The Evolution of the Chilean Crisis (I)

The string of mobilizations that began with the rise in the subway fare and that revealed various unresolved social demands, have been analyzed by different unions and companies in recent days.

But the mea culpa is shared. Much of the responsibility is attributed to the political class, who have kept the most relevant reforms in the congress locked or with little progress.

In terms of inequality, “There was a great growth of the middle class but it is a precarious middle class, which has low pensions, high levels of debt, that lives a lot on credit and has very low salaries. It is a situation where everyday life is precarious, living with uncertainty" (BBC World).

In relation to the expectations of social improvements, the Chilean political class has been promising improvements in the quality of life of people in Chile for years.

Educational, constitutional, tax and health reforms have been announced but many of them have failed to meet society's expectations.

Social unrest, then, has resulted in this outbreak that is ending with the destruction of a hundred public spaces in different cities in Chile.

The violent protests that have caused the closure of businesses, the paralysis of transport, the interruption of supplies of goods and the insecurity in the streets will affect employment, will have an impact on economic activity, on consumer prices and levels of population consumption. However, and considering that the manifestations have been decreasing economic activity should tend to normalize and not affect the projection of 2020.

* You could also read: The riots that shook Chile

Among the proposals of the entrepreneurial and social world to overcome the social conflict are:

- Demonstrate that companies are at the service of people and not just their shareholders.

- Generate greater flexibility in working conditions and improve social benefits within the company.

- Evaluate the possibility of offering minimum monthly salaries close to CL$ 500,000 (app USD 690).

- Access to credit for financing new ventures.

On the other hand and through a platform for citizen participation created by a small team of Chileans committed to democracy, other priorities have been obtained that they would like to see addressed.

"Chilecracia.org" does not use a traditional voting mechanism, but rather a system of ranking citizen preferences based on peer comparison. In this technique, two items are placed next to each other and people should choose the one they prefer.

There is a list of 90 proposals for which chilean citizens can vote. These are shown in random order in pairs of options, of which only one preference (vote) can be marked. After marking the preference, another pair of proposals appears for a next vote, and so on. There are a total of 4,005 possible pairs; Chilecracia keeps each vote, so that the participant can stop at any time.

The result of the selections is used to create a network of preferences that is used to establish priority rankings. These priority rankings can then be analyzed according to various variables (sex, age, region, political orientation).

Having registered 5,500,000 votes, the most relevant topics for Chilean citizens who have participated up to now are:

1) Minimum Pension Equal or Greater than Minimum Salary

2) Increase Minimum Salary

3) Set the salary of politicians as a proportion of the minimum wage

4) Water deprivatization

5) Effective jail for Collusion offenses

6) Free Public Transportation for Senior Citizens

7) Eliminate obstacles and punishments with pre-existing diseases in Isapre 

    and Fonasa (health systems)

8) Universal Health Insurance

9) Limit Price or Gain of Medicines

10) Reduction of salaries of high public officials

There is a coincidence that we must continue on the path of growth and development, but now a new social agenda is added that contributes to improve people's conditions.

La semana que cambió a Chile

La tercera semana de Octubre, parte de los chilenos se lanzo a las calles para reclamar por varias demandas económicas, llegando a reunir más de un millón de personas en la ciudad de Santiago, a lo cual el gobierno de Sebastian Piñera respondió con unas pocas medidas que la ciudadanía consideró insuficientes. 

Después de una semana de manifestaciones, la presión ha disminuido pero no lo suficiente como para asegurar la total normalidad. Hay sectores que intentarán seguir en la calle, como el PC, el Frente Amplio y la CUT, que convocaron a más  días de paro y protesta. A estas fuerzas parece haberse sumado el Partido Socialista, que escogió una de las dos veredas en las que se sitúa ahora mismo la oposición. 

En una de ellas están los tres partidos políticos que concurrieron a La Moneda para dialogar con el Presidente (DC, PPD, PR) y en la otra está el resto, básicamente comunistas, socialistas y frente amplistas. Estos últimos viven su propia crisis. Su mentor e ideólogo, Carlos Ruiz, les manda un severo «tirón de orejas». Les dice que deben dejar de actuar erráticamente y que «este no es momento de sacarse selfies en las marchas» sino que hay que irse para la casa a escribir propuestas y tratar de impulsarlas (La Tercera).

