Chile and the Economic and Political Violence of the State – Council On Hemispheric Affairs

by Patricio ZamoranoFrom Washington DC

The media had to double down through aconstant barrage of violent photos and videos arriving through social networksso that especially non-Chileans, who are accustomed to the mythical image of astable and exemplary country, could internalize and believe the spectacle offire and blood on their screens.

The president of Chile, Sebastin Piera,realized a feat impossible to imagine after almost 30 years since the return ofdemocracy: provoke street clashes between Chilean youth, who were not raisedduring the dictatorship, and military troops, while enforcing a curfew, a state of emergency, and thesuspension of some constitutional guarantees. These measures create a ghostlycontinuum of the dictatorship embedded in the Chilean collective psyche.

The outcome thus far will go down in history: as of October 23rd, the official count is 16 deaths (5 of them by military and police forces), 226 wounded and 1,692 detained.[1] In addition to the human cost, more than 70 metro stations were damaged, with 20 set on fire, and some trains destroyed. A large amount of public and private infrastructure has also been destroyed.

Of course, the analysis by apologists forthe government, that this was all a surprise, is meant for foreign consumption.Last weekend Chileans knew all too well what was coming. The population of thecountry has been subjected to state violence for decades. The images of thesepast days are the same ones seen during the painful protests of the 80s, whenthe country seethed from the poverty and desperation produced by the politicaland economic repression of the Pinochet dictatorship. The images recall thestate repression inflicted against secondary school students 10 years agoduring the so called Penguin Revolution (penguin is a nickname forstudents, based on the colors of school uniforms), when children were attackedby police dogs. And the images also remind us of the legal coercive methodssuch as the violence of the anti-terrorist law applied to the Mapuches insouthern Chile.

The president of Chile, Sebastin Piera, realized a feat impossible to imagine after almost 30 years since the return of democracy: provoke street clashes between Chilean youth, who were not raised during the dictatorship, and military troops, while enforcing a curfew, a state of emergency, and the suspension of some constitutional guarantees.

The Chilean police, called carabineros,have always been a repressive force, adding to the other repressive institutions that have convertedChile into a great pressure cooker. The government struggles to maintain amade-up face before the international community. Far from creating a narrativeof reconciliation in response to social upheaval, the government uses the ideaof war against an internal enemy.[2] Pinochet used this painfulmetaphor to justify the violation of human rights of Chileans and provide amoral basis for soldiers to exercise repression directly against theircompatriots.

One has to remember that despite theadvances of the social agenda since the end of the dictatorship, Pinochetmanaged to implant neoliberal privatizations that still impact the daily livesof 17 million Chileans. He privatized education and created an underfinancedpublic sector that compromises the well being of millions of children,condemning them to substandard technical-professional training that leaves themill-prepared to compete with the sons and daughters of the national elite. Heprivatized health care making it into a totally regressive system, creatingconstant desperation for the nations majority who must either use the publicsystem slow, bureaucratic, and of poor quality or pay for private care.He also privatized pensions, which regressively provides benefits according tothe level of ones lifetime income and personal savings, favoring theprivileged.

Socialtrauma generated by the economic and political model

All of these privatizations have beencreating a social trauma that one can breath in on each visit to Chile. It is afeeling of permanent institutional harassment by economic pressures and by thenews media. The Chilean soul has been converted into an expression of permanentfrustration.

Salaries are at pauper levels. A study bythe Sol Foundation shows that 70% of Chileans earn less than $700 dollars permonth, and 50% earn less than $500 dollars, little more than the minimum wage.[3] Thelives of middle class Chileans are plagued by chronic debt, with millions ofpeople trying to attain a quality of life similar to that projected by themedia of those living in higher income neighborhoods.

