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US Foreign Policy Challenges in East Asia

Luis Durani

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Despite the media’s constant barrage of news pertaining to the Middle East, another region that is strategically imperative to the US is East Asia. The Far East is comprised of economic powerhouses such as China and Japan as well as the vibrant and growing economies of South Korea, Taiwan, Vietnam, and others. East Asia will be the global economic center of gravity in the coming decades.

While the economic forecast looks promising, the diplomatic and military situation appears tenuous at best. One of the bigger concerns for the next president of the US will be how they approach the growing rift in East Asia between China and her neighbors.

China

Currently, there doesn’t appear to be any major challenger to US hegemony in the world but many commentators refer to China as the most viable contender. The Chinese economy has been growing consistently each year for the past thirty years. On par with the economic growth, the Chinese defense budget has been increasing as well.

At the moment, China does not appear to wield any sort of ideological bent that it desires to propagate to other nations instead it is focusing on economic development. As such, it does not appear that China will become an ideological rival to the US on the global stage like the Soviet Union. Nevertheless, as China grows it will want to reassert itself in its backyard without any foreign meddling. This aspiration poses a long-term strategic threat to US security imperatives in the region. Aside from not being able to fulfill mutual defense treaties with allies such as Japan and Taiwan, the US can be left out of a region with the largest economic growth projected in the near future.

Aside from the military tensions in the region, the next president needs to impress upon China the role and responsibility of a rising power with respect to its international duties. One of the major issues that the US and other nations have encountered recently is the currency devaluation practice China employs in order to help stimulate exports at the expense of international trade. Another contentious problem that will need to be addressed is the protection of intellectual property. The Chinese have become notorious for stealing and imitating an array of intellectual property and rebranding it as her own.

Additionally, the Chinese will need to be confronted on matters of cyber infiltration. With the ever growing digitalization of the developed world, the vulnerability of the US to a cyber-attack continues to grow. The US has already sustained cyber-attacks allegedly by Chinese hackers that were working for the People’s Liberation Army. These types of attacks resulted in losses of American military and corporate intelligence.  

In the last couple of decades, the fashionable mantra in politics is to point out that the US is in decline while China is on the rise. Even though China may match American economic might in the coming decades, its military and technological gap is still wide. With the US on the path to becoming energy independent and a potential energy exporter, the supposed decline of America might be not so near. However in order to perpetuate the status quo, the next president has to work on maintaining a relationship with China that helps bring both nations closer together to resolve global issues while ensuring both nations are working on equitable terms.

South China Sea

Robert Kaplan, one of the foremost experts on the region, stated: “The South China Sea will be the 21 st Century’s defining battleground.” This large swathe of a sea is considered to be a great economic source of wealth as well as vital to geopolitical strategy.

With eight nations vying for control of the maritime features, tensions are starting to spill over into potential conflict. One of the most recent flashpoints has been the artificial island constructions by China, which were employed as airstrips. This allows China to create forward operating “islands” in the middle of nowhere and increase its Economic Exclusive Zone (EEZ).

The significance of the South China Sea is its potential for wealth as well as the strategic advantage it will bequest upon whoever controls it. Unlike other seas, the South China Sea has three factors that make it one of the most important seas to observe and promises a major conflict in the next few decades.

The South China Sea has a wealth of resources such as fishery stocks that comprise the livelihood and diet of so many in the region. It is believed to be one of the most lucrative fishing areas in the world. Securing a stable food sources will be a critical aspect for most countries in the region as their population continues to grow.

The discovery of large sources of oil and gas reserves under the seabed has only further enticed the surrounding littoral nations to intensify their claims for control of the sea. Chinese officials have estimated the oil reserves at one trillion US dollars. The potential for gas is even larger. If any nations manage to wrest control of the region, energy independence as well as a large revenue stream is guaranteed.

The control of the South China Sea is vital in projecting power to the Eurasian rimlands and eventually to the vast interiors. The sea also serves as a natural link between the Indian and Pacific Oceans only furthering its appeal. This natural passageway between the two oceans creates what is known as the Malacca Dilemma for Chinese strategists. The Malacca Dilemma refers to the dependence of China on the Strait of Malacca both economically and geopolitically. The Strait of Malacca is analogous in importance to the Strait of Hormuz in the Persian Gulf. One-third of all global trade transits through the strait as well as more than the overwhelming majority of raw materials and energy needs for the Chinese economy. Due to the increased traffic over the years, it has become a critical chokepoint.

