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WEEKLY NEWSLETTER
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Chile
Index
Chile's business community has long played an active
role in
the nation's politics. During the years of
import-substitution
industrialization, businesses developed close links with
political
leaders and state agencies, seeking subsidies, tariffs,
and other
forms of regulation that would protect them from the
rigors of
market competition domestically and internationally.
Indeed, the
expansion of the state, in particular its decentralized
semiautonomous agencies, led to the creation of
semicorporatist
boards whose members included formal representatives of
large
business associations. As the parties of the right began
to decline
in importance, business leaders became increasingly
"apolitical,"
preferring "independent" candidates such as Jorge
Alessandri to
those with strong party ties.
In the early 1990s, most businesses in Chile employed
only a
handful of workers, and business trade groups probably
represented
less than 20 percent of all business establishments in the
country.
Small businesses were represented by the Council of Small
and
Medium Enterprises (Consejo de la Pequeña y Mediana
Industria--
CPMI), and large businesses were represented by the
Chamber of
Production and Commerce (Cámara de la Producción y
Comercio--CPC).
Small and medium-sized business groups were in turn
divided into
associations, such as the Truck Owners Association
(Asociación
Gremial de Dueños de Camiones) and the Federation of
Retail
Business of Chile (Confederación del Comercio Detallista
de Chile).
The most important of the associations affiliated with the
CPC were
the Industrial Development Association (Sociedad de
Fomento Fabril-
-Sofofa) and the National Agricultural Association
(Sociedad
Nacional de Agricultura--SNA), both of which had
considerable
political influence and clout.
During the Allende years, the associations of both
small and
large businesses played a critical role in combating the
parties of
the left and undermining the Allende government. Smallbusiness
associations, particularly the truck owners, brought the
country to
a standstill, aggravating an already difficult economic
and
political situation. Large-business associations also
worked hard
to depose the Popular Unity government. Sofofa, in
particular,
played an important role by supporting a highly cohesive
group of
economists critical of the Allende government who prepared
a
document that served as the basis for the military
regime's shift
in economic policy. Because of their prominent role in
bringing
down the Allende government, business leaders assumed that
they
would have influence over economic policy and be able to
reestablish a close and mutually beneficial relationship
with the
state. Much to the business leaders' surprise, the
far-reaching
structural adjustment policies pursued by the military
government
proved extraordinarily disruptive, contributing to the
bankruptcy
of hundreds of major firms.
Business leaders, already weakened by the reform and
revolutionary policies of the previous two civilian
presidents,
were too dispirited to oppose the determined economic
advisers of
the military. Small business, which had the most to lose,
made some
gestures toward joining the growing opposition movement
after the
dramatic economic downturn of 1981, only to be kept in
line by the
regime's strategy of using tough measures when necessary
and
moderating its policies at key points just enough to
retain
private-sector allegiance.
Overall, the lack of strenuous resistance to the
regime,
particularly from medium-sized and large businesses, was
attributed
to memories of the traumatic Allende years. Entrepreneurs
and
business managers feared that any strong opposition on
their part
might weaken the military regime and create the
possibility of a
return to the leftist policies that they felt had
practically
destroyed the private sector in the past. A weak business
community, in combination with the private sector's
determination
not to risk a return of the left, gave the military regime
wide
latitude to restructure the economy as it saw fit.
Because of the weakness of the parties of the right,
business
groups remained influential in right-wing politics after
the return
to democracy. In 1989 they were instrumental in imposing
an
"independent" candidate of the right to run for president
and
actively supported one of their own in the presidential
race of
1993. Yet business associations were less influential in
politics
in the early 1990s than previously, largely because of the
changes
resulting from Chile's opening to world markets and,
ironically,
because of the decreased importance of the state in
regulating and
controlling business. Political leaders and government
officials,
however, solicited the views of business interests on
labor and
environmental questions because of their common desire to
encourage
continued expansion of the Chilean economy
(see Social
Organizations and Associations
, ch. 2).
Data as of March 1994
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