Chile

The Chilean people are predominantly homogeneous, descended from the Spaniards and the indigenous population and later European immigrants. Among Chile’s population, intermarriage has created a society European in outlook and relatively free from racial prejudice. There are few pure Indians left, perhaps 300,000, among them the Araucanian Indians of the south, who have tried to preserve their way of life against the encroachments of modernisation.

Chile’s riches in metals and minerals made it, by the 1990s, one of the most developed and urbanised nations in Latin America. In the course of the twentieth century the towns absorbed most of the population. Agriculture played a significant but decreasing role in the economy, with the traditional structures of large estates in the fertile valleys of central Chile worked by a poor landless peasantry surviving into recent times. The close ties between wealthy landholders and wealthy industrial magnates enabled these conservative groups to wield political power far in excess of their numerical strength. Industrialisation and urbanisation in the twentieth century created a relatively large working class, born in Chile and playing an important role in Chilean politics. The authoritarian Pinochet regime that ruled for two decades (1973-90) concealed what had been one of the distinguishing features of Chilean politics in Latin America, its traditional constitutional and parliamentary system, with the military accepting their subordinate though highly respected position. Escalating political conflict, the result of violent clashes of economic and social interests in the 1970s, a national economy in deep trouble as a result of failed socialist measures and of a denial of assistance from the West, especially the US, led in 1973 to a military coup and, as few had expected, to a prolonged, ruthless dictatorship.

Before the 1920s the Chilean economy was dependent on the world price of a single commodity, nitrates; since then it has been copper. Prices fluctuated violently and so impeded consistent internal development. Politics, too, were volatile. It is all the more remarkable that from 1891, after the end of a short but bloody civil war, until 1973, with the exception of a short period (1927-31) of suspended civic liberties and military rule, the parliamentary system survived, with regular national elections and peaceful transfers of power from one ruling political coalition to another. Throughout these years political fortunes were heavily dependent on the economic health of the state, which in turn was dependent on the economies of the industrialised West. What made Chilean progress even more problematical was that its prime export-earner, copper, was owned by foreigners. US companies transferred the bulk of the profits home and did not invest them in the less favourable conditions of Chile. The one issue on which all political parties were agreed was resentment of the US, and when the copper companies were eventually nationalised in 1971 by Salvador Allende, the measure uniquely received unanimous support in the Chilean Congress.

Characteristic of the period of politics in Chile from 1891 to 1927 was the emerging alliance between the conservative landowner-merchant elite and a middle class alarmed at the rising demands of trade unions whose members were struggling in the inflation-ridden economy to maintain their living standards. The government response was more often repression and imprisonment of union leaders than concession and legalisation of union activities. At the same time efforts were made to reduce workers’ militancy by means of welfare legislation. The military took over in 1927, but the impact of the depression made government a thankless task and the generals handed control back to the civilian politicians and Congress in 1931. Copper prices, which had fallen precipitously, recovered very gradually after 1932; the economy was so managed that Chile escaped the scourge of the 1930s, mass unemployment, at the cost of low wages and inflation. As the decade drew to a close, Chilean politics had become polarised. Working-class politics and union strength had greatly increased and a popular front was formed, a coalition that was no more than mildly socialist in its policies, and inherently unstable when in office. At no time did it pose a threat to the Chilean tradition of parliamentary government.

The coalition of the left was exposed to the hostility of the US as the Cold War developed. In 1948 the Communist Party was outlawed (though not for long). During the next twenty-five years, Chilean politics remained deeply divided, elections fiercely contested. The left could not muster majority support and was kept out of power by a coalition of the centre-right. Unemployment was still held in check but the economy was stagnating and inflation a constant problem. The benefits of a substantial rise in copper prices from 1945 to 1955 were counterbalanced by an equally large fall in production. In the 1960s Chile’s economic and social problems multiplied and would have been even worse without the support of Kennedy’s Alliance for Progress. The problems of the rural poor had not been effectively tackled; their influx into the cities created massive new demands for housing, education and employment, a common experience in the underdeveloped regions of the world. The small population (11.2 million in 1980) and its weak buying power could not sustain large-scale home industries except in the most basic goods, which poor people can afford to buy.

