International
Higher contributions and social security: the keys to Chile’s new pension reform
The Chilean Parliament gave the green light this Wednesday by a large majority to a pension reform promoted by the Government of Gabriel Boric that seeks to improve low pensions and proposes the most significant changes to the model created more than four decades ago by the dictatorship.
“It’s a tremendous achievement for Chile. It is an act of justice, of deep affection and respect for our people, which responds to what is one of the biggest debts that our country drags,” the president said in a public statement from the La Moneda palace.
Here are the keys to a reform that for some is “decaffeinated” and for others is an “achiemement” of a very polarized political class, which has not agreed for years on the great structural changes that Chile requires:
Established in 1981, in the middle of the dictatorship of Augusto Pinochet (1973-1990), the Chilean system was a pioneer in the region in installing individual capitalization and forcing each formal worker to contribute 10% of his monthly salary to a personal account that he can dispose of when he retires, managed by the controversial private pension administrators (AFP).
Its defenders argue that the model has contributed to the development of the national capital market, while its detractors consider that it is an abusive and unfair system and that it only works if you have a stable job and a high income, something unthinkable for the vast majority of Chileans.
“This system has not worked because of the way pensions are calculated. People who contributed between 35 and 40 years and retired in 2023 had a replacement rate of 32.6%, this is a third of their average 10-year salary,” María José Azócar, of the Sol Foundation, told EFE.
Pensions have been leading the polls on major citizen concerns for years and citizens had lost confidence in the ability of politics to improve them.
The refoundation of the system was also one of the main demands of the 2019 protests.
None of the reforms proposed by the Governments of Michelle Bachelet and Sebastián Piñera came to the surface and only partial achievements were obtained such as the creation of a public pension for the most vulnerable in 2008 and its expansion in 2022.
The reform, which has undergone substantial modifications since it was presented by the left-wing Administration in 2022, seeks to benefit 2.8 million retirees, with increases in their pensions of between 14% and 35%.
It also increases the universal basic pension to 250,000 ($253); gradually raises the contribution to 17%, at the expense of the employer; creates social insurance; incorporates intra- and intergenerational solidarity mechanisms and tightens industry regulation to make it more competitive.
“It is a reform that changes the face of what the dictatorship did to this country,” said the Minister of Labor and Social Security, Jeannette Jara, after the approval.
The economist of the University of Chile Guillermo Larraín explained to EFE that “the most advanced countries have mixed systems, but these are more dominated by the State, while in Chile the path has been the other way around, because it is moving from a very private system to a slightly more public one.”
It was negotiated with the traditional right-wing coalition Chile Vamos and, although it is far from what the Government aspired to, it is a breath of air for Boric, since it was one of his great campaign promises, along with the tax pact that he still does not manage to move forward.
The most radical part of the coalition that makes up the Government (Communist Party and Broad Front) voted in favor, despite believing that too many concessions were made during the parliamentary debate and that they gave up eliminating the AFPs and creating a system with greater state weight.
“This reform is valid and perfects the system of the AFPs. In the long term, 6 more points will go to individual capitalization, when in the original Government project those 6 points went to social insurance so that Chile could catch up on the international stage and not continue to be an extreme case,” said Azócar.
Skepticism also reigns in the street: according to the latest Data Influye survey, 64% of those over 55 believe that the reform will not “definitely” solve the problem of pensions, compared to 33% who believe that it will only solve it “in part” and 1% who are very satisfied.
The only ones who voted against were some of them from Chile Vamos and the deputies of the different far-right parties in Parliament, opposed to any distribution system.
The leader of the far-right Republican Party, José Antonio Kast, who lost to Boric in the 2021 elections, charged against the reform in X for “taking away from workers one of their most precious assets, the right to property over their savings” and warned that he will repeal it if he manages to come to power in the elections at the end of the year.
International
Mexican authorities bust Meth Lab and seize tons of drugs and chemicals in multiple states
Mexican authorities dismantled a clandestine laboratory containing 2.5 tons of methamphetamine in the southeastern state of Chiapas, seized a warehouse with more than four tons of chemical precursors in Guerrero (south), and intercepted a trailer in Tijuana attempting to cross into the United States with 2.7 tons of drugs.
