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184 OF THE 346 MUNICIPALITIES ARE IN WATER SHORTAGE

These are times of extreme drought. And despite the fact that Chile has one of the most abundant water reserves in the world, thousands of people are living under pressure to protect the precious resource.

In fact, 53.2% of all municipalities in the country have a water shortage decree. This mechanism seeks to diminish the impact of the water deficit by redistributing water resources and even by purchasing water rights. But it does not cover the root problem in rural areas, where agriculture and mining leave populations without a drop.

From the total of the Chilean rural population, something like 2 million people, 65.8% of them live under this decree. Meanwhile, in those same sectors, agriculture grows and grows.

Avocado is the great example on the agricultural side and its worst face has been seen in Petorca, a small town about 220 kilometers north of the capital. Its warm climate, between mountains, resisted because of its large aquifers. However, agribusiness has taken everything, legally and physically, digging deep wells to irrigate their avocados, while the wells of the population have already dried up.

Meanwhile, in the mining industry, the alarm bells were sounded by the mining giant Antofagasta Minerals, which last year cut its production estimate due to the severe drought. "This possible reduction would be greater if Los Pelambres were not one of the most efficient operations in the use of water," warned Iván Arriagada, CEO of the mining company, one of the largest operating in Chile and owned by the Luksic group.

However, a small town in the district of Los Vilos in the Fourth Region of the country near that project think different. Caimanes was left without water because of Pelambres project. Although in this case it was not only the use, but also the disposal of the water used in the mining machinery, it is one of the direct repercussions of Chile's extractivist model.

Inflation and job vacancies skyrocketing… as everywhere else

The labor market continued to recover in December, consolidating the improvement of 2021 following the lifting of health restrictions and the economic reactivation that generated greater demand. According to the Central Bank's Internet Job Postings index, in december reached 101 points (on a base 100 index in 2015), up 45.7% from December 2020.

But jobs are not being filled as fast as they are being created. Partly because the pandemic delivered things to us that, normally, we weren't used to. So, for many experts, the heat is on the job benefits can offer to workers.

Employers who are requiring face-to-face presence will have to adapt to attract post-pandemic workers: flexible schedules, telecommuting, training, transportation, appropriate equipment and, of course, higher wages.

Another problem that has become clear in other latitudes is inflation, which is running rampant in Chile. With a gap that has been widening between the market's two-year inflation expectation and the Central Bank's target of 3% for the same period of time, the question that arises at this point is when experts see it returning to anchor.

Inflation has been surprising them month by month with records above their projections since mid-2021, and the year ended with an annual increase in the Consumer Price Index (CPI) of 7.2%, after December's record was again above forecasts (0.8% versus 0.5%, respectively). For the following months, they expect that it will continue to climb until it reaches a ceiling of 8% between May and June of this year.

Even as inflation hits its highest level since 1982 in the United States, Chile just got back to 2008. But is this a bad o good thing? Depends on the circumstances.

Almost everyone agrees that super fast price increases — often called hyperinflation — spell trouble. Check Venezuela out to see how is this going. They destabilize political systems, turn middle-class workers into paupers overnight, and make it impossible for businesses to plan.

Moderate price gains, even ones a bit above the Fed’s official goal, are a topic of more-serious debate. Slightly higher inflation can be good for people who owe money at fixed interest rates. If I sell coconuts for $1 and owe my bank $200 today, but next year I am suddenly able to charge $1.05 for my coconuts, my debt becomes easier for me to pay back, said a article on the NYTimes.

But inflation can be tough for lenders. The bank to whom I owe my $200 is obviously not happy to get 190 coconuts worth of money instead of 200 coconuts worth. For workers taking home paychecks, whether inflation is a good or bad thing hinges on what happens with wages. If a worker’s pay goes up faster than prices increase, they can still find themselves better off in a high-inflation environment. This could be really hard for people on fixed incomes, like students and many retirees.

Wages are growing quickly right now, especially for lower earners, but some measures suggest the growth is not keeping pace with inflation as it picks up steeply. Still, many households are also receiving transfers from the government — including an expanded Child Tax Credit — which could keep some families’ financial situations from deteriorating.

A zombie government seeks its post-apocalyptic legacy

At the end of last year, the government of Sebastián Piñera began its departure from La Moneda after almost four years since its assumption of office. Spite of a strong campaign to highlight positive points of this administration, such as the one carried out by Juan José Ossa in several media, the reality is that the mandate ended two years ago.

Piñera came to the Government in 2018 with almost 3.8 million votes out of a total of 7 million votes. Almost one million less votes than those achieved by Gabriel Boric last December out of a total of 8.3 million votes. An abysmal difference that is reflected in his actions during the October 2019 revolt and the pandemic.

According to internal Government sources, they point out that the legacy should be the "democratic exit" regarding the 2019 social outburst and the management in the pandemic, especially the vaccination plan. This is due to the fact that he is worried about "what people will say" about his administration. According to the CEP survey of September, 68% disapprove of his administration, while the last Cadem survey of early December revealed that 22% approve of his government.

The General Secretary of the Presidency, led by Ossa, has sent different communications for the Chilean right wing to bow to this situation: "Time will highlight and rescue at least two things from the government of President Piñera: the value, relevance and importance of taking a gamble for an institutional solution to a very serious social crisis that we all lived through (...) this will be a very important seal that will be remembered".

A solution that was not proposed by him, of course. Remember that the November 15 agreement was signed by parliamentarians and politicians from the whole spectrum, allowing a democratic solution to a government that was on the verge of falling. But this is something his entourage does not understand. A letter from one of his daughters published in El Mercurio says that "it is not easy" to explain to your children "why the streets are lined with 'Piñera murderer', when he has not killed anyone".

Piñera preferred to let them set fire to the Metro while he ate pizza in a totally irresponsible attitude for someone who holds the highest power in the nation. The same with the migratory crisis, leaving thousands of migrants helpless and in spite of making an international show where he opened the door to this avalanche of Venezuelans, Haitians and Colombians. Why go into details of what is happening in La Araucanía, where the State simply ceased to exist during his government.

That is the true legacy of Sebastián Piñera.

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#ChileWeekly: Piñera and the search for a…