Bright flames rise chaotically from graffiti-ridden buses, their ashes camouflaged in the one-year-old asphalt of once-tranquil streets. Thousands of enraged citizens fling Molotov cocktails and sharp stones at riot police, their faces covered to conceal their identities. Small stores remain closed, their iron doors tightly shut, even as the sun pierces through the darkness of the smoke. This is neither Bogotá in 1948 nor Caracas in 1989. Hard as it is to believe, this bedlam is occurring this year in Santiago de Chile, once considered to be South America’s great economic hope.
Since October 18th of 2019, Chile has experienced a series of anti-government protests and civil strife at a scale unprecedented in its recent democratic history. In a country of just 18 million, over one million demonstrators stormed the streets of the capital in one such protest. Initially triggered by a proposed hike in Santiago’s public transportation fares, the movement escalated and endured in response to broader perceived economic injustice. While the vast majority of protesters have been peaceful, a significant portion of them has engaged in violence and vandalism, resulting in substantial human and material losses. In the broader context of Latin America, it is difficult to understand how Chile suddenly became a hotbed of unrest.
After all, Chileans enjoy a per-capita income about 30 percent higher than that of Latin America as a whole, nearly twice that of their neighbors in Peru, and over three times that of their neighbors in Bolivia. Given the large impact these protests have inflicted on the country, it is worth assessing the roots of the protesters’ grievances and considering their implications for other Latin American countries as they strive to pursue economic development.
Situation on the Ground
By November 1st, violent clashes between protesters and the police resulted in twenty deaths and over one thousand injuries, an unseen phenomenon since the end of the Pinochet dictatorship in 1990. Protesters have also engaged in riots and vandalism, inflicting significant material damages, especially in the capital city of Santiago.
“They’ve destroyed the transportation system, the metro, and it’ll take about a year to rebuild it,” said Chilean real estate entrepreneur Rodrigo Gonzalez in a phone interview with The Politic. Ironically, he pointed out that those most hurt by the protests are those that the protesters claim to be fighting for, including small business owners and those who work with them.
“It’s especially hurting micro-enterprises, run by people who live from month to month and can’t open shop because of the violence. Everything’s closing now at 5:00pm, so they’ve been able to sell a lot less but have to face the same costs,” explained Gonzalez.
While rioting has been particularly severe in Santiago and other cities, the protesters have also threatened Chile’s limited transportation routes, negatively impacting rural communities.
“Thanks to a process of mutual understanding, the demonstrations have not affected the main sources of work in this region, such as mining and agriculture,” Alejandro Álvarez, Advisor to Chile’s Ministry of Finance for the O’Higgins Region on the outskirts of Santiago, told The Politic. “However, the concern today is that the products exported from our region may not reach their destination without difficulties along the way.”
Additionally, the turmoil has led to a series of symbolic defeats for the country’s traditional institutions. The El Mercurio building in Valparaíso, home to the world’s oldest continuously published Spanish-speaking newspaper, went up in flames during the first week of protests in an unqualified attack against the free press. Furthermore, as Chilean Political Scientist Daniel Rojas explained in an interview with The Politic, President Piñera was forced to remove eight of his cabinet ministers and cancel the Asia-Pacific Economic Cooperation (APEC) Forum and the 25th UN Climate Change Conference (COP25), “events that would have validated Chile’s role in a world that’s increasingly concerned about fighting climate change and protecting free trade in the context of Trump’s trade war with Xi Jinping.”
Shortcomings Amidst Success
According to Rojas, the objective material concerns of the protesters are “totally valid,” and apply across multiple facets of the country’s economy. He highlighted that, while in 2006 the highest-paid 10 percent earned 30.8 times as much as the lowest-paid 10 percent in labor incomes, this figure had risen to 39.1 times by 2017, according to government figures. Furthermore, 50 percent of workers earn monthly labor incomes at or below about $555 US dollars. He then outlined the presence of oligopolies in many sectors, the precarious state of pensions, and the dependency on credit of large segments of the population.
“The advances of development are there but they’ve come at a very high cost,” concluded Rojas.
However, it is equally important to consider the extraordinary achievements of Chile’s model of economic development. Since the country’s return to democracy in 1990, its gross national income per-capita has increased by a factor of 2.5, an expansion that has propelled it towards levels of development scarcely seen elsewhere in Latin America. Furthermore, while the country’s income inequality remains among the highest in the OECD, and although it has increased along some dimensions (including, as noted earlier, among wage earners), the broader trend in recent years shows a consistent decrease in overall levels of income inequality. This is because the primary beneficiaries of Chile’s economic growth have been the very poorest. While the top 20 percent saw their total 2017 incomes grow to just over 210 percent of their 1990 incomes, the lowest 20 percent saw a much greater expansion of almost 400 percent, and every income group in between predictably benefited most the poorer they had initially been.
It must be noted that most of this expansion took place before 2012, after which economic growth stagnated across Latin America as a result of declining commodity prices. While Chile remained Latin America’s third fastest-growing large economy during this time period, behind only Colombia and Peru, the slowdown undoubtedly impacted the country’s ability to deliver on its promise.
