Will the LatAm backlash against free-market policies persist?

One morning in December, Belen Larrondo set out, as she had dozens of times over the past two months, to meet fellow students and activists outside a metro station in Santiago, Chile.

She went with peaceful pleas for political transformation to redress staggering income inequality in her country. But she also went prepared for confrontation, armed with goggles to shield her eyes from projectiles and baking soda in case she got hit with tear gas.

An architecture student and the president of the Catholic University of Chile’s student federation, Larrondo knew full well the potential for state security agents to respond violently to her and other protesters – as they had before when trying to tamp down the social unrest that has swept the country since October.

“If something happens to me, my family will die,” Larrondo told Al Jazeera during a telephone interview from her home in Santiago. “But unfortunately, it’s something that we have to do. And fear is not going to stop me. Because I think there are things you have to fight for.”

That sentiment rippled across parts of Latin America in 2019 as movements of varying scale and mechanism captured and channeled deep-seated discontent rooted in questions about inequality, democracy, and what it means to lead a dignified life.

The outrage and frustration that has spilled onto the streets sprouted from seeds planted long ago. In some cases, the signs were ignored. In others, they were overshadowed by other debates. And while there is not wholesale cohesion, experts point to the repudiation of austerity and neoliberal, free-market policies as one common thread that could continue to stoke discontent as a new decade dawns.

Contagion effect

Chile, a country that had previously cultivated an image of stability and economic prosperity in South America, has seen visceral protest movements.

High school students who jumped subway turnstiles to demonstrate against a transit fare hike struck a deep chord with the nation on October 18, inspiring thousands of Chileans to take to the streets almost every day since.

At least 27 people have died, thousands have been arrested or injured, and property damage is widespread.

But the protests carry on – a leaderless movement fuelled by a wellspring of discontent with an economic system that has birthed inequality.

In Chile as in other parts of Latin America, frustration with economic policies that promise to pile more financial pain on low- and middle-income segments of society has boiled over into demonstrations calling to upend the status quo.

In Ecuador, indigenous-led protests brought the country to a standstill over fuel subsidy cuts and other austerity measures.

In Argentina, people who had been marching in the streets over growing levels of poverty took their anger out at the ballot box, removing the market-friendly President Mauricio Macri and installing a centre-left Peronist, Alberto Fernandez, in his place.

During his inauguration speech in December, President Fernandez blamed his country’s fragile economic and social fabric on the “the adventure” of his predecessor – a reference to the growing rejection around the region against the neoliberal economic model.

“There is definitely a contagion effect; I do see it very clearly,” said Silvia Otero Bahamon, an assistant professor of political science at Universidad del Rosario in Bogota, Colombia.

Colombia saw its own wave of unprecedented anti-government protests at the end of November.

Motivated by a range of issues that included discontent over free-market policies, hundreds of thousands of Colombians took to the streets, only to be met with force by the conservative government in power.

“Especially with ordinary citizens, they see what is happening in Chile, they say, f*** it, let’s go to the streets,” said Bahomon. “It’s working for them there, what if it works for us too?” 

‘A dignified life’

Leaders in Chile expressed surprise at the intensity of protests that broke out in October. But Chilean economist Marco Kremerman told Al Jazeera that the statistics have long indicated that an explosion of discontent was just waiting to happen in a country he says has “two faces”.

“In terms of macroeconomics – the growth of the economy, the generation of wealth, a controlled level of inflation, low levels of public debt – the numbers are good,” said Kremerman, who works with the think-tank Fundacion Sol, in Santiago. “It’s as if you had a house, and from the outside it looks very well painted. It has a very nice exterior. But the problem is inside the house. Inside the house there are many fractures. The statistics on salaries, pensions and indebtedness are very serious.”

The Organisation for Economic Co-operation and Development (OECD) ranks Chile as one of the most unequal countries in its membership, with an income gap that is 65 percent wider than the organisation’s average.

More than half of Chileans earn the equivalent of less than $500 a month, said Kremerman, noting that about half of the pensioners in the country’s privatised system collect pensions of around $230 a month. Chile’s highly privatised economy, which includes education and healthcare, is rooted in free-market policies implemented during the 17-year dictatorship of General Augusto Pinochet, who was in power from 1973 to 1990.

Kremerman says inequality was papered over in Chile thanks to growing levels of household debt as people borrowed to pay for housing and other necessities such as food and clothing.

The relentless economic pressure on the country’s low- and middle-income classes helps explain why the student subway fare protest moved a much wider segment of Chilean society to demand reforms aimed at securing “a dignified life”, as Larrondo and Kremerman put it.

The mostly peaceful demonstrations have included bouts of looting and destruction by a small subsection of vigilante protesters who have torched buildings and damaged the Santiago metro. They have also been met with forceful repression by state police, who are accused by various organisations -including the United Nations – of violating human rights.

Jennifer Pribble, an associate professor of political science and global studies at the University of Richmond in the United States, sees the crisis in Chile not simply as a backlash against neoliberalism, but as a reaction to the failure of the centre right and the centre left to respond to demands for reform stretching back to 2006 and 2011, when students took to the streets to demand more spending on public education.

