Distribution of Wealth
The gap between rich and poor, once an issue of the landed and the landless, is more complex today. The issue has not disappeared, especially among the Mapuche who hope to reclaim ancestral lands from forestry companies and fundos; in general, though, agrarian reform and land redistribution is a matter of the past.
More important is the difference between hereditary wealth and a nouveau riche plutocracy on the one hand, and a struggling working class on the other. The gap between rich and poor remains an intractable problem despite the country’s macroeconomic successes: According to 2005 statistics, the wealthiest 10 percent of Chileans receive 47 percent of all income; by contrast, the lowest 10 percent earned only 1.2 percent of total income. The income ratio of the highest to lowest 10 percent is roughly 41 to 1.
Some 2.9 million Chileans (about 19 percent of the population) live in poverty, earning less than US$88 per month. About 710,000 (4.7 percent) live in abject poverty, on less than US$44 per month. While these figures have improved since the dictatorship’s last years, when the poverty figure was 40 percent, the rate is now falling. About a third of Chilean children live in poverty.
By contrast, two Chileans made the most recent Forbes list of the world’s richest people: Eliodoro Matte (158th with US$4.1 billion) and Anacleto Angelini (181st with US$3.7 billion). Matte owns mining and forestry companies, while Angelini has interests in energy, fishing, forestry, and mining.
To put this into context, a Chilean earning the minimum wage (roughly US$250 per month) would need 1,366,667 years to equal Matte’s fortune, 1,233,333 to match Angelini, and just under 17 million years to displace Microsoft’s Bill Gates (US$50 billion) from the top of the list. White-collar crime (fraud and tax evasion) is also common, by some estimates up to 7 percent of GDP. Failure to provide employee benefits and overtime is endemic, and wages are low compared to price levels.
The wealth gap has geographical as well as social dimensions; the lowest poverty rates are in the Región Metropolitana (which, incidentally, accounts for 40 percent of the country’s GDP) and in the northern mining areas of Region I (Tarapacá) and Region II (Antofagasta), and in the thinly populated Patagonia of Region XI (Aisén) and Region XII (Magallanes). Even the north’s apparent prosperity is a bit misleading, since capital-intensive mining has been responsible for much of its relative prosperity.
The poorest regions are those with redundant miners and industrial workers, such as Region VIII (Biobío), and large peasant populations, such as Region IX (La Araucanía). Rural poverty is decreasing, though—according to the governmental Instituto de Desarollo Agropecuario (INDAP, National Agricultural Development Institute), more than half the rural population lived in poverty in 1990 and over 20 percent had no cash income. Today those figures have fallen by more than half.
© Wayne Bernhardson from Moon Chile, 2nd edition