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By Felipe

There have been disruptive weeks in Chile’s largest cities. Millions of Chileans have taken to the streets to ring their pans, make barricades and confront the police, and, in some cases, even the armed forces. In the face of this atmosphere of dissatisfaction, many are wondering about the causes and solutions to this problem. Chile was wrongly considered by many foreigners as the oasis of Latin America. Some immigrants even arrived at this country pursuing the “Chilean dream”. However, the reality that many politicians and company owners had brushed under the rug is the high price this stability had demanded.

Most Chilean people have been taught that they belong to a “middle class”. As a result of this, 70% of them feel a part of this social and economic group, even the president of Chile himself, the entrepreneur Sebastián Piñera (Barozet, 2017). This construct engaged Chileans either in the individual work ethic or the choice of post-secondary education, when possible, for upward mobility. However, this large group that addresses both working class and petit-bourgeoisie, must confront the fearsome bulwark that prevents them from concretizing this idea: a small but strong elite, the famous 1%. This is not explicitly stated by any protester indeed, but the sense of belonging to the middle class is deeply rooted in Chileans’ mindset.   

Nonetheless, the barrier to upward mobility and inequality are not the only problems that Chileans highlight. Despite some interpretations that only focus on the critique to the Chilean “political class” as the cause of these protests, Chileans have brought to the forefront of this discussion some issues that question the economic model forged in Pinochet’s dictatorship. One of them, and the most prominent perhaps, is AFP (a fully funded capitalization system run by private pension funds), a system that has been firmly questioned since 2016. According to Gálvez & Kremerman (2019), 50% of the Chileans who became pensioners in 2018 under the AFP system obtained a pension under 48.000 pesos and 50% of the ones who contributed from 30 to 35 working years obtained a pension under 246.000 pesos. This number is low indeed if it is compared to the minimum wage of 301.000 pesos in Chile (Senado de Chile, 2019). Chileans are increasingly becoming aware of the problems of individual capitalization social insurance.

A Chilean protester carries a banner against AFP system

Added to the AFP issues that the Chilean population is facing, Chile is facing a severe drought. The main problem, however, is the Chilean Water Code itself, because it allows the water market in which this sources of this resource can be sold, bought or mortgaged. Because of this, there are 1,4 millions of Chileans without either access to safe water or sewage disposal and 76 comunas (an administrative division) suffering a water shortage even when the Chilean territory has water flows that are 8 times greater than other Latin American countries (Acevedo, 2019). Considering this situation, some Chileans have raised the slogan “No es sequía, es saqueo” (It’s not drought but looting).

Petorca, a village in the Center of Chile, has become the symbol of the consequences of the water market

As seen, the development of the “Latin American Jaguar”, as it was blindly called by some liberal economists, has not been exempted from large economic problems, at least for most Chilean workers. As every capitalist economy, Chile has been economically successful at the cost of the vast part of the workers. Nonetheless, people have started to question some of the principles that have guided the Chilean economy since Pinochet’s dictatorship. Chilean revolutionary organizations and the people themselves are far away from developing the levels of organizations needed to advance towards socialism, but the Chilean people have become aware of their own power, a sine qua non for the achievement of that purpose. 

References

Acevedo, Y. (March 28th, 2019). Territorios Sin Agua. Retrieved from https://radio.uchile.cl/2019/03/28/territorios-sin-agua/

Barozet, E. (2017). ¿Es usted de clase media? Probablemente, no. CIPER Chile. Retrieved from https://ciperchile.cl/2017/04/10/es-usted-de-clase-media-probablemente-no/

Gálvez, R. & Kremerman, M. (2019). ¿AFP para quién? Dónde se invierten los fondos de pensiones en Chile. Ideas Para el Buen Vivir, 15. Retrieved from http://www.fundacionsol.cl/wp-content/uploads/2019/07/TEXG-4.pdf

Senado de Chile. (2019). A ley salario mínimo con acuerdo hasta marzo de 2020. Retrieved from https://www.senado.cl/a-ley-salario-minimo-con-acuerdo-hasta-marzo-de-2020/senado/2018-09-05/165055.html

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