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The cracks in the Chilean miracle

The eruption of a social crisis in the country that spearheaded economic growth in Latin America for 14 years has perplexed the world. Pensions, health, education and salaries are the fissures within a system that concentrates wealth and has turned Chile into a referent for one of the region’s structural problems: inequality.
Por:: Paulette DesormeauxyMichelle Carrere,
2 Nov 2019 – 05:24 PM EDT
Recent protests have brought millions of Chileans onto the streets, described as the largest since the return of democracy. Crédito: Marcelo Hernandez / Getty Images

The subway trains are charred. So are the three ATMs in the station where they stopped. The rails of the underground railway destroyed. Everything down there is completely covered in ashes. The smell of smoke and burnt iron is pungent and it is, at times, difficult to breathe without coughing.

Outside the station, a group of armed military youth keep passers-by from entering. Inside are families and neighbors of the Lo Prado sector, in the western part of Santiago, the Chilean capital. It is about fifty people who, using shovels and sacs, clean what remains of the San Pablo station, the last station of line 1 which traverses the city, connecting east with west.

Rosa Pinto arrives early along with her mother-in-law and her grandchildren. They want to speed up the process of rebuilding the station that was burned down on Saturday, October 19, 2019, amidst the social protests that broke out massively in the country with the best human development indices in Latin America, according to the United Nations Development Program (UNDP).

Alongside them, wearing thick gloves, a blue apron and hair tied back, Gladys Zúñiga, a 53 year-old woman born and raised in the commune, indignantly sweeps the station’s soot. Every so often she interrupts her chore, looks straight at the camera and rants, arms in the air, against the reasons that have kept her discontent for years and that today, in a scorched setting, render her furious.

Her stories offer clues in understanding the fury that has broken out in Chile.


The protests in the South American country emerged after president Sebastián Piñera -- counseled by a technical board of experts -- announced an increase in subway ticket fares by 4 cents, making the new price $1.17 USD. Chile was already ninth on the list of 56 countries in the Organisation for Economic Co-operation and Development (OECD) with the most expensive public transportation systems.

In backlash to this measure, students shared information and memes on social media, and organized to call upon a massive evasion of subway fare payments. Hundreds, some in their school uniform, started to jump over the turnstiles to access the underground railway.

According to a record kept by the Ministry of the Interior, elaborated with information given by the Carabineros de Chile, Chile’s civil police body, on Thursday, October 17th a mob of 400 broke the turnstiles of the San Joaquín subway station. The next day, seven subway stations were set on fire. At one of those, the fire was ignited by a plasma TV that was launched furiously towards the rails.

That Friday, the subway gradually closed the 136 stations that connect its 7 lines of underground railways, by which 2.6 million people travel daily.

Patricia Aravena is a nurse and works at a medical center in Las Condes, an affluent sector of Santiago. Due to the damages, she was held back 45 minutes inside a subway train without being able to access the station. When she was able to get out into the street, she did not know where she was or how to get back home.

It was 5 p.m. and hordes of santiaguinos clogged the streets.

“I became anxious, it is confusing when you get thrown off your usual route, I didn’t know what to do”, tells Patricia, who lives in Recoleta, in the north part of the capital.

Sin The buses were packed and there was a sense of generalized consternation in the middle of the chaos. Without the option of taking buses, taxis or Uber, people began to walk. There were some for whom it took eight hours to get home, crossing, by foot, a city populated by seven million.

A taxi driver riding with his wife and baby saw Patricia standing on the street and offered to take her closer to home. When she arrived, her neighborhood did not look the same as it did in the morning. The supermarket and pharmacy would be looted, and the subway station two blocks from her house, burned.

That night, the corporate building of the multinational company Enel, which produces and distributes gas and electric energy, was also set on fire. Witnesses called radio stations, telling that they had heard an explosion and then the fire escalated through the stairways of the 19-story building, located right in the center of Santiago.

While thousands of people struggled to make it home in the middle of protests, president Piñera dined at a pizza parlor of an upscale neighborhood to celebrate his grandson’s birthday. Someone who was also dining there took a photograph of him, uploaded it to social media, and that is how Patricia and Gladys saw it on their mobile phones.

