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Neoliberal education reform and how to finance political irony to Mourn

( Published in The Counter August 6, 2008 )

about two years have passed so-called movement of the penguins, which manifestations secondary students opened a broad debate on the precariousness of basic and secondary education in Chile . Not surprisingly, the students have returned to the streets and demonstrations, and that the claims raised by these re- and remain a profit, the General Law of Education, the quality of education, full school day, school fee, among others. All this, despite the installation of the Presidential Advisory Council on Quality Education, pompously announced by Ms. Bachelet, who should have generated the appropriate proposals, but that only served to stop the student movement and not exceed great scourges of the educational system: financing, quality and equity.

is important to remember that one of the major problems facing the Chilean educational institutions is the bias that favors the replacement of public and private schools, which has resulted in the dismantling progressive of the former, the latter not supply them with adequate quality and results of fair coverage. For its part, the announced reforms and the educational framework agreement between the Government and the Right have failed to reverse this situation. As is known, the public system was built for about a century governments of all political and was a key factor in the progress and social transformation that the country experienced in the second half of the twentieth century. During the military dictatorship 1973/1990, underwent a severe decommissioning, which has only worsened during the governments of the Concertación.

One of the factors contributing to this situation is funding mechanism used, which, through subsidies per student, makes no distinction between public and private subsidized schools, helping to focus more resources on subsidized private schools end up being more competitive, attracting more tuition and, therefore increasingly enjoying the benefits granted to them by the state, although the north end of these schools is the profit of his supporters. That is, in large part, public resources for education have just finished helping to sustain the rates of return on investment in education.

None of this would be relevant whether or these significant changes had improved the quality of Chilean education. However, according to the TIMSS 2003 international test, applied to the knockout basis Chile averaged 387 in math, 5 points lower than before and far below the international average of 467. Just over countries like the Philippines, Botswana, Saudi Arabia, Ghana and South Africa. Science in Chile obtained 413 points, 7 points less than in 1999, while the international average was 474. Surpassed only in Tunisia, Saudi Arabia, Morocco, Lebanon, Philippines, Botswana, Ghana and South Africa. In this international measure, from the meager results Chile decided to retire.

These transformations have done nothing to improve inequalities and have not contributed anything to be a mechanism for social mobility. The diagnosis of equity is as bad or worse in quality.

The same can be observed in relation to the results of the University Selection Test, for example, the 2007 results, only 1% of the children of lower-income families exceeded 700 points, while the children of high-income families this percentage reaches 16%. These figures show that the poor condition of exclusion in education are very poor, which does not occur with high-income students. Hence the system college selection is not only a reflection of social reality in the country, why in the latest proposal submitted by the secondary to the Ministry of Education last December, raised its eventual elimination and its replacement by a mechanism to consider school systems and scientific humanism.

and wrong in the same direction can consider other mechanisms such as indirect tax contribution (AFI) which is now a public policy as regressive, since the assumption of promoting academic excellence awards to institutions of higher education hosting students from higher socioeconomic strata, are those who scored better on the PSU and come to a time, private schools show better results historically SIMCE. A vicious circle has more than 30 years without breaking, inherited from the dictatorship and the Concertación has ratified. Just remember the demands of the side of the second half of the eighties which were neither more nor less than the same on 24 April, when students again took to the streets in cities across the country and received the usual repression police.

An explanation of the problem comes because of the importance of public education over private. It is more or less well known that private education is not geared to become an instrument of social justice and advancement. Highly developed countries maintain significant levels of public education as a percentage of national wealth, while in Chile, the importance of private education is almost the same as the public.

Obviously, this allows us to infer a direct relationship between public education and development of peoples. This is for the simple reason that the criteria for access to quality education in these countries, there are socio-economic categories, but the qualitative and quantitative improvement of human capital. In addition to the justice factor social development is the factor, ie, when the people want to develop must necessarily involve the whole society and improve their productive capacities and professional. When it puts profit as the rationale of education, in order to achieve better standards of development is inevitably postponed. This, the economists should know very well, because resources are scarce and it is not possible, in most cases, profit and ensure quality, social justice and profit, profit and development. Normally one should choose and when people are too affected by the asymmetries of power in favor of the elites and oligarchies, tend to favor profits over any other goal social. This is the case of Chile.

In our country, we spend approximately, according to the Ministry of Education, about 150 thousand dollars per pupil average monthly private education, where he studied no more than 8% of the students, while spending per pupil in the sector age amounts to no more than 30 thousand pesos a month. That is, there is a huge difference between 5 times the investment per pupil in the public sector's spending per student versus the private sector. 90% of Chilean children have access to a poor quality of education they receive.

