Three decades into democracy, Chile reckons with inequality

The social earthquake shaking what was long considered to be South America’s well-behaved economic miracle has not left the modest, middle-class neighborhood of Froilán Cubillos and Grisel Hernández unscathed.

The nearby metro station that served laborers, midlevel professionals, and small-business owners of south Santiago’s Maipú neighborhood sits closed, burnt out and festooned with bedsheets spray-painted with the slogans of Chile’s “revolution.” Of the area’s two giant supermarkets, one remains shuttered, having been ransacked and then torched by a furious mob.

And yet the Cubillos family – like much of Chile’s middle class, from all appearances – stands behind a movement that it says has been a long time coming.

The events shaking Chile in recent weeks may have been touched off by young people unhappy over a subway fare hike. Youth-led movements elsewhere, in nearby Ecuador or distant Hong Kong, or the continent-spanning demand for climate action, probably served as examples. But rumbling below the surface for perhaps a decade, they say, was an ever-widening gulf between an out-of-touch government and dismissive elites and an exhausted and disgruntled middle class that had tasted the fruit of Chile’s boom years and now felt like it was falling behind. More than 1 million people, spanning the country’s middle and working classes, stunned the government by marching in Santiago and other cities Oct. 25.

Moreover, in a country that only threw off the chains of military dictatorship three decades ago, many were venting a growing sense that the promise of democracy had soured, delivering instead a system working mostly for a privileged few.

“It wasn’t just the 30-peso [about 4 cents] fare hike in the metro, that was just the spark that ignited all the frustrations and disappointments of the working people of Chile,” says Mr. Cubillos, a geography professor at Santiago’s Metropolitan University of Educational Sciences. “People feel exploited and disregarded by a system that concentrates the wealth of the country in the hands of a few,” he adds, “and it all finally boiled over.”

As she attempts to corral the couple’s rambunctious 2-year-old son Aliwein, Ms. Hernández emphasizes another aspect of Chilean society she says underlies the surge of protests.

“Instead of any effort to understand where this awakening was coming from, [the elites] simply made fun of the people,” she says, cradling her squirmy son in the family’s toy-strewn living room.

“Instead of listening,” Mr. Cubillos adds, “they mocked.”

Indeed, many Chileans seem unlikely to forget anytime soon the government minister (since sacked) who advised metro riders unhappy with the fare increase to get up earlier and get to work on an off-rush-hour train when lower fares prevail; or another (since sacked) who quipped that people unhappy over price hikes might consider buying flowers, since the price of a bouquet had recently dropped. 

And then there was the first lady, wife of President Sebastián Piñera, who was recorded privately telling a friend that the throngs in the streets seemed like aliens who had arrived from out of the blue.

“For years people kept quiet as they struggled to pay for their kids’ education and pay for housing and health care and other necessities, and watched as the few who are rich refused to share the country’s prosperity,” says Ms. Hernández, a professor of education studies currently on leave to care for her son. “But it was the humiliations that had the people saying, ‘No more!’”

But perhaps nothing cemented public perception of an out-of-touch leadership more than Mr. Piñera’s televised statement that “we are at war” and his declaration of a state of emergency that lasted nine days. The 20,000 soldiers he sent to the streets conjured up memories of the 1973 coup against a democratically elected government and the repressive military dictatorship of Augusto Pinochet that tortured and disappeared thousands of Chileans.

“When I went to the march on the Alameda [opposite the presidential palace] and saw 10 tanks coming down the street towards us, it took me back to 1973 and it was chilling,” says Ana María López Cordero, an itinerant flower vendor who lives with her husband in a tidy home around the corner from the Cubillos family. 

“Chile is not at war, at least the people in the streets are not waging war,” she says. “But unfortunately what Chileans have learned is that the governing classes never pay the least attention unless the people make some noise.”

Disappointments with democracy?

Chile is a country of sharp economic inequality, though it is not Latin America’s worst case. (Economists generally award that crown to Brazil.) In recent years a number of corruption scandals have roiled the country, and high-profile cases of tax-dodging – including one involving President Piñera – have fed a growing resentment.

