Inequality, Chile's Bicentennial Challenge

  • by Daniela Estrada (santiago)
  • Friday, September 17, 2010
  • Inter Press Service

For a long time the Chilean economic model, founded on the neoliberal policies followed by the 1973-1990 dictatorship of Augusto Pinochet, 'has shown this duality of economic growth and inequality,' economist Raúl González of the private University Academy of Christian Humanism, told IPS.

Saturday Sept. 18 marks the bicentennial of the formation of the First National Government Junta and the beginning of the struggle for independence from Spain, achieved eight years later. The main official commemoration festivities are taking place Friday through Sunday.

Between 1990 and 2006, poverty fell from nearly 40 percent to 13.7 percent of the population, under successive governments of the centre-left Coalition of Parties for Democracy (Concertación), which ruled the country from 1990 to March 2010. In 2009 it increased slightly to 15.1 percent, mainly due to the international economic crisis.

But income distribution did not do as well. According to this year's Human Development Report by the United Nations Development Programme (UNDP), 10 of the 15 most unequal countries in the world are in Latin America.

Bolivia has the highest inequality in the region, followed by Haiti, Brazil, Ecuador, and Chile, which is tied in fifth place with Colombia, Guatemala, Honduras, Panama and Paraguay.

According to the government's National Socio-Economic Survey (CASEN) for 2009, the poorest 10 percent of households in this country of 17 million people receives 1.5 percent of the national income, while the richest 10 percent gets 39.2 percent.

Although state cash transfers, arising from the social policies implemented in the last 20 years, improve the figures somewhat when income is measured per person, the situation remains unacceptable for a country aiming to attain developed status by 2020, experts and authorities say.

But Alberto Mayol, a sociologist and political scientist at the state University of Chile's Social Structure Research Centre, said income distribution is only one of the signs of inequality in the country. Educational, health care, cultural, territorial, ethnic and gender inequalities are also of concern, he stressed.

Weaknesses in the social protection system mean that families that manage to escape from poverty can all too easily fall back into it if, for instance, the head of household loses his or her job or a family member falls prey to a serious illness, requiring a large financial outlay.

González mentioned problems such as the 'regressive tax system' based on consumer taxes which do not address the concentration of wealth, and the structure of production, 'which creates too many poor-quality jobs, because it is based on exporting natural resources and a low-value service sector.'

Education has failed to deliver social mobility to the extent that was hoped, because of differences in the quality of education provided by public schools, state-subsidised private schools, and the fully independent private schools that achieve the best academic results.

'The Concertación's targeted policies (focused on the poor) just divide the population into two or three bands and are very inefficient in the long term,' Mayol told IPS. In his view, equality should start with the state providing a free 'universal supply' of high quality goods and services.

According to Mayol, 'a culture of targeted policies has taken hold in the country, to the point that even people on the left argue that it would be a bad mistake to give money to rich people.'

'If this misguided view is taken, it follows that there should be no free universities, for example, but this is absurd, since public universities are by definition free,' he said.

'This is the first thing that has to be understood in a society that aspires to equality,' he added.

A recent study by the Organisation for Economic Cooperation and Development (OECD), a forum of the world's most industrialised economies that Chile joined this year, indicates that, on average, Chilean families contribute 83.9 percent of the cost of their children's higher education, with the state paying for the rest.

The proportion paid by parents is the highest among the 36 countries studied. In Finland, families contribute only 4.5 percent of the cost of tertiary education.

Mayol said one of the most worrying problems today is the cultural process tending towards the creation of a rigid 'caste system,' that is, 'the upper strata of society are taking on the character of a caste, which must not be 'contaminated' by the lower classes.' This has the effect of 'creating exclusive neighbourhoods and ghettoes, to keep them apart.'

González, who holds a doctorate in social sciences, concurred. 'A society as fragmented by inequality as Chile's is a society doomed to continue spending increasing amounts on the police force, on alarms, on gated communities where people are trapped by fear, and in which public spaces are deserted.'

Social stratification remains entrenched in Chile because citizens have become depoliticised, according to Mayol, while González said lower-income sectors have very little influence and bargaining power vis-à-vis employers. These factors tend to legitimise the status quo and prevent structural change.

That is why Mayol called for 'taking power away from the élites' and giving it to civil society organisations instead.

This dimension is being addressed by the campaign 'Ciudadanía Bicentenario: para crear más democracia' (Bicentennial Citizenship: Creating More Democracy), launched Sept. 9 by the Chilean Association of Non-Governmental Organisations (ACCIÓN), which will use a variety of media to celebrate the collective social advances made in the 20th century.

'Inequality has many faces, but it all stems from the structure of work,' Martín Pascual, the head of ACCION, told IPS. 'In this we are in agreement with the International Labour Organisation (ILO).

'When you compare remuneration levels in the country, like returns on capital and wages for labour, and you see the daily struggle to maintain decent working conditions and to ensure our rights are not violated, you realise how far we still have to go,' he said.

In Mayol's opinion, 'since there are 'no politics' in Chile, social dissatisfaction has no outlet except through its somatisation as disorders like mental illnesses in individuals themselves.

'The system's analgesic (pain-killing) remedies,' such as letting people fall into debt, are aimed at keeping conflicts from flaring up, Mayol said.

González, on the other hand, described Chile as 'imploding,' that is, turning its rage inwards, which makes it difficult to predict the outcomes of the numerous fragmented conflicts that exist today, he concluded.

© Inter Press Service (2010) — All Rights ReservedOriginal source: Inter Press Service

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