For purposes of tying or seek a certain balance, it would take about 60 thousand pesos a month investment per student in the world of public education to achieve the minimum rank of private fees 90 000 pesos per month for 3 million 294 thousand students in the public system and / or subsidized.

The answer that always gives the authority is that Chile is a poor country can not afford such luxuries. Therefore do not expect but the fruits of economic growth. However, this increase would mean an annual investment sum of an additional $ 3,500 million, which is a lower figure compared to the wealth available in Chile, not only from the perspective of the profits of banking, capital and economic groups considerable gains of corporations, but also from the perspective of our rich natural resources, the use and exploitation in Chile, is the sole benefit of private national and transnational capital.

box then we can see that the application of royalties to the use of critical resources such as copper, water, forest resources that large companies operate almost free of charge, leaving a surplus of more than 8 billion dollars year. Consequently, given the available natural resource endowment, Chile may well have the necessary financial resources for educational reform to alter substantially the asymmetries quality, equity and financing that shows the Chilean educational system.

Remember that these resources belong to Chile and charging for the use of these resources is entirely a matter of equity trading, where they are supposed to provide some capital-in this case Chile and its resources should be rewarded the economic contribution that capital generates. Natural resources in Chile and its economic value, representing approximately one third of the sales value of these productive sectors, but given the power of capital and the political imbalance that showcases our country today, these economic values \u200b\u200bare intended to swell the profits capital, rather than be reassigned to the development of the country. This is what made countries like Norway, Finland and other OECD countries that achieved higher standards of development and that is what Chile can do, since their governments are prisoners of the political and economic power of the oligarchy.

development of peoples is a political issue, not technical and this development requires heavy investment, is not free. The people who have achieved have invested significant development resources on that policy goal. In Chile, the choice is an economy based primarily on exporting natural resources whose income is appropriated by the capital, where human capital formation is contrary to the type of system economic is installed, as well-educated people not only become critical and independent citizens, but also would raise wage levels, which would reduce the profitability of capital.

The crisis of education in Chile is not the result of a country that does not have the necessary financial resources, but rather of an oligarchy that tightly taking positions of command and control, is not prepared to compromise, or as less, the distribution of surplus production is the result of collective work of the Chileans, but that is appropriated by the elites, by the power it exhibits incontestable in socioeconomic and political space of the country.

Marcel Claude, an economist.

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IV

( From "To govern is to educate" "Educating for profit" )

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Paraguay in the Journey of Hope

( Published in The Counter July 15.2008)

In his most famous literary and historical, "The Open Veins of Latin America, Eduardo Galeano speaks once of Paraguay, which in its first years of independence from the English Empire, was the only country in South America that really touch the wings of freedom real and effective and, therefore, was crushed in the name of this curious and hypocritical free trade so much like entrepreneurs, oligarchs and capitalists. Paraguay was not dominated by the scourge of foreign debt since the end of English colonization in 1811, the Paraguayan State protectionism practiced to form a protective bar to its domestic industry and domestic market. He became the most advanced state of Latin America, as the British Empire in 1986 instigated the War of the Triple Alliance articulated to Brazil, Argentina and Uruguay, in order to end the Paraguayan experience that threatened to spread the region, making profits that "free trade" provided him with the British. War is remembered as the cruellest of Latin American history, because, after five years of carnage, left with life is barely one-sixth of its population. What follows is a liturgy thousand times repeated, to Paraguay were imposed draconian economic sanctions, had to cede part of its territory to other countries of the Triple Alliance and, of course, pay the debts of the war. Then, a country that had developed during 60 years without recourse to external debt, began to repeat the tragic history of the continent. Le

ignoble legacy of that war epic has been perpetuated until today. According to the "National Human Development Report 2008 Paraguay: Equity for Development", the high concentration of land indicates that 1% of the population has 77% of the land and income and the richest 10% takes 40% of the country's wealth. It is so little attention to the different sign oligarchic governments have given the poorest, Paraguay has one of the lowest social spending in the region, rising to 9% according to UNDP, This contrasts with 20% average for the countries of the region. It is also a country with a highly regressive tax system, since the maximum income tax reaches 10% when Argentina is 35%, 28% in Brazil, and Uruguay is 40%. For its part, extreme poverty will reach 20% of the population and 2.5 billion live on less than two dollars per day, ie 42% of the population. Other figures are more raw and speak more than 50% of the population living below the poverty line and 35% in absolute poverty. Unemployment is about 11% of the economically active population, while informal employment comprises about one quarter of the workers.

