Cold War Case Study: Chile 1945-1981

1. Cold War Case Study: Chile 1945-1981

2. Points to Ponder • Compare and contrast the impact on the Americas of the foreign policies of U.S. presidents Nixon and Carter. • Explain how the economic and domestic policies of Chile were affected by the Cold War.

3. Chilean Politics • Since independence from Spain, Chile has had a long history of political activism. • First South American country to hold free elections. • Diverse population, economy, an class system = multiparty state and diversity of political parties • Populist leaders held power prior to WWII. Post war struggle between various party factions. • Chilean Political Parties • Popular Right: includes conservative and liberal factions • Popular Action Front (FRAP): combined Socialist and Communist parties (1957) • Christian Democrat: moderate centrists

4. Election of 1952 • Carlos Ibanez de Campo, running as a populist elected president in a multiparty race with 47% of the vote • Promised minimum salaries, family living subsidies, and to hear the demands of labor • Economic troubles • Post war inflation near 50% • To fund his campaign promises borrow money from the United States and the International Monetary Fund (IMF) • IMF orders austerity (severe cuts in government services to curb government spending, slow inflation?) • To control inflation he orders wage freeze • Political troubles • Rules by presidential decree • Ibanez alienates just about everyone

5. Election of 1958 • Socialists and communists joined to form Frente de Accion Popular (FRAP) as left wing opposition to Ibanez • Chile’s internal political factions become a microcosm of global Cold War bipolarity. • Results: • Jorge Alesandri , Conservative/Liberal – 31.6% (wins by plurality) • SalvadoreAllende, FRAP – 23.9% • Eduardo Frei, Christian Democrat – 20.7% • Others – 18% • What do the results say about the Chilean electorate?

6. Election of 1958 • Socialists and communists joined to form Frente de Accion Popular (FRAP) as left wing opposition to Ibanez • Chile’s internal political factions become a microcosm of global Cold War bipolarity. • Results: • Jorge Alesandri , Conservative/Liberal – 31.6% (wins by plurality) • SalvadoreAllende, FRAP – 23.9% • Eduardo Frei, Christian Democrat – 20.7% • Others – 18% • What do the results say about the Chilean electorate? • Alesandri government • Uncooperative legislature rallies around Frei and Christain Democratic party as a non-Marixist alternative • Alesendri continues IMF austerity economic policies

7. Election of 1964 • 1964 election framed by Cuban Revolution and Missile Crisis • Communism vs. Liberty (free markets, Capitalism) • Dictatorship vs. Democracy • Eduardo Frei wins with 56% • Frei’s economic trouble • Failed land reform plan • Strikes • Tries to “Chileanize” copper industry. Anaconda and Kennecott curb the plans. • Frei’s political trouble • Left= Frei is too conservative; Right= he is too liberal • Revolutionary Leftist Movement • Nationalist Party • Reaches out to women with “Mother’s Centers”; youth lowers voting age to 18.

8. Election of 1970 • Frei can’t keep campaign promises and cannot walk a center line between Communism and Capitalism • SalvadoreAllende and Unidad Popular, UP Party win with 36% • Nixon administration, through State Dept. and CIA tried to prevent Allende from winning • Fear of full scale communist government under Allende • Middle and upper class run on the banks ( dries up credit) • Close and sell businesses (fewer goods, increased unemployment) • Middle class, merchants and wealthy leave the country ( brain drain )

9. Allende Government • Nationalized copper mining and processing under U.S. control(Anaconda, Kennecott) • He launched "Social Revolution." Chilean peasants began to seize landin violent clashes. • The Chilean economy was increasingly put under state control • The World Bank in Washington cut off credits to Chile. • Inflation is out of control • Street protest and food riotsF • Factional divisions within UP Party erodes Allende support • Allende courts economic relations USSR and Cuba

10. Enter Nixon • U.S. businesses (Anaconda, ITT) lobby Nixon to take action. • Nixon tells Sec. of State Kissinger to..”make the economy scream” • Covert CIA and overt economic policies • Cut off 70 million in aid • Discouraged European trade with Chile • Blocked IMF loan credits • Depressed international copper prices • CIA organized trucker’s strike • Financed opposition party activity • Chile in chaos • Legislature appoints Augusto Pinochet as commander-in-chief of the Chilean army (to restore order)

11. Exit Allende, Enter Pinochet • On September 11, 1973, Allende was violently ousted in a coup by Gen. Augusto Pinochet. • Allendewas found dead after the Moneda, the presidential palace, had been set ablaze in the army seige. • U.S. quickly recognized the Pinochet regime and restored financial aid.

