Chile education reforms caught in tangle of interests

Education reforms are needed to improve student achievement and boost lagging labor force productivity. The business community could benefit, but is deterred by higher taxes.

Eliseo Fernandez/Reuters
Chilean teachers take part in a demonstration against the government to demand changes in the public state education system, in Santiago on June 25, 2014.

Efforts to reform the Chilean education system and create a more productive labor force are hitting roadblocks, literally, as some 150,000 teachers went on strike across the country this week demanding higher pay and improved conditions.

For the business sector, the planned education reform is painful because President Michelle Bachelet plans to pay for it by increasing taxes by 3 percent of gross domestic product, as well as by increasing the corporate tax rate to 25 percent by 2017. The corporate tax rate is currently 20 percent. However, the education reforms are crucial for improving student achievement and boosting a labor force that is less productive than many other nations, according to our correspondent in the capital of Santiago, where some 50,000 teachers marched Wednesday.

“The mining industry is facing a huge productivity problem, and part of it comes down to training to international standards,” says our correspondent. “Chile wants to develop a more innovative economy that will [depend on] better higher education.”

President Bachelet has proposed ending public funding to for-profit schools, making all primary and secondary education free of charge, creating more universities, and increasing kindergarten funding as well as preschool institutions. The reforms, some sent to Congress on May 19, were a key part of her election campaign last year, and in direct response to university students who have organized massive protests to raise education quality and lower costs.... For the rest of the story, continue reading at our new business publication Monitor Global Outlook.

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