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CHILE
a country study
Federal Research Division
Library of Congress
Edited by
Rex A. Hudson
Research Completed March 1994
Data as of March 1994
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Foreword
This volume is one in a continuing series of books prepared by the Federal Research Division of the Library of Congress under the Country Studies/Area Handbook Program sponsored by the Department of the Army. The last two pages of this book list the other published studies.
Most books in the series deal with a particular foreign country, describing and analyzing its political, economic, social, and national security systems and institutions, and examining the interrelationships of those systems and the ways they are shaped by cultural factors. The authors seek to provide a basic understanding of the observed society, striving for a dynamic rather than a static portrayal. Particular attention is devoted to the people who make up the society, their origins, dominant beliefs and values, their common interests and the issues on which they are divided, the nature and extent of their involvement with national institutions, and their attitudes toward each other and toward their social system and political order.
The books represent the analysis of the authors and should not be construed as an expression of an official United States government position, policy, or decision. The authors have sought to adhere to accepted standards of scholarly objectivity. Corrections, additions, and suggestions for changes from readers will be welcomed for use in future editions.
Louis R. Mortimer
Chief
Federal Research Division
Library of Congress
Washington, D.C. 20540-5220
Data as of March 1994
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Acknowledgements
The book editor would like to thank the chapter authors for reviewing and commenting on various chapters. In particular, the observations and country expertise of Arturo Valenzuela and J. Samuel Valenzuela, who closely reviewed the text, contributed greatly to the overall quality of the book. J. Samuel Valenzuela also contributed anonymously to Chapter 5, "National Security." In addition, the book editor would like to thank Scott D. Tollefson for his invaluable support in volunteering to amend Chapter 5, "National Security," and to comment on Chapter 4, "Government and Politics."
The authors are grateful to individuals in various agencies of the United States government; international organizations; private institutions, including the Latin American School of Social Sciences (Facultad Latinoamericana de Ciencias Sociales--FLACSO) in Santiago; and Chilean diplomatic officers, who offered their time, special knowledge, or research facilities and materials to provide information and perspective. Thanks also go to Ralph K. Benesch, who oversees the Country Studies/Area Handbook Program for the Department of the Army. None of these individuals, however, is in any way responsible for the work of the authors.
The book editor would like to thank members of the Federal Research Division who contributed directly to the preparation of the manuscript. These include Sandra W. Meditz, who reviewed all textual and graphic materials, served as liaison with the sponsoring agency, and provided numerous substantive and technical contributions; Marilyn L. Majeska, who supervised the editing; Andrea T. Merrill, who edited the tables, figures, and Bibliography managed production; and Barbara Edgerton and Izella Watson, who did the word processing. Thanks also go to Vincent Ercolano, who performed the copyediting of the chapters; Cissie Coy, who performed the final prepublication editorial review; and Joan C. Cook, who compiled the index. The Library of Congress Printing and Processing Section performed the phototypesetting, under the supervision of Peggy Pixley.
David P. Cabitto provided invaluable graphics support, including preparation of several maps and the cover and chapter illustrations. He was assisted by Harriett R. Blood, who prepared the topography and drainage map, and by the firm of Greenhorne and O'Mara.
Finally, the authors acknowledge the generosity of the individuals and the public, private, diplomatic, and international agencies who allowed their photographs to be used in this study.
