Bottom Line Up Front
- In Chile, one of Latin America’s wealthiest nations, anger and resentment over corruption and economic inequality reached a boiling point over the weekend.
- Protests in Chile continue, with the government declaring a state of emergency and deploying the military into the streets to quell growing unrest and instability.
- Ordinary Chileans have not enjoyed the benefits of economic prosperity, with a decline in purchasing power, stagnation in wages, and an overall rise in prices.
- The government must not overreact to civil unrest with force, as the memories of violence committed by the military junta in previous years remains fresh.
Around the world, protests are intensifying in a diverse array of countries and regions. From Spain to Hong Kong and Iraq to Lebanon, demonstrations have been fueled by a mixture of civilians’ grievances. The most recent protests to make headlines are occurring in Chile, the Latin American nation where anger and resentment over corruption and economic inequality reached a boiling point over the weekend. The situation in Chile is noteworthy because the country is relatively prosperous and politically stable. But that prosperity has been concentrated in the hands of a few, leaving the vast majority of Chileans to struggle with debt, economic insecurity, and a dearth of services. The current protests in Chile began with youth jumping the turnstiles in metro stations to protest an increase in transit fares.
The situation has since metastasized, quickly morphing into a more broad-based protest in response to widespread inequality and endemic corruption. Some of the protests were violent, with demonstrators clashing with the police and burning stores and metro stations. On October 21st, President Sebastián Piñera declared a state of emergency and implemented a curfew. He also ordered the military, which has played a contentious and notorious role in Chile’s history, to restore order. Chile has made remarkable strides since the end of the military juntas that terrorized and murdered its citizens under the draconian reign of Augusto Pinochet, a brutal dictator who ruled Chile from 1973 until 1990. It is unclear how long the current protests will last. In Sudan and Hong Kong, protests have ebbed and flowed for months. President Piñera revoked the transit fare increase, but it remains unclear how far he will go to assuage the protesters’ demands.
Copper exports are among Chile’s most lucrative resources, but revenues have declined drastically due to a drop in the price of metal commodities. Meanwhile, oil and foodstuffs are more expensive, squeezing the average Chilean even further. Like numerous other administrations in Chile over the past several decades, President Piñera’s government believes that lowering taxes on society’s most wealthy will ‘trickle down’ and encourage private investment. Government investment is considered wasteful, and as a result, infrastructure, education, healthcare, and pensions are deemed by many to be inadequate. The average Chilean has not enjoyed the benefits of a national economic growth, with a decline in purchasing power, a stagnation in average wages, and an overall rise in prices. Investors looking for quick and high returns are uninterested in the long-term benefits of public health and infrastructure, leading to an acceleration in economic inequality.
Even with its obvious problems, Chile is still in a better position economically than most of its neighbors and many other countries in Latin America. Venezuela remains mired in economic freefall with a staggering rate of refugees fleeing the country and pervasive violence in society. In other Latin American countries, including Brazil and Colombia, criminal gangs and the drug trade are ubiquitous. Chile has avoided most of these crises but is not immune to further instability and social unrest. The government must be careful not to overreact to the violence perpetrated by some of the protesters—the memory of the crimes committed by the military in the 1970s and 1980s are still fresh. There are no easy answers to the unrest facing Chile. Rather, it will take sustained engagement and long-term strategy by the government and society to reverse the growing economic inequality in one of Latin America’s most prosperous countries.