Chile: A Four Cent Tip of the Iceberg

Protests are dominating headlines as of late. While it may seem easy to paint with broad brush strokes, the root discontent for each of these protests remain different. Chilean protests are unlike those in Hong Kong in that the Chileans are sick of over thirty years of broken promises and an economic “miracle” that was only miraculous for an elite few.

         However long the protests last, the uproar at a small hike in metro fare was just the tip of the iceberg in this Chilean discontent. “We Chileans have been unhappy for years, because of low salaries, poor health coverage, and very low pensions,” says Campio Conreras de Ruiz, a resident of Chile’s capital, Santiago. These are just a few of the issues underlying the current protests.

History of the Crisis

To understand the current crisis, one need look no further than 1970. The Cold War was in full swing and the U.S. was overtly resisting the spread of communism and Russian influence. Three years later, the U.S. backed a military coup in Chile to overthrow the democratically-elected president Salvador Allende, whose socialist tendencies conflicted with American interests in South America [1]. This American intervention helped the dictator Augusto Pinochet take control for the next seventeen years. With his regime came a new constitution and the hope of a better Chile through a massive economic overhaul. Through an American exchange program, a group of Chilean economists came to the University of Chicago to study free-market capitalism and bring it back to Chile. These “Chicago Boys,” as they were known, transformed the Chilean economy [2]; the pension system, state owned enterprises, water, education, health care, and most government services were all privatized [3]. Chile bloomed as a “free-market miracle” in the eyes of the world. Such an experiment had never been done before! But this system that was supposed to lift all Chileans only ended up benefiting a select few while the rest struggled to stay afloat. 

Below the Surface

The overprivitizaion of social services has caused long-standing tension between the government and the Chilean people. “We are the generation for whom the joy never came,” said a student from the University of Chile [4]. The new constitution after Pinochet promised better days ahead, but history has proven differently. While Chile is arguably better off than many of its neighbors, the situation is still not enviable. People are working hard night and day to become a part of the middle class, the same middle class that was supposed to rise under the post-Pinochet constitution. 

         Chile has the highest levels of social inequality even though Chilean workers work “about 300 hours more than a typical American worker.” Political elites make thirty-three times the average Chilean salary. As Chile burned the night of the first protests, President Sebastian Piñera was at a birthday dinner, accompanied by members of his cabinet. Could this really be the situation those Chicago Boys had in mind? What began as a supposed economic miracle ended with nothing more than high payouts to political elites, leaving the poor and middle class to fend for themselves. Chileans were promised their pensions “would provide 70 percent of workers’ final wages at work; the real figure is 38 percent” [5]. Chileans have been protesting the pension system, water system, etc. It’s that now, they have finally had enough.

The State of the Protests Right Now

Though the fare increase was quickly scrapped, the protests raged on. President Piñera hurriedly shuffled his cabinet and made promises to amend the constitution and agreed to hold two referendums in April of next year. One referendum will replace the Pinochet-era referendum and the other will decide who makes the changes, politicians or regular people. The protesters have celebrated these moves towards a more equal Chile, but as in Hong Kong, minor concessions have not been enough to quell the protests.

         However long the protests last, the uproar at a small hike in metro fare was just the tip of the iceberg. Chileans of all ages are calling for a new constitution, and with it, a better future.

 While most Americans might see a price hike of four cents as a minor inconvenience, to many Chileans it was not about the price of the transport, but the message that it sent. What Chileans needed was an outstretched hand, but got instead a slap in the face. 

[1] https://www.nytimes.com/2019/11/15/podcasts/the-daily/chile-protests.html

[2]https://slate.com/business/2016/01/in-chicago-boys-the-story-of-chilean-economists-who-studied-in-america-and-then-remade-their-country.html

[3] https://www.nytimes.com/2019/11/15/podcasts/the-daily/chile-protests.html

[4] https://www.nytimes.com/2019/11/03/world/americas/chile-protests.html[5]https://www.latimes.com/business/hiltzik/la-fi-hiltzik-chile-social-security-20160812-snap-story.html

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Hailey Hannigan

HAILEY HANNIGAN is a senior from popular tourist destination, Salt Lake City, Utah. Recently Hailey returned from an internship in Scotland with a head full of ideas and a suitcase full of British crisps. As much as she loves her country, her passion lies in European politics and she’s still debating whether to follow her 4th grade dream of becoming an expatriate. She hopes to pursue a masters in Public Policy abroad (or something fun like that).

Hailey Hannigan

HAILEY HANNIGAN is a senior from popular tourist destination, Salt Lake City, Utah. Recently Hailey returned from an internship in Scotland with a head full of ideas and a suitcase full of British crisps. As much as she loves her country, her passion lies in European politics and she’s still debating whether to follow her 4th grade dream of becoming an expatriate. She hopes to pursue a masters in Public Policy abroad (or something fun like that).

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