Pero, ¿quién esta detrás del caos generado en estos días? ¿Es casual el incendio simultáneo de varias estaciones de metro y el edificio ENEL? ¿Habrá grupos anárquicos o el narcotráfico detrás de estos atentados ?

Este es un remezón por habernos creído un país rico por mucho tiempo, dejando de lado a los que quedaban en el camino.

Si no nos ponemos de acuerdo corremos el riesgo de caer en populismos o extremismos. No debemos sacrificar todos los logros conseguidos por la premura de mejorar las cosas.

La salida real a esta crisis es la de un gobierno de unidad nacional. Para que eso ocurra, no sólo deben los opositores aceptar ser parte de este proyecto, sino que los que hoy están en el poder deben aceptar reducir el suyo. Se debe convocar a una agenda clara, garantizar el crecimiento económico para solventar mayores demandas. Regular las concentraciones de poder por sectores industriales fin incentivar la competencia. Fortalecer los municipios y las regiones. Modernizar la educación. Modernizar el Estado y rebajar la burocracia.

Sería un error politico pensar en cambiar el modelo económico, en vez de mejorarlo.

Debemos entender que un aumento del 4% al fondo de pensiones es insuficiente para obtener una buena tasa de reemplazo en el tema de las pensiones a largo plazo.

La rebaja de dieta de los parlamentarios debiera ser cercana o superior al 50% de su remuneración actual.

Como hemos podido apreciar, gran parte de la ciudadania está de acuerdo con las manifestaciones que piden cambios sociales mediante medios pacíficos lo que cambia radicalmente si se producen actos violentos o delictivos.

Por otro lado se percibe que el gobierno no ha reaccionado oportunamente en ofrecer soluciones a esta crisis.

Siendo las principales motivaciones que han generado estas manifestaciones los sueldos de los trabajadores, los precios de los servicios básicos (luz, agua, gas), las pensiones de los jubilados y la desigualdad económica entre los chilenos.

Dentro de las medidas propuestas por el Presidente Piñera, las mejor evaluadas son: La reducción de las dietas de los parlamentarios y altos sueldos de la administración pública y reducción en el número de los parlamentarios, el proyecto que crea el derecho a la Sala Cuna Universal a todos los niños de madres o padres que trabajen y el proyecto que establece la reducción de las contribuciones de los adultos mayores más vulnerables. Y a su vez los peor evaluados son: El Seguro que cubre parte del gasto en medicamentos, el aumento de Pensiones de Vejez y el Ingreso Mínimo Garantizado de CL$ 350.000.-

Las medidas que debiera tomar el gobierno para superar la crisis debiera ser: Escuchar las demandas ciudadanas y generar un plan de mejoras, reconocer los problemas de desigualdades en Chile y llamar a un acuerdo político con todos los partidos de Chile y entender en detalle los malestares de la ciudadanía. 

Y como medidas concretas que debiera tomar el gobierno para superar la crisis económica seria: Mejorar el sueldo mínimo, congelar el alza de los servicios básicos (luz, agua, gas), mejorar las pensiones en su pilar solidario, disminuir la Dieta Parlamentaria, reducir el número de Parlamentarios y la gratuidad en Transporte Público para los adultos mayores.

Es fundamental no perder el norte de las demandas de la ciudadanía que no contemplan dentro de sus prioridades la modificación a la actual Constitución o la creación de una Asamblea Constituyente que en algunos países ha obtenido un poder absoluto, por encima incluso de los tres poderes del Estado.

Fuente estadística: Activa Research

President Sebastián Piñera apologized and announced a series of measures to end the social crisis

Pensions, minimum wage and parliamentary reduction: Piñera delivers a series of measures amid crises in the country.

The President also apologized to the Chileans, for their "lack of vision", in a crisis that, according to him, had been coming for decades.

President Sebastián Piñera announced a series of measures to end the social crisis in the country.

First he indicated that this comes from decades ago, so he acknowledged a "lack of vision and I apologize to my countrymen." To then point out a series of measures that will make up his "Social Agenda" that will be proposed to Congress or directly implemented by the Government, as appropriate.

