BRASILIA/SANTIAGO/BUENOS AIRES (Reuters) – From the streets of Santiago and Quito to the ballot boxes of Buenos Aires, many South Americans have strongly rejected in recent weeks their leaders’ free market agendas, amid outcry that they are fueling inequality across the region.
With economic growth slowing sharply, job security fraying and holes in social safety nets widening, a wave of protest has arisen, spanning millions of people across the continent.
The end of the ‘pink tide’ of leftist leaders that swept Latin America in the 2000s gave way in recent years to a series of more broadly conservative governments.
But while each country has its own issues, there has been a common backlash against the "market-friendly” policies pursued by some of those governments – such as the privatizing of state assets, reduction of public subsidies, and exposure of more aspects of society to market forces.
In Chile, which introduced market reforms long before the rest of the region and is seen by many as a posterchild of neoliberalism, some 1 million people marched on Friday to protest the conservative economic agenda of billionaire President Sebastian Pinera, the largest protest since the country’s return to democracy in 1990.
That followed a week of riots in which at least 18 people were killed. The unrest began after the government raised the price of metro fares, but reflected long-simmering anger at its failure to alter Chile’s economic course despite growing inequality.
"There are two Chiles here. The Chile of people with money, and the Chile of the poor,” said Nathaly Melendez, 28, a manicurist in Santiago. "If you don’t have money, you have to wait in long lines for healthcare, education is terrible, students are all in debt.”
The protests in Chile came hot on the heels of violent demonstrations in Ecuador sparked by a proposed cut to decades-old fuel subsidies, which forced the government to temporarily relocate the capital to Guayaquil.
And in perhaps the most emphatic rejection of austerity and business friendly reforms, Argentine voters on Sunday removed conservative President Mauricio Macri in favour of Peronist Alberto Fernandez – a landslide backing for a decidedly more protectionist agenda.
Branko Milanovic, visiting professor at The City University of New York and an expert on inequality, said the uneven effects of globalization had sown discontent in Latin America.
Globalization in recent decades brought a surge in low-cost products from emerging countries like China and expanded the export markets for Latin America’s commodities, helping to fuel economic growth, but many across the region feel the rewards have accrued mostly to the wealthy.
By some measures, Chile is one of the most unequal countries in Latin America, though it also has the highest average income. According to Milanovic, the combined wealth of Chilean billionaires in 2015 was equal to a quarter of gross domestic product – the highest in the world, excluding tax havens like Cyprus, and around double the level of Mexico and Peru.
"If there is no social justice and minimum of social cohesion, the effects of growth will dissolve in grief, demonstrations, and yes, in the shooting of people,” Milanovic wrote.
The unrest coincides with a slide in Latin American economic growth in the wake of a long commodities-driven boom. The International Monetary Fund this month slashed its growth forecasts for the region this year to a dismal 0.2% – the second-slowest rate in the world, behind the Middle East and North Africa’s 0.1%.
While many people globally feel poorer as the world economy slows, in Latin America it is actually true, according to World Bank figures.
The Bank uses a variety of measures to track GDP per capita, depending on exchange rate fluctuations, and most of them suggest it is lower in the region today than it was five years ago.
According to its measure using current U.S. dollars, GDP per capita in Latin America last year was $9,023, down 13% from the peak of $10,405 in 2014.
With economic growth slowing sharply, job security fraying and holes in social safety nets widening, a wave of protest has arisen, spanning millions of people across the continent.
The end of the ‘pink tide’ of leftist leaders that swept Latin America in the 2000s gave way in recent years to a series of more broadly conservative governments.
But while each country has its own issues, there has been a common backlash against the "market-friendly” policies pursued by some of those governments – such as the privatizing of state assets, reduction of public subsidies, and exposure of more aspects of society to market forces.
In Chile, which introduced market reforms long before the rest of the region and is seen by many as a posterchild of neoliberalism, some 1 million people marched on Friday to protest the conservative economic agenda of billionaire President Sebastian Pinera, the largest protest since the country’s return to democracy in 1990.
That followed a week of riots in which at least 18 people were killed. The unrest began after the government raised the price of metro fares, but reflected long-simmering anger at its failure to alter Chile’s economic course despite growing inequality.
"There are two Chiles here. The Chile of people with money, and the Chile of the poor,” said Nathaly Melendez, 28, a manicurist in Santiago. "If you don’t have money, you have to wait in long lines for healthcare, education is terrible, students are all in debt.”
The protests in Chile came hot on the heels of violent demonstrations in Ecuador sparked by a proposed cut to decades-old fuel subsidies, which forced the government to temporarily relocate the capital to Guayaquil.
And in perhaps the most emphatic rejection of austerity and business friendly reforms, Argentine voters on Sunday removed conservative President Mauricio Macri in favour of Peronist Alberto Fernandez – a landslide backing for a decidedly more protectionist agenda.
Branko Milanovic, visiting professor at The City University of New York and an expert on inequality, said the uneven effects of globalization had sown discontent in Latin America.
Globalization in recent decades brought a surge in low-cost products from emerging countries like China and expanded the export markets for Latin America’s commodities, helping to fuel economic growth, but many across the region feel the rewards have accrued mostly to the wealthy.
By some measures, Chile is one of the most unequal countries in Latin America, though it also has the highest average income. According to Milanovic, the combined wealth of Chilean billionaires in 2015 was equal to a quarter of gross domestic product – the highest in the world, excluding tax havens like Cyprus, and around double the level of Mexico and Peru.
"If there is no social justice and minimum of social cohesion, the effects of growth will dissolve in grief, demonstrations, and yes, in the shooting of people,” Milanovic wrote.
The unrest coincides with a slide in Latin American economic growth in the wake of a long commodities-driven boom. The International Monetary Fund this month slashed its growth forecasts for the region this year to a dismal 0.2% – the second-slowest rate in the world, behind the Middle East and North Africa’s 0.1%.
While many people globally feel poorer as the world economy slows, in Latin America it is actually true, according to World Bank figures.
The Bank uses a variety of measures to track GDP per capita, depending on exchange rate fluctuations, and most of them suggest it is lower in the region today than it was five years ago.
According to its measure using current U.S. dollars, GDP per capita in Latin America last year was $9,023, down 13% from the peak of $10,405 in 2014.
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