Chile was the most stable and prosperous South American country, but heading into 2020, it is collapsing financially. What’s the story?
Post available in: English
Before discussing the present [October-Decembrer 2019] events, it is important to note that similar, albeit smaller scale, uprisings in Chile have become somewhat common. Some of the features of these earlier events are similar to what is currently going on.
2010: In the Magallanes region of Chile the natural gas prices are very low, and are heavily subsidised by the national government, through taxation and public monies. As a result of the low prices, construction typically avoids adequate insulation and instead homeowners and businesses rely on burning excessive amounts of cheap natural gas. When the first PiÃ±era government attempted to reduce the amount of the subsidies and to encourage modern energy conservation practices, the residents revolted, even though the actual subsidy reduction amounted to only pennies. This rebellion (locally called a âparoâ) resulted in considerable economic and physical harm to the region, barricading roads and preventing access to ferries and airports. Thousands of foreigners became trapped, some unable to leave Tierra del Fuego, others stuck in Puerto Natales. The Chilean Red Cross and the Chilean armed forces created an âair bridgeâ wherein the Chilean air force evacuated many hundreds of people on military aircraft. However, the continuing regional ârebellionâ resulted in two deaths, the sending of additional police forces to the region to restore order, and the threat of martial law and the arrests of the many criminals involved, along with millions of dollars of damages to the local and national economies. Later analysis determined that much of the damage had been intended to undermine the PiÃ±era government, which failed to control the rioting and damage. PiÃ±eraâs weakness was duly noted by the opposition. This regional revolt was a prelude to the 2019 events.
InÂ 2012Â the PS (socialist party) mayor of Puerto AysÃ©n organised another regional revolt, building on the experiences of the previous events in the Magallanes region and PiÃ±eraâs unwillingness to take decisive action. Rather than a single point of complaint, this rebellion involved objections to fisheries conservation measures, the âhigh cost of livingâ due to inflation and distance from food-producing areas, complaints of regional âisolationâ (from people who had freely elected to live in the isolated region), the inconvenience of having to use better Argentine highways to reach other regions of the country, and demands for free firewood from the government. The rioters barricaded entry to and from the region, keeping food and fuel supplies from entering, and again trapping foreign visitors. Rioters damaged at least one ambulance aircraft removing injured persons. The âparoâ again resulted in millions of dollars in losses and damages and caused some businesses to close or relocate. It was also determined to be deliberately organised to undermine the PiÃ±era government. In both the 2010 and 2012 disturbances, the PiÃ±era government acted with conspicuous weakness, eventually caving in to rioter/protester demands, setting the stage for the 2019 outburst and equally weak government response.
Barricades and mob violence in AysÃ©n 2012:
2012 – Santiago, which logically had nothing to do with the distant AysÃ©n region disturbances, nevertheless used the occasion as an excuse to create the same sort of havoc to be seen in 2019. The response to the 2012 events revealed that the government was inept and toothless in predicting or dealing with violent demonstrations orchestrated by these elements :
Fast forward to 2019:
Many of the media internationally continue to incorrectly report that this uprising [October-December 2019] is over a tiny increase in the Santiago metro fares. The increase was on the order of about US$0.04 and insignificant. The metro itself is heavily subsidised by tax monies. But it was a clever propaganda measure to incite hooliganism and millions of dollars of damages to the metropolitan transport systems. And the vandalism and destruction and looting have continued unabated since the rescinding of the small tariff increase.
There are so many factors and interests involved in the current disturbances that a book would be needed to properly examine the context and extent of the matter. There is one aspect that is quite common, however, and it relates to the excuse to vandalise the transport system. That factor is essentially the same as was seen in the 2010 and 2012 disturbances: theÂ unwillingness to pay for goods and services.Â This is aggravated by the acculturated criticism of the privately owned business that provides goods and services, itself a feature of a combination of the teaching of the universities and the legacy of the Allende years.
This breaks down into other features. One is the expectation that many goods and services should be subsidised or even provided directly at no user cost by the state, from tax monies. Another is the resistance to the fact of externally driven inflation, the effects of which are often childishly perceived to be nothing less than local greed, and the reason to take to the streets, to unwittingly worsen the impacts of that inflation.
