Boric announces his cabinet picks

CHILE - In Brief 21 Jan 2022 by Robert Funk

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The markets have reacted positively to Gabriel Boric’s cabinet announcement. Is this enthusiasm warranted? Yes and no.On the one hand, even though the average age of the new ministers seems low (49), they are all quite experienced. The new Foreign Minister, for example, has a distinguished record as president of the OAS Inter-American Commission for Human Rights. The designated Interior Minister, Izkia Siches, was the president of Chile’s College of Physicians during the pandemic, often serving as a gadfly to the government’s early attempts to gloss over the deteriorating situation. Even the new Minister of Labor, Jeanette Jara, a Communist, has experience in government and is likely to compromise.But it is the designation of Mario Marcel at Finance that probably caused the loudest collective sigh of relief, interpreted as a sign that Boric not only wishes to tack to the center, but also that he recognizes that Chile’s economic and fiscal situation will require an experienced set of hands. Marcel has guided the Central Bank during an especially rough couple of years and it is likely that the next few years will, for different reasons, be equally challenging. He will need to, first, oversee the tax reform that Boric needs to finance the rest of his program and return the country to a more stable fiscal situation. Moreover, he will be constantly trying to soothe nervous domestic and national investors.Today’s optimism is based in part on relief: after months of doomsday scenarios, where many thought that "Chilezuela" was around the corner, the naming of a mainstream and known economist should result in a dramatic change in tone from Chile's business class. However, the r...