Then there is dissatisfaction with Chile’s free-market economic model – widely derided by young protesters, old pensioners, and average workers in between – that since the end of the Pinochet dictatorship in 1990 has delivered new levels of prosperity and reduced poverty rates, but has also resulted in an economy and social-welfare system where virtually everything, from most education and health services to the pension system, is largely privatized. (As one taxi driver proclaimed to this reporter, “Señor, Chile is the only country in the world where even the rivers are privatized!”) 

“We have been highlighting this unhappiness in Chile in our reports for almost a decade; it’s really nothing new, but no one and least of all the leadership has chosen to listen,” says Marta Lagos, director of Latinobarómetro, a polling and opinion research firm based in Santiago.

“There is major dissatisfaction with democracy and the performance of institutions that is true across much of Latin America, but what is different in Chile is the unhappiness, with Chile consistently coming in last [in Latin America surveys] in satisfaction with life,” Ms. Lagos says. “There’s a sense of stagnation and retroceso [falling behind], a very strong sense that democracy and the country’s institutions work for the few and not for the many.”

For some experts, the key to understanding Chile’s revolution is the country’s middle class, which both contributed to and reaped the benefits of rising prosperity since democracy was reestablished in 1990. Now that middle class wants more, or in some cases is falling behind in a less-robust economy, and is finding that the paths to further prosperity are reserved for a protectionist few.

“The Chileans who are protesting are the emerging middle class that stands at the gates of the promised land – and they’re finding that the elites are not letting them in,” says Patricio Navia, a Chilean sociologist and adjunct professor at New York University’s Center for Latin American and Caribbean Studies.

According to Professor Navia, who splits his time between Santiago and New York, Chile is “actually moving in the right direction” in terms of poverty reduction, prosperity, and even income equality. But he says that progress over three decades has created expectations that are not being met – in no small part due to the country’s power structure and small circle of ruling families.

The prime example of that unfair tilt that Chileans offer – from those demonstrating in the streets, to experts like Professor Navia – is the country’s education system. Public schools are in shambles and most of the middle class send their children to private schools, but top-tier private schools are essentially reserved for the elites.

“What we learned is that schools here are key to developing the social group you belong to and the contacts that will be determinant for your future,” says Nora Balzarotti, an economist with Euromonitor International in Santiago who moved with her family from Argentina to Chile a decade ago “for a better quality of life.”

Ms. Balzarotti says “Chile is a place where you have to work hard.” Still, she prefers Chile’s classic free-market economic model over Argentina’s recurring bouts of economic populism. But she also understands where some of the tumult in the streets may be coming from.

“Here it’s like living in a tiny town where everyone knows each other, everything is organized by very closed circles, and anyone from outside the town may have trouble moving in,” she says. “I can imagine it can be very difficult for many in the middle classes who may have the education but not everything else it takes, like the right last name, to get in there.” 

Turning protest to progress

President Piñera insists he will not resign, as many Chileans are demanding. He has taken a few measures, like canceling the metro fare increase and raising rock-bottom pensions, but no one believes that will be enough to calm the storm.

In the wake of the country’s “awakening,” some Chileans are beginning to form neighborhood and workplace discussion groups, called cabildos, to channel the ire of the streets into forums for finding solutions.

And many more are demanding a new constitution to replace the current one, which dates from the Pinochet dictatorship. It might be a necessary step, Professor Navia says, not so much because the current one isn’t working – he says reforms over the years mean that about 40% of the constitution has already been changed – but because “Chile needs the symbolism of once and for all laying Pinochet to rest.”

But the more difficult task Chile faces, he adds, will be changing society so that social mobility and sharing more equitably in the country’s prosperity become a reality.

“Right now Chile is like a party with a small circle of elites in attendance,” he says. “But now more people are at the entrance clamoring to get in, and the few on the inside are going to have to open the door a little if they don’t want those at the entrance to start throwing stones and ruin the party for everybody.”