Por Al Jazeera
The country’s prosperity, though lauded, has not been evenly shared.
To understand the wellspring of discontent that exploded into violent protests across Chile more than two weeks ago, one should look no further than the placards held aloft by demonstrators listing grievances from rising transport costs and student loan debt, to paltry pension payouts and tone-deaf elites.
The wave of civil unrest that has so far claimed 20 lives and left thousands injured has laid bare festering resentment in a middle-income country lauded as a shining beacon of sound economic management, despite its failure to redress staggering inequality.
From a macro point of view, Chile is a success story. The world’s biggest copper producer, it has been among Latin America’s fastest-growing economies in recent decades and boasts one of the largest middle classes in the region.
Much of that growth can be attributed to market-friendly policies that have encouraged private enterprise, trade and investment and discouraged the government from spending beyond its means.
Chile has deftly avoided boom-bust traps that so often plague countries whose fortunes pivot on commodity prices. And it’s political system has proven remarkably stable since the reinstatement of democracy in 1990.
The results have been impressive in some respects. Chile is the highest-ranking Latin American country in the United Nations Human Development Index. The percentage of the country’s 18-million strong population living on $5.50 a day – the poverty threshold for an upper-middle-income country – has plummeted from 30 percent at the start of this century to less than seven percent by 2017, according to the World Bank.
But the prosperity that has helped lift millions out of poverty has not been evenly shared.
The fine print
The fine print of Chile’s success story reveals a Gini coefficient – a measure of income inequality – that is among the highest in the relatively affluent, 36-member Organisation for Economic Co-operation and Development (OECD).
Much of the wealth that accumulates to a narrow slice of the populace is not being redistributed effectively through taxes and benefits. Chile ranks second to last in the OECD for social spending.
Slowing economic growth and a depreciating currency have heaped pain on average workers and made even less money available for public services. Levels of household debt are high by regional standards and many Chileans have moved into less secure self-employment.
This is the backdrop of financial insecurity that is informing demonstrations that began as a protest against a subway fare hike and have since ballooned into widespread protests over inequality.
Citing a weakening currency and rising fuel costs, the government increased the subway fare by 30 pesos ($0.04). Though less than five cents in terms of United States dollars, the price hike proved a tipping point in a country where about half of all workers earn less than $541 a month, according to Sol Foundation, a think-tank.