Pensions

On the issue of Pensions, he announced an "immediate increase of 20% of the Basic Solidarity Pension, which will benefit 590 thousand pensioners." Together with this, an "immediate 20% increase in the Solidarity Pension Contribution, which will benefit 945 thousand pensioners." An "additional increase in basic pensions and solidarity pension contributions, during the years 2021 and 2022, for pensioners over 75 years old."

While for the pension savings of the middle class and the women who work and contribute, they will be given a contribution of fiscal resources "to increase their pensions at the time of retirement, which will favor 500 thousand workers".

And finally, tax contributions to improve pensions for senior citizens.

Health and Medicines

Speaking about health, the President announced the creation of an Insurance, which will cover part of the cost of medicines in Chilean families. And in turn, the "extension of the FONASA agreement with pharmacies, to reduce the price of medicines, which will benefit more than 12 million people." 

In addition, he insisted on the urgency of "immediate discussion of the Bill sent by our Government to the Congress that creates the Catastrophic Diseases Insurance, in order to ensure a ceiling on family health spending." Whatever exceeds that ceiling, the insurance will cover it.

Guaranteed Minimum Income

On Salaries, a Minimum Guaranteed Income of CL$ 350,000 (USD 482) will be created, "for all full-time workers that complement the workers' salary, when it is less than CL$ 350,000." In the Guaranteed Minimum Income, the State is responsible for supplementing the salary, in case the worker does not reach CL$ 350,000.

Electric rates

Another of the announcements was a mechanism for stabilizing electricity rates, which would allow the recent increase of 9.2% of electricity to be canceled, which had been announced by January 2020.

Inequality

While in inequality, one of the measures he explained was higher taxes on the highest income sectors, with the creation of a new tranche in the 40% Complementary Global Tax for income over CL$ 8,000,000 per month (USD 11,016). This "would increase tax collection by USD 160 million." 

On the other hand, he pointed out greater equity between high and low income districts. This, strengthening the Municipal Common Fund, "establishing greater contributions from the higher-income districts, for the benefit of the lower-income districts."

He added that they propose, and therefore support, the reduction of parliamentary diets and high salaries of the public administration. In addition to reducing the number of parliamentarians and a limitation of re-elections.

Delinquency

To combat crime, he proposed the creation of the Victim Advocacy Office, which would facilitate access and strengthen legal defense and social and psychological support for victims of crime.

Reconstruction

In conjunction with this, in order to restore property that has been damaged in recent days, a "Reconstruction Plan for damages and destruction caused by violence and crime in recent days, which have caused serious damages to public infrastructure, especially in the Metro. 

The President evaluated that the plan "will take time" and will commit resources for more than 350 million dollars.

Urgency in projects sent

In addition, the President said that there are several projects of high social content that have been sent to Congress and are intended to accelerate their processing and approval. 

Among them the Pro-Childhood Project, which ends with the SENAME; The project that creates the Catastrophic Health Insurance; Project the right to the Universal Crib Room and the project that establishes the reduction of the contributions (housing tax) of the most vulnerable older adults.

Finally, President Piñera stressed that "this Social Agenda will not solve all the problems that afflict Chileans. But it will be a necessary and significant contribution to improve their quality of life."

Source: Emol

The riots that shook Chile

The unease of citizenship and the perception of inequality in cases of corruption tired a large part of Chilean society that feels delayed in a successful but unequal economic system.

But this feeling is not something of this week or of this government, but a series of situations that have been developing in recent decades.

Although Chile has grown steadily in economic terms, in relation to many of our Latin American neighbors, and having overcome the most extreme poverty, there has always been a feeling of inequality and issues to be resolved.

The pension system that for many years did not adapt to the changes in today's society (in terms of contribution, active population and life expectancy) has generated poor results in its replacement rate, resulting in very low pensions for an important part of society.

Public education was always of a lower quality than private schools, but in a modern society in which the level of professionalism and specialization is more demanding than a few decades ago, it is even more noticeable.

All of the above plus other issues related to health, safety and transportation have been postponed by a mean political class that puts its partisan interests above the common good of the country.

This is how in recent days there have been disorders that began with a simple call to evade the passage of the subway in response to the rise in its price. Then it gradually climbed until it reached that violent groups burned some subway stations, a public building and some private businesses.

Seeing that the situation was increasing, the Government of Sebastian Piñera under the protection of the Constitution declared a state of exception (state of emergency) leaving security control under the command of Army General Javier Iturriaga.

