Inequalities in Chile - Essay Example

? Inequalities in Chile Table of Contents 0Introduction 3 2.0Income Inequality 5 3.0Education Inequalities 8 4.0Critical Reflection 10 5.0Conclusion 11 References 11 1.0Introduction 3 2.0Income Inequality 5 3.0Education Inequalities 8 4.0Critical Reflection 10 5.0Conclusion 11 References 11 1.0 Introduction Many emerging economies today are trying all they can to grow their economy. Their role in ensuring the same may well go beyond into the future with a view to making the economy great as well as rising the living standards of the citizenry. Lately, there have been emerging trends in the world that have necessitated a close scrutiny in order to unravel the reasons behind them and their relationship to growth (OECD, 2009). There exist a number of inequalities that may impact the growth prospects of a country. Therefore, comprehensive assessments should be carried out in order to establish the underlying trends so as to address this phenomenon at the earliest opportunity and unearth possible facts. Chile has always enjoyed stability in democracy as well as the economy across South America. In the whole of Latin America, the people of Chile have benefited from improved standards of living, efficiency and effectiveness of the government that has the lowest levels of corruption and a functioning democracy that serves the interests of all citizens in the region. Nevertheless, despite having all these developments in democracy with resolute institutions coupled with a continued growth in the economy, there have been reported levels of inequality in the socioeconomic platform that can be traced from the previous leadership that failed to guarantee a fair treatment to everyone in the society (Robinson, 2001). This kind of inequality in the Latin America region emanates from social decadence with roots way back in colonialism time where the monopolistic aspect of the royal families controlled the economy to a great extent. This action left large chunks of wealth to a few individuals who became filthily affluent, something that widened the gap between those at the helm of leadership and those in the ‘working nation’ with this phenomenon staying long enough even after attaining self-government (Barron, 2009). This led to unnecessary pressures in the social setup, thus jeopardizing the stability that ensures victory within a democratic country in the class of Chile. This country also followed the same route that rewards a few people in the economy which saw immense pressures mount in the 1970s due to the idea to redistribute the wealth acquired unfairly to those who never had any or those with meagre traces (Suter, 2010). To address this inequality, several policies were drafted that aimed at charting the best way possible to redistribute the wealth for the benefit of all. This was also to nationalise all other major sectors and tackle the inequality amicably. Notably, there was very little growth at the time of this inequality and there could be no growth since wealth accumulation was directed to one side of the rich and powerful (Anastassiou, 2011). However, the effort to undertake the redistribution was met with friction amongst the affected, thus bruising the economy with the unending chaos experienced that was evident from how the policies were implemented. The dictatorial leadership altered the economic structure leading to an eventual coup with the economy status still struggling to regain strength soon after the coup. With the elapse of time, the then general constituted a team of experts to address the problem and undertake an overhaul that saw Chile on its feet again. Their activities’ objectives were concerned with tackling inflation that was biting heavily and other monetary policies that remained strict and tight. Many barriers to trade came to an end with some tariffs facing abolishment to pave the way for more lucrative business deals within and without the country (Boesten, 2010). The economy was given a facelift that made the country start exporting some of its surplus, thus leading to a favourable balance of trade. The inequalities in the socioeconomic front have for a long time affected growth negatively since the distribution of the national cake is unevenly distributed thus it has been a big impediment in the search for sustainable growth in Chile. Arguably, the entire undertaking was a success since the social spending was checked appropriately, which had been left in the hands of the government that privatised the health care sector with a view to offering the best to the people, the education sector as well as the pension framework (Morrison, 2011). Unfortunately, the economy fell to its knees once more in 1982 following cumulative debts that had risen to unmanageable levels, hence rising unemployment levels and fall of the banking sector. The transition democracy in the country has overturned events in Chile’s economy, thus experiencing enormous growth with the social spending going up and the safeguarding of the rights of the populace (Chant, 2010). In conclusion, this inequality has lowered the growth rate of the country has had negative influences on the country’s economy to a great extent. 