The cost of multidimensional inequalities in Chile underlines the need for a new social pact

Chile’s recent protests represent the culmination of decades of serious social upheaval. The Piñera government’s inept reaction and subsequent conciliatory proposals have misread the nature and severity of the country’s underlying social discontent. The noxious effects of Chile’s deep and diverse multidimensional inequalities are both material and intangible, and only a genuine dialogue between actors prepared to reconfigure their underlying structures can provide the new kind of social pact that will lead to a better social, political, and economic future, writes Kirsten Sehnbruch (LSE International Inequalities Institute).

• Disponible también en español

What has been most surprising about reporting on the current explosion of social unrest in Chile is the level of surprise expressed by the international press. How, they seem to wonder, could this normally calm and prosperous Latin American country, the very model of economic and social success, suddenly have erupted into violent rioting and sustained protests that have brought more people on to the streets in more places across the country than at any point in living memory?

A masked Chilean protester stands behind a burning barricade in front of graffiti that reads 'no more repression'
“No more repression!”: Chile has experienced serious and sustained social protest in recent decades (2015, detail of Esteban IgnacioCC BY-NC-ND 2.0)

A protest foretold: chronic social upheaval in Chile

But the reality is that Chile has experienced a succession of social protests in recent years. In 2006, schoolchildren protested against poor education and conditions in schools. The 2010 earthquake was accompanied by violent looting and generated widespread grassroots movements that organised local communities to participate in the reconstruction process. In 2011, students took to the streets for months on end to demand education reform, and there were also extensive environmental protests during the same year. In 2016, the population mobilised against the country’s privatised pension system. And now, in 2019, we are seeing the most sustained and violent protests in living memory.

Chilean citizens have become more aware of their rights. They are becoming more organised as an increasing number of NGOs and civil society organisations emerge and flourish. They increasingly distrust authority and public institutions and are more conscious than ever of the unequal distribution of political and economic power in the country. They have also become significantly more sensitive to the indignities that they suffer as a result of these ingrained inequalities.

Yet these protests are also different from the ones that preceded them. They are not led by a particular social movement, seeming to have sprung up from nowhere with a strong and violent anarchist component. They are not about a single issue, least of all the relatively simple problem of increased metro fares. They have brought more people out into the streets than ever before, and not just in Chile’s capital, but also in the country’s regions. They have even mobilised people from all social classes, including in high-income areas of Santiago, prompting the weekly news magazine Qué Pasa (read by Chile’s elite) to wonder why young people from such wealthy areas should be feeling such a degree of solidarity with the city’s less fortunate.

And these protests have for the first time seriously affected they country’s economic activity, with the degree of damage to half of Santiago’s metro stations paralysing the city and preventing people from getting to work. Supermarkets have been looted and vandalised. The head offices of the Italian energy company ENEL were set ablaze. As a result, many businesses across the city closed during the protests, whereas others were hit by the curfew. Meanwhile, lorry protests blocked the city’s motorways and burnt-out buses blocked ordinary traffic around the city. To top it off, Santiago’s international airport overflowed with stranded passengers. Questions were immediately raised about whether these protests would affect Chile’s standing amongst foreign investors.

A protester in Santiago sits inside a burnt-out bus and raises his middle finger to the camera  
A defiant protester takes a ride in a burnt-out bus near Bellas Artes in Santiago during the October 2019 protests (Felipe y Jairo CastillaCC BY 2.0)

Piñera’s reaction to the protests

The government’s reaction to this crisis can only be described as inept. It seems that President Sebastian Piñera learnt little from the prolonged student and environmental protests that were the real legacy of his first period in office.

His depiction of protesters as delinquents and vandals with whom the country was at war was used to justify his declaration of a state of emergency, which led in turn to the imposition of a curfew and mobilisation of the army to reestablish law and order. A complicit press attempted to play down the violence that people continued to see in the street while videos of police and army violence against protesters went viral on social networks. In the end, these measures brought at least a million people on to the streets of Santiago on Friday, 25 October, and also fed into further protests the following weekend.

But the government does have a problem: there is no obvious leadership coordinating these protests, and there is no single issue to focus on. What will make this situation better? What will make the protesters go home?