Data as of March 1994
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Table of Contents
* CHILE
* Foreword
* Acknowledgements
* PREFACE
* Table A. Chronology of Important Events
* Country Profile
o COUNTRY
o GEOGRAPHY
o SOCIETY
o ECONOMY
o TRANSPORTATION AND TELECOMMUNICATIONS
o GOVERNMENT AND POLITICS
o NATIONAL SECURITY
* INTRODUCTION
* Chapter 1. Historical Setting
o PRECOLUMBIAN CIVILIZATIONS
o CONQUEST AND COLONIZATION, 1535-1810
* Politics and War in a Frontier Society
* The Colonial Economy
* Bourbon Reforms, 1759-96
o WARS OF INDEPENDENCE, 1810-18
o CIVIL WARS, 1818-30
o ARISTOCRATIC REPUBLICANISM, 1830-91
* The Conservative Era, 1830-61
* The Portalian State, 1830-37
* Two Conservative Presidencies, 1841-61
* The Liberal Era, 1861-91
* War of the Pacific, 1879-83
* Downfall of a President, 1886-91
o PARLIAMENTARY REPUBLIC, 1891-1925
* Urbanization
* Arturo Alessandri's Reformist Presidency, 1920-25
o MILITARY INTERVENTIONS, 1925-32
* The 1925 Constitution
* Carlos Ibáñez's First Presidency, 1927-31
o MASS DEMOCRACY, 1932-73
* Alessandri's Second Presidency, 1932-38
* Popular Front Rule, 1938-41
* Juan Antonio Ríos's Presidency, 1942-46
* Gabriel González Videla's Presidency, 1946-52
* Ibáñez's Second Presidency, 1952-58
* Jorge Alessandri's Rightist Term, 1958-64
* Eduardo Frei's Christian Democracy, 1964-70
* Salvador Allende's Leftist Regime, 1970-73
o MILITARY RULE, 1973-90
* Neoliberal Economics
* The 1980 Constitution
* The Crisis of 1982 and the Erosion of Military Rule
* Chapter 2. The Society and Its Environment
o GEOGRAPHY
* A Long, Narrow Nation
* Natural Regions
* The Far North
* The Near North
* Central Chile
* The South
* The Far South
o THE PEOPLE
* Formation of the Chilean People
* Current Demographic Profile
o URBAN AREAS
o RURAL AREAS
o THE LABOR FORCE AND INCOME LEVELS
o SOCIAL ORGANIZATIONS AND ASSOCIATIONS
o WELFARE INSTITUTIONS AND SOCIAL PROGRAMS
* Social Security
* Health Programs
* Housing Policies
o EDUCATION
* Enrollments
* Administration and Reforms
* Primary and Secondary Education
* Higher Education
o RELIGION AND CHURCHES
* Religious Affiliations and Church Organization
* Religion in Historical Perspective
* Forms of Popular Religiosity
o ATTITUDES TOWARD FAMILY AND GENDER
* Divorce, Abortion, and Contraception
* Family Structure and Attitudes Toward Gender Roles
o WHITHER CHILE?
* Chapter 3. The Economy
o EVOLUTION OF THE ECONOMY
* The Colonial Era to 1950
* Economic Policies, 1950-70
* The Popular Unity Government, 1970-73
* Economic Crisis and the Military Coup
* The Military Government's Free-Market Reforms, 1973-90
* Trade Policy
* Banking Reform and the Financial Sector
* Rural Land Market Reform
* Labor-Market Reform
* Public Employment Programs
* The Debt Crisis: Further Reforms and Recovery
* The Return to Democracy, 1990
* Continuity in Economic Policy
* Emphasis on Social Programs
o THE CURRENT STRUCTURE OF THE ECONOMY
* Industry and Manufacturing
* Mining
* Agriculture
* Fishing and Forestry
* Fishing
* Forestry
* Energy
* Banking and Financial Services
* Transportation
* Telecommunications
* Tourism
* Construction
o INCOME, LABOR UNIONS, AND THE PENSIONS SYSTEM
* Employment and Unemployment
* Income Distribution and Social Programs
* Unions and Labor Conflicts
* Economic Results of the Pensions Privatization
o MACROECONOMIC POLICY, INFLATION, AND THE BALANCE OF PAYMENTS
* The Central Bank and Monetary Policy
* Exchange-Rate Policy and the Balance of Payments
* Trade Policy and Export Performance
o THE FUTURE OF THE ECONOMY
* Chapter 4. Government and Politics
o CONSTITUTIONAL HISTORY
* Development and Breakdown of Democracy, 1830-1973
* Imposition of Authoritarian Rule
* The Constitution of 1980
* Authoritarianism Defeated by Its Own Rules
* The Constitutional Reforms of 1989
o THE STATE AND GOVERNMENT INSTITUTIONS IN CHILE
* The State and the System of Government
* The Presidency
* The Legislative Branch
* The Courts
* The Autonomous Powers
* The Comptroller General
* The Constitutional Tribunal
* The Central Bank of Chile
* The Electoral Certification Tribunal
* The Armed Forces
* Regional and Local Government
o PARTIES AND THE ELECTORAL SYSTEM
* The Party System
* The Electoral System
* The Parties of the Left
* The Parties of the Center
* The Parties of the Right
* The 1993 Presidential Election
o THE CHURCH, BUSINESS, LABOR, AND THE MEDIA
* The Church
* Business
* Labor
* The Media
o FOREIGN RELATIONS
* Relations with the United States
* General Relations
o FUTURE CHALLENGES OF DEMOCRATIC CONSOLIDATION
* Chapter 5. National Security
o MILITARY TRADITION AND THE EVOLUTION OF THE ARMED FORCES
* Early History
* Genesis of the Armed Forces, 1814-36
* Confederation War, 1836-391
* War of the Pacific, 1879-83
* Development of the Armed Forces
* Growth of United States Influence
* Repression and Human Rights Violations
* Civil-Military Relations
o MISSION AND ORGANIZATION OF THE ARMED FORCES
* Mission
* Command Structure
* Army
* Navy
* Air Force
* Civic Action
* Defense Spending
o MANPOWER AND TRAINING
* Recruitment and Conditions of Service
* Training
* Uniforms, Ranks, and Insignia
* Army
* Navy
* Air Force
o FOREIGN SOURCES OF Matériel
o THE DEFENSE INDUSTRY
* Army Ordnance
* Naval Equipment
* Aircraft Equipment
* Cardoen Industries
* Minor Defense Manufacturers
o THE SECURITY FORCES
* The Carabineros
* Organization
* Recruitment and Training
* Uniforms
* The Investigations Police
* Internal Security Intelligence Organizations
o PUBLIC ORDER AND INTERNAL SECURITY
* Incidence of Crime
* Narcotics Trafficking
* Criminal Justice
* The Penal System
* Terrorism
* A Modern Deterrent?