The uproar was palpable on the streets, and on his way back to the governmental palace, president Piñera declared a state of Constitutional Emergency -- which implies a reduction in freedom of transit and assembly -- leaving General Iturriaga in charge of maintaining public order. He determined that Santiago would adopt a curfew; the first curfew decreed by social protest and not by a natural catastrophe, since the country’s return to democracy.

Gladys saw it on television. A station away from San Pablo, in Pudahuel, a Líder supermarket, property of the transnational company Walmart, was sacked and burned down. Running in the aisles -- even when the flames started flaring up -- adults, adolescents and some boys and girls, took merchandise, washing machines, refrigerators, plasma TVs and other consumer goods.

It has been 14 days since the protests in Chile started, and in its 16 regions people gather daily on the streets banging pots, demanding changes to an economic system that places the country third on the OECD income inequality index for this year. Low pensions, the high cost of health and education, and low salaries relative to the cost of living are the primary fissures in a model that seems to have exhausted Chileans’ tolerance.

Ten regions had a night curfew. In Santiago, twenty subway stations were burned down, 24 buses set ablaze and nationwide, hundreds of supermarkets and pharmacies looted.

It saddens Patricia to say it, but she believes it is the same neighbors that raided the local businesses in her neighborhood. “It’s as if they wanted to take ownership of something”, she says, and “they took ownership of the first thing they could lay their hands on”. It’s because “it was in the heat of the moment, they didn’t think it through and just acted on impulse”, she tries to explain.

In some sectors, neighbors assemble at night in yellow jackets to prevent their neighborhoods from being vandalized. That did not happen where Patricia lives. “Harmony was lost a bit because we are divided on the harm done. Because our own neighbors took these things; and seeing how affected we are, and how alone we are left at this moment”, she laments.

Snipers positioned atop the Military School sought to intimidate, aiming their weapons at protesters who encroached upon the affluent sector of the capital city to protest for the first time, revealing the transversality of citizen discontent across sectors of varying income levels.

As of October 28, the Instituto Nacional de Derechos Humanos (INDH), Chile’s National Institute for Human Rights (NIHR) accounted for 1,132 people injured in protest that were in hospitals, of which 245 people were injured by firearms. According to the Union of Doctors, over 100 had experienced vision loss in one of their eyes due to the impact of a pellet, a bullet, or a tear gas bomb. 20 people had died, three from bullets fired by military officials, one ran over by a vehicle driven by a Navy official, and others burned in lootings . The Ministry of the Interior registered more than 5,300 detainees and over 630 injured police and military officials. 347 underage citizens had been arrested and the NIHR had started 101 legal proceedings; 54 for unlawful coercion or torture, 18 for sexual violence and 5 for homicides at the hands of State agents.

The country's former President, Michelle Bachelet, today the UN High Commissioner for Human Rights, decided to send a mission of three observers to Chile to investigate allegations of human rights violations during the state of Emergency by the Armed Forces and of Order and security. The mission was to arrive on Monday 28, the same day that President Piñera lifted the state of constitutional exception, but without giving further explanations, the NHRI announced that the observers would arrive “in the next few days”.

“Healthcare here in Chile is shit, professors are robbed, everyone is robbed, these shameless assholes”, says Galdys, furious. “The AFP are the biggest thieves, and that was done by Mr. Piñera’s little brother. Why won’t the thief come face all Chileans? Chile has awakened, Piñera, it has awakened, we were tired of sleeping, we woke up, we woke up, asshole”, she claims. Her discontent reflects that of many, who, in their daily lives have not felt they live in one of Latin America’s most prosperous countries.

Gladys’ rage is rooted in the inequality generated by an economic system implemented under the Pinochet dictatorship in the 80s. The so-called “miracle” started when a group of Chilean economists at Chicago’s School of Economics who studied with Milton Friedman (considered the father of neoliberalism), counseled dictator Pinochet in the creation and implementation of policies that allowed for the establishment of a free-market economy and the privatization of health, education, retirement, water and other natural resources.

Juan Andrés Fontaine, one of the so-called 'Chicago Boys', is now Minister for Economic Affairs. Days before the protests were to paralyze the city, in response to the citizen discontent regarding the fare increase, he told the press that to avoid paying more, people could just wake up earlier and take the train at 7 a.m.

