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Chile
Index
By the mid-1970s, the dictatorship switched from
destroying the
old order to constructing its version of a new Chile. The
junta not
only overturned decades of democratic government but also
decades
of statist economic policies, which had mainly protected
industrialists and organized workers. The new economic
program was
designed by civilian technocrats known as the
"Chicago boys" (see
Glossary) because many of them had been trained or
influenced by
University of Chicago professors. The government
instituted a
dramatic conversion to free-market economics in 1975.
After curbing inflation and returning a significant
amount of
property to its former owners, the administration embarked
on a
radical program of liberalization and privatization,
slashing
tariffs as well as government welfare programs and
deficits. As a
result, the economy grew rapidly from 1976 to 1981, a feat
heralded
as the "Chilean miracle." That growth was fueled by the
influx of
private foreign loans until the debt crisis of the early
1980s.
Financial conglomerates became the major beneficiaries of
the open
economy and the flood of foreign bank loans. Exports of
nontraditional commodities, especially fruit, timber, and
fish
products, also grew impressively; the value of new
exportables came
to equal that of copper sales. Despite high growth in the
late
1970s, income distribution became more regressive and
unemployment
stayed in double digits. The underemployed informal sector
also
mushroomed in size. The regime responded with a "minimum
employment" public works program
(see The
Military Government's Free-Market Reforms, 1973-90
, ch. 3).
In conjunction with the liberalization of the economy,
the
junta implemented a series of social reforms to reduce the
role of
the central government in social security, labor disputes,
health
care, and education. These reforms fit with the desire to
shrink
the central government, decentralize administration, and
privatize
previous state functions. Critics charged that the welfare
state
was being dismantled to leave citizens at the mercy of the
marketplace. The regime retorted that it was focusing its
social
assistance on the poorest of the poor to meet basic needs,
and it
pointed with pride to improvement in such indicators as
infant
mortality
(see Welfare
Institutions and Social Programs
, ch. 2;
Economic
Results of the Pensions Privatization
, ch. 3).
The most important of the government's so-called
modernizations
in social policy was the 1979 Labor Plan. The regime had
already
outlawed the CUTCh, Marxist union leaders, several Marxist
unions,
union elections, strikes, and collective bargaining.
Nevertheless,
after bearing the brunt of repression in 1973-74, unions
gradually
revived in the late 1970s. Little by little, cooperation
increased
between Marxist and Christian Democrat union leaders, the
latter
making gains because the former were outlawed. Although a
few
unions supported the government, most firmly opposed the
regime and
its economic program. The Labor Plan sought to codify the
dictatorship's antilabor policies. It placed stringent
limits on
collective bargaining, strikes, and other union
activities,
especially any participation in politics. Almost all labor
unions
rejected the Labor Plan and aligned with the opposition
(see Unions and
Labor Conflicts
, ch. 3).
Data as of March 1994
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