With the highest GDP per capita in South America in 2020, Chile’s growth in the last few decades has been viewed as a model for Latin American development. Adopting a laissez-faire approach, the government shied away from significant spending on welfare, with the few existing programs geared toward middle and upper-class Chileans. However, recent administrations have made combating poverty a central theme of their campaigns, with presidents like Sebastián Piñera and Gabriel Boric both committing to the elimination of extreme poverty. Poverty reduction in Chile and the challenges the country faces serve as an inspiration and a warning for other developing nations.
Chile’s Approach to Poverty Reduction
Chile’s approach to poverty reduction is based upon a series of programs that focus on short-term income support and long-term economic security. During the 1990s, the Aylwin administration invested in hospitals and schools while also increasing the minimum wage. These reforms halved the number of Chileans living in poverty while contributing to the country’s steady growth throughout the decade. However, the highly centralized and inefficient public services system, coupled with strikes from teachers and health workers, meant Chile required a new solution for the new millennium.
Chile Solidario
With a new presidential administration and the need for change amid stagnating results, the government introduced ‘Chile Solidario’ as the country’s newest front in reducing poverty. Conceived in 2002, the program aimed to help low-income Chileans on an individual level while simplifying the arcane bureaucracy behind the country’s welfare system. Chile Solidario provided those in extreme poverty with cash stimuli and “psycho-social support” from social workers, assisting with immediate needs and future plans. In addition, the program synthesized many smaller financial assistance programs into a cohesive system, aiming to make aid more accessible to low-income citizens.
The program showed some successes with poverty reduction in Chile, albeit with limitations. The clearest evidence supporting Chile Solidario is the rapid decline of the percentage of people living in poverty in the years after the program’s introduction in 2002, from 29% to 8.6% by 2017.
Furthermore, attendance in schools and hospitals rose significantly, suggesting health and educational benefits in the future. A significant drawback of Chile Solidario is that while many in the program leave poverty, the rates of exit from the program are not as high. A study during Chile Solidario’s early years also found that household income per capita among recipients did not significantly increase.
The administration of Piñera further modified Chile Solidario. In 2012, President Piñera replaced Chile Solidario with the Ingreso Ético Familiar (Ethical Family Income). As part of his broader promise to end extreme poverty in Chile, IEF focuses primarily on conditional cash transfers to eligible Chileans, requiring school attendance and regular health checkups.
Looking Ahead
Unfortunately, the emergence of the COVID-19 pandemic and Chile’s strict lockdown has challenged the nearly continual progress of poverty reduction in Chile, with the poverty rate increasing from the 2017 low of 8.6% to 10.8% in 2020. Chile’s new president Boric promised $3.7 billion in aid in April 2022, undertaking to create new jobs while raising the minimum wage.
The ongoing debate over Chile’s draft constitution offers hope in the fight against poverty, promising to end job insecurity and institute a universal basic income. However, it also risks undermining the gradual, albeit successful progress of the last four decades in its radical rejection of the blueprint of the 1980 constitution.
Poverty reduction in Chile stands at a crossroads, able to embrace more direct government involvement in reducing the poverty rate or continue to let economic growth naturally spread to its poorest citizens. President Boric’s government seems to firmly favor the former, but in September, it is up to Chileans to decide whether they agree with his vision for the country.
– Samuel Bowles
Photo: Pixabay
U.S. inflation
“I have heard of a friend who had six to seven children. Although some of them, husband and wife earn RM2,000- RM3,000 per month, they do not seem to offer to help their parents; at least RM200 is sufficient. But instead, they tell their mother, ‘I need RM200 from you, I want to pay for my house, my car and my children’s education.’ You have this kind of people. That is considered financial abuse.” This is a quote from a
Founded in 2018,
Sri Lanka is experiencing an economic crisis of massive proportions. The U.N. has dubbed it a “
With
Russia and Ukraine are two of the largest grain producers in the world, combining to supply
Researchers from Cornell University found a link between extreme heat and child malnutrition in western Africa. The study revealed that there was an increased prevalence of chronic and acute malnutrition in young children due to extreme heat exposure.
The COVID-19 pandemic forced schools across West Africa to shutter their doors. These widespread school closures had a deleterious effect on the education and well-being of western Africa’s most vulnerable children. Youth were not only deprived of an education but also a chance to receive a meal through their country’s school feeding program. As schools gradually reopened as COVID-19 rates subsided, school feeding in West Africa provided an avenue for children to
In July 2022, the World Bank announced a 