“One man said we would have to wake up at 4 in the morning, in order for the subway to be cheaper, what an idiot: look, they’ve killed kids for a cigarette, they’ve killed young girls; you have to wake up that early so the subway and bus fare will be cheaper? Please, we’re not in, say, Las Condes -- we’re in no man’s land”, claims Gladys.

The economic model that Chile introduced brought about development that has been lauded in Latin America for achieving some of the most rapid growth in the region; even though this did not result in greater equality.

As of today, only few experience the privileges that come with economic boom. In 2017, the United Nations Development Program (UNDP) examined the country’s social gap. More than half of those surveyed in sectors with low socioeconomic status said they were barely surviving on their salaries. The study concluded that 33% of the income generated by the Chilean economy is picked up by the wealthiest 1% of the population.

“We’re going to have to give up our privileges and share with the rest”, said Chile’s First Lady Cecilia Morel, nervously, in a private voice message she sent after the break out of the massive social protests. These protests baffled her so much that she compared them to “an alien invasion”.

Patricia was also distraught, although her concern was not about yielding privileges.

“It scares me because we can see the beginning, but not the end of this. Multiple gunshots, the helicopter permanently hovering above my home, military troops passing by at every moment; we are left without supermarkets, pharmacies, means of transport, without the subway. In this moment we feel isolated, like on an island, and we feel that our own people are betraying us, to put it that way”, she says.

Sitting in her courtyard in Lo Prado, Gladys remembers her childhood when near her street, the sidewalks were small farms where potatoes, lettuce and tomatoes were harvested. Those weren’t necessarily times of plenty, but the vegetable cart was ever present and the vegetable booth at the market was never empty. Gladys is an informal vendor, a category that identifies her as an independent entrepreneur in official statistics. Her financial well-being is dependent on the empanadas and cornbread she’s able to sell on a daily basis at her neighborhood’s market. The one located very close to the scorched subway station.

Gladys says she thought that with the return of democracy in the 90s, her life would be much better. “But it was worse”, she laments. “The increases began, let’s keep spiking things up”, she alleges.

Photo “GLADYS young”

Photo caption: Gladys Zúñiga with her son when he graduated from primary school.

Photo credit: Personal archive from Gladys Zuñiga.

En un país en que un parlamentario gana mensualmente hasta 13.000 dólares – 31 veces el sueldo mínimo-, cuando Gladys vende 30 empanadas, anda feliz. Pero el entusiasmo dura poco. El ingreso se diluye rápido detrás de facturas de agua, gas y electricidad, que sólo este año ha tenido un alza en la tarifa de un 19 por ciento.// In a country where a congressman earns up to $13,000 USD monthly (31 times the minimum salary), when Gladys sells 30 empanadas, she’s happy. But the enthusiasm is short-lived. The income dissipates quickly behind water, gas and electricity bills, the latter of which has seen a 19% increase just this year.

El sueldo mínimo en Chile es de 423 dólares y la mitad de los trabajadores recibe un sueldo igual o inferior a 562 dólares al mes. Es un monto alto para la región, pero el costo de la vida es más caro y el dinero “no alcanza”, dice Gladys. El arroz, las papas, el pan, el aceite y los huevos, son más caros en Chile que en cualquier otro país de Latinoamérica, al igual que el alquiler, afirma un artículo de este mes publicado por la BBC Mundo.// The minimum monthly salary in Chile is $423 USD, and half of the country’s workers earn a salary less than or equal to $562 dollars a month. It is a high amount for the region, but the cost of living is more expensive and the money is just simply “not enough”, says Gladys. Rice, potatoes, bread, oil and eggs, are more expensive in Chile than in any other country in Latin America, maintains an article published this month by BBC Mundo, and the same goes for rent.

“Si en la feria la gente pudiera pagar con tarjeta, acá se comprarían hasta la última papa”, dice.// “If people could pay with a credit card at the market, they’d be buying up until the last potato”, she says.

En Chile, las tarjetas de crédito de bancos y casas comerciales son la forma en que las personas pueden acceder a una vida que no siempre pueden financiar. “La gente ya no tiene dinero en los bolsillos, andan todos con las tarjetas”, asegura Gladys. Ella tiene la tarjeta de la casa comercial “Corona” y gracias a eso su hijo pudo comprar en cuotas su teléfono móvil.// In Chile, bank and commercial establishment credit cards are the way people can access a life that they can’t always finance. “People no longer have money in their pockets, everyone has a card”, asserts Gladys. She has a card from “Corona”, and it is thanks to this that her son could buy his mobile phone in payments.

