Pre-Peru Economic Musings

I’m heading out for Peru tomorrow to check out Cusco and Machu Picchu, completely sans guilt about missing a week of class.  Being an anthropology major allows me to justify just about any sort of travel as “experiential learning,” especially in this case since I have a test on Incan culture and religion the day after I get back, so what better way to prepare than by seeing the Sacred Valley in person? Right? Right. Anyway, I’m feeling economical today, and so before my somewhat feisty Internet goes out again I want to start a conversation about the economic situation here, especially as related to poverty and inequality. The following information come from the 2008 United Nations Human Development Report website, so pop on over and brush up on your global statistics if you are so inclined.

  • Using the UN’s Human Development Index (a combined measure of education, life expectancy, and income), Chile ranks 40th out of 179 countries, just between Poland and Slovakia
  • There is a high degree of income inequality: using the UN Gini coefficient as a measure, Chile ranks 40th in the world (as in, 39 countries have less income inequality than Chile).
    • A Gini coefficient of 0 represents absolute income equality, while 100 represents absolute inequality. Chile’s is 54.9.
  • The GDP per capita is $12,997 (56th in the world), compared to $41,890 in the U.S (2nd in the world).
  • According to a study on socioeconomics conducted by the Chilean government in 2006, 13.7% of the population was living in poverty as compared with 38.6% in 1990 and 45.1% in 1987 during Pinochet’s military regime.
  • The minimum wage is $144.000 pesos per month (about $260 US dollars)

The Concertación government, a center-left coalition that has been in power since 1990, has made significant social and economic progress since the end of Pinochet’s regime, and Chile is one of the most economically and politically stable countries in Latin America. However, it still faces significant problems with poverty and inequality. One article I read for my Chilean Politics and Economics class (“Chilean Economic Policy under the Concertación: The Triumph of the Market?” by Lois Hecht Oppenheim if you want a bit of policy analysis) holds that the “Chilean miracle” that resulted from a decade and a half of militant neoliberalism under Pinochet, followed by only minor adjustments has left a market-and-export based economic model that has overlooked other areas of social improvement like education and access to it, gender equality, and classism. Furthermore, Chile’s economy is almost entirely based on primary products: fruit, wine, copper, and nitrates. Unless Chile can eventually diversify it’s economy to include services, it is unlikely to see much more economic growth.

Along with this, chilenos I’ve talked to have mentioned a fairly rigid system of social classes. The other day, my host mom was describing the difficulty of moving up from lower middle class as a direct product of a lack of educational access. College tuition is prohibitively expensive for many students, even those with great academic potential. Scholarships exist, but are limited. Families that can afford it send their children to private schools, though public schools and state-subsidized private schools (similar to charter schools in the U.S) are more common, and suffer from underfunding and overcrowding. Classism is a much bigger problem in Chile than racism or ethnic discrimination, since 90% of the population shares Mestizo (mixed European and indigenous) heritage. Friends that volunteer at Cerro Navia Joven, a nonprofit community organization that serves the a poor area in the western sector of Santiago, reported that many of the people at the center need to lie about where they live in order to get hired anywhere. To admit to being from a bad neighborhood would doom them to unemployment.

Much, much more on these topics to follow. I just wanted to put a few themes up for now, so stay tuned!


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One Comment

  1. Adnan / October 7, 2009

    This is a great conversation starter, Julia. What kind of a viewpoint does the “upper class” take on this Classism issue? Do they also see this as a problem?

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