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WEEKLY NEWSLETTER
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Chile
Index
Figure 1. Administrative Divisions (Regions) of Chile, 1993
THE SOUTHERNMOST NATION of Latin America and one of the
longest and
narrowest nations in the world, Chile may derive its name
from the
indigenous Mapuche word "Chilli," which may mean "where
the land
ends. The Mapuche's own name means "people (che) of
the land
(mapu)." Another meaning attributed to Chilli is
the
onomatopoeic cheele-cheele--the Mapuche imitation
of a bird
call. The Spanish conquistadors heard about Chilli from
the Incas
of Peru, who had failed to conquer the land inhabited by
the
Araucanians, of which the Mapuche in central Chile was the
most
warlike group. The few survivors of Diego de Almagro's
first
Spanish expedition south from Peru in 1535-37 called
themselves the
"men of Chilli."
As native American tribes became for the United States,
the
Araucanians, who mastered horsemanship and Spanish
military
strategy, became part of Chile's "noble savage" lore. This
is
exemplified by the legend of the Mapuche warrior Lautaro
(the
Chilean equivalent of the North American Apache Geronimo)
in the
epic poem "La Araucana," written, initially on bark, in
the 1560s
by Spanish soldier-poet Alonso de Ercilla y Zúñiga. This
conquistador may have been the first to employ the term
"Araucanian" (araucano, from arauca, the
Inca word
for enemy), which has been widely used as a general term
for
Chile's indigenous peoples. The Spaniards and their
criollo
successors continued to wage warfare against the Mapuche
until
1883, when the government was forced to grant them
autonomy. The
Mapuche population has increased significantly in the
twentieth
century, to about 928,000 in 1992, but they have not had
much
cultural influence on the largely European and
mestizo (see Glossary)
population of Chile.
Despite its geographical isolation by formidable
barriers--the
Andes Mountains on its eastern flank, the Atacama Desert
in its
northernmost area, and the Pacific Ocean on its western
side--
Chile, after Uruguay, traditionally has been one of South
America's
best educated and most stable and politically
sophisticated
nations. Chile enjoyed constitutional and democratic
government for
most of its history as a republic, particularly after
adoption of
the 1833 constitution. After a period of quasi-dictatorial
rule in
the 1920s and early 1930s, Chile developed a reputation
for stable
democratic government. Like Uruguayans, Chileans have
benefited
from state-run universities, welfare institutions, and,
beginning
in 1952, a national health system. Sociologist J. Samuel
Valenzuela
points out in "The Society and Its Environment" chapter
that
Chilean universities, for example, contributed to the
Chileans'
strong sense of national identity.
Throughout the 1970-90 period, however, Chilean
national
identity was tested as the country was subjected to
profound
political, economic, and social changes. Although the
country began
the 1970s by embarking on what soon proved to be a
disastrous
experiment in socialism, it ended the 1980s with a widely
acclaimed
free-market economy and a military government that had
committed
itself, albeit inadvertently, through a plebiscite, to
allowing a
transition to democracy in 1990. Since the restoration of
democracy, Chile has served as a model for other
developing nations
and the East European countries that are attempting to
make a
similar transition to democratic government and an
antistatist,
free-market economy. Yet the Chileans endured rough times
before
finding an economic prescription that works for them.
During the ill-fated Popular Unity (Unidad Popular)
government
of its Marxist president, Salvador Allende Gossens
(1970-73), Chile
experienced uncharacteristic economic and political
turbulence. As
economic and political conditions deteriorated rapidly in
August
1973, the Chilean Armed Forces and even the moderate
Christian
Democratic Party (Partido Demócrata Cristiano--PDC),
Chile's
largest single party, began to view the Allende
government's
socialist economic policies as a threat to the
constitutional order
that the armed forces felt duty-bound to uphold, at
whatever cost.
On September 11, 1973, the armed forces shocked the world
by
attacking the lightly defended presidential palace, La
Moneda, with
army troops and aerial bombardment. Led by newly appointed
army
commander General Augusto Pinochet Ugarte, the bloody coup
seemed
incongruously violent for a country of Chile's democratic
and civil
traditions, especially considering that Allende had been
elected
democratically and had won a substantial 43 percent of the
vote in
the March 1973 congressional elections. Not having fought
a real
war since the War of the Pacific (1879-83) against Peru
and
Bolivia, the army seemed to welcome a pretext for
reminding
Allende's supporters of the military option contained in
their own
national motto, "By reason or by force."
In the "Historical Setting" chapter, historian Paul W.