Chronicdebt and generalized depression

Approximately half of the 9 millionChilean workers[4] arein debt.[5] AJune 2017 study showed that 31% of those in debt have a financial burdengreater than 40% of their income, and 22% of debtors have a financial burdengreater than 50%. Also, 43% of debtors have monthly income less than 500,000pesos, equivalent to a little less than $700 according to present exchangerates.[6] Itis simply impossible to make ends meet with peace of mind.

A 2014 international studyplaces Chile in second place in Latin America for credit card debt per capita.[7] Under these conditions, the possibility of saving orspending on leisure are very difficult.

This situation has repercussions formental health in the country. Chile has one of the highest rates of depressionin the world, afflicting more than 18% of the population. And this is a problemaffecting mostly the poor in Chile. Mariane Krause, psychologist and directorof the Instituto Milenio de Depresin y Personalidad, points out that highincome sectors have an 8% rate of depression, while the poor reach a rate of25%. This is to say, shockingly, that one of every four persons living inpoverty suffers from depression in Chile.[8]

The reasons for the social debacle ofrecent days leaves no room for doubt. The extraordinarily high rate of chronicstress may even be under-represented considering the limited access to mentalhealth services in a privatized system.

Transportation:a sensitive topic

The topic of the cost of riding the metroas well as other public transportation is not merely symbolic or just a matterof an increase of a few cents by decree. One needs to study the details. Tofigure out the real cost, note that a worker spends on a daily basis between $3and $6 dollars combined on public transportation, depending on the distancebetween home and work, and the number of trips taken, for work or other dailyactivities (picking up children from school, errands, emergencies, shopping,etc.). This is between $60 and $120 per month. About 50% of workers earn lessthan 500,000 pesos, a little less than $700 per month. If a father or motherare the only breadwinners, and there is a son or daughter that needs paidtransportation, for example, to attend university or take care of some businessor go out to eat some night . . . the picture emerges of constant financialpressure on millions of families.

Lets compare this to a city likeWashington, DC. A young worker with some experience can aspire to a salary of$4,000 per month. The metro in DC is expensive and in one day can cost about$10 for two trips or $200 per month. Yet that cost does not come to even 5% ofmonthly salary of the worker in Washington.

Chile:the same recipe as Ecuador and Argentina

This system of institutional violence isbased on the impunity of the elite. As Professor Javier Ruiz Tagle of theUniversidad Catlica points out, the extent of sacking of public funds revealedby prosecutions of large Chilean corporations has exceeded $4 billion over thelast few years.[9] Thisincludes tax evasion, price fixing, and illegal monopolies, all of whichinvolve large business groups, including that of Piera himself.

The social explosion under the governmentof Piera is not isolated from the international context. In Ecuador, thegovernment of Lenin Moreno has reversed the social policies of his progressivepredecessor, Rafael Correa. Moreno, for example, decreed a tax amnesty for thebank system and other large corporations that have not paid taxes for decades.This loss in State revenue comes to more than $4 billion.[10] Lenin Moreno transferredthis debt of the private finance sector to the Ecuadorian people, along with the elimination of gas subsidies. Thisblow to the population was felt immediately only a few days ago, especiallyamong the indigenous peoples. More than 500 were wounded and several killed.This was a crude reminder of the instability suffered by Ecuador for decadesand the cost of the structural adjustment package and conditions imposed by theInternational Monetary Fund (IMF). The approval rating of Lenin Moreno hasfallen to as little as 20%, one of the worst on the continent.[11]

A parallel situation has occurred in Argentina. Thefiscal and monetary policies of President Macri have dismantled almost entirelythe subsidies and social programs of the former progressive government.[12]Macri eliminated subsidies for public transportation, water, natural gas, andelectric services, provoking a 500% rise in the cost of the latter.[13] Thelooting and despair could not wait.[14] Just this past month, an enormous demonstration demanded measuresthat would stave off hunger among the population.[15] The IMF is also behindthese fiscal policies of austerity insocial spending, despite the fact that the banking system brought in $170billion in profits in 2018, 120% more than the 2017 figure.[16] What is the result of thesesocial policies? The poverty rate in Argentina exceeds 30%,[17] childhood poverty is at50%, and one in six children experiences hunger.[18]

