In October 2020, Chile will hold a referendum on the creation of a new constitution,78%The new constitution was drawn up with the approval of the The constitution to be repealed was created in 1980 during the dictatorship of Augusto Pinochet. This constitution was designed to minimize the role of the state in the economy and to favor employers over workers. As such, this constitution has contributed to the creation of the social and economic disparities that have long been a problem in Chile.

Chile is currently one of the wealthiest countries in Latin America, but also one of the most unequal in the world; through economic growth since the 1990s, poverty and unemployment rates have declined, but decades-long social and economic disparities have not been eliminated. 11 TP3T of the population is the country's wealth.33%and the current situation is that many people in the middle and working classes are struggling to make ends meet. Let's take a closer look in this article.

The capital city of Santiago (Photo: Sami Haidar/Flickr[)CC BY-NC 2.0])

History of Chile

In 1818, Chile gained independence from colonial Spain. Then, in the late 19th century, the Industrial Revolution occurred and the entire country prospered. While this led to an increase in exports and national income, politicians, industrial capitalists, and landowners began to monopolize the wealth of the country. As a result, by 1913, the wealth held by the top 11 TP3T of the population was more than the entire country's income.25%The first time, the country was occupied by the On the other hand, in the second half of the nineteenth century, the Chilean government and military began to take over the indigenous people'smapucheThe oppression of the people of the country was exacerbated by the repression of the The rights of the Mapuche people were ignored, and their lands, rich in natural resources, were invaded and used to conduct business. Thus, a situation of inequality was created in Chile in various ways.

Beginning in 1938, a new administration became aware of the problems with this disparity, and the government began to develop an economic structure thatreformIn particular, from 1970 to 1973, Salvador Allende, then president, promoted socialist reforms, including the provision of free medical care. However, a coup d'état in 1973 overthrew Allende's government and installed Pinochet as the new president. The coup was coordinated by the Central Intelligence Agency (CIA) of the U.S., which was then in the midst of the Cold War.participationIt is said that they did so because they feared the spread of socialism in the Latin American region. They feared the spread of socialism in the Latin American region.

Former President Pinochet (Photo: Biblioteca del Congreso Nacional/Wikimedia Commons[)CC BY-SA 3.0CL])

Once in power, Pinochet began his dictatorship and began to implement free market reforms as part of his policies. These reforms were.Chicago BoysThe influence of the Chicago Boise was the nickname given to a group of Chilean economists educated at the University of Chicago in the US under Milton Friedman, a neoliberal (*1) who developed monetarism (*2) in the 1950s. The Chicago Boise plan called for an economy open to social and imports with less government intervention in economic activities, and these policies were supported by the U.S. government. During the Pinochet dictatorship, the Chicago Boise joined the government, and several of them were appointed as ministers. Influenced by this, Pinochet's policies minimized the role of the state, cutting budgets for public housing, education, social security, and infrastructure, and selling off state-owned enterprises. Private companies were also given responsibility for education, pensions, the health care system, and water resources, and between 1973 and 1980, the number of state-owned companies went from 300 to 24decreaseThe first time, the company was in a position to do so.

In 1980, a new constitution was enacted. The content of the constitution also reflected free market reforms, limiting government expansion of social welfare and intervention in favor of business. And the responsibility for social services changed from the state to the private sector. In addition, laws based on this constitution have been difficult to amend. In order to change the content of laws on education, elections, and other matters based on the Constitution, members of the Senate and the House of Representatives57%approval of the Constitution, and is subject to checks by the Constitutional Court, which determines whether the law violates the content of the Constitution.

A referendum was then held in 1990.56%The dictatorship ended with the transition to democracy after the approval of the However, after the return to democracy, the country maintained the laissez-faire economic system and constitution of the Pinochet dictatorship. He also implemented neoliberal policies such as free trade and expansion of exports.

[Vemaps.combased on map of]

The Economic "Miracle" and the Other Side of the Story

The laissez-faire economic system has allowed Chile's economy to grow rapidly, and by 2018 the value of the gross domestic product (GDP) had reached its 1990Approx. 9 timesreached $3.2 trillion in 1992. This economic growth led to dramatic reductions in poverty and unemployment rates. 199233%The poverty rate, which was 81 TP3T, decreased to 81 TP3T in 2014. In addition25 yearsReal wages have risen sustainably over the Through economic growth, Chile has become one of the wealthiest countries in Latin America, with a GDP per capita in 2019 second only to Uruguay andsecond (in a series)The price was high in the

This economic growth is related to Chile's copper industry, significant export revenues from international trade, and foreign investment. The copper industry accounts for a large share of Chile's economy and exports49%is also a copper industry. Miners earn a lot of money and are paid well. Among them are the world's largest open-pit copper minesAntofagastamining region has the fastest growing economy and the highest GDP per capita of any country. In addition to the copper industry, Chile has the highest rate of exports and foreign investment in South America, supporting economic growth.

