Two Chilean presidencies, two crises, and two fundamentally different responses. Both governed during an externally originated shock: the COVID-19 pandemic and the current oil price surge. Despite the political turmoil following the 2019 social uprising, Chile entered the pandemic with relatively solid macroeconomic fundamentals that has been a trade marrk in economic media. The first crisis was exogenous, sudden, and globally synchronized.

Businessman Piñera’s response was expansive in his political role. The state deployed significant fiscal resources and savings to sustain households and firms, effectively cushioning the social impact. Emergency transfers, private pension withdrawals, and liquidity measures stabilized demand and prevented a deeper social collapse. The cost was a deterioration in fiscal balances, but the priority was clear: contain the social consequences of an external shock. Perhaps the 2019 demonstrations provided some sensible social reflexes to the Chilean right wing president, who also had recently proclaimed Chile as a haven place in South America, a phrase that clearly shows his blindness on the social and political conditions, as demonstrated by the already mencioned 2019 social uprising.

In contrast, Kast faces at the beginning of his administration, a different political configuration. The Hormuz-related crisis, linked to global energy disruptions, intersects with a structurally weaker fiscal position. Unlike the pandemic, this shock arrives when the state’s capacity to spend is already constrained, but also and more interesting, those social reflexes of the righ elite weaned along the time, as demonstrated by their recent economic measures that are showing a fixed wien only on fiscal health.

Kast’s response, as you frame it, is restrictive. Rather than expanding expenditure, the government prioritizes fiscal correction by reducing state spending, containing deficits, and signaling discipline to markets. This strategy assumes that macroeconomic stabilization is the precondition for recovery.

The contrast reveals two governing logics within Chilean right:

  • Piñera: absorb shock → protect society → accept fiscal deterioration
  • Kast: restore fiscal order → protect macro stability → accept social risk

The key difference is not ideological alone, but situational:

  • Piñera governed with fiscal space, internal and external shock
  • Kast governs only with fiscal constraint and compounded vulnerability

This produces a critical tension:

when fiscal correction coincides with external shock, the burden shifts from the state to society.

Liberal economist endorses the idea that economy self-regulates. The risk is clear. While Piñera’s approach was different under the Covid-19 crises, it risked long-term fiscal strain, but it mitigated immediate social breakdown. Kast’s approach, by contrast, return to the basic asumption of liberal state, is implementing a politics that may stabilize fiscal accounts but amplify social stress, potentially transforming an economic crisis into a political one.

The deeper question is not which strategy is correct, but:

under what conditions does the state absorb crisis, and when does it transfer it to society?

Chile’s trajectory suggests that this decision is about doctrine than about available space—fiscal, political, and temporal. Moreover, it would seem that parlamentary decisions weight less compared to strong president personal thus arbitrary ideas and professional backgroud on how face contingencies.