Carabineros watch over a protest near Rotonda Grecia in Santiago (Jorge Morales Piderit, public domain)

In the absence of an obvious interlocutor with whom to open dialogue, the government must instead engage with an increasingly active and organised civil society. It must initiate a serious, sustained, and public social dialogue the likes of which Chile has never seen. Nor can political parties offer much help in this context: they are no longer seen as representative of the needs of the population, their credibility having long since been frittered away.

As such, the call for a new social pact, as proposed by numerous civil society leaders and Chile’s Centre for Social Conflict and Cohesion, must be heeded. And when it is heeded, the government and congress must prove themselves willing to engage with civil society demands in a way that can genuinely reconfigure the structures that perpetrate Chile’s multiple inequalities.

The president and members of his cabinet have now begun to propose new measures – increasing the minimum pension and the minimum wage, freezing transport prices, promising a cabinet reshuffle – but aside from the fact that such measures would constitute little more than the proverbial drop in the ocean, they also fundamentally misunderstand the nature of the inequalities that Chileans face in their everyday lives.

Everyday inequalities, everyday indignities

The inequalities faced by Chileans are both multidimensional and structural. They are also both material and intangible.

For example, in a brilliant article in The Observer, Johnathan Franklin described the appalling conditions and lack of minimal medical care that awaited injured protesters who were brought into Santiago’s central public hospital, the Posta Central. Beyond the violence that they had suffered at the hands of the police and the army, these people will also have known that opposite the Posta is a first-rate private clinic run by Chile’s Catholic University. But that clinic can only be used by people with private health insurance or enough money to pay out-of-pocket for the best care.

There is, of course, a material aspect to this example. But there is also the less tangible indignity that patients in public hospitals suffer at the hands of overworked doctors and staff, who tend to look down on poorer or darker-skinned patients. More importantly, there is also the violation of basic human rights produced by a medical system that treats patients not according to their needs but rather by their ability to pay.

An elderly man lying in the street exchanges a glance with a pigeon at his side  
Despite its reputation as an economic success story, Chile remains one of the most unequal countries in the world (Evandro SudréCC BY 2.0)

The example also serves to illustrate the multidimensional and structural aspects of inequality in Chile. Although income inequality is so high that a slight increase in the metro fare significantly eats into the disposable income of most Chilean workers, it is equally telling that rich and poor will never meet in the same hospital, in the same school and rarely at university. The risk-sharing components of health insurance, pension systems, and unemployment insurance are minimal. At least 50 per cent of Chileans have highly precarious jobs and are therefore not adequately covered by the existing social-protection systems. In addition, political and economic power are concentrated in the hands of a very exclusive and homogeneous elite, which lives in five adjacent boroughs of Santiago, as segregated as possible from the lower-income areas of town.

How to respond to Chile’s cry for help?

Many analysts and experts in Chile, as well as the more enlightened segments of the press, are rightly interpreting the protests as a cry for help in a very unequal country where there is no level playing field.

While this interpretation is certainly correct, few talk openly about what this means in practice. Taking this interpretation seriously implies the need for a new social pact that can bring the government and congress together with social actors that are willing to think about genuine structural reforms rather than simply patching up existing social-protection systems with limited resources from already overstretched fiscal funds.

This means building up social-protection systems not via taxes but through general contributions. It means building up what developed countries call a welfare state. It also means implementing tax reforms that genuinely and significantly redistribute resources and provide the state with the means necessary to establish functioning public infrastructure and services. It should not be a pipe dream that in the near future rich and poor Chileans will meet each other in the same hospital.

Since its return to democracy, every single social reform undertaken by Chilean governments has fallen short of implementing genuine structural changes to established social-protection systems. The vested interests of economic and political elites have blocked risk-sharing across the entire population. Until now, social reforms have been hailed as “structural” even when their risk-sharing component was minimal. In large part, this is because political and economic elites see social investment as a cost that brings little return and restricts the freedom of firms, thereby lowering the country’s potential for economic growth.

The time has come to invert this picture and see social investment as a necessary prerequisite for improving productivity and future economic growth. While this would only really deal with the material aspects of inequality, it might also help with its more intangible aspects if public services can provide equal treatment and opportunities for all Chileans as a result. Without a genuinely new social pact that addresses the multiple dimensions of inequality, expect more social protests, lower economic growth, and voters increasingly susceptible to the kind of political populism that offers unsustainable solutions.

What will foreign investors think of Chile then?


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