Poverty and Inequality in Chile: Offspring of 25 Years of Neoliberalism

Abstract

This paper attempts to show the close relationship between the neoliberal economic model imposed in Chile since 1975, firstly by the military regime and then by the democratic governments that followed from 1990 on. Primary causes of poverty of more than 60% of the Chilean population and the unequal distribution of income, assets and power are: dismantling of state institutions capabilities that shifted objectives of socioeconomic public policies from the common good towards attending the interests of rich minorities; Notwithstanding rapid economic growth over 12 years, income distribution remained unchanged, with benefits of higher productivity and production going to the wealthiest through various means; opening of the economy helped to weaken the capacity of employment creation, due to increasing imports of industrial and agricultural goods; worsening of labor conditions plus increased unemployment, and severe environmental deterioration. All these aspects will be examined within the context of overall macroeconomic policies.