MercoPress. South Atlantic News Agency

Chile's proposed Constitution unlikely to prevail

Rejection seems to be a good thing for Chile's economy

Three weeks ahead of Chile's Constitutional Plebiscite, the nays (Rejection)are still ahead, according to a survey by the consulting firm Cadem, which showed 46% of the voters would rather keep the Constitution drafted under Dictator Augusto Pinochet in 1980 instead of adopting the one penned by the Constitutional Assembly convened last year.

Those approving the innovative version of the Fundamental Law amount to 38%, Cadem said, while 16% of Chileans were yet to make up their minds.

The proposed Constitution meant “hope” for 39% of respondents and “concern or fear” for 55% of them. Regardless of their own vote, 48% of Chileans believed Rejection will win and 43% that Approval will prevail.

The survey was conducted by telephone between August 10 and 12.

The fact that Rejection is likely to win has played a key role in the current stability Chile's economy is going through, according to market analysts who tie the current economic situation (the appreciation of the Chilean peso, the rebound of the stock market, the slight drops in interest rates and the fall of Chile's risk premium) to that factor.

“From the point of view of the markets, the fact that the 'Rejection' has been ahead in the polls with a gap in relation to the other option, at an economic level will lead the value of assets in Chile to go up and the markets will continue to value them more strongly if this position is maintained. And they will be higher than what the 'I approve' option generates on September 5, given the starting point it has in terms of modifications,” Economist Patricio Rojas of Rojas y Asociados told Diario Financiero.