As every Latin American country, Paraguay is a victim of transnational capital to utilize in natural resources energy. In particular, has been severely affected, in hydro-sovereignty by the agreements that led to contracts Yacyretá Itaipu, signed by the Stroessner dictatorship in Brazil and Peron's Argentina. Both treaties Paraguay significantly harmed. In the Itaipu treaty states that the energy produced will be shared equally by each country, but also ensures each country to acquire the energy not used by the partner for its internal use. Obviously, as Paraguay consumes only 5% of the energy produced by Itaipu, is forced to sell the surplus to Brazil and values \u200b\u200bfar below market prices. The Yacyretá agreement with Argentina is very similar and harmful to Paraguay. According to figures provided by Lamarque Rebellion, the income received by the holding Paraguay Itaipu, are only 7.5% of market value.

This is the country with which we start trying Fernando Lugo, former Catholic Bishop of San Pedro, one of the poorest regions of the country, on August 15 next when it comes formally to the presidency of Paraguay. There are few hindrances or challenges facing your administration, despite its voluminous close to 41% victory over the Colorado Party candidate Blanca Oviedo (31%) and the former general Lino Oviedo (22%). Failure to obtain an absolute majority in Paraguay does not preclude the presidential elections because in the first round are decided by simple majority. Their participation in politics is very recent, only in late 2006 left the priesthood to get involved in politics, after 100 thousand signatures ordered him to make that choice. Surprise and change have been very significant and instructive for the Latin American region because he managed to form a coalition called the Patriotic Alliance for Change (APC) that include groups rather radical left and the Authentic Radical Liberal Party (PLRA), passing across the political spectrum. The political gestures very Lugo style of freshness and vitality that has always shown the Latin American region, ending the hegemony of the Colorado Party, which ruled without counterweight or alterations for 61 years.

So far, things go Lugo icing on the cake. In fact and according to a survey of business opinion Studies Office (GEO), commissioned and published by the newspaper The Republic of Peru, 59.7% of Paraguayans believe that your government will be good. Moreover, 14.8% believed that Lugo administration will be "very good." However, the same study conducted between June 20 and July 3 last, also indicates that 56.3% of respondents considered Lugo "will have it tough." Clearly, this perception is wrong. On the one hand, must deal with conflicts and contradictions of his own coalition government, the Patriotic Alliance for Change, which by their nature may appear politically multifaceted before long his government. In this regard the challenge is to consolidate the changes in the direction of democratization, social justice, transparency of the public system, the distribution of land and wealth, without necessarily find resistance within the Liberal factions his coalition. It would be unfair to the poor and marginalized for ever and America Paraguay Latin for balance, inner-the government of President Lugo to line up close to economic policies that have been practiced in Chile the governments of the Concertación, which have been a blow to the hopes and casual betrayal of the will popular.

However, the most dangerous for the future of Paraguay is the strong opposition that will be installed, and is classic in our America, employers, landlords and right-wing politicians who see their interests threatened with the sole choice of a man who is not their ranks. Not having yet formally assumed the presidency, these sectors of the oligarchy and should be planning their strategies. So they have always done in Latin America also supported the U.S. classical. In Chile went so far as to assassinate the commander of the Army for refusing to ignore the election results that led to the presidency of Chile, Salvador Allende. So also in Paraguay, the Colorado Party and their constituents-the landowning oligarchy and establish business-fierce opposition to the changes that are intended in Paraguay's Fernando Lugo.


Nothing less can we expect if we think that within the main tenets of his government are, first, a comprehensive agrarian revolution must necessarily affect the property land and, secondly, an economic recovery program linked to greater social justice, which necessarily should happen to increase public spending, the tax burden of the wealthiest and greater state interference in the Paraguayan economy. None of this is or will be liked by the business and landowning oligarchy that, obviously, will do everything possible to shut out the changes and dismay the Paraguayan economy and society. Some would go to the always well prepared "cooperation" U.S. to "secure peace and freedom" in America.

is no less the hope that rises in Paraguay and throughout Latin America's arrival as President of Paraguay Fernando Lugo. No less does not face resistance by employers and landowners, which will not look at costs or aberrant behavior to stop. What they do, have done a thousand times and will continue as they have been very successful at it. What we do not know and will be a mystery, strength, clarity and political savvy of Lugo, his coalition and the Paraguayan people to withstand the political attacks to come.

For those who dream of a great and generous America that embraces all children born in their land, the process starts to live in Paraguay, is all a sign of progress and hope we are confident that, as I said Salvador Allende, the great values \u200b\u200bof humanity will end eventually prevailed.

