Table Of ContentCHILE 1970-73:
ECONOMIC DEVELOPMENT AND ITS
INTERNATIONAL SETTING
INSTITUTE OF SOCIAL STUDIES
SERIES ON THE DEVELOPMENT
OF SOCIETIES
VOLUME IV
INTERNATIONAAL INSTITUUT
VOOR SOCIALE STUDl~N - 'S GRAVENHAGE
CHILE 1970-73:
ECONOMIC DEVELOPMENT
AND ITS INTERNATIONAL
SETTING
Self-criticism of the Unidad Popular Government's Policies
Edited by
S. SIDERI
In collaboration with
B. EVERS
•
SPRINGER-SCIENCE+BUSINESS MEDIA, B.V
© 1979 by Springer Science+Business Media Dordrecht
Originally published by Martinus Nijhoff 1979
Softcover reprint oft he hardcover 1st edition 1979
All rights reserved. No part of this publication may be reproduced, stored in a retrieval
system, or transmitted in any form or by any means, mechanical, photocopying, recording,
or otherwise, without the prior written permission of the publisher, Martinus Nijhoff
Publishers bv, P.O.B. 566, 2501 eN The Hague, The Netherlands.
ISBN 978-94-011-8233-1 ISBN 978-94-011-8902-6 (eBook)
DOI 10.1007/978-94-011-8902-6
FOREWORD
One of the main objectives of the Unidad Popular ('Popular Unity') Govern
ment was to attain Chile's evolution towards more advanced forms of social
organization within the framework of strictly respected democracy.
This objective, which is deeply inherent in every human being and conse
quently present under all conditions and in all parts of the world, is not
weakened by temporary defeats or transient retreats. History proves this, and
current events in many parts of the world fully confirm it.
One of the areas in which this struggle for progress takes place most in
tensively is economics. Here, clashes take place between the forces which work
towards social progress, and those which oppose it and aim to maintain a sys
tem of intolerable priveleges. The ideological and material resources available
to the forces which attempt to restrain social progress are not small, and under
given circumstances they overcome the forces by which the majority tries to
realize a better future.
This is expressed very clearly in the relationships which link the internal
dynamics of social development with the great economic and political forces
operating at the international level. Consequently, analysis of the social trans
formation process in such countries as Chile, in the context of the political
and economic reactions these processes unleach at the international level, is of
key importance.
The chapters in this book are intended to contribute to the much-needed
reflection that nations and movements which aspire to emancipation must
scientifically undertake in order to devise political strategies which are viable
in the different and changing conditions under which this great social struggle
progresses.
This book aims to be a self-critical analysis of certain aspects of one par
ticular experience - the Chilean experience - which was of brief duration and
took place in the extreme south of the Western hemisphere. Undoubtedly,
because this experience has many peculiarities and limitations, one cannot
extract conclusions from it which are automatically applicable to other coun
tries. Nonetheless, I believe that analysis of this experience, which is absolutely
imperative to carrying on the process of re-establishing democracy in Chile,
may offer some lessons which can be used creatively by the nations which,
each in its particular way, face the same internal and external enemies as those
whose actions are described in the following chapters.
vi HORTENSIA BUSSI DE ALLENDE
The above becomes more relevant if one considers that those who contrib
uted to this book have been important in creating the economic policies of
Salvador Allende's Government. However, they have not shied away from
carrying out the most thorough self-critical analysis of the actions they took.
This constitutes proof of their honesty and their desire to contribute to search
ing sCientifically to discover the truth.
I believe that those governments which, like that of the Netherlands, im
plement policies of supporting the Third World countries in their fight for
emancipation are likely to find some guidelines in this book for making their
technical assistance and international cooperation programmes more directly
effective and relevant in fostering the social transformation processes which
will continue to take place in these countries.
The experience studied in this book was shattered. Those who came into
power by shattering a legitimate government sacrificed democracy for the sake
of a minority's priveleges. The events in Chile during the last few years more
than confirm the validity and justness of the proposals of all those social and
political forces for whom the key objective is attaining an advanced democ
racy. What the Chilean nation has experienced and suffered has not been in
vain, for an increasingly large number of people, with a greater awareness and a
stronger spirit of unity, are preparing themselves to obtain the return and
development of new forms of democracy which will uproot Chilean fascism
forever. It is in this perspective that the studies presented in this book have
been written.
