Updated: November 2, 2019 9:04:19 am
The “difficult circumstances” — fiery street protests, mob violence, arson, and looting — cited by Chile’s President Sebastián Piñera to back out of hosting the COP25 and APEC Summit have surprised the world, which has long regarded the country as a remarkable example of prosperity and political stability in generally turbulent Latin America.
How did the Chile protests start and spread?
The trigger was a modest 4% increase in subway fares announced on October 1. On October 7, the day after the new fares came into effect, school students launched a campaign to dodge them, jumping turnstiles on the Santiago Metro in civil disobedience, and trended #EvasionMasiva, or ‘Mass Evasion’ on social media.
As the campaign spread, there were violent incidents, and several Metro stations were shut on October 15. Three days later, the entire grid was shut down, and Piñera announced a 15-day curfew. However, the rioting continued, and spread from Santiago to Concepción, San Antonio, and Valparaíso.
The government cancelled the fare hike on October 19, but the protests did not cease. On October 26, over a million people marched in the streets of Santiago.
At least 20 people have died in the demonstrations and violence so far; prosecutors said on Wednesday that they were investigating a total 23 deaths believed to be linked to the protests. Many Metro stations have been destroyed, supermarkets set afire, and stores have been looted. The protests have been described as the most tumultuous of the last 30 years, since the country returned to democracy at the end of General Augusto Pinochet’s dictatorship. Interior Minister Andrés Chadwick has called the situation “more violent and barbaric than anything in (his) memory”.
On Thursday, thousands of protesters wearing Halloween masks and alien costumes swarmed Santiago’s Plaza Baquedano in response to a leaked recording of First Lady Cecilia Morel saying it seemed as though aliens had invaded Chile, while other groups clashed with police at the presidential palace.
But why are Chileans so angry?
The protesters represent the voices of those left out of the economic growth and prosperity that most non-Chileans have come to identify the country with. Discontent against broad income inequality is the key provocation. People are angry about low incomes from salaries and pensions, and are unsatisfied with public healthcare and education.
A major driver of the protests has been the fear of poverty in old age, which has seen many elderly Chileans marching alongside the youth. Chile has a defined contribution pension scheme in which workers pay at least 10% of their wages each month to for-profit funds, called AFPs. Over the years, these AFPs have come to hold an enormous corpus — $216 billion, or about 80% of the nation’s GDP at present — and have huge investments in Chile and overseas.
However, not all Chileans benefit from the pension scheme. Many can’t contribute enough regularly, and end up with small payouts. A third of Chileans who work in informal jobs, as well as those who don’t have jobs, and women who quit to raise children, lose out too. In essence, critics say, the AFPs have helped fuel an economic boom that has been visible in impressive skylines and apparent prosperity, but has really benefitted only a relatively small elite.
What is the government doing?
Piñera has acknowledged most of the protesters’ demands. He has offered a reform package that includes higher taxes for the rich, and multiple policies of redistribution of wealth. This week, he fired several ministers against whom the public has expressed anger. He has said he would increase the state’s contribution to basic pensions by 20% for the poorest Chileans, and would raise employer contributions.
“We have listened with humility to the powerful voice of the people and their legitimate demands for urgent solutions to problems which we all know have dragged on for many decades,” he said last week. However, the protesters remain unmoved, and want Piñera, one of the richest people in the country who has been President since 2018, to go. Opposition parties too, have indicated that they would not simply rubber-stamp the government’s attempts to fast-track pension reform.
Is there a counter-argument?
The AFPs argue that the problem does not lie with the pension scheme, but rather with low wages, a weak job market, and the country’s ageing population. There are many in the country who do not sympathise with the protesters, or who disagree with their violent methods.
The Santiago-based Spanish language daily La Tercera said in an editorial on October 24 that it was “essential to be clear on the origin of these happenings and those who are responsible… This violence must be very clearly distinguished from peaceful protests …(The violence) only seeks the destabilisation of the country, and has nothing to do with the demands of the marches.”
In its editorial of the previous day, La Tercera had praised Piñera’s reforms package as “effectively taking care of the needs most felt by the people, particularly the most vulnerable sections, and allowing for a new political and social dialogue”.
A letter to the editor in La Nación said: “Chile has 9% poverty, 2.3% destitution. Since the return of democracy, the GDP has multiplied 5 times. Inflation is below 5%. There is a high level of employment. There is access to credit, and interest rates are around 2%. Although there exists the problem of distribution, the country continues to be rich and orderly. The complaints of the middle classes do not justify the setting ablaze and destroying of a nation that is a model of development for the region.”
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