Chile’s carefully crafted image as the star of stability and economic growth in Latin America shattered in dramatic fashion in early October when the government announced a four-cent price increase for Santiago’s metro during rush hour. This seemingly innocuous rise in subway fares have embroiled Chile in protests for the last month. Protestors, who have come out in the millions in Santiago and all over the country, are not simply angry at the cost of transportation. While Chile is known for its neoliberal economic development, the country has one of the highest rates of income inequality within the OECD. The middle and working class struggle with high costs of living that cannot be sustained by stagnant wages. A privatized pension system has left the elderly in impoverished conditions. In simplistic terms, the Chilean demonstrators seek to create a more equal society. One of their most notable demands has been to create a new constitution that not only reflects these aspirations, but also Chile’s desire to emerge from the shadow of General Pinochet, a catalyst for this insurrection against the status quo.
In the early 1970s, Chile captured the world’s attention. While the Latin American country had long been seen as a comparatively orderly and democratic country in a turbulent region, it was suddenly gripped in turmoil as General Augusto Pinochet Ugarte, a career military officer and Commander in Chief of the Chilean army, overthrew President Salvador Allende in a US-backed coup. Allende was the first freely elected Marxist in the West- a novelty in itself, especially during the time of the Cold War. General Pinochet ruled Chile for the next 15 years in a military junta, a government led by a committee of military leaders. He was removed from power in a national referendum in 1990 and Chilean democracy was essentially reinstated. Nonetheless, Pinochet’s legacy has remained entrenched within the country as the subsequent governmental structures perpetuated the military junta’s economic model and its constitution.
General Pinochet was supposed to rule for one year before he was to step down and allow other military leaders to take over the position. Despite this agreement, Pinochet continued to rule as President of the Republic, a nominal title, where he implemented seemingly radical economic reforms. The 1980s was a new age of neoliberalism, an ideology that famously emphasizes the role of the private sector in the free-market, and gained traction in the developing world in response to the “Third World Debt Crisis.” The Washington Consensus asserted that market-driven policies were the best way to correct these struggling economies. The Bretton-Woods Institutions, such as the International Monetary Fund and the World Bank, created Structural Adjustment Programs (SAPs) in order to better facilitate this turn to neoliberalism. This program was a series of reforms that countries had to commit to in order to secure any type of loan from these institutions. These reforms included: little to no government regulation, reduced government spending (otherwise known as austerity measures), privatization, and free trade. This was a radical departure from the economic policies of President Allende, who emphasized a state-led economy and protectionist policies, yet these new policies were just the beginning of a new era of capitalism.
The SAPs were implemented in a variety of countries in order to encourage self-sufficiency and promote investment; it was believed by many that these reforms would break the cycle of dependence on loans. However, criticism is sharp and many point to the lack of success the SAPs have had in fulfilling their own ambitions. The largest criticism is the effect austerity measures have had on already poor nations, who often adhere to them by reducing funding for social welfare programs. By reducing or eliminating funding for social welfare programs, vulnerable groups, such as women and children, are faced with an added burden that can seriously impede upon their ability to survive. There is enough evidence that demonstrates that between implementation in the 1980s and the 2000s, SAPs reduced the standard of living for many. Another criticism was that these programs were essentially neocolonialism. These reforms forced countries to open up to exploitative investment by multinational corporations, thus perpetuating uneven power dynamics within economic systems that were present during colonial rule. Scholars such as Frederick Cooper and Randall Packard were able to articulate key aspects of this claim by arguing that development was not only a way for former colonial powers to maintain some form of legitimacy, it was also used by leaders in the Global South for the same purpose. This restructuring of Chile’s economy in the form of SAPs was a strategy that Pinochet employed to legitimate a regime whose conception was an illegal coup. Furthermore, these reforms were a way in which Pinochet could bring his version of Chile to fruition.
The SAPs were successful for Chile in more ways than one. They helped usher in an era of economic growth for the country, though there are debates about who benefited from them most. It also helped to legitimize Pinochet’s legacy, as the new leader’s victory was underscored by this nation-wide expansion. Internationally, most people recognize that General Pinochet was a brutal dictator, yet there is slightly more nuance within Chile. The 60,000 Chileans that showed up for his funeral procession all seemingly believed that Pinochet “saved” the country from Marxism. Even when pundits discuss the period’s economic growth and the advent of neoliberalism, they downplay the fact that this development came at a great price, which continues to manifest itself. The findings of two National Commissions detailed the brutality and violence of the Pinochet regime which involved arbitray arrests, torture, incarceration, disappearances and political executions. Approximately 3,000 people died. No one from the left was safe from Pinochet and the hated head of secret police, Manuel Contreras. These commissions also illuminated the fact that the General mismanaged funds for his own personal benefit. Despite the systemic and rampant abuse of human rights, Pinochet’s embezzlement and corruption was the proverbial ‘straw that broke the camel’s back’.
Pinochet’s regime also conceptualized an entirely new constitution that came into force in 1980. It was never replaced, even upon Chile’s democratization in the 1990s. The dictatorship-era document is a combination of traditional Catholic values, liberal principles, and some elements that could be considered social-democratic. The constitution also heavily reflects the neoliberal policies of the time; it is often interpreted to hand over the responsibility of health and education over to the market, instead of the government. Furthermore, the document is hyper-executive and while the legislative has the power to enact policy, they can be limited in their scope. Although it has been altered since Pinochet’s fall, including amendments that broadened political participation to left-wing groups and limited the political role of the military, it’s presence leaves a shadow.
The preservation of Pinochet’s constitution and the neoliberal policies of the 1980s has led to the current protests that are reverberating throughout the country. The protestors are a diverse group of people, but they have all articulated a similar feeling of an opportunity being taken from them. Chile’s post-tax income inequality is now the highest among countries in the OECD. The cost of living has increased, while wages remain low and social welfare allowances are insufficient. The pension system became privatized following the ratification of the constitution in 1980. The funds are managed by for-profit groups who guarantee a pension of $137 per month. This has created a serious burden for senior citizens who have to somehow be able to afford medications which are notoriously high; a result has been that people over the age of 80 have the highest rate of suicide in Chile. Another major problem which has been a central focus of the protests is a lack of access to water: although it has been formally declared a public good, the rights to use it are privatized and administered through a market system. This ‘water code’ is enshrined within the constitution. Watersheds are unevenly distributed throughout the country and with climate change affecting Chile, where the majority of the population is concentrated within an arid region, the issues of water rights and distribution have become a focal point.
There are many dimensions to the Chilean protests, as demonstrators are seeking to create a more equitable society. The current president, Sebastian Pinera, a center-right billionaire politician, has promised reformative measures and has fired cabinet members, but it has yet to be enough. Chileans are pushing for an entirely new constitution that could better reflect the interests of the general public and finally break free of the dictatorship. 78 percent of Chileans support the idea of a new constitution, one where the people have a hand in its conception, and party leaders have recently agreed to hold a national referendum in April 2020. The protests have stretched well into November, and the sounds of the cacerolazo protesters continue to ring out. While the world has seemingly been rocked by protests, from Latin America to Hong Kong, it is important to remember that although systemic change may appear to be unfathomably difficult to achieve, it is still within reach.