Chile is a victim of its own success | The Business Standard
Skip to main content
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
The Business Standard

Friday
June 13, 2025

Sign In
Subscribe
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
FRIDAY, JUNE 13, 2025
Chile is a victim of its own success

Economy

Noah Smith
31 October, 2019, 07:00 pm
Last modified: 31 October, 2019, 07:14 pm

Related News

  • US cities brace for more protests as parts of Los Angeles placed under curfew
  • Trump warns protests at Army parade will be met with force
  • US Marines arrive in LA; California governor warns 'democracy under assault'
  • Protesters stage demo in Rajshahi blocking railway tracks, demanding station renovation, intercity train stop
  • Australian reporter shot with rubber bullet while covering LA protests 

Chile is a victim of its own success

If Chile is so successful, why are the streets exploding in rage? Chileans might be feeling more economically precarious. They may feel that a narrow elite dominates the political process and denies them a true voice.

Noah Smith
31 October, 2019, 07:00 pm
Last modified: 31 October, 2019, 07:14 pm
Getting to the other side. Photo: Getty Images via Bloomberg
Getting to the other side. Photo: Getty Images via Bloomberg

For more than two weeks, protesters have thronged the streets of Chile's major cities. Initially angry over a rise in train fares, the protesters have remained in the streets to rail against inequality, poverty and corruption. This might lead many casual news readers to conclude that Chile is one more broken emerging-market country, mired in economic stagnation and authoritarian rule. The opposite is true: Chile has been one of the developing world's biggest success stories.

From 1973 to 1990, Chile was ruled by the right-wing military dictator Augusto Pinochet. Though hardcore free-marketers applauded his laissez-faire policies, Pinochet's economic record was fairly underwhelming. The dictator encouraged a real estate bubble that went bust and took the economy with it, and his fiscal austerity made the slump worse. But in the years since democracy was restored in 1990, the country has enjoyed a long run of steady growth. It has not only outpaced its Latin American neighbours but has closed a little of the gap with the US as well:

This growth is even more impressive given Chile's dependence on resource exports. It has avoided both the cyclical booms and busts, and the political dysfunction all too common among commodity-based economies. Instead, Chile has managed its natural endowments with skill and prudence; even the Great Recession caused only a brief blip.

The Business Standard Google News Keep updated, follow The Business Standard's Google news channel

Of course, economic growth isn't very important unless it's broadly shared. Like most countries in Latin America, Chile is very unequal, with a Gini index of 46.6 in 2017, as compared to 41.5 for the US (100 indicates maximum inequality). But, thanks in part to increasing investments in education, Chile is substantially less unequal than it was in 1990:

Thanks to continued growth and falling inequality, Chile's relative poverty rate — defined as the percentage of people living on less than half of the median income — is down to just 16.1%, lower than in the US and barely higher than in Japan.

Meanwhile, the country is doing well on a large array of social indicators. Its life expectancy has risen, and now exceeds that of the US:

On measures of political freedom, Chile also does well. Freedom House, a US-based think tank, gives Chile a combined political and social freedom score of 94 out of 100, equal to Germany; the US scores a mere 86. Reporters Without Borders, a France-based think tank, rates Chile 46th in the world in terms of press freedom, ahead of the US at 48th. On corruption, Chile fares a little worse, with the German-based think tank Transparency International giving it only 67 out of 100 on its corruption perceptions index, slightly lower than the US but still ahead of South Korea and Taiwan (100 being the least corrupt).

So to an external observer, Chile looks like a very successful upper-middle-income country — free, prosperous, healthy and doing a good job of tackling its inequality problem. Protests or no protests, Chile's leaders and its democratic system deserve congratulations and admiration for these achievements.

But the question inevitably follows: If Chile is so successful, why are the streets exploding in rage? One possibility is that the common metrics cited above simply miss some important elements of social or economic failure. Chileans might be feeling more economically precarious. They may feel that a narrow elite dominates the political process and denies them a true voice. Or they might simply care a lot about prices of certain daily goods, such as train tickets.

Alternatively, protests like Chile's might simply be an outgrowth of the rise of social media. In his book "The Revolt of The Public and the Crisis of Authority in the New Millennium," former CIA analyst Martin Gurri theorizes that social media has made large protests so easy to start that essentially any reason for discontent -- anger about history, a vague feeling of being cheated by elites, disappointment with government's failure to live up to grand promises -- now tend to spill into the streets.