No Chilean government in the twentieth century had, so far, found a solution to social and economic problems: to the confrontation of political parties and to the opposing interests of the poor, the middle classes and the wealthy elite. Any bold policy that attempted to breach the status quo was immediately stymied by the opposition in the Chilean Congress. Yet, for just one decade from 1964 to 1973, Chile’s political leaders did try to break out of this cycle, and their failure had tragic consequences.

As the presidential elections of 1964 approached, the communist-socialist alliance, led by a veteran Marxist politician Salvador Allende, looked like polling the most votes, though he would not win an absolute majority; the parties of the right were second in strength, and third was a new Christian Democrat Party, pledged to implement thorough reforms and led by Eduardo Frei. To prevent the left coming to power, the parties of the right decided to back Eduardo Frei. Allende called for a socialist revolution and Frei for a ‘revolution in liberty’, which would not endanger civic rights or rights to property. The Johnson administration in Washington was determined to do what it could to keep Allende from winning. There must be only one ‘Cuba’ in the hemisphere. The CIA channelled substantial funds to Frei’s campaign, and he won easily. Nevertheless, Allende, who had nearly won in 1958 in a three-cornered contest, made a strong showing.

Frei’s policies were boldly reformist and he was helped by a large influx of US aid amounting to $327 million from 1964 to 1967. One longstanding problem concerned the US copper concerns. Frei did not nationalise them, but bought a state share as part of a Chileanisation programme. The state took an interventionist role in planning the economy. Local industry was diversified; with the country rich in timber, a paper industry was established, and petrochemicals were developed. Joining the Andean Pact with Peru, Bolivia, Ecuador and Colombia created a larger market. But the emphasis was on nationalism and independence from foreign economic domination. A more determined attempt at rural reform was made and the break-up of the large estates was begun. Between 1964 and 1967 copper prices rose steeply, as did production. Then copper prices fell again and inflation soared. There were large-scale strikes met by violent repression. As the 1970 presidential elections approached, all classes of society, for different reasons, were becoming disenchanted with Frei’s economic reforms. With the conservative right now putting up their own candidate and the constitution preventing Frei from standing again, it was clear that this was Allende’s opportunity.

President Nixon and his national security adviser, Henry Kissinger, regarded an Allende victory as totally unacceptable to the US. It would end Cuba’s isolation and, they believed, mark the beginning of an advance of Marxism in South America. Subsequent US congressional investigations have revealed the extent of US intervention. The Chilean military were encouraged by the CIA, on instructions from Washington, to stage a coup to prevent Allende assuming the presidency. But the Chilean army commander-in-chief, General Rene Schneider, stood by the constitutional process and blocked the plot. The conspirators thereupon decided to remove him: he was shot and killed, possibly accidentally, when a third attempt was made to abduct him. This brutal intervention outraged the Chilean generals and the planned military coup did not materialise; another constitutionally minded commander-in-chief replaced the murdered man. When the election results were announced, Allende had won the largest number of votes, 36.3 per cent, but his rightist rival came a close second with 34.9 per cent and the Christian Democrat had secured 27.8 per cent. Allende could rightfully claim the presidency and was duly inaugurated by Congress, but he could not assert that he had won a national mandate to undertake a socialist revolution. For that, in any case, he would need majorities in Congress, which would be able to veto any Marxist transformation.

The three years of Allende’s presidency in Chile are one of the most bitterly disputed periods in Latin American history. To some Allende became a martyr; his supporters accused the US of repressing the righteous struggle of a Marxist for the betterment of the people. In fact, he achieved more by his death at the hands of the military than he had accomplished during his presidency; the barbarity of what followed brought out the contrast between the humane president and his successor, General Augusto Pinochet. ‘Allende’ became the rallying cry of the left and of the many demanding justice and change in Chile.

