Chile's middle class takes to streets over crushing debt

Yahoo – AFP, Jordane BERTRAND, November 1, 2019

Clashes between demonstrators and security forces in Santiago have been
going on for two weeks (AFP Photo/Martin BERNETTI)

Santiago (AFP) - It is not poverty that is driving Chile's middle class into the streets to join massive protests: it is debt, brought on by sky-high private health and education costs that have created an economic fragility many find unbearable.

That is why so many have taken part in two weeks of social upheaval, protesting against the economic policies of Chile's ruling elite.

Chile has an economic record that is the envy of Latin America: poverty has never been lower, dropping from 40 percent to less than 10 percent in 30 years, and transforming this country of 18 million into one where middle class citizens are the majority.

But for many, the ultra-liberal economic model inherited from the Augusto Pinochet dictatorship (1973-90) -- which privatized water, health, education and pensions -- has generated a "permanent worry" about unexpected expenses.

Nicolas Achondo, 33, was forced to close his restaurant.

After paying bills, wages and taxes, he had nothing left for private health insurance.

A motorbike accident left him owing thousands of dollars for treatment.

"I couldn't pay, they put me on the debtors list. That closes all doors to you: you can no longer get a bank loan or rent an apartment," he said.

Protesters are mostly angry about high private health and education costs --

 alongside low public standards -- and insufficient state pensions (AFP Photo/

Martin BERNETTI)

"I no longer had access to credit and my business started generating debts. It's very unfair."

Thanks to help from his family, he managed to pay off his debts but has no capital to relaunch his restaurant business. He now wants to emigrate to Canada.

"We don't get state subsidies. The only thing we can do is access bank loans to pay for housing, health, education, clothing," said Achondo.

His parents suffered the same fate. They owned a video store in the 1980s-90s but fell victim to evolving technology.

They managed to pay for their two eldest children's private education without needing loans, but could not afford the same for their younger two children, both of whom are in the vastly inferior public school system.

'With or without uterus'

Marisol Berrios, a social worker, took out loans to pay for her two children's higher education.

"Now they're both university professors but they have insecure contracts. They receive the minimum wage and have no health care."

At least 20 people have been killed since the protests began two weeks ago, 

with sporadic incidents of looting, arson and street violence (AFP Photo/Martin BERNETTI)

In a model with minimal state intervention, profitability is king.

As is often is the case, women are the hardest hit. They have to pay up to three times as much as men for health insurance when they want children.

"There are 'with uterus' contracts and 'without uterus' contracts that are cheaper. You pay a higher percentage when you're fertile," said Berrios.

Women also pay more in old age, says the 59-year-old, who admits to fearing retirement.

"I will retire in one year and my pension will be 170,000 pesos ($230)," said Berrios, who currently earns 1.2 million pesos ($1,620) a month.

"I went into depression about it this summer."

Health, education and pensions may be the biggest worries but on top of that are increases in electricity costs, a proliferation of motorway tolls around Santiago and an unregulated medication market.

For fed-up Chileans, it's this accumulation of expenses that weighs so heavily.

Decades of pent-up frustration have come pouring out over the last two weeks as 

Chileans protest against social and economic inequality (AFP Photo/Martin BERNETTI)

It was against this backdrop that a seemingly innocuous 3.75 percent hike in the price of a metro ticket lit a fuse under decades of pent-up frustration.

In a bid to douse the flames of discontent, conservative President Sebastian Pinera announced a raft of social measures: suspending a 9.2 percent hike in electricity bills and an annual 3.5 percent increase in toll charges.

But that didn't calm the public.

"Chile has awoken," has become one of the main slogans of anti-government protesters since October 18.

"We've woken up to the brutality of the system," said Berrios.

Chileans go on strike as protest death toll hits 18

Yahoo – AFP, Miguel SANCHEZ, October 23, 2019

Riot police use water cannons on demonstrators in Santiago, on the sixth straight
day of street violence in Chile, which has left at least 18 people dead (AFP Photo/
Javier TORRES)

Santiago (AFP) - Thousands of Chileans flooded the streets of Santiago and other cities Wednesday on day one of a general strike, upping the pressure on President Sebastien Pinera after days of social unrest that have left at least 18 dead.

Students, professors and state workers walked off the job at the urging of the country's largest union, ignoring a package of measures announced by Pinera aimed at quelling the violence.

"THE STRIKE IS ON! We say it loud and clear: enough of the increases and abuses," said the Workers' United Center of Chile (CUT), which organized the two-day action with about 20 other groups.

In the capital Santiago, police used water cannons to dispel protesters.

"Chile has awakened," read the sign of one protester.

The country, usually one of the most stable in Latin America, has experienced its worst violence in decades since protests against a now-scrapped hike in metro fares escalated dramatically on Friday.

