The U.N.’s first and most important Sustainable Development Goal (SDG) for all nations is to “End poverty in all its forms everywhere.” Chile has experienced an economic miracle since the fall of Pinochet, and here is an explanation of how this economic transformation has translated into modern development.

Poverty

The U.N.’s SDG 1 measures poverty rates across the globe, the number of people who live on less than $1.90 a day and the amount those who live on less than $3.20 a day. Chile’s transition from the Pinochet kleptocracy to a market-based economy in 1990 helped develop the Chilean economy through foreign investment and internal economic development, which increased the quality of life and living standards across Chile.

Although the World Bank estimates that in 1990 38.6% of Chile’s population lived below the poverty line, as of 2022, the U.N. estimates that 0.03% of Chileans live on less than $1.90 a day and just 0.18% live on less than $3.20 a day. These scores show that the updates on SDG 1 in Chile are that significant progress has occurred. Market orientation to has effectively eradicated poverty in Chile, but that does not tell the whole story about the updates on SDG 1 in Chile.

The second aspect of the U.N.’s SDG 1 in Chile is measuring relative poverty, the share of a population whose income is less than half of the median disposable income in that country. Chile scored particularly badly in this metric at 16.5% in 2017. The U.N.’s long-term goal is for all countries to score around 6%, and Chile is wide of this margin.

Inequality

Chile has had long-run problems with inequality stretching back to the Pinochet era and the beginnings of marketization. The focus on Chile’s growth was firmly based on poverty eradication and little investment went towards structures that allow a thriving middle class to develop. The Chilean governments of the 2000s and 2010s did not sufficiently invest in educational infrastructure and a true welfare state, resulting in what has become known as “Santiago style-inequality,” where a lower class lives above the poverty line with little prospect of any further development.

Education in Chile is almost fully privatized, resulting in a system designed only to help high achievers and leave behind those who often need good education the most to improve their economic situation. This includes high school education, a sector traditionally run by the state in developing nations to ensure a decent outcome for all students. According to The Guardian, the cost of education in Chile is astronomical, with the average university degree costing 41% of an average yearly income which further prevents social mobility, keeps those above the poverty line in that class and creates “Santiago style-inequality.”

Major Reforms

Chile’s president from 2014-2018, Michelle Bachelet, made major reforms to education, improving the quality of and access to primary and secondary education. Still, Bachelet’s main reform was to make higher education free for those with the lowest incomes. The bill protected a certain amount of the budget to pay for the higher education of some of the poorest Chileans, which at the time made higher education free for 60% of the country. The bill also set up a national body to set tuition fees for all students apart from the 10% richest Chileans. Private universities can only charge whatever fees they choose for the richest 10% of students rather than all students.

People are seeing the benefits of Bachelet’s reform in the updates on SDG 1 in Chile today. Social mobility has increased by breaking down these educational barriers and making education available to all Chileans, reducing poverty and inequality. Poorer Chileans are going to university in larger numbers than ever. However, there is still much of done on future educational reform to help reduce inequality in the long term.

Overall, the updates on SDG 1 in Chile are that Chile is on track to achieve the poverty eradication aspect but is failing in inequality reduction. Still, hope exists for the future if Chile can put the right educational reforms in place.

– John Cordner
Photo: Flickr