COUNTRY BRIEF: CHILE

CHILE: BASIC STATS Population16.9 million GNP/capita 8,350 USD Poverty rate 13.7 %

STRATEGIES FOR ECONOMIC DEVELOPMENT The Liberal Era (1880s-1920s) Import-Substitution Industrialization (1930s-1970s) The Socialist Alternative (1950s-1980s) Neoliberalism (1980s-present) –The “new Left” –ALBA

CHILE: OVERVIEW Natural Resource: Minerals –Nitrates –Copper –Sparse migration Export-Import Growth –Pacific Coast connections –Copper as key –Political democracy (of sorts) Democracy and Military Rule –Party politics (1940s-70s) –Socialism via democracy? Salvador Allende ( ) –The Pinochet regime ( ) Neoliberal Politics and Policy –Democracy (1990-present) –Economic uncertainty + reliance on exports (again)

KEY QUESTIONS 1. Why such a brutal (and durable) dictatorship under Pinochet? 2. Why such a vibrant democracy now?

MILITARY RULE Perception of threat: –Tradition of labor mobilization –Links to political parties Left = socialist, communist Center = Christian Democracy Right = National Party (PN) –Cold War mentality, doctrines of “national security” –Support from the United States

The Dictatorial Solution –Military as bulwark of patriotism –Weakness of conservative institutions –Need to purge subversive elements –Reconstruction of society (and economy) –Pinochet in command –Constitution of 1980 The Stunning Plebiscite (1988) –Victory of “No” (55-43 percent) –Bargaining and guarantees –Protections for the “right”

DEMOCRACY RESTORED Human rights: –“Truth and Reconciliation” commission –1998 arrest of Pinochet Economics: –A “gift of the dictator” –Consensus on free-market policies Politics: –Restoration of “golden age” –Formation of Concertación (center-left)

INSTITUTIONAL FEATURES Executive –MRO –Four-year terms (renewable after one interim term) Legislative –Bicameral structure (Chamber of Deputies = 120 members, Senate = 38) –Voting rules to help the right (“binomial system”) –Located in Valparaíso –Weak resources, but increasing authority Judiciary –20 justices on Supreme Court, tenure for life –Court creates list of 5, President selects one, two-thirds Senate confirms

QUALITIES OF CHILEAN DEMOCRACY One of only three countries to receive perfect scores from Freedom House (along with Costa Rica and Uruguay) Top ranking on corruption from Transparency International (#22 in world) Top ranking on rule of law according to World Bank (+1.25, range )

DEMOCRATIC PRESIDENTS Center-Left alliance: Concertación Patricio Aylwin ( ) Eduardo Frei ( ) Ricardo Lagos ( ) Michelle Bachelet ( ) Right: Sebastián Piñera (2010- )

THE WASHINGTON CONSENSUS Reducing the role of the state: –Less regulation –Less public ownership Liberalizing trade: –Reducing tariffs and quotas = less protection –Seeking commercial partners Promoting private enterprise: –Privatization –Foreign investment

POLICIES IN CHILE Trade liberalization –Unilateral + –FTAs –Diversification of destinations Privatization Stability (low inflation) Foreign investment Poverty and inequality

EXPORTS Products: copper, fruits and nuts, fish and seafood, wood (and wine) Partners (2009): –China 16.5 % –USA 11.3 –Japan 9.1 –South Korea 6.5 –Brazil 4.6 –Mexico 4.1

INEQUALITY Mexico.461 Argentina.513 Chile.549 Brazil.570 USA.408

Thus is born a “poster child”…