Chile and the World’s Most Expensive Subway Price Hike: A Lesson in the Intricacies of Global Risks

We have all probably heard of the butterfly effect – the notion that small changes in complex systems can cause huge, unpredictable effects. Recently, a small hike in subway prices in Santiago led to massive protests in Chile, with potentially global implications.

The protests escalated quickly

On the 4thof October, an expert technical panel approved a price hike for subway tickets in Santiago, the capital of Chile. Two days later, on the 6th, the fare hike became effective. The citizens of Santiago, however, did not like this increase. They did not like it one bit.

Students were the first to dissent. Protest groups encouraged them to evade paying the subway tickets. A mere week later, more people had jumped on the bandwagon. Massive evasions were becoming rampant. Police were called in to secure subway stations.

On the 18thof October, exactly two weeks after the approval of the price hike, the transport minister publicly denied a reversal of the said hike. It didn’t take long before things escalated. By 1 pm several subway stations were closed due to protests. By 3 pm, subway lines were being closed. By 7 pm the entire subway system shut down.

And then things escalated even further

Protests got out of control. Whole subway stations and subway trains were set on fire; the headquarter of the capital’s main electricity company was also put to the torch. The following day, things got so out of hand that the President decreed a State of Emergency in Santiago and several non-urban areas.

Chaos reigned: to stop looting and arson, the military was called in. By the end of the day, the Head of the National Defense decreed curfew[i], the first such occurrence in over 30 years in Chile. And for those who wondered: yes, the price hike was swiftly reversed.