With less than two weeks to go until the referendum, opinion polls have barely budged
Firms should review their five-year strategic plan for Chile given that the September vote is likely to extend rather than limit political and regulatory uncertainty, particularly if, as we expect, the constitution is rejected. Still, firms should not be dissuaded from long-term investment in the market; while an alternate reform process will be longer and more convoluted, it is likely to lead to more balanced rules of the game in the long term than the current constitutional draft.
- With less than two weeks to go until the September 4 referendum, opinion polls have barely budged, revealing continued low support for the 2022 constitution. Although 10–20% of voters remain undecided, polls suggest that most of these voters do not intend to show up to vote, suggesting that they are unlikely to sway the vote away from the “reject” camp.
- The referendum is increasingly tied to President Gabriel Boric, with voters likely to express sentiment toward the current administration in the plebiscite. Moreover, the “reject” campaign is far outspending the “approve” campaign, preventing the “approve” camp from winning, as many during the campaign period anticipated.
- Finally, the opposition is increasingly open to compromise. Chile’s Congress recently changed the threshold for reforming the 1980 constitution to four-sevenths of lawmakers. (Previously, three-fifths or two-thirds of votes were required, depending on the nature of the change). The opposition has even vowed to pursue priorities like expanding Chile’s commitment to social rights even in the event of a rejection.
- It is highly unlikely that Chile will simply revert to the 1980 constitution if the plebiscite fails (as the current process outlines), but these factors have enabled support for pursuing another constitutional route to gain steam.
No matter the outcome, Chile will continue to experience heightened political and regulatory uncertainty over the next five years. If the constitution does pass, the implementation process that was outlined by the constituent assembly will extend implementation until 2028. The path forward is less clear if the constitution is rejected. The Boric administration is pushing for another constitutional process in the event of a rejection; however, this option would likely require yet another referendum, prolonging uncertainty. Other, less popular alternatives include selecting a committee of experts to draft another constitutional text or implementing changes to the 1980 constitution through Congress now that the approval threshold is lower. Regardless of the outcome of this vote, two things are clear: social rights will be expanded—though the timeline for changes and the extent to which they are implemented remain highly uncertain—and uncertainty is here to stay.
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