The economic fundamentals were not favourable to Allende, and the price of copper was turning down from a peak in the late 1960s. Although Frei had made progress, it was not enough; and high inflation, which Frei had attempted to check with austerity measures, had returned. Allende restored and improved the living standards of the workers by a large increase in wages while controlling prices. The benefit was short-lived: a boom was followed by higher inflation. Allende’s left coalition was committed to a transition to socialism, which meant state control of the economy to a much greater extent than his predecessor had thought possible or desirable. On the issue of foreign companies operating in Chile, nationalism and resentment of their economic role united all parties when in 1971 Congress approved the nationalisation of the US copper companies. Compensation was denied on the ground that their excess profits over the years had exceeded any compensation due. Other US companies, powerful in the US, such as Ford and ITT, were taken over too; but when it came to nationalising the big banks and the largest concerns in Chile, there was an outcry from the industrial elites. Vigorous land reform enacted by Frei but until then hardly implemented added the landowners to the implacable opposition. The middle classes were alarmed by the expansion of state control, from which only the smallest enterprises appeared to be exempt; it was easy to frighten those small shopkeepers by suggesting that their private ownership would not last long either. Meanwhile, the expectations of many workers ran high. Through occupation of factories they tried to force the hand of the government, and sometimes they succeeded in doing so, though Allende tried to retain control of policy.

A number of key questions now arise. Was Allende leading Chile to a fully Soviet-style state, as his opponents maintained? Allende was an experienced politician who had participated in Chile’s constitutional politics for many years. He now headed a coalition of the left, which extended from moderate socialists to the communists, who were themselves more moderate than their East European counterparts; but the coalition also embraced extreme radical groups who wanted to hasten the creation of a socialist state. Would Allende be able to control the coalition, or would the extreme elements take over? By 1973 Allende had boxed himself in; he could rid himself of the extremists only if he could secure the support of the reformist Christian Democrats. That he tried to make an opening to the centre shows that his intention was not only to maintain himself in power but to moderate the course of change. He was not a mouthpiece of Moscow but a socialist seeking a Latin American solution to Chile’s economic and social problems.

Nor was Allende following in Castro’s path, though the Cuban leader was enthusiastically received when he visited Chile in 1971. Allende did not forcibly dissolve Congress, abolish the opposition parties or rule by making use of repression, terror, censorship or the suspension of civil liberties. There may have been supporters for such a course among his coalition partners, but the

Army’s loyalty was to the constitutional process and if Allende had tried to establish an authoritarian Marxist regime he would have plunged Chile into civil war.

The path to socialism was blocked by Congress, where the opposition had a majority. Allende resorted to undemocratic means to bypass Congress and to continue expropriations, making use of his presidential powers. He proposed a constitutional amendment, replacing Congress with a People’s Assembly and submitting this to a plebiscite. Congress predictably rejected this device in 1972. The proposal marked the high point of Allende’s attempts to create a Marxist state. Allende did not pursue this extra-legal course; instead with the economy in chaos he moved towards Frei’s Christian Democrats. Their support would have provided the coalition with a firm majority in the country while neutralising the extremists in the coalition. The negotiations came to nothing and the appalling state of the economy in 1973 was creating widespread unrest. The inflation rate had reached 150 per cent, inexperienced bureaucrats were running the state sectors of industry, private industry was demoralised and factory owners were not inclined to cooperate with a socialist government. A black economy flourished. Foreign credit was exhausted. And the sorry state of the economy was primarily the result of Allende’s policies, though the Nixon administration remained implacably hostile and helped to undermine Allende. The principal US weapon was to deny aid and loans, which totalled only $18 million for the three years from 1971 to 1973, as against $156 million from 1968 to 1970. Since mid-1970 Nixon had blocked the Chilean economy, and private investment dried up.

For a year, from the summer of 1972 onwards, there were increasing numbers of strikes, boycotts and mass street demonstrations of the pro - and anti-Allende masses. The opposition encouraged this public confrontation and the Marxist coalition called out its supporters. In the congressional elections in the spring of 1973, which were free and democratic, Allende’s Unidad Popular not only held on to its support but increased it (compared with the presidential election) to 43 per cent, though this was still less than the combined opposition figure of 55 per cent. The weakness of Allende’s ‘transition to socialism’ was that it never won the support of the lower-middle class - the shopkeepers and small traders, those with some stake in a free-enterprise economy. By the summer of 1973 terrorist incidents were added to large-scale strikes and demonstrations. After negotiations with the Christian Democrats had failed, Allende sought the support of the army and brought in a moderate general as minister of defence. On this general’s resignation, Allende turned to another who was believed to share the army’s traditional constitutional outlook - Augusto Pinochet. But the military were plotting a coup. On 10 September 1973, they struck. Allende hurried the following morning from his private residence to the presidential palace, rejecting offers of safe conduct and exile in the Latin American tradition. By this courageous decision he ensured that the coup would be condemned as unconstitutional. An attack by fighter planes set fire to the palace and Allende died there resisting the assault on his authority, an outrage in the long constitutional history of Chile.

