Chile | Economics

| Post-Chicago Boys Economics

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Presentación de la política monetaria de Chicago Boys y las fallas/consecuencias del sistema, específicamente en productividad, y centralización.

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| Wealthy, well informed, US connected Chilean Super Elite against Chilean development

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La experiencia muestra que la mayoría de los países que salen de la pobreza y se acercan al desarrollo, como Chile, se estancan a mitad de camino. El fenómeno ha sido bautizado como “la trampa del ingreso medio”. Muchos especialistas creen que para salir de ahí se necesitan políticas industriales. Una reciente investigación de Tomás Bril-Mascarenhas y Aldo Madariaga examina por qué se ha fracasado en implementar políticas industriales en Chile y la responsabilidad que le cabe a los gobiernos de la Concertación, a la elite económica y al primer gobierno de Sebastián Piñera en ese fracaso.

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https://ciperchile.cl/2018/04/12/como-la-elite-torpedeo-los-intentos-de-sacar-a-chile-de-su-dependencia-de-las-materias-primas/

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| Inequality

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The International Monetary Fund has backed economists who argue that inequality is a drag on growth in a discussion paper that has also dismissed rightwing theories that efforts to redistribute incomes are self-defeating. The Washington-based organisation, which advises governments on sustainable growth, said countries with high levels of inequality suffered lower growth than nations that distributed incomes more evenly.

…

And in what is likely to be viewed as its most controversial conclusion, the IMF said analysis of various efforts to redistribute incomes showed they had a neutral effect on GDP growth.

Income Inequality damaging for growth.

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| Low investment on a high income inequality region

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An overview of Chile and Latin America, the very low investment rates, and why Latin American growth isnt stable over time. ♦ Chile “gifts”, in foreign investment repatriations the equivalent of 2 times Paraguayan PIB. 32:28

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Chile | 1973

| US Intervention

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In 1970, the CIA’s deputy director of plans wrote in a secret memo: “It is firm and continuing policy that Allende be overthrown by a coup. … It is imperative that these actions be implemented clandestinely and securely so that the USG [the U.S. government] and American hand be well hidden.”

♦ Secret Documents Show Nixon, Kissinger Role Backing 1973 Chile Coup

♦ DemocracyNow! Coverage of US intervention in Chile

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| Torture

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“Me metieron ratas por la vagina, me violaron perros, me colgaban”, sostuvo. Agregó que sus captores la amarraban desnuda junto a su padre y su hermano, quien por entonces tenía 15 años, y le decían que su padre la violaría. “Hacían una fila de militares y me obligaban a hacer contacto oral con todos ellos y eyaculaban en mi cuerpo y me bañaban de semen”, relató. “Me cortaron el vientre con un yatagán (un cuchillo corvo)” y también le hicieron tajos con hojas de afeitar en “los senos y nos ponían cables eléctricos y alcohol”.

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| General Information

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Chile | Pre-Coup economics, and economic warfare

| The Soft Line

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As Helms reported in his notes, there were two points of view. The “soft line” was, in Nixon’s words, to “make the economy scream.” The “hard line” was simply to aim for a military coup. Our ambassador to Chile, Edward Korry, who was a Kennedy liberal type, was given the job of implementing the “soft line.” Here’s how he described his task: “to do all within our power to condemn Chile and the Chileans to utmost deprivation and poverty.” That was the soft line.

chomsky.info/secrets04

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“La CIA financió secretamente huelgas sindicales y gremiales en Chile por más de 18 meses*, antes de que el Presidente Salvador Allende fuera derrocado, revelaron fuentes de inteligencia estadounidenses”

CIPERChile

*Including some of which reached upwards of 250.000 attendees

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| Economic warfare

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En el mismo reportaje, Hersch dice que sus fuentes le informaron que la mayoría de los “US$8 millones autorizados por la CIA para actividades clandestinas en Chile”, fueron utilizados en 1972 y 1973 para proveer de fondos y apoyo logístico a los huelguistas anti Allende. Entre ellos, se cita a los camioneros que participaron en el paro nacional del sector que duró 26 días (1972), “dañando la economía chilena y provocando la primera de una serie de crisis laborales para el presidente Allende”.

CIPERChile

A number of sources also explained that the Central Intelligence Agency, by using the Chilean black market, was able to increase the basic buying power of the $7‐million estimated to have been spent on clandestine efforts between 1970 and 1973. The unofficial exchange rate, sources said, was as much as 800 per cent higher than the official rate, indicating that the C.I.A.’s cash could have had a local impact of more than $40‐million*.

