Chilean 'Model' Is Shaken, but Very Much Alive | Chile

Chilean 'Model' Is Shaken, but Very Much Alive
Andres Oppenheimer

Critics of Chile's free-market democratic model had a feast in recent days with images of massive student strikes and a two-day general strike that made headlines across the world. But their glee may be premature, and short-lived.

Chile is not Libya, nor Egypt, nor Greece. Judging from what I saw in recent days in this country, and from what I heard in interviews with people ranging from Communist Party student leader Camilla Vallejo to right-of-center President Sebastian Piñera, Chile remains one of Latin America's biggest success stories, and will most likely continue to be.

Granted, Chile's political system has been shaken like few times before, and the country has to urgently address its social inequality problems, as well as address many of the students' legitimate concerns regarding higher education tuition costs. But, overall, Chile's achievements over the past 20 years of democracy are impressive.

Consider:

- Since 1990, Chile has reduced poverty from 45 percent to 15 percent of the population, by most standards more than any country in the region.

- Chile is planning to become the first Latin American country to join the world's most advanced economies -- those that have a per capita income of more than $25,000 a year -- by the end of this decade.

- Despite suffering a devastating earthquake in early 2010, Chile's economy grew by 5.2 percent last year, and a whopping 8.2 percent during the first six months this year.

- Inflation is at about 3 percent, one of the lowest rates in Latin America.

- Credit rating agencies rank Chile with an A+, while most rankings of political stability, rule of law, and corruption control place Chile way ahead of other Latin American nations.

- Chile ranks No. 1 in Latin America in the PISA student achievement test of 15-year-old students in math, science and reading comprehension.

To be sure, despite the huge reduction of poverty, the gap between rich and poor remains wide: 54 percent of the country's income is held by the richest 20 percent of the population. Chile is the fifth most unequal country in Latin America, behind Ecuador, Brazil, Bolivia and Haiti, according to United Nations figures.

And as I witnessed here, the student protesters enjoy wide popular support. When I walked with Camila Vallejo -- the stunningly attractive and charismatic 23-year-old Communist Party student leader -- people on the street stopped her as if she were a rock star.

But while most Chileans sympathize with the students' demands for more affordable university education, they don't share their demands for "changing the economic model." Vallejo's Communist Party gets 5 percent of the vote in national elections.

In a wide-ranging interview at the presidential palace, Piñera told me that "far from reflecting a collapse of the Chilean model, what these protests reflect is the opposite: considering the good results of the Chilean economy, people are demanding things that exist in developed countries."

Piñera said he inherited sky-high university tuition rates -- as well as Chile's remaining inequity problems -- from the left-of-center governments that ruled Chile over the past two decades. As for the student protests, he noted that only 200,000 of Chile's 3.5 million students are on strike.

Why do you think your popularity has fallen from over 50 percent two years ago to 26 percent today? I asked. Piñera said Chileans have become "much more severe in their judgment of politicians in general. True, the government's popularity has decreased, but the opposition's popularity has collapsed: it's below 20 percent."

On Friday, two days after we spoke and after one 16-year-old student died in the protests, Piñera called for a "dialogue in good faith" with the students for the first time since the protests began, and offered new measures "to make sure that no Chilean youth is left without higher education for lack of resources."

My opinion: Chileans rightly support the students' specific demands for more affordable higher education, but won't support "changing the economic model" that -- largely thanks to responsible left-of-center governments -- has led Chileans to live better in recent decades.

Judging from the polls, and from what I heard here, they want the Chilean model to make a much-needed correction and transfer more of the country's recent prosperity to the needy, but they won't support destroying a vibrant democracy that produced sustained growth for the past two decades.

Twitter: @ihavenet