the private pension and health systems and raise taxes to finance greater social spending.
"This Cabinet's mission is to lay the foundations for the great reforms that we have proposed in our program," Boric said after unveiling his ministers, adding that it would look to drive economic growth while cutting out "structural inequalities."
"We are talking about sustainable growth accompanied by a fair redistribution of wealth," he said.
Chile, a global front-runner in the roll-out of COVID-19 vaccines, ended last year as the world's best-performing economy, buoyed by large state spending and several rounds of private pensions withdrawals to ease the impact of the pandemic.
Boric will, however, have to contend with signs of an overheating economy and inflation, as well as a fragmented Congress, which analysts say will force him to seek consensus with more centrist sectors.
"One of Boric's biggest challenges will be cooling down the economy and retaining popular support," Oxford Economics said in a report, adding that the young leader would face pressure to increase social spending while meeting tighter budget targets.
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Chilean peso has rallied from record low https://tmsnrt.rs/3rEpA0i
Chilean peso has rallied from record low (Interactive) https://tmsnrt.rs/3qL0Uny
Latin America bond yield spreads https://tmsnrt.rs/3ryvBvG
Latin America bond yield spreads (Interactive) https://tmsnrt.rs/3KumAMH
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(Reporting by Fabián Andrés Cambero and Natalia Ramos; Editing by Sandra Maler, Chizu Nomiyama and Paul Simao)
Fri, January 21, 2022,
By Fabian Cambero and Natalia A. Ramos Miranda
SANTIAGO (Reuters) -Chile's leftist President-elect Gabriel Boric unveiled his Cabinet on Friday, throwing markets and investors a bone by picking current central bank head Mario Marcel to be the Andean country's finance minister.
Boric also named Izkia Siches, a prominent doctor and part of his campaign team, as the interior minister and his deputy, as well as lawmaker Marcela Hernando for the key role of mining minister, where copper and lithium development will be in focus.
The balanced make-up of the incoming government suggests Boric, a 35-year-old lawmaker and former student protest leader, may look to push gradual reforms rather than abrupt changes some had feared in the world's top copper producing nation.
"Naming Mario Marcel as finance minister is a very good sign of economic stability, seen positively by markets," said Miguel Angel Lopez, a public affairs professor at the University of Chile, adding it was a mix of coalition allies and technocrats.
"It's all linked to a much more centrist, more pragmatic shift in terms of what Boric wants to do in his government."
The new government, which will take office on March 11, was made up of members of parties across the political spectrum, reflecting a fragmented and diverse Congress. Women will lead more than half of the ministries.
Boric pledged during the election campaign to enact major reforms to Chile's market-led economic model, rattling investors, though he has moderated his tone since, boosting Chile's markets and currency.
The peso currency strengthened early on Friday to under 800 per dollar for the first time since November. A select index of Chilean equities also rose more than 2%.
'GREAT REFORMS'
Boric during the campaign pledged to "bury" Chile's market-orientated model, which has driven growth in the South American country in recent decades but has also deepened inequality, triggering months of social protests at the end of 2019.
He has promised to reform the private pension and health systems and raise taxes to finance greater social spending.
"This Cabinet's mission is to lay the foundations for the great reforms that we have proposed in our program," Boric said after unveiling his ministers, adding that it would look to drive economic growth while cutting out "structural inequalities."
"We are talking about sustainable growth accompanied by a fair redistribution of wealth," he said.
Chile, a global front-runner in the roll-out of COVID-19 vaccines, ended last year as the world's best-performing economy, buoyed by large state spending and several rounds of private pensions withdrawals to ease the impact of the pandemic.
Boric will, however, have to contend with signs of an overheating economy and inflation, as well as a fragmented Congress, which analysts say will force him to seek consensus with more centrist sectors.
"One of Boric's biggest challenges will be cooling down the economy and retaining popular support," Oxford Economics said in a report, adding that the young leader would face pressure to increase social spending while meeting tighter budget targets.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Chilean peso has rallied from record low https://tmsnrt.rs/3rEpA0i
Chilean peso has rallied from record low (Interactive) https://tmsnrt.rs/3qL0Uny
Latin America bond yield spreads https://tmsnrt.rs/3ryvBvG
Latin America bond yield spreads (Interactive) https://tmsnrt.rs/3KumAMH
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Fabián Andrés Cambero and Natalia Ramos; Editing by Sandra Maler, Chizu Nomiyama and Paul Simao)
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