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COUNTRY BRIEF: CHILE. CHILE: BASIC STATS. Population 16.9 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)
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CHILE: BASIC STATS • Population 16.9 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 (1970-73) • The Pinochet regime (1973-1989) • 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 +- 2.50)
DEMOCRATIC PRESIDENTS Center-Left alliance: Concertación • Patricio Aylwin (1990-94) • Eduardo Frei (1994-2000) • Ricardo Lagos (2000-06) • Michelle Bachelet (2006-10) 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