China appears to be both the most economic and militarily preponderant force in the region. As China continues to grow, it will assert itself much more forcefully in the South China Sea in order to expel the US military from the region. If successful, the Chinese can disturb the freedom of navigation in the major sea lanes. This will threaten US economic interests. The next president will need to watch the sea carefully and continue to use the US navy as a buffer to Chinese ambitions in order to ensure freedom of navigation.

North Korea

North Korea or the Democratic People’s Republic of Korea (DPRK) poses one of the most precarious predicaments in politics due to its nuclear arsenal, fickle dictator, unstable economy, and repressed population. The volatile situation makes all the regional states apprehensive and afraid of the ruinous potential that exists in being dragged into a conflict. The Chinese are reticent to defend the North Koreans yet more fearful of a united Korea with an American base on its border. Across the demilitarized zone, the US is weary of defending the South Koreans yet it cannot be perceived that it won’t fulfill its commitment to an ally. The best way out is a compromise between the two Koreas but there isn’t any desire on either side of the border to do so.

China is the main lever that can control North Korea’s actions to an extent. The next president will need to work and goad China to rein in the instability caused by Pyongyang. With an insecure dictator that possesses a nuclear arsenal, North Korea will be a country that keeps the next president awake at night.

Taiwan

Taiwan or the Republic of China continues to be a thorn in the Sino-American relationship. When Taipei announced its government, the US was not diplomatically apt to recognize the country. It was not until the Korean War that the US started a policy of containment in the Pacific Rim region with the protection of Taiwan as a priority.

As China grows economically and militarily, the Taiwan question will come more into play. Of all the perils associated with the South China Sea to security and peace, the disorder affecting the Taiwan Straits is by far the most threatening. The prospect of war is nowhere more promising than in this dispute. The US mutual defense agreement with Taiwan has helped secure it from a Chinese invasion for now. As the Chinese military continues to strengthen its capabilities, especially its anti-access/area denial capabilities, it will become more brazen in its actions towards Taiwan. The next US president will need to watch the precarious situation develop while maintaining its commitment to Taiwan. The US will not only need to play the role of a security guarantor to Taiwan but also a tension mollifier between the two rivals in order to maintain the peace.

Vietnam

Once an enemy of the US, Vietnam today represents one of the most pro-American countries in the region. With the rise of China, Vietnam’s status in the Pacific tug of war between the US and China has enhanced. Naturally, Vietnam is inclined towards the US because of its long and quarrelsome history with Beijing as well as China’s regional hegemonic aspiration. Although the US and Vietnam have not cozied up to the level of other regional states, the common interest of containing China’s regional goals is motivation enough for both countries to further develop their burgeoning relationship.  

China and Vietnam are currently engaged in disputes in and around the South China Sea mainly the Paracel Islands. While Vietnam claims the islands, China fully controls them. The islands have been the site of many clashes. When China placed an oil rig within Vietnam’s EEZ and justified it by arguing that the area was within the Chinese EEZ due to its “sovereignty” over the Paracel Islands, a face-off ensued. After a few clashes, the Chinese withdrew citing completion of their test but warned they reserved the right to return. While the US called the Chinese move rabble-rousing it did not impose any punitive measures. At the same time, the US continues to not sell any lethal weapons to Vietnam. With the US uninvolved and China’s growing naval strength, Vietnam is becoming somewhat intimidated and may eventually bend to the Chinese whim.

As the US begins to pivot more to Asia, the next US president needs to consider taking the relationship with Vietnam to the next level. With a deep water port and growing industrial manufacturing capabilities, Vietnam can play a great military and economic role in the US East Asia strategy.

Burma (Myanmar)

Burma has the potential to play the pivotal trump card in the US-China tango for East Asia. Due to the lack of media coverage, Burma’s importance to the US strategic imperative for the region is not stressed enough.