* Appendix. Tables
* Bibliography
* Glossary
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PREFACE
Like its predecessor, this study is an attempt to examine objectively and concisely the dominant historical, social, environmental, economic, governmental, political, and national security aspects of contemporary Chile. Sources of information included books, journals, other periodicals and monographs, official reports of governments and international organizations, and numerous interviews by the authors with Chilean government officials. Chapter bibliographies appear at the end of the book; brief comments on sources recommended for further reading appear at the end of each chapter. To the extent possible, placenames follow the system adopted by the United States Board on Geographic Names. Measurements are given in the metric system; a conversion table is provided to assist readers unfamiliar with metric measurements (see table 1, Appendix). A glossary is also included.
Spanish surnames generally are composed of both the father's and mother's family names, in that order, although there are numerous variations. In the instance of Eduardo Frei Ruiz-Tagle, for example, Frei is his patronymic and Ruiz-Tagle is his mother's maiden name. In informal use, the matronymic is often dropped, a practice that usually has been followed in this book, except in cases where the individual could easily be confused with a relative or someone with the same patronymic. For example, Frei Montalva's son Eduardo Frei Ruiz-Tagle, is the current president.
The body of the text reflects information available as of March 31, 1994. Certain other portions of the text, however, have been updated. The Introduction discusses significant events that have occurred since the completion of research, the Country Profile includes updated information as available, and the Bibliography lists recently published sources thought to be particularly helpful to the reader.
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Table A. Chronology of Important Events
Period
Description
SIXTEENTH CENTURY
October 21, 1520
Ferdinand Magellan first European to sight (but not
identify) Chilean shores.
1535-37
Diego de Almagro leads first Spanish expedition to
explore Chile.
1540
Pedro de Valdivia conquers Chile.
February 12, 1541
Valdivia founds Santiago.
1553-58
Indigenous Araucanian uprising.
1557
Mapuche rebel chief Lautaro defeated.
1560s
Alonso de Ercilla y Zúñiga composes epic poem "La
Araucana."
SEVENTEENTH CENTURY
1603
First army-like force, or militia, established in Chile.
1609
Pope Paul V authorizes war against Araucanians.
1643
Although warfare against Araucanians continues, Indians
help Spaniards repel invasion of southern Chile by Brouwer
expedition.
1647
Earthquake destroys Santiago.
EIGHTEENTH CENTURY
1730
Earthquake causes great destruction in Santiago and most
of central Chile.
1759-96
Bourbon reforms give Chile greater independence from
Viceroyalty of Peru.
1791
Governor Ambrosio O'Higgins y Ballenary outlaws
encomiendas and forced labor.
NINETEENTH CENTURY
September 18, 1810 Criollo leaders of Santiago declare
independence from Spain.
1814-17
(La Reconquista)
October 2, 1814
The Reconquest Spanish troops from Peru reconquer Chile at
Battle of Rancagua.
February 12, 1817
Troops led by Bernardo O'Higgins Riquelme, father of
Chile, and General José de San Martín defeat Spanish in
Battle of Chacabuco.
1817
O'Higgins (1817-23) becomes supreme director of Chile.
April 5, 1818
Chile wins formal independence after San Martín defeats
last large Spanish force in Battle of Maipú.
August 1818
First provisional constitution approved in plebiscite.
