Growing Up Is Hard To Do

SANTIAGO, Chile--It might be argued that a country ceases to be underdeveloped when its citizens shift their anger from other people's wealth to the quality of the services their own wealth is paying for.

Chile is perhaps the world's best example. For the past two years, President Michelle Bachelet has faced a national malaise that has manifested itself in violent student protests, strikes affecting copper mining and the forestry industry, and the gradual unraveling of the coalition that has governed since 1990.

I recently asked Bachelet and former President Ricardo Lagos what was happening. Their answers were instructive. Lagos told me that "Chileans feel they have became a nation of consumers but not quite a nation of citizens; in other words, our economic prosperity, which has reduced poverty to 14 percent of the population, is not reflected in the kind of basic services people are obtaining. Our coalition bears some responsibility because our political platform is stuck in the early 1990s and today's problems are those of a more prosperous nation."

I asked Bachelet if she agreed. "Yes," she said, "but I would add that in today's world, because of improved communications, it is easier for Chileans to realize that the countries we now compare ourselves with, like Spain, provide better services than the ones we have. Also, communications make it easier for Chileans to realize that in order to be competitive, our education system needs to take a big leap forward."

Of course, there is no real difference between being a consumer and being a citizen. A person who obtains a first-rate education that makes him or her a proud citizen has to "consume" an education that someone produces. Chile's governing coalition has not quite understood that link--a reason why the economy is heavily reliant on private enterprise while the basic services are stifled by government bureaucracy.

Two-thirds of the families whose children attend public schools are extremely dissatisfied with the quality of education, whereas two-thirds of the families whose children attend private schools, including many who benefit from a voucher program that helps them meet tuition, are very satisfied. Not surprisingly, the students who plagued Bachelet's first year in office were mostly those in the public system.

Another example of the disconnect between Chile's free economy and a service sector riddled with government intervention -- between what Lagos calls "consumers" and "citizens"--is transportation. The government tried to overhaul the capital's transit system, replacing a privately run bus system with a centrally planned operation that covered fewer routes, lengthening the time it took to go from one place to the other and overcrowding the subway, which used to be highly regarded. The result was a political earthquake that left the government badly wounded.

At first sight, Chileans should be content. Their economy is the envy of Latin America. Their average per capita income, which will soon reach $10,000, continues to rise. And the prospects for copper, the country's main export, are rosy: Despite a decline in demand in the United States, China's insatiable appetite for the metal means that global demand will continue to grow for quite some time.

One of the most significant developments that took place in Chile in the last decade and a half was the center-left coalition's buying into the economic reforms it inherited from Augusto Pinochet's dictatorship. That political consensus translated into stability and predictability, generating a steady flow of investment and an increase in economic production. But now that people are weary of the governing coalition, Chile faces a challenge similar to what Spain faced some years ago: the need for the right--the child of the military dictatorship--to demonstrate that it is ready to govern under the rule of law. The effect will be not only to bid farewell to the Pinochet syndrome once and for all, but, more importantly in today's modern and democratic Chile, to engage in a new wave of reforms that begins to narrow the gap between an economic environment that is first class and a service environment that for many Chileans is third rate.

It is by no means assured that the right will opt for such costly reforms or that most Chileans will understand that the way to satisfy their demands is to reduce the bureaucratic dead weight attached to the basic services. Still, it is heartening to know that Chileans are becoming real citizens--worrying more about the quality of that which their money can buy and less about who stole the nation's mythical treasure. If they act decisively upon that growing sentiment, they should catch up with Spain in the not-too-distant future.

By Alvaro Vargas Llosa