China has a long and comfortable relationship with the country since its independence in the middle of the 20th century. China is a vital military supplier and has many strategic military cooperation initiatives. In exchange, China is granted access to Burma’s naval ports, which grants it an entrance to the Indian Ocean bypassing the Malacca Strait. China hopes to use the nation as a corridor to the Indian Ocean and reduce its reliance on the South China Sea. The country also serves as a pivot point for China to observe Indian military movements in the region. However, this friendly relationship between the two nations has hit a few bumps in the last couple of years. Burma has beckoned a change in its foreign policy by engaging other regional players and reducing its dependence on China.

In recent years, the relations between the US and Burma has warmed up with the exchange of ambassadors as well as the easing of sanctions against the country. Despite human rights abuses by the Burmese government against the Rohingya minority, economic exchanges with the US are still going forward. The US is supporting the democratic transition in Burma. As Burma’s neighbor to the north becomes stronger and richer, a counterweight is needed to help ensure Burma’s interest and regional stability is maintained. The next president of the US will have many countries to look at in this part of the world but Burma will play a fundamental role in determining if Chinese ambitions are checked for the region. A balance is needed between encouraging the transition to democracy and condemning their actions towards the minority population. It will be a fine line for the next president to tread on.

Luis Durani is currently employed in the oil and gas industry. He previously worked in the nuclear energy industry. He has a M.A. in international affairs with a focus on Chinese foreign policy and the South China Sea, MBA, M.S. in nuclear engineering, B.S. in mechanical engineering and B.A. in political science. He is also author of "Afghanistan: It’s No Nebraska – How to do Deal with a Tribal State" and "China and the South China Sea: The Emergence of the Huaqing Doctrine." Follow him for other articles on Instagram: @Luis_Durani

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Some False Statements Made in the Trump- Impeachment Hearings

Eric Zuesse

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In the December 4th statement that was made by Stanford University law professor Pamela Karlan was this:

We have become the shining city on a hill. We have become the nation that leads the world in understanding what democracy is. One of the things we understand most profoundly is it’s not a real democracy, it’s not a mature democracy if the party in power uses the criminal process to go after its enemies. I think you heard testimony, the Intelligence Committee heard testimony about how it isn’t just our national interest in protecting our own elections. It’s not just our national interest in making sure that the Ukraine remains strong and on the front lines so they fight the Russians there and we don’t have to fight them here.

It’s also our national interest in promoting democracy worldwide, and if we look hypocritical about this, if we look like we’re asking other countries to interfere in our election, if we look like we’re asking other countries to engage in criminal investigations of our President’s political opponents, then we’re not doing our job of promoting our national interest in being that shining city on a hill.

She said: “We have become the shining city on a hill.” Here is a list of just a few of the democratically elected presidents and prime ministers in foreign countries whom the U.S. regime overthrew, by coups, in order to install brutal dictatorial regimes there that would do sweetheart deals with America’s international corporations. Also, unsuccessful, merely attempted, U.S. coups are discussed there.

Furthermore, the scientific studies of whether the U.S. Government is controlled by the public (a democracy) or is instead controlled only by its very wealthiest (an aristocracy) are clear: this country is an aristocracy, not a democracy at all, except, perhaps, in the purely formal senses of that term — our great Constitution. Far-right judges have recently been interpreting that Constitution in the most pro-aristocratic, anti-democratic, ways imaginable, and this might have something to do with why the scientific studies are finding that the U.S. is now a dictatorship. And this fact, of America’s now being a dictatorship, was blatantly clear in America’s last Presidential election, which was actually a s‘election’ by Americas’ billionaires — not  by the American public.

How, then, can Professor Karlan be respected about anything, if she lives in a dictatorship (by its aristocracy) and is deluded to think that it’s still (which it never was completely) a democracy?

Furthermore: her statements about Ukraine are equally deluded. She is obviously unaware that the Obama Administration started planning its coup against Ukraine in 2011 and started implementing it in the U.S. Embassy in Ukraine on 1 March 2013, and started in June 2013 soliciting bids from U.S. companies to renovate at least one building in Crimea for use by the U.S. Navy to replace Russia’s main naval base — which Russian naval base was and is in Crimea — by a new U.S. naval base to be installed there. 

The craziest thing of all about Karlan’s statement, however, is this part: “It’s not just our national interest in making sure that the Ukraine remains strong and on the front lines so they fight the Russians there and we don’t have to fight them here.”