12. Aftermath • Allende was already losing support among the left and would have been out of power by 1976. • Economy in a shambles and Chile unlikely threat or even a domino • Still, U.S. could not have another Cuba in the region • Pinochet regime • Crack down on political opponents, banned rival political parties • 1200-3200 killed, 80,000 interned w/o trials, 30,000 tortured • Complete reversal of all liberal economic policies, incl. minimum wage laws, social security, banned labor unions • 1988 Plebiscite led to presidential and parliamentary elections. • Pinochet steps down in 1990. • 2004 Superior Court Judge Juan Guzeman orders Pinochet held under house arrest awaiting trial on 300 separate criminal charges • Pinochet

13. Anybody noticing a trend?

14. CENTRAL AMERICA • In the 1930s in Nicaragua, U.S. Marines had helped put dictator Tacho Somoza into power. • Forty years later, Nicaragua was still ruled by a Somoza. After years of fighting, guerrillas who called themselves Sandinistas, after the name of a 1930s anti-U.S. rebel, ousted Somoza in 1979. • The Sandinistas allied themselves with Cuba and attempted to bring a Marxist order to their country. But they found themselves being challenged by a counter-rebellion -- the Contras.

15. At the same time, in neighboring El Salvador, protests had broken out against right-wing military rule. • Catholic Archbishop Oscar Romero was among those who spoke out. In March 1980, as he was saying Mass in a private chapel, the archbishop was assassinated. At Romero's funeral, mourners were fired upon -- and many died. • Later in the year three U.S. nuns and a female lay worker were kidnapped, raped and killed by men later discovered to be part of El Salvador's National Guard. • The U.S. briefly, and temporarily, withdrew aid to the Salvadoran military. Meanwhile, Salvadoran guerrillas expanded their campaign against the government.

16. Grenada • As the fighting continued in Central America, Washington was planning another operation -- on the British-governed Caribbean island of Grenada. • When Grenada's left-wing prime minister, Maurice Bishop, was assassinated by extreme Marxists in 1983, the U.S. military had an invasion plan ready for Reagan's approval. • The invasion, weakly opposed by a group of Cuban advisers on Grenada, was over in a few days. Within six weeks, their work done and Reagan's image enhanced, the U.S. troops left.

17. The Reagan administration also was funding Nicaragua's Contra rebels. • That undeclared war upset the U.S. Congress, which curtailed the Contras' funds. • To pay for the Contras, White House officials secretly sold arms to Iran, a scandal that, once discovered, came back to hinder Reagan's government.

18. By 1990, Nicaragua agreed to open and free elections, and Sandinista leader Daniel Ortega asked the Nicaraguan people to elect him president. • His opponent was Violeta Chamorro, the widow of Pedro Joaquin Chamorro, an opposition leader killed during the Somoza regime. • When the votes were tallied, Chamorro won a narrow, yet stunning victory. • The superpower struggle in Central America had given way to a quiet revolution at the ballot box.

19. Did You Know? • The United States suspected Russia's interests in the Western Hemisphere long before the Cold War. In fact, fears about Russian territorial ambitions in the Americas were a primary motivation for the Monroe Doctrine.

20. Brinkmanship Game • You are President Reagan's national security adviser. The president, fearing that a communist Nicaragua threatens all of Central America, has asked you to find a way to continue helping the "Contras," a Nicaraguan rebel group fighting the Cuban-supported Sandinista government. • Congress has limited your legal options, however, by passing the Boland Amendment, which explicitly prohibits any further direct or indirect military aid to the Contras. • A staffer suggests the Contras could benefit from another White House endeavor: the sale of missiles to Iran in exchange for the release of U.S. hostages in the Middle East. The staffer suggests diverting some of the arms sale proceeds to the Contras. This would accomplish two of Reagan's objectives -- freeing hostages and funding the Contras -- but it would directly violate the Boland Amendment. • Do you approve the plan or reject it?

