Chile Will Experience an Intense 2021

Paul Walder
The Chilean model went off the rails in October 2019 and has since begun its process of deterioration. The first and fierce blow dealt by the popular revolt was followed in a course of continuity by the pandemic and the productive and commercial shutdown, with disastrous effects on the economy and its neoliberal orthodoxy.

Rules maintained for more than 30 years have been dismantled by the nature of desperation and political fear of new and greater revolts. If 2020 had any special significance in Chile, it was the beginning of the death of the most extreme and absolute market model on the planet.

2020 was a consequence of the revolts of the previous year. Even when the pandemic and the long confinements lowered the social tension and the daily protests, the celebration of the plebiscite in October with the majority triumph of the “yes” option marked a political year with a government in full decline and massive citizen repudiation. Sebastián Piñera had the worst citizen support ever recorded by a president during 2020 and he only remains in government through the support provided by the political class in parliament.

This political weakness also had its expression in the economy. Given the inability of Piñera’s government to promote an effective program against unemployment and misery as a consequence of the pandemic and the confinements, the only solution, promoted by deputies but contested by Piñera and the financial system, has been to dip into the pension savings managed by the private sector. From August to the present, Chilean men and women managed to survive on these savings.

Economy

The private pension system was the cornerstone of Chilean-style capitalism, with billions of dollars of workers’ savings financing large corporations. This machine has been soured by the pandemic. When millions of workers lost their jobs, the only solution, rejected by the pension fund administrators, the business leaders and the government itself, was to draw on part of the capital saved to pay for services, debts and food. To date, workers have lost 20 percent of their savings and it is very likely that another ten percent will be taken out in March. What will happen to future pensions is a question that today has no answer but undoubtedly is and will be another blow to the private system. The process of collapse is in full swing.

The slow but sure collapse of the private pension system, which manages more than 200 billion dollars, is one effect of the October revolt amplified by the pandemic. The Chamber of Deputies would not have presented a motion for the withdrawal of these funds without the political conviction of the overwhelming support of the citizenry but also, and especially, without the certainty that changes to the model were not only possible, but a dense popular demand.

Without those billions of dollars in the market, 2020 would have been very different. Hunger was halted in the towns, shopping malls were filled and restaurant kitchens remained open with sales on delivery. Unemployment rates arrested their expansion and even macroeconomic figures improved. This was a temporary stimulus with no structural consequences. In Chile, as in the rest of the Latin American continent, the economic and social regression during 2020 has few points of comparison. Poverty has grown by four percent, unemployment stands at 12 percent and GDP up to the third quarter fell by 16 percent. A statistical pandemonium unparalleled in regional and local history.

The described context is an anomaly, the record of a shortcoming. It is an anomaly in its full extent insofar as market fundamentalism has no tools for social security. Chileans suffered confinement, cutbacks in sales and unleashed unemployment in a state that has no resources, logistics or institutions for social protection. The pandemic in Chile was confronted as an emergency following a natural cataclysm.

Policy

Chile has lived through 2020 and begins 2021 in a stability that is not only apparent but temporary. Chileans live day by day with the liquidation of their individual savings, which will run out sooner rather than later, and will be facing the biggest political changes of the last three decades. The installation of a constitutional convention in April and the presidential elections in November open certain expectations, which, however, given the depth of the crisis, are not likely to be fulfilled. The demands of the mobilized people seek not only a change of government but structural transformations of the entire neoliberal order.

We have seen the reaction of the entire institutional apparatus to the popular revolt of 2019 in 2020. A social interregnum due to the effect of the pandemic used by the controlling elites to shape the future. Almost a year and a half after the social outbreak and almost a year after the beginning of the confrontation with the political power, the control of the country is not held by the deteriorated government of Piñera but by the powers behind the big extractive and financial corporations in their different political expressions. In these months, the forces have returned to their channels.

Piñera ceased to govern on October 18, 2019. Since then, his policy is to manage the crisis day by day with increased police violence, thousands of arrests, hundreds of protesters in prison and a panoply of increasingly repressive laws.

A similar policy towards the Mapuche people. A state violence unleashed since the murder of community member Camilo Catrillanca in November 2018 continues unabated. A spiral of repression and Mapuche resistance that on January 7 marked a new turning point in an operation consisting of a thousand police officers, armored vehicles and helicopters raided a Mapuche community.

This year we can look forward to a constituent process designed by the political forces of the right and center plus the social democratic forces (the Communist Party and other smaller ones did not sign the document) as an institutional guideline whose mechanism will exclude or marginalize social organizations and groups that represent the popular movements that demand structural changes.

This marginalization will force the return to the streets beginning on the date of the election of the constituents. The members of the popular revolt have already announced that the only way to achieve profound changes to the neoliberal order will be through pressure and mobilizations.

Paul Walder: Chilean journalist and writer, graduate of the Autonomous University of Barcelona, director of Mural.cl, collaborator of the Latin American Center for Strategic Analysis (CLAE).

Translation by Internationalist 360°