By Rosalba O'Brien
SANTIAGO, March 12 Chile's new center-left
president Michelle Bachelet said on Wednesday she will forge
ahead with ambitious reform plans to combat steep income
inequality despite an economic slowdown that is deepening.
With growth slowing to a near four-year low and prices for
top export copper tumbling to 44-month lows, some had speculated
she may tone down her program, which is expected to begin with
tax reform, including a corporate tax hike.
But when asked by Reuters whether the gloomier global
outlook could lead the administration to scale back its reform
pledges, Bachelet brushed aside concerns.
"When the economy is doing well there's an excuse to say tax
reform isn't needed because the economy is doing well and there
are resources. When the economy is doing poorly they say we
can't because the economy isn't doing so well," Bachelet said
during a press conference on Wednesday.
She said the reform would be done "responsibly" but in
accordance with the mandate that voters gave the government.
"The tax reform (plan) has been crafted with responsibility
and seriousness and will be implemented gradually in such a way
that those in question can make the necessary adjustments so
that it won't affect the development of their company or the
Her comments chimed with earlier remarks from new finance
minister Alberto Arenas, who said the planned 56 reforms in 100
days were fully financed.
While top copper producer Chile is often lauded as an
economic star in Latin America, many in the Andean country are
clamoring for the spoils of a copper boom to be more fairly
shared and for improved education, health and pension systems.
Moderate socialist Bachelet was sworn in on Tuesday, vowing
a raft of measures including overhauling the education system
and tearing up the dictatorship-era constitution.
One of her major challenges will be navigating the slowdown
in Chile, whose open, mining-dependent economy is closely tied
to the health of global markets.
Bachelet did say some budget adjustments may be in the cards
given the economic outlook.
Still, with the central bank forecasting growth at between
3.75 percent and 4.75 percent this year, the Chilean economy
looks enviable to many in the developed world- and social issues
may end up dominating Bachelet's agenda more than economic ones.
"Despite slowing economic growth and concerns from investors
and the outgoing government, Bachelet seems unlikely to
backtrack on her tax reform plans, mainly because of the social
risks this will imply," said Maria Luisa Palomino, analyst with
"High expectations over her reform agenda, and a persistent
risk of student protests, suggest that the incoming government
will follow through on plans," she added.