The Chuquicamata mine in Antofagasta, the largest open pit copper mine in the world (Photo: Tennen-gas/Wikimedia Commons[)CC BY-SA 3.0])

However, GDP only represents the overall size of a country's economy and cannot measure the distribution of wealth gained from economic activity or economic disparities. While economic growth has reduced poverty and benefited the wealthy, disparities remain in Chilean society as a whole. Although the poverty rate has decreased, 50% of the population still receives a monthly salary ofLess than US$500The population lives in the The current state of economic inequality is worsening: in 2006, the income of the top 101 TP3T of the population was about 30 times that of the bottom 101 TP3T; in 2017Approx. 40 timesreached the level of Also, with regard to land, 11 TP3T farmers are70% or higherChile is the most unequal landowning country in the world. Chile is therefore the most unequal country in the world in terms of20 countriesThe country is considered to be one of the most important In addition, the copper industry has supported Chile's economy,2014The economy was affected by a drop in the demand for copper, which lowered its price.

People's Lives Suffering

Let's take a closer look at the living conditions of people in this highly disparate country, where the privatization of education, health care, pension systems, water resources, etc. in the 1980s has resulted in a situation of inequality in social services between the wealthy and the less wealthy that persists to this day.

A poor neighborhood in the capital city of Santiago (Photo: C64-92/Flickr[)CC BY 2.0])

In education, the government spends only a fraction of GDP on higher education.0.5%Of the more than 150 universitiestwo thirdsof universities are operated for profit by private companies. The average cost of a university is equal to the average income ofApprox. 41%The children of wealthy families who can afford to pay for a good education are therefore able to receive a good education. Therefore, children from wealthy families who can afford to pay can receive a good education. However, families that cannot afford to pay a large amount of money for education are not able to provide their children with the skills necessary to obtain good jobs and high incomes, which contributes to the economic disparity. Therefore, in 2007, government-supported student loans began to be offered,Approx. 70%s students are now able to pursue higher education. However, in exchange for their access to education, many are struggling to repay huge scholarships after graduation.

Problems have also arisen with regard to health care and welfare. During the Pinochet dictatorship, a for-profit private health care system emerged. Many people use the public health care system because private health care is overwhelmingly more expensive than the public health care system. However, the public health care system is of lower quality than the private health care system. Furthermore, the world's first privatizedpensionThe system fails to adequately protect low-income and informal workers in their retirement years. The average pension amount paid by the private sector is the minimum wageApprox. 400 U.S. dollarsbelow the level of the previous year. Chile.retirement plansThen, with the exception of the military and police, there is no guarantee that retirees will receive any retirement benefits from the state or companies when they retire. In 2008, President Michelle Bachelet enacted a pension reform for the poorest pensioners, but even so, they still do not have enough money to live on in their retirement years. But even so, they still do not have enough money to live on in their old age.

Former President Bachelet enacting a law to provide pensions (Photo: Gobierno de Chile/Flickr[)CC BY 2.0])

Furthermore, the Pinochet Constitution stipulatesLabor RightsThe society has become more favorable to employers due to the The rights of workers to bargain with their employers have been cut to the bone. Particularly with regard to informal workers, there are not enough rights to protect workers, such as termination benefits, employer-paid insurance for workplace injuries, and trade union rights. As a result, informal workers work for low wages. On the other hand, even regular workers have their rights to organize restricted by labor codes from the Pinochet era.

tax systemInequality also occurs with respect to the The system requires the poor to pay a large tax burden, causing the general population to have less money available for living, even if their salaries have increased in real terms. As a result, many of the poor suffer from malnutrition because they cannot afford to buy enough food and daily necessities. On the other hand, many of the wealthy and powerful ,tax avoidanceand ... andcorruptionIt is believed that the company has repeatedly

Chile's water resources are also fullyprivatizationThe water is owned by the government and cannot be drunk or used without permission, even if it flows through the property. In addition, industries such as beverage, fuel, firewood, and energy are owned by three large corporations and distributed to the people. These three large corporations set prices and monopolize the provision of services essential to life.

