Chile's Man From Harvard Campaigns in Santiago's Harlem

By L. Francis Bouchey
[The Wall Street Journal, June 19, 1992, Excerpts]

SANTIAGO -- Mark Klugmann is not your typical Chilean campaign volunteer. But this former Reagan White House speech writer is not working for a typical Chilean candidate. His boss, José Piñera, is a
free-market-oriented Harvard Ph.D. running for mayor of Conchali, a poor industrial working-class barrio in Santiago. "It's a case of Harvard goes to Harlem," says Mr. Klugmann, "of applying the free market where it's needed most, in the poorest neighborhoods."

Mr. Piñera, who for three years was a cabinet minister in the Pinochet government, believes free-market policies can gain popularity in poor areas if they are effectively applied toward solving such specific problems as education. That's how his run for office in Conchali originated -- with an education program to make upward mobility an option for the poor.

As head of Project Chile 2010, Mr. Piñera has matched 41 medium-sized businesses with schools in their neighborhood, organizing a creative partnership to improve education and instill employment-relevant skills. The program has three elements: bonuses for good teachers; stipends for high-performance students to help them cover the costs of books, transportation, school uniforms and shoes; and a creative partnership to improve education and instill employment-relevant skills. It's all private and costs the government nothing. This is not charity. Businesses are investing in their future labor forces.

Beyond education, Mr. Piñera addresses the lack of opportunity for poor adults. Despite the free-market changes that revolutionized Chile's economy for the middle and upper levels of society, here in Conchali the government still bestows favors instead of respecting rights guaranteed by law. The people of Conchali often complain of unresponsive bureaucrats "who do everything for their own convenience and are even hostile to citizens they are supposed to serve, especially the poor." One man reported spending three days visiting six offices to get a license for his tiny furniture shop operating from a shed and then learning that he had to have a concrete floor to operate. So he went on working in the underground economy. Four hours a day, Mr. Piñera walks the streets of Conchali as a candidate, explaining how if elected he will legalize small, "informal" (unlicensed) businesses.

Mr. Piñera's aim is to apply Chile's celebrated economic model to those on the lower rungs of society's ladder. "To do that," he says, "means bringing a message of hope and self-reliance to people who have always been told to look to the state to provide for them or who have been thwarted by government policy and regulation when they have tried to help themselves." This unconventional candidate promises a one-stop service center where citizens will receive simplified and expedited attention with a minimum of paper work.

Within Chile, there is surprise that this former cabinet member as well as economic adviser to presidents has chosen to take on such commonplace issues and run for office in the slums. But Mr. Piñera, the son of Chile's United Nations ambassador during the Christian Democratic government of President Eduardo Frei, is a sometimes prickly maverick.

When he was labor minister of the military government, Mr. Piñera crafted a modern labor code that is now recognized as a pillar of Chile's economic transformation. He also gave the country a second
pillar of its new economic order: a privatized pension system that replaced old-style social security transfer payments. And as mining minister, he wrote the law that helped develop Chile's largest industry by opening the country's natural resources to world investors.

The brash young Mr. Piñera completed this trampoline-trick of reforms in 1981 at the age of 32. The first depoliticized and democratized the labor movement; the second fueled domestic savings and capital markets; the third integrated Chile into the world investment portfolio, producing huge capital inflows. All are recognized accomplishments today, even though they sparked intense controversy when formulated.

(President of the Washington-based Council for Inter-American Security Foundation, a nonprofit research institute).



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