1818-30
Period of civil wars.
April 17, 1830
Liberals defeated by Conservatives at Battle of Lircay.
1830-61
Period of Conservative rule.
1830-37
"Portalian State" initiated by businessman Diego Portales
Palazuelos, who dominates politics.
1833
New Portalian constitution implemented.
1836-39
Chile wages war against Peru-Bolivia Confederation.
January 1839
Chile wins war by defeating Peruvian fleet at Casma on
January 12 and Bolivian Army at Yungay on January 20.
1861-91
Period of Liberal rule.
1879-83
Chile wages war against Bolivia and Peru in War of the
Pacific.
1883
Chile seals victory with Treaty of Ancón.
1891
Civil war pits supporters of President José Manuel
Balmaceda Fernández against Congress, which wins.
TWENTIETH CENTURY
1891-1925
Period of Parliamentary Republic.
1925
Chile's second major constitution approved.
1945
Gabriela Mistral wins Nobel Prize for Literature.
September 4, 1970
Popular Unity's Salvador Allende Gossens wins presidential
election.
1971
Pablo Neruda wins Nobel Prize for Literature.
September 11, 1973
Military led by General Augusto Pinochet Ugarte overthrows
Allende government.
September 1973-90
Period of military rule under General Pinochet.
1980
New military-designed constitution is approved in a
plebiscite.
1988
Plebiscite held on Pinochet rule.
1990
Transition to democracy begins with presidency of Patricio
Aylwin Azócar.
March 11, 1994
Aylwin is succeeded by Eduardo Frei Ruiz-Tagle.
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Country Profile
COUNTRY
Official Name: Republic of Chile (República de Chile).
Short Name: Chile.
Term for Citizen(s): Chilean(s).
Capital: Santiago.
GEOGRAPHY
Size: 756,950 square kilometers (nearly twice the size of California); land area: 748,800 square kilometers, including Easter Island (Isla de Pascua; 118 square kilometers), Islas Juan Fernández (179 square kilometers), and Isla Sala y Gómez, but excluding claimed Chilean Antarctic Territory (Territorio Chileno Antártico), which covers 1,249,675 square kilometers (not recognized by the United States).
Coastline: 6,435 kilometers (continental Chile).
Maritime Claims: Contiguous zone: twenty-four nautical miles; continental shelf: 200 nautical miles; exclusive economic zone: 200 nautical miles; territorial sea: twelve nautical miles.
Disputes: Bolivia has sought a sovereign corridor to Pacific Ocean since ceding Antofagasta to Chile in 1883; Río Lauca water rights in dispute between Bolivia and Chile; short section of southern boundary with Argentina is indefinite; Lago del Desierto (Desert Lake) region under international arbitration as a result of a border conflict between Argentina and Chile; Chile's territorial claim in Antarctica partially overlaps Argentina's claim.
Topography and Climate: One of narrowest countries in the world, averaging 177 kilometers wide (ninety kilometers wide at its thinnest point in the south and 380 kilometers across at its widest point in the north). Rugged Andes Mountains run down eastern side of country. Cordillera Domeyko (Domeyko mountain chain) in northern part of country runs along the coast parallel to the Andes. Five north-to-south natural regions: desert far north (Norte Grande), consisting of dry brown hills and sparse vegetation and containing extremely arid Atacama Desert and Andean plateau; near north (Norte Chico), a semiarid region between Río Copiapó and Santiago; Central Chile (Chile Central), most densely populated region, including three largest metropolitan areas--Santiago, Valparaíso, and Concepción--and the fertile Central Valley (Valle Central), with a temperate, Mediterranean climate; heavily forested south (Sur de Chile), south of Río Bío-Bío, containing cool and very rainy (especially during winter) lake district and crisscrossed by hundreds of rivers; far south (Chile Austral), sparsely populated, forested, constantly cold and stormy, with many fjords, inlets, twisting peninsulas, and islands. Land use: 7 percent arable (of which 29 percent irrigated), 16 percent meadows and pasture, 21 percent forest and woodland, 15 percent other, including 1 percent irrigated. Temperate rain forest totals 14,164,045 hectares. Annual rate of deforestation (1981-85): 0.7 percent. Nearly 607,030 hectares clear-cut (stripped of all trees) since 1978. Seasons: spring--September 21 to December 20; summer--December 21 to March 20; autumn--March 21 to June 20; winter--June 21 to September 20.
