Wednesday, 10 September 2008

The gaff that keeps on giving

Ever since John Marshall established the principle of judicial review in Marbury v. Madison, bodies entrusted with these powers have locked horns with executives. It should come as no surprise, then, that Michelle Bachelet has had some difficult encounters with Chile’s Constitutional Tribunal, including a tussle over the government’s plans to make birth control pills available at public clinics. But the latest encounter is particularly damaging.

Since it implementation in February, 2006, the revamped public transportation system in Santiago has been the Bachelet government’s Achilles Heel, costing the government tens of millions of dollars a month, while public opinion claims not to notice a substantial improvement in service (indeed, the number of those with a negative opinion of the system has increased). Faced with bankrupting Transantiago, the government sought funding in Congress but was unable to garner enough votes. It then obtained a U$400 million loan from the Inter-American Development Bank. But this week the Constitutional Tribunal declared the loan unconstitutional. As if that weren’t bad enough, the government is threatening to use its weapon of last resort – the 2% of the budget the constitution permits for spending on ‘catastrophic events’. Of course, declaring Transantiago a catastrophe is a public relations nightmare, but options are becoming scarce. Without Congress’ cooperation, funding runs out in two weeks. Opposition critics are demanding the abandonment of the plan altogether and a total redesign.

Transantiago has already become a symbol of technical incompetence, opening the door for opposition claims that government is incapable of offering solutions to problems of public policy. Chile remains a country where many public services, from roads to water to pensions are largely in private hands, and although Michelle Bachelet has had some success in areas such as health care and pensions, Transantiago gives a strong boost to the neoliberal argument. For President Bachelet’s progressive agenda, this is the legacy of Transantiago.

That is the public policy problem. But there is a political problem as well. This week former president Ricardo Lagos, who insists he does not want to run for president but who is making more and more public appearances, lashed out at Bachelet, saying that “One responsibility is the plan’s design, which all the international authorities applaud… but the way in which it was implemented, or implemented ahead of time, is not my responsibility.” In other words, he handed over an internationally-approved plan and Bachelet messed it up. Vote for Lagos, he’ll fix it.

What lies behind this extraordinarily ungraceful outburst? Probably the publication of a poll earlier in August in which 32 percent of those polled blamed the previous administration for Transantiago, whereas only 25 percent blamed Bachelet. What Lagos did not say is that although the government’s current subsidization of Santiago’s public transportation system was not written into the original plan, it is the rule rather than the exception. Although the government claims that one of the principal funding problems that Transantiago is that too many riders are not paying their fares, research shows that most public transportation systems around the world are not, in fact, financed entirely by what riders pay. In the US, fares cover anywhere from 13% of total operating costs (Detroit) to 67% (New York’s subway), with most in the 30 to 50 percent range. Whatever the implementation problems Ricardo Lagos wishes to concentrate on, it appears that in addition to routes and technology, not admitting that subsidization was going to be necessary was a design flaw as well.