Demonstrators have decried social and economic woes, including a yawning gap between rich and poor.

A demonstrator in Santiago holds a sign reading 'Chile has awakened' (AFP Photo/

Martin BERNETTI)

A four-year-child and a man were killed in the latest protests when a drunk driver rammed into a crowd of demonstrators, Interior Undersecretary Rodrigo Ubilla said.

A third person died after being beaten by police, according to the victim's family.

In an address to the nation late Tuesday, Pinera apologized for failing to anticipate the outbreak of social unrest.

"I recognize this lack of vision," Pinera said after a meeting with some of Chile's opposition leaders.

Beyond the dead, another 269 people have been injured and about 1,900 have been arrested, according to the National Institute for Human Rights (INDH).

Pinera's proposals

Having initially taken a confrontational line -- declaring that Chile was "at war against a powerful, implacable enemy," and imposing a state of emergency in Santiago and most of Chile's 16 regions -- Pinera has rapidly changed tack and sought cross-party support to find a solution.

He says he will increase the universal basic pension by 20 percent, cancel a recent 9.2 percent increase in electricity bills and propose a law that would see the state cover the costs of expensive medical treatment.

Chilean President Sebastian Pinera apologized in an address to the nation for 

failing to anticipate the outbreak of social unrest (AFP Photo/HO)

He also pledged a state subsidy to increase the minimum wage from 301,000 to 350,000 pesos ($482) a month and said the government would introduce health insurance for medication, which is among the most expensive in the region.

Chileans were unconvinced by the promises.

"I don't think that what Pinera said is all that useful," said 38-year-old Karla Araneda, who works near the seat of government.

"Today, even more people are going to be in the streets and the problems are going to continue."

After widespread scenes of violence, destruction, arson and looting last week, protests have become more peaceful this week, particularly in Santiago.

But it's the worst violence to hit Chile since the country returned to democracy after the 1973-1990 right-wing dictatorship led by General Augusto Pinochet.

Some 20,000 police and troops have been deployed while a nighttime curfew was announced on each of the last four days.

After widespread scenes of violence, destruction, arson and looting last week, 

protests have become more peaceful this week, particularly in Santiago (AFP Photo/

Martin BERNETTI )

Strike organizers issued a statement demanding that the government end the state of emergency and send troops back to their barracks.

The country's powerful copper mine workers' unions have joined the strike movement.

Chile is the largest producer of copper in the world, much of which is sold to China.

But despite 2.5 percent growth, ordinary Chileans are deeply unhappy about low salaries and pensions, as well as health and education systems that are unaffordable for most.

"Pinera has always been a liar and now... he is asking for forgiveness," said 23-year-old Carlos Morales.

Another resident, Ximena Gutierrez, told AFP: "We will not be silent."

Before Pinera's announcement, one of Chile's largest conglomerates, Quinenco, promised to increase its minimum salaries to 500,000 pesos a month from January 1 -- 60 percent more than the current minimum wage.

Map of Latin America showing countries where major protests 

have occurred in recent months (AFP Photo)

Chile's big business conglomerates are one of the major factors in the huge wealth disparity that has angered protesters.

Nine dead in fires

The strike will put Santiago to the test. Life in the capital has been returning to normal, with three of seven metro lines due to be open Wednesday and buses back on the road.

More than half of Santiago's 136 metro stations suffered heavy damage during last week's protests and remained guarded by soldiers.

Shops and businesses -- even banks -- appeared to be reopening, but some Santiago-area schools were still closed.

Maduro welcomes papal interest in Venezuela mediation

Yahoo – AFP, April 30, 2017

Venezuelan President Nicolas Maduro welcomes Pope Francis' offer for
Vatican mediation (AFP Photo/Juan BARRETO)

Caracas (AFP) - President Nicolas Maduro on Sunday welcomed an offer by Pope Francis for Vatican mediation in crisis-torn Venezuela but opposition leaders rebuffed the overture.

The pope's call for a "negotiated solution" came in response to waves of protests by Venezuelans demanding new elections to pull the country out of a downward spiral.

At least 28 people have died in protests since they began April, and hundreds have been arrested.

"Dramatic news on the worsening of the situation in Venezuela keeps coming in with numerous deaths, injuries and prisoners," the pontiff said before a crowd of 70,000 attending weekly prayers in Saint Peter's Square.

"United in sorrow with the families of the victims... I issue a sincere appeal to the government and all sectors of Venezuelan society to avoid all forms of violence henceforward," said the pontiff.

Urging respect for human rights, Francis said the Vatican was willing to act as a mediator under "clear conditions."

Maduro responded on his weekly program on state VTV television, pointing a finger of blame at the opposition.