Based on the situation of chaos and looting that some groups of criminals were already affecting the order of the city, a curfew is declared, which prohibits the movement of citizens through the streets of the city under the control of the army and forces of order.

"I call all my compatriots to unity in these difficult times, to take care of our country, everything that we have built with so much effort and we cannot allow a group of violentists to damage what we have built together," President Piñera said in conference Today, Sunday October 20th.

For his part, Minister Blumel reports: "We are going to make the bill that leaves the price (subway rate) increase without effect, it will be processed immediately". "The financial report of the project to curb the rise of the passage has a fiscal cost of CLP 3,500 million (USD 4.9 million app).

Today groups of neighbours who spontaneously came to cooperate in the cleaning of the sinister subway stations, together with the subway train workers. This is the real Chile, that of working people who are against crime.

The UN High Commissioner for Human Rights would have received illegal contributions

Leo Pinheiro former boss of the OAS construction company

September 16th 2019

Entrepreneur investigated by case Lava Jato links OAS and Lula with Bachelet campaign in Chile. Léo Pinheiro, former construction boss, said he delivered 101.6 million pesos (about USD 145,000) to finance the campaign of the then candidate for President of Chile, at the request of the former Brazilian President.

In the midst of the investigation into the Lava Jato case, which investigates a wide network of corruption between politicians and contractor companies in Brazil, businessman Léo Pinheiro revealed in his judicial statement that the company he ran, the construction company OAS, illegally financed the presidential campaign of Michelle Bachelet in 2013, at the request of former President Lula da Silva.

As part of the delation agreement negotiated with the Public Ministry, according to the Folha de Sao Paulo newspaper, Pinheiro mentioned the former Brazilian president as a business intermediary between the aforementioned company and the Governments of Costa Rica and Chile, as well as revealed an alleged interference in other countries such as Bolivia and Equatorial Guinea.

Luiz Inácio Lula da Silva began serving a 12 year prison sentence in 2018 for corruption

In the case of Chile, Pinheiro -who has been detained since 2016- said that the Brazilian company was trying to establish itself in 2013, by joining the consortium that sought to build a bridge in the Chacao canal, a process initiated during the Government of Sebastián Piñera, but that would be specified in the subsequent administration. It was an election year, where New Majority flag bearer Michelle Bachelet was the favorite to return to La Moneda.

In that sense, according to the testimony revealed by Folha, OAS was afraid of losing the contract with the change of government, a concern that they transmitted to Lula. The former president replied that he discussed the issue with former Chilean President Ricardo Lagos, who in turn would have guaranteed that the construction company would continue with the concession.

Likewise, Pinheiro assured that Lula asked for money to finance the Bachelet campaign, in order to secure the concession. This is how, according to the businessman, the Brazilian company paid 101.6 million pesos "in the interest of the Bachelet campaign". This amount, he said, was delivered through a fictitious contract with the company Martelli y Asociados after the end of the campaign.

Lula Da Silva supporting Michelle Bachelet (2013)

However, after the Lava Jato case broke out in Brazil and OAS interference was investigated, the construction company withdrew from the concession in the Chacao canal.

According to Folha, Léo Pinheiro also revealed shares of his company in other countries, with the intervention of Lula. That was the case of Bolivia where, according to the former director, OAS was awarded the construction of a road between the cities of Potosí and Tarija in 2003 at the request of the leader of the PT, whose government at that time had differences with the administration of Evo Morales. It was not an easy project, since it had been initiated in 2003 by Queiroz Galvao, a company that broke into a conflict with the Bolivian government, breaking the contract in 2007. This opened a diplomatic impasse that Brasilia wanted to avoid.

In this way, Pinheiro assured that the then Brazilian President promised OAS to obtain another contract in Bolivia as compensation for taking a problematic project.

Another case cited by the former president of OAS was the intervention of Lula in Costa Rica. In 2011, the former president was hired by the Brazilian company, through the payment of USD 200,000, for a conference, and managed a meeting between Pinheiro and former Costa Rican head of state Óscar Arias.

Likewise, the businessman met with the then President Laura Chinchilla to negotiate the obtaining of public concessions, a business that took shape.