Drake
summarizes various explanations for Allende's downfall and
the coup
as posited by analysts of the different political
tendencies. Drake
takes a similarly egalitarian approach to assessing blame
by noting
that "there was ample blame to go around," and that
"groups at all
points on the political spectrum helped destroy the
democratic
order by being too ideological and too intransigent."
Prior to the
coup, Chilean society became polarized between Allende's
supporters
and the growing opposition, particularly during the
culmination of
the constitutional crisis in August 1973. In political
terms,
society was divided into three hostile camps--the Marxist
left, the
Christian Democratic center, and the conservative right.
In "The
Economy" chapter, economists Sebastian Edwards and
Alejandra Cox
Edwards blame the Allende government's downfall to a large
extent
on its disregard of "many of the key principles of
traditional
economic theory." In their analysis, Allende's UP
government did
this not only in its monetary policies but also in its
lack of
attention to the role that the real exchange rate plays in
a
country's international competition and balance of
payments.
The Allende episode has remained politically charged
during the
past two decades, as evidenced by the march by Socialists
and
Communists on La Moneda and their skirmishes with police
on the
occasion of the twentieth anniversary of Allende's
overthrow. A
peculiar aspect of the historiography of the military
coup, one
that is illustrative of the political sensitivities
surrounding it,
is how Allende's death has been described. Some scholars
have
mentioned both versions of his death--the official
military account
that he committed suicide and the left-wing version that
he was
assassinated by the military. Others, including historian
Mark
Falcoff, have used the more noncommittal phrase that
Allende "died
in the coup." Thanks in large part to the assassination
myth that
Cuban president Fidel Castro Ruz and Colombian novelist
Gabriel
García Márquez helped to create, the left-wing version is
still
widely believed. Available evidence, however, is adequate
to
reasonably conclude that Allende committed suicide with
the AK-47
assault rifle given him by Castro. Scholars such as Paul
E. Sigmund
and James Dunkerley believe it was suicide, and reference
sources
and mainstream news media tend to use this version. For
example, in
a New York Times report on the twentieth
anniversary of the
coup, correspondent Nathaniel C. Nash states that Allende
"killed
himself rather than be taken."
It is fairly well known that Allende was a long-time
admirer of
Chilean president José Manuel Balmaceda Fernández
(1886-91), who
shot himself to death while inside the Argentine legation
on
September 19, 1891, the day after his term ended.
Balmaceda
committed suicide as a result of his defeat in the Civil
War of
1891 between his supporters and those of Congress. In
contrast to
Peruvian president Alberto Fujimori's bloodless
"self-coup" in
April 1992, in which he dissolved the National Congress
for being
"obstructionist," Balmaceda's attempt to establish a
strong
executive and destroy the National Congress (Congreso
Nacional;
hereafter, Congress) resulted in the deaths of 10,000
Chileans. Yet
Balmaceda's economic nationalism made him a hero of the
left. In
the weeks before the 1973 military coup, Allende, who like
Balmaceda had overstepped his constitutional authority,
had made
his obsession with suicide as a last resort known to
various
individuals, including French president François
Mitterrand. The
coup and Allende's death were a tragic denouement to a
chapter in
Chilean history that most Chileans probably would like to
forget,
just as they would like to forget the repression that
followed.
After the overthrow of the Allende government, Chile
was
plunged into a long period of repressive military rule.
According
to the National Commission on Truth and Reconciliation
(the Rettig
Commission), an eight-member investigatory body created by
the
government of Patricio Aylwin Azócar (1990-94), the armed
forces
and security forces were responsible for the deaths of
2,115
Chileans in the years following the 1973 coup, as well as
the
systematic torture or imprisonment of thousands of other
opponents
of the Pinochet regime.
Beginning with the Allende government and continuing
with the
military regime of General Pinochet (1973-90), Chile
underwent two
decades of social, economic, and political restructuring.
As
political scientist Arturo Valenzuela points out in the
"Government
and Politics" chapter, the Pinochet regime, ironically,
proved to
be "the longest and most revolutionary government in the
nation's
history." Although the Pinochet regime adopted a system of
local
government administration based on
corporatism (see
Glossary), it
avoided the corporatist economic policies often associated
with
authoritarian military rulers and favored by Chile's
industrial
bourgeoisie and landowning class. Instead, Pinochet
listened to
economic guidance offered by students of the University of
Chicago's Milton Friedman, a spokesman for
monetarists (see
Glossary). This connection developed because of the
Catholic
University of Chile's exchange program with the University
of
Chicago, whose Chilean graduates won Pinochet's ear.