Outbreak of mass demonstrations

This unequal situation did not improve, and people began to rebel against the social and economic disparities. Then in 2011, demonstrations led by students against the inequality of the education system, and in 2016, demonstrations against the pension system occurred. In response to the demonstrations, Bachelet, who was president at the time, instituted reforms in human rights, healthcare, pensions, the tax system, and education, but these reforms did not fully resolve the situation.

The situation of social and economic inequality did not improve after the outbreak of these demonstrations, and in October 2019, triggered by a price increase equivalent to about US$0.04 (30 pesos) in subway fares, massive demonstrations broke out around the capital city of Santiago and spread throughout the country. in one day.Approximately 1.2 million peopleparticipated in the demonstrations, which resulted in 22 deaths, more than 2,200 injuries, and more than 6,000 arrests, and were so large that the military was deployed for the first time since the return to democracy. The demonstrations have caused Chile to cancel two international conferences, the Asia-Pacific Economic Cooperation (APEC) summit scheduled for November 2019 and the 25th Conference of the Parties (COP25) to the United Nations Framework Convention on Climate Change (UNFCCC), scheduled for the following month. the 25th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP25).suspensionIt was so large and continuous that it became

Demonstration that occurred in 2019. The person at the front holds a Mapuche flag. (Photo: cameramemories/Flickr[.CC BY-NC 2.0])

."Not for 30 pesos, but for 30 years." This became the slogan for the 2019 demonstration. The protests of the demonstrations do not represent a protest against the 30 peso fare increase, but against the situation of economic disparity that has persisted for 30 years since the return to democracy.The demonstrations that occurred in 2019 were backed by protests against the suffering of daily life and the social and economic disparities that have persisted for many years in Chile. They are.

Sebastián Piñera, who took office for a second term (*3) in 2018, originally took a hard-line stance against the demonstrations. However, as the demonstrations grew in scale and momentum could no longer be contained, he responded by announcing that the government would increase the amount of pensions paid, raise the minimum wage, lower medical costs for the elderly, raise taxes on the wealthy, and cut politicians' salaries. However, the government's implementation was slow and the demonstrations did not subside.

Furthermore, in 2020, the economy was severely damaged by the city blockade caused by the new coronavirus, and demonstrations by impoverished people continued. The government's concession to suppress demonstrations that would continue from 2019 was a referendum on the creation of a new constitution.

The Road to a New Constitution

As mentioned at the beginning of this article, a referendum will be held in October 2020 and the constitution will be newly rewritten. The Representative Assembly, which will be composed of 155 members to discuss the contents of the new constitution and prepare a draft constitution, will hold elections in 2021 to choose these 155 members.scheduleIt is Through the new constitution that will be created, it is hoped that it will help to eliminate the disparities that have long been a problem in Chile. In addition, the current relationship between the state and indigenous peoples isaggravationThe indigenous peoples are also involved in the following activities. Violent acts have been committed by indigenous peoples, especially in opposition to companies that are expanding into indigenous lands. Since the current constitution has no provisions for indigenous peoples' rights, a new constitution should recognize the rights of indigenous peoples and obtain political rights for them.expectationThe following is a summary of the results of the study.

A scene from the Chilean conference (Photo: Diputadas y Diputados de Chile/Flickr[)CC BY-NC-ND 2.0])

In recent years, income inequality and poverty conditions throughout the Latin American region havereductionAlthough it has done so, the distribution of wealth is among the most unequal in the world. Many countries in Latin America have experienced a lower rate of economic growth, and the situation of poverty and inequality is more severe than in Chile. Among them, we have seen in detail that while Chile has experienced economic growth and reduced poverty since 1990, social and economic disparities remain. It is hoped that Chile's new constitution will help to fundamentally improve decades-long social and economic disparities, particularly in education, health care, and pensions.

1 Neoliberal: A position that deregulates, minimizes government intervention in the market, and leaves the economy to the outcome of free competition in the market.

2 Monetarism: Proposed by Mr. Friedman, this is the idea that the government should refrain from intervening in the market other than by supplying money.

3 Piñera was president from 2010 to 2014 and again from 2018; Bachelet was president from 2014 to 2018.

Writer:Saki Takeuchi

Graphic:Saki Takeuchi

Follow @GNV_tweets