The Minister of Finance of Chile, Mario Marcel (Santiago de Chile, 63 years old), has been classified as the government superstar of Gabriel Boric, who this Saturday will celebrate one year in power. He is backed by recent indicators that speak of a rebound in the Chilean economy and surveys that establish him as the best valued by the citizens of the team of ministers, something unusual for a head of the Treasury’s wallet that has taken care of public spending (it fell more than 23% in 2022 and a surplus was achieved for the first time in a decade). Of the leading technical cadres of the center-left Concertación that governed Chile between 1990 and 2010, he fulfilled important functions in all these periods and landed in the current Executive directly from the presidency of the Central Bank.
At the time of this interview with EL PAIS, however, the economist is coming off his first major defeat. Less than 24 hours have elapsed since the Chamber of Deputies threw out the most important project for the Treasury, the tax reform that sought to collect 3.6% of GDP to finance the Government program. On the day of the biggest legislative failure that has been seen in these 12 months, on Wednesday, Marcel was seen angry in Congress, as few times. In this conversation in his office a few meters from La Moneda, the socialist – with his usual, leisurely tone – draws the back room of defeat and what is coming for the future. He does so within hours of President Boric making a Cabinet change this Friday whose depth is unknown, although Marcel seems immovable.
Cristian Soto Quiroz
Ask. The deputies have thrown down, from the outset, his tax reform. How do you explain it?
Answer. We have a Congress with great dispersion, where the great blocks that at the time dominated our political system are not present and where the Government is in a minority. To legislate, therefore, it depends on the attitude of the opposition and of parliamentarians who are neither in the ruling party nor in the opposition. The legislative process has become more complex.
Q. There have been many governments without a parliamentary majority, with the exception of Michelle Bachelet’s second…
R. But the four-year alternation of governments has been putting a lot of stress on the political dynamics of Chile and, unfortunately, a point has been reached where the arguments and data are not enough.
Q. Did the result take you by surprise?
R. We knew it would be a close vote, especially since there was an express definition of the opposition parties to vote against. But what surprised me was the weakening of the willingness for parliamentary dialogue and the desire to inflict a blow on the government for various reasons, which I prefer not to try to interpret.
Q. What is it referring to? Something similar said the president…
R. What was behind the vote was much more than tax reform. It is a more complex political moment, in which the Government has been strengthening public opinion, the economy is improving and where, at the same time, emblematic projects such as the pension reform are being discussed.
Q. The traditional right has been very open to dialogue with the government and showed it after the plebiscite on September 4, when it honored its commitment to continue with a new constituent process. Isn’t it possible that your project was bad?
R. One can find a bad project and can think how to improve it. The legislative process has many instances to improve it. So it’s not the issue.
Q. Three left-wing parliamentarians were absent from the room due to a previous altercation with the Minister of Education and you were missing two votes…
R. I don’t know how these deputies rank on the political spectrum. They are clearly not from the government coalition. Because the parliamentarians of the government coalition voted in favor of the reform, with the support of the Christian Democrats.
Q. Both the Minister of the Interior, Carolina Tohá, and the spokeswoman, Camila Vallejo, pointed to the responsibility of former President Sebastián Piñera, who reappeared in recent days very critical of the reform. It matches?
R. It is one more piece of information about the elements that surrounded the vote. The responsibility belongs to those who rejected it, not to those who encouraged it or who had a discussion (referring to the Minister of Education).
Q. Isn’t there a strategic design error and the way in which the Government faces the political discussion? He seems confident in the ability to have votes by the margin, but he has a minority position in Parliament…
R. It takes two to tango. If the counterpart, the opposition, does not have a greater will to dialogue, one cannot force it.
Q. This episode has been classified as the Government’s most serious crisis and its greatest legislative defeat. Do you think the same?
R. It is a defeat and, unfortunately, it does not only affect the Government, but everything that was contained in the reform project, measures expected by the citizens. But I would not call it a crisis, because the Government is whole, complete, with the full support of its parties and the will to move forward.
Q. In this analysis, what is the self-criticism behind closed doors on the part of the Government? The management of votes or not having moderated the conflicting points?
