Geopolitics

Chile And The Paradox Of (Relative) Prosperity

Chileans are fairly well off, but only in comparison to their Latin American neighbors. The country's success has also bred greater expectations.

Chile is now a high-income country but citizen purchasing power has not improved.
Chile is now a high-income country but citizen purchasing power has not improved.
Farid Kahhat

-Analysis-

LIMA — Defenders of Chile's economic model claim this was the first Latin American state to reach the threshold of prosperous, high-income countries. The country has reduced income inequalities (as gauged by the Gini index) in this century, and its social spending — both in per capita terms and in proportion to the size of its economy — is among the highest in Latin America. It is, they add, a country with a relatively high level of social mobility.

If these affirmations leave you skeptical you are not alone. I confess, I too considered them dubious. But instead of overlooking or distorting data that doesn't not fit my preconceptions (a habit psychologists call cognitive dissonance), I did what ought to be done in these cases: revise the relevant information.

Turns out the defenders of the Chilean model are, effectively, right. Which prompts the question: Why are so many Chileans dissatisfied with the present state of affairs? The information I checked yielded some possible explanations for the apparent paradox.

Chilean citizens does have a probability of joining the highest-earning 20% of the population but faces a greater probability of falling back down to the poorest 20%.

First, if Chile now qualifies as a high-income country, it must be compared with other such countries, not with regional states with mid-level earnings. That's because for high-income countries, social expectations are also higher. And in that context, Chile is a high-income country with one of the most unequal of income patterns, a relatively reduced tax burden (around 20% compared to the 34% average rate in OECD countries), and with the least social spending given the size of its economy (about 11% of the Gross Domestic Product compared to an average 20% in OECD countries).

While Chile has, in fact, reduced income inequalities this century (as have other regional countries), in 2015 it remained Latin America's sixth most unequal country, and 14th worldwide.

Chilean housing facades — Photo: Olivier Chatel

Regarding social mobility, a Chilean does have a relatively high probability of joining the highest-earning 20% of the population but faces a greater probability of falling back down. Downward social mobility, in other words, is more likely in Chile than ascent. While a citizen there has a 9% chance of seeing his or her income grow to the level of the top-earning 20%, there is a 16% probability of those revenues falling to levels earned by the poorest 20%.

Official figures in Chile show that half of all Chileans have an income equal to or less than the $562 a month, and with a relatively high risk of seeing it decline. That is, they have emerged from poverty but without attaining levels of consumption usually associated with the "middle class' condition. They're fairly likely, furthermore, to see their purchasing power decline.

This, in my opinion, is the key factor. As I explained in my book El eterno retorno: la derecha radical en el mundo contemporáneo (The Eternal Comeback: The Radical Right in the Contemporary World), downward social mobility is more conducive to political protest than poverty.

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Society

A Mother In Spain Denied Child Custody Because She Lives In Rural Area

A court in Spain usurps custody of the one-year-old boy living with his mother in the "deep" part of the Galicia region, forced to instead live with his father in the southern city of Marbella, which the judge says is "cosmopolitan" with good schools and medical care. Women's rights groups have taken up the mother's case.

A child in Galician countryside

Laure Gautherin

A Spanish court has ordered the withdrawal of a mother's custody of her one-year-old boy because she is living in the countryside in northwestern Spain, where the judge says the child won't have "opportunities for the proper development of his personality."

The case, reported Monday in La Voz de Galicia, has sparked outrage from a women's rights association but has also set off reactions from politicians of different stripes across the province of Galicia, defending the values of rural life.


Judge María Belén Ureña Carazo, of the family court of Marbella, a city on the southern coast of 141,000 people, has ordered the toddler to stay with father who lives in the city rather than with his mother because she was living in "deep Galicia" where the child would lack opportunities to "grow up in a happy environment."

Front page of La Voz de Galicia - October 25, 2021

Front page of La Voz de Galicia - Monday 25 October, 2021

La Voz de Galicia

Better in a "cosmopolitan" city?


The judge said Marbella, where the father lives, was a "cosmopolitan city" with "a good hospital" as well as "all kinds of schools" and thus provided a better environment for the child to thrive.

The mother has submitted a formal complaint to the General Council of the Judiciary that the family court magistrate had acted with "absolute contempt," her lawyer told La Voz de Galicia.

The mother quickly accumulated support from local politicians and civic organizations. The Clara Campoamor association described the judge's arguments as offensive, intolerable and typical of "an ignorant person who has not traveled much."

The Xunta de Galicia, the regional government, has addressed the case, saying that any place in Galicia meets the conditions to educate a minor. The Socialist party politician Pablo Arangüena tweeted that "it would not hurt part of the judiciary to spend a summer in Galicia."

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