Drafting A New Chilean Constitution: The Cost Of Life

By Valeria Fugate

On Oct. 18, 2019, people took to Chilean streets in droves. They abandoned workplaces and schools to join demonstrations, chanting EVADE! Tension building since Oct. 7 had finally boiled over. Who knew this would affect the Chilean Constitution.

It started because the Chilean subway system recently implemented a 30-peso increase (equivalent to 5 cents in the United States (U.S.)). On Oct. 6, a fare increase would go into effect. Not expecting the change, high school students could not afford the increase and decided to jump the turnstile to catch their school lift. The police came to arrest students.

Soon after, Chile exploded as grass-root, faredodging campaigns sprung up. Authorities closed train stations to control the dodgers, leading to larger clashes, demonstrations and fires caused by fights between students and the police.

This was the latest episode in a saga of ever-increasing costs of necessary living expenses. Most Chileans were living far beyond their means and barely getting by. Privatization of industries, specifically in education, roads, gas, pharmaceuticals, health care and pensions, had put the cost of living far outside the average Chilean income.

Large loans placed by citizens against living expenses became commonplace and necessary; 10 to 30-year credit lines were borrowed at high-interest rates. Lower and middle classes were feeling the pressure of making ends meet, with little reprieve in sight. This one extra cost took them over the edge.

As demonstrations intensified, Republic of Chile President Sebastián Piñera Echenique declared, “we are at war with a powerful, implacable enemy,” referring to his citizens.

More than one million Chileans demonstrated against Piñera five days later, demanding his resignation on Oct. 25. Riots led to armed police fighting off students and citizens with tear gas and water cannons. Demonstrators were met with rubber bullets, causing 2500 eye and face injuries, some people permanently blinded. Nineteen people died that day, 29 by the end of the year. Police arrested 2,840 people and some are still in jail awaiting their hearing one year later.

Until recently, the economy was booming for most Chileans. Before 2014, the promise of upward mobility was in sight. Neo-Liberal policies had reduced Chilean poverty from 40 percent to five percent. The working class was willing to “put in their dues” to keep this momentum going. Yet, for the last five years, the financial noose around Chileans’ necks had tightened to the point of breathlessness and they were now demanding to breathe.

To understand Chile’s present, you have to understand the country’s past. Here’s a brief rundown:

On Sept. 11, 1973, a “Golpe de Estado” overthrew President Salvador Allende, a democratically elected, socialist leader.

Backed militarily and financially by then U.S. President Richard Nixon and facilitated by Secretary of State Henry Kissinger, the U.S. injected $10 million to prevent and unseat Allende from holding and maintaining power.

Four hundred U.S. CIA experts assisted Allende’s army Commander-in-Chief, Augusto Pinochet, in creating a coup d’état.

Pinochet went on to establish and implement a Neo-Liberal economic model assisted by the Chicago-Boys economists. Pinochet then began denationalizing industries. During this time, he committed massive human rights violations, “disappearing” and placing citizens in concentration camps. He prohibited any political opposition, controlled and limited the press, ended the elected Congress. He also dismantled unions and forced any person who resisted his will into exile or death.

In 1980 Pinochet created a plebiscite to write a Neo-Liberal Chilean Constitution, and in 1981 he pushed through into “effect” the new Constitution, making Pinochet the “President” of Chile.

In 1988 under another plebiscite, the “SI or NO” vote helped Chile decide whether Pinochet should remain as President (assuming he’d win) or open up voting to elect a new leader. He lost the election, ending a 17-year violent dictatorship. The vote in 1990 marked the first steps into a long-awaited democracy and a free market.

Nineteen-ninety was the first year the world’s markets opened to them, and Chileans bought their freedom. Chile’s economy exploded and copper was their ticket out of poverty and onto the world economic stage. The interest on personal loans to fund their middle-classed dreams sat at 21.5 percent and fluctuated heavily. The cost of living never kept pace with low Latin American salaries and work protections were scarce. People borrowed a lot, and banks and credit cards were happy to make up the difference.

