Piñera's Problems - Unrest in Chile

November 11, 2019

After three weeks of unrest in Chile, political leaders have done little to address its underlying structural problems, aside from shaking up the governmental administration. 

 

Protestors have taken to the streets of Santiago, Chile’s capital, chanting “Chile woke up” whilst lighting fires, causing the city to come to a standstill. Social media is ridden with videos of looting and general chaos while the police try to contain the protestors, some of them armed with Molotov cocktails. Allegations of human rights violations have emerged as images of security services and police beating protestors spread, with 1000 injured and 100 partially blinded after being shot at by police. In a country deemed the economic success story of Latin America, to many these images are surprising. 

 

The causes stem from much deeper structural problems, as the decades-old promise from politicians that a free market economy would lead to prosperity has failed the people of Chile. Political scientist Cristóbal Rovira Kaltwasser describes the situation as a “legitimacy crisis” with the rich not paying their fair share, highlighting the deep-rooted issues of inequality that are endemic in Chilean society.

 

Many protestors cite economic problems as their core motivation. The country suffers from high prices, low wages and a privatised retirement system which means that many elderly people are forced to live in poverty. Many Chileans have accepted that whilst conservative economic policies are a shift away from the socialism of Allende’s government, they are more of a threat to political stability than a way of ensuring it. The economic situation of the country has seriously deteriorated, with the median salary at an average of $540 for a family of four for a month- well below the poverty line.

 

In 1990, the tyrannical dictatorship of Pinochet came to an end when the people voted for a change in government. The country moved from dictatorship to democracy, leading to decades of economic growth. Although this growth was perceived to be because of rising GDP, it was not felt by all Chileans. The end of the dictatorship did not lead to the return of the socialist system practiced by Salvador Allende before the US-backed Pinochet coup, with governments instead opting to keep Pinochet’s laissez-faire economic system.

 

These economic problems are all caused by Pinochet’s economic model which deregulated markets and privatised security systems. The current economic system means that the wealthy get discounts on products and services as they can pay with cash, deepening levels of inequality. The country appears to be fearful of returning to the socialist model operated by previous governments before Pinochet came to power, but this may be what is needed to fix the systemic inequalities free-market economics has failed to solve.

 

Along with the widespread economic problems, a series of corruption and tax-evasion scandals have eroded the public’s faith in politics. President Sebastián Piñera scrapped the four-cent subway fare increase that initially set off the demonstrations, but this has not been enough to stop them. His appearance on TV to ask for forgiveness, promising higher pensions, better health coverage, higher taxes for the rich, and pay cuts for politicians was a sign of weakness and desperation from the President, as there is little evidence these reforms will ever take place. 

 

The present constitution is also in dire need of reform, as it is a remnant of Pinochet’s dictatorship. Amending the constitution would demonstrate that the country is no longer living under the shadow of the Pinochet regime. Such structural reforms, however, are hard to implement as the government does not command a majority in Congress, making it difficult for them to push through any serious change. Piñera needs to take the chance to lay the foundations of a real welfare state. Reforms need to be radical and far-reaching rather than the usual smaller policies such as increasing the minimum wage that fail to make a dent in the inequalities caused by private social systems. 

 

Piñera took an important step by reshuffling his cabinet to include younger and more liberal ministers, giving off the impression he is willing to make changes and tackle the unrest. These changes include firing ministers such as Andres Chadwick, a supporter of the Pinochet regime. However, these changes were not felt by the public, with fresh protests breaking out just hours after Piñera fired the hard-line members of his cabinet.

 

By removing the toxic legacy of Pinochet’s regime, Piñera’s administration is heading in the right direction. However, he still has a long way to go if he wants to fix the structural inequalities of the country. The laissez-faire economic model must be adjusted to address the widening wealth inequality it has created. If he is willing to implement such wide-reaching structural reforms, there is a chance he could reduce the civil unrest, and instead move towards creating a better standard of living for all Chileans. 

 

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