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Chile: Crisis in Neoliberal Paradise


Santiago is mulling over a new and deep sense of disquiet. A new awareness of the problems of Chile is being expressed aloud in bus stops and in the metro, in working class neighbourhoods such as La Victoria, frontline of resistance against the dictatorship, in the corridors of public hospitals and at college gates, and to those responsible for the “model” – as the politicians of the Left and the Right still boast about it – this is sending clear signs of fatigue.

In 15 months, the government of Michelle Bachelet has accumulated problems and several fronts have opened up. The first was the massive and solid protests by the secondary school students against the education law inherited from the dictatorship. The mobilisation put on the table the problem of the profit-making in teaching, which the greater part of the establishment is reluctant to question. Hardly had the echoes of the student gatherings – which have come to be a watershed in a political culture centred on representation – died down than Transantiago (a private mass transport system) floundered, provoking a political crisis which can be the ruin of Concertación Democrática, the alliance of Christian Democrats and Socialists that has administered the Chilean electoral system since 1990 when Pinochet quit the presidency. The unease rose by a few degrees at the beginning of May with the killing of a forestry worker by the police in the south of the indigenous Mapuche land where ancestral fury bubbles just below the skin.

 

For the first time in years, the politicians are showing signs of worry at the direction of these events. The economic “model” has sprung a leak. A recent study by two University of Chile economists indicates a record flight of capital in 2006 – $25billion, 17% of the GDP. They said the Chilean economy was living through a “fatigue” and that only the contribution of the state mining company, Codelco, prevented a crisis from surfacing. In a country that has glorified like no other the private sector, it is the state sector which has salvaged the situation.

 

 Most of the capital that fled, or reverted according to the technocratic jargon, was from the mining sector which gained with the denationalisation of copper.

 

The trade unionist Pedro Marín told the newspaper Clarín: “Codelco has 30% of the business and the foreigners 70%. But the contribution to the treasury is the other way round: Codelco contributes 70% and the foreign companies 30% despite their profits.” The impression is that that the economic situation of the “model” hangs by a thread. Regarding copper: in 2003 it was valued at 80 cents a pound; this year it reached three dollars. The flight of capital in 2006 equalled 84% of the state budget and threatens to choke growth.

 

The question of Transantiago is even serious because it lays bare before the population the perversity of the “model”. The government handed over to the private sector the remodelling of the chaotic mass transport system of the capital. Transantiago was inspired by Transmilenio of Bogota: a large number of buses moving along lanes, separated by trunk and secondary routes. It was launched in February and there was chaos. There were not enough of the buses because the businessmen did not want to take risks. In the poorest neighbourhoods, where it is least profitable, the buses did not arrive or did so after enormous delays. People had to walk kilometres to arrive at a stop where they could expect to wait for up to an hour for a bus to turn up. Thousands have lost their jobs for arriving late. And the metro is so congested it cannot cope.

 

The first arguments, which generated some spontaneous demonstrations, were followed by indignation when the level of speculative gains by the businessmen came to be known. As the service started making losses ($30 million in April alone), the government decided to help the private sector. The efficient state metro was forced to lend money to Transantiago and now the Bachelet government has proposed to parliament a loan of $290 million to a private business that did not fulfil its contract.  Even Christian Democrat deputies have questions about the state supporting business inefficiency. The former President, Eduardo Frei Ruiz-Tagle, a neoliberal Christian Democrat, asked for the establishment of a “state transport system like in the large cities of the world”, something unthinkable a few years ago.

 

A section of the ruling Concertación circulated a document two weeks ago titled ‘The Dilemmas’ in which it sought “to put in corrections to the current model of development, facing up to the inequalities and moving towards an integral system of social protection”. The establishment feels that it has lost ground. The document goes further: it criticises a model to which “the level of fiscal reserve is more important than the social cohesion of the country”; denounces the “grave problems of the quality of education, health, housing, environmental protection, precarious working conditions” and so on; warns about “the unstable quality of our democracy” and censures “the enormous injustice and inequality”. Almost like a leftist opposition manifesto.

 

In reality, the problem is elsewhere. The social protest now tends to go beyond the sectors that were always set against the Chilean neoliberal model, like the Mapuche people and the nonconformist youth, isolated and hemmed in by repression. A long strike in the south, where 7,000 forestry workers raised their fist against the powerful and haughty Angelini business group, one of the strongest in Chile, is all in all a sign of the new times. The workers used the firm’s heavy machinery to resist the police with the outcome of one dead and many injured.

 

At some point the protest of the workers, residents, Mapuches and students can come together. We know that when those at the bottom no longer put up with repression, the ones at the top start thinking of introducing changes so as to redo the make-up.

 

Translated from Spanish by Supriyo Chatterjee. The original article was published in La Jornada, Mexico, on 18 May 2007.

 

 

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