Privatization, price-fixing and collusion became commonplace and included everything from supermarkets, gas, highway tolls, pharmaceuticals to toilet paper. This increased the cost of living further as Chileans held onto their middle-classed dream through gritted teeth.

“The middle class is in debt at unacceptable levels,” says Marco Enriquez-Ominami, former congressman, former presidential candidate, filmmaker and leader of the Progressive Party in Chile. “Thirty years later, you have the lower class and the middle class together against the system.”

He says that the people agreed to pay their dues. Still, after a few decades of never moving forward individually, they’ve had enough. They feel as if, “I went through dictatorship and I’ve gone through democracy, now let’s stop,” Enriquez-Ominami says.

The unsustainable price of living has caused many Chileans to wonder how to manage inequity. Although they have worked their way out of poverty, becoming one of Latin America’s economic powerhouses, there is still a gap between those who can afford to live and those who can’t.

Neo-Liberal policies lifted the GDP, but the levels of inequality and inability to cross the chasm between HAVE versus HAVE-NOT has not changed for most, leading many to wonder why.

Using schooling in public versus private sectors, EnriquezOminami illustrates how inequity grows. Public schools and universities receive limited government funding. They are legally obliged to take all students (low-income, learning, or physical disabilities).

Privatization dominates most fields. Touting “superior service and quality,” handpicking those they want to serve (with money, high grades, gifted students) while also receiving public money. After decades the advantages build up.

Chilean median monthly wages sit at about $500 US. An average family with three children, ready to go into university, must come up with enough income to ensure they can all attend school. Education is the only way to ensure a decent salary and to escape the clutches of poverty.

Universities, the good ones, are privatized and cost $700 US monthly per student. The parents may bring in $1000 collectively yet spend $2100 on schooling alone. This has led to a crisis of debt, Enriquez-Ominami believes.

“You and your husband go to the bank and ask for credit for 10 years. But then, you have to pay this credit, and you pay the double ... the triple,” he explains.

Unable to escape debt or gain wage-to-inflation parity, many feel powerless to elevate beyond their class, unable to break the cycles of inequity.

Chile boasts one of the strongest economies in the region. Chile’s President Piñera is worth $2.8 billion and gained attention amid allegations of banking fraud with Banco de Talca in the 1980s, before running for the presidency in 2005. Despite having some of the wealthiest families in Latin America, this country continues to have high inequity levels, within the region sitting at the eighth highest inequity rating in Latin America (Gini coefficient of 46.6).

Patricio Navia is a clinical professor of Liberal Studies and an affiliated faculty member with the Center for Latin American and Caribbean Studies at New York University (NYU) and a political science professor at Universidad Diego Portales in Chile. He states that reducing inequity has been impossible in Latin American countries because elites do not want to give up the powers that they already have.

So rather than creating structures that systematically reduce inequality gradually over time, elites in Latin America have told people they are reducing poverty. They claim that everyone will be better off, but it is not enough.

“People tolerate inequality provided that everyone gets a fair chance. People will say, okay, inequality is not bad if it is the result of meritocracy,” says Navia. “But if it’s always the same people on top, if the American dream doesn’t become a reality, people will say, ‘look, I’m playing by the rules, but I can never make it.’” He believes there is a societal bottleneck where the middle class cannot move up within Latin America.

The wealthy retain their position as elites, isolated from the rest of the population. Navia defines this phenomenon as “discontent at the gates of the promised land.” Chile has successfully pulled itself out of poverty, decreased infant mortality, increased children’s access to education.

The country has hit significant success markers. Yet as the middleclass comes to the “promised land,” waiting to sit on the other side of the gates with the elites, the elites have said “NO,” states Navia, and told them to wait a little longer. This discontent, he believes, is what triggered the riots in Chile in 2019.

This discontent created the argument, in political circles, for the current Chilean Constitutional plebiscite. Many feel these inequities are stitched into the current Constitutional fabric, and its questionable “introduction to Chilean law” delegitimizes it. This friction and the collective pressure felt by a global economic downturn spurred by COVID-19 compounds the lack and inequity rampant in modern-day Chile, highlighting the dire need for change.