Determined to
transform Chile's statist economy, Pinochet embraced the
free-
market, export-oriented economic model recommended by the
so-called
"Chicago boys" (see
Glossary). These policies called for
integrating the Chilean economy into the world economy,
privatizing
nationalized industries as well as the social security and
health
sectors, sharply reducing the number of public employees,
adopting
monetarist policies, deregulating the labor market, and
carrying
out a sweeping tax reform, among other measures.
By the late 1980s, the Chilean economy was again
booming, and
other developing countries were looking to it as an
economic model.
The regime's drive to privatize was an important indicator
of the
transition to a market economy. Of about 550 firms under
state
control in the 1970s, fewer than fifty remained so by the
end of
1991. Whether Chile's structural transformations could
have been
carried out by a democratic government is unclear. By the
early
1990s, Argentina's democratically elected president,
Carlos Saul
Menem, had achieved comparable reforms without sacrificing
democracy or human rights. However, the success of the
Pinochet
model in Chile probably had less to do with
authoritarianism per se
than it did with the authoritarian implementation of
antistatist,
free-market policies.
Fortunately for the future of Chilean democracy,
Pinochet was
unable to carry out his plan to permanently abolish
traditional
political parties and institutions and continue ruling as
Chile's
president for most of the 1990s. His mistake (and Chile's
gain) was
to hold a plebiscite on a key provision of the Pinochet
constitution, which voters had approved on September 11,
1980. The
1980 constitution provided for the gradual restoration of
democracy
by 1989, but it would have extended Pinochet's presidency
through
most of the 1990s. An overconfident Pinochet proceeded
with the
constitutionally mandated plebiscite on October 5, 1988,
and was
shocked when nearly 55 percent of registered voters
indicated their
preference for open elections in late 1989, while only 43
percent
voted for allowing Pinochet to remain president through
1997.
According to Arturo Valenzuela, the opposition basically
outfoxed
Pinochet and won the plebiscite "following Pinochet's
rules."
Aylwin, a Christian Democrat, easily won the
long-awaited
presidential election on December 14, 1989, as the
candidate of the
Coalition of Parties for Democracy (Concertación de
Partidos por la
Democracia--CPD), winning 55.2 percent of the vote. In
concurrent
congressional elections, the CPD also won a majority of
elected
seats in both houses of Congress. However, the coalition
was unable
to offset the nine Pinochet-designated senators, making
the CPD's
plans to further reform the military-designed constitution
unattainable for the foreseeable future.
When Aylwin (1990-94) took office as president on March
11,
1990, he inherited one of the strongest economies in Latin
America,
although the gross domestic product (
GDP--see Glossary)
growth rate
in 1990 was only 2.1 percent. In addition to continuing
Pinochet's
free-market policies, Aylwin enhanced the former regime's
foreign
trade policy by further reducing import tariffs from 15
percent to
11 percent. Whereas the free-market policies adopted by
Uruguay in
1990 met with strong resistance from a population
accustomed to a
generous cradle-to-grave welfare system, in Chile similar
policies
met with support from all sectors of society. Chile
emerged not
only as a showcase of a successful transition to moderate
democratic government but also as a widely admired
economic model
for the developing world, achieving a GDP growth rate of
5.5
percent in 1991, with an unemployment rate of only 6.5
percent, and
an unprecedented 9 percent GDP growth rate in 1992. The
GDP growth
rate reportedly slowed to about 5.5 percent in 1993, but
the
economy remained strong. In 1993 unemployment was only 5
percent,
and inflation was down to 12 percent. Moreover, thanks to
the
economic policy of President Aylwin's minister of finance,
Alejandro Foxley Riesco, total investment in Chile in 1993
was an
impressive 27 percent of GDP, while Chile invested a
comparable
percentage of its GDP in other countries, including
Argentina.
Chile's economic reforms had their downside. As Samuel
Valenzuela points out, the Pinochet regime's social and
economic
policies led to increased socioeconomic inequalities, and
urban and
rural poverty remained extensive. The severe structural
transformations, combined with the two harsh recessions
and high
debt-service obligations, aggravated the already high
inequality of
income distribution. More than 40 percent of the
population, or
about 5 million Chileans, remained poor, with 1 million of
them
living in
extreme poverty (see
Glossary). According to
Chilean
sociologists Cristóbal Kay and Patricio Silva, who was
health
undersecretary in the early 1990s, extreme poverty still
affected
nearly 55 percent of the rural population in 1990. The
standard of
living of many Chileans was further reduced by the
declining
quality of schooling and health care and inadequate land
reform.
