Chapter 8

Rebuilding public ownershipin Chile: Social practices of theRecoleta commune and challenges
to overcoming neoliberalism
By Alexander Panez Pinto

Chile has gone through more than four decades of neoliberalism,
inaugurated by the civil-military dictatorship (1973-90). Different areasof social life (such as education, health and social welfare) went throughradical processes of privatisation and commercialisation. In addition, oneof the central aspects of the current model is the neoliberal exploitationof natural common goods such as the land, water and minerals. Controlof these natural resources is currently concentrated in a few companies,mainly transnationals.
During this neoliberal period, some of the main privatisations were ofstate-owned companies for electricity distribution, gas, water supply andsanitation, hydropower and transport, leading to an increase in the priceof these services for the population. Economic changes were accompaniedby strong political repression of opponents to the dictatorship’s policies.
In addition, the centralisation of power in the national government wasstrengthened, which reduced the democratisation of decision-making
spaces for citizens in general.
Since the 1990s, institutions like the World Bank and International
Monetary Fund usually present Chile as a ‘model’ of development for otherLatin American countries, because of its economic growth. However, after
decades of neoliberal doctrine, there are massive inequalities between
people who can afford privatised services and those who cannot.

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CHILE OF CASES 44
TOTAL NUMBER

Remunicipalisation 2
Municipalisation 42

Health care &social services40
Education1

Local government3Building cleaning and maintenance 2
Housing 1Highlights• Between 2015 and 2018, 40 new public pharmacies have been created andthe “Chilean Association of Popular Pharmacies” brings thesemunicipalities (80 in total) together.
• They follow the public pharmacy model of the local government of Recoleta,
where some residents are now spending 70% less on medication permonth.
• In 2018, the local government created the Open University of Recoleta.
• Today it provides 150 courses in the areas of arts, science, humanities,
social science and technology. In total, 3,300 students have taken one ormore courses at the Open University.

In 2011, Chile saw significant student and socio-environmental mobilisation. Ever since, resentment of neoliberalism has grown. The numberof movements protesting the negative consequences of this model has
multiplied and gradually political forces have emerged that promise
pathways out of neoliberalism. The nation-wide demonstrations of October 2019, still taking place as this chapter goes to press, are the mostrepresentative sample of discontent caused by social inequalities and theprecariousness of living conditions for a majority of Chileans.
This chapter seeks to highlight local initiatives in Chile that are working
for a social re-appropriation of the commons1 in order to strengthen
public ownership of public services across the country. We will focus on
the experience of the local government of Recoleta, a commune in themetropolitan region of Santiago, Chile. Recoleta stands out as an exampleof proposing and practising social alternatives to market-led policies thatfavour the private sector.

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Background
According to the most recent census, Recoleta has 157,851 inhabitants.
It is a commune2 characterised by historical cycles of migration, withthe arrival of migrants from other countries in South America and theCaribbean. Since 1991, the commune is administered by a municipal
government. According to the latest official records, 14 per cent of
Recoleta’s population lives in poverty,3 which is more than double theaverage poverty rate for the Santiago Metropolitan Region.
Daniel Jadue, a member of the Communist Party of Chile, has been themayor of Recoleta since 2012. Mayor Jadue was elected on the promise ofmoving away from the market model to recover public ownership. Fromthen on the municipality aimed to achieve local development based onparticipation and continuous improvement of municipal services as thecore of the relationship with residents.
One of the challenges as defined by Recoleta’s team was trying to create
new public services in areas that were priorities for the population.
Privatised services had become very expensive due to inefficient contracts
that the municipality maintained with private companies.

Key local government initiatives in Recoleta
To illustrate broader discussions about public ownership in Chile, we haveselected four representative initiatives in the areas of health, housing,cleaning and education that are part of the political project in RecOLETA.
Box I

Popular pharmacy
In Chile, private pharmacies supply the vast majority of thepopulation with medication, and the government does not regulate

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prices. Currently, three pharmaceutical companies dominate 90
per cent of the market. These companies have been investigatedand convicted multiple times for crimes of collusion in pricing
medicines. The public health system only offers medications fora limited number of serious illnesses with high mortality rates.
Faced with the high price of medications, the local government of
Recoleta created the country’s first ‘Popular pharmacy’ in 2015.
The pharmacy offers cheap medicines for the residents of thecommune who are treated in the public health system.
The popular pharmacy reclaims the role of the state as a direct
supplier of goods. Bulk purchases of medicines are based on priorevaluation of what citizens need from the national medicine supply
centre (demand-driven vs. supply-driven purchases that are
standard practice with private pharmacies). The public pharmacy
also provides social security based on the principle of solidarity.
It facilitates equal access through subsidies for those with lower
incomes.
Four years after implementation, results of this initiative for thepopulation are already showing. The municipality’s calculations
demonstrate that in some cases there have been savings of up to
70 per cent compared to what the residents of Recoleta used tospend each month on medications.
Box II