21. Policy adviser No. 1: • This proposal is a brilliant solution to two problems. And it will never be uncovered -- nobody would believe it. Approve the plan.

22. Policy adviser No. 2: • This scheme is a clear violation of the Boland Amendment, and it rewards terrorists for taking hostages. Reject it.

23. Intelligence chief: • We have an obligation to support the Contras. If we don't, Nicaragua could become a base for communist expansion throughout the hemisphere. Approve the plan.

24. Did you • A) Reject it? • B Approve it?

25. YES • Reagan's national security adviser, John Poindexter, made the same decision. He approved the plan. The result was the Iran-Contra scandal. • The scheme had been conceived and directed by Lt. Col. Oliver North, an assistant deputy director on the National Security Council who already had been guiding extra-legal efforts to fund the Contras under the direction and approval of CIA Director William Casey. • The first part of the Iran-Contra plan -- selling arms to Iran in exchange for hostages -- had been approved by Poindexter's predecessor, Robert McFarlane, in early 1985. This exchange directly contradicted the administration's public policy of refusing to bargain with terrorists. Then, with Poindexter's approval, North arranged to divert a portion of the proceeds from the arms sales to the Contras. This was in direction violation of the law -- the Boland Amendment. • The story became public after a Lebanese newspaper uncovered the arms sales. Reagan ordered an investigation, revealing the diversion of funds to the Contras. Though he had ordered his staff to find a way to fund the Contras, Reagan denied any knowledge of North's scheme. The damage, however, was done: Congressional hearings and a special counsel investigation ensued. Poindexter and North lost their jobs and were prosecuted, while Reagan's approval rating plummeted. The scandal weakened Reagan's ability to pursue his objectives in Central America or anywhere else. • The Contras, meanwhile, failed to gain ground in Nicaragua. A diplomatic initiative, led by Costa Rican President Oscar Arias, was more successful. After years of negotiations, the Sandinistas agreed to hold free elections. In 1990 Sandinista leader Daniel Ortega was defeated by opposition leader Violetta Chamorro. The Sandinistas handed over the government, and the Contras were disarmed.

26. NO • This was not the decision of Reagan's national security adviser, John Poindexter. He approved the plan. The result was the Iran-Contra scandal. • The scheme had been conceived and directed by Lt. Col. Oliver North, an assistant deputy director on the National Security Council who already had been guiding extra-legal efforts to fund the Contras under the direction and approval of CIA Director William Casey. • The first part of the Iran-Contra plan -- selling arms to Iran in exchange for hostages -- had been approved by Poindexter's predecessor, Robert McFarlane, in early 1985. This exchange directly contradicted the administration's public policy of refusing to bargain with terrorists. Then, with Poindexter's approval, North arranged to divert a portion of the proceeds from the arms sales to the Contras. This was in direction violation of the law -- the Boland Amendment. • The story became public after a Lebanese newspaper uncovered the arms sales. Reagan ordered an investigation, revealing the diversion of funds to the Contras. Though he had ordered his staff to find a way to fund the Contras, Reagan denied any knowledge of North's scheme. The damage, however, was done: Congressional hearings and a special counsel investigation ensued. Poindexter and North lost their jobs and were prosecuted, while Reagan's approval rating plummeted. The scandal weakened Reagan's ability to pursue his objectives in Central America or anywhere else. • The Contras, meanwhile, failed to gain ground in Nicaragua. A diplomatic initiative, led by Costa Rican President Oscar Arias, was more successful. After years of negotiations, the Sandinistas agreed to hold free elections. In 1990 Sandinista leader Daniel Ortega was defeated by opposition leader Violeta Chamorro. The Sandinistas handed over the government, and the Contras were disarmed.