Imagine if someone said, “It’s not just our national interest in making sure that the Mexico remains strong and on the front lines so they fight the Americans there and we [Russians] don’t have to fight them here.”

If a Russian were to assert that, would the statement be any more justifiable than what Karlan said regarding Ukraine? Of course not! Even an idiot can recognize this fact. But Karlan can’t.

On December 5th, the anonymous “Moon of Alabama” blogger, whose opinions and predictions turn out to have been correct at perhaps the highest rate of anyone on the internet, headlined “The Delusions Of The Impeachment Witnesses Point To A Larger Problem” and he not only pointed out the “delusional” beliefs of Professor Karlan (“One must be seriously disturbed to believe such nonsense. How can it be that Karlan is teaching at an academic level when she has such delusions?”), but he noted that:

How is it in U.S. interest to give the Ukraine U.S. taxpayer money to buy U.S. weapons? The sole motive behind that idea was greed and corruption, not national interest:

[U.S. special envoy to Ukraine] Volker started his job at the State Department in 2017 in an unusual part-time arrangement that allowed him to continue consulting at BGR, a powerful lobbying firm that represents Ukraine and the U.S.-based defense firm Raytheon. During his tenure, Volker advocated for the United States to send Raytheon-manufactured antitank Javelin missiles to Ukraine — a decision that made Raytheon millions of dollars.

The missiles are useless in the conflict. They are kept near the western border of Ukraine under U.S. control. The U.S. fears that Russia would hit back elsewhere should the Javelin reach the frontline in the east and get used against the east-Ukrainians. That Trump shortly held back on some of the money that would have allowed the Ukrainians to buy more of those missiles thus surely made no difference.

To claim that it hurt U.S. national interests is nonsense.

It is really no wonder that U.S. foreign policy continuously produces chaos when its practitioners get taught by people like Karlan. …

The Democrats are doing themselves no favor by producing delusional and partisan witnesses who repeat Reaganesque claptrap. They only prove that the whole affair is just an unserious show trial.

In the meantime Trump is eliminating food stamps for some 700,000 recipients and the Democrats are doing nothing about it. Their majority in the House could have used the time it spent on the impeachment circus to prevent that and other obscenities.

Do the Democrats really believe that their voters will not notice this?

(Of course, they do, and they might be right. After all, polls show that Democrats still believe that Barack Obama was a terrific President, just as Republicans believe that George W. Bush was a terrific President. The fact that both  — and Trump himself —were/are among the worst in American history eludes the voters in both Parties. But though I disagree with his opinion on that particular matter, he’s just asking a question there, and I hope that his more optimistic take than mine turns out to be right, and that the voters — in both Parties — are coming to recognize that American politics right now is almost 100% a con-game, in both Parties.)

Why do people pay subscription-fees, to Jeff Bezos’s Washington Post, and to the New York Times, and to other media that are controlled by America’s billionaires, when far higher-quality journalism, like that of “Moon of Alabama” (and like the site you’re reading here) is freely available on the internet? Who needs the mainstream ‘news’-media, when it’s filled with such unreliable claptrap, as respects (instead of exposes) what persons such as Karlan say? Jonathan Turley is to be taken seriously, and he is at the very opposite end from Karlan’s opinions in the impeachment hearings (and regarding much else). (And the hearings-transcript in which both law-professors testified is here.) But the exception is Turley, and Karlan is far more the norm in the U.S.-media mainstream. And virtually all Democratic-Party propaganda-organs (‘the liberal press’) are playing up the Karlan claptrap. So: yes, I do think that “the Democrats [referring to the ones in the House of Representatives, of course] really believe that their voters will not notice this.” Most voters are just as “deluded” (misinformed by the ‘news’-media) as Professor Karlan is.

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Two Cases, Minor and Major

Dr. Arshad M. Khan

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News stories have Donald Trump being mocked by France’s Macron at a Buckingham Palace reception for the NATO leaders meeting.  A nearby open mic caught the incident.  Trump’s response was to call Macron two-faced.

Macron returns to a France paralyzed by the biggest strike in years.  Teachers and transport workers are alarmed by his plan targeting their traditional pension scheme.  They would now have to retire later or accept lower benefits.