Chilesregressive tax system: economic violence

In Chile, the neoliberal economic model,has been perpetuated by all presidents (including the socialists Lagos andBachelet) since the Pinochet dictatorship without any significant structuralchanges The taxation feature of thismodel places excessive weight on citizens and a minimal burden on companies.More than 40% of the tax collection in Chile comes from VAT (sales tax forproducts and services). The burden fallson citizens, not companies. Thisregressive and unfair situation disproportionately affects the mostvulnerable. People with higher incomes only represent 9% of tax revenue[19]. Companies in Chile also havegreat advantages when filing taxes that, in some cases, allow them to pay aslittle as 0%[20] . Companies in the miningsector, one of the most important sources of revenue for the country, have alsogreatly benefited. According to a study by economist Eduardo Titelman, between2004 and 2009, the state stopped receiving more than $10 billion due to specialdispensations offered to mining companies, privileges that few Chileans have[21] .

Everything leads to inequality. Accordingto a 2019 ECLAC report, the richest 1% of Chile hold 26% of the nations wealth[22] . And Chile ranks seventhamong the most unequal countries on the planet, as reported by the World Bankin 2018[23] .

More than 40% of the tax collection in Chile comes from VAT (sales tax for products and services). The burden falls on citizens, not companies. This regressive and unfair situation disproportionately affects the most vulnerable. People with higher incomes only represent 9% of tax revenue

The economic model then, is based on aregressive tax policy that exacerbates inequality. The system is so rooted inthe Chilean socio-political culture, that there are no institutional mechanismsin place to transform this model of economic violence into one that is moreequitable and fair. The electoral route, in that sense, has been totallyincapable of bringing about a change that benefits the whole country. Streetmobilization and violence appears, then, as the only way out, the cry ofdespair in the face of the chronic stress of daily life. And as we have seen,other governments in the region, also faced with the lack of substantive toolsto respond to these crises, are also resorting to extraordinary measures suchas, in the case of Piera, using curfews, military troops, the state ofemergency or the anti-terrorism law.

Afury fueled by 30 years and the recipe for change

As in the cases of Argentina and Ecuador,both governed by right-wing presidents, Piera impacted a basic service ofcritical importance to the population, by increasing the price of the Metroticket and the public transportation system of Transantiago. Although theincrease was only a few cents, it precipitated the peoples fury against 30years of state violence, as the popular slogans on the streets say. Piera andthe powerful financial sector he represents are incapable of providing asolution to the Chilean problem. Chileans gain nothing by appealing to Pierafor a lasting solution; it would be tantamount to shooting themselves in thefoot.

The recipe is clear: the corporate groups( Angelinis, Luksics, Pieras and a long etcetera), must voluntarily cedepart of their factual power and allow a real tax reform that floods the statecoffers.

The privatization of the health systemmust be reversed immediately, and a universal insurance system must be createdthat covers all the needs of the population. That is, health care is a humanright. It is not necessary to reinvent the wheel: it prevails in Canada,Europe, and even in embargoed Cuba.

The pension system must also beuniversal, although mixed variants should be allowed that provide the option ofprivate pension accounts for those who can collect more as a fair reward fortheir previous income. But the state must guarantee a fair and substantial fundfor every retiree in the country. All proceeds from the investment operationsof these public funds must be returned to each citizen.

And the salary structure must be urgentlyreformed. The objective is to create income and consumption conditions thatfoster a strong domestic market, unlike the one now based on chronicindebtedness. The structure of consumption in Chile is based on the permanentdebt of the middle and working classes, which is not only unsustainablebut keeps the domestic marketpermanently depressed. The current equation exhausts the population by aconstant sense of job insecurity, harming productivity, professional morale,and the quality of life of families. If large business groups want morecommerce, more dynamism, more production, it is incomprehensible why they optfor the economic repression of millions of potential consumers. Simply put,there is conformity with the current profit levels, and even greater conformitywith the submissive passivity suffered by millions of workers in the country.

