Debate over private pension system takes center stage in Chile.
| Autor | Witte-Lebhar, Benjamin |
Widespread frustration with Chile's privately managed pension system boiled to the surface last month in coordinated marches that drew hundreds of thousands of participants and prompted more than a few comparisons to the student-led education reform movement of 2011-2012 (NotiSur, July 22, 2011, Nov. 11, 2011, and Sept. 7, 2012).
Organizers behind the July 24 demonstrations, which took place simultaneously in Santiago and dozens of other Chilean cities, are promising further protests this month in a bid to keep the pension polemic forefront in the minds of the public and politicians alike. A nationwide "cacerolazo" (pot-and-pan-banging demonstration) was planned for Aug. 10, followed by another round of protests on Aug. 21. The events are being coordinated by an umbrella group called "No+AFP" (no more AFP), in reference to the for-profit companies, called Administradoras de Fondos de Pensiones (AFPs), that manage the retirement savings of most Chilean workers (NotiSur, Feb. 11, 2005).
"This is about the indignation of the general public, which is sick of the abuse, the arrogance, the corruption, and the impunity," said Luis Mesina, spokesperson for No+AFP, in a July 27 interview with The Clinic, a Chilean news site and weekly satirical magazine. Mesina added that the demonstrations were also in response to revelations that Myriam Olate, a recently retired official of the national prison service (Gendarmeria de Chile), receives monthly pension payments of roughly 5.2 million pesos (nearly US$8,000), more than 20 times the legal minimum salary in Chile. Olate is an active member of President Michelle Bachelet's center-left Partido Socialista (PS). She is also the ex-wife of Osvaldo Andrade, a congressional deputy and former PS party president who served as labor minister during Bachelet's first administration (2006-2010).
The Olate revelations proved to be something of a straw that broke the camel's back for critics of the AFP system, which was introduced by decree in 1981 during the military dictatorship of Gen. Augusto Pinochet (1973-1990) and has come to be seen by many in Chile as an egregious give-away--at the expense of everyday citizens--to banks and corporations. Backers of the system hail it as a model to be emulated, and credit it with helping drive Chile's "miracle" development in recent decades.
Paltry pensions
The AFP system was designed by Jose Pinera, a so-called "Chicago Boy" (even though he studied economics at Harvard) who...
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