Principal Rivers: Aconcagua, Baker, Bío-Bío, Imperial, Loa (Chile's longest at about 483 kilometers), Maipo, Maule, Palena, Toltén, Valdivia.
Principal Lakes: Del Toro, General Carrera, Llanquihue, Puyehue, Ranco, Rupanco, Sarmiento, Villarrica.
SOCIETY
Population: 13.7 million (July 1993 estimate), with 1.6 percent average annual population growth rate between 1982-92. Projected annual population growth rate 1991-2000, 1.5 percent. Density, 18 persons per square kilometer (1993), with great regional variations. Fifth, Eighth, and Santiago Metropolitan regions contained 63 percent of population, with about 39 percent or 5.3 million in Santiago Metropolitan Region (1992). Population about 86 percent urban, 14 percent rural. Urban population annual growth rate in 1960-91, 2.6 percent; projected 1991-2000, 1.8 percent. Of some 335 communities nationally in 1993, poorest twenty-one located in regions of Araucanía (eleven), Bío-Bío (five), and Coquimbo (five), containing 2.62 percent of national population.
Ethnic Groups: Mestizo (mixed native American and European ancestry), 66 percent; European, 25 percent; native American, 7 percent; other, 2 percent. Under law of September 28, 1993, state recognizes Mapuche (also called Araucanian), Aymara, Rapa Nui, Quechua, Colla, Alacalufe, and Yagán as main indigenous communities. Native Americans totaled 1.3 million in 1992, including 928,069 Mapuche, 48,477 Aymara, and 21,848 Rapa Nui. Quechua and Aymara located in north; Alacalufe and Ona in south; Mapuche, who speak Mapudungu, in south and Central Chile, mostly around Temuco; Pascuene and Huilliche in Easter Island territory. Only Mapuche and former Huilliche islanders managing to survive culturally on mainland.
Official Language: Spanish (called Castellano in Chile).
Education and Literacy: In 1966 primary education became eight years and secondary education four years. School calendar: March through December. In mid-1980s primary school attendance varied between 93 percent and 96 percent; by 1989 secondary school enrollment had risen to 75 percent. Students in universities and professional institutes numbered about 153,100 in 1989, or 10.3 percent. Combined primary and secondary school enrollment ratio in 1987-90: 90 percent. Adult literacy rate 94.6 percent, with average of 7.5 years of schooling (1992).
Health: Heavy investments in programs for very poor and in water and sanitation systems helped lower infant mortality rates and raise life expectancy, giving country a relatively high human development index (HDI) world ranking of thirty-sixth in 1992. Proportion of Chileans living in poverty decreased from 45 percent in 1985 to 33 percent in 1992. Birthrate 22.4 per 1,000 population; total fertility rate 2.7 children born per woman (1993); death rate 5.6 deaths per 1,000 population (1992). In 1993 life expectancy estimated at seventy-one years male, seventy-seven years female (74 total). Infant mortality rate in 1992: 17 per 1,000 live births. Population with access to health services in 1988-90, 95 percent; safe water, 86 percent (rural/urban average), 100 percent (urban); sanitation 83 percent; sanitary services 100 percent urban, 6 percent rural. Recorded twenty-eight cholera cases in first nine months of 1993, with no deaths. In 1984-89 population per doctor: 1,230. Social security benefits expenditures as a percentage of GDP: 9.9 percent (1980-89).
Religion: In 1992 census, population segment aged fourteen years and older (totaling 9,775,222), 76.7 percent declared Roman Catholic, 13.2 percent Evangelical or Protestant, 7 percent indifferent or atheist, and 4.2 percent other, including small Jewish, Muslim, and Christian Orthodox communities. Roman Catholic Church source of significant opposition to military regime of General Augusto Pinochet Ugarte (1973-90), playing key role in protection of human rights. Church's influence in society has diminished since 1970s because of substantial growth of Pentecostal (Evangelical) churches.
ECONOMY
Gross Domestic Product (GDP): One of Latin America's most economically developed countries, with a diversified, free-market economy. GDP US$33.7 billion (1992). GDP per capita between US$2,515 and about US$2,800 (1992), US$3,160 (1993). During 1990-93 period, poorest 20 percent of population experienced increase in income of 30 percent. GDP growth rate in 1992: 10.4 percent. Slowed to 6 percent in 1993. GDP growth projected by Central Bank to be 4.5 percent in 1994, and by Economist Intelligence Unit (EIU) to be 8 percent in 1995.
Gross National Product (GNP): In 1992 GNP per capita US$2,550; 1.1 percent annual per capita growth rate 1980-90 period. Total GNP in 1990: about US$25.5 billion; 2.8 percent annual growth rate of GNP in 1980-90 period.
