The Econmist - USA (2021-10-30)

58 TheAmericas TheEconomistOctober30th 2021

that  are  below  the  minimum  wage  of

337,000  pesos  ($418)  a  month.  There  were

large protests in 2006, 2011 and 2016 calling

for  reforms  to  these  areas,  but  many  feel

little has changed. Those who can afford to

seek  private  schools  and  health  care.  This

year Cristóbal Rovira Kaltwasser, a political

scientist, published a survey of 137 manag­

ers and board members from the country's

largest 500 companies. Just under half said

their  parents  were  educated  in  private

schools, but 96% said their children were. 

Those  in  power  often  seem  uncon­

cerned by the gulf between the rich and the

poor.  After  raising  metro  fares  at  peak

hours  in  October  2019,  Juan  Andrés  Fon­

taine, the economy minister, said Chileans

could  “wake  up  earlier”  if  they  wanted  to

avoid  paying  the  higher  costs.  Few  Chil­

eans  set  much  store  by  the  political  sys­

tem. Trust in institutions is low (see chart);

electoral participation is exceptionally so. 

The Pinochet­era constitution, adopted

in 1980, was designed to give a dispropor­

tionate  role  to  the  right,  argues  Claudia

Heiss of the University of Chile. Seats were

reserved for the army in the Senate (which

remained  the  case  until  2005),  while

unusually  high  thresholds  were  put  in

place  to  change  laws  that  would  give  the

state  a  bigger  role  in  the  provision  of  cer­

tain  services,  such  as  education.  Despite

the  fact  that  centre­left  presidents  have

mostly been in power, they had to negoti­

ate  extensively  with  the  opposition.  This

made politics seem like “a cartel”, says Ste­

ven Levitksy of Harvard University.

Initially,  it  seemed  that  writing  a  new

constitution could help bring more legiti­

macy to a discredited system. Last year the

turnout  for  the  referendum  over  whether

or  not  a  new  constitution  should  be  writ­

ten  was,  at  51%,  among  the  highest  since

voting became voluntary in 2012 (78% vot­

ed yes). Young and poor people’s participa­

tion grew the most. Though Chileans’ trust

in the convention has recently dipped, it is

still far above that in Congress and politi­

cal parties. Juan Pablo Luna, a political sci­

entist at Chile’s Catholic University, claims

thattheconventionhasledtoa “revindica­

tionofpolitics”amongyoungpeople.

Butliberalsareincreasinglyalarmedby

thedirectionthattheconvention,stuffed

fullofpoliticalnewbies,istaking.Inearly

October,theassemblyfinishedapproving

itsrulesofprocedure.Oneoftheseimpos­

espenaltiesfor“denialoromission”ofhu­

man­rights violationscommitted by the

dictatorshipandbythestateinthecontext

ofthe 2019 uprising.Thevaguenessofthe

ruleisworrying,thinksSergioVerdugo,a

constitutionalexpert.Hisconcernisthat

theconvention’sindifferent approachto

freedomofspeechcouldbereflectedinthe

finalconstitution.

Similarlya groupledbytheCommunist

Party is trying to circumvent rules that

mean every part of the charter is approved

by  a  two­thirds  majority.  Indeed,  leftists

have the most sway in the assembly. “This

will be the world’s first woke constitution,”

thinks Robert Funk, a political scientist at

the University of Chile.

Allthiswillaffecttheeconomy,which

has been scarred by a long lockdown.

Stricterenvironmentalrules—almostcer­

tainlyincludedinthenewconstitution—

mayhindercopperexports,onwhichthe

economydepends.Senatorsareclose to

approvingabilltoletChileansmakean

earlywithdrawalof10%oftheirpension

pots.Thiswouldbethefourthtimesuchan

emergencymeasurehaspassedsinceco­

vid­19startedsqueezingfamilybudgets.It

islikelytospurannualinflation,whichhit

a seven­yearhighof5.3%lastmonth.

Meanwhiletheviolenceislikelytocon­

tinue.OnOctober8tha leftistmemberof

theconventionwashoundedbyanangry

mobinSantiago,whohurledstonesather

andbrandedhera “sell­out”forcontem­

plating  working  with centrist  members.

Chile’s  more  aspirational  politicians  have

often  compared  the  country  to  Finland.

But  the  events  of  recentweeksand  years

suggest that it actually resembles one of its

dysfunctional neighbours.n

The big chill

Chile, public trust in institutions

% responding “a lot” or “quite a lot”

Source:CentreforPublicStudies

Politicalparties

Congress

Government

Newspapers

Catholicchurch

Police

6050403020100

August 201 August 2021

Digitalcurrencies

Red, white and blue tape

S

aily de amarillois an entrepreneur in

a  system  that  discourages  diversity.  In

Havana  she  runs  a  boutique  hotel,  a  café

and  a  co­working  space.  She  also  teaches

people about social media on Slyk, a web­

site  that  has  taken  off  in  Cuba.  Slyk  gives

her  an  online  presence  without  having  to

build a website. Even more important, she

can be paid for her work in cryptocurrency.

Parts of Latin America and the Caribbe­

an  are  experimenting  with  alternatives  to

cash. In September Nayib Bukele, the pres­

ident  of  El  Salvador,  introduced  a  law

which makes bitcoin, a cryptocurrency, le­

gal tender. Mr Bukele, who is increasingly

authoritarian, pushed through the law de­

spite  the  fact  few  Salvadoreans  actually

want to use crypto. Nicolás Maduro, Vene­

zuela’s autocrat, may have been hoping to

catch some of the same headlines when he

announced the country’s new “digital boli­

var”  in  August.  Digital  in  name  only,  the

new banknotes lop six zeros off a currency

ravaged by years of hyperinflation. Locals,

tired of carrying bundles of cash, use mo­

bile payments and debit cards instead.

Cuba  is  part  of  this  trend—but,  as  ever

with the communist island, with a twist of

its  own.  Interest  in  crypto  had  been  bub­

bling for a while, but took off properly late

last  year,  when  President  Donald  Trump

imposed sanctions on organisations affili­

ated with the Cuban armed forces. That in­

cluded  the  banks  which  process  much­

needed remittances from family members

abroad.  Almost  overnight,  firms  such  as

Western  Union  could  no  longer  operate.

This cut off a lifeline in a country in which

payment  firms  such  as  Visa,  Mastercard,

Paypal and Stripe were already off­limits. 

Accustomed  to  finding  creative  work­

arounds  in  desperate  situations,  Cubans

Cuba’s communist regime is trying to control crypto

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