2.0 Income Inequality Notably, when Chile’s growth is audited, the ingredients of the growth experienced are never explained in detail. There is a general view that most of the citizens miss in the representation of the statistics denoting the rates of growth achieved, something that signifies an inequality aspect. Many scholars have looked at this from different stand points with some such as Zahler making an analysis showing presence of two countries in one with regard to income (Evans & Whitehead, 2001). There is a clearly comprehensive disparity in wealth distribution in Chile, but to the surprise of many, the GDP is always on the upward trend with expectations of even higher figures in future. However, other factors are responsible for this, some of which can be attributed to proper functioning of some factors such as mining, as is the case of copper. The economy is wholly dependent on the prices of copper with higher prices in the commodity translating to higher GDP and so on (Milanich, 2010). There are high profits that are reaped from the mining sector that tends to raise the general GDP of Chile, but to the surprise of many, the industry fails to offer adequate jobs to the citizens to devolve the wealth to individual levels. This means that the growth of the country wealth is not a benefit to the many people who are dependent on the country’s resources for survival and satisfaction. Another case in point is that of the 1990s where the GDP of Chile rose considerably majorly through the mining sector alongside other areas (Palma, 2008). The expectation of many is that the same will be distributed evenly to the growth of other sectors of the economy as well as lifting the standards of living of the people. Conversely, this did not happen and many of the citizens of the country still languish in extreme poverty, yet their economy seems to make large strides of development. The wealth accumulated this year ended up in the hands of a few individuals who had power of political connection. This inequality in the income platform is a great impediment to the success and the overall growth of the country that is endowed with plenty of resources, most of which it cannot share with the common people, leaving the majority poor and helpless (Collins, 2001). The graph below reveals that the level of inequality with regard income has been facing fluctuation from 1990 to 2003. It started from slightly below 55% ever changing all the to approximately more than 51% in the year 2003 Those who own big industries, supermarkets, banks and other companies are the mighty and powerful and are the actual people who run Chile at the expense of the poor citizens and control the economy indirectly alongside making decisions that are vital for the country. This is a clear view of the fact that the leadership of the country is left in the hands of those who have accumulated massive wealth, thus other peoples’ lifestyles are inconsequential and less important to the government. Research shows that almost 90% of the people earn less than the salary earned in developed countries on average (OECD, 2011). Statistics also hold that these wealthy Chileans evade tax at all costs. Any policy that aims at taxing people based on what they earn is shot and discouraged with a view to protecting the rich. Many cling to the idea that having free education will end up benefiting the rich and elite, but the fact has always been that they fear that their taxes would face an increase since the money needed to subsidise the same should come from the public through taxation and other statutory deductions. Another sorrowful situation is the protest by students who have been thwarting any efforts for come up with a long lasting solution to the dragon of inequality for the last couple of days. However, as is evident in the discussion of this inequality, there seem to be a general growth in the economy and the GDP seems to take an upward trend regardless of the inefficient distribution of wealth to individuals. This is the major effect that is posed to the growth and development of Chile’s economy. It is ironical how the growth is accelerated and the citizens are treated unfairly yet they are the same drivers who take the economy to higher destinations. 3.0 Education Inequalities The education system in Chile shows a sense of inequality more so by the education ministry evaluation process that makes the assessment of both primary and secondary students. Those who are preparing to further their studies in higher institutions are either favoured or misused by the process. For instance, those students who come from rich areas and families get higher marks than those from other poor areas in Santiago. Those who study in the best schools get better education with little regard to whether the school is public or private (Boudon, 2006). Education happens to be part of the ingredients that improve the growth of a country where the elite propels the economy by engaging all the factors of production fairly for the benefit of the whole country. Thus, its discrimination against a fraction of the population will rob the country of great talents that could be harnessed in future to be an asset to the economy. With this in mind, Chile should increase its budgetary allocations towards education so that more institutions can be built in order to accommodate every willing and qualified candidate. This is the only way that the government can erase the existing inequality in the education sector and also restore confidence and loyalty to the systems. Increase in the GDP must be distributed equitably to cater for the needs of the population at all levels. Development and growth rely on equity and equality where applicability can occur. These inequalities have slowed growth of the country as it is just a small number that enjoy the national cake while others suffer in poverty and starvation. Education is the key to an augmented growth of a country as the economy is bound to be run by experts and professionals. In this regard, distributing this noble asset unequally sets the stage for retardations in growth thereby impacting negatively towards the same. This inequality has therefore been an obstacle to the growth of Chile thus the realization of having a country rich in economic gurus and other sectors is put at bay. There has been an increase in education spending in Chile increasing from 2.5% in 1990 to an estimate of 4.4% currently. The graph above reveals such spending and quality of education in a relationship where each level of spending per student is depicted. 