The military junta’s campaign of repression against civilian supporters of the former Allende government also had no parallels in Chilean history. Certainly nothing as bloody had occurred since the civil war almost a century earlier. ‘Suspects’ were rounded up in the football stadium. Thousands of likely opponents were imprisoned; thousands were murdered, perhaps 5,000, possibly three times that number, during the early days after the seizure of power. The hope of the urban poor and peasants for a new deal was buried under bayonets. The military ruled, Allende was gone and Washington heaved a sigh of relief. But it was one thing to get rid of a Marxist leader, another to replace him with a reformist, democratic, free-enterprise government respecting human rights. This is what the US wanted, as did the majority of the Chilean people. General Pinochet, who emerged as the caudillo, the strongman of the junta, broke with Chilean military tradition and did not hand back power to the civilian politicians. His regime ‘suspended’ all political activity, sent Congress packing and drove political parties underground. The democratic representative constitution was set aside and an emergency ‘state of siege’ declared that effectively abolished freedom and civil rights. These were not short-term measures. The ‘state of siege’ was only lifted fifteen years later in the summer of 1988 as Pinochet was seeking to improve the image of his repressive regime on the eve of a referendum designed to confirm him in power; even Chilean exiles were now invited to return.

But Pinochet’s first task in 1973 was to ensure the security of his military regime. This he did during the next fifteen years by waging a ruthless campaign to eliminate any opposition; people were picked up in the street or in their homes and just ‘disappeared’, without trial; their relatives were told that nothing was known about them. All social classes were affected, and all shades of political opinion, though the main target was the left wing. A regime of terror was inaugurated. Women as well as men were imprisoned, tortured and killed; others languished in prisons and camps. The ‘disappeared ones’ became one of the most horrifying features of recent Latin American history. In Chile (a rough estimate) 3,000 are missing, in Argentina 30,000, in Guatemala 35,000, in El Salvador 9,000, in Haiti 15,000; children were orphaned, their identities obliterated, and they have been adopted by politically ‘safe’ parents. These flagrant violations of human rights aroused only sporadic protest in the West, but Pinochet was safe from any effective international interference. The attitude of the US was of particular importance.

The Nixon-Ford administrations wanted a stable government in Chile, preferably one that was reasonably democratic and supported a free-enterprise economy, with a decent human-rights record. But the US also saw in Marxism a cancer spreading out from Cuba; it had to be contained in Cuba; should it break out of this isolation, given the severe problems of Latin America, it would not halt in any one country, but would spread to the neighbours of the US and present a threat to America in its own hemisphere. The fight against communism was therefore to be given priority. Large-scale aid once more flowed to Chile: loans to assist economic recovery, aid under the Food for Peace programme (eight times larger than what was given during the Allende years) and funds to purchase arms. In all these measures the Nixon-Ford administrations expressed their support for Pinochet. It is true that their purpose was to defeat communism, not to underpin the Chilean regime’s brutalities, but they could not escape the dilemma: the two were linked - they were making, as they saw it, the choice that best served US interests. As Kissinger explained, the US should not become involved in ‘temptations to crusade’. But Senator Edward Kennedy and other members of Congress embarrassed the Republican administrations with their opposition and their attempts to restrict aid to Chile by linking it to human rights. The administrations’ task thereby became more difficult, but ways were found to continue giving aid from 1973 to 1976, the most repressive years of the Pinochet regime, during which the opposition was decimated. For them, by the time the new Democratic president Jimmy Carter made human rights a key plank of US policy, with particular reference to Latin America, it was too late. Aid to Chile and other repressive regimes was drastically cut, without noticeable effect on the brutality of these regimes. The US could not bring about their fall by economic means, nor was economic aid sufficient to maintain them. That is why US policy in Chile is such an instructive example of the difficulties and frustrations that appeared to face Washington’s policy makers.

