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  HOME | Chile

Chile’s Small and Mid-Size Firms Hurt by Protests

SANTIAGO – Small and medium-sized businesses in Chile find themselves trapped in a vicious circle of losses as a result of weeks of massive protests against economic inequality.

While citizens take to the streets daily to demand deep structural change, higher pay and pensions and reductions in utility rates, small-business owners have seen their bottom line battered.

The government estimates that some 6,800 small and mid-size enterprises have suffered damage to their premises or stock since the demonstrations began on Oct. 18.

Some of those firms are family businesses, built up with years of hard work and sacrifice, whose proprietors depend on them for their livelihoods.

And even businesses that have been spared physical damage are losing money due to a sharp decline in customer traffic, restricted operating hours and problems with suppliers.

Merchants lost more than $1.4 billion in the first week of protests, according to the Santiago Chamber of Commerce, and that total includes $900 million in damage from looting and vandalism.

Retail sales have fallen 10 percent, while turnover in the hospitality and entertainment sector has plunged 36 percent, the chamber of commerce says.

In the area around Santiago’s Plaza Italia square, the epicenter of the uprising, many shops and other establishments are shuttered and plenty have put up wooden planks and even sheets of steel to protect their property.

A significant number of establishments have posted signs reading “Family business, don’t loot” or “Family business on which 4 people depend.” The approach has proven very effective in deterring vandalism.

Juan Gonzalez, manager of a book store just 50 m (164 ft) from Plaza Italia, told Efe that he doesn’t understand how his shop has remained unscathed so far, while nearby banks and pharmacies have been wrecked.

“The thing is, they respect us. We stay open every day,” he said, while acknowledging that sales are down 90 percent.

Just around the corner from Gonzalez’s store is Rene Cano’s sandwich shop, which has been in business for 10 years. He blames the vandalism on people who infiltrate the protests.

“We support the cause, we support the reasons for the march,” he said. “But the issue is the disturbances that happen afterward. There are a lot of young bucks who infiltrate the march and begin to take advantage of the circumstances and look for shops they can loot. That is the big problem.”

Cano, whose business is off by 60 percent, says that he is starting to have problems staying current with payments to suppliers and employees.

The Chilean government has announced plans for roughly $16 million in subsidies and loans to aid small and mid-sized businesses hurt by the protests.

Authorities have also offered affected business-owners flexibility in meeting their tax obligations.

 

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