Agriculture: Agriculture, forestry, and fishing accounted for 8.2 percent of GDP in 1992, according to EIU, or 6.2 percent according to Inter-american Development Bank (IDB). Exports totaled US$1.2 billion (1991). Major crops--apples, corn, grapes, plums, potatoes, rice, sugar beets, and wheat, as well as forest products. Leading agricultural export--fruit. Leading agricultural imports-- bananas, coffee, corn, cotton, dry milk, rice, soybean, sugar, tea, and wheat. Although free-market oriented, agricultural sector protected by "price bands." Agriculture accounted for 18 percent of labor force (1989-91).
Industry: One of most highly industrialized countries in Latin America. Manufacturing accounted for 20.8 percent of GDP (1992), according to EIU, or 35.9 percent, according to IDB. Industrial exports totaled US$4 billion (1992), surpassing copper exports (US$3.9 billion) for first time, but slowed in 1993. Industry accounted for 20.8 percent of labor force (1992). Mining accounted for 6.7 percent of GDP (1992), with copper still most important product in 1993, despite plunging prices (accounting for 30 percent of total value of exports in 1991). World's leading copper producer since 1982. Estimated 2 million tons of copper produced (1993), up from 1.9 million tons (1992). Opening of new copper mines and increasing output at existing mines expected to boost country's share of world copper production from 17.5 percent in 1990 to about 33 percent in 2000, or 3.3 million tons by 2000. Chile produces about twenty-four nonmetallic minerals, with exports amounting to US$191 million (1993).
Energy: National energy reliance on petroleum and natural gas, 60 percent; hydroelectric power, 25 percent; coal, 15 percent. In 1992 kilowatt capacity 5,769,000; kilowatt hours produced, 22,010 million. Annual rate of change in commercial energy consumption (1980-90), 2.9 percent. However, electricity demand rose by 8 percent in 1993, and growth of more than 6 percent was expected for 1994. Domestic oil consumption estimated 138,527 barrels per day (1991). Oil reserves declining at 10 percent per year; stood at 300 million barrels (1992). Estimated 17.9 billion barrels per day produced in 1991, equivalent to only 13 percent of domestic oil consumption. In 1992 Argentina and Chile agreed to build a trans-Andean oil pipeline. Gas production amounted to about 4 billion cubic meters in 1991. Work began on gas pipeline from Argentina in 1992.
Services: Accounted for 29.1 percent of GDP (1992), according to EIU, or 57.9 percent, according to IDB. Employed 26.4 percent of labor force (1991). Tourism one of key service industries. Total visitors--half of them from Argentina--grew from 1.35 million in 1991 to estimated 1.5 million in 1992; visitors spent estimated US$900 million in 1992 and 1993.
Exchange Rate: On August 5, 1994: 413.8 Chilean pesos (Ch$) per United States dollar, compared with 411 in August 1992 and 573 in August 1984. Three important changes in "crawling peg" exchange-rate policy during 1985-92 included first centering "reference" exchange rate set by Central Bank within a 6 percent intervention band; then, in January 1992, widening band to 10 percent and adjusting reference rate downward, and then making daily adjustments in relation to a currency basket (United States dollar; German mark, and Japanese yen). Annual devaluation running at 13 percent to 16 percent.
Balance of Payments: Continued trade surpluses since 1982 led to accumulation of unprecedented US$9.9 billion in international reserves by end of 1993. Country's foreign investment inflow in first eleven months of 1993 rose to US$2.3 billion, a 92 percent increase over the same period of 1992. Current account deficit in 1993 estimated at about 4.5 percent of GDP, or US$1.9 billion. Expected to broaden to US$2.4 billion, or 5.3 percent of GDP, in 1994. However, capital account surplus in 1993 created US$800 million overall balance of payments surplus (US$50 million more than in 1992). Balance of payments surplus in 1994 estimated at only US$100 million, with a current account deficit of US$2.4 billion.
Imports: Principally petroleum, wheat, capital goods, spare parts, motor vehicles, and raw materials, mainly from European Union (EU), United States, Japan, and Brazil. Imports expenditures in 1993 estimated at US$10.1 billion, with 20 percent growth of imports of capital goods. Liberal import policy. Import duty a flat 11 percent for most products, except for expensive luxury goods or commodities governed by price band, which often carry additional surtaxes; regional accords aiming to cut tariffs to zero. Imports also subjected to 18 percent value-added tax (VAT) on c.i.f. (cost, insurance, and freight) value. Duty-free imports of materials used in products for export within 180 days, with prior authorization. Free-zone imports, if reexported, are exempt from duties and VAT. Central Bank approval is needed for all imports.
