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Long and narrow, Chile clings to the western edge of South America's South­ern Cone. Hugging - page 15 / 46





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Chile                                    451

the center-Right into his cabinet. Instead, he used the power of the presi­dency to implement a free-market economic model of development as much as possible. He imposed economic stabilization plans (budget-cutting), in­stituted a single fixed exchange rate, reduced the level of protection for do­mestic industries to boost efficiency, encouraged foreign direct investment, and curbed labor rights. He also began a very modest agrarian reform pro­gram and failed to get U.S. copper companies to invest more in processing the ore in Chile to boost the value of exports. Copper by then accounted for about 80 percent of hard currency earnings. Alessandri's policies did little to solve Chile's socioeconomic problems, but they did alienate the center-Left and the Left because they perceived those policies to be an onslaught against hard-earned gains.

Certain they could not win the presidency in 1964, and fearful of the Left's chances in a serious three-way race, the Conservative and Liberal parties de­cided not to present a candidate. This electoral strategy boosted the center-Left, now dominated by the Christian Democratic party under Eduardo Frei, which won handily with 56 percent of the vote. Salvador Allende, again the standard-bearer of the Communist-Socialist alliance, garnered 39 percent. The candidate of the Radical party finished a poor third.

The Christian Democrats came into office with a reformist socioeconomic program. The "Revolution in Liberty" addressed the social problems of the urban poor by stressing housing, education, and neighborhood self-help or­ganizations. Land reform would aid the rural poor and, it was hoped, boost agricultural productivity. A controlled opening of the economy to imports, partial nationalization with compensation of U.S.-dominated copper mines, and promotion of export diversification into fishing and timber were in­tended to invigorate the Chilean economy.

The Frei administration began to implement much of this platform dur­ing its first three years. But the manner in which it proceeded only served to deepen the nation's ideological polarization. Although the Right had helped elect the new government, and although they lacked a majority in congress, the Christian Democrats decided to rule alone. Neither Conser­vative nor Liberal party members were invited to serve in the cabinet. This hampered agrarian reform and killed trade liberalization policies. Business sectors also opposed increased regulation of their activities. In short, prop­erty owners suspected that the administration's policies were simply dis­guised socialism. Meanwhile, the left feared that the Christian Democrats were trying to displace them by organizing new social groups that they con­sidered to be their natural constituencies: shanty town dwellers and the rural poor. Thus, the Communist, and especially the Socialist party began to outbid the Christian Democrats by espousing more radical programs. This stepped up revolutionary rhetoric.

Political opposition and renewed inflation hampered the implementation of the Revolution in Liberty for the last half of the Frei administration. Po­larization deepened as the Conservative and Liberal parties united in the National party in 1966. This was a response to the leftward drift in the cen­ter of gravity of the Chilean party system. The more radical wing of the

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