CAS Blog

Chile in the Midst of Social Explosion, Hunger, and Constitutional Reforms

Claudio Llanos Reyes, 26 October 2021

Upon my arrival in Santiago, in the early morning of 18 October 2019, the streets and subway stations were filled with heavily armed police officers. The reason for this was a spontaneous demonstration against paying for subway tickets after a 30-peso rise (circa 30 cents). That day, during a meeting with my colleagues in Santiago, rumours of increasing street protests dominated the conversations.

The trip back to Valparaíso usually takes about 90 minutes, but it took me more than six hours that day. Chile's capital city was rife with barricades, tear gas, massive demonstrations, and police shootings. The sparks from Santiago quickly spread throughout the country. A state of emergency was declared, and the peaceful demonstrations, destruction of public spaces, and shootings by the military, in some cases causing eye damage to civilians, were regularly covered by the news reports in the weeks that followed.1

Mass demonstration, 25th October 2019, motorway between Viña del Mar and Valparaíso.
© Fernanda Llanos Glas.

Millions of people marched in almost every city in the country in October and November 2019 to demand a new constitution. The speed with which these events occurred, as well as the nature of the political discussions, caused a schism in a country that had been regarded for many years as a model of good economic management, social stability, and foreign investment security. The slogan "It's not about 30 pesos; it's about 30 years!" called into question the conventional wisdom regarding economic growth and social development. What are some of the historical factors that explain such a dramatic shift?

Chile, Santiago, 25th October 2019, © Susana Hidalgo.

The answer to this question is not simple, but I will raise two relevant issues for discussion: increasing income inequality and poverty.

Chile's economic inequality and poverty were major issues by the end of the dictatorship (1990), with a Gini Index of 57,22 and a poverty rate of more than 40%. During the 1990s, democratic governments implemented significant anti-inequality and anti-poverty policies. The reforms that aimed to improve salaries, the positive international economic scenario, and the expansion in access to credit offered by the retail sector at high interest rates all contributed to the unprecedented success of these measures. However, Chilean politicians agreed to uphold most of the economic order established by the military dictatorship, particularly in the areas of education, health care, and pensions.

Despite improvements in some economic indicators and increased access to consumption, the dominance of business and some private interests over social needs has maintained social and economic segregation. The history of these policies is intertwined with neoliberal ideas and their effective implementation during the dictatorship, particularly from 1975 to 1990, and their continuation after the “return” to democracy in 1990. The Constitution of 1980 promulgated institutional order characterized by a predominance of market interest and weak social security. Therefore, it has been one of the main pillars of the continuity of neoliberal ideas. One example is the health system, which was the first in the country’s history to provide health care to the poor, but was divided into public and private sectors according to the logic of “choice”. Other examples include the educational system, which promotes segregation within impoverished public schools, and housing policy, which is responsible for the development of neighbourhoods far away from basic services, with no environmental planning, and with inadequate community infrastructure. All of Zygmunt Bauman's general observations apply to Chile, where “services for the poor are poor services”.

Socio-economic issues are certainly not new in Chilean history, but many of the policies imposed during the dictatorship, which have not been drastically changed under democracy, have played a significant role in increasing inequality. Although the reforms implemented since the 1990s have reduced the massive poverty left behind by the dictatorship, they have failed to provide better social services and rights, exacerbating the inequality problem.

In 2017, 26% of the population lived in multidimensional poverty, with inadequate public services (such as education and health) and social security.3 Chile's neoliberal model, which had been praised by international economic institutions for many years, has now become a source of concern due to rising inequality.4

Using a credit card to pay off other credit card debts became a common practice among the poorer sectors of society in order to maintain consumption levels. Deregulation, temporary contracts, and high levels of informal employment have characterized significant parts of the labour market, resulting in precarious salaries, social benefits, and labour rights (at the beginning of 2021 informal employment reached 26,7%; the number of workers in this situation reached over 2.1 million). In 2019, the income of 50% of workers was equal to or less than approximately $510 US dollars per month.5

Considering the effects of the Covid-19 pandemic today, “focused” support has been a failure in dealing with employment and income inequality problems. After a few months of quarantine, all previous statistics, publicity, and discussions about Chile's GPD per capita of $15,000 and its imminent entry into the developed world collapsed. In 2020, the Minister of Health admitted that there was poverty and overcrowded living within the country, but that he did not know the extent of it.6

As for 2021, there has been little improvement compared to the previous year: the combination of social inequality, the pandemic, quarantine, working restrictions etc. has increased the rates of unemployment and poverty. News reports no longer mention Chilean economic success, instead focusing on the recurrent issue of hunger, which was one of the main topics covered by the news between the end of 2020 and the beginning of 2021. Neighbourhoods and churches have organized “ollas comunes” (common pots) in a 21st century revival of a very widespread practice during Pinochet’s dictatorship. The pandemic will end someday, but its intertwined effects have deepened Chile's inequalities.

