Let’s talk about what’s been happening in Chile.
This is a country some people have described as
an economic success story.
But we’re also seeing this
protesters angry at not being able to put food on the table
get proper healthcare
and just generally with how the country is run.
So what are they seeing that others aren’t?
Is there a flip side to Chile’s success story?
Whether Chile can be described as successful
depends on who you ask and ultimately
where their politics lie.
But let’s start with a look at Chile’s economy.
And really any story about the country’s modern economy
should start with these guys
the Chicago Boys.
They’re a famous, some would say infamous
group of Chilean neo-liberal economists.
In the 1970s they studied in Chicago
under Milton Friedman, a champion of
free-market capitalism and an eventual Nobel laureate.
It was around that time back in Chile
that General Augusto Pinochet staged
a military coup to get rid of President Salvador Allende
and his socialist government.
Chile’s economy was a mess.
Yearly inflation was running around 300%
and a lot of people struggled to pay for basic necessities.
So Pinochet needed a plan to fix the economy
and the Chicago Boys had one.
It went like this.
The best social public policy
is economic growth.
If the economy grows
you will have less poverty
and so on along the time.
In this part
Chicago Boys
their recommendation was right.
Chile’s economy did grow.
Thanks to freeing up the market Chile made trade deals
with countries around the world, exporting things like
copper and its internationally renowned wines.
In 2010 Chile even became the first Latin American country
to join the OECD, a club for developed economies.
“Applause, backslapping and especially congratulations
were in order at Chile’s presidential palace.”
Chile’s economy has had its bumps
but compared to its Latin American neighbours
the country has become a sort of Promised Land.
Between 2017 and 2018 Chile’s economy
grew by about $20 billion.
Compare that to Argentina
where the economy shrank by $123 billion in that time.
It’s no wonder tens of thousands of migrants
from all over South America have moved to Chile
for jobs in the last few years.
This is one of the leading countries in GDP per capita.
We have reduced our poverty from
nearly 40% in 1990 down to 8.6% last year.
So with that rosy picture in mind
it’s tough to imagine why a four cent increase
in metro ticket prices led to
the biggest protests in Chile in years.
Young people kicked it off by refusing to pay for the metro.
Soon the protests grew.
And spread.
“The unrest on the streets of the Chilean capital
and elsewhere in the country has been unrelenting.”
But it also got ugly.
People started burning stuff, there was looting
and the government deployed the military.
Protesters and police confronted each other.
Thousands were injured on both sides
and people have died.
Now this movement has been about a lot of things
but one of the big ones is inequality.
33% of Chilean GDP goes to the 1 percenters.
That's higher than almost everywhere.
I don't think there's another country that
has that level of inequality.
What many protesters say is that
the middle class in Chile isn’t middle class at all.
That’s because in the government’s eyes
a person can qualify as middle class
even if they earn as little as $180 a month.
For a family of four it’s about $630.
I would be classified among the richest 20% in the country.
And my monthly income is about 950 euros a month
and I’m a professional with a master's degree.
I don’t think that’s a rich person.
Chile’s National Statistics Institute calculated that
80% of people have no money left at the end of the month.
Once they get through paying for food, transport
housing and basic services it’s all gone.
Unless they pay for stuff in instalments
which in Chile you can do just about anywhere.
A lot of people go to the supermarket
with a credit card.
They don't even have enough to pay for
that supermarket bill in cash.
So in a way, we have seen a decrease in poverty
but we have more people in debt.
The protesters have another criticism
and that’s against high levels of privatisation.
In Chile utilities like water and electricity
are in the hands of private companies.
Whereas sectors like education and health
have a mix of private and public options.
Critics say that system is driving prices up
and that the quality of public offerings are worsening.
If a retiree hasn’t paid into a private pension, for instance
they get a government allowance
of just $180 a month.
We have people who are receiving pensions
after working their whole lives which are making them poor.
They don’t cover their basic needs
with the pension that they are getting.
Access to good healthcare.
That is really expensive.
Access to private schools.
That's really expensive.
Access to some universities.
That's really expensive.
Now in response the Chilean government has raised
the minimum wage, promised more money
for health services and the very elderly.
But some protesters say it won’t be enough.
And now there’s division over just how much
Chile’s free-market model should change.
There are two perspectives for the crisis in Chile.
One is Chile’s a poor country
unequal society and so we need to change everything.
The other is much more social democrat.
We need to improve the pension funds
the health and so on
but we need to keep
the competitiveness of the economy.
And that’s the government’s message
Yes, we recognise the need for social fairness but
We cannot change things overnight
and also we need to keep a country
that keeps an economy working
because if the discussion is about redistributing wealth
we first need to create that wealth.
Moving ahead won’t be easy.
There’s been damage.
Chile’s National Human Rights Institute accuses the police
and military of serious abuses that include
using excessive force during the demonstrations.
Even Chile’s famously stable economy
had its biggest drop in a decade
and probably won’t recover for a while.
But there is a plan to reconcile the country.
It involves rewriting the constitution that
was originally drafted during Pinochet’s dictatorship.
Polls in Chile say it’s something 80% of Chileans
seem to support and so does the president.
In April a referendum will ask voters whether they want
a new constitution and whether it should be written
by an all-citizen body or include lawmakers too.
If it goes ahead elections for that body
are expected to happen in October.
It’s going to be a long and politically difficult process
but the idea is that Chile can write a new story if you will.
A story more people can call a success.