NEOLIBERALISM AND THE WASHINGTON CONSENSUS: THE CASE OF CHILE

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

WASHINGTON CONSENSUS Reducing the role of the state –Less regulation –Privatization Liberalizing trade –Reduce tariffs, quotas –Expand exports Promoting the private sector –Foreign and local production –Stimulate market competition

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)

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

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”…