In a countrywide Chilean Constitutional referendum held on Oct. 25, 2020, an overwhelming 80 percent majority of 52 percent of the Chilean population voted to build a new “Democratic” Constitution. On April 11, 2021, Chileans will go to the polls and elect the 155-member Chilean Constitutional assembly to draft this new Constitution.

A marked turn from previous Neoliberalism shows citizens hope this Chilean Constitution will level the playing field and bring about new perspectives on running the country. The Chilean Constitutional assembly will consist of a 50 percent female voting gender-parity and an Indigenous presence never seen in previous Chilean leadership. The Chilean Constitutional assembly will consist of a 50 percent female voting gender-parity and an Indigenous presence never seen in previous Chilean leadership.

The plebiscite is essential because it came as a direct consequence of last year’s mass protests, says Ximena Velasco Guachalla, Ph.D., assistant professor at the University of Essex Department of Government.

The Chilean Constitution will be rewritten by a citizen assembly, elected by popular vote. It will have a more inclusive and legitimately elected creation.

“Elections play a pivotal role in shaping people’s attitudes toward democracy as a political system,” says Velasco Guachalla. Adding that this is not only true in Latin America, but across democratic countries.

Velasco Guachalla states that democratic erosion is coming from popularly elected governments. They are then consolidating their power by limiting opposition parties from organizing. They are also limiting civil liberties and changing institutions to allow for more consecutive terms and, in some cases doing away with term limits altogether. All of this undermines democracy at its core.

She explains that open and fair elections support the legitimacy of the “state” and the democratic process. This is relevant to support representative political systems within Latin America, considering the hyper-cycle of elections the region has gone through in the last few years.

Navia likened writing a constitution to Chileans tearing down an old house to build a new house and questioned whether they couldn’t salvage the old one instead. He recommended renovating to keep what is working and fix what is broken and outdated.

Doing so prevents throwing out the proverbial baby with the bathwater in the middle of a pandemic and an economic crisis. Considering the timing, starting from scratch may not be the wisest thing to do currently.

Navia also states that the house may not be the “core problem” in people’s minds. “Pinochet’s Constitution is like the house built by an abusive father. Now that you are a grown-up, the house is OK, you can remodel it, but there is an issue with the house because it was built by the abusive father,” he explains.

Healing the collective Chilean psyche won’t be fixed by a piece of legislation.

Instead, keeping the things that work, like the regulations that helped Chile’s rapid economic expansion, and changing the things that don’t, by introducing reforms to reduce inequality, is best.

But great constitutions are meaningless if there is no economic growth to enforce them.

Although many Chileans believe that rewriting the Chilean Constitution will solve inequities, critics wonder what will effectively change? Navia has his doubts, saying, “People think of constitutions as a miracle pill that will solve all the problems. If it were so easy, then Latin America would be the most developed region in the world. We have had more constitutions than any other region.”

Chile’s problems echo a regional “Catch 22” every Latin American economic power has faced historically. “Chile has three problems: High levels of inequality; it depends too much on one commodity (copper), and it has an increasingly corrupt political and business elite,” says Navia.

Venezuela faced the same issues in 1988. Cuba faced them in 1958, Argentina in the 1920s and Haiti in 1805.

Latin America continually stumbles on its success to become industrialized countries because they have not found ways to reduce inequalities. Economic growth is constricted by maintaining inequity.

Enriquez-Ominami thinks additional elements are missing in the solution. “Chile has to come back to America Latina. We escaped during the ‘80s to go out of the continent with the United States, Europe and Asia. We need more integration with Argentina, Peru and Bolivia; to sell to Brazil, and we need to go to the Atlantic. If we don’t reform that strategy in Chile, we will be poor,” he says. “We need more integration within Latin America for geopolitical reasons. We need to be together, but the elite, the rich, the powerful people don’t agree with me.”

Municipal and gubernatorial elections were scheduled in Chile for April 11, 2021 (if COVID-19 regulations allow) to elect the new constitutional group. Positions were open to current and previous political party members and independents (if voted in). The third election to accept or deny the newly drafted constitution will be held in August 2022.