Exports: Principally copper (accounting for about 35 percent of exports), industrial products, molybdenum, iron ore, wood pulp, seafood, fruits, and nuts, mainly to EU, United States, Japan, and Brazil. Constituted 34 percent of GDP in 1990; 7 percent annual growth rate 1980-90. International recession and lower commodity prices caused value of exports to fall 7 percent in 1993, but exports constituted about 36 percent of GNP that year. Estimated 1993 total export earnings of US$9.3 billion down by US$800 million, creating country's first trade deficit in more than a decade. In 1991-93 Japan was Chile's largest export market, surpassing Chile's exports to United States. In 1993 Chile was third-largest supplier of wine to United States, after Italy and France.
Foreign Debt: Despite substantial improvement in country's exports, foreign debt rose from US$17.4 billion in 1991 to US$18.9 billion in 1992 (or US$19.1 billion according to International Monetary Fund (IMF)) to an estimated US$20.2 billion in 1993. However, net foreign debt (total debt minus net international reserves) declined from 47 percent of GDP in 1989 to 21 percent of GDP in 1993. By early 1991, Chile was upgraded to status of nonrestructuring country, meaning that its debt was now considered recoverable, thus facilitating access to voluntary capital markets. In June 1991, became first Latin American country to benefit from reduction in debt with United States within framework of President George Bush's Initiative for the Americas agreement. In December 1993, Standard and Poor Corporation, a United States credit rating agency, raised Chile's credit rating from investment-grade (BBB) to BBB+ for long-term debt in foreign currency.
Fiscal Year (FY): Calendar year.
Fiscal Policy: International trade liberalized since 1979. Has had fundamentally sound market economy. Since 1990 democratically elected government has maintained export-led growth, fiscal discipline, and relatively low inflation. Exchange-rate policy, based on daily adjustments of nominal exchange rate and aimed at encouraging exports, has been at center of country's economic success. Gross domestic public investment in 1991: 2.9 percent of GDP; gross domestic private investment in 1991: 15.9 percent of GDP. Gross national savings in 1992: 18.4 percent of GDP. Average annual rate of inflation 20 percent in 1980-90 period. Inflation 18.7 percent in 1991, 12.7 percent in 1992, and 12.2 percent in 1993; projected by EIU to be 10 percent in 1994 and 9 percent in 1995. Unemployment in 1992 about 4.5 percent according to National Statistics Institute. Estimated 1994 budget US$1.14 billion.
TRANSPORTATION AND TELECOMMUNICATIONS
Roads: Totaled 79,025 kilometers, including 9,913 kilometers of paved roads, 33,140 kilometers of gravel roads, and 35,972 kilometers of improved and unimproved earth roads. Pan American Highway (Longitudinal Highway), running length of country, forms 3,600-kilometer backbone of road system, with transversal roads leading from it east and west. Southern extension of about 1,100 kilometers, Southern Highway, from Puerto Montt to Puerto Yungay, opened in 1988. International highways also include AricaSantos Highway to Bolivia and Trans-Andean Highway between Valparaíso and Mendoza, Argentina.
Vehicles: 1.7 million (1994), including 1,034,370 passenger cars, 403,842 vans, 49,006 buses, 126,698 trucks, 80,558 motorcycles, and 46,014 other commercial vehicles. An additional 202,000 vehicles expected to be registered in 1994.
Railroads: Mostly state-owned, operated by State Railroad Company (Empresa de Ferrocarrilles del Estado--EFE). Totaled 7,766 kilometers. Privately owned lines, totaling 2,130 kilometers, mostly in desert north, where northern terminal is Iquique. No passenger trains to northern Chile from Santiago. Four international railroads: two to Bolivia, one to northwest Argentina, and one to Peru. In 1992 Congress approved privatization of EFE, with only infrastructure remaining state owned. After period of neglect, government investment in EFE infrastructure was expected in 1993 to total US$98 million. In July 1993, Chile and Brazil invited Bolivia and Argentina to participate in joint effort to build interoceanic railroad line between Chilean and Brazilian coasts. Santiago has underground railroad system (metro).
