Chilean Protests Challenge Governing Strategy

Dispatch: Chilean Protests Challenge Governing Strategy

September 15, 2011 | 1812 GMT

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Analyst Karen Hooper examines ongoing strikes and protests in Chile and their impact on the strategy of President Sebastian Pinera’s government.

Editor’s Note: Transcripts are generated using speech-recognition technology. Therefore, STRATFOR cannot guarantee their complete accuracy.

RELATED LINKS

• Chilean Students, Workers Continue Protests
• Geopolitical Calendar: Week of Sept. 12, 2011

Another week of protests confronted Chilean President Sebastian Pinera, kicking off on Sept. 11 commemorating the 1973 coup against former Chilean President Salvador Allende.

The trouble continued with a two-day health care workers’ strike and culminated on Sept. 14 with another student protest. Chilean students are currently negotiating with the Pinera government on a four-point plan demanding the freeze of two bills before the legislature that would reform Chilean education that were written without the consultation of students and teachers. The students are also demanding that all negotiations between students and the government be conducted with live TV coverage to ensure transparency. The students and teachers are also demanding that state funding be suspended for all private educational institutions. Students are also hoping that an Oct. 7 deadline be extended so that they may finish their semesters and not lose access to current scholarships and loans.

Meanwhile, tensions are building with neighboring country Argentina. Argentine President Cristina Fernandez de Kirchner has canceled her visit to Chile, citing scheduling conflicts. In reality, the situation is that Fernandez has an election coming up and cannot afford to be seen with Pinera.

The simmering discomfort between the two countries highlights the extreme differences between the two neighbors. Ideologically, the two countries could not be more different. Chile has embraced fiscally conservative policies, low spending and high growth and deals with civic unrest on an ad hoc basis. On the other side of the Andean border, Argentina’s entire sociopolitical structure is built around an authoritarian government that uses its power to redistribute income to ensure popular support.

But things are changing for Chile. More than 20 years after the collapse of the Pinochet dictatorship, a whole generation of students has come into their own. These students have gone to college in record numbers and never experienced the fear or repression under the dictatorship that the previous generations did. At this point the Pinera government is having to deal with the kind of popular pressure that Argentina has been dealing with for a long time.

The government will have to make concessions, but the concern will be that every concession made proves strikes and protests to be an effective form of negotiation. But Pinera is a fiscal conservative, and every concession will come dear to him. But the fact of the matter is that incremental concessions may not be enough to satisfy the protesting populace, and despite Pinera’s fiscally conservative policies, these protests may force him to seriously reconsider the relationship of the Chilean state to social spending.

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Read more: Dispatch: Chilean Protests Challenge Governing Strategy | STRATFOR 

Protests Continue In Chile

show details 9:09 AM (4 hours ago)

Chilean Students, Workers Continue Protests August 26, 2011 | 1537 GMT JUAN MABROMATA/AFP/Getty Images Protesters supporting Chilean students march toward the Chilean Consulate in Buenos Aires on Aug. 25 Summary Chilean students and workers took to the streets for a second day Aug. 25 to protest government policies. More than 1,000 have been arrested during the protests, with more than 200 injuries and one civilian death reported. The protests are being driven by a downturn in the Chilean economy and a spike in the number of college-age youths, and while these factors could ultimately be self-limiting, in the short term the government will have to make changes to keep the protests from growing. Analysis Violence erupted Aug. 25 during the second day of national strikes in Chile as  students and workers protested the Chilean government’s policies. Gunfire was reported in several locations around the country, and reports indicate that 1,394 people have been arrested, 153 police and 53 civilians have been injured, and one civilian was killed. Sponsored by the Workers’ United Center labor union, the protests have merged wage disputes with ongoing student demonstrations against Chilean President Sebastian Pinera’s government policies. The protesters demand sweeping education reform and wage hikes, and some environmentalists are protesting a dam planned for Patagonia. The protests pose a serious political challenge for Chile, which had been one of the region’s most stable countries over the past two decades. Pinera, a right-wing leader, businessman and Harvard-educated economist, ran on an election platform of education reform and a promise to run the country like a business. Pinera’s is the first right-wing government to hold power in Chile since the country returned to democracy in 1990, and Pinera’s approval ratings — which have plummeted to 26 percent from 44 percent in late 2010 — are the lowest in that same time period. Given that Pinera’s policies have not shown much of a change from the previous administration, it seems clear that the protests stem from the population’s desire for significant change as represented by the 2009 election of Pinera’s party after two decades of continuity. The students involved in the protests across Chile have numerous complaints. They want education to be completely subsidized — a reflection of the financial strain created by a 26 percent increase in the price of public education since 2005. The increased costs affect a greater portion of the population than before; the number of college students in Chile has grown from around 200,000 two decades ago to approximately 1 million. Legally, private universities can compete alongside public institutions, and students are protesting the idea of universities making a profit by charging higher tuition. Students are also protesting strict loan repayment rules. Since previous protests attempting to pressure the government to make structural changes to the education system have triggered only limited concessions from the government, the students now want a national referendum on the issue. At the same time, the government is facing opposition from workers at state-owned copper company Codelco. A workers strike in July — the largest such strike in 28 years — caused millions of dollars in losses and forced Pinera to reconsider a proposal to privatize the company. An agreement was reached in early August, but the size and intensity of the strike lent considerable weight to growing unrest throughout the country. A couple of structural factors are contributing to the current unrest. First is Chile’s economy. The country has done relatively well in the wake of the global economic downturn, with the growth rate for 2011 initially projected to be 6 percent. However, in combination with the effects of the 2010 earthquake, the global downturn triggered a rise in Chile’s poverty rate — from 14 percent in 2006 to more than 19 percent in 2010. This is still a significant decrease compared to the dictatorship-era rate of nearly 40 percent in 1989, but it is a sharp rise for a country that, in recent years, has grown accustomed to a consistently narrowing gap between rich and poor. The second major structural factor is a population surge of people in their late teens and early 20s, many of whom are the first in their families to attend college. Not only is there a bump in the youth population, but it is also the first generation of students to have grown up entirely in post-dictatorship Chile. With more students enrolling in college, there are more students looking ahead to unprecedented (for Chile) levels of indebtedness when they graduate. This is also a generation that has grown accustomed to economic stability and mostly participatory democracy, with none of the fears of their parents’ generation. This population cohort’s increased willingness to use protests to push for political change has been a notable phenomenon over the past several years. Ultimately, these factors could be self-limiting. Government policies are likely to remain fiscally responsible and relatively responsive to public demands. Chile’s copper-funded coffers are deep, and the government’s options for expanded spending to combat the economic downturn are more numerous than in many other countries in the region facing civil unrest. Furthermore, youth cohorts ultimately grow up, get jobs — assuming a continued economic recovery — and have families. However, in the short term, Pinera will have to make greater educational and wage reforms to placate the protesters. His calculations likely will be tempered by the concern that the government’s capitulation would only prove the effectiveness of protests and could spur a secular shift toward more protests in Chile. If, however, Pinera refuses to make changes, the protests will grow, possibly affecting key industries and economic activities. Give us your thoughts on this report For Publication Not For Publication Read comments on other reports Reader Comments