The Chilean summer, 2012

The good news:

According to the Heritage Foundation’s 2012 Index of Economic Freedom (, Chile holds seventh place, ahead of the United States (#10 on the list).  The index measures such things as rule of law, regulatory efficiency and the openness of its markets. The Organization for Economic Cooperation and Development (OECD) reports ( that Chile is in relatively good shape in the face of the global financial downturn, having rebounded relatively well after the 2010 earthquake and tsunami and predicts a growth rate of five percent for next year.

The bad news:

The OECD also notes that Chile has the highest income inequality of any member country and that despite some modest improvements, “inter-generational social mobility is low.” And not all investors are enthusiastic.  Last year Israeli entrepreneur Arnon Kohavi moved from California’s Silicon Valley to Santiago to start a venture capital fund, confidently predicting that the next big thing like Skype or Facebook was surely going to come out of Chile. Six months later, disillusioned, he transferred to Singapore, saying that while Chile had great potential, it was “not there yet.”  He had some rather unflattering things to say:

“The Chilean society is less dynamic than Asia or the US; a handful of monopolistic families control the country, and won’t move. Worse, these families don’t care about anything (the young, the poor…) besides their money. They don’t have to: the country’s natural resources (copper, etc.) are a disadvantage here, because it means the rich don’t need to work hard.”

On the subject of social inequality, the Chilean media was rocked this past week by revelations that in certain affluent gated communities, gardeners, construction workers and domestic employees are not allowed to enter the neighborhoods on foot, but must arrive and depart in shuttle buses which deposit them at their employers’ homes.  One homeowner challenged the regulation in court, calling it “an outrage against people’s dignity.” He complained that his house was only three blocks from the community’s entrance but that his housekeeper was not allowed to walk there.  The court turned down the homeowner’s petition, saying the restriction was designed to prevent burglaries. At another gated community, a notice was circulated requiring all domestic staff to wear uniforms and were prohibited from entering the pool area.

Chilevision broadcast an interview with a 28-year old housewife living in one of the gates communities, who defended the quasi-apartheid policy, saying “just imagine what it would be like for all the maids and workmen to be walking around when your children are out riding their bicycles.”  Her statements caused an uproar, and a television employee who leaked the complete transcript of the interview was fired.

The Santiago Times published an English translation of a good column on this and related issues by Patricia Politzer, one of Chile’s leading journalists:

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