Chile Forum

Unsure if this should be in the Global economic thread but I thought I'd post it under RE as that's the asset most of us are contemplating. We've all noticed and to a lesser extent commented on the class system in Chile as in "haves vs have nots". This of course fosters resentment among the have nots who usually happen to be the younger generation. This resentment appears to have manifested itself more recently in a more left leaning vote.
Now it may have been discussed before, (if so, excuse me) but with the peso being an attractive option, several of us are considering pulling the trigger on the transfer of considerable sums in order to secure Chilean real estate in the current downturn.
Chuck, you must be asked "how stable is the country?" on a daily basis, but what do you think the chances are, given the prospect of a long recession/depression that another Allende type vote might happen? In this event, it would be a rough ride for non natives who appear to be "haves".
I noted during my last trip down that the harsh economic times during the Allende regime seem to be fading from memory. If anything, the gringo (US, corporate interests etc) is blamed for sabotaging the economy and dooming his policies. Only the older generation who had to actually feed a family during this period have any recollection of just how tough it can be to make Socialism work, the lesson may need to be re-learned by the youth of Chile IMO.

Like most instances in the history of Latin America, I think there will be another dictatorship or coup of the right if the leftist begin to worry the middle class.

Under right-like rule, an extranjero, as long as you stay out of politics should be fine. Look up Doug Casey's early writings as an expat in Chile under Pino.

Under left-like rule, who knows. Expropriation will hit both chilenos and extranjeros equally.

I believe the largely apolitical youth will yearn for stability over philosophy if things become unstable, but then again ... maybe not.

Two pesos ... FWIW.

My two pesos

eeuunikkeiexpat wrote:as long as you stay out of politics should be fine.

Good point. I've looked a creating several types of legal shelters to protect the investment in land, same as I would stateside.

My RUN/RUT is the same number as I got it 20 years ago and the compra/venta and related documents all have my primary address in Chile, so it doesn't appear as a foreigner's land anywhere. Regardless, once it is registered in your name I wouldn't be too concerned.

I did a bit of research when getting into this and found the number 200 acres (around 80 hectares) came up during Allende's time as the breakpoint for redistribution - no link off hand but if I found it once it has to still be available with a Google search. I paid attention to it as history tends to repeat itself and previous points like this one could be recycled if things went in that direction.

Managing more than 200 is a lot of work ... and most people in Chile are urban residents - perhaps victory gardens? We've bought several rolls of "nylon" (industrial grade plastic sheeting used for many applications) for greenhouses - makes a big difference in terms of being able to diversify a diet. 650/$1 goes a long ways at COVEPA

Greenspan hit a low note this morning, and GMAC is requesting full payment from dealers, so there are more waves to Greenspan's tsunami to come.

Not a chance in hell of that happening again. You all missed the chapter after the Allende chapter in the history book. Goes something like this:

Dumb ass extrema left attempts to seizes foreign owned assets in Chile.
Military overthrows left
New constitution hard codes foreign property rights in to it
Everyone goes out and charges up their credit card.

The only people remaining in Chile that would under any circumstances say that Allende was right, are a bunch of pot smoking 16 year olds listening to their ipods while talking on their cell phones that where not even alive when it happened. Guess what? Most of those dumb asses are able to do that because mom and dad are footing the bill. I have talked to a bunch of them. They think Marx is a clothing store from Europe. We are not talking some sort of 60's or 70's highly philosophical intellectual movement here or some sort of poor rural peoples revolution. They are more of the Anarchist crowd, than the communist crowd. They are the me, me, me generation, and not the save the world generation. The power the thousands of malls across Chile in big and small cities that seem to crop up everywhere.

Don't mix up up the "left", or even most of the mainstream but way politically left "communist party" with what you traditionally think of as left in the States or Europe from like 1930's or so. They all drive their cars to happy hour for pisco sours and pay with their Ripley card. The lower economic class in Chile might not be happy with what they got, but they are also not about to give up what they have. This is one of the most superficial consumerist societies in the world, rich or poor. They all have their pensions tide up in the stock markets, bonds, and whatever other things the private pension system is wired in to. The poor own land, houses, cars, and so on.

The only people remaining in Chile that would under any circumstances say that Allende was right, are a bunch of pot smoking 16 year olds listening to their ipods while talking on their cell phones that where not even alive when it happened.

Not only 16 years old but some university students, although I doubt they can afford an ipod (maybe some chinese mp3 xD, but I don't have an ipod either... I kinda dislike overpriced gadgets like that), but they still smoke pot... you can find lots of them at the local U. Católica here in Temuco, and some others at Ufro, mostly the ones who are like that study humanist careers.

The rest is true, but don't underestimate us young people. There are always freaks here and there, but we normal people outnumber those.

All this leftist radical talk is just that.

It is only the radicals and extremists that get noticed. Your average Chilean even those that lean a fair bit to the left would never vote in another communist president.

Jason Roesler
ISH

j. Ro wrote:. . . . Your average Chilean even those that lean a fair bit to the left would never vote in another communist president. . . .

So say my Chilean friends and family; but, as most of the older ones among them suffered under Allende, there may be bias or wishfulness in their declarations.