“While the country was growing, the salaries increased accordingly every year,” said Gonzalez. “But as of late the salaries have been quite stagnant, so many people have lost some of their purchasing power to increasing prices.”
However, even during these difficult times, Chile’s economic model tends to prioritize the improvement of the worse off. Between 2015 and 2017, while gross national income shrunk slightly when adjusted for inflation, as did the incomes of the top 40 percent, the remaining 60 percent of Chileans saw their incomes grow, and the poorest 20 percent in particular saw a highly significant increase.
This income growth has resulted in improved standards of living across other dimensions. In 1990, Chile’s citizens were expected to live nearly four years less than those of Canada. By 2017, that gap had fallen to just above two years, an impressive accomplishment given Canada’s historical development levels and its status as the country with the world’s 12th longest life expectancy.
Chile’s improvements in the realm of education access have been similarly impressive. Chilean children today are predicted to undergo 16.4 years of schooling on average, a figure equivalent to or exceeding those of Austria, Switzerland, and France, and a whole two years above the Latin American average.
While there are undoubtedly limitations to Chile’s path towards higher standards of living, on the whole, it has resulted in dramatically improved standards of living for the most vulnerable. The explosive unrest that has transpired in the past weeks, therefore, left many observers across the rest of Latin America deeply puzzled, a sentiment echoed by Peruvian Nobel Prize-winning author and former presidential candidate Mario Vargas Llosa in a recent column entitled “The Chilean Enigma.”
“Chile has almost left behind its status as a developing country; it’s much closer to the First World than to the Third,” he wrote. “How can one, then, explain what’s transpired?”
New Wealth, New Challenges
Searching for an answer to Vargas Llosa’s enigma, The Politic contacted Dr. William Klein, a Senior Lecturer at Yale’s Humanities Program who specializes in the history of civil strife. He recalled the 2011 rise of the Indignados Movement in Spain, claiming that it had emerged both from new circumstances—namely, the 2008 recession—and also, crucially, from the work of activists seeking to stoke indignation towards pre-existing realities.
“Stephan Hessel was trying to mobilize people by listing the things they should be indignant about but that they hadn’t been.” said Dr. Klein. “While the recession was a new fact, the essential system wasn’t any different, and he was saying it’s time to feel indignation towards that system.”
This process of dual causation displays important parallels with Chile. While the mid-2010s slowdown of the Chilean economy was much less severe than Spain’s situation following the 2008 financial crisis, it nevertheless subverted the expectations of a population that had grown accustomed to greater prosperity. This made it possible for agitators to portray more long-lasting shortcomings, such as Chile’s high but decreasing levels of inequality, as completely unacceptable and worthy of indignation. This explains how, despite Chile’s having been a much less equal and poorer country 15 or 20 years ago, the country’s civil unrest has risen to levels that were unthinkable in those times.
However, this analogy misses an important point. While Spain has been an economically developed country since at least the 1970s, Chile is at best a newcomer to the developed world. The rising expectations of the country’s first predominantly middle class generation, coupled with a government accustomed to addressing the concerns of a citizenry with much more basic needs, offers a unique challenge, Álvarez explained.
“Chile today faces a new stage, in which the citizenry does not demand to leave poverty, have safe drinking water, or improve its public infrastructure, but instead demands more equality and for everyone to feel part of a community in which the standards have, without a doubt, changed,” he told The Politic.
A component of this new challenge has to do with the mere belief in increased standards, what Vargas Llosa described in his column as “the perfectly comprehensible impatience” of this new generation. However, as Klein told The Politic, it is perhaps just as important that large numbers of Chileans, no longer forced by circumstance to dedicate themselves entirely to ensuring subsistence for their families, now have the means to even protest at all.
“There’s a level of, as Aristotle would say, leisure, that’s required to participate in politics,” he explained. In other words, by achieving a level of development sufficient to lift millions out of poverty but insufficient to create a strong perception of economic justice, Chile has produced a deeply ironic hurdle to continued prosperity and harmony.
Hope for the Future
While the situation appears grim in the short term, we should neither lose sight of everything Chile has achieved nor of its potentially positive prospects for the future. As Álvarez explained, the Piñera government has proposed a series of forward-looking reforms meant to bring an end to the crisis. These range from a substantial increase in the minimum wage and the country’s guaranteed pension scheme, impacting 500,000 workers and about three million adults, respectively, to a more generous public health insurance system and stricter bargaining with pharmaceutical companies for drug prices.
“It is to be expected that these measures, in conjunction with a deep discussion about which structural measures we must debate, will allow Chile to move forward and continue to build a country where everyone feels included,” said Álvarez.
Even the business community, largely the target of the ire of the protesters, keeps a largely optimistic long-term outlook. “The economic model will not fully change, but it will be adjusted,” explained Gonzalez. “And the country may even emerge stronger as a result, because we will have unleashed and addressed this buildup of civil unrest.”
Whatever happens next, the case of Chile offers valuable lessons for other states on a similar path towards development. While hubris is almost inevitable in the midst of remarkable success, governments should never overestimate their ability to meet the changing needs of their constituents and guarantee an enduring concord.