NYTArchive

*$40 Million in 1970 translates to $260 Million 2018 US Dollars.

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Written by Henry Kissinger and sent to the Secretaries of State, Defense, the Director of the Office of Emergency Preparedness and the Director of Central Intelligence, this memo directs U.S. agencies to adopt a “cool” posture toward Allende’s government, in order to prevent his consolidation of power and “limit [his] ability to implement policies contrary to U.S. and hemisphere interests.” The memo states that existing U.S. assistance and investments in Chile should be reduced, and no new commitments undertaken. Furthermore, according to Kissinger’s memo, “close relations” should be established and maintained with military leaders throughout Latin America to facilitate coordination of pressure and other opposition efforts.

National Security Decision Memorandum 93, Policy Towards Chile, November 9, 1970 [PDF]

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| Make The Economy Scream

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In July 1971 the U.S.-owned copper mines were nationalized, and after a calculation of the companies’ “excess profits” from 1955 to 1970… Nationalization however caused an escalation of ongoing U.S. plans to destabilize the Chilean economy… So, the U.S. cut off loans to Chile and blocked World Bank and other sources of money (the U.S. ambassador to Chile remarked: “Not a nut or a bolt will reach Chile…. We will do all in our power to condemn Chileans to utmost poverty”).

As a result of the drop in aid and economic sanctions, Chilean industry ran into problems getting spare parts, technology, and new machinery.

Allende’s Chile, 1972

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In August of 1972, a series of strikes began in Chile. At the head of these actions were the truck drivers. Chile had little in the way of a railway system so the vast majority of goods had to be moved by truck. The stop work action crippled the Chilean economy, stopping the delivery of food and sowing discontent amongst the population. According to a CIA intelligence bulletin, the Chilean Department of Investigation had received requests to investigate foreigners living in Chile who were manipulating the strikes. It has since been discovered that the CIA were manipulating the strikes as part of the Track II plan to cripple Chile’s economy. The PDC was a strong supporter of the strikes and had been receiving funds from the CIA since Track I was put in place. These funds were passed onto the strikers, prolonging the strikes and bringing the Chilean economy to a halt.

r/AskHistorians

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Despite a promise from US Ambassador Korry to Allende’s predecessor Eduardo Frei in 1970 that “not a nut or bolt would be allowed to reach Chile under Allende,” the US continued to provide assistance to the Chilean military in the form of hardware and training… The Chilean military presented a shopping list of weapons and vehicles to the US valued at seven million dollars. This list included recoilless rifles, helicopters, artillery pieces and C-130 Hercules aircraft. Kissinger advised Nixon to offer the requested items to the military on credit as a refusal to supply the weapons could “cause resentment in the Chilean armed forces and sever our tenuous relations with them while there is still a possibility they might act against Allende.” It is clear that the Nixon administration was planning to use the military against Allende. In direct violation of their own policy of strangling Chile’s economy, the US increased assistance to the Chilean military from 3,221 million dollars in 1970 to 13,540 million dollars in 1972. Assistance from the US government to the Chilean military was not only in the form of money but in training as well.

r/AskHistorians

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Throughout 1972 class conflict grew. In October and November, truck drivers, retail merchants, and professionals went on strike, a so-called “Paro de Jefes/Bosses’ strike” against the government. The government responded by having trade unions and neighborhood groups take over the distribution of goods. The strike ended in a stalemate, with more factory occupations and worker support for the government, but more shortages of goods and loss of middle class support.



Despite inflation and rightwing sabotage of the economy, the UP [Allende’s Party] increased its share of the vote in the March 1973 congressional elections from thirty-six percent to forty-four percent… This outcome meant that the UP’s enemies could not get the two-thirds vote needed to impeach Allende and remove him legally. The rightwing opposition therefore hardened its tactics. In May the [Right wing] copper miners went on strike against the government… On June 19, 1973 there was an attempted military coup with assistance from fascist, or extreme right-wing civilians, which failed when part of the army remained loyal to the government. On July 29 came the second truckers’ strike, combined with much right-wing terrorism against people and trucks, buses, gas stations, pipelines, and trains.

Allende’s Chile, 1972

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Chile | September 11

Finally, on September 11, 1973 came the brutal military coup that overthrew the government. Allende died fighting in the presidential palace. His final words, broadcast to the nation, were:

Chile | Documentaries

| Trilogía: La Batalla De Chile

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