Trump returns to face impeachment.  Speaker Nancy Pelosi has asked the House to get on with it and draw up the Article of Impeachment.  Trump also wants the same.  So he said upon his return from Europe.  He wants it over so he can get on with running the country, which he says has a bustling economy, the lowest unemployment in recent history and a booming stock market.

The source of Trump’s self confidence:  a Republican majority in the senate bound to acquit him.  Truth be told, this is an unusual impeachment in that it has not managed to obtain the support of a single member of the president’s own party.  Prior impeachments of others had more substantial grounds and always some bilateral support.

This impeachment is also unusual for its triviality.  Taking together the partisanship and the weak reasons, some legal scholars warn it sets a bad precedent, and the possibility that future presidents might well face the prospect not as rarely as in the past. 

To summarize the issue:  it stems from Joe Biden’s son Hunter earning $50,000 per month serving on the board of Burisma, the notoriously corrupt Ukrainian gas enterprise, while lacking any professional expertise in the company’s area of business.  The clear implication is that it was due to his father being Vice President of the United States.  Trump simply asked for an announcement from the Ukrainian president that they were opening an investigation.  So what is worse nepotism or an inquiry into it?

From the relatively trivial to the deadly serious.  The International Court of Justice (ICJ) will hear the case against Myanmar for the Rohingyan genocide.  Aung San Suu Kyi as tarnished as her Nobel Peace Prize remains obdurate.  Her country’s claim the genocide case stems simply from the world”s inability to understand the complexities of the issue.

Forget the BBC film clip of one incident where the perpetrators boasted proudly of their handiwork as smoke from a village they had set alight rose in the background.  Killing  or stealing livestock, destroying crops to make return impossible was another tactic in the event villagers escaped.  Rape, mass murder, people being burnt alive locked in their houses are well documented.  Later, the UN Human Rights Council’s fact-finding mission confirmed convincing evidence of genocide.

Aung San Suu Khyi will face a legal team from Gambia.  Why?  Well it’s a story of happen-chance.  Last year Gambia’s Justice Minister Abubacarr Tambadou visited Bangladesh for the Organization of Islamic Cooperation’s annual conference.  What he saw and heard there recalled for him painful memories of the Rwandan genocide where he had prosecuted cases.

With the OIC delegation he visited Rohingya refugee camps to hear repeated stories of rape, murder and arson, and on his return he was able to convince the OIC to file a case with the ICJ.  It is the first of its kind since the 1990s from the then demised Yugoslavia — the case of Bosnia and Herzegovina versus Serbia and Montenegro charging genocide filed in 1993.   

And a timely warning to over-enthused promoters of religious nationalism willing to step over the line of human decency and respect for the other.  Look where it leads. 

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Why finance is at the heart of Chile’s crisis

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The outsized role of unfettered finance in Chile has only worsened inequality that led to recent uprisings

In September this year, less than a month before frustrated Chileans took to the streets in Santiago, on Chile Day, former finance Minister Felipe Larrain announced new legislation that, it was hoped, would make Chile into a regional financial center. The new bill would contains regulatory changes to facilitate registration of foreign securities in Chile and eliminate tax differences between locals and foreigners that affected the ability of finance to move seamlessly in the domestic economy. These measures were announced to commemorate ChileDay in London, where Conor Burns, minister in the UK government praised Chile’s macro-economic growth and fiscal management under the Sebastian Pinera government.

After years of trying to make the country into a financial regional center, the new bill concretized the government’s intentions. Larrain explained that the initiative meant to relax existing rules of financial regulations through a number of areas, including reduce paperwork for foreign investors, introduce new international practices in the local fixed income market for investors to access liquidity, simplify tax laws and contracts for short-term finance and make mutual funds more flexible. In this way the government sought to enable growth in profits of financial assets, which are primarily held by wealthy investors and high net worth Chileans. Protestors’ move into the affluent Providencia neighbourhood to up the ante a few days ago – known as Chile’s financial district – ironically represent the apogee of this relationship.

After unease spread about the social conditions in Chile after the increase on metro fares, Minister Felipe Larrain, who retained the position from Pinera’s 2010 administration, was sacked. Larrain’s firing is emblematic for several reasons. Much of the recent analysis while rightly focusing on worsening social conditions for the majority of Chileans, few commentators have pinpointed one, if not the most important culprit, of high inequality since Chile became a democracy ended in 1990. Chile’s embrace of financial globalization has been at the forefront of higher levels of inequality in Chile for over the last 2 decades during both left- and right-wing governments.