Prior to those movements, mobilisations had been largely muted in Chile, following a dictatorship that had killed, tortured, disappeared and disarticulated members of civil society.

“It is still fundamentally seen as a system that was built by a dictator to maintain a conservative democracy and to limit the ability of democracy to respond to citizen demands and to promote citizen engagement and participation,” said Pribble.

In addition to calling for the reform of education, pensions and the healthcare system, citizens have demanded an overhaul of the constitution. A plan is in place, proposed by a coalition of political parties, that will see Chileans vote in an April plebiscite on whether they want to rewrite the constitution, and how to go about it.

Some protest demands are getting a response from government. On Sunday, the centre-right Chilean President Sebastian Pinera announced a proposal to reduce healthcare wait times and lower the cost of medicine.

‘A pretty flag to burn’

Argentina, by contrast, is known for greater levels of public spending in the region, but has been living through a painful recession, for which former President Macri has been blamed.

Poverty sharply went up during his tenure. It is now more than 40 percent, according to the Catholic University of Argentina, with six out of every 10 children and youth in the country living below the poverty line. (The latest count from the National Institute of Statistics and Census in Argentina pegged the poverty figure, in the first quarter of 2019, at 35 percent).

The country’s debt has soared, and average Argentines have watched their purchasing power evaporate due to rampant inflation. 

President Fernandez says Macri left Argentina in “virtual default” due in part to a whopping $57bn bailout deal with the International Monetary Fund. Conversations to renegotiate terms with the IMF have started. Fernandez said the country wants to settle its debts, but it needs to grow the economy to be able to do that. In comments last week, he argued that a “social pact” struck with trade unions and businesses gives him more leverage in the IMF talks.

“The creditors took on a risk by investing in a model that has failed all over the world, time and again,” he said during his inauguration speech. “To reorganise the economy, we need to leave the logic of more cuts, more recession, and more debt that the last four years have brought us. In this reorganisation, we’re going to protect the most vulnerable sectors.”

Days after Argentina’s new government assumed office, it started to make good on that promise to protect the vulnerable. Economy Minister Martin Guzman, a young academic who has worked alongside Nobel laureate economist Joseph Stiglitz, announced a series of measures, including bonuses for pensioners, higher taxes on the wealthiest, freezing of utility prices, and currency controls.

“In the short term there has to be a concrete response to the situation of hunger that is back in Argentina, of families who can’t complete the four daily meals, and all of that is a challenge,” said Silvia Saravia, national coordinator for the group Barrios de Pie, one of the organisations that staged massive protests against the Macri government. “They have to be urgent responses.”

But Argentine economist Eduardo Levy Yeyati sees the discontent that swept Macri from office not as a rejection of the neoliberal model, but of the government of the day that bore responsibility for the crisis, adding that the country has long suffered from problems with deficits and external debt. Chile, and Colombia, by contrast suffer from problems rooted in people legitimately demanding access to services like education, healthcare or housing, Yeyati argues. 

“I think neoliberalism is a pretty flag to burn during these demonstrations,” said Yeyati, the dean of the School of Government at Universidad Torcuato Di Tella and director of the Center for Evidenced-based Policy. “But I believe the frustration in countries that grew in these last few years has much more to do with second-generation demands, in a manner of speaking – demands around access to goods and services, demands of the middle class. And I think the solution to these conflicts will depend a lot on the capacity of the governments, of different political stripes, to satisfy them, without sacrificing the future, economic growth and investment.”

In Colombia, the anger expressed on the street had another unique feature, according to Otero Bahamon, who says this has to do with the 2016 peace agreement that was struck with the Marxist group the Revolutionary Armed Forces of Colombia (FARC).

Although the peace deal’s implementation is precarious, Otero Bahamon says it means that issues around conflict no longer have a stranglehold over Colombia, freeing up space for other public debates, including those around economic issues such as pension and healthcare reforms. The peace deal also neuters the government’s ability to dismiss all forms of protest as being aligned with the FARC, which it had done in the past.

In November, Colombia saw its first “cacerolazo” – a form of protest in Latin America, and popularised by Argentina, that features ordinary citizens marching through the streets banging pots and pans.

“It felt very magical,” said Otero Bahamon. “To hear your neighbours that you never speak to, to see them through the kitchen window and to see that they are enraged. They are tired of it all. People are connecting in a political way.”

Larrondo agrees. “In the long run, I think this is going to help us improve our quality of life in Latin America. But in the short term, I am less optimistic,” she said, questioning the political will for fundamental change in Chile, at least.

Kremerman insists that the dispute is not driven by middle-class desires, but by concerns over the precarity of life. And so far, all of the measures proposed by the Chilean government have been to tinker with the existing model, not change it.

“I’m worried about the levels of repression and the political vacuum,” he said. “But [I have] a lot of hope, because the protagonists are back on the streets and we’re talking amongst ourselves again.”