Covid-19 May Destroy Chile’s Iconic Pension System
Letting savers raid their accounts could shortchange their retirement and the country’s recovery.
The writing is on the wall.
Photographer: Javier Torres/AFP via Getty Images
If last year’s national convulsion wasn’t enough to break up Chile’s romance with market-friendly technocracy, the spreading civic choler over the miseries brought on by the coronavirus pandemic may finish the job.
Yes, President Sebastian Pinera’s speedy measures to combat the outbreak and pump the economy with emergency funds for the most vulnerable households gave the besieged government a breather. Yet the recent 95 to 36 vote by the Lower House to allow Chileans to raid their private pensions was a rebuke to fiscal parsimony and more broadly to Pinera’s faith in capitalist reformism.