Tuesday, November 14, 2017

Chile and the elderly

 1% of the Chilean population receives 33% of the country’s income, with multimillion and even billion dollar fortunes common among the elite. Tax avoidance, as in most of the world, is rife.

Almost half of the state budget in Chile is raised via VAT (in the UK, the same figure stands at 17%), representing an acutely unfair sharing of the tax burden. 

Over half the workforce are paid less than 300,000 pesos a month. 

Thanks to the country’s controversial “AFP” private pension system which has turned out to provide shockingly low returns and sparks regular protests  low-income workers can be assured of future pensions that will barely cover their basic needs.  Most pensions are well below the minimum monthly wage of 250,000 pesos (£300)


 There is a lobby at the legislative level, seeking to encourage companies to take on more seniors by relaxing employment laws. When asked about the latter, one government economist wryly commented: “All they want to do is tap into more cheap labour.”

The reality is that many seniors who have no family support are obliged to keep working well past their retirement age regardless – otherwise they’d starve. 

 Petrol pump attendant Isias Riquelme. Aged 74, his monthly AFP pension comes to 120,000 pesos. His rent in a boarding house is 90,000 pesos. Medication for acute pulmonary fibrosis after 50 years of exposure to petrol fumes costs another 150,000. At the petrol station he’s paid the minimum wage and receives the customary tips for checking oil and water levels and cleaning windscreens. “I’ve got no choice but to work and carry on inhaling the fumes,” he sighs. When I ask him what about his future, he replies: “I’ll just have to die.”

When questioned about how the elderly are treated in Chile, most say they feel ignored by wider society, although the biggest problem is trying to survive on a state solidarity pension of 104,000 pesos (£125) a month and pay for food, services, medication and heating fuel. “I spent all winter in bed just to keep warm,” says Fernando. “I simply didn’t have the money to buy gas for my heater.” 

Chile’s 3 million over-60s represent 17% of its 17.5 million inhabitants. In Valdivia, the proportion is even higher at 20% of a total 150,000 – set to rise to 25% in the next decade. Yet the city’s main public hospital has no geriatric unit. According to WHO recommendations, Chile should have at least 500 geriatricians. But there are only around 80, three-quarters of whom work in the private sector, while the few that are employed in the public sector are all based in Santiago

In terms of resources at the national level, Chile is certainly not poor, thanks to its mining, forestry and wood-pulp, wine, salmon, agriculture and financial services industries. However, given the nature of its economy, the inequalities in opportunities and income, and the government’s limited resources, funding for social welfare, healthcare and education are always stretched. 

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