The planned growth of the financial sector, while good for investors and those with idle assets, it is not positive for the majority of Chileans. The United Nations Economic Commission for Latin America and the Caribbean shows ownership of financial assets are concentrated in the pocket books of the 1 per cent. In 2017, the net worth of households was extremely distorted. While the poorest 50% of households had an average net worth of US$ 5,000, the sum for the wealthiest 10% averaged US$ 760,000, and the richest 1% owned US$ 3 million. To make matters worse, the richest 10% made a whopping 92.2% of investments in shares and mutual funds, other forms of equity holdings and investment portfolios, and 77.4% of deposits in savings accounts and long-term fixed deposits. In comparison, the lower 50 per cent of the population held just 7.7% of total physical assets like motor vehicles and real estate. As a result, many Chileans are swimming in debt, owing a total of US$116 billion (about 44 percent of gross domestic product) – a significant portion due to mortgages and showing increases by 12 per cent since 2010.

In its 2018 economic survey, the OECD laid out the conditions that have led to the current crisis: as many 30 per cent of Chilean workers engage in informal work or on short-term contracts, with high concentrations among women, youth, low-skilled and indigenous groups, while unemployment benefits are virtually nonexistent. Self-employed workers earn 20% less than a formal waged employee with the same skills and experience. Financial sector employees also make more than twice the average worker and even mining sector workers. Over the years, this wage inequality and labour informalisation have been facilitated by deregulating labour markets whereby workers have less bargaining power of labour unions. Labour unions’ calls to increase their stake in the congress therefore offer some hope for workers to gain more of the share of national wealth. Increases in labour income, as ECLAC shows, have a positive effect on macro-economic growth. Pinera’s obstinacy to these initiatives seem to protect his economic standing rather than promote a resolution in workers’ favour. Government resistance would only encourage further polarization.

Chile’s financial sector has expanded at a rate more than any other economic sector, and realized a significant portion of total income and profits in the country. In terms of asset base as a percentage of GDP, the financial sector (including money bank deposits and of other financial institutions) it has growth from 64% in 1984 to 67% in the late 1990s, surpassing the 100% mark in 2010. In 2016, this ratio reached 117%. After Mexico, Chile has the highest capital penetration of foreign banks in Latin America which has counter intuitively reduced the amount of credit available to small local businesses to finance production in new products and sectors. In the meanwhile, foreign investment has however expanded in areas that do not employ great numbers. Large mining businesses which employ fewer numbers of Chileans also have a disproportionate access to international markets for credit. Chile’s pension system is also privatized and seen as source for financial sharks to make a killing, which fluctuates according to traders’ optimism and can lose as it did in late 2018 when investors lose confidence.

Increased privatization of the state, and narrow industrial policies promoted by agencies like the Inter-American Development Bank bolster the role of finance using a number of instruments and incentives. Compared to years prior to the dictatorship, and for a short period during Pinochet reign after the banking crisis of the 1980s, finance was largely well regulated and credit expanded to sectors that generated a large number of jobs. Now, rather than expanding employment and increasing high-value industrial exports, Chile has since the 2000s suffered becoming more and more specialized in mining. Even as private investment flows increased in copper mining during the 2000s, this has not had a broad effect on re-industrializing the Chilean economy. The opposite is true. In fact, the majority of the country’s lithium is manufactured outside of the country.  

While some economists have suggested that that higher inequality was due to the end of the high-price commodity boom in Chile in 2014, the historical record shows that inequality was rampant during Pinochet’s dictatorship and only slightly decreased from the 1990s onwards. Inequality was practically baked into the tax system, as well as the housing and transport policies of successive governments, as Chileans found it hard to seek work opportunities in its capital city Santiago. This has earned Chile the infamy of the most unequal country in Latin America and the OECD as a whole according to certain analyses. 

As the world awakens to the reality that the expanding finance do not lift all boats or ‘trickle down’, if there is to be a successful resolution to the current calamity that dates back to the reforms of Pinochet, democratizing finance is critical to return power to the hands of Chileans.

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