So far on the maps, so close in the memory of those who were twenty in the seventies, Chile is back in the news. For heaven's sake, the election victory of Gabriel Boric, an exponent of the radical left, he does not arouse the emotions raised in the West (Italy in the lead) at the time by Salvador Allende's Popular Front. But the reaction of the financial markets proves that the turning point will not be painless: the Santiago Stock Exchange has lost 10 per cent under the pressure of the capital flight: according to the central bank at least 50 billion dollars, about 15 percent of foreign exchange reserves, have left the country in recent months. Something that recalls, at least from afar, the revolts of the truckeros and the chorus of pots in the middle-class neighborhoods that anticipated the coup by Pinochet, a shadow that is always alive at the foot of the Andes (Boric's opponent is the nephew of a minister of the junta).
But today more than then, however, they are much more important for the purposes of international equilibrium the flows linked to the country's mineral wealth, or copper and lithium, very precious raw materials in the era of electric cars and batteries. With one important difference from the last century: they are no longer the hated Gringos Americans to impose the prices of commodities, but China which absorbs a large part of the copper extracted from the bowels of the Escondida mine in Antofagasta which represents 10 percent of the GDP, a sacred place of resistance where the pro-Allende miners sacrificed themselves with dynamite. And for this year, despite the slowdown in yellow industry, Beijing's purchases will rise by 8 percent.
Beijing moreover through the giant Tuianqui controls 24 percent of the lithium mines of Sqm, share in free fall (-11 percent) after the vote. Why this decline? Beijing (and the London Metal Exchange) do not like the proposal to create a national lithium agency. Or, even worse, the prospect that the new government could curb the gigantic investment plans (74 billion dollars) in the mining and water management sectors, another sensitive issue on an ecological level.
It will be this the test bench of the governing capacity of Allende's grandchildren, faced with a paradoxical situation: Chile, rich in resources, boasts growth of around 6 percent, well above that of its neighbors with an inflation rate of 6,3% , high according to Western criteria but much lower than that of Brazil (+26 per cent) and Argentina (+21 per cent). Apparently a manageable situation, if not favorable, also because at least half of Chileans have received two doses of the vaccine. But with a big handicap: inequality, which places Chile at the bottom of the international rankings.
The new president, who came to power on the wave of the protests that broke out two years ago after the increase in the price of the subway ticket, will find himself facing a three-pronged emergency: the reform of the economy, to avoid an environmental meltdown; health care reform, loudly invoked during the violent protests of recent months that have frightened the bourgeoisie. And, above all, the revision of the mother of reforms, that of pensions. It was 1976 when Pinochet entrusted Milton Friedman, the guru of US liberalism ("The left - he said - contested me, but did not say a word when I proposed the same things to China"), the creation of a system based on pure capitalization. The result was the Pinera reform, signed by the brother of the billionaire who later ascended to the presidency, who replaced the pay-as-you-go model with the capitalization one, carrying out at the same time a strong privatization and liberalization of the pension fund system to allow workers to find an "ad hoc" plan for their needs.
Chilean pension funds have managed 75% of the country's GDP, promising a transformation rate, i.e. the amount of the pension in proportion to the last salary, of as much as 70% after 37 years of contributions equal to 10% of the gross salary. The goal was to create on the one hand the resources necessary for development against a society capable of saving resources for old age. That squaring of the circle to which almost all countries aspire with varying results, grappling with the growing costs of the welfare state. For this reason the Chilean model for almost half a century it was at the center of social security studies, with mixed success. To come to a sad conclusion: the numbers don't add up. For multiple reasons. Last but not least the fact that Chile, like Italy, stands out for its high tax evasion. This, combined with the low level of official salaries, has meant that the savings flowing into the funds (regime oligopoly, far from efficient) have proved too small to guarantee a pension for Chileans.
From here, starting since 2008, a series of interventions starting from the introduction of a basic pension, paid for by general taxation, for the benefit of around 600 elderly people without contributions. A social pension that is now worth about $150 a month. Subsequently, a sort of minimum supplement was arranged for another 900.000 retirees. Finally, in order to avoid a return to public welfare, the Pinera government involved the contributions of companies in the system. And now? The government intends to dismantle the system even if, as always happens in pension reforms, the devil is in the details. Certainly the tax card will be played against the richest, at least as far as possible in a tangled political situation, where the right-wing opposition controls the Senate. In the hands of the new president, then, there is a powerful weapon: Chile is one of the least indebted countries in the world (37,5 per cent of GDP), which allows considerable room for maneuver to finance a reform.
What is certain is that the Chilean experiment is drawing to a close. Of course, the fault of the pandemic, which has greatly impoverished the system due to the decrease in contributions and the increase in benefits and which does not even spare the mixed formulas, in force in most systems. But the pandemic appears only as the last act of a deeper crisis that the contagion has only accelerated. It is always difficult to believe that, even after the discovery of a therapy or a vaccine, the world can go back to what it was before, without dealing with inequalities (internal, but still more linked to immigration) and demographic crises.
