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27 November 2019

Chile’s unrest has reawakened its egalitarian spirit

The combination of low wages, rising living costs, meagre pension provisions and expensive drugs are driving growing numbers of Chileans into debt and despair. 

By Jerome Roos

When Chile’s billionaire president Sebastián Piñera was interviewed in the Financial Times in October, he evidently took pride in describing the achievements of his right-wing government.

“Look at Latin America,” he said. “Argentina and Paraguay are in recession, Mexico and Brazil in stagnation, Peru and Ecuador in deep political crisis, and in this context Chile looks like an oasis because we have stable democracy, the economy is growing, we are creating jobs, we are improving salaries and we are keeping macroeconomic balance.”

By the time the interview was published on 17 October, the streets of Santiago were alight with student protests provoked by an increase in the city’s metro fare. A violent police response, in which at least 24 people have been killed and thousands more injured so far, inflamed popular indignation, and the demonstrations swelled into a revolt against social inequality and the rising cost of living. Piñera declared a state of emergency on 18 October and deployed the army to restore order.

In a country still marked by the trauma of nearly two decades of military rule between 1973 and 1990, the image of tanks rolling through the tree-lined avenues of the capital evoked painful memories. The crackdown reminded people of when the government of Salvador Allende, the former socialist president, was overthrown on 11 September 1973 by armed forces under the command of General Augusto Pinochet. The US-backed coup led to political repression, during which the army executed or “disappeared” thousands of political opponents.

The Piñera government’s response to the recent mass protests also laid bare the enduring legacies of the Pinochet era. Many of the frustrations now coming to the fore can be traced back to Chile’s role as the original laboratory of authoritarian neoliberalism, when economic policy was shielded from democratic demands.

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In 1975, the newly installed military junta confronted a deep recession. In response, Pinochet turned to a group of US-trained economists, many of them disciples of Milton Friedman at the University of Chicago, and handed them effective control over economic policymaking. Under the technocratic direction of these so-called Chicago Boys, Chile became a testing ground for the political and economic reforms that Margaret Thatcher and Ronald Reagan introduced in Britain and the US in the 1980s.

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Pinochet was always careful to present his political agenda as constructing a more open, efficient and dynamic economy. For this, he received enthusiastic plaudits from many free-market economists, including Friedman. In reality, however, his project amounted to a thorough reform of the state in order to defend the established order of private property, dismantle Allende’s welfare programmes, insulate economic policy-making from popular pressures and restore the undisputed power of the Chilean business class.

This culminated in one of the most far-reaching privatisation programmes anywhere in the world, and the passing of a new constitution that enshrined the country’s economic model into law.

Since then, Chile has often been considered an unlikely success story in a region that has been blighted by social unrest, populist politics and financial turmoil. Yet whatever modest gains the country made over the years in terms of GDP growth, its economic performance has been accompanied and conditioned by deep social polarisation. The dictatorship’s principal legacy was to cement a spectacular concentration of wealth and power, turning Chile into the most unequal country in the OECD and allowing an ultra-rich corporate oligarchy to establish control over the political system and economy.

This neoliberal model was largely left untouched following the transition to democracy after 1990. In fact, the centre-left Concertación coalition governments of the 1990s and 2000s not only maintained Pinochet’s constitution, but also deepened his regime’s long-standing privatisation initiatives. As a result, many public goods and services – including education, health care, pensions, transport, water and electricity – are now provided by private companies or public-private partnerships, leaving them unaffordable for the mass of the population.

The combination of low wages, rising living costs, meagre pension provisions and expensive drugs are driving growing numbers of Chileans into debt and despair. (People over 80 have the highest suicide rate in Chile. One recent message sprawled across a wall in Santiago reads, “This is for all the grandparents who killed themselves so as not to be a burden. Today we rise up in your honour.”)

The protesters are therefore keen to emphasise that the social uprising of the past month is not about the 30 pesos of the metro fare increase, but about 30 years of accumulated frustration. The ghost of Pinochet continues to haunt the country – not least in the figure of Piñera himself, one of the richest men on the continent, who made his fortune by introducing credit cards to Chile from the late 1970s.

 But just as the protests have exposed some of the hangovers from the Pinochet era, so they have revived earlier visions of a freer, more egalitarian order that his dictatorship crushed. As the socially engaged lyrics and enchanting melodies of the Nueva Canción Chilena – the popular folk music of the Allende era – resound once more from the streets of Santiago, the world is reminded of the last broadcast of the deposed socialist president who, in his final moments, with the military closing in, continued to express faith in his fellow Chileans, declaring that one day they would “overcome this dark and bitter moment”.

Now, with the Piñera government having announced on 10 November that it has finally agreed to hold a referendum in April 2020 on replacing the Pinochet-era constitution, that long-awaited day of reckoning may have arrived at last. 

Read the rest of our world in revolt series here