The Chilean Senate has approved the bill that enables the early withdrawal of 10% of the private pension funds almost 11 million people burdened by the economic hardship caused by the pandemic. The initiative must now go back to the Chamber of Deputies for a new and fast procedure.
The measure represents a defeat for the President Sebastián Piñera, who has tried to stop tooth and nail to advance a project that points to the heart of the legacy of the General’s dictatorship Augusto Pinochet (1973-90) that seemed impregnable. Piñera has watched in puzzlement as up to five senators from the right-wing coalition have joined the opposition forces. Those legislators did not care this time that they were branded as populists.
The Pension Fund Administrators (AFP) broke into that country in the early 1980s as an unprecedented neoliberal experiment. Since then, the AFPs have invested and speculated with the money that employees have to contribute. More than a pension fund, it has been a large-scale capital accumulation mechanism.
The total sum collected in almost four decades is equivalent to 80% of PIB. The system became the flagship of what was later called the “Chilean model”. However, promises of prosperity in retirement never materialized. Men and women receive from these companies an average pay of 160 euros per month.
Last year, 127,000 citizens found themselves in their accounts with just 55 euros per month. The discontent is so deep that millions of people have mobilized during the last five years to demand “No + AFP”. Those protests, neglected by the authorities, anticipated the social outbreak last October.
Under the current law, 10.9 million AFP members will be able to withdraw up to $ 5,400. In late May, Peru adopted a similar measure, and hundreds of thousands of people signed up to withdraw a limit of $ 3,700.
According to the portal ‘El Mostrador’, Piñera is after the vote “with his hands tied.” Their chances of going to the Constitutional Court or vetoing the initiative “are relegated to failure.” The parliamentary victory leaves the opposition with a bitter taste too. The withdrawal of AFP funds shows the absence of the State in the face of the economic challenges of the pandemic. Jacqueline Saintard, member of the Forum for Fair and Sustainable Development, has pointed out that, in the face of these circumstances, Chileans have had no choice but to “help yourself“and draw on your savings.
The eighth country with the most infections in the world
Chile, with its almost 18 million inhabitants, is the eighth country in the world with the most positive cases of covid-19. The 336,402 infected place it ahead of the United Kingdom, Italy and Spain. The death toll is 8,722 so far. However, the School of Public Health of the University of Chile has verified a “downhill curve“Infections. In this context, President Sebastián Piñera, whose unpopularity is close to 75%, launched a disinfestation plan last Sunday,” Paso a Paso “, which has several stages: the current quarantine, a transition, the preparation of opening and advanced opening. Under the epidemiological situation, health authorities will be able to determine the speed of each phase and even a return to restrictions. The pandemic has staged social inequalities. “The virus brings it the rich, the dead are put by the poor, “has chanted these days in the revival of protests in the capital’s periphery.