People’s real estate agency of Recoleta
Housing in Chile is dominated by the real estate market. The state
only participates through a policy of limited subsidies for thepoorest families, so they can access low-cost housing according
to market prices. This implies that the poorest residents of cities

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must opt for small, poorly constructed houses that in most cases
are located on the periphery. This has deepened urban inequality.
In 2018, the local government of Recoleta created the first Chilean‘People’s real-estate agency’. It offers affordable housing to
the commune’s poorest families. The municipality formed apartnership with the Ministry of Housing and Urbanism to ensure
construction of housing, establishing a project with sharedfinancing (although most of the funds come from the ministry).
The first project, launched in 2018, is a building with 38
apartments. Each 55 m2-apartment has three bedrooms, as well
as a living room, kitchen and bathroom. The construction of thebuilding is scheduled to be completed in 2020. From then on, theRecoleta government will rent the apartments to poor families
for a maximum of five years,4 and will charge rent that is lessthan 25 per cent the household’s income. The administrationis also planning to add another 90 apartments to an existing
condominium project in the commune. This is the first time inChile since the military dictatorship that a local government istackling the housing problem and represents a landmark shift inhousing policies in the country.
Box III

Workers’ co-operative for city cleaning services
Until recently, the government of Recoleta was criticised for theprecarious working conditions and poor service of Servitrans, aprivate cleaning company responsible for street cleaning, parks,public buildings, and so on. Due to these problems, in 2016 thelocal government decided to support the creation of the ‘Jatu
Newen’ co-operative for the cleaning service concession. The cooperative was created by former workers from Servitrans and is131

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now made up of 105 workers belonging to various ethnic groups(Mapuche and Aymara), as well as Chileans and migrants from
Colombia and Peru.
Since then, the co-operative has taken over the cleaning ofthe commune. Workers’ salaries have increased two-fold andconditions have improved, based on a model in which all members
perform the same work for the same salary.
Box IV

Open University of Recoleta
Education is another area where the private sector plays a majorrole in Chile. Nearly 85 per cent of the students in the country attend
a private higher education institution. In addition, graduate-levelcourses are very expensive in relation to wages and living costs inChile. For example, studying psychology in a private university cancost US$8,400 annually, while medicine can cost $11,000 per year.
Even in public universities, students face expensive fees for theireducation.5 This creates barriers to fostering a knowledgeable
and educated population, and impedes the democratisation ofknowledge in the country.
In this context, the local government created Universidad Abierta
de Recoleta (Open University of Recoleta) with the goal of making
general knowledge available to all citizens. To create this project,the municipality used the successful experiences of free universities
in Europe and Latin America as inspiration. The Open University
is not only designed to improve access to education, it also seeks
to encourage the exercise of a more critical, liberated, active andtransformed citizenry in day-to-day life.

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Given the highly privatised education system, one interesting
aspect of the Open University is that it not only accessible to
Recoleta residents, it is open to all who wish to participate in thecourses, free of charge.
To bring this initiative to life, the municipality built partnerships
with several universities and educational institutions both
locally and internationally, including the University of Chile,
the University of Santiago and the United Nations Educational,Scientific and Cultural Organisation (UNESCO). Today, the Open
University of Recoleta offers 150 courses in the areas of arts,
science, humanities, social science and technology. To date, 3,300
students have taken one or more courses.

Photo: Universidad Abiertade Recoleta

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Maincharacteristics

Type of public
ownership

Type of publicownership

Results

Creation of amunicipal pharmacy
to provide affordable
medicines toresidents.

Municipality

Municipality

Significant
reduction in thecost of medications(average savingof 70 per centcompared to what
residents used tospend monthly on
medicines).

End of concession
for the privatecompany Servitrans.
New city cleaning
service, run bya workers’ cooperative.

Municipality granted
a concession toa workers’ cooperative.

Municipality granted
a concession toa workers’ cooperative.

Better working
conditions forworkers. A 50%
increase in workers’salaries.

People’s realestate agency

Construction ofhousing projects
that offer affordable
housing to lowincome families in
the commune.

Municipality inpartnership with
Ministry of Housingand Urbanism.

Municipality inpartnership with
Ministry of Housing
and Urbanism.

The housing
projects are underconstruction.

Open University ofRecoleta

University withnostudent fees.

Municipality inpartnership withother educationalinstitutions.

Municipality inpartnership withother educationalinstitutions.

150 courses persemester with morethan 3,300 students
participating so far.

Popular pharmacy

Workers cooperative ‘Jatu
Newen’

Lower cost andimproved cleaning
services for themunicipality.

Figure 1: Main initiatives of the local government in Recoleta

Spreading the Recoleta model nation-wide:
possibilities and challenges
Finally, it is important to reflect on some developments and challenges
arising in Recoleta’s local politics if we are to overcome neoliberalism inthe country.
After Recoleta’s success, many locales have replicated some of the local
government’s initiatives, the most popular being the popular pharmacy.