Economicfreedom, only for the elite

The most important challenge is toproduce a new mindset of the Chilean business elite. By supporting andfinancing the political and economic values of the Pinochet dictatorship, theholders of big Chilean capital opted for repressive and often lethal socialcontrol by the State, while pretending to advance the values of individual developmentand freedom championed by free market economists Milton Friedmanand his followers. Non-intervention of the State in the economy is a myth. Inreality, the State intervenes strongly to guarantee a permanent position ofeconomic privilege of a specific sectorof the population. The way in which this logic has been developed for more thanfour decades leaves no doubt. There is no interest in developing the productivepotential of the Chilean people. There is a huge distrust in the population thatis perceived by the ruling elites as a mass that must be controlled andrendered docile.

By supporting and financing the political and economic values of the Pinochet dictatorship, the holders of big Chilean capital opted for repressive and often lethal social control by the State, while pretending to advance the values of individual development and freedom championed by free market economists Milton Friedman and his followers.

Chiles low quality and expensive private health system keeps them sick and indebted with the private hospital system. The educational system frustrates the vast majority of young people and keeps them under-employed and under-educated. They are locked in a stagnant and insufficient salary structure, which prevents the accumulation of capital and savings, and truncates the possibility of sufficiently financing leisure, spiritual and creative activities. The electoral system does not provide an avenue for profound structural changes. It does not matter if the governments are nominally socialist, social democratic or right-wing; oligarchic rights are maintained at the expense of civil society. The law and constitutional coercive measures are used to crush the expression of social protest, leaving the door open to the raw expression of violence.

The Chilean explosion this weekend is nota new phenomenon. It has always been present, latent, sometimes submerged, butready to overflow the streets. The international community generallymisconstrues Chilean reality, convinced by the mirage created by macroeconomicfigures. Thus Santiago suffers, destroyed and rebuilt several times a year, ina cadence of rage that has already become a painful litany. The Chilean people,hardworking and persevering in a land full of natural calamities, politicalcalamities and social calamities, got tired this October of 2019, of turningthe other cheek.

Patricio Zamorano is a singer-songwriter, journalist and academic in political science. He is also Co-Director of COHA.

Translation by Fred Mills. Editing assistance by Roger Harris

[VISIT the Photo-Report of COHA prepared by four young Chilean photographers to document the social unrest in Chile]

End notes

[1] INDH anuncia querellas por cincopersonas fallecidas en Estado de Emergencia. https://www.indh.cl/indh-anuncia-querellas-por-cinco-personas-fallecidas-en-estado-de-emergencia/

[2] Presidente Piera: Estamos en guerracontra un enemigo poderoso. https://www.telesurtv.net/news/pdte-pinera-estamos-guerra-contra-enemigo-poderoso-20191020-0047.html

[3] Los verdades sueldos de Chile. http://www.fundacionsol.cl/estudios/sueldos-chile-2018/

[4] Banco Mundial. https://datos.bancomundial.org/indicator/SL.TLF.TOTL.IN

[5] SBIF realiza radiografa delendeudamiento en Chile https://www.sbif.cl/sbifweb/servlet/Noticia?indice=2.1&idContenido=11889

[6] SBIF realiza radiografa delendeudamiento en Chile https://www.sbif.cl/sbifweb/servlet/Noticia?indice=2.1&idContenido=11889

[7] Chilenos tienen la segunda mayor deudaen tarjetas de Latinoamrica. http://www.economiaynegocios.cl/noticias/noticias.asp?id=124482

