In 1990, Chile saw the end of President Pinochet’s dictatorship. Yet, they carried his legacy forward for the next three decades. Finally, on October 25, 2020, Chileans voted to get rid of his most prominent legacy: the Constitution formulated during his rule. This change was essential and long overdue and it was a consequence of a year-long protest, the second state of emergency since Pinochet’s rule and mass protests and destruction of public property. Chile had amended its Constitution more than 40 times, yet the fundamental principles of the book remained the same. In essence, the old Constitution had two major issues: one, it favoured the private sector at the cost of public welfare and two, it gave too much power to the President over the proceedings of the Parliament.
The protests were sparked by a rise of 30 pesos in the price of the peak-hour metro fare. While it may seem like a trivial issue for the world, for the people of Chile it was a move that tipped the scales against the government. The pre-referendum system of governance in Chile favoured the market and private sector. The private sector controlled major public services and the government played second fiddle.
Chile has a two-level healthcare structure, wherein the public chooses between a private healthcare system (called Isapres) and a publicly funded one. The public healthcare system is mired with troubles: they have long queues, and poor staff and medical resources, whereas the private healthcare facilities offer the finest services in a fraction of the time that the public healthcare system takes. Unsurprisingly, the private system is also exorbitantly priced and largely unaffordable for a majority of people in Chile. The government offered no intervention or made zero effort to improve the circumstances. The education system followed a similar track of poorly funded state schools and expensive private universities. The schools are poorly staffed and so resource-starved that parents often have no choice but to take out loans and send their child to a private school if they want proper education for their offspring.
The poor state of healthcare and education; two of the most important components of a decent standard of living fueled the fire of the revolution in Chile, another catalyst, that perhaps led the protests was the pension scheme.
“One of the trademarks of Pinochet’s model was a pension system of individual savings account in private funds known as AFPS, with no contributions by employers or governments” (Santiago, 2020) The pension system was based on the idea that private savings should have a “70% of final salary” of payout, however, the actual payout was less than the minimum wage in the country. The military did not have a private fund based pension system, which meant that the government was spending more on military pensions than for the rest of the country. This was a force point of contention between the government and the protestors, partly because the AFPS was a pro-market scheme which gave more power to private insurers and consequently aligned perfectly with the right-wing regime’s agendas. However, for the rest of the country, this scheme was a deadly noose. Almost 60% of the country’s population lie in the middle-lower income bracket. This group had to take massive loans to access basic healthcare and education services, and the pension scheme was a beacon of light for these people to be able to pay back those loans to the private companies. However, due to the low payout, the pension scheme created a debt trap.
Chile has the widest income inequality gap in the Organisation for Economic Co-operation and Development (OECD), an elite group of countries that Chile became a part of in 2010. It was the first country in Latin America to have joined OECD owing to its rapidly growing economy. However, this economic progress slowed down significantly in 2014. Yet, economic growth was one of the major arguments of pro-Pinochet-era constitution groups.
While these arguments may have some merit, it does not negate the fact that there are huge gaps in the distributions of economic gains within the country. The policies and laws favour the elite and rich community. There existed a trade-off between economic growth and basic human needs when there was no need for such a binary. The public has very little trust in the democratic institutions of the country. The revolution was against inequality, it was a revolt against the elite and it has finally come to fruition in the form of a new Constitution.
The aim of the new Constitution is to make Chile socially-democratic. A committee formed under it will have women forming half its total strength and will focus on improving economic and social equality. The laws would likely amend the structure of important facilities: education, healthcare, housing and pension. It will also aim to reduce the influence of the private sector in the public services sphere and install greater checks and balances on the powers accorded to the President, who until now had powers to prioritise bills debated in the Parliament and be one of the few people in the Congress with the power to introduce fiscal policy bills. The people have high hopes of this change in Chilean political structure, and so far it seems as legitimate a chance as it can be. The people will decide the committee that will make the new Constitution, and there are little chances of the elite in the parliament bull-dozing the proceedings because any new convention would require a minimum of 67% approval in the committee. The focus, now, would shift towards creating an ecosystem where equality and economic growth will sustain together. The new Constitution of Chile is expected to make a decent and healthy standard of life in Chile affordable.
In times of heavy anti-democracy movements and governance across the globe, this revolution in Chile is a silver lining in the otherwise dark cloud of global governance and one congratulates the people of Chile on this hard-earned victory.
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