Education in Chile: We want the world

by Patricia Navia for The Economist, August 11th, 2011.

A trial of strength between students and the government.

It began on August 4th with the metallic clink of a few pots and pans. By nightfall, thousands of people were on the streets of Santiago banging kitchenware, a form of protest last heard under the dictatorship of General Pinochet. This time the cacerolazos, as they are called, are being staged in the name of educational Utopia—and in response to a cack-handed government ban on marches.

Chile’s school system is the least bad in Latin America, according to the OECD’s PISA tests, which compare educational attainment across countries. But that does not make it good. And the overall performance hides huge disparities. Analysis done in Chile of the test results in the 65 countries that took part finds that it ranked 64th in terms of the variance of the results according to social class. Rich pupils get good private education; poor ones are condemned to underfunded, dilapidated state-funded schools.

This “educational apartheid” as Mario Waissbluth, a campaigner, puts it, is widely blamed for the fact that Chile remains a highly unequal society, despite its dramatic progress over the past quarter of a century in reducing poverty. “The kids from the posh suburbs study in those suburbs, go to university in those suburbs, get jobs as company executives in those suburbs and employ friends from the schools they went to themselves,” says Mr Waissbluth.

The centre-right government of President Sebastián Piñera agrees. Chile inherited from the dictatorship a voucher system under which the government pays money to the school of the parents’ choice. In November the government unveiled a plan to increase the value of the voucher, especially for the poorest children. As well as trying to attract better teachers to state schools, the government will set up 60 lycée-style “schools of excellence” aimed at bright children from poor families.

Students and teachers responded by demanding the abolition of all for-profit education. After they staged big marches along the Alameda, Santiago’s main thoroughfare, Mr Piñera last month sacked his unpopular education minister. The government also said it would draw some $4 billion from its reserve fund of windfall copper revenue to pay for better schools. (continue reading… )

 

Argentina: ghosts of 2001 default linger

by Jude Webber for Financial Times – Beyond Brics, August 11th, 2011.

Argentina believes it has closed the chapter on its $100bn sovereign default in 2001 after two debt swaps, in 2005 and 2010, which have restructured more than 92 per cent of the defaulted bonds.

It says the two take-it-or-leave-it offers prove its good faith in the matter, and has vowed not to negotiate or settle with the remaining “holdouts” – especially so-called “vulture” funds which are among those to have been pursuing it through US courts.

But a new avenue of litigation has been opened with a 283-page decision last week by the World Bank’s arbitration tribunal, ICSID, which has not yet been made public, that it is competent to hear a claim for more than $1bn brought by some 60,000 jilted Italian bondholders.

At a time of financial market panic and default fears in Greece, when the fine print of bond jurisdictions is under the spotlight in case bond holders need to sue to get their money back, the ICSID decision could reverberate widely.

Represented by global law firm White & Case, the Italian bondholders say Argentina is accountable under a bilateral investment protection treaty. The World Bank’s International Centre for the Settlement of Investment Disputes ruled on August 4 that it was competent to hear the case. (continue reading… )