[8] MARIANE KRAUSE: Chilerequiere un cambio sociocultural para superar la depresin https://www.conicyt.cl/blog/2019/02/01/mariane-krause-chile-requiere-un-cambio-sociocultural-para-superar-la-depresion/

[9] La cifra de la indignacin: Acadmicocalcula en ms de cuatro mil millones de dlares las prdidas que sufri elEstado en beneficio de unos pocos. https://www.eldesconcierto.cl/2019/10/20/la-cifra-de-la-indignacion-academico-calcula-en-mas-de-cuatro-mil-millones-de-dolares-las-perdidas-que-sufrio-el-estado-en-beneficio-de-unos-pocos/

[10] Ecuador: gobierno de Lenin Morenosacrifica a los sectores empobrecidos para satisfacer al FMI. http://www.coha.org/ecuador-gobierno-de-lenin-moreno-sacrifica-a-los-sectores-empobrecidos-para-satisfacer-al-fmi/

[11] Consultora Mitofsky. https://radioequinoccio.com/inicio/item/9179-presidente-lenin-moreno-con-pesima-aprobacionsegun-consultora-mexicana.html

[12] Macri persiste en su poltica deeliminar subsidios a los servicios. https://www.elciudadano.com/latino-america/argentina/macri-mantiene-su-politica-de-eliminar-subsidios-a-los-servicios/05/31/

[13] Gobierno de Macri elimina subsidios aelectricidad, se esperan alzas de hasta 500% https://www.eltelegrafo.com.ec/noticias/mundo/8/argentina-aumentodeprecios-luz-tarifazo-macri

[14]Crisis econmica enArgentina: Intento de saqueo termin con un nio de 13 aos muerto por heridade bala. https://www.eldesconcierto.cl/2018/09/04/crisis-economica-en-argentina-intento-de-saqueo-termino-con-un-nino-de-13-anos-muerto-por-herida-de-bala/

[15] Argentina y una semana marcada porprotestas que exigen la emergencia alimentaria https://www.france24.com/es/20190911-argentina-protestas-emergencia-alimentaria-crisis

[16] El sector financier siguesiendo el gran ganador de la era Macri. https://www.infobaires24.com.ar/el-sector-financiero-sigue-siendo-el-gran-ganador-de-la-era-macri/

[17] Argentina se hunde en lapobreza mientras el dlar se dispara. http://www.rfi.fr/es/americas/20190429-argentina-se-hunde-en-la-pobreza-el-fmi-aplaude

[18] Ms de la mitad de los nios argentinos son pobres. https://elpais.com/internacional/2019/06/07/actualidad/1559927136_602178.html

[19] Chile recauda cuatro veces msimpuestos por el IVA que por lo que pagan los ms ricos. https://www.publimetro.cl/cl/noticias/2017/11/24/chile-recauda-cuatro-veces-mas-impuestos-iva-lo-pagan-los-mas-ricos.html

[20] Cmo y por qu el gobierno permitira las empresas no pagar impuesto corporativo. https://ciperchile.cl/2019/07/18/como-y-por-que-el-gobierno-permitira-a-las-empresas-no-pagar-impuesto-corporativo/

[21] Los enormes beneficios tributarios alos que acceden las empresas mineras en Chile. https://ciperchile.cl/2011/07/19/los-enormes-beneficios-tributarios-a-los-que-acceden-las-empresas-mineras-en-chile/

[22] Cepal describe a Chile como un pas desigual: Un 1% concentra el 26,5% de la riqueza https://www.cnnchile.com/pais/cepal-describe-a-chile-como-un-pais-desigual-un-1-concentra-el-265-de-la-riqueza_20190116/

[23 ] Aparece Chile: estos son los 10 pases ms desiguales del mundo. https://www.biobiochile.cl/noticias/nacional/chile/2018/07/04/aparece-chile-estos-son-los-10-paises-mas-desiguales-del-mundo.shtml

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Chile and the Economic and Political Violence of the State - Council On Hemispheric Affairs