By the way, Jason, what does "ISH" stand for? "IHS" I know, but not "ISH"!

It is a little subliminal marketing for the housing company my wife are trying to get off the ground. We are still working on the business plan and I have a meeting with the VP of the current housing company I work for next week about perhaps getting a little more flexibility in my work schedule and getting some ideas from him about this. Ideally I want to be well positioned for when the credit crunch/recession is over and people start spending again.

I want to adopt a similar business model to the company I work for now and just take it down to Chile with me. I can't say to much more, I am just trying to get the name out there so we are already have a finger nail in the market when we are ready to start full operations.

Jason Roesler
ISH

Jason, by the time this crunch is over, you'll have all the work flexibility you need!
As for the students harking back to Allende's time, I've sat through lectures in the most improbable places.
The class struggle isn't over, believe me. Maybe they do smoke pot, I couldn't tell due to my own chicha haze.

Doubted, the Chile of 2008 is not the same as the one of 1970 (when Allende was elected), totally different set of circumstances. You are right in stating that the Allende times are fading from peoples memory, but the other side of the coin is that the "have nots", have a lot more than what they have back them when the class differences were much more pronounced than now.

MikieO wrote:Jason, by the time this crunch is over, you'll have all the work flexibility you need!

If you are implying that I am going to be out of work I will have to disagree. Most people in Canada are still able to buy houses, granted sales are down but my companies market percentage is up. We are actually doing rather well right now.

The Canadian banks are fairly regulated which puts them in a different position than the American bank. There hasn't even been whispers of any of our major banks going under. From what I have heard a lot of economists are saying that Canada is well situated to ride this out.

I think there was a certain set of conditions in Chile that made Allende possible that simply do not exist anymore on a sufficient scale. Before Allende Chile did have a lot more in common with the neighbors (that still have not fixed it). Chile however figured out that you can not get too top heavy with a rich elite and give nothing to lower economic class. The lower economic class must at the least be given the ability to become the middle class, and the middle class must at least have the ability on paper to become the upper class. Now, obviously in Chile there are still a lot of family name type glass ceilings and such, but all those apartment buildings is Las Condes are not filled with people from those super rich elite families. They are filled with the new rich middle class. I am speaking of class in an economic sense here. They often still hold a lot of the political power in the country, even if they lost a lot of their economic power under Allende and the dictatorship. Essentially, even the rich figured out that poor people don't buy stuff.

The rural areas of Chile are still filled with massive inequalities, but the urban parts of Chile have grown so rapidly now it is a City vs rural issue. Just now there are not sufficient people left in the rural areas to be a political movement in themselves. I think there is massive imbalance of political and economic power developing between the densely populated central region and the rest of Chile. They need more say over how their local problems are solved, money is spent, and so on. Does that translate in to the possibility of a Chavis like idiot coming to power in Chile? I highly doubt it.

The real big big big gap, and what you likely get out of your weekly tear gas protest from the university pot club, is education. The gap between the good universities and the cheap universities is massive. There are a few really good universities in Chile, but no where near sufficient to fill the demand or to take Chile out of developing country status. Chile has since Allende done an incredible job of eliminating illiteracy, but they have not done much to move beyond it.

When we hire people just out of the University, what they don't know is impressive. We have to give them crash courses to put the footing under a really narrow education. Essentially that first two years of general and elective exposure to subjects that are common in the United States and other University systems around the World. Things like doing research, using word processors, critical thinking, anthropology, language, economics, political science, and so on. Our clients have that sort of educational background or life experience, so our employees need to be able to relate on that level to understand where our clients are coming from and what they want.

Luckily my wife as a law professor is in position to fix a lot of that in our hiring pool of her law students before they leave school, and we then can choose from the best amongst them. The things my wife teaches however are never taught even at the best Chilean Universities. Most of her students have never written even a single research paper before her classes, have never had any basic critical thinking courses or logic courses, never had a class in say economics or politics, or even engaged in a debate in class. The Socratic method simply does not exist.

Some of the better and more expensive schools in Chile have adopted more international standards, but they are also just getting a handle on it. My wife teaches at both the Austral and the Católica university law schools, and says the difference in the level of education of the Students is massive. The Austral is light years ahead of U. Católica. I am sure that is one of the reasons that the pot smoking tear gas club is bigger at the Universities in Temuco. The pot smoking tear gas club would likely be a whole lot less ticked off, if they had an opportunity to voice their views on the World, have a say in how their own personal education is developed, and most importantly feel like they might really be prepared to do something after the University.

Unfortunately, it is one of those things that politicians do not like staking a claim on because the results don't show for a generation.

I think the fastest way Chile could fix this problem would be to make University eduction free to anyone that can get in, with across the board grants to any student to go to any University they choose. They need to throw that copper money at the University system, and the best way to get the international level of results is to ship students out of the country. If a kid can get in to Harvard, MIT, whatever, then it is automatically payed for. It would diversify the economy, equalize the economic status, and those students would eventually trickle back as a few PhD's and researchers that would bring the level of the Universities up to international standards and open up new markets. It is a formula that has worked for just about every single developed and developing country in the World.