Marcel Claude, an economist.

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The Failure of Minimum Wage Adjustment

( Posted in The Desk, June 27, 2008 )

It recently announced an agreement between the CUT and the government of Chile, read and Labour ministers, and Andrade Velasco respectively, relative to a minimum wage increase of 10.4%.

Every year, workers represented by Arturo Martinez complained of intransigence and ill treatment by authorities economic. This episode regular and permanent workers always go shorn, contrasts with the situation in the financial sector and corporations that have always had the backing and support of the Unidad de Fomento (UF) as a mechanism to protect their enormous profits During these past years. The situation gives

also think that there would have to redesign the way that the minimum wage is determined, in order to move to automatic indexation, at least the famous and controversial minimum wage, although it would be fair to apply automatic adjustments to all wages paid to contract workers.

worthy or not is just that while the banking and commercial companies automatically adjust their income to the CPI and thanks to the UF, workers must go through strenuous and often unworthy negotiation process to retrieve, to a lesser extent, the effect exerted on prices wages making them lose their purchasing power.

The evidence shows, moreover, that if anything has served to UF, has been to preserve the profits and gains, while wages are sinking into the dungeon of the devaluation. As is known, the UF is an economic recovery mechanism linked to consumer price index (CPI), which enables automatic and daily indexation -Depending on the CPI-all values \u200b\u200bexpressed in the famous UF. Ie it is a great way to hedge against the devaluation implies inflation.

Currently this is used predominantly in the financial sector are indexed so that all types of loans, mortgages and other contracts in the housing market, financial instruments and long-term government. There are also some types of income are indexed as alimony and some benefits of the social security system. At first the value of the UF was set three times a year, which showed a lag for the CPI. From year 1977 until today, the value of the UF is updated daily based on the CPI for last month.

Information is abundantly clear: financial indexation has fairly effectively fulfilled its objective of protecting the financial returns of inflation. Net income from financial institutions show a strong upward trend between 1990 and 2007, with a systematic increase of over 500% in the period, and these appear to be isolated from variations in the level of economic activity, so that declines in GDP growth are not reflected in similar declines in earnings of these institutions.

stresses, in this sense, they just have been adversely affected by the contraction of GDP in 1999, reducing its rate of growth only to quickly resume the course of accelerated growth have been presented to date. The same can be assessed on the banks that use financial indexation as a way to protect the returns on their loans. Again the net profits and rates of return appear to be isolated sector of the evolution of the entire economy.

Moreover, rates of return than banks several times (over 15%) of GDP growth in the period from 1999 to 2004. Is not unlike the general case of corporations. The Search data for the years 2002 to 2007 show a sustained growth of net profits by over 500% during the study period and again regardless of the level of economic activity, since hardly altered with decreases in productive activity country. Clearly, the introduction of financial indexation has been effective in preventing the erosion of purchasing power when income arising in the financial returns of the production factor capital.

However, for workers the story is the opposite sign. As is known, the year 1985, the labor market more flexible to the extent that the fixing of wages began to be subject to negotiation between the employer and the individual worker. From then until today the update of salary depending on the level of inflation is subject to the possibilities of workers to include clauses in their contracts indexing, mainly through the processes of negotiation and collective agreements.

The problem is that in Chile, the scope of these mechanisms is extremely limited, since between 1990 and 2007, the number of workers to collective bargaining is not enough to cover 15% of total employed workers.

This context of demobilization and low union participation illustrates the ineffectiveness of letting the workers themselves periodically for the negotiation of adjustment of wages according to the price variation. Unlike what was observed in respect of profits, wages have shown a tendency to fall.

The nominal wage growth was almost a decade of declines between 1995 and 2004, rising again to run in 2005. Only in 2007 will reach the level of growth experienced by the wages a decade earlier. In real terms, wage growth fell by half between 1995 and 2000, then stabilized and rising again recently in 2007 to the levels of a decade ago.

Contrary also to what happens with capital income, the trend in earnings growth shown in any single business cycle, but in the opposite direction to that presented by the utilities. Nominal wages are the downward course of economic activity between 1995 and 1999 but decline lasts for 5 years. While the course of GDP touches its lowest point in 1999 to begin a new uptrend since 2000, the rise in wages comes only in 2005. If you look at real wages, however, the trend is shown completely decoupled from the trend in economic activity, presenting a more moderate decline but also more persistent over time.

Such developments should be well understood by the trade unions and begin to come together to establish at least one indexing the minimum wage and not have to take every year humiliating and outrageous treatment to undergo successive finance ministers to workers.

Marcel Claude, an economist.