"If I say dialogue, they flee in horror. They don't want dialogue. Yesterday they lashed out at Pope Francis. I respect what Pope Francis is saying," Maduro said.

He charged that the protests were an attempt to plunge the country into chaos, take over power and "impose a counter-revolution on Venezuela."

"There are no words for what they have done since April," he said.

The opposition walked away from talks in December, accusing the government of failing to fulfill promises to set up a timetable for elections and free political prisoners.

Julio Borges, president of the opposition controlled National Assembly, said Sunday he would send a document to Pope Francis reaffirming the opposition's demands centered on general elections.

"The pope says some very interesting things. In the first place that, if there are no guarantees, there is no possibility of moving forward here," he said.

Saturday, former presidential candidate Henrique Capriles said dialogue might be nice but not involving Spanish ex prime minister Jose Luis Rodriguez Zapatero. The former PM, who took part in an earlier mediating team, was not neutral, according to Capriles.

Sunday, a day before Workers' Day, Maduro increased the minimum monthly wage by 60 percent to the equivalent of 90 dollars at the official exchange rate; or 15 at the black market rate.

Venezuela suffers from one of the world's highest rates of inflation -- forecast by the IMF to come in at 720 percent this year.

Brazilian town embraces universal income experiment

Yahoo – AFP, Louis GENOT, 14 February 2017

Brazilian town embraces universal income experiment

Does being handed money every month -- no strings attached -- sound attractive? The residents of a small town in Brazil are finding out.

Governments and think-tanks around the world are increasingly fascinated by the idea of a universal basic income, where citizens are given cash to spend as they want.

In Marica, a seaside town of about 150,000 people near Rio de Janeiro, the left-wing municipal government has spent the last year finding out how it works.

"We are a laboratory for the Brazilian left," says Washington Quaqua, who introduced the experiment as mayor in December 2015 before stepping down. He was replaced by another candidate from the leftist Workers' Party, Fabiano Horta.

The idea of a universal basic income isn't new, but long-considered as a potential tool for social equality and redistribution of wealth.

The concept has gained traction more recently among high-powered business thinkers, especially in Silicon Valley, as they ponder how society will cope with the ever-expanding role of automation -- a trend some futurists believe may create mass unemployment.

In Marica -- a surviving Workers' Party bastion in increasingly right-leaning Brazil -- the basic income idea fits in well with the leadership's socialist fervor.

Just about every public building is decorated in socialist red and Quaqua's office sports portraits of communist revolutionary Che Guevara, whose name is also soon to be given to a new hospital.

"The world lacks creativity and Marica is giving the example of a town that knows how to redistribute its riches," Quaqua says with pride about his pet project.

Modest reality

Despite his claims, Marica is only taking baby steps.

Inconclusively tried around the world for decades, the experiment is currently getting a high-profile rollout in Finland. The left-wing French presidential candidate Benoit Hamon, backed by the star economist Thomas Piketty, has also made the basic income part of his platform.

However, if Finland is handing out payments of about $590 a month -- and only to a test group of unemployed people for now -- the amount in Marica is a measly 10 reais, or about $3.20. The new mayor hopes to raise the amount to $32 in 2017.

Only the town's 14,000 poorest families are currently being given the income, which is denominated in Mumbucas, a virtual currency created to pay welfare under Quaqua three years ago.

The 10 reais is added to the 85 reais ($27) monthly welfare check for families whose income doesn't top three times the minimum wage. The extra money is also given to poorer people aged between 14 and 29 and pregnant women already receiving other benefits.

There's another limitation: only 131 local businesses -- less than 10 percent of the total -- accept payment in Mumbucas, the mayor's office says.

The currency, which physically exists only on specially issued red magnetic cards, is unpopular with business owners because they must wait more than a month after purchases are completed for the government to convert payments into reals.

Feasible or fantasy?

Opposition politician Filippe Poubel denounces what he calls an attempt to addict the people of Marica to welfare. Handing out an income, he says, will backfire.

"People want to work, they want to earn their income with dignity. They would be a lot happier if the mayor would create jobs and offer them decent hospital care."

Horta dismisses such criticism saying a basic income will in fact create jobs, "stimulating the local economy."

And he says that the town, which draws revenues from offshore oil exploitation, can afford to boost the program "in an exponential way over the next 10 years."

"The rich love it when they get millions in tax breaks," Quaqua says of his project's opponents. "But they are furious when we give a few hundred reais to the poor."

Brazilian town experiments with a universal basic income, whereby residents are given cash to spend as they want https://t.co/n8F2zkigjB pic.twitter.com/i8bnxj2Wo8

— AFP news agency (@AFP) February 14, 2017

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