Chile Endures 4th Day of Protests in Worst Unrest in Decades

Laura Millan Lombrana and Sebastian Boyd
Chile Endures 4th Day of Protests in Worst Unrest in Decades

(Bloomberg) -- Thousands of protesters gathered in Chilean city squares Monday after a weekend of riots, looting and clashes with soldiers and police that left 11 dead.

Chile is enduring the worst unrest since the country returned to democracy in the late 1980s to become Latin America’s most prosperous nation. The peso and local shares slumped as violence seemed poised to persist.

“It seems things need to reach a crisis point for us to be heard,” said David Vargas, a credit-card company technician who joined peaceful protests and anti-looting patrols.

About 1,500 people have been arrested in a wave of arson and riots that have brought cities to a near standstill and seen security forces fire on masked looters. President Sebastian Pinera declared a state of emergency Friday and called on the army to restore order.

The scenes are difficult to reconcile with the country’s image as one of the region’s most economically stable and an emerging-market exemplar. What began as protests against subway-fare increases quickly morphed into outpourings of discontent over income inequality, pensions, health and education.

“It’s like a pressure cooker,” said Claudio Fuentes, a political science professor at Diego Portales University in Santiago. “This is a series of parallel agendas that have been building for decades and exploded with the rise in transport fares.”

Political Risk Revived in Latin America as Protests Spread

While Pinera back-pedaled on the fare increase, his efforts to crack down on violence have merely intensified it. Late Sunday, he had a stark message for Chile: We are at war, choose sides and we will win. There was no mention of dialogue -- nor who the enemy in this war might be. The protests have no real leaders, beginning as student protests but now encompassing a spectrum ranging from the disgruntled bourgeoisie to black-clad anarchists.

Pinera adopted a more conciliatory tone on a televised speech on Monday night in which he called for dialogue and said the government was working on a reconstruction plan to rebuild the country after the violent protests. The government is also working on social measures including lowering the price of drugs, improving healthcare and the pensions system, and reducing the cost of regulated services and toll-roads, Pinera said, without giving specifics. He promised to meet government and opposition party leaders tomorrow.

Behind the riots is a larger swell of people protesting against Chile’s free-market economy, which has produced vast wealth and vast inequality.

Hundreds of protesters started to fill Santiago’s Italia Square at around midday Monday. Most were university students banging pots and wearing scarfs over their mouths and noses. They chanted for the military to leave the streets and carried banners calling for Pinera to resign.

‘To Repress Us’

Armored vehicles sprayed tear gas to disperse demonstrators, and officers occasionally fired at the crowd. The people set burning barricades across nearby streets, and some threw stones at police and army vehicles as they raced by.

The square gradually filled during the afternoon and troops abandoned the area. Demonstrators chanted, played instruments and sang in a festive environment reminiscent of sports celebrations held in the same place. At 1 p.m., the crowd began marching through the city.

“They have stolen our natural resources, sold them to private companies and the government is protecting them,” said Stephanie Mora, 20, a law student at Universidad de Chile. “Demonstrations were very peaceful at the beginning, but they turned violent because the government sent the military to repress us.”

Indeed, Pinera’s bellicose statement -- and the armored vehicles in the streets -- had special resonance in a country that from 1973 to 1990 was ruled by the military in one of the continent’s most brutal dictatorships. Army General Javier Iturriaga on Monday responded to Pinera’s comments by saying, “I’m not at war with anyone.”

The protests will derail the government’s tax, pension and labor reform agenda that it had promoted as key to growth, according to Ricardo Solari, an economist and former minister during the government of socialist Ricardo Lagos.

“Pinera’s government from now on will just focus on running things smoothly and drop its reforms,” Solari said. Santiago is set to host President Donald Trump and other leaders of the Asia-Pacific Economic Cooperation forum in less than a month.

Chilean stocks trading closed earlier than usual to allow people to return to their homes and prepare for another night with a curfew. The IPSA index slumped 4.6%, the most in two years, while the peso weakened 2.1%, the most among major emerging market currencies. Trading volume was low and fell short of panic selling as many market participants stayed home.

“Markets operated normally but with low volumes,” central bank President Mario Marcel told reporters on Monday. “The peso’s depreciation was within normal parameters for an event such as this one.” The central bank doesn’t consider any sort of intervention necessary, “but will keep monitoring the situation.”

8pm-6am Curfew

But normality may be hard to regain after three bloody days. The deaths were caused by arson attacks at a supermarket and a warehouse. About 70 subway stations have been damaged, some almost destroyed, dozens of buses have been burned, shops looted and buildings set alight. A curfew has failed to prevent the chaos, which spread to other regions.

At least 22 people were severely wounded during the protests, Chile’s National Human Rights Institute said on Sunday, according to Chilean daily El Mostrador. The organization said there were reports of excessive force and sexual harassment by security forces, with women forced to take off their clothes, El Mostrador reported.

On Monday, most shops were shut and many companies encouraged employees to work from home. Those who did go to work, after the curfew lifted at 6 a.m., faced restricted public transport, with soldiers guarding subway entrances and military helicopters overhead.

Vargas, the credit-card company worker, walked to his job Monday. Normally, he leaves home at 6 a.m. and doesn’t get home until midnight, spending about $3 and three hours a day on public transport.

He joined other people banging pots in the streets in previous days, but stayed at home Sunday as his neighbors organized patrols against looting.

“Three supermarkets in my neighborhood were looted yesterday and the police didn’t even turn up,” said Vargas. “The government’s only focusing on safety, and they’re adding fuel to the fire with that language.”

Bad Memories

Mining unions called a general strike for Wednesday and accused the police of “brutal aggression.” They want an end to the state of emergency and curfew, according to a statement from the umbrella group CTMIN, which represents workers from Anglo American Plc’s Los Bronces copper mine, Teck Resources Ltd.’s Quebrada Blanca, Antofagasta Plc’s Los Pelambres and Zaldivar among others.

(Updates in 8th paragraph with quote from Pinera.)

--With assistance from Philip Sanders and Eduardo Thomson.

To contact the reporters on this story: Laura Millan Lombrana in Santiago at lmillan4@bloomberg.net;Sebastian Boyd in Santiago at sboyd9@bloomberg.net

To contact the editors responsible for this story: Daniel Cancel at dcancel@bloomberg.net, Stephen Merelman, Larry Reibstein

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