AIM­ING HIGH

With a grow­ing mid­dle class and one of Latin Amer­ica’s most sta­ble economies, has Chile com­pleted the jour­ney from dic­ta­tor­ship to democ­racy?

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Has Chile com­pleted the jour­ney from dic­ta­tor­ship to democ­racy?

The jour­ney along Avenida Lib­er­ta­dor Bernardo O’Hig­gins, from the his­toric down­town in the west to the glitzier sub­urbs be­neath the An­des, re­veals key facets of 21st-cen­tury San­ti­ago, Chile’s cap­i­tal. You can do the trip by cab; though to avoid con­tribut­ing to the smog that tem­po­rar­ily shut down the city in 2015, look out for one of the 60 new elec­tric taxis. Or hop on one of the new buses op­er­ated by Transan­ti­ago, ar­guably the most am­bi­tious trans­port sys­tem found in a de­vel­op­ing coun­try.

Or do as I do, and walk. I like to walk off long-haul flights; and, let’s face it, most flights to Chile are long-haul.

Down­town is all civic HQs, Span­ish-style plazas, colo­nial-era churches, a tiny char­ac­ter­ful quar­ter known as Bar­rio París-Lon­dres and grimy of­fice blocks. On a typ­i­cal af­ter­noon, you’ll see politi­cians and civil ser­vants, a chang­ing of the guard at the La Moneda pres­i­den­tial palace, and brown-suited clerks gath­er­ing for cof­fee and a smoke in the cafés con pier­nas – lit­er­ally, “cafés with legs”: staunchly un-PC cof­fee shops where the all-fe­male staff serve trea­cly espres­sos in lap-danc­ing garb.

Over in the east lie the leafy bar­rios of Las Con­des, Vi­tacura, El Golf, Nunoa and La Reina, over­lap­ping with the huge com­mer­cial and res­i­den­tial district of Prov­i­den­cia. Head­quar­ters for banks, multi­na­tion­als and in­sur­ance firms tower above high-end flag­ship stores and flash restau­rants. Man­i­cured parks, golf clubs, em­bassies and man­sions lie close by. The over­all look is im­ported from the United States, as is the life­style: cars and coun­try houses are com­mon­place. Up here, you get views of the snow-capped peaks – smog per­mit­ting.

Though only six miles from the old city cen­tre, this af­flu­ent neigh­bour­hood feels like a dif­fer­ent world com­pared to the shanties and grim es­tates of the south and north­west met­ro­pol­i­tan sprawl.

Of course, all cities are split along so­cial and eco­nomic lines, em­phat­i­cally so in de­vel­op­ing na­tions; in Chile, how­ever, the slick, aspi­ra­tional aes­thet­ics and the widen­ing in­equal­ity gap are rel­a­tively new.

THE CHILEAN “MIR­A­CLE”

In the Eight­ies, Mil­ton Fried­man used the term “mir­a­cle of Chile” to char­ac­terise the re­di­rect­ion of Chile’s econ­omy as steered by a group of Chilean econ­o­mists – mostly for­mer Fried­man acolytes – known as the “Chicago Boys”. It takes an econ­o­mist to find good in a dic­ta­tor­ship: Fried­man was cel­e­brat­ing the fact that Au­gusto Pinochet’s gov­ern­ment (1973-1990) had put so­cial­ism, high in­fla­tion and pro­tec­tion­ism be­hind it, and had em­braced neo-lib­er­al­ism.

Sub­se­quent ad­min­is­tra­tions were pre­dom­i­nantly cen­tre-left, but Chile →

con­tin­ued to pur­sue a gen­er­ally free-mar­ket ap­proach to pub­lic spend­ing and for­eign in­vest­ment.

“Since re­cov­er­ing democ­racy in 1990 ev­ery Chilean gov­ern­ment has kept strong fis­cal dis­ci­pline poli­cies,” says Vi­viana Gi­a­ca­man, a po­lit­i­cal sci­en­tist at the pro­gres­sive Chile21 think tank.

“In the year 2000, Pres­i­dent La­gos in­tro­duced a fis­cal rule to keep a struc­tural bud­get sur­plus of one per cent of GDP, which has made the coun­try re­silient to strong head­winds com­ing from the in­ter­na­tional mar­kets, and al­lowed [Chile] to keep low lev­els of in­fla­tion, rel­a­tively low unem­ploy­ment rates and high and sta­ble growth rates.

“This eco­nomic per­for­mance has al­lowed the well-be­ing of large seg­ments of the pop­u­la­tion to in­crease. Since 1990 poverty de­creased from 68 per cent to 11 per cent, a much lower poverty rate than the Latin Amer­i­can av­er­age. House­hold in­come has in­creased, ac­cess to for­mal ed­u­ca­tion has ex­panded, in­fra­struc­ture has de­vel­oped and democ­racy has grown sta­ble. In fact, Chile has the high­est rank in UNDP’s [United Na­tions De­vel­op­ment Pro­gramme] Hu­man De­vel­op­ment In­dex in Latin Amer­ica.”

In 2002 Chile signed an “as­so­ci­a­tion agree­ment” with the EU, rat­i­fied in 2005, which granted it most-favoured na­tion sta­tus; Chilean ex­ports of agri­cul­tural and food prod­ucts and ser­vices to the EU have since tripled. It was also the first South Amer­i­can na­tion to join the Or­gan­i­sa­tion for Eco­nomic Co-op­er­a­tion and De­vel­op­ment.