But it's possible that Chile's very success during the past three decades is what's driving discontent now. Although Chile's growth was fast for 22 years, it has slowed down recently, possibly due to falling commodity prices. In 2018, real per capita income was only 5% higher than in 2013. And most of the drop in inequality ended by 2006. A generation raised on expectations of steadily rising living standards, burgeoning freedom and increasing equality might be enraged that those expectations weren't fulfilled.

This idea, called a revolution of rising expectations, has been used to explain protests and revolutions across the centuries, from the French Revolution to the unrest of the 1960s and 1970s. It implies that rapid bursts of progress followed by pauses tend to stoke uprisings. Chile may well be a victim of its own success. If that's the case, Chile has little option but to wait out the unrest.

Disclaimer: This article first appeared on Bloomberg.com, and is published by special syndication arrangement.

Top News

Chile / protest

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Smoke rises as a building stands damaged in the aftermath of Israeli strikes, in Tehran, Iran, June 13, 2025. Majid Asgaripour/WANA (West Asia News Agency) via REUTERS
    World reacts to Israeli strike on Iran over nuclear activity
  • Rescuers work at the scene of a damaged building in the aftermath of Israeli strikes, in Tehran, Iran, June 13, 2025. Majid Asgaripour/WANA (West Asia News Agency) via REUTERS
    Israel hits Iran nuclear facilities, missile factories; Tehran launches 100 drones in retaliation
  • The rear of an Air India Boeing 787 Dreamliner plane in Ahmedabad, June 12, 2025. Central Industrial Security Force via X/Handout via REUTERS
    Air India plane crash in 33 seconds, 260 dead, 1 miracle survival: What we know so far

MOST VIEWED

  • Wreckage of a Boeing 787 Dreamliner showing part of its registration "VT-ANB" in Ahmedabad, India, June 12, 2025. REUTERS/Amit Dave
    Air India Dreamliner crashes into Ahmedabad college hostel, kills over 290
  • File Photo of Chief Adviser Muhammad Yunus: UNB
    Prof Yunus to receive Harmony Award from King Charles today
  • Bangladesh Bank Governor Ahsan H Mansur. TBS Sketch
    Bangladesh mulls settlements with tycoons over offshore wealth: BB governor tells FT
  • Railway seeks Tk2,000cr foreign loans to revive coach assembly, modernise workshops
    Railway seeks Tk2,000cr foreign loans to revive coach assembly, modernise workshops
  • UK Prime Minister Keir Starmer, Chief Adviser Muhammad Yunus
    Disclosure of unconfirmed Yunus-Starmer meeting shows ‘diplomatic imprudence’: Analysts
  • Brother sues Latifur's daughter, widow over alleged forgery to seize control of Transcom
    Brother sues Latifur's daughter, widow over alleged forgery to seize control of Transcom

Related News

  • US cities brace for more protests as parts of Los Angeles placed under curfew
  • Trump warns protests at Army parade will be met with force
  • US Marines arrive in LA; California governor warns 'democracy under assault'
  • Protesters stage demo in Rajshahi blocking railway tracks, demanding station renovation, intercity train stop
  • Australian reporter shot with rubber bullet while covering LA protests 

Features

Among pet birds in the country, lovebirds are the most common, and they are also the most numerous in the haat. Photo: Junayet Rashel

Where feathers meet fortune: How a small pigeon stall became Dhaka’s premiere bird market

1d | Panorama
Illustration: Duniya Jahan/ TBS

Forget Katy Perry, here’s Bangladesh’s Ruthba Yasmin shooting for the moon

2d | Features
File photo of Eid holidaymakers returning to the capital from their country homes/Rajib Dhar

Dhaka: The city we never want to return to, but always do

4d | Features
Photo collage shows political posters in Bagerhat. Photos: Jannatul Naym Pieal

From Sheikh Dynasty to sibling rivalry: Bagerhat signals a turning tide in local politics

5d | Bangladesh

More Videos from TBS

What did Iran say in response to the Israeli attack?

What did Iran say in response to the Israeli attack?

11m | TBS World
Israel strikes Iran nuclear facilities

Israel strikes Iran nuclear facilities

51m | TBS World
Banks' estimates were wrong: Bangladesh Bank spokesperson

Banks' estimates were wrong: Bangladesh Bank spokesperson

16h | Podcast
What exactly happened to the ill-fated Boeing aircraft?

What exactly happened to the ill-fated Boeing aircraft?

17h | TBS World
EMAIL US
contact@tbsnews.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Advertisement
  • Privacy Policy
  • Comment Policy
Copyright © 2025
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net