It was in Chile, too, that Western academic economists and technocrats were allowed a decisive influence in policy making to cure the economic chaos that was prevailing at the end of Allende’s presidency. The Chilean generals did not understand economics but, opposed as they were to socialism, backed free-market remedies being advocated by Professor Milton Friedman’s Chicago School. At its most basic, the theory was that the free-market system should be allowed to function and that all artificial restraints, such as protection of economic sectors that were otherwise not competitive, trade unions bidding up wages beyond their market value, state-run industries not dependent on commercial profits, should be removed. Inflation would be cured, and market forces would achieve a balance between supply and demand, provided the government balanced its own budget and kept the supply of printed money in check. Ideologically, the father of this economics was Friedrich Hayek, who saw in socialism and its central controls the modern road to slavery. The attitudes and expectations of workers and employees could best be changed by the sharp shock of changing the protectionist system quickly. Paradoxically, it was a nation that had fallen under a vicious dictatorship, the kind of state Hayek most abhorred, which now provided the laboratory.

In Chile the technocrats did not have to worry about the immediate practical consequences: workers would be cowed and trade unions would not be allowed to interfere. In a less authoritarian regime, the severity of Chile’s inflation (it had reached 500 per cent in 1973) would have ensured that the remedies were applied with more circumspection. Looked at in the short term, the economic policies adopted in Chile were successful. People even talked of a ‘Chilean miracle’; inflation was down within a few years to less than 10 per cent; the growth rate in the 1970s was healthy. But the price paid in terms of distress experienced by the poorest was equally spectacular; there was large-scale urban unemployment and mounting debts. The bankers had miscalculated in their belief that good profits could be earned from Latin America’s most repressive regimes which had a record of keeping their countries stable and which repaid their foreign loans punctually. Then the decline in commodity prices in the early 1980s hit Chile hard, dependent, as it still is, on exports of copper; servicing the foreign loans places an increasing drain on an economy.

The Pinochet regime also came under mounting pressure, not only from opposition at home expressed in massive strikes, but from the Reagan administration, which in 1986 sponsored a UN resolution criticising Chile’s human-rights record. Even his fellow generals opposed Pinochet when he declared he would stay in office until 1997. In September 1986 he narrowly survived an assassination attempt; this he countered with another bout of severe repression, which included arresting leaders of the opposition. The left-wing guerrilla group, the Patriotic Front, planted bombs. The papal visit of John Paul II in 1987 brought more criticism on Pinochet’s head and the generals were openly calling for a hand-over to a civilian president. Violent street demonstrations accompanied Pinochet’s 1988 campaign for the plebiscite designed to confirm him in the presidency until 1997, but the general was sufficiently confident to lift the state of emergency and to allow the opposition to campaign against him. In the event the Chileans rejected Pinochet by the surprisingly small majority of 463,833 votes out of a total of just over million. No doubt the improved economic situation, with substantial growth from 1985 to 1988, and memories of the chaos Allende had left behind him had persuaded nearly half the voters to back Pinochet - better the devil you know. But the result was decisive enough. In December 1989 Patricio Aylwin Azocur, a 71-year-old lawyer, won the presidential elections and was inaugurated in March 1990. Pinochet did not retire but confined himself to the role of commander-in-chief. In November 1990 he celebrated his seventy-fifth birthday - too old, one might hope, to turn the constitutional clock back again, but it remained to be seen whether the army would resume its former role of respecting representative constitutional government. Although the price paid in human terms was considerable, the Pinochet years transformed the national economy.

In the aftermath of the military regime, the country learnt the grisly truth about the years of dictatorship. Nearly 2,300 had died, many by shooting and torture, and nearly 1,000 had simply disappeared (at least one unmarked mass grave was uncovered). One of the hardest tasks confronting Chile in the 1990s was to come to terms with its past, and to keep the military in check. It also faced the challenge of reforming its social and economic structures - including health provision, education and housing - while at the same time ensuring employment and maintaining a free-market economy. The ghosts of the Pinochet years are receding, Pinochet old and ill has slipped into irrelevance. The democratic government is in control. Constitutional reforms in 2003 eliminated the life senators and the army will no longer be permitted to play a leading role in politics. The amnesty for the part played in the ‘dirty war’ was also annulled.

Colombia, Peru, Bolivia, Paraguay and Chile, 2000