Those actually familiar with Chilean retail will recognise the problem of extensive ârobo hormiga,â â- unconvincingly translated as âant theftâ but actually large-scale petty larceny. It costs Chilean supermarkets some 10 billion pesos a year in theft (the source cited below calculated this effect at US$250 million). This is another expression of the cultural predilection for avoiding payment for goods and services. It is summarised as something like, â mamÃ¡, they have all this stuff, it wonât hurt anybody if I take a little bitâ¦.â Or, as someone in Chile once described this common Chilean perspective, âlos frutos de los exitosos deben ser compartidos por la fuerza con los menos enÃ©rgicosâ (âthe fruits of the successful must be forcibly shared with the less energetic.â)
Socialist-controlled legislatures in Chile have habitually prevented the significant criminalising of such theft. Businesses respond by hiring armies of security personnel and surveillance machinery, adding the cost to the prices on the shelves.
It would be quite incorrect to suggest, as is done so often in the US and European media, that the looting is done âfor necessities.â The Carabineros and PDI have noted that those participating are typically middle class and many arrive in late-model automobiles to participate in the looting of products that include alcoholic beverages, electronics, and similar items. The police have identified and confiscated dozens of such private automobiles used by their owners in the pillaging of shops large and small. One example of the reporting is here:
Another aspect of this disturbance behavior isÂ evasion. Much of the country is enamored of evasion â of taxes, of fares, or whatever cost feature can be easily (and illegally) evaded. You see this in tax evasion, which is a great deal more widespread than many are willing to admit. You see this in fare evasion â on the Transantiago transport system, fare evasion has been as high as 40 percent of the users for some operators. I had a recent amusing conversation at a Chilean business not long ago while the principals were complaining of government corruption while at the same time were conducting an illegal tax-evasion transaction. And such culturally accepted evasion is the marginally prettier step-sister of simple theft. Today we see âevadeâ in the conspicuous graffiti around Santiago.
For those who might wish to further study the evasion/theft of services question on the Transantiago transport system, the two concession operators with the worst evasion levels were STP (46.6% fare evasion) and Vule (40.2% fare evasion).
Summary: a very large portion of the Chilean population habitually acts criminally in avoiding paying for goods and services that it receives, and this factors into the recent attacks on the Santiago transport systems. Such theft of services would continue even if the form of government were changed â it is simply deeply embedded in the culture. (The Argentines speak of âChilean thievesâ as if the statement were redundant. )
Translation, in the context of the disturbances:Â a large portion of the Chilean population objects to paying for goods and services that are provided by privately owned businesses, particularly larger businesses that â ironically â offer economy of scale pricing advantages to consumers.
Itâs significant to note that the majority of the population in Chile would like to be free of this âuprisingâ and the disturbances and violence that keep them from getting on with their lives and work. After all, they recognise that their economic system has provided them with the highest standard of living in all of Latin America, considerable economic opportunity commensurate with personal effort, the highest standardised-test scores in the region, comparatively low unemployment, and until these riots, low levels of inflation. Much of that is about to change, for the worse.
Unfortunately, a significantly large portion of the rest of the population is still living under the seduction of the imaginary promise of the socialist paradise of the Marxist Allende years, of which they believe they were robbed and must now address. Letâs call them the âNuevos MIRistasâ after the MIR of the 1970s â theÂ Movimiento de Izquierda Revolucionaria, (Revolutionary Left Movement). Do your own homework on that one.
Another quite disturbingly large portion of the population is simply anarchist in nature, destroying for the sake of destroying and never mind the consequences (this is sometimes locally known as âpaga Moyaâ). There is a long history of anarchist sentiment and violence in Chile, something largely underappreciated in most political commentary from outside the country, and it is loosely linked to the better-known anarchism of the 1930s in Spain. Writers in Chile often characterise the domestic variant as âanarco-comunismo.â Somewhat ironically, there is a substantial Chilean anarchist âorganisation.â About 20 years ago there was even a âCongreso de UnificaciÃ³n Anarco-Comunista.â So we must not discount the contribution of this element in the violence, arson, and other disturbances
You see evidence of the âcircle-Aâ anarchist symbol all over the graffiti sprayed on every square metre of the walls in Chilean (and many Argentine) cities. The themes typically include identifying its enemies as âthe stateâ and âcapitalâ and virulent anti-clerical notes. These, along with the ubiquitous âkill the policeâ and âkill the presidentâ messages, coupled with calls for free abortion, the burning of churches, anti-immigration sentiment, and alternative grammatical practices in the Spanish language. And of course, the ever-present theme of âevasion.â
Nonresident Colombians believed to be associated with the FARC have been found participating in the disturbances. At least one Colombian national is believed to have been killed in the events. Many of the disturbances outside of the major cities have been traced to agitators from the Santiago area who travel to other regions to organise construction of barricades to restrict movement, looting, and other vandalism. The PDI has noted that these mobile agitators move with considerable stealth and briefly lodge in places that donât demand proper identification, making the surveillance more difficult.