During the covid pandemic "ollas comunes" attempted to alleviate the hunger of the poor. © La Olla Placeres.

Chile has now started a constitutional process; 155 citizens have been elected to convene and draw up a new constitution, which will be approved or rejected in 2022 via referendum. Additionally, other important discussions are taking place on issues such as taxation and fiscal policies.

The results of the Constitutional Convention (CC) election revealed the crisis that many of the traditional politicians are facing. The right-wing parties did not obtain the necessary votes to prevent changes at the CC, and other parties, for example the Christian Democrats (one of the most important parties to gain power after the dictatorship) only has one delegate participating in the CC. The election also showed a political predominance of new left organizations, such as the Frente Amplio, with roots in the students’ movements that started particularly in 2011, and the Lista del Pueblo, which brought together various movements and organizations and then fell apart. However, differences and tensions among and between these new political actors show important levels of fragmentation in their agendas, although they concur in proposals put forward to increase the provision of social security and to safeguard environmental and Indigenous rights.

The work of the Constitutional Convention represents a slice of history, full of social and political expectations in a country where the need for changes is evident; however, social inequality and poverty are not easy to curb or solve. Historically, such processes in Chile have always been clouded by political tension and polarization.

The problem stems not only from the many people demanding changes, who sometimes radicalize their actions, but also from the few who oppose the changes in a country where 1% of the population owns nearly 27% of the national wealth.7 These concerns have sparked heated debates about the distribution of political and economic power. As a result, the current turbulence (including the effects of Covid-19) and unrest will stretch well into the era of this new political and economic environment.

The new constitution is very likely to establish new economic, social, and political relations that must respond to old and new challenges, such as the need for better pension, labour, education, and health systems, and to move towards a more egalitarian society with access to better social protection and environmental justice.

  1. McDonald, Brent: “A Bullet to the Eye Is the Price of Protesting in Chile”. The New York Times, 21/11/2019 https://www.nytimes.com/2019/11/19/world/americas/chile-protests-eye-injuries.html.
  2. Gini index (World Bank estimate) – Chile.
  3. Hogar de Cristo: “Pobreza en Chile” https://www.hogardecristo.cl/pobreza-en-chile/.
  4. Ostry, J., Loungani, P. & Furceri, D.: “Neoliberalism: Oversold?”. Finance & Development, June 2016: 38–41.
  5. La Tercera, 26 October, 2020 “La realidad del ingreso de los chilenos: La mitad de los trabajadores gana $401 mil o menos y aumenta diferencia entre hombres y mujeres”. https://www.latercera.com/pulso/noticia/la-mitad-de-los-trabajadores-chilenos-gana-400-mil-pesos-o-menos/2V4LQLJNIBE3JGLGXIP7KJ6KBE/ Created during the dictatorship, the private pension system proved to be disappointing. It turned out to be a profitable business for a small number of pension administrators and a cause of frustration and distress among most pensioners and their families. Under this pension system, the income of most pensioners is below the minimum wage, and in 2019, about 80% of them received a pension below 352 euros per month.[^ Fundación Sol. https://fundacionsol.cl/blog/actualidad-1/post/cual-es-la-pension-maxima-y-minima-en-chile-6587.
  6. Mañalich reconoce que en un sector de Santiago "hay un nivel de pobreza y hacinamiento del cual yo no tenía conciencia de la magnitud que tenía”. La Tercera, 28 May 2020. https://www.latercera.com/politica/noticia/manalich-reconoce-que-en-un-sector-de-santiago-hay-un-nivel-de-pobreza-y-hacinamiento-del-cual-yo-no-tenia-conciencia-de-la-magnitud-que-tenia/5BQZLGLOPVDDPKQ2SNSSSWRGYU/.
  7. 10% control 66.5% of the national wealth. See: CEPAL (2019). Panorama Social de América Latina 2018. Santiago, 2019, 61-63. https://repositorio.cepal.org/bitstream/handle/11362/44395/11/S1900051es.pdf.
Claudio Llanos Reyes, Chile in the Midst of Social Explosion, Hunger, and Constitutional Reforms, CAS LMU Blog, 26 October 2021, https://doi.org/10.5282/cas-blog/31