Chile’s Moment of Reckoning
Chile has often been lauded as Latin America’s economic and political success story. Over the last few decades, Chile’s embrace of market capitalism and democracy has prompted falling poverty rates, the construction of shiny skyscrapers in its capital, and the birth of a middle class that had never before existed in Chile. Over the last few months, however, that middle class is taking to the streets to demand a more equal slice of the pie, and onlookers are left wondering whether Chile really is the golden child of Latin America.
In October, a 3.7 percent increase in subway fares led students in Santiago to organize a fare-dodging campaign which soon metastasized into unrest and lawlessness not seen since the country’s transition to democracy in 1990. Three weeks after the first protests, one million people—more than five percent of the country’s population—took to the streets of Santiago to voice their discontent over inequality and related social and economic issues. The protests have shown few signs of slowing down since early October.
Chile’s working classes—while well-off relative to those in other Latin American countries—are struggling to see the potential for upward mobility. Its upper classes, however, enjoy continued wealth and prosperity, much of which is tied to the Augusto Pinochet dictatorship (which fell in 1990) or even as far back to the colonial period. So while Chile is well-off in Latin American terms, its elite class has been entrenched—and exclusive—for decades.
According to Patricio Navia, a professor at New York University and the Universidad Diego Portales in Santiago, Chile’s history of success relative to the rest of Latin America is necessary context for understanding the current protests.
“This is discontent at the gate of the promised land,” Navia told The Politic. “Chile has made great progress with economic development and the restoration of democracy…. That middle class now wants in the promised land, and they are showing their discontent as a result of frustration.”
High utility prices, large household debt loads and a deteriorating private pension system are hurting everyday citizens while the richest one percent of Chileans control a third of the country’s wealth (The Organisation for Economic Co-operation and Development ranks Chile as the most unequal of its 35 member-states). The protests—which have elicited states of emergency in parts of Chile—have also touched on a lack of access to high-quality health care and education.
At least 27 people have died as a result of the protests, with thousands of others injured or detained. Human rights organizations, including Amnesty International and Human Rights Watch, have received reports of Chilean security forces using torture, arbitrary detention and sexual assault against protestors.
For the country’s elites, the riots are a wakeup call to, as Navia puts it, unlock the gates to the promised land. Yet Chile’s ruling class is deeply entrenched in the country’s authoritarian history. Much of the Chilean elite’s wealth is linked to the Pinochet dictatorship, when University of Chicago-trained economists known as the Chicago Boys pushed privatization of state-owned companies and the dilution of labor and tax reforms which benefitted corporations and wealthy families. And according to Navia, Chile’s constitution—which allows for a democratic system—is widely seen as a sort of original sin, since it was born out of the now-illegitimate Pinochet dictatorship.
Elites have abused their power, too. In 2015, the owners of a large Chilean holding company who had close ties to Pinochet were charged with tax fraud, money laundering and bribery and were sentenced to attend ethics lectures at a Chilean University. Pinochet himself avoided jail time after being convicted of plotting the murder of hundreds of Chileans through his political influence. Even the elites themselves recognize their extreme and unjust amount of power in the country: First Lady Cecilia Morel was heard in a leaked October WhatsApp audio recording saying “we will have to reduce our privileges and share with the rest.”
“It’s not just that the system is skewed against the many, but also that those who manage the system break it even further,” said Jorge Heine, a professor at Boston University who has served as the Chilean ambassador to China, India, and South Africa and as a Cabinet Minister in the Chilean government. “The emerging consensus is that the system that is in place is not working for people, and that change needs to be made.”
Some protests in Chile have turned violent. Looters have destroyed shops and supermarkets, and in addition to the 27 people who have died, thousands more injured (at one point, Piñera declared the country at war, which only intensified the nation’s turmoil). Chile’s state human rights institute has criticized the security forces for using excessive force in street battles between policemen and young men covering their faces and throwing rocks and Molotov cocktails. Yet most protestors are not staging a revolution. Rather, they are demanding economic change.
According to Francisco Palmieri, the former U.S. Assistant Secretary of State for Western Hemisphere Affairs and a current Senior Fellow at Yale’s Jackson Institute for Global Affairs, the protests are an indication that Chile’s democratic experiment is working rather than a widespread revolution.
“I see these protests not as a sign of the failure of a political model but rather the ongoing development and evolution of democratic capitalism in any country,” Palmieri told The Politic. “It’s never perfect…. I wouldn’t say that either system is a failure, but that Chile is in the midst of confronting a moment where its political and economic systems have to reconcile some fundamental questions of inequality in a society that is making people take to the streets.”
In November, Chilean lawmakers reached a pact which schedules an April referendum in which voters will decide whether they want a new constitution. Both Heine and Navia agree that the current constitution retains much of the spirit of Pinochet’s authoritarian dictatorship. But while a new constitution may symbolically put Pinochet to rest, Navia told The Politic it will likely do little to solve inequality long term, and that it is up to those in power to solve the problem themselves.
“That’s the challenge going forward,” said Navia. “If the elites accept to save capitalism from capitalists, then Chile will come out of this as a stronger, more developed and more democratic country. If the elites fail to do this, then Chile will follow the same path as Venezuela and we will watch this movie again and again.”
The uprising in Chile has become the most significant chapter in the nation’s history since the 1988 plebiscite that unseated Pinochet’s military dictatorship. While voters will have a say in the country’s future when they head to the polls in April, it is up to those in power to enact real reform in the system they inherited from Pinochet. Time is of the essence too, as a recession is imminent and will only trigger worse conditions for the nation’s lower and middle classes. If Chileans are to walk through the gate of the promised land, something must give.