Of those participating in the so-called âpeaceful demonstrationsâ (which inevitably end in violence) there is some doubt that they really understand what their lemming-like participation is all about. In a recent survey here, nearly two thirds of the population had no understanding of the actual provisions of the current constitution, though that does not prevent this segment from insisting onâ¦ a new constitution.
There is no single âcauseâ in these disturbances, as the protests range from objection to the toll roads, the retirement system, the funding for health care and education, labor laws, tax law, and dozens of special interests. Anyone with a gripe or perception of a need or desire seems to feel justified in breaking some windows or supporting those who do.
Some have suggested a degree of âclass warfareâ and there is probably some validity in that, though not yet in much actual shooting warfare but rather in other ways. There is no question about the traditional friction between economic classes by comparatively small numbers of people, but recent events have aggravated old conditions. We have seen at many cases of the lumpen setting up roadblocks to delay the passage of motorists. Some victims take it good-naturedly. But in other cases itâs an attempt to humiliate those perceived to be âcuicosâ or â³ABC1â³ (which is Chilean shorthand for those with higher incomes) by demanding that they get out of their vehicles and dance ( âel que baila pasaâ â he who dances can proceed). Iâve recently personally observed school children in crosswalks mimicking this, interfering with traffic while saying âel que baila pasaâ to drivers. Itâs basically a revolt of the vulgar proletariat of the sort seen just before the outbreak of the Spanish Civil War. Itâs not a healthy thing, a quite illegal and dangerous form of mob rule, and these practices will eventually result in further violence.
Social media, of course, are used as tools for organising the disturbances, along with lists of which demonstration reflects which cause is presumably represented:
There is also the aspect of the Mapuche âmovementâ sometimes classified as terrorists in several southern locations (considerable arson, several people killed). In some of these areas, the threats to both police and residents are such that movement is severely restricted and dangerous. Visible elements of âsolidarityâ with the Mapuche terrorists are seen in so-called peaceful marches as well as the considerable graffiti and showing of flags.
Contrary to the content of local and international reporting, the great degree of looting, violence, and damage to property and infrastructure is not limited to a small number of âviolentistasâ but rather involves large numbers of generally urban-area students and other young people up to about age 29. These are primarily drawn from middle-class families and some foreigners from elsewhere in Latin America.
A curious social tenant has emerged in the past 20 years which posits moral rectitude to justify theft as an acceptable response to oneâs own failure to achieve sufficient economic success. In the US this is sometimes considered âentitlement.â This is seen in the participation of the middle class in large-scale looting, involving the theft of not the ânecessitiesâ but rather high-end clothing and electronics, appliances, alcohol, and conspicuously (and noted in images in local media) the theft of large-screen televisions. Late-model automobiles belonging to middle-class looters are being used in these thefts and local media have carried stories of police recovering vast amounts of stolen merchandise from middle-class residences.
As of the end of November 2019, the government and media are reporting nearly 2,500 looting events since the beginning of the disturbances, and many of those sites were also burned.
Letâs face it: this uprising is to a large degree criminal in nature. Since the beginning, over 20,000 people have been charged (not just arrested) in serious crimes related to these events, and most of those have been charged in this looting. This is a reflection of the inveterate criminal nature and values of an unfortunately substantial portion of the population.
The depth and extent of the disturbances are considerably greater than what are being reported in international media. The Chilean government is attempting to rebuild its âcountry imageâ (which was always false in any event) and some of the local media are cooperating by deliberately understating the magnitude of the uprising.
Todayâs media [29 Nov 2019] carried a story from the national government showing that the necessary repairs to streets, parks, traffic signals, and other public infrastructure due to the recent vandalism has reached about 35 billion CL pesos, which would be about US$45 million (dollars). This is only a small part of the more than US$2 billion in overall direct damages and losses, as the Chilean stock market has collapsed and the CL peso is rapidly devaluing. Growing unemployment has already been noted as hundreds of shops have been looted and destroyed, throwing thousands out of work. Inflation, capital flight, and misery will follow.
Post available in: English