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Chile’s Social Explosion: Inequality and the Ghosts of Pinochet

On Sunday, 4th September 2022, the people of Chile go to the polls in a mandatory vote on whether to approve (“apruebo”) or reject (“rechazo”) the new proposed constitution, seeking to replace the 1980 Constitution that was imposed by the military dictatorship of General Augusto Pinochet. This process of constitutional reform was put in motion in October 2019, after the eruption of some of the biggest protests in Chilean history, known as the “Estallido Social” (“Social Explosion” or “Social Outburst”). Yet, before the Social Explosion, Chile was for decades hailed by many economists, politicians, and observers as a beacon of economic development and stability within Latin America.

This article will first analyse the short and long-term causes of the Social Explosion in Chile with a focus on inequality, to help explain why the constitutional overhaul became the rallying point of this social movement. It will be shown how Chile’s economic development has failed to address rampant inequality, and how Pinochet’s dictatorship-imposed constitutional legal framework has cemented a divisive legacy preventing institutional reform, thus leading to demands to replace the 1980 Constitution. Nevertheless, it is important to note that while this article focuses on institutionalised inequality, it does not address some of the other prominent interest groups of the Social Explosion, especially that of Chile’s fast-growing feminist and indigenous rights groups. Furthermore, this article does not engage with the constitutional process itself, merely the reasons behind the desire for constitutional reform.

Figure 1: Abarca Sandoval, C. (2020). Chile's protesters won the right to choose their nation's future, but not without bloodshed.

The Social Explosion

Chile’s economic development over the last thirty years has been in many ways remarkable. Since 1990, the Chilean economy has been growing at a rate of between 4-7% a year, with life expectancy, literacy rates, nutrition standards, maternal and child mortality rates, and numbers of children in primary and secondary level education having reached that of many developed nations (Candia et al., 2021). The last ten years have furthermore seen Chile’s poverty rates reduced from 22.2% in 2011 to 8.6% in 2017, with those living in extreme poverty down from 8.1% to 2.3% in that same period. Meanwhile, record numbers of Chileans are in university education (Candia et al., 2021). This “Chilean Miracle” has drawn widespread international praise from economists, observers, and politicians, earning Chile a reputation as Latin America’s most prosperous country and facilitating its admission as a member of the OECD in 2010 (Candia et al., 2021). Yet it was a 4% rise in the price of Santiago metro tickets by 30 pesos, the equivalent of around $0.04, that sparked a mass uprising (Gonzalez & Le Foulon, 2020). The rise in metro tickets was of course not the primary reason for the subsequent outburst of demonstrations and anger, merely the straw that broke the camel’s back, with underlying economic and social causes for which Chile’s headline economic figures have failed to account for. The next section will analyse the short-term causes of the Social Explosion in regard to the cost of living, before investigating some of the decade’s long resentments and structural issues that had been hiding beneath Chile’s economic growth.

As large groups of Chilean students hopped over metro barriers en masse across Santiago as part of a fare-dodging protest, many people in Chile were broadly sympathetic. By 2019, the cost of living in Chile had been rising for everyone, with the average monthly cost per person around $862 per month (Gaete et al., 2020). The headline figure on Chilean average monthly wages in 2019 was around $871 per month, yet this average is heavily distorted by the small number of top Chilean earners. Instead, almost 70% of Chilean workers were earning less than $640 per month, with 50% of Chilean workers earning less than $466 a month — far below the cost of living (Gaete et al., 2020). For pensioners, the situation was even worse. 90% of pensioners in receipt of the state retirement fund were receiving less than $200 per month, a rate unchanged for much of the previous ten years (Gaete et al., 2020). Consequently, for most Chileans life was only affordable through the issuing of private credit, with those above the poverty line dependent on credit for even basic necessities, with such practice the only one preventing many people from falling into the headline national poverty figures (Candia et al., 2021). Accordingly, the average Chilean household was accumulating a private debt of over 70% of their monthly salary, with interest rates on this credit meaning poorer Chileans were spending up to 20% more on basic goods than those not dependent on credit, throwing them further into debt (Candia et al., 2021). The inability to meet the cost of living through wages was despite Chileans working a standard of 45 working hours plus an average two-hour daily commute (Gaete et al., 2020).