Although the regime made heavy investments in programs for
the very
poor, thus helping to lower the infant mortality rate and
raise
life expectancy, its land reform measures were not
particularly
effective. Chile in 1987 remained in the category of
countries with
high inequality in the distribution of landholdings, with
a
Gini coefficient (see
Glossary) of 0.64, according to the
United Nations
Development Programme.
The Aylwin government funneled at least 20 percent more
resources into social programs, such as education,
housing, and
health, by raising taxes and seeking foreign assistance.
Under the
Aylwin government, the income of the lowest quintile of
the
population increased by 30 percent in 1990-93. By 1992 the
proportion of Chileans living in poverty had decreased to
33
percent, from 45 percent in 1985. This amounted to 4.2
million
Chileans living in poverty in 1993, with 1.2 million
living in
extreme poverty.
The Aylwin government also continued the privatization
of
social security, begun by the military regime in 1981. By
the end
of Aylwin's term, Chile's pension reform was the envy of
the world.
Officials from developing as well as developed nations
were
visiting Chile to see how it was done. By 1994 the system
was
managing assets of US$19.2 billion, giving Chile a savings
rate
similar to some Asian nations. Thanks in large part to its
pension
fund, Chile now has a strong capital market consisting of
stocks,
bonds, and other financial instruments.
As a democratic political model, the Aylwin government
had a
major handicap, namely the military, which, according to
Arturo
Valenzuela, has served as a virtual autonomous power
within the
government. With the help of its rightist allies in
Congress, the
military demonstrated its influence by derailing the
Aylwin
government's cautious but determined attempts to prosecute
military
officers for past human rights abuses. Aylwin refused to
support
the enactment of a blanket amnesty law, such as the one
approved by
Uruguay's General Assembly for military officers accused
of human
rights abuses committed between 1973 and 1978.
The military's rightist allies in Congress also
thwarted the
Aylwin government's attempts to enact reforms, such as one
that
would have eliminated the designated senators and another
that
would have replaced the military-designed
binomial electoral
system (see Glossary) with a system of proportional
representation.
Despite his setbacks in enacting reforms, Aylwin made good
use of
the strong presidential powers provided by the
Pinochet-designed
constitution. For example, he succeeded in enacting a
constitutional reform law restoring the country's
tradition of
elected local governments and another limiting the power
of the
military courts to trying only those military personnel on
active
duty.
Aylwin's generally very successful presidency,
particularly his
handling of the economy, assured a continuation of
democratic
government under another politically moderate president,
especially
the well-regarded son of Eduardo Frei Montalva (1964-70),
one of
Chile's most respected presidents. Eduardo Frei Ruiz-Tagle
entered
politics only in 1989, when he ran successfully for a
Senate seat
from Santiago. Until the late 1980s, he had devoted his
career to
hydrology as a partner in Sigdo Koppers, an engineering
firm. He
was elected PDC president in 1991, winning 70 percent of
the vote.
Although a consensus candidate for the PDC presidency,
Frei was
particularly favored by the PDC's right-wing faction,
popularly
known as the guatones (fat men). The party's other
factions-
-the left-wing's chascones (bushy-haired men) and
the
center's renovadores (renewalists)--favored other
candidates.
On May 23, 1993, Frei defeated his Socialist Party
(Partido
Socialista) rival, Ricardo Lagos Escobar, to obtain the
CPD's
presidential nomination, with a lopsided vote of 60
percent to 38
percent. Thanks in part to Aylwin's strong performance in
the
social, economic, and political areas, in part to Frei's
political
inheritance, and in part to continued divisiveness among
the
rightist parties, there was never any doubt that Frei
would win. As
chairman of the Senate's key Finance and Budget Committee,
Frei
earned a reputation as a fiscal moderate. His positive
public
rating, according to a Center for Public Studies (Centro
de
Estudios Públicos--CEP)-Adimark poll of July 1993, was a
remarkable
75 percent, even higher than Aylwin's 73 percent positive
rating.
Indeed, Frei's coalition easily won the presidential
election
on December 11, 1993, with nearly 58 percent of the vote,
compared
with 24 percent for Arturo Alessandri Besa, Frei's closest
challenger and candidate of the newly formed center-right
coalition
called the Union for the Progress of Chile (Unión por el
Progreso
de Chile). Frei received the largest popular mandate of
any Chilean
leader since 1931. The election was a sort of reverse
replay of the
1958 election, when Frei's father was defeated by
Alessandri's
uncle, Jorge Alessandri Rodríguez (president, 1958-64).