4.0 Critical Reflection Distribution of income involves a set of processes including taxation, cash transfers and others. The question of whether the same aspect impacts on the improvement of growth in a country or not remains open and debatable. Inequalities in a country are generally associated with retarded growth and could lead to far reaching effects towards not only the economy but also the populace of that nation at large. For instance, inequalities in health are believed to result to poor health conditions as visualized in measures of average rates of mortality, mortality rates in infants, more so in nations with great levels of income inequality. Nevertheless, the relationship between equity as far as health is concerned and inequality in income in various groups of population has not been seen adequate exploration. Health equity unearths lack of differences in some aspects regarding health across the groups that are defined in terms of socioeconomic, demographic or even geographic frameworks. The same therefore, has a reflection on health distribution as opposed to health levels on average. Although there has been generally understood that an elaborate distribution of income has an association with a better distribution of education and health, there has never been such a demonstration whatsoever. Increased income for working class and other people may not directly translate to improved health there is lack of controls and accessibility to income related health determinants (Castillo, 2011). Arguably, education is the key to better income and development in a country. Likewise, there has not been a keen scrutiny that associates education inequalities with such a phenomenon. More research should be done to establish these issues in order to get a clear understanding on the diversity exhibited by these issues (Mullard, 2004). The relationship between education, socioeconomic and education inequalities should be given advanced studies so that more insights can be derived to add to the body of knowledge concerning the same. 5.0 Conclusion Countries, just as business enterprises, should always endeavour to better the lives of the citizens they lead. The fortune realised should be equitably distributed so that the benefit derived can reach every party to the organisation. This paper has scrutinised how this aspect has been misused by the top leadership of the country. In a business setup, the profit realised is taxed and the remainder after that is either distributed to the shareholders or even ploughed back to grow the business to greater heights (International Monetary Fund, 2003). All these activities are done transparently without favour to any party to the business (Wagstaff, 2002). Moreover, the surplus is still directed to the society in which the business operates to indulge in corporate social responsibility alongside sponsoring events and all. On the other hand, the interests of a country should be addressed accordingly. This paper has sought to establish the inequalities presented by the Chilean government in the process of offering its services to the people. As scrutinised, sensitive sectors such as the mining is left to benefit a few at the expense of the entire nation although the government is seen to give a deaf ear to the affair (Babones, 2009). References Anastassiou, G. A. (2011). Advanced Inequalities. World Scientific. Babones, S. (2009). Social Inequality and Public Health. The Policy Press. Barron, K. (2009). Health Inequalities, Volume 2. The Stationery Office. Boesten, J. (2010). Intersecting Inequalities: Women and Social Policy in Peru, 1990-2000. Penn State Press. Boudon, L. (2006). Handbook of Latin American Studies: Social Sciences. University of Texas Press. Castillo, J. C. (2011). The Legitimacy of Economic Inequality: An Empirical Approach to the Case of Chile. Universal-Publishers. Chant, S. H. (2010). The International Handbook of Gender and Poverty: Concepts, Research, Policy. Edward Elgar Publishing. Collins, J. (2001). Chile's Free-Market Miracle: A Second Look. Food First Books. Evans, T., & Whitehead, M. (2001). Challenging Inequities in Health: From Ethics to Action: From Ethics to Action. Oxford University Press. International Monetary Fund. (2003). Chile: 2004 Article IV Consultation – Staff Report; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Chile. International Monetary Fund. Milanich, N. B. (2010). Children of Fate: Childhood, Class, and the State in Chile, 1850–1930. Duke University Press. Morrison, M. (2011). Chile. Raintree. Mullard, M. (2004). The Politics of Globalisation and Polarization. Edward Elgar Publishing. OECD. (2009). OECD Territorial Reviews OECD Territorial Reviews: Chile 2009. OECD Publishing. OECD. (2011). Maintaining Momentum OECD Perspectives on Policy Challenges in Chile: OECD Perspectives on Policy Challenges in Chile. OECD Publishing. Palma, A. (2008). Explaining Earnings and Income Inequality in Chile. Goteborg University. Robinson, W. I. (2001). Promoting Polyarchy: Globalization, US Intervention, and Hegemony. Cambridge University Press. Suter, C. (2010). Inequality Beyond Globalization: Economic Changes, Social Transformations, and the Dynamics of Inequality. LIT Verlag Munster. Wagstaff, A. (2002). Inequalities in Health in Developing Countries: Swimming Against the Tide? World Bank Publications. Read More