November 2019

By Daniel P. Erikson

As a modest metro fare increase in Chile sparked widespread public protests over the past several weeks, international observers watched the news, photos, and videos emerging from the country with growing alarm. While the early steps by the administration of President Sebastián Piñera to calm the public outrage—including lowering fares, appeals for calm, and firing much of his cabinet—failed to stem citizen anger, few initially thought that Chile’s hosting of the annual Asia-Pacific Economic Cooperation (APEC) Summit was seriously at risk. Chile, a slender country bound by the Pacific Ocean in the west and the forbidding Andes mountain range to the east, had emerged from one of the harshest Cold War dictatorships in the 1990s to become a beacon of democracy and economic and social stability in the troubled and troubling continent of South America. The “Chilean model,” long considered an enviable reference point for the rest of Latin America, had faced protests and social mobilizations in the past and had always come out on the other side with its reputation unscathed. But this time was different. Faced with unrelenting citizen discontent, the Piñera Administration made the hard choice to shed the responsibility of hosting APEC in November, and also cancelled a second major climate change summit, known as COP-25, in December. 

Accompanied by the Minister for Foreign Relations and the Minister for the Environment at a press conference on October 30, Piñera stated that despite the “deep pain and regret” his administration felt regarding the decision to step down as hosts, their “concern and priority as a government is to concentrate absolutely on, first, to fully restore public order, citizen security and social peace; second, to promote with all force and urgency the new social agenda…and third, to promote a wide and deep process of dialogue to listen to our countrymen.” It was clear that the significance of his decision was not lost on him, though, as he reiterated his desire to “ratify our total and deep commitment to APEC…Chile’s participation in APEC is a powerful instrument to create more and better jobs for our compatriots, to generate more and better opportunities for our companies, especially micro, small and medium enterprises, and to create conditions for a life of better quality for all Chileans.”

While the loss of both summits is significant, it is Chile’s withdrawal as the host of APEC that will have perhaps the more far-reaching geopolitical consequences for Chile. After all, it was Chile’s decision to host APEC in 2004 that ushered in a period of greater economic cooperation between Asia and Latin America and made Chile an important conduit for this growing trade, especially with China. Of the 21 countries that are APEC members, only three are from Latin America: Mexico joined in 1993, followed by Chile in 1994 and Peru in 1998. As the first South American APEC member, Chile has signed 16 trade agreements within the APEC framework, including with China, and most recently with Indonesia in December 2017. President Piñera himself has been a committed pan-Pacific leader, founding the Pacific Alliance grouping of Mexico, Colombia, Peru, and Chile during his first term in office, and he recently attended the ASEAN Summit ahead of the 2018 APEC Summit in Papua New Guinea, as well. Indeed, in the 15 years that have passed since Chile first hosted APEC in 2004, the region’s ties with Asia have become even more intertwined. According to the Asian Infrastructure Investment Bank, total trade between Latin America and Asia in 2016 reached a record high of US$445 billion—including US$237 billion with China alone. By 2016, China had become the largest export market for Brazil, Chile, and Peru. While Mexico had hosted in 2002, and Peru in 2008 and 2016, Chile’s decision to host in 2019 was perfectly suited with President Piñera’s own goals to present his country as a forward-looking bridge builder ready to embrace the 21st century as an era of Asia Pacific integration.

Alas, it turned out that Chile had not left its 20th century problems behind after all. Instead, persistent inequality, strained public services, and surging citizen discontent were all powerful enough forces to eclipse the country’s global ambitions. In mid-November, nearly 200,000 people were expected to participate in approximately 200 meetings related to the themes of “Connecting People, Building the Future: 30 Years of Integration.” Now, unless a new host suddenly steps in to fill the void, Chile’s sudden cancellation of APEC means that the integration agenda will be pushed back until next year’s summit in Malaysia.

The Chilean model was once heralded by economists and politicians as the pathway for development with equity, but now that perception has been badly damaged by the social tensions caused by deeply entrenched inequities that its citizens believe are the result of decades of empty promises. Even as the country takes steps to restore social calm, the impact of the cancellation of APEC will leave scars for years to come. Chile’s people are connected, and a new future is being built, but in the shadow of APEC, it is becoming increasingly clear that the future of integration will be shaped, in part, by the unfinished business of the past.