Models: A Big Step to the Left

It's hardly surprising that Chilean President Michelle Bachelet didn't take them seriously at first. They were just a bunch of chiquillos --kids--decked out in their black-and-white high-school uniforms complaining about the quality of education. But those "kids" are part of a new generation that has grown up free of the repressive 17-year dictatorship of the late Gen. Augusto Pinochet.

Coordinating protests through e-mail, blogs and cell phones, they turned out for three weeks last June--an estimated one million of them--to boycott classes, close schools and clash with police in the largest student movement in Chile's history. Their "Penguin revolution," as it came to be called, rocked a complacent establishment and focused a spotlight not only on education but on the 12th worst income gap between rich and poor among countries worldwide. By the end of the year, the protests had spread to strikes by workers at hospitals and schools, and Bachelet was aggressively pushing an agenda of social reforms. "Chile is not far away from restoring a social-welfare state," says Chilean economist Manuel Riesco, who has studied development models throughout the region. "We are beginning to move away from the myth in Chile that the market can solve everything."

Belatedly, the frustrations with the country's free-market economic model that have erupted in protest and brought leftists to power in some parts of Latin America are forcing change on Chile, once an oasis of stability. The strikes began in August at the nation's largest copper mine, Escondida, and more strife is predicted in the year ahead. "Chileans have lost their patience," says Claudio Fuentes, a Chilean political scientist. "They are more conscious now that there is an abundance of wealth in this country and that it's not being shared the way it should."

That looks set to change. The government is pushing through new laws to help the poor. Beginning in 2008, the state will make direct payments to workers and housewives whose pensions are so low as to leave them near-destitute. All Chileans will be guaranteed a minimum monthly payment of roughly $145.

The government is also launching a "social protection" agenda, focusing on education. Public schools have been badly shortchanged in government budgets since Pinochet privatized much of the educational system in 1981. Wealthier Chileans have preferred to send their children to private schools that spend five times more per student than public schools. The results: half of public-school grads don't pass university entrance exams, while 90 percent of private school kids go on to college.

Attempting to redress such inequalities, the Bachelet government in June raised its education budget by $138 million, cut the cost of college entrance exams and promised to increase subsidies for student transportation. A broad-based governmental commission was formed to consider farther-reaching reforms.

Chile's expanded social-welfare program will still be less generous than those of other neighboring countries. Uruguay and Argentina already have significant state-supported pension and education programs. Experts also say that long-term, economic, tax and labor policies must be re-engineered. "In Chile, we have a weak state in which 60 percent of the government's income comes mainly from sales taxes. That puts too much of the tax burden on the poor," says Rodrigo Pizarro, an economist with the Terram Foundation in Santiago.

Chile may not become a classic social-welfare state, but it is showing a social conscience lacking in the Pinochet era. The question is whether it's enough to keep the "Penguins" in the classrooms, and off the streets.