Chile’s Right Set to Make History With Congressional Majority

Chile’s right-wing opposition is likely to win a congressional majority for the first time in at least seven decades in elections later this year, according to a simulation by data analysis firm Unholster.

José Antonio Kast. Photographer: Jeenah Moon / Bloomberg

While ultra-conservative Jose Antonio Kast is expected to win the presidential vote, right-wing parties —including his Partido Republicano— will take 85 of the 155 seats in the Chamber of Deputies and 26 of 50 places in Senate, Unholster calculated. The first round of presidential voting and the congressional election both take place on Nov. 16.

“It’s a great opportunity to establish their way of governing without having to reach agreements with the left,” said Unholter’s director Cristobal Huneeus. “It gives them more freedom to pursue their agenda.”

Ever since electoral reform in the 1950s that ended widespread electoral fraud, Chile’s Congress has been either split or, very rarely, controlled by an alliance of the center-left. Should Kast win the presidency and gain control over both chambers he would have more power to implement radical free-market policies than at any time since the dictatorship of Augusto Pinochet that ended in 1990.

Two of Kast’s most controversial proposal that would require congressional backing include cutting $6 billion in government expenditure in his first 18 months in office, and turning irregular migration into a crime. Kast has also pledged to lower taxes and to reduce red tape.

A split congress has been the bane of presidents since the return to democracy in 1990, with only one —Michelle Bachelet — gaining a majority in both chambers in 2014. For years, so-called designated senators — many appointed by the military — prevented the center-left coalition controlling congress. More recently, the administration of President Gabriel Boric has been consistently frustrated in its attempt to overhaul the economy by its lack of a majority.

A victory for the right in congress would lead to the “appreciation of the Chilean peso as political uncertainty diminishes,” Scotiabank economists including Jorge Selaive wrote in a report. The outcome would also drive a “re-rating of domestic equities, particularly in sectors sensitive to regulatory reform” and the compression of local bond spreads, reflecting an improved fiscal and policy outlook, according to the report.

Still, a simple congressional majority may not represent control for Kast. The opposition is split into two blocks that are competing for seats in both chambers. There is no guarantee that lawmakers from a more moderate alliance led by center-right candidate Evelyn Matthei will entirely support Kast’s policies. There are also likely to be lawmakers from more populist parties.

“The ideal scenario is for us to have a right-wing government with right-wing lawmakers, but that will be difficult to achieve,” said Hugo Osorio, director of investments at Portfolio Capital, a wealth management advisory firm. “If the majority is obtained by a right-wing that is not the same as the president’s, you won’t actually have the majorities that you think.”