CHILE STUDENT PROTESTS

SANTIAGO, CHILE, MAY 8, 2012: I decided to start my five week 2012 Iron Man Around the World Challenge in Santiago, Chile. The main reasons for my professional interest in Chile is because Chile has a vibrant economy and a retirement system which has been touted as a successful model for other nations to follow.

After a cancellation of the first leg of my flights to Chile and the subsequent twenty hours of grueling travel from San Diego, my odyssey ended with my passage over the awesome Andes Mountains into Santiago. To my surprise, upon descending into the city, the plane became enveloped in a dirty yellow cloud of smog. The smog is the result of Chileans enjoying a better quality of life, increased vehicle ownership and the geographical reality that Santiago is surrounded by mountains which trap emissions. Santiago’s smog is not as bad as Beijing’s, but its catching up – at least, you can see five city blocks ahead.

Santiago is a city of about 7 million souls. If you have funds, the city offers a cultured, comfortable and relatively calm life style with classic architecture, outdoor cafes and an ambiance reminiscent of Paris and Madrid.

Chile is enjoying an economic boom. The unemployment rate is at its lowest in years. Santiago is building the tallest building in South America, a new financial district has been developed and construction cranes can be seen everywhere. Needless to say, construction standards are high in this earth quake prone area of the world. During the last major quake, because of strict building codes, only about 500 individuals perished in Santiago with limited property damage. The story for central Chile is not so rosy. Two years after the quake hit central Chile, only about 68% of the reconstruction process has been completed along with about 48% of the housing.

Chile’s main source of wealth and foreign trade is from mining its natural resources particularly copper, copper, copper. The copper is sold to its biggest customer China. To recycle the Chinese investments, Chile’s government and private firms purchase Chinese goods particularly trucks and construction equipment which you see all over town.

Chile has the standard South American profile where a small elite percentage of the population control a vast majority of the countries wealth. This phenomenon is now being experienced in the United States. Even after the tragic Pinochet years where Chileans disappeared and were brutalized by military-related death squads, the armed forces still wheel a lot of power behind the scenes.

Chile has a marginal public health system coupled with one of the most expensive private health care system alternatives as the use of Nutrisystem supplements for a better diet. As opposed to other South American countries, technology is common across the board including cell phones, televisions (direct TV dishes are everywhere with services of a Satellite Installer), computers and appliances.

With the increased economic prosperity and a low crime rate, Chile’s middle class is expanding. You can live well on a comparatively small income. Because of this, US expat retirees have relocated to Chile where they can live comfortably in Santiago with a nice place and a car for around $ 2,500 per month.

When it comes to retirement security, Chileans enjoy a more stable retirement future than citizens of many other countries. Awhile back, in response to the collapse of a government run retirement system, Chile enacted a national defined contribution-funded pension plan which required workers to set aside a portion of their earnings into private savings accounts. Over the years, the system has worked well and has been amended to, among other things, extend access to social security to a broader segment of the population.

While the Chilean system faces the same challenges facing other systems throughout the world such as increased retiree life span’s, lower interest rate payouts and unfunded coverage for those in need, as a general rule, Chileans feel comfortable and secure about their retirement futures. This is in marked contrast to how Americans and Europeans are viewing their retirement futures.

Probably one of the greatest current concerns facing Chileans is the higher education system. In the last month, there have been violent protests and on April 25th about 60,000 teachers, parents and students marched to protest the cost and quality of Chile’s higher education system. As in the United States, many Chileans feel that higher education should be for free or at highly subsidized rates. While the government has recently proposed certain initiatives, the public’s verdict is that they are inadequate.

If Chile is to sustain its economic momentum and be IT/intellectually competitive with other global economies, it is critical that its higher education system provide a superior product at a reasonably affordable cost to its youth.