The economist Miguel Torres, professor at ELADES and editor-in-chief of the CEPAL Review, published the chapter “The Present as History: The Political Economy of Contemporary Chile (1990–2023)” in the book Crisis and Development Perspectives in Latin America, where he examines the structural causes of productive stagnation and the social tensions Chile is facing, from a historical and political economy perspective.

In his analysis, Torres argues that Chile is not exempt from a long-term regional trend characterized by low growth and stagnant productivity, a phenomenon CEPAL has described as a potential new lost decade. Low economic growth, he explains, not only limits productive dynamism but also impacts other social indicators such as poverty and marginalization.

This fragile economic scenario, the author maintains, is intertwined with democratic weaknesses and political crises. He warns that while immediate issues may be addressed, the deeper structural problems remain unresolved. Within this context, phenomena such as Chile’s social uprising are situated, as expressions of demands for greater wealth redistribution and deeper democratization of political and economic power.

A Social, Economic, and Political Reading

To understand this process, Torres proposes a historical reading of recent Chile from an economic, social, and political perspective, aimed at considering structural reforms. Politically, he reviews the social mobilizations that led to a constituent process that ultimately failed, as well as the difficulties faced by the current government in implementing its reform agenda.

From a macroeconomic standpoint, the chapter analyzes how the current government has had to deal with complex national and international conditions, including inflation, rising prices of basic and energy goods, and unemployment. Torres identifies some reforms he considers promising for improving productivity — such as reducing the workweek and increasing the minimum wage — although he warns that the path to growth will depend on changes in strategic sectors. In this regard, he argues that advancing toward a virtuous cycle of structural change requires appropriate developmental and institutional policies.

The analysis explicitly engages with the thought of Aníbal Pinto and his concept of the development dilemma. It revisits the idea of the “first historical frustration of development,” linked to the failure to advance in productive diversification and technical progress.

Economic Development in Numbers

The chapter also provides a comparative look at Chile’s economic performance. Between 1950 and 1973, during the developmentalist period, Chile grew at an average rate of 3.6%. That figure dropped to 3.2% during the dictatorship. Between 1998 and 2002, amidst international crises, growth was 3.9%, later climbing to 4.7% during the commodity boom, largely driven by copper. After that cycle ended, growth stalled at around 2% annually — the lowest level of the period analyzed.

Comparison with countries like Finland, Korea, and Malaysia reinforces one of the study’s central conclusions: although Chile grew faster during the deepening of neoliberalism after 1990 than in the developmentalist period, that growth came with a declining contribution from productivity, which was even negative between 2014 and 2021.

From a structuralist perspective, Torres links this prolonged stagnation to an endemic trait of Latin American economies: structural heterogeneity. The productivity gap between sectors creates wage disparities and deepens income inequality — a pattern, he notes, that is repeated in other countries in the region.

In his concluding reflections, the author turns to Antonio Gramsci to interpret the social uprising as a cyclical phenomenon — a “Gramscian moment” in which the old has not yet died, and the new cannot yet be born. Five years after October 18 and the constitutional process it sparked, Torres argues that the lesson is not to close the debate, but to address the social demands raised. The way out of Chile’s development dilemma, he concludes, involves “understanding current social dynamics, advancing in deep changes to socioeconomic structures, and strengthening a more participatory democracy.”

The full chapter is available at this link.