In 2006, Chile be­came the coun­try with the high­est GDP per capita in Latin Amer­ica. In the same year, the coun­try elected its first fe­male pres­i­dent, Michelle Bachelet. An ad­vo­cate for women’s rights, she made no­table ad­vances in pen­sion re­form, so­cial jus­tice and indige­nous rights. She was re-elected in 2013. That ad­min­is­tra­tion estab­lished a long-term pol­icy on re­new­ables, with the goal to have 90 per cent of the coun­try’s en­ergy from re­new­able sources by 2050.

But Bachelet’s two terms were dogged by eco­nomic dif­fi­cul­ties, the chaotic roll-out of Transan­ti­ago, and protests and strikes from sec­tors de­mand­ing speed­ier re­forms. A cor­rup­tion scan­dal in 2015 led to the res­ig­na­tion of her en­tire cabi­net.

The cur­rent pres­i­dent, bil­lion­aire Se­bastián Pin­era, as­sumed of­fice in March 2018 and is also serv­ing a →

se­cond term. Ac­cord­ing to Bet­tina Horst, of right-lean­ing think tank Lib­er­tad y De­sar­rollo: “He was re-elected as the can­di­date who would pri­ori­tise the role of the pri­vate sec­tor as an engine of de­vel­op­ment and job cre­ation.

“Dur­ing his first term, eco­nomic growth and em­ploy­ment in­dices im­proved more than in ei­ther of the two Bachelet-led gov­ern­ments.”

Chile is ex­tremely cen­tralised – San­ti­ago con­trib­utes about half of the coun­try’s GDP

HID­ING BE­HIND THE AN­DES

Al­most ev­ery­thing about Chile sets it apart from the rest of South Amer­ica – most ob­vi­ously the An­des moun­tains, which it shares with Ar­gentina and Bo­livia. It’s a very long, ex­tremely thin coun­try, av­er­ag­ing only 110-miles wide with a 2,653mile seaboard. It’s ex­posed to the sea – and in­va­sion – as well as to tsunamis. The coun­try lies on the Pa­cific Ring of Fire; earth­quakes are fre­quent and oc­ca­sion­ally fe­ro­cious, as in the 8.8-mag­ni­tude quake of 2010 that left 525 dead and dam­aged 370,000 homes. The ex­treme to­pog­ra­phy also means the 15 of­fi­cial re­gions are markedly dif­fer­ent: Tara­paca, Ata­cama and Antofa­gasta are in the Ata­cama desert; San­ti­ago is in a fer­tile sub­trop­i­cal zone; the south has cold win­ters and year-round rain, while south­ern Patag­o­nia is sep­a­rated from the rest of Chile by ice fields.

Chile was colonised by the Span­ish and, fol­low­ing In­de­pen­dence in 1818, by cre­oles from north to south. The indige­nous Ma­puche of­fered fierce re­sis­tance and were never van­quished. Some 1.5 mil­lion still live in the area around the Chilean lakes – 500-plus miles south of San­ti­ago. Most Chileans are a mix of Euro­pean and Amerindian.

These and other fac­tors con­tribute to a con­flicted na­tional iden­tity. Mes­tizo Chileans will boast of their An­glophilia or wax lyri­cal about Ger­man an­ces­tors. Chileans proud to be on ex­cel­lent terms with the EU will de­cry Ar­gen­tine hege­mony and pour scorn on Bo­livia’s per­sis­tent claim to a seaboard – which it lost in wars with Chile and Peru in 1879-84.

Most prob­lem­at­i­cally, rather like Spain af­ter Franco, Chileans read­ily fall into pro- and anti-Pinochet camps. A re­cent scan­dal in­volv­ing a cul­ture min­is­ter’s res­ig­na­tion over San­ti­ago’s Mu­seum of Mem­ory and Hu­man Rights threw into re­lief the en­trenched po­lar­i­sa­tion.

COM­MODI­TIES ARE KING

Chile’s pop­u­la­tion is around 18 mil­lion, more than a third of whom live in met­ro­pol­i­tan San­ti­ago. Con­se­quently Chile is ex­tremely cen­tralised, with 90 per cent of all cor­po­rate head­quar­ters, most trans­port and ser­vices and the best ed­u­cated work­ers all in the cap­i­tal. San­ti­ago con­trib­utes about half of the coun­try’s US$277.08 bil­lion GDP. The prov­inces are largely cut off from these re­sources and, to date, de­cen­tral­i­sa­tion has been lit­tle more than a cam­paign slo­gan.

Com­modi­ties are both Chile’s power-base and Achilles heel. Cop­per ac­counts for 43 per cent of the coun­try’s ex­ports. China’s eco­nomic slow­down and its es­ca­lat­ing trade war with the US present sig­nif­i­cant chal­lenges to this high de­gree of de­pen­dence. De­clin­ing cop­per prices led to a fall in GDP growth from 6.1 per cent in 2011 to 1.5 per cent in 2017, ac­cord­ing to the World Bank.

Di­ver­si­fi­ca­tion has been slow. Some 2,800 prod­ucts, rang­ing from wine, fresh fruit and salmon to lum­ber, beans and wool, are ex­ported to more than 120 dif­fer­ent coun­tries. The long coun­try’s seven dis­tinct macro-re­gions al­lows it to stag­ger har­vests; it can also ex­ploit the fact that har­vest times

Chile’s cap­i­tal San­ti­ago, sit­u­ated at the foot of the An­des moun­tains

ABOVE FROM LEFT:The Casacostan­era shop­ping com­plex in fash­ion­able Vi­tacura, San­ti­ago; tours of Con­cha y Toro vine­yard, just south of San­ti­ago, re­flect the growth of Chile’s trade in wine tourism

BE­LOW: Ter­race suite at Noi Vi­tacura, San­ti­ago; roof ter­race at Ho­tel Mag­no­lia, San­ti­ago

ABOVE: The colour­ful Paseo Ban­dera (flag walk) in the cen­tre of San­ti­ago

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