The overwhelming support for a change to the Chilean constitution that saw 78% of registered citizens vote in favour of reform could have profound consequences for the rest of Latin America and beyond.
As the results of the referendum came in, it became clear that the vast majority of the country’s 18 million inhabitants had voted in favour of reforming the Chilean constitution, which had been established in 1980 during the General Augusto Pinochet regime. The result ushers in a two-year process of drafting a new constitution that will need to be approved by popular vote in 2022.
Chile was long considered the darling of Latin America by western governments and multinational businesses. With more free trade agreements in place than any other country it was favourably regarded as a stable base from which to set up operations on the continent. However, Chile’s reputation as a safe beach head took a resounding blow last October when a protest by high school students over a 3-cent increase in subway fares boiled over into a full-scale social revolution.
Tens of thousands took to the streets around the country to protest against endemic inequality. The Government quickly reversed the fare rise, but to no avail. The fuse had been lit on a powder keg of pent-up national frustration. Popular demands included abolishing the private pension fund system, increasing state investment in education and civil works, and defending indigenous rights. Protests quickly turned violent in many cities around the country, with buildings and subway stations torched and billions of dollars of damage inflicted. To date 30 people have died, and many thousands have been injured in the violent protests.
President Sebastian Piñera, a conservative billionaire, who was re-elected in 2018, had been against re-writing the Chilean constitution. But under pressure from the popular uprisings agreed last November to hold the referendum. After a Covid caused delay, the populace had their chance to vote last week.
“Starting today, we must all collaborate so that the new constitution is the great framework for unity, stability and the future,” said Piñera.
The economic model for the constitution established under Pinochet was originally much admired and replicated around Latin America and in emerging nations further afield. Principally written by Pinochet’s advisor Jaime Guzman, the 1980 charter was built around the neoliberal philosophies of US economist Milton Friedman. Advocating minimal state intervention and allowing the private sector to control public services.
Chile’s pension system of defined contributions, which is the cause for so much of the current ire, was for decades regarded as the neoliberal template for emerging market countries establishing their welfare systems.
As popular movements gain traction the world over, Chile’s current predicament seems likely to be repeated by many of those that copied the Pinochet-Friedman blueprint.