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Such practices led to the growth of foreign loans and investment to Chile, which were stopped during Allende's office, but at the same time it led to the domination of foreign capital in economy sector and weaking positions of national production. Mining industry was privatized by big American corporations, which restored their traditional influence in this sector:
Pinochet's neoliberal economic policies' benefits have been sharply contested. In 1973, unemployment was only 4.3%. Following ten years of junta rule in 1983, unemployment skyrocketed to 22%. Real wages declined by more than 40%. In 1970, 20% of Chile's population lived in poverty. In 1990, in the last year of Pinochet's dictatorship, poverty doubled to 40%. Between 1982 and 1983, the GDP dropped 19%. In 1970, the daily diet of the poorest 40% of the population contained 2,019 calories. By 1980 this had fallen to 1,751, and by 1990 it was down to 1,629. Furthermore, the percentage of Chileans without adequate housing increased from 27 to 40% between 1972 and 1988, despite the government's boast that the new economy would solve homelessness. Meanwhile, the wealthy were raking it in. In 1970, the richest one-fifth of the population controlled 45% of the wealth compared to 7.6% for the poorest one-fifth. In 1989, the richest one-fifth controlled 55% of the wealth while the poorest one-fifth controlled only 4.4%"
But at the same time we can conclude that the stability achieved by Pinochet's junta was mainly resulted by different forms of aid which Chile received mainly from the U.S.A. USA was its main lobby in international financial institutions (such IMF) even during Carter's office that criticized violence and repressions of junta. It was the time of the Cold war and Latin America with a big segment of working class and uneasy political conditions was very vulnerable towards penetration of "revolutionary Marxism." Pinochet always justified his methods by the struggle against the spread of Marxism in Latin America. Similar politics was common for dictators of Argentina, Peru and Bolivia of that period.
Today it's difficult to say whether Chile under Allende or socialists would have experienced better economical indicators, but we can obviously conclude that years of junta led to the total destructive lose of economic independence. Policies of Chicago Boys in monetary and financial sector were very short eyed, as the pay off to the growth of investments and foreign loans was incomparable to benefits. Country faced serious economic problems by the year when Pinochet resigned foreign debt was equal to 70% of GDP, unbelievable indicator even for Latin American states.
Making a conclusion it's important to note that in many respects thanks to failure of socialists in Chile, South America was saved from the spread of "Marxism." Attempts of "communist guerillas" to start revolution in any country of the continent failed by early 1970's mainly because there existed no support in the face of legitimate government in neighboring countries. In case of different situation with copper prices in late 1960's Chile's socialist government would have preserved and spread influence of populism over Latin America. Today the similar situation is in Venezuela, where the success of Hugo Chavez, former marines colonel, is resulted by high oil prices, which allows him to promote wide populist social programs, gaining support of lower classes. Socialists in Latin America also restored their popularity in Nicaragua and Columbia. In case of socialism spread or even new military juntas these countries will be ruled by nationalists who would concentrate more on Latin American cooperation, rather than cooperation with the U.S.A. Or Europe. Such situation was possible in 1970's and military coup of Pinachet had prevented spread of socialism and Marxism in Latin America, which could change the whole geopolitical situation on the continent.
Petras, James Leiva, Fernando Ignacio Democracy and Poverty in Chile: The Limits to Electoral Politics Westview Press, 1994
Pinera, Jose Latin America: a way out. An article from: The Cato Journal January 1, 2003 p.409
Constable, Pamela Valenzuela, Arturo A Nation of Enemies: Chile under Pinochet Norton, 1991
Hewitt, Kenneth Between Pinochet and Kropotkin: State Terror, Human Rights and the Geographers
The Canadian Geographer, Vol. 45, 2001
Falcoff, Mark Chile: Pinochet, the Opposition, and the United…[continue]
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