A Tinderbox of Inequality: The root cause of the protests in Chile

Chants of “Chile woke up” echoed through Santiago’s O’Higgins park on a Saturday afternoon. The country has experienced over a month of mass protests, originally sparked by an announced hike in Santiago’s subway fares on October 4 (800 pesos to 830 during peak travel times). High school students took to the streets to protest the proposed hike and by October 6, the entire city was engulfed. One day alone saw over one million Chileans demonstrating.

Chile is widely regarded as Latin America’s success story. It has experienced extensive economic growth within the last two decades, and it is currently one of the wealthiest nations on the continent. Chile has the highest per-capita income in Latin America at $20,000 USD, and while its economy is expected to grow by 2.5 per cent in 2019, it is only expected to experience a 2 per cent inflation rate. However, Chile also has one of the highest income gaps in the world, 65 per cent above the OECD average. In fact, half of Chilean workers earn $550 USD a month or less. A 2018 government report also showed that the income of the richest Chileans was 13.6 times greater than that of the poorest.

So, what is responsible for this systemic inequality? The end of Pinochet’s military dictatorship in the 1990s did not translate into a shift away from the free market economic policies that dominated his rule in the 70s and 80s. In fact, subsequent governments followed similar economic policies, despite their more democratic nature. Today, many Chileans see those policies as the true reason for the current level of inequality. This is captured in the chant, “It’s not 30 pesos, it’s 30 years,” alluding to the fact that the 30-peso subway fare hike is simply the spark that set fire to the tinderbox of inequality created over the last three decades.

The recent privatization of public services has put increased stress on the average Chilean. Education, water, electricity, phone services, healthcare, and pension plans have all been privatized. One protestor told the New York Times that “education was supposed to be our ladder out of poverty,” but because of the privatization of the educational system, scholarships no longer cover tuition. As a result, many students from working class backgrounds have no option but to borrow money to afford higher education. Further, the supposed meritocracy of Chile still excludes those of poorer socio-economic backgrounds from securing employment.

However, this is not the first protest in Chile led by students. In 2001 and 2006, high school students led nation-wide protests against the privatization of Chile’s public assets. Then, in 2011, those same students (now in university) organized more protests against more laissez-faire policies, a movement which opened the door for the formation of more left-leaning political parties.

After the protests over the subway fare hike resulted in the burning of a garment factory just outside of Santiago on October 20, President Sebastián Piñera declared a state of emergency in Santiago and five other cities. As of November 1, 20 people have died and over 7,000 have been arrested. Further, there have been reports of extreme police brutality after the President called in the military. More than 160 eye injuries from non-lethal ammunition have occurred since the beginning of the protests, as well as the use of water cannons to disperse crowds.

President Piñera attempted to appease protestors on October 22 by announcing the cancellation of the subway fare hike, an immediate 20 per cent increase in government pensions, new and improved insurance programs, a guaranteed monthly income of $483 USD, the cancellation of a planned 9.2 per cent electricity price hike, and a new 40 per cent tax bracket for those who earn over $11,000 USD per month. He also promised the reduction of the number of members of Congress, new congressional term limits, and pay cuts for elected officials. These announcements, however, have not yet been successful in pacifying the protestors, as they continue to take to the streets.

Claudia Mix, a congresswoman from the leftist Frente Amplio coalition, thinks that these announced reforms are “stingy.” Further, many of the proposals are not new, but involve fast-tracking legislation that was stalled in Congress, including a bill that proposed a 25 per cent reduction of legislators’ salaries that was stalled for six years.

The protests in Chile follow a year of upheaval in Latin America. Protests in Venezuela against President Maduro started in January of 2019, and in August, Brazilians took to the streets to protest President Bolsonaro. In recent months, more protests have broken out in Bolivia, Ecuador, and Haiti.

In Chile, continued protests and calls for the end of President Piñera’s administration echo the last years of the Pinochet’s dictatorship. The Chilean people will not be appeased by simple policy changes. They demand solutions to systemic inequality. However, whether or not the government is willing to make the changes demanded by its young people remains to be seen.