Léo Pinheiro is syndicated as one of those responsible for OAS in a huge plot of corruption that includes the delivery of a triplex by the construction company to former President Lula, made by which the former ruler was sentenced to 9 years in prison, penalty which he is serving in a criminal enclosure in Curitiba.

September 17th 2019

Bachelet and alleged relationship between her campaign and Brazilian construction company: "I have not had any link with OAS." I do not know if there will be a background behind this, "said the former President, after a Brazilian publication said that in 2013 her campaign would have received contributions from the company.

Former Chilean President and current UN High Commissioner for Human Rights

The former President and current High Commissioner for Human Rights of the UN, Michelle Bachelet, spoke about the supposed link between the OAS company and the financing of her campaign in 2013. "I have never had a link with OAS, nor with no other company, "said Bachelet, also describing as" strange that this information now appears on topics that are quite speculative such as the Chacao Bridge, which the truth is that it was awarded during the Government of Sebastián Piñera and not during mine. " .

Source: Emol.com

Visit of Pope John Paul II to Chile (April 1987)

The visit of John Paul II to Chile, made between April 1st and 6th, 1987, was that Pope's only trip to the country and the first visit of a supreme head of the Catholic Church to Chile.

This historical event, which was framed within the 33rd Apostolic Journey of John Paul II (in which he also visited Argentina and Uruguay), revolutionized the faithful of Catholicism and contracted multiple meanings and facts because it was carried out during the military government of Augusto Pinochet, and served to dispel to some extent the political tensions of that time.

John Paul II arrived at Comodoro Arturo Merino Benítez International Airport in Santiago on April 1st, on a six-day visit. At the air terminal, he was received by Augusto Pinochet and first lady Lucia Hiriart, along with military and government troops.

Later, from the Cathedral, he went to visit the Sanctuary of the Immaculate Conception on San Cristobal Hill, where he blessed Santiago and sent a message to the whole country.

When descending from the Alitalia flight that landed on the slab of the old Pudahuel airport, on Wednesday, April 1st, 1987, the first thing that John Paul II did was to kiss the Chilean soil. He came to spend six days in the country, which had never before received the visit of the Pontiff.

Karol Wojtyla's tour, then 66 years old, had a busy schedule and included eight cities: Antofagasta, La Serena, Valparaíso, Santiago, Concepción, Temuco, Puerto Montt and Punta Arenas.

As expected, due to the magnitude of the character and the present that was lived, the visit had a series of milestones.

The first one was the meeting he held the next day with a Pinochet dressed in a suit and tie. What it meant was a private appointment, it was converted by the regime as a show of support, with the image of both greeting the public from a balcony in La Moneda.

The Eucharist on Friday 3rd in the O'Higgins Park had a series of situations that would end up marking it. The massive presence of the public, which is estimated at one million people, and the pitched battle in which the enclosure was converted, due to clashes between those present and the regime's security agencies, and that included barricades, fire and bombs tear gas.

The use of gases affected even the Pope, who stopped his words for a few minutes observing what was happening in front of him.

After three days in the capital, with a brief transfer to Valparaíso, the Pontiff flew to Punta Arenas, from where he began to move from south to north until the end of April 6th with a mass in Antofagasta.

The Cold War determined the international context, where the conflict between the east, led by the United States, and the west, ruled by the Soviet Union, progressively increased the tension between these powers and their countries of influence. “Pope John Paul II was the result of that international historical situation. His nomination caused a stir because he was a Polish Pope, since Poland was under the Soviet Union. ”

Chile, meanwhile, lived in an authoritarian regime and society became polarized among the sympathizers and antagonists of the head of government. It was a complex picture, compared to what was happening abroad.

The Pope had also paid a visit to Poland, which was ruled by a leftist general, with an iron and authoritarian regime that was Jaruzelski, and was coming to Chile, which was also ruled by a general in a fervent way, but from the right and focused on neoliberalism.

Source: Channel 13, Catholic University of Chile

Foreign Ministers of Chile and Brazil support the Bioceanic Corridor Between Brazil and Chile

The Foreign Minister of Chile, Teodoro Ribera, and his Brazilian counterpart, Ernesto Araujo, reaffirmed the interest of both countries to develop the Bioceanic Road Corridor that will link Porto Murtinho (Brazil), via Paraguay and northern Argentina, with the Port of Antofagasta (Chile).