R. The Executive was very willing to dialogue and consult throughout the processing of this project.
Q. It seems that the Government never makes self-criticism in depth. When the proposal for a new Constitution, which the ruling party supported, was rejected, they blamed misinformation…
R. There has been a lot of self-criticism and it would be very reductionist with respect to the plebiscite if the diagnosis was misinformation. I do not think it is representative of the attitude of the Government. There are people who reproach the government precisely for being very self-critical, for asking for many apologies.
Q. President Boric’s couple was the one who said that the rejection had won because of misinformation, because of “the campaign of terror.”
R. But the couple of President Boric is not the spokesperson for the Government.
Q. What are the ways to try to get the reform forward?
R. With the president’s clear decision to go ahead with the tax reform, we are going to look for the appropriate means. But clearly it will not be easy, that is evident.
Q. What is the dimension of the blow that Parliament dealt them and to what extent does this affect the plans for the remaining three years?
R. It is a blow, but the center-left has been a sector that has received many blows in its history and has been able to get up many times. Along with this reform, the Government has projects such as the royalty mining, that of corrective taxes, there is the option of re-discussing the income tax through different mechanisms, waiting a year or insisting through the Senate. But in this political scenario a rather careful assessment is required.
Q. Will you have to moderate the reform?
R. Necessarily, from the moment in which a reform is required to be legislatively approved in a Congress of these characteristics, one has to be willing to give in and hopefully the other party is also willing to give in to something.
Q. Ricardo Mewes, leader of one of the main business unions, said that they understand “the objective of raising more resources to cover social needs, but that cannot be done at the cost of taxing savings and investment, harming growth and Job creation”.
R. It’s a very broad definition that leaves out too much. We have to be a little more realistic and generous. In the weeks after the social outbreak of 2019, we heard many businessmen say that they were willing to make an additional tax effort to solve social problems. What one would expect is that this will continue to be present, because if not, unfortunately, we would not want to repeat scenarios like the ones we had three years ago and that we must remember that it was not fulfilled. I believe that this will is latent in many businessmen and we hope that the business unions will be more open to understand the country’s issues.
Q. Is there a breeding ground for a new outbreak?
R. Still trying to understand what led to the 2019 outbreak, there are many different views. If we are not clear about this, it is very difficult to assess the risk or predict that it will happen again. What is relevant for politicians, union leaders, businessmen, is to be sure that we have done everything possible to solve the problems that people face. And if we ask ourselves today if everything possible has been done, unfortunately we must say no.
Q. According to surveys, such as that of Criteria, you are the most valued in the Cabinet. What does the failure of the tax represent for you, politically?
Q. I do not evaluate these things from a personal point of view. I am not here to become popular or pursue a political career, but to serve the country. And if the tax reform is not approved, we will be failing the country.
Q. The government too?
R. Given how the vote took place, if the tax reform is not approved, the entire political system will be failing the country. It has already happened with the pension reform on two occasions, with the reforms of President Michelle Bachelet and President Piñera. It was the political system that was incapable of reaching agreements.
Q. Before this black Wednesday for the Government, there was very good news for the Chilean economy. Can we already speak of a trend towards recovery?
R. I would say yes. The economy during this quarter will tend to stabilize and probably from the following quarter it will start to grow, always comparing quarter to quarter. In the 12-month comparison, we will always have negative figures, because we are coming from a very high point, due to the overheating of the economy in 2021. But it is undeniable that the set of things that have been observed is positive.
Q. Is a recession ruled out?
R. The recession, understood as two quarters of decreased activity compared to the previous quarter, will not occur in 2023.
Q. The economist Sebastián Edwards has assured that “the recent upturn in the economy is the product of the triumph of rejection” in the plebiscite on September 4, when a profoundly transformative proposal was demolished. Do you agree?
R. I do not agree with assigning the recovery of the economy to a single cause and even less to the triumph of the rejection of the draft new Constitution. If one looks at the timing Of all things, he realizes that any natural lag that one applies to the issue of political perceptions does not fit with the moments that have been improving the figures. Therefore, it is a statement that does not stand up to analysis, which is not to say that the referendum did not have a positive impact.
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