Chile is in the midst of one of its worst crises since the end of Augusto Pinochet's brutal military dictatorship in 1990.

Key points: A 3 per cent transport fare hike spiralled into generalised dissent over inequality

A 3 per cent transport fare hike spiralled into generalised dissent over inequality Despite strong economic growth, Chile is still plagued by socio-economic issues

Despite strong economic growth, Chile is still plagued by socio-economic issues Successive governments have been slow to address wealth disparity concerns

Days of violent unrest have left at least 15 people dead, buildings ablaze, and chaos in the streets as soldiers responded with tear gas and non-lethal rounds at rioters and protesters.

Most of those killed have been at the hands of rioters setting fires, while only a handful were killed by security forces.

What started ostensibly as a pushback against a hike in public transport costs has now morphed into a widespread anti-government protest movement.

Often touted as a beacon of prosperity and stability on a continent often in short supply of either, Chile isn't the first place in South America where observers would have anticipated such an intense bout of violent civil disobedience.

So how has a rise in public transport fares now led to a Pinochet-era, military-enforced state of emergency?

What prompted the situation and why?

Protests in Chile continued into the night after President Sebastian Pinera called for calm. ( AP )

Earlier this month, the Chilean Government announced a plan to increase metro train fares by roughly 3 per cent, prompting a public backlash.

Minister of Economy Juan Andres Fontaine responded by saying people affected could wake up earlier and pay a lower rate — that incited anger.

Students soon began a campaign of "mass fare evasion" that eventually spiralled into violence last week.

Despite the government initially dispatching police and military forces to try to quell the uprisings, it eventually backed down on the fare hike — but the move has since inflamed tensions over the cost of living in Chile.

Chilean sociologist Patricio Navia says the unrest is caused by "a multiplicity of causes".

"High levels of inequality, high dependence on a single commodity [copper], and a political class not living up to expectations," Dr Navia said.

How is the government handling the situation?

Chilean President Sebastian Pinera addressing the nation this week. ( AP: Luis Hidalgo )

President Sebastian Pinera's right-wing government has acted inconsistently in addressing the crisis so far.

It's the first time a state of emergency has been declared in Chile for something other than a natural disaster since the end of military rule.

The state of emergency suspends some public liberties like the freedom of movement and assembly. It is designed to maintain public order in times of crisis.

"The government didn't really pay that much attention to the protests the first week, and then it overreacted by declaring a state of emergency and sending troops out [over the weekend]," Dr Navia said.

Police have deployed armoured vehicles across major cities and used water cannons, tear gas and rubber bullets to try and quell the unrest.

After originally declaring the country was "at war", President Pinera has since struck a more conciliatory tone.

Authorities have been accused of using excessive force, prompting a call from the country's former president and now UN human rights chief, Michelle Bachelet, for an inquiry into the behaviour of security forces.

This week, Mr Pinera vowed to forge a "new social contract" across political lines to restore faith in government and alleviate the grievances affecting everyday Chileans.

By Friday, thousands of students had hit the streets in Santiago, jumping turnstiles, burning barricades and vandalising train stations. ( AP: Esteban Felix )

Is Chile really an unequal society?

Latin America is racked by endemic inequality and corruption, but Chile ranks better in both amongst most nations on the continent.

But of the 30-wealthiest countries in the world, Chile ranks the highest for after-tax income inequality.

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"Neither economic growth nor the absence of economic growth has been able to reduce inequality in Chile [at a rapid enough pace]," Dr Navia said.

While Augusto Pinochet's military dictatorship from 1973 until 1990 was characterised by radical neoliberal economic policies, successive governments since have failed to structure the economy in a way that addresses inequality effectively.

"It's not just a problem of discontent with the current government, it's a deeper problem of people who want to be led into the promised land of prosperity," Dr Navia said.

"They are protesting because they have expectations that have not been met."

Economic growth has not brought with it social cohesion and equal prosperity — and the feeling among protesters is that Chile's wealth has accumulated among a small group of elites.

A higher level of development means people expect wealth and income to be more evenly distributed.

"The larger issue is whether the growing middle class can actually challenge the elites who remain in a very privileged position," Dr Navia said.

What might happen from here?

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 24 seconds 24 s Hundreds of police have been deployed to quell the unrest.

There are similarities to be drawn between Chile now and Venezuela in the 1980s.

Some 30 years ago, Venezuela was arguably Latin America's most prosperous democracy, but an economic crisis coupled with growing inequality eventually paved the way for the political and humanitarian problems it faces today.

"Today we teach that Chile is the most stable democracy in Latin America and it has the same problems as Venezuela 30 years ago," Dr Navia said.

"But there is much less poverty in Chile now than there was in Venezuela, [and the broader picture shows] the country has been growing, poverty has gone down.

"That is what makes this protest so surprising."

For now, protesters and observers are watching the Pinera Government to see how it will handle the situation, and whether or not it can realise a bipartisan solution as promised to calm the unrest.