Moreover,
Frei Ruiz-Tagle allied himself with the PS, whereas his
father
joined in an alliance with the right, specifically the
National
Party (Partido Nacional). In sharp contrast to the
presidential
elections of September 4, 1970, the unexciting elections
of
December 11, 1993, lacked left-wing and right-wing
rhetoric. The
vast majority of Chileans, enjoying Latin America's
strongest
economy, were apparently content to let the government
remain in
the hands of the political center, namely Frei Montalva's
son.
Although Frei Ruiz-Tagle, unlike his late father, is not
distinguished for his public oratory, Chileans regarded
his low-
key, nonconfrontational, and statesmanlike campaigning
style, as
well as his penchant for consensus-building, as positive
traits.
Frei Ruiz-Tagle appears to have a better chance than
Aylwin had
to make the executive stronger vis-a-vis the military, not
only
because of his powerful mandate but also because the
political
right is becoming less protective of the military's
prerogatives
within the military-designed political system.
Nevertheless,
daunting challenges in the form of military resistance
face Frei in
his plans to seek to amend the Pinochet-era constitution.
These
plans include abolishing the eight "designated" Senate
seats,
reforming the electoral system, and making the army
commander,
General Pinochet, and the other military commanders
accountable to
elected officials. Frei's political agenda also includes
less
politically sensitive goals, such as improving secondary
and higher
education, consolidating Chile's political democracy,
modernizing
public services, and giving priority to rural development
and
eradication of poverty.
On the foreign front, Frei appeared to be inclined to
reverse
Chile's disinterest in regional trade pacts. In
particular, his
government was reassessing the potential benefits of
joining the
Southern Cone Common Market (Mercado Común del Cono Sur--
Mercosur; see Glossary)
and expected that Chile would become an
associate
member by January 1995. After the United States Congress
ratified
the North American Free Trade Agreement (
NAFTA--see Glossary) in
November 1993, Chile began lobbying to join a similar
agreement
with the United States (one which would drop the "North"
from
NAFTA), citing President Bill Clinton's position that
Chile is
"next in line" to join NAFTA. Total bilateral trade
between Chile
and the United States amounted to US$4.1 billion in 1993.
Frei's coalition maintained a majority (seventy) of the
120
seats in the lower house of Congress, the Chamber of
Deputies, but
fell short of the eighty it needed for a two-thirds voting
bloc.
Its lack of majority support in the forty-six-member
Senate also
seemed to preclude passage of constitutional amendments,
which
require a three-fifths majority in both houses. Like its
predecessor, the Frei government's efforts are likely to
be
hampered by the nine nonelected senators appointed by the
Pinochet
regime (of whom only eight are still serving) and by the
binomial
electoral system, which the military adopted for the 1989
elections
in order to strengthen the hand of the rightists.
Furthermore, unlike Chile's pre-coup democracy, its
democracy
of the 1990s is expected to remain fettered by a military
with a
strong institutional role in government, a military that
will not
likely tolerate a departure from the economic policies
that
constitute the principal accomplishment of its seventeen
years in
power. Even Frei's stated intention to push legislation to
relieve
the Copper Corporation (Corporación del Cobre--Codelco) of
its
constitutional obligation to give the armed forces 10
percent of
its annual earnings entails a risk of antagonizing the
military. In
1993 this contribution amounted to US$190 million, almost
one-fifth
of the total defense budget. However, one casualty of a
financial
scandal at Codelco that broke in January 1994 could be the
army.
The copper unions asked the army to give up its 10 percent
share of
Codelco's annual sales as a patriotic gesture. Although
the army
ignored this request, Congress was planning to discuss
military
spending later in the year, leaving open the possibility
that the
army could be compelled to make the sacrifice to head off
additional budget cuts.
Frei's relations with the military may determine how
successful
he is in achieving his stated objectives, but
confrontation with
the military did not appear to be his style. Indeed, in
his address
to Congress on May 21, 1994, Frei avoided the most
controversial
issue, his lack of power to appoint or dismiss the
military
commanders. The only feasible resolution of the dilemma of
Pinochet's continuing influence in government may need to
await the
general's scheduled retirement in 1997. Even then,
however, Chile's
transition to democracy will not be fully consolidated
until reform
of constitutional anachronisms, such as the immunity of
military
commanders to presidential dismissal, the binomial
electoral
system, and the designated senators.
August 31, 1994
Rex A. Hudson
Data as of March 1994
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