Why Aylwin's "Growth With Equity" Programs Did Not Make Chileans More Equal

This is a mural in Rengo, portraying an incident in which members of the Chilean army murdered impoverished farmers who had been vocal in their support of Allende. They lived in the countryside surrounding Rengo.

President Patricio Aylwin, the leader of El Concertacion was inaugurated in 1990 after Pinochet's rule ended. While Pinochet's programs grew Chile's economy, 8% annually, 44% of Chileans still lived in extreme poverty by the end of Pinochet's rule, twice as high as it had been when Pinochet initally took power. This is largely because Pinochet lowered social spending and privatized social programs. He more or less caused the many important social programs that should be run by the central government for their citizens to become dependent on the highly undependable free market economy that he created. This is the structure that Aylwin unfortunately inherited. Aylwin thought that Chile not only needed economic growth, but also social programs to support the many impoverished sectors of Chilean society. He felt that it was important to distribute the wealth more evenly in order to stabalize a very new and unstable democracy. He did attempt this daunting task by first implementing tax reform, using international loans and grants to increase spending by 17%. They used this money mostly targeting the lower class by expanding health care, rasing the minimum wage, and creating basic education programs. This entire effort was largely decentralized, placing most of the responsibility in the hands of local towns through Solidarity and Social Investment Fund(FOSIS)

whose primary objective was to fund local social programs. It didn't actually fund programs on it's own. Unfortunately, FOSIS was more connected to NGO's than the local government industries. Because of this, many of the programs that FOSIS started were short and made little impact on many impoverished communities. However, the new government was succesful when it created a labor reform law, allowing unions, protection against lay-offs, and strikes, all of which had been forbidden under Pinochet.

For the first three years of Aylwin's presidency, life in Chile became better, as the level of extreme poverty decreased from 44% in 1990 to 23% in 1994. However, after those first three years nothing more had changed. In fact, after the first three successful years of the Aylwin presidency, the disparity between the rich and poor began to increase again, and many other of his social programs proved to be ineffective. Eduardo Frei, Alwyin's succesor,(and recent losing candidate in this year's election,) attempted to create more social programs but was met with opposition from businesses and right wing groups, and ultimately many of his ideas failed. FOSIS did not help the most impoverished people. The middle class, which had suffered economically under the Pinochet regime, did not find any help with La Concertacion's programs, either. This is because when Pinochet reduced taxes, privatized the social sector, and lowered state spending, he transfered most of Chile's investments into the private sector. Thus, businesses and the most wealthy benefited from this arrangement. However, those that most needed social aid only could resort to government funded programs because they could not afford those offered from the private sector. Unfortunately, there was so little aid given to those that needed it because there was so little money in the government. Lamentably, the government of La Concertacion had been too hesitant to change the inneficient setup of social programs that Pinochet had created with his neoliberal policies. Neither Aylwin nor Frei ever attempted to change it, by giving more power to the central government. Lesson Learned: Free Market Economy and Social Programs should not mix. If they do, social programs will become another agent of the free market economy. Thus, their purpose as a safety net for those who need help is eliminated.

source: http://www.hartford-hwp.com/archives/42a/index-da.html

In Pursuit of "Growth With Equity": The Limits of Chile's Free Market Social Reforms

By Pilar Vergara

Globalization is NOT Westernization

In the article, " Mcdonald's in Hong Kong", James Watson argues that a new lifestyle is emerging in Hong Kong that is postmodern and transnational. McDonalds has spread to this culturally rich city, and has become just another example of the transfer of foreign goods, products, and superficial aspects of culture. These Chinese are eating the big macs, yes, but they are still Chinese. One's culture is not only defined by what one eats, wears, listens to, watches on tv, but also is defined by the manner in which one thinks, and relates to those around them. While this aspect of culture is always much more dificult to see, it is there, and can be radically different country to country. This aspect of culture, I feel, is far from changing. In the article "How to Judge Globalism", Amartya Sen explains that "globalization has contributed to the progress of the world through travel, trade, migration, spread of cultural influences, and dissemination of knowledge and understanding". Throughout world history, (not just in the last 30 years,) globalization has helped advance many countries in the world, those in Europe, those in East Asia, those in South America... The spread of understanding is one of the great benefits of globalization. Where would the world be if paper never left China, if decimals never left India? it is in every nations best interest to absorb what other nations have to offer them. By modernizing, they are not losing their culture. Yes, they can be exposed to other cultures, through foods, music, movies, and other endless physical entities that are transferred country to country, and these aspects, while rather superficial, can allow all members of all cultures to be more aware that there are other ways of living and thinking, outside of their own. But they can still retain their own culture.

