The Evolution of the Chilean Crisis (II)

No one can deny that after the events of October the constitutional protection of the Chilean economic model is seriously injured.

On October 18th, 2019, one of the strongest and most violent social outbreaks in its republican history took place in Chile. The demand for this movement was clear in its proposal -the improvement of the economic conditions of Chileans- but strongly undetermined in its solution.

The diagnosis, however, is shared. The wonderful macroeconomic results that placed Chile in a privileged position in Latin America have not, over time, relieved the weight of the cost of living of the poorest. While those with greater resources have been able to have a quality lifestyle and services close to any European country, the most dispossessed, on the contrary, fail to meet basic daily needs.

To the deep urban segregation that affects the country must be added the sustained segregation in the most important public services, such as health or education.

In educational matters -perhaps one of the most advanced sectors in the last decade- while the average educational achievement places Chile in a prominent position, that place of privilege falls when studies are made comparing the gap between the top 20% and lower income, showing a frequent mark in the Chilean reality: good average, but bad internal distribution.

The social outbreak has been the answer to all these results. From the hand of the most intense package of neoliberal reforms implemented in some country, the profound inequality that they have generated over time, has simply become intolerable.

The social movement, meanwhile, and quite similar to other European outbursts, is not articulated, denies political mediation quite intensely and does not react as expected to the measures announced. The Chilean panorama is, then, paradoxical: politicians who claim a certain primacy in the concretion of citizen demands, citizens who simply protest and a government that wants to resume normality knowing that things will never be as before.

With the passing of time, however, there was a way of giving a certain intellectual unity to citizen demands. To the questioning of the neoliberal economic model of the most extreme sectors, the rejection of all the political and legal forms that have given it protection was added. Among them, the one that gave it its most efficient and effective coverage during all this time: the 1980 Constitution.

Unfortunately, some sectors have used discontent to try to convince that the change of Constitution will be the automatic solution to all current problems.

This Constitution, created in the middle of the Military Government of Augusto Pinochet, entrusted to a group of lawyers related to the regime and approved by a plebiscite, has ruled the country for more than 30 years. That fundamental carta has been modified in countless opportunities, always with the permission of the political parties that have supported the ordoliberal agenda. They have been, therefore, reforms that have allowed us to live together, but not make structural changes in the successful economic model. When any of those changes were approved, even with the votes of the right, the Constitutional Court -one of the institutions questioned by some sectors of the left- managed to avoid it, ironically protecting the model.

The news of the opening to change the Constitution, and not only to modify it, agreed transversely by all the relevant political sectors of the country, has been received with high doses of joy, but also with some skepticism. Joy, thinking that finally a document will be written considering the needs of the people.

The negative point of this modification is that it would take at least a couple of years in its complete writing, unlike some sectors that propose to modify the existing carta to implement the necessary changes as soon as possible.

The Chilean social outbreak, on the other hand, has shown that the intensity of demand can only be satisfied with structural changes. The improvement of the current pension system -one of the clearest demands of the citizenry- must consider how it is possible to improve the current model of individual savings and move towards one that sees the old-age pension as a social right, for which it is intended to create a mixed system (individual capitalization and distribution).

The fate of the Chilean constitutional change process is still a half-told story.

In these convulsed days, one might think that neoliberalism -at least in the form disseminated by the so-called "Chicago School"- was born and could be improved in Chile.

CSAV will close its maritime vehicle transport business this year

The company will focus its efforts on the container ship business.

The South American Steam Company (CSAV) reported that it will stop providing maritime vehicle transport services within the next few months. 

According to the firm, this business has historically represented less than 1% of its total assets.

Along these lines, CSAV is informing all its customers of operational solutions to continue their transportation needs.

The General Manager of CSAV, Óscar Hasbún, explained that “the decision announced today aims to focus all our efforts on the container ship business, which has evolved according to our expectations and is our main asset through the German shipping company Hapag-Lloyd AG, one of the most efficient companies in the industry and with which we have a long-term commitment. ”

Source: Pulso

Who is Luis Lacalle Pou ?

Luis Lacalle Pou wins the elections in Uruguay and ends 15 years of leftist government. The heir who ended the Frente Amplio (Broad Front party) cycle and will be the youngest elected president in Uruguayan history.

Son of former President Luis Alberto Lacalle and great-grandson of the leader of the Luis Alberto de Herrera National Party, he arrives at the government on his second attempt.

Luis Lacalle Pou has the paradoxical virtue of being a familiar face, as a member of a family of political tradition, and a refreshing figure for his youth and the renewal he represents in the National Party (PN). With these ingredients he came to the presidency of Uruguay after defeating in a hard-fought ballot the official candidate Daniel Martínez and thus ended the 15-year cycle of the Frente Amplio (FA) in the Uruguayan government.

Lacalle Pou was born in a wealthy family in Montevideo. Second of four brothers, he studied in a private college and university where he studied law, although he never practiced. Now he also lives in a luxurious neighborhood in the Uruguayan capital with his wife and two children. Great-grandson of Luis Alberto de Herrera, the historic leader of the National Party that catapulted him to power, and the son of former President Luis Alberto Lacalle (1990-1995) and former Senator Julia Pou could only dedicate himself to politics.

Thus, two years after finishing his university studies, he threw himself into the political arena, being elected as a national deputy, a position he revalidated twice, the last in 2010. He has forged his entire career in Congress.

In 2014, he decided to go one step further and opted for a presidential candidacy. After prevailing in the primary elections, he was in the first round at a distance of 17 percentage points from the FA candidate, Tabaré Vázquez. In the ballot, he reduced the difference to 13, just as far away from Vázquez, who returned to power.

