Let’s talk about what’s been happening in Chile. This is a country some people have described as an economic success story. But we’re also seeing this protesters angry at not being able to put food on the table get proper healthcare and just generally with how the country is run. So what are they seeing that others aren’t? Is there a flip side to Chile’s success story? Whether Chile can be described as successful depends on who you ask and ultimately where their politics lie. But let’s start with a look at Chile’s economy. And really any story about the country’s modern economy should start with these guys the Chicago Boys. They’re a famous, some would say infamous group of Chilean neo-liberal economists. In the 1970s they studied in Chicago under Milton Friedman, a champion of free-market capitalism and an eventual Nobel laureate. It was around that time back in Chile that General Augusto Pinochet staged a military coup to get rid of President Salvador Allende and his socialist government. Chile’s economy was a mess. Yearly inflation was running around 300% and a lot of people struggled to pay for basic necessities. So Pinochet needed a plan to fix the economy and the Chicago Boys had one. It went like this. The best social public policy is economic growth. If the economy grows you will have less poverty and so on along the time. In this part Chicago Boys their recommendation was right. Chile’s economy did grow. Thanks to freeing up the market Chile made trade deals with countries around the world, exporting things like copper and its internationally renowned wines. In 2010 Chile even became the first Latin American country to join the OECD, a club for developed economies. “Applause, backslapping and especially congratulations were in order at Chile’s presidential palace.” Chile’s economy has had its bumps but compared to its Latin American neighbours the country has become a sort of Promised Land. Between 2017 and 2018 Chile’s economy grew by about $20 billion. Compare that to Argentina where the economy shrank by $123 billion in that time. It’s no wonder tens of thousands of migrants from all over South America have moved to Chile for jobs in the last few years. This is one of the leading countries in GDP per capita. We have reduced our poverty from nearly 40% in 1990 down to 8.6% last year. So with that rosy picture in mind it’s tough to imagine why a four cent increase in metro ticket prices led to the biggest protests in Chile in years. Young people kicked it off by refusing to pay for the metro. Soon the protests grew. And spread. “The unrest on the streets of the Chilean capital and elsewhere in the country has been unrelenting.” But it also got ugly. People started burning stuff, there was looting and the government deployed the military. Protesters and police confronted each other. Thousands were injured on both sides and people have died. Now this movement has been about a lot of things but one of the big ones is inequality. 33% of Chilean GDP goes to the 1 percenters. That’s higher than almost everywhere. I don’t think there’s another country that has that level of inequality. What many protesters say is that the middle class in Chile isn’t middle class at all. That’s because in the government’s eyes a person can qualify as middle class even if they earn as little as $180 a month. For a family of four it’s about $630. I would be classified among the richest 20% in the country. And my monthly income is about 950 euros a month and I’m a professional with a master’s degree. I don’t think that’s a rich person. Chile’s National Statistics Institute calculated that 80% of people have no money left at the end of the month. Once they get through paying for food, transport housing and basic services it’s all gone. Unless they pay for stuff in instalments which in Chile you can do just about anywhere. A lot of people go to the supermarket with a credit card. They don’t even have enough to pay for that supermarket bill in cash. So in a way, we have seen a decrease in poverty but we have more people in debt. The protesters have another criticism and that’s against high levels of privatisation. In Chile utilities like water and electricity are in the hands of private companies. Whereas sectors like education and health have a mix of private and public options. Critics say that system is driving prices up and that the quality of public offerings are worsening. If a retiree hasn’t paid into a private pension, for instance they get a government allowance of just $180 a month. We have people who are receiving pensions after working their whole lives which are making them poor. They don’t cover their basic needs with the pension that they are getting. Access to good healthcare. That is really expensive. Access to private schools. That’s really expensive. Access to some universities. That’s really expensive. Now in response the Chilean government has raised the minimum wage, promised more money for health services and the very elderly. But some protesters say it won’t be enough. And now there’s division over just how much Chile’s free-market model should change. There are two perspectives for the crisis in Chile. One is Chile’s a poor country unequal society and so we need to change everything. The other is much more social democrat. We need to improve the pension funds the health and so on but we need to keep the competitiveness of the economy. And that’s the government’s message Yes, we recognise the need for social fairness but We cannot change things overnight and also we need to keep a country that keeps an economy working because if the discussion is about redistributing wealth we first need to create that wealth. Moving ahead won’t be easy. There’s been damage. Chile’s National Human Rights Institute accuses the police and military of serious abuses that include using excessive force during the demonstrations. Even Chile’s famously stable economy had its biggest drop in a decade and probably won’t recover for a while. But there is a plan to reconcile the country. It involves rewriting the constitution that was originally drafted during Pinochet’s dictatorship. Polls in Chile say it’s something 80% of Chileans seem to support and so does the president. In April a referendum will ask voters whether they want a new constitution and whether it should be written by an all-citizen body or include lawmakers too. If it goes ahead elections for that body are expected to happen in October. It’s going to be a long and politically difficult process but the idea is that Chile can write a new story if you will. A story more people can call a success.