There is one critique I have on globalization. The immense amount of wealth being produced still is not being represented in the destitute areas of the world, which remain the majority. I feel like globalization is not inherantly flawed, but rather needs to develop, as, this wave of globalization is still recent. I will give a historical example....this might not relate so much but oh well: During the gilded age, Great Britain entered in the 2nd industrial revolution that created all of these wonderful goods and forced the majority of its people into living horrible, humiliating, and short lives. Then came progressivism, and Industrialization evolved and restrictions were created. Employers were now not allowed to employ young children, minimum wages were created, as were maximum work days. People suffered a little less. I feel that this could happen with globalization. Maybe. Maybe I am to ideological. But it would be a solution. If the better off nations of the world come together and realize that globalization has given them a whole lot more than countries like Uganda, then maybe somehow they could create restrictions and rules on what they can and cannot do on the world stage. Westernization is not happening, but exploitation still is. If there just was some sort of international system (UN...) to regulate globalization somehow, then I bet that more people could enjoy the benefits of globalization, and less people in the United States would be complaining about all those "goddamn" foreigners!!! in Honduras and in China takin' all their jobs...
I should learn more about economics...

Bienvenido Pinera: Chile has voted.

The Chilean presidential elections took place this past Sunday. Pinera, la Alianza, won with 52% of the vote, as Frei, El Concertacion only managed to win 48 % of the popular vote. This is the first time that a Rightist has been democratically elected in Chile since Jorge Alessandri, 52 years ago. (Obviously, Pinochet was not quite **democratically elected**. The feelings in Chile right now seem to be comparable to the national sentiments in the United States after Obama won the presidency... almost strikingly so. The reason that Pinera won is because there is a slight majority of Chileans who are sick of the same old order that has governed since Pinochet in 1990. Weeks before this election, many displayed the Pinera star logo, and proudly chanted in every possible place Pinera's rallies: "Sumate! Sumate! Sumate al cambio! Vota para el cambio!" ( Add yourself to the change! Vote for the Change!) Honestly I am still not exactly sure what this "change" entails, and it seems quite vague. Shortly after learning he had won, Sebastian Pinera declared "Hoy, una imensa mayoria de chilenos hablo con claridad, con fuerza, y opto por el cambio, el futuro, y la esperanza". (Today, an large mayority of Chileans spoke with clarity, with strength, and opted for change, the future, and hope). With respect to how Chileans voted overall: An independent, Ominami, who had run in the first round months prior, had been eliminated because he had obtained less votes than Frei and Pinera. (In this round, only the top two (Frei, Pinera,) were voted on, in order to have one gain a majority.) The majority of the voters who had voted for Ominami in the first round, cast their votes for Pinera, this round, lending him quite an advantage. Pinera gained more votes in 10 of the capital cities, (Arica, Iquique, Valparaiso, Santiago, Rancagua, Concepcion, Temuco, Puerto Montt, Coyhaique, and Punta Arenas.) While, Frei, only won in 5 capital cities, (Antofagasta, Copiapo, La Serena, Valdivia, and Talca). Pinera won every community in two regions, Tarapaca, and Aisen, two sparsely populated regions in the far north and south, respectively. In various sectors of Santiago, (Pucon, Las Condes,) Pinera won roughly 70 %. (Santiago is integral, considering it contains roughly 60% of the Chilean population). Surprisingly for me, in my region, Region VI, Region O'Higgins, where Rengo is, a few more people voted for Frei than for Pinera. I thought that Pinera would win for sure, considering the excitement about him was imminent: the number of lifesize Sebastian Pinera cardboard cutouts were endless, as were the Pinera stars being handed out every day, as were the words "Sumate! Sumate! Sumate!" being yelled through the streets..." I not once saw any cardboard cutout of Eduardo Frei, and I don't know if he had a logo like Pinera did...he probably did have one too, but it just goes to show as evidence of how apathetic Chileans were about his return that I don't even know what his logo was...) The 48% that did vote for him most likely still believe in the ideals behind the groups in El Concertacion, and begrudgingly voted for an uninspiring politician who unfortunately was the one to represent these ideals. El Concertacion is in desperate need of a makeover.


**When I write Pinera, the n should be an "enye"...I just have no idea how to write that on this keyboard...just for future reference**