El año pasado, las deudas de las familias chilenas llegaron a su máximo histórico y el FMI catalogó, en 2017, al país como aquel con los hogares más endeudados de América Latina.// Last year, the debt incurred by Chilean families reached a historic high, and in 2017 the IMF classified Chile as the country with the most indebted households in Latin America.

Estudiar ha sido, por décadas, una de las deudas más pesadas.// Studying has been, for decades, one of the most burdensome debts to incur.

Gladys vive con su hija y sus dos nietas. Le gustaría algún día verlas estudiar en la universidad, dice. Doctora, ingeniera. Pero el sueño es ambicioso. Quizás, si alcanza, sea para una de las niñas y piensa en cómo podría su hija elegir cuál. “No se puede”, dice.// Gladys lives with her daughter and her two granddaughters. She would like to one day see them studying at university, she says. A doctor, an engineer. But the dream is ambitious. Maybe, if there’s enough, it will only be for one of the girls and she thinks about how her daughter would go about choosing. “You just can’t”, she says.

Photo “GLADYS with her grandchildren”

Photo caption: Gladys with her grandchildren Lia (10 years old) y Mily (3 years old).

Photo credit: María José Díaz.

En 2015, Chile era el cuarto país con los aranceles universitarios más caros del mundo, según datos de la consultora inglesa Expert Market. Las familias gastaban en promedio 73% de su sueldo en financiar una carrera universitaria, dicen las cifras del estudio citado internacionalmente.// In 2015, Chile had the fourth highest tuition rates in the world, according to data from the British consulting firm Expert Market. Families were spending, on average, 73% of their salaries to finance a university degree, as reported by the figures in the aforementioned international study.

Aún la universidad debe pagarse, incluso en un establecimiento público, ya que este debe autofinanciarse. La educación superior había sido gratuita en el país hasta 1981, cuando Pinochet flexibilizó los requisitos para crear universidades privadas, estas se multiplicaron y fijaron sus propios aranceles.// University must be paid, even within a public establishment, since the latter should be self-sustaining. Higher education in the country had been free of charge until 1981, when Pinochet loosened the requirements to create private universities, and these multiplied and set their own tuition rates.

It was the student demonstrations of 2011 that put access to free and quality public education on the agenda, as a right and not as a consumer good. Today, with “free tuition” approved, the only students who can study free of charge are those who come from families below the 60th percentile for income and have been admitted to the institutions that have been assigned this benefit.

Photo gallery 2:

Caption: Chile is one of the most prosperous and unequal countries of the region.

Photo credits: Ruta 35 (plus the name of each photographer as it shows in the name of each photo)

The country also has one of the world’s most segregated education systems. 9 out of 10 schools with the best scores in the 2018 university entrance exam are tuition-based private schools. Only one is municipal and free of charge. To study at one of those nine institutions for a year, a family would have to pay more than $3,400 USD to enroll a student in the least expensive one, and more than $17,600 USD to enroll them at the most expensive one.

Gladys’ granddaughters, she affirms, would never be able to attend one of those tuition-based institutions.

The conditions at many of the public institutions aren’t optimal. In 2013, when Chile was growing at a rate of 4.1% and president Piñera was on his first term, more than a thousand educational establishments lacked reliable access to safe drinking water, and more than 70 had only latrines in lieu of fully equipped bathrooms. Five years later, in July of 2018, public and private subsidized educational establishments pushed to access more resources for the improvement and maintenance of their infrastructure.

The then-Minister of Education, Gerardo Varela, said: “Every day I get complaints from people that want the Ministry [of Education] to fix the roof a school that has a leak, or a classroom with a bad floor...and I ask myself, why don’t they just do a solidarity-focused bingo? Why do I have to go all the way from Santiago to fix the roof of a gymnasium?...People don’t take matters into their own hands, they want everyone else to do it for them.”

For Gladys, who, before being a market vendor worked in construction, cleaned apartments and removed rubble, Varela’s remarks reflect the gaping disconnect between the political establishment and the citizenry.

In the massive protests that continue throughout the country, you don’t see political party banners or flags. Nor is Gladys interested in any of that. In her five decades of life she claims to have seen all the colors, all the speeches, and all of the promises parading before her. The result was never what she expected. Not in the 23 years of the center-leftist government, and not in the 6 years of the right.