"The crossing of the Andes mountain range and the Chilean ports are fully ready and operational to receive Brazilian cargo," said Foreign Minister Ribera.

"In the bilateral sphere, we agree in the interest of moving towards a strategic relationship, which will strengthen long-term ties between both countries, looking towards 2040," said the Chilean Foreign Minister.

Regarding trade relations, Ribera said Chile is the second largest trading partner of Brazil and, in turn, this country is the first for Chilean international trade.

In that regard, he stressed “the importance of putting into effect the Free Trade Agreement signed in November 2018, and that it needs to be approved by both Congresses”.

In addition, they reaffirmed the interest of promoting the process of convergence between the Pacific Alliance and Mercosur, within the framework of the respective Pro Tempore Presidencies that Chile and Brazil exercise in said integration mechanisms.

The 1,800 kms bi-oceanic route that will connect Chilean Pacific ports with Brazilian Atlantic ports and cross the Paraguayan Chaco, will reduce merchandise transport between the two oceans to three days.

Nowadays, ships that follow the routes to Asia, passing through Cape Horn, take an average of 13 days.

Source: PortalPortuario, ABC.com

Argentina and the fear of the return of Kirchner

Mauricio Macri - President of Argentina

The baggy triumph of Kirchnerism in the last week primaries has been interpreted by many as the announcement of the end of President Mauricio Macri government and the arrival at the Casa Rosada of the Fernandez-Fernandez de Kirchner duo.

In his statements following the knowledge of the results, the President confirmed that he will continue in the campaign until October with the expectation of reversing the results of last Sunday.

He assumes in his support that in the primaries many citizens wanted to express their protest over the difficult economic situation, but that when electing the president they will prioritize the memory of Cristina Kirchner's mismanagement and the corruption that characterized her government.

President Macri's expectations are not accompanied by the markets. Judging by what happened, they take for granted an upcoming change of government and have operated accordingly. It is also clear that many foreign and local investors and analysts see that change with enormous pessimism. Many serious opinions speak of a return of populism to Argentina.

Just as the Friday before the primaries (known as PASO) Argentine bonds and stocks rose when the polls predicted a very favorable outcome for the ruling party, on Monday, with the results, they collapsed violently. The price of Argentine shares fell by more than 40% in one day, the country risk is around 1500 basic points and the price of the dollar has grown by 25%.

Mauricio Macri's presidency failed to correct the mistakes and consequences of the populism that preceded him. His management began auspiciously, but he opted for a gradualism that did not have enough time to become successful.

Politically correct and fear of social reactions led him very close to a default that could only be avoided with the help of the International Monetary Fund. The necessary adjustment probably should have been carried out more quickly.

There are own faults in the electoral setback, but with a very clear origin in the inheritance he received from Cristina Kirchner. It is a shared fault. There is no doubt that the negative reaction of the markets must be largely attributed to the deplorable fame of Kirchnerism.

The return of Peronism

Macri pays the price of having managed the crisis by reassuring only the IMF and the wealthiest classes

The overwhelming victory obtained by Alberto Fernández-Cristina Fernández de Kirchner in Sunday's primaries in Argentina predicts the return to the Casa Rosada of Peronism in the October presidential elections. 

Casa Rosada

In the face of the last-minute predictions and the hope of the markets that justicialism would achieve a tradable victory, the 15 points of advantage (47% vs. 32%) make it clear that Mauricio Macri, who aspires to re-election, does not even seem able to force Peronism to play a second round in two months.

Everything indicates that Peronism will return to power, once again becoming a presumably corrective factor in the social bankruptcy caused by the right. But this time he will do it in a scenario consumed by poverty, foreign debt, recession and galloping deficit, a frame of reference that demands realism and rigorous measures. 

The devastating effects of the economic crisis, the failure of the neoliberal recipe with which Macri arrived at the Casa Rosada and the rapid forgetting of Peronist excesses during Fernández de Kirchner's last term facilitate the new arrival of Peronism.

Neither the cases of corruption that marked the last Peronist presidency nor the suspicions of criminal participation in cases such as the death of prosecutor Alberto Nisman, which reach Fernández de Kirchner, have damaged the expectations of victory of those who, as so many times, they present as the restorers of the progressive message against that of the establishment.

Source: La Nacion, El Periodico, Author's notes.

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