Dogged by adversity, Sebastián Piñera eyes his legacy

Sebastián Piñera is no stranger to adversity. Eleven days before the start of his first term as Chilean president in 2010, one of the strongest-recorded earthquakes devastated his country. Much of that presidency was spent picking up the pieces.

His second term in office, which he hoped would hasten Chile’s passage from middle-income status to fully developed nation, has instead been marked by a triple crisis: the coronavirus, a prolonged spell of riots and social protests in 2019, and last year’s global economic downturn.

“We aren’t here to complain or to cry over spilt milk,” Piñera says briskly in an interview with the Financial Times when asked about the multiple misfortunes. “We are here to deal with adversity, overcome it and carry on”. 

Adversity was not much in evidence early in Piñera’s career. He made his first fortune by bringing credit cards to Chile in the 1970s. Then he made a shrewd early investment in LAN Chile, an airline which later became Latin America’s biggest airline LATAM. In the process, he became one of Chile’s richest men, with a fortune of nearly $3bn, according to Forbes.

Along the way, he acquired a reputation as a fearsome dealmaker. “You don’t want to be on the other side of the table from Piñera,” says one business figure in Santiago. 

As a conservative billionaire and leading member of the elite, Piñera was an easy target for the street protesters of 2019, whose uprising was motivated partly by anger that the fruits of Chile’s strong economic growth had not been shared widely enough.

Piñera was criticised for a heavy handed initial response to the riots after he declared a state of emergency and sent the army on to the streets, saying Chile was “at war with a powerful enemy”. His poll ratings plunged to single digits and demonstrators called for his resignation.

“Of course, we have made mistakes,” Piñera admits, “but I think that, in the main, we have managed to direct the three big challenges on to the right path”. The social protests have been channelled into a democratic process to elect members of a special convention to draft a new constitution; the pandemic has been fought with one of the world’s fastest vaccination programmes, plus Latin America’s most comprehensive testing regime; and the economy is forecast to recover its pandemic-related losses faster than any other in South America.

Still, the experience has been a severe test for the president, whose long experience in the private sector often influences his style of governing. “He’s the best CEO Chile could have but he’s a horrible politician,” says one banker in Santiago, echoing a commonly heard view that Piñera’s people skills are no match for his business acumen.

One former official, who knows him well, says of the president: “He is a very smart man and an able manager. But he is impossible to like.”

With an energy that belies his 71 years, the Chilean leader wants to be remembered when he steps down next year for helping to bring his country intact through its most difficult period in half a century and laying the foundations for prosperity.

The goal of developed nation status, however, remains elusive. Near the start of his first term, Piñera told the Financial Times that he hoped it would be reached by 2020, yet a decade later he admits “we still have a long way to go”.

Andrés Velasco, a former finance minister under a centre-left government, criticises Piñera for failing to do enough to stimulate economic growth, saying that he relies excessively on a belief in “animal spirits”. “If the big reason to vote for Piñera was to achieve a lasting increase in the rate of growth, he’s failed to deliver,” Velasco says.

Chile is still dependent on copper exports, although it has built up successful overseas sales of fresh fruit and wine and is pursuing investment in renewable energy and the production of green hydrogen.

The president points to how Covid-19 has accelerated technological change and says the digital economy is the place to look for prosperity. “When we return to a new normal, the world will be very different . . . ” he says. “We can’t arrive late for the technological revolution”.

To stay competitive, Chile is creating a nationwide fibre-optic network for broadband services and aims to be one of the first countries in the region to bring 5G mobile services online. With other South American nations, it is also investing in the continent’s first direct subsea optical cable link with east Asia and the Pacific, removing the need to route traffic via North America. Since 2000, trade with China has grown to the point where it is Chile’s largest trading partner. Piñera has no time for trade wars and wants the US to collaborate with Beijing rather than confront it. He will not pick sides over issues such as whether to use Chinese 5G technology. “Chile has good relations with China and good relations with the US,” he says. “It will hold auctions for 5G technology according to the interests of Chile, without us getting into this fight between the two big superpowers.”

The world will be very different. We cannot arrive late for the technological revolution

Mindful of protectionist sentiment among American Democrats, President Joe Biden said on the campaign trail he would not pursue fresh trade deals in office. Piñera nevertheless hopes that Washington will eventually return to pursuing the aim of negotiating a free trade area covering all of the Americas — a goal set by Bill Clinton in 1994 but abandoned a decade later.

With less than a year to go before he steps down, Piñera remains determined and energetic. A strong Catholic faith and a supportive family have helped him weather the storms, he says.

The earthquake in his first term destroyed a third of Chile’s schools and hospitals.

“Now we have to face adversities of a different kind,” he says. “And we are facing them with all our strength and will and with the best tools, within democracy, the rule of law and national unity.”