This year he decided to try again, after overcoming for the second time the internal screening of the National Party and with the Broad Front extremely weakened after fifteen years of government.

In the first round held on October 27th, Martinez took almost 10 points ahead of Lacalle Pou. However, the opponent managed to get the backing of the main opposition blocks, which outlined him as the big favorite for the ballot.

To his credit he has the popularity and political solvency of his family and, at the same time, with the fact of being the youngest presidential candidate in the country's history, a breath of fresh air just when Uruguayans seem to seek alternatives to the Frente Amplio .

In addition, he has declared himself willing to form a coalition government that would include members of the main parties: the National (center-right), the Colorado (center), Cabildo Open (ultra-right) and even the Broad Front (left).

On March 1st 2020, with 46 years, he will become the democratically youngest President-elect in the history of Uruguay.

Source: Infobae

Chile: Agreement for Peace and New Constitution

The government of Sebastian Piñera and the opposition reached an agreement for a new constitution.

It will be the first time in history that Chile has a Magna Carta born from the democratic debate, because the previous ones -that of 1833, 1925 and 1980- were preceded by a civil war, noise of sabers and a coup d'etat. It is not clear that a new Constitution manages to appease the protests, which exploded on October 18th as an expression of a good part of the citizens who feel outside the path of development of Chile in recent decades. The political class, however, is committed to deliver a solid signal to the public, which has no confidence in any of the democratic institutions, revealing a serious state crisis. "

What will the history books say about what happened in the early hours of this Friday, November 15th? First they will say the basics. That on this day 90% of the political forces signed an agreement called "For Peace and a New Constitution."

They will say that this understanding initiated a process to write a new Magna Carta for Chile, starting with a plebiscite in April 2020, where it will be voted whether or not Chileans want to replace the current Constitution, and how they want to do it.

But the historical texts will also have to add that the transversal agreement was signed just four weeks after a violent outbreak that destroyed a relevant portion of the Santiago Metro network and that included looting, vandalism, church burns, public service headquarters, and of political parties.

The new constitution will carry this "prequel" and probably that will force it with greater reason for its elaboration to reach very high levels of legitimacy. That is what the political forces that signed the agreement tried, by establishing that the new fundamental laws must be approved by 2/3 of the constituent body that is defined via plebiscite. And then the full text must be ratified by a referendum where there will be a mandatory vote.

Anyway, what will start from today is a discussion about how this new constitution should be.

On November 15th, Chile achieved a pact to change its Magna Carta. But what is the agreement really about and why is it historic?

After 28 days of massive protests -in which the citizens demanded to end with a "system of abuses" and greater equality-, the Chilean political class reached a historic agreement around one of the main demands of the protesters: the change to the Constitution.

The negotiation was not easy. Leaders of all political sectors -with the exception of the Communist Party (PC)- remained long hours in Parliament discussing and trying to agree on a formula that would leave everyone more or less satisfied.

"Tonight is historic for Chile," said Senate President Jaime Quintana. "We are responsible, indeed, for many of the injustices that Chileans have pointed out to us," he said.

Broadly speaking, the pact established the convening of a referendum in April 2020 and in which Chileans will have to answer two questions: first, whether or not they want a new Constitution; and, second, what kind of body should write it.

Although it is still difficult to predict whether or not this will calm the rage of the protesters, various public figures -and of different political sectors- have positively valued the agreement and called for "social peace."

But what is consensus really about? Why is it historical? 

1 - The most important points of the pact

The first most relevant point of the agreement is the realization of a plebiscite in April 2020 where Chileans must answer two questions:

* Do you want a new Constitution?

I approve or reject.

* What kind of body should write the new Constitution?

Constitutional mixed convention or constitutional convention.

What is the difference between both methods? While the "mixed constitutional convention" will be made up of 50% of parliamentarians in office and 50% of citizens elected for the occasion, the "constitutional convention" will consist only of citizens elected for that purpose.

With the result of the plebiscite, the election of the members that will make up any of these two instances will take place in October 2020 under universal suffrage. This will happen at the same time as the regional and municipal elections.

As a method of election, the agreement text states that "the same electoral system that governs the elections of deputies in the corresponding proportion will be used".

On the other hand, the pact of Chilean politicians points out that the term of operation of the constituent body in charge of drafting the new Fundamental Charter will be up to 9 months, extendable only once for three months.

This body must approve the voting rules and regulations of the same under a quorum of 2/3 (66.6%) of its members.

Sixty days after the delivery of the new constitutional text by this body, a ratifying referendum will be held with universal and mandatory suffrage.

Finally, the new Constitution will govern at the time of its promulgation and publication organically repealing the current Constitution (issued in 1980 during the Government of Augusto Pinochet).

Whatever the constituent body (mixed constitutional convention or constitutional convention), it must be dissolved once the task entrusted to it has been completed, that is, to write a new Fundamental Charter.

2 - Why is it historical ?

The political leaders who signed the pact considered this agreement "historic."

But how true is that statement?

The doctor of political science of the University College London (UCL), Javier Sajuria, explains to BBC Mundo that the historical character is due to the fact that "never in Chile has a Constitution been drafted by an elected body or with citizen participation."

"It has always been done by small groups, either experts or politicians, without much feedback during the process," says the academic.

On the other hand, there are those who say that it is historic due to the "breadth of the agreement", being signed from a party as conservative as the Independent Democratic Union (UDI) to members of the left-wing coalition called Frente Amplio.

Source: BBC, T13, El Libero, Author's notes

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.