By Alexander Villegas and Fabian Cambero
SANTIAGO, Dec 15 (Reuters) – Chilean markets rallied on Monday after right-wing hardliner Jose Antonio Kast was elected president in a commanding runoff win against leftist candidate Jeannette Jara.
Kast secured a commanding margin of victory of some 16 percentage points over government-backed Jara, a member of the Communist Party. Kast ran on a law-and-order platform that pledged a crackdown on rising crime and a tougher stance towards unchecked migration at Chile’s porous northern border.
“We are going to work tirelessly to recover tranquility, to recover order, to recover growth and to recover hope because Chile has given us a clear mandate that admits no excuses,” Kast said in a victory speech at his party headquarters on Sunday evening.
He will take over in March from leftist President Gabriel Boric, with whom he met on Monday to discuss the transition.
Kast’s economic plan involves more flexible labor laws, corporate tax cuts, less regulation, and a deep reduction in spending. He has said he will seek to encourage investment in the copper industry in the world’s no.1 supplier, but has indicated no plans for major changes to its governance.
The Chile equity benchmark, MSCI, surged 0.55% on Monday, continuing its recent rally as investors have bet on a Kast win and more market-friendly policies ahead. The Chilean peso has strengthened about 2.7% against the USD since the beginning of November.
‘MORE LIKE MIKE PENCE THAN DONALD TRUMP’
Kast has been on the right-wing fringes of Chilean politics for years, with two previous failed presidential runs under his belt and both personal and family support for the dictatorship of Augusto Pinochet in his past. He has frequently railed against crime, migrants and abortion.
However, he has struck a more moderate tone in campaigning in recent months and was notably conciliatory towards opponents in his victory speech.
“This is going to be ‘Make Chile Boring Again’ and I think that’s good news because there were a lot of people who were afraid he was going to be an authoritarian, populist, radical president,” said Patricio Navia, a Chilean professor of liberal studies at New York University.
Kast – a Catholic with nine children – wears suits and eschews the fireworks of populist regional leaders like Argentine President Javier Milei, former Brazilian President Jair Bolsonaro or U.S. President Donald Trump.
“He doesn’t have that aggressive style of Milei or President Trump,” Navia said. In his speech, in which Kast repeatedly cautioned that change would take time, “he seemed much more like Mike Pence than Donald Trump.”
While there is broad political support to tackle security issues, Kast will be conscious of the need to work with a Chilean Congress that is divided and may not support his more radical proposals. The Senate is evenly split between left- and right-wing parties, while the swing vote in the lower legislative body belongs to the populist People’s Party.
In his favor, there are already signs that sectors like construction and retail are recovering after a tough few years, while inflation has been cooling. But debt is high, said University of Chile economist Jorge Berrios, and his first 100 days will be key.
“There are a lot of expectations in relation to the future government and high expectations can cause problems if they are not fulfilled,” said Berrios.
(Reporting by Alexander Villegas and Fabian Cambero in Santiago; Additional reporting by Froilan Romero and Gabriel Araujo; Writing by Rosalba O’Brien; Editing by Bernadette Baum, Chizu Nomiyama and Alistair Bell)
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