Omar García Harfuch, head of the Secretariat of Security and Citizen Protection (SSPC), reported on Saturday via social media that agents from the Criminal Investigation Agency of the Attorney General’s Office (FGR), along with representatives from the Defense Secretariat, Navy (Semar), National Guard (GN), and SSPC, disabled the methamphetamine production lab in Chiapas and confiscated 2.5 tons of the drug.
A statement specified that the agents secured 2.5 tons of methamphetamine, barrels containing substances used to manufacture synthetic drugs, a firearm, and four trucks. In another operation in Guerrero, authorities located over four tons of chemical substances.
The discovery took place on a property in the community of Margarita Maza, Juárez, used to store materials for synthetic drug production. Sufficient evidence was collected and presented to a control judge who authorized the intervention of the property.
In Chiapas, authorities also seized more than 300 barrels and containers with chemicals for making synthetic drugs, as well as various metal containers and devices.
International
Maduro gains support from Venezuelan Assembly amid U.S. drug trafficking accusations
The National Assembly of Venezuela expressed its support this Saturday for President Nicolás Maduro, condemning the United States’ increase in the reward offered for his capture as an “act of aggression.”
U.S. Attorney General Pam Bondi announced on Thursday that Washington had doubled the reward to $50 million for Maduro’s capture, labeling him as one of the “world’s largest drug traffickers.”
“We reject the absurd and desperate actions announced by the U.S. Attorney General’s Office, which are clearly illegal and lack any real basis, beyond being a delirious attempt of aggression against the president (…) and against our rebellious and brave people,” said the Assembly leader, Jorge Rodríguez, while reading a letter he said was unanimously approved by the deputies.
“It is precisely President Nicolás Maduro (…) the protector of the strong democracy that shelters us and the leader who firmly upholds the rule of law and justice,” Rodríguez continued. He is also Venezuela’s chief negotiator in talks with Washington.
Bondi accused Maduro of using “terrorist organizations like the Tren de Aragua, the Sinaloa cartel, and the Cartel of the Suns to introduce lethal drugs and violence” into the United States.
“In 25 years of revolution, we have resisted and advanced despite constant imperialist aggressions. They have not succeeded, and will not succeed, with crude sanctions, criminal blockades, or senseless threats in diverting the noble path the Venezuelan people charted in the free elections of July 28, 2024, in which Nicolás Maduro was elected President of the Republic,” the statement read.
The Venezuelan opposition alleges fraud in those elections and claims victory, and as a result, has boycotted the 2025 legislative, regional, and municipal elections.
International
U.S. doubles bounty on Venezuela’s Nicolás Maduro to $50 million
In February, the United States designated eight Latin American criminal organizations as “global terrorist” groups, including Mexico’s Sinaloa Cartel, Venezuela’s Tren de Aragua, and the MS-13 gang. In July, it added the Cartel of the Suns to the list — a group Washington claims is led by Venezuelan President Nicolás Maduro.
Last Thursday, U.S. President Donald Trump’s administration doubled the reward for information leading to Maduro’s arrest, raising it from $25 million to $50 million, U.S. Attorney General Pam Bondi announced on social media platform X.
U.S. Secretary of State Marco Rubio explained that labeling the Cartel of the Suns as a terrorist organization allows for a strategic shift in dealing with the Venezuelan regime, as it is now also considered a direct threat to U.S. national security, according to El Espectador.
In an interview with The World Over on EWTN, Rubio said the designation enables the U.S. to “use intelligence agencies, the Department of Defense, or any other element of American power to go after them.” He stressed this is no longer just a law enforcement matter, but a national security operation.
When asked at the White House whether he believes it is worth sending the military to combat Latin American drug cartels, Trump responded:
“Latin America has many cartels, a lot of drug trafficking, so, you know, we want to protect our country. We have to protect it.”
Mexican authorities bust Meth Lab and seize tons of drugs and chemicals in multiple states
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