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Today, a Chilean Association of Popular Pharmacies brings together 80
municipalities. Other models like the People’s real estate agency are also
being used by other local governments.
The spread of these initiatives is due not only to their results at the local
level, but also to the traction that Recoleta’s experience has gained in
the media. Importantly, they are not top-down models imposed by thenational government; they represent a process of exchange and horizontal
learning among di fferent local governments.

Diverse forms of public ownership
One of the most interesting aspects of the experience in Recoleta is
the diversity of ways of building public ownership. These forms ofownership range from the creation of a new public service managed by
the local government (popular pharmacy), to partnerships between local
authorities and other public institutions (such as with public universities
in the Open University), to a workers’ co-operative taking over theconcession from a profit-driven company (cleaning service). This shows
the importance of thinking about public ownership that goes beyond
state-led institutions in Latin America, incorporating organisations
from civil society in public management. However, one point that does
not appear so strongly in Recoleta’s experience is the implementationof public ownership initiatives where the community plays a key role.
This is a significant shortfall given the long tradition of community
organisation in Latin America around services and common goods(mainly by indigenous groups, peasants and residents of impoverishedurban areas).

Does Recoleta’s experience go beyond neoliberalism?
A key issue with Recoleta’s new initiatives regards their scope andwhether they have the capacity to transcend the neoliberal model in Chile.

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I believe that Recoleta’s initiatives should be taken as a starting point forsocial transformation rather than an end point. In one way, the initiatives
described here are actions to improve the well-being of the population of
Recoleta in sensitive areas such as health, housing and education, making
services free or affordable. In another sense, the experience shows that it
is possible to create new initiatives at the local level as an alternative tothe market-led services that dominate the country.
Nevertheless, if these initiatives are not accompanied by politicisationof the debate around the transformation of Chile’s current politicaleconomy, the experiences of local governments risk becoming mere
corrections to the neoliberal model through which the public creates orrecovers essential services that are not profitable for private companies.
The fact that right-wing local governments are also creating popular
pharmacies is a case in point. These governments seek to take advantageof the popularity of this initiative in order to legitimise their governance.
However, these right-wing municipalities are not seeking to eliminate
the privately controlled medicine market and the private health system.
Their action simply builds on them. For this reason, the popular pharmacy
initiative is insufficient unless accompanied by political proposals totransform the health system as a whole.
Recoleta’s experience has placed the strategic importance that local
governments have in overcoming neoliberalism on the political agenda.
Since the dictatorship in Chile, the historical complaint of leftist
political groups has been that the centralisation of power and resourcesin the national government leaves very little space for transformative
political action locally. The government of Recoleta has shown that with
innovation and an anti-neoliberal political vision, it is possible to reclaim
public services and even create new forms of public organisation at thelocal level.

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The possibilities of implementing anti-neoliberal policies at the local
level have important legal and institutional limitations. At the sametime, what these concrete initiatives do is exactly that: they highlight thelimitations of Chile’s political system and call for change in the current
order to achieve social and environmental justice. This can be a key
strategy to challenge the neoliberal model in Chile in the coming years.
With the mass mobilisation of October 2019, the political horizon for thissocial momentum has widened.
ABOUT THE AUTHOR

Alexander Panez Pinto is an activist in theMovement for the defense of water, land andenvironment (MODATIMA), Chile. He holds aPhD in Geography from the Fluminense Federal
University of Rio de Janeiro (Brazil) and currently
is Assistant Professor at the University of Bio-Bioin Chile.

Endnotes
1

In Latin America, the use of the word ‘remunicipalisation’ as a strategy for achieving thedemocratisation of the commons is controversial. Latin America has a long tradition ofcommunity management of the commons: water, land, education, health, etc. Whereas ‘remunicipalisation’ can indeed be progressive in some European and North American countries,
in the Latin American reality this kind of initiative has been used by States as dispossession
policy to end community management. Networks of movements and organisations such as
Plataforma de acuerdos público-comunitarios de las Américas (Platform of public-community
partnerships of the Americas) prefer to talk about social re-appropriation of the public orsocial re-appropriation of the commons.

2

The commune is the smallest administrative subdivision in Chile.

3

According to a 2015 survey, see: Ministry of Social Development (2015) Resultados Encuesta
CASEN. http://observatorio.ministeriodesarrollosocial.gob.cl/casen-multidimensional/casen/
casen_2015.php

4During the five-year rent period, the municipality of Recoleta will be responsible for advisingfamilies in the search for a more permanent housing solution.

5This situation was one of the main reasons for the student mobilisation in 2011, which put
the problem of profit in education and family indebtedness on the political agenda in Chile.
Major protests demanded a change in educational policy, calling for free, quality public education. The demands of the students have not yet been accepted by the national government
authorities.

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