Mexico City Hortensia Bussi de Allende
March 1978
CONTENTS
Foreword by Senora Hortensia Bussi de Allende v
Participants in the Seminars xi
Introduction xiii
Abbreviations xxiv
1. CLODOMIRO ALMEYDA, The Reasons for Self Criticism of the
Unidad Popular Government
2. ALEXIS GUARDIA, ALBERTO MARTiNEZ and SERGIO RAMOS,
General Considerations on the Chilean Economic Structure 11
1. Antecedents in the Structure of Chile's Economy 12
2. The Economic and Political Antecedents of the Economic
Situation 20
3. Some General Considerations 25
Notes 30
Tables 32
Statistical Appendix 34
3. ALEXIS GUARDIA, Structural Transformations in Chile's Economy
and in its System of External Economic Relations 45
Introduction 45
1. From the Structural Crisis to the Transformation Crisis 46
2. The Legacy of the Capitalist Economic Structure 51
3. The Nature and Extent of the Structural Changes 55
4. The Internal Economic Effects of the Changes 61
5. The Reaction of Other Countries to the Chilean Structural
Changes 67
6. The External Stranglehold 78
7. The External Financing Policy and the Deficit 80
8. Conclusions 86
Notes 91
Thb~ 93
viii CONTENTS
4. CLODOMIRO ALMEYDA, The Foreign Policy of the Unidad
Popular Government 103
1.-12. 103
Notes 132
5. FERNANDO F AJNZYLBER, The External Sector and the Policies
of the Unidad Popular Government 135
Introduction 135
1. The Chilean Economy during the 1960s 136
2. Foreign Trade Policy 145
3. Some Considerations on the Economic Blockade during the
1970-73 Period 161
Notes 168
Tables 170
6. CARLOS FORTIN, Nationalization of Copper in Chile and its
International Repercussions 183
1. Chile and the U.S. Copper Companies, 1920-70 184
2. Nationalization of Copper in 1971 192
3. The Development of the International Conflict on Chilean Copper:
the Causes and Consequences 203
4. Conclusions 214
Notes 216
Tables 219
7. ALBERTO MARTINEZ, The Industrial Sector: Areas of Social and
Mixed Property in Chile 221
Introduction 221
1. National and Foreign-Owned Monopolies in the Urban-Industrial
System 222
2. The APSM in Industry 226
3. The Formation of the APSM in Industry 233
4. The APSM and Domestic Financial Problems 239
5. The Internal Organization of the APSM in Indu~try 246
6. Industrial Production in the APSM and External Difficulties 251
Notes 255
Tables 258
Appendix 260
8. ALFONSO INOSTROZA,Nationalization of the Banking System in
Chile 275
1. Characteristics of the Banking and Financial System in 1970 275
2. The UP Government's Policy of Nationalizing Banks 282
CONTENTS ix
3. How the Nationalized System Worked 295
4. The Features of Nationalized Banking in Chile 300
5. Conclusions 310
Notes 311
9. SERGIO RAMOS, Inflation in Chile and the Political Economy of the
Unidad Popular Government 313
1. Inflation and Economic Disequilibria 314
2. Determinants of the Economic Evolution during 1971-73 320
3. A Description of the Inflationary Process during 1971-73 329
4. The Dynamics of Economic Disequilibria 335
5.Conclu~ons 352
Notes 354
Tables 358
10. S. SIDERI, The Process of Transformation and the Role of Inter-
national Cooperation: an Observer's View 363
1. The UP's Economic Programme 363
2. The Transformation Process and the Role of Foreign Assistance 372
3. Chile's Development and Foreign Assistance 376
4. International Cooperation for Development 379
Notes 384
Table 389
Index 391
PARTICIPANTS IN THE SEMINARS
Clodomiro Almeyda Former Minister of Foreign Affairs and of Defence
Mireya Baltra Former Minister of Labour and Social Affairs
Alejandro Bell Former member of the National Congress
Sergio Bitar Former Minister of Mining
Otto Boye Former political adviser to the Ministry of Foreign
Affairs
David Baytelman Former Vice-President of the Corporation for Agrarian
Reform (CORA)
Anna Corossacs Former staff member of the Documentation Center of
the Central Bank
Ben Evers Staff member of the Development and Research In
stitute of Tilburg University (IVO)
Fernando Fajnzylber Former executive of the Foreign Trade Department of
the Central Bank (SEREX)
Hugo Fazio Former Vice-President of the Central Bank
Edgardo Floto Former economic adviser to the Ministry of Foreign
Affairs
Carlos Fortin Former Head of the European Office of the Copper
Corporation (CODELCO)
Alexis Guardia Former economic adviser to the President of the Re
public
Agustin Gumicio Former member of the National Congress
Peter van Ginneken Staff member of the Dutch Ministry of Foreign Affairs
Claudio Huepe Former member of the National Congress
Alfonso Inostroza Former President of the Central Bank
Leon Jansen Staff member of the Development and Research In
stitute of Tilburg University (IVO)
Orlando Letelier Former Minister of Foreign Affairs and of Defence
Alberto Martinez Former Director of the Industry and Trade Depart
ment of the Ministry of Economics (DIRINCO)
Orlando Millas Former Minister of Economics
Hugo Miranda Former member of the National Congress
Carlos Morales Former member of the National Congress
