Chilean Economic Officials Resign in Blow to Center-left Coalition

Chilean Finance Minister Rodrigo Valdes and two other senior economic officials resigned on Thursday in a blow to President Michelle Bachelet’s center-left coalition months before presidential and parliamentary elections.

Valdes, an economist who has led the finance ministry for two years, told a press conference some members of the government did not share his sense of urgency to promote growth.

This week he had criticized a controversial decision by the government to reject a $2.5-billion copper and iron project on environmental grounds, a decision Bachelet backed.

“To advance sustainably toward greater growth requires discipline and the conviction of the government to open spaces so that the private sector can roll out its initiatives with clear rules,” Valdes said, adding: “But I believe I wasn’t able to make everybody share this conviction.”

Bachelet said she had accepted the resignations of Economy Minister Luis Felipe Cespedes and Finance Undersecretary Alejandro Micco shortly after Valdes resigned. She said Valdes will be replaced by Nicolas Eyzaguirre, an economist in charge of legislative affairs for the president, while Cespedes will be replaced by Jorge Rodriguez, president of Banco del Estado de Chile.

“I don’t think development is something to be done with your back to the people, where only the numbers matter and not what’s happening to families,” said Bachelet.

The president did not give a reason for the resignations for Cespedes and Micco, though both had been critical of the government’s decision to cancel the Dominga copper and iron project, owned by Andes Iron.

Eyzaguirre and Rodriguez, both centrists, served under Ricardo Lagos, a moderate who was president from 2000 to 2006.

Valdes’ resignation, ahead of the November elections, was seen by some as a blow to the center-left and its candidate Alejandro Guillier, who is generally supportive of Bachelet, and a boost for conservative frontrunner Sebastian Pinera.

Bachelet has faced criticism that her government is poorly organized and lacks unity. Her approval rating has risen slowly in recent months after a series of legislative wins but remains in the low 30s.

“She showed a bit of momentum, but this is something of a reversal,” said Kenneth Bunker, head of an elections unit at the Universidad Central de Chile.

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