Chile: an illusion

After weeks of mass daily demonstrations, all the rubbish that Chile had swept under the rug began to be revealed, and highlighted the facade of its economic miracle. Español

Daniela Del Solar
Daniela Del Solar
14 November 2019, 12.00am
A demonstrator with a chilean flag in front to riots during a protest against the government of president Sebastian Pinera on November 6, 2019 in Osorno, Chile
Photo: Fernando Lavoz/NurPhoto/PA Images. All rights reserved

During the last decades, Chile was, to the international eyes, the country with the greatest economic, political and social stability in Latin America, often presented as an example for the countries of the region. Its economy was known as the Chilean miracle which gave it the nickname “Jaguar of Latin America”.

The position that the country was taking on the international scene led Chile being in charge of hosting and organizing two of the most important summits at the international level: APEC and COP25. However, in mid-October a social outbreak in the capital that expanded rapidly throughout the country surprised everyone. Now Chile faces the greatest political and social crisis since its return to democracy almost 30 years ago and with it the impeccable image begins to crack.

Chile stood out among the countries in its neighborhood. Its stability in all areas was worthy of envy from its Latin American peers who in recent times faced social conflicts within their borders. The country had the best macroeconomic indicators in the region, being recognized by the World Bank as one of the fastest growing economies in South America.

Steve Hanke, an academic at the Johns Hopkins American University, commented on BBC World: "Chile is so far ahead of its neighbors that in many ways it does not even seem to be part of Latin America." And that was the presentation letter that Chile sold internationally: an oasis in the middle of a convulsed stage, an island outside the continent.

The image of being a developed country had led the Chile to be responsible for organizing two of the most important summits at the international level: The Asia-Pacific Economic Cooperation Forum (APEC), which would take place in November, and the United Nations Conference on Climate Change (COP25), scheduled for December. Numerous leaders and their respective delegations of the major world powers were going to attend both events. Everything seemed to be going well for the jaguar of Latin America. Chile was affirming its position in the world order.

The miracle of the Chilean economy began to be orchestrated during the civil-military dictatorship. With a population neutralized by terror, disappearance, torture and death, a series of neoliberal policies suggested by Chilean students of the Chicago School were promoted, without restriction.

The new market logic permeated all areas of people's public and intimate life and all basic services were privatized. With the return to democracy the neoliberal model deepened and began to bear economic fruits, income poverty was reduced and the country began to be known internationally for its success, being presented as a positive example in terms of the privatization of public goods.

Chile was emerging as a neoliberal paradise, as it was the place where this model in its extreme version had triumphed. Macroeconomic numbers looked healthy and was considered the richest economy in the region in terms of per capita income - which is not the best way to measure the wealth of a nation.

In recent decades, the guinea pig of the Chicago School seemed to be approaching to the great dream of being a developed country. His entry in 2010 to the Organization for Economic Cooperation and Development (OECD), the club of the most developed nations in the world, was a proof of that, Chile was the first country in South America to achieve this.

The development of which Chile boasted was excluding a large part of its population that did not see the country's progress reflected in an increase in its quality of life

However, shortly after entering into the select group, Chile began to lead in the worst rankings of the organization and it was the last in the positives. These indicators began to show that the economic success of the nation was not translating into greater well-being.

The international image that the country showed contrasts with what happened internally. The development of which Chile boasted was excluding a large part of its population that did not see the country's progress reflected in an increase in its quality of life or in an equitable distribution of earnings.

Wealth is concentrated in a small group of families while most Chileans have get into debt for a long time to access basic rights such as education or health. According to a report by the Central Bank, the level of indebtedness of an average family is 74.3% of the annual household income, which causes the middle class to be suffocated by debts and high living costs, but macroeconomic numbers that the country presented hid those edges.

Growth was not accompanied by the development of a welfare state that could satisfy the needs of the population and the social demands that, on the other hand, constantly faced the indolence of the political class that did not give its arm to twist and only responded with repression. In addition there were other discomforts such as an insufficient minimum wage, very long working hours, poorly designed cities that make long journeys, pensions that are not enough to reach to the end of the month, among others. All these aspects made the Chilean situation a grassland that with a seemingly small event, such as the 30 Chilean pesos (US $ 0.04) increase in the subway passage, burned rapidly.

Even after the uprising, it took a long time to the government to react and understand the background of discontent. From the political class, the anger of the population was treated as a simple youth tantrum to which, as is often the case with other demonstrations, the full weight of state repression was thrown out by taking the military to the streets, an event that had not happened since the dictatorship, except in cases of natural disasters.

In a few days of revolt, there were already more than a dozen dead at the hands of state repression, which is unusual for an OECD country.

After two weeks of protests, all the garbage that Chile kept under the carpet began to be unveiled, those aspects that were hidden behind its image of an economic miracle. Today the jaguar of Latin America is no more or less developed than before the social outbreak, only now the world has a more transparent image of what Chile really is.

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