Via Financial Times

Demonstrators were gathering on Wednesday in the Chilean capital Santiago and other cities after an apology from President Sebastián Piñera for his government’s “lack of vision” failed to quell public anger and defuse a mounting political crisis.

Mr Piñera had late on Tuesday announced a package of reforms aimed at pacifying the demonstrators who have taken to the streets over a proposed rise in metro fares, which triggered a state of emergency.

The package, which requires congressional approval, included a rise in the minimum wage, pension payments, health benefits and electricity subsidies and will partly be financed by raising taxes for the wealthiest Chileans. “It is true that problems accumulated for many decades and that different governments were not able to recognise this situation,” Mr Piñera said. “I recognise and apologise for this lack of vision.”

Yet the apology and the proposals stopped well short of the demands of Mr Piñera’s most vocal critics.

Santiago has in recent days been convulsed by riots, looting and arson, pushing the government to introduce the state of emergency and suspend the metro fare rise. A national strike on Wednesday was also widely respected, including by workers at the biggest mines.

The protests have exposed deep-seated anger among Chileans at an unequal system that has excluded them from a remarkable economic performance in recent decades. The protests are “not about the 30-peso rise in metro fares, but 30 years of a faulty democracy that didn’t attend the needs of the majority of the people,” said Camila Vallejo, leader of Chile’s Communist party.

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“If the government wants dialogue, it must include social organisations,” she said.

SANTIAGO, CHILE - OCTOBER 20: Anti-government demonstrators clash with police as they protest against cost of living increases on October 20, 2019 in Santiago, Chile. President Sebastian Piñera suspended the 3.5% subway fare hike and declared the state of emergency for the first time since the return of democracy in 1990. Protests had begun on Friday and developed into looting and arson, generating chaos in Santiago, Valparaiso and a dozen of other cities. (Photo by Marcelo Hernandez/Getty Images) ***BESTPIX***
There have been calls for military personnel to be withdrawn from the streets, but Mr Piñera has said that, for now at least, the state of emergency remains in place © Getty

Ms Vallejo and others have also called for military personnel to be withdrawn from the streets, but Mr Piñera has said that, for now at least, the state of emergency remains in place. Many say the army’s presence has only aggravated the violence, with at least three of 15 confirmed deaths so far connected to the military. Videos circulating on social media show soldiers permitting looting.

“We are deeply concerned by the images of instances of police brutality coming out of Chile,” said José Miguel Vivanco, Americas director at Human Rights Watch.

Mr Piñera’s declaration that he was “at war against a powerful enemy” has also provoked widespread contempt. “The only war is against inequality,” read one protester’s sign. “This isn’t war, it’s history,” read another. 

“In such conditions it will be difficult to reach an agreement,” said Emilia Schneider, president of the student union of the University of Chile, the building’s façade covered in fresh graffiti-inciting violence (“kill the cops”) and demanding that Mr Piñera and his “fascist” group resign. 

On Tuesday, Ms Schneider led a meeting of a few hundred students in the central patio of the university’s main building opposite the presidential palace. There was almost unanimous agreement among the students of the need to rewrite a constitution that dates back to the dictatorship of General Augusto Pinochet, a document that many see as illegitimate.

Such a proposal was notably absent from Mr Piñera’s reform package. Hordes of students have joined the mass protests across Santiago and around the country, banging pots and pans with wooden spoons.

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Although most took part peacefully, some masked agitators hurled rocks at security forces and lit fires in streets. Most had been cleared away with tear gas by the time a nationwide curfew began at 8pm.

Not all protests have been violent. As a student orchestra in Plaza Ñuñoa, the centre of a middle-class neighbourhood in Santiago, started playing the national anthem — to which the crowd sang along with alternative lyrics that such protests will “always make tyrants tremble” — many voiced concern about the social divide.

“We are protesting peacefully here, even if there are some sectors that would like to portray us otherwise. But there are no delinquents here. There are families, with children, in a safe space,” said Gustavo Becerra, a musician and actor wearing a black trilby, echoing concerns about repression by the armed forces that for many recall the darkest days of the dictatorship of Mr Pinochet in the 1970s.

“An enormous social divide despite great wealth in Chile will require basic concessions” from the privileged classes, said Mr Becerra, as a young man walked by clutching a sign that declared: “Chile has woken up.” 

Mr Becerra warned that the government response to Chileans’ grievances must be fast and serious.

“If not, these protests could continue for months,” he predicted. “This is not just 20 guys looting a supermarket. There is evidently generalised, wide-ranging social discontent. The people are united.”

Quinn Markwith, analyst at Capital Economics, said the finance minister had estimated that the total cost of the new measures at $1.2bn, or 0.4 per cent of GDP.

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“That estimate seems quite plausible to us,” he said. “Chile’s public finances are quite strong, and so they can afford this without causing bond yields to rise.”