Gladys is diabetic and undergoes medical examinations through the public health insurance system, the Fondo Nacional de Salud, Fonasa. Sometimes, she thinks it would be a good idea to get affiliated with an Isapre (Institución de Salud Previsional), or a private health insurance company, and that way maybe she could get access to a clinic (also private) in a more affordable manner while reducing her waiting time. If she were to fracture her hip, she could immediately undergo a procedure and not go through the average 469-day waiting period for trauma surgery, according to data from the Ministry of Health. 42% of Fonasa patients who seek some sort of pathological surgery wait at least a year to be treated. In the public system, there aren’t enough beds or doctors.

In July of this year, the then-undersecretary of Health Care Networks (Redes Asistenciales), Luis Castillo, addressed the issue of the extremely long queues at health care centers, where people arrive at dawn and wait for hours to be seen by a doctor. “They always want to go to a clinic early, some of them don’t just go to see the doctor, but for the social element, it is a social gathering”, he said. This cost him his position.

But Gladys knows that having Isapre isn’t necessarily the best option. She knows that those who pay for the private health care system have also taken to the streets banging their pots. Because of the increase in cost of healthcare plans, because of low coverage, because of pre-existing conditions, because of restricted access to healthcare centers.

Either way, in both cases, private or public, if Gladys buys brand-name medicine at a pharmacy, she’ll have to pay more for them than she would in Argentina, Brazil, Colombia, Ecuador, Peru, or Mexico.

It distresses her to think about her age, adjusting in ways she cannot imagine, to a pension that, on average, reaches $266 USD monthly for women.

The Chilean pension system was created in 1980 by José Piñera, the president’s brother, and is based on mandatory individual capitalization of pension contributions. This means that someone who receives a compensation must deposit 10% of that on a monthly basis, into a personal account managed by an AFP (Administradora de Fondo de Pensiones), or a pension fund management company. These AFPs are private and charge a percentage to manage the account, independent of the profit or loss generated from it.

The system has been highly beneficial for Chilean economic groups. A study by Fundación Sol concluded that 58% of the future retirees’ monies, more than $124,336 million dollars, is invested in companies belonging to the Luksic, Said, Yarur, Saieh, Matte and Solari groups.

Gladys knows this well and has an opinion about it: “The AFP is robbing everyone of our money, and they work it for their own pockets, all those rich thieves, those than run the country of Chile”

The pension received by each person at retirement will depend on the amount they managed to accumulate in their account, the number of years they contributed, and on the good or bad investment made by the AFP with the money contributed by the employee. Men, for example, receive an average of $455 dollars a month.

That is why the old are sick. They become sick from stress”, says Gladys.

Those over 80 years old have the highest suicide rate, with 17.7 cases per 100,000 inhabitants, according to a study conducted by Ana Paula Vieira, a scholar in gerontology at Universidad Católica and president of Fundación Míranos. Just between 2010 and 2015, 935 people over the age of 70 committed suicide in the country.

It’s Tuesday at night, it has been five days of intense protests. After apologizing for “short-sightedness” with regard to the country’s problems, president Piñera announced the reforms with which he seeks to respond to the social uprisings and mitigate the tension: a 20% increase in the basic solidarity pension, the creation of an insurance plan for catastrophic illnesses in order to “cap healthcare costs for families”, a guaranteed minimum income of $480 USD for full-time employees, a 5% increase on incomes exceeding $11,000 dollars, and a decrease in parliamentary assistance allowance, among others.

If president Piñera had announced these changes before October 18th, he would have surprised Chileans; but now, actually, Patricia doesn’t know how to determine whether this is a good starting point. It bothers her to hear talk about changes they’ve been waiting on Congress to make for five years, like the decrease in parliamentary wages, which was mocked by senators and representatives when proposed by members of a new political front.

“There are a lot of young people that are outraged, determined to give it their all, put up a fight, versus the older people waiting for who knows what to happen”, says Patricia. Even though she’s scared, she believes there’s a need for a new constitution, for democratic assemblies and real citizen consultations. “If only there were people that truly represented us in political parties, in the Senate, but what I see now is that no one represents us...not for education, not for health, not even for the elderly. We’ve been given up on”, she laments.