Ports: Nine main ports: Antofagasta, Arica, Coquimbo, Iquique, Puerto Montt, Punta Arenas, San Antonio, Talcahuano (country's best harbor and its main naval station), and Valparaíso; also nine others. Only four or five have adequate facilities; about ten are used primarily for coastal shipping, restricted to Chilean flag vessels. Northern mining ports include Caldera, Chañaral, Coquimbo, and Huasco. Petroleum and gas ports include Cabo Negro, Clarencia, Puerto Percy, and San Gregorio. Main forest product ports San Vicente and Lirquén on Concepción Bay. Transnational transport of goods by road between Chilean ports of Antofagasta, Arica, Iquique, and Valparaíso and Brazilian ports of Santos and Porto Alegre. Government building a US$10 million commercial port in Punta Arenas to service growing number of foreign vessels, cruise liners, and scientific ships en route to Antarctica. Puerto Ventanas--first private port in country, located on Quinteros Bay, in Valparaíso Region--opened in 1993.
Waterways: 725 kilometers of navigable inland waterways, mainly in southern lake district; Río Calle Calle provides waterway to Valdivia.
Airports and Air Transport: 390 total, of which 351 are usable airports, forty-eight of them paved. Two international airports: Comodoro Arturo Merino Benítez International Airport at Pudahuel outside Santiago; Chacalluta International Airport, Arica. Three main Chilean carriers: National Airlines (Línea Aérea Nacional de Chile--LAN-Chile), Fast Air, and Chilean Airlines (Línea Aérea del Cobre--Ladeco). By 1993 air transportation market had grown by 56 percent since 1990. United States share of United States-Chile market increased from 34 percent in 1990 to 62 percent in late 1993.
Telecommunications: 342 radios, 205 televisions, and sixty-eight telephones per 1,000 people in 1990. Broadcast stations included 167 AM, no FM, 131 TV, and twelve shortwave stations. Modern telephone system based on extensive microwave relay facilities. Total telephones in 1991 about 768,000. In October 1993, Chilesat, a Telex Chile subsidiary, joined the Americas-1, Columbus-2, and Unisur cable networks, a fiber-optics telecommunications system through submarine cables linking South America with North America and Europe.
GOVERNMENT AND POLITICS
Government: Multiparty republic with a presidential system based on 1980 constitution, amended and approved by referendum in July 1989, with fifty-four reforms. Executive, legislative, and judicial branches. Executive power with president directly elected; successive reelection not allowed. Presidential candidates must win a majority or face a runoff. Under a constitutional reform approved by Congress in February 1994, the presidential term was reduced from eight to six years, the traditional term. Eduardo Frei Ruiz-Tagle, elected president of the Christian Democratic Party (Partido Demócrata Cristiano--PDC) on November 23, 1991, won the presidential election held on December 11, 1993, and assumed the presidency on March 11, 1994. National Security Council (Consejo de Seguridad Nacional--Cosena) includes president of republic, presidents of Supreme Court and Senate, and heads of armed forces and police. Bicameral National Congress (located in Valparaíso): Senate, with forty-six members, including eight designates, serving eight-year terms, and Chamber of Deputies with 120 members serving four-year terms. Courts include Supreme Court (seventeen judges), seventeen appellate courts, and a number of military courts.
Administrative Subdivisions: Twelve numbered regions (regiones, I to XII) and Santiago Metropolitan Region. Numbered regions each headed by an intendant (intendente). Regions subdivided into total of fifty-one provinces (provincias), each headed by a governor (governador) and 300 municipalities (municipalidades), each headed by a mayor (alcalde) appointed by the municipal council (in towns with fewer than 10,000 inhabitants) or by the president of the republic (in towns with more than 10,000 inhabitants). Lowest subdivision, communes (comunas). Santiago, like other cities, headed by a mayor.
Politics: Governing coalition, the Coalition of Parties for Democracy (Concertación de Partidos por la Democracia--CPD), dominated by PDC and socialists, expected to retain control in Congress, but without increase in legislative strength it may be unable to introduce important constitutional reform, such as composition of Constitutional Tribunal, membership and functions of Cosena, and promotion of military officers.
Political Parties: Left--Communist Party of Chile (Partido Comunista de Chile--PCCh) discredited since October 1988 plebiscite (which PCCh claimed regime would not allow Pinochet to lose), revolution in Eastern Europe, and disintegration of Soviet Union. Party for Democracy (Partido por la Democracia--PPD), which is an independent-minded creation of the Socialist Party (Partido Socialista--PS) and a member of Aylwin government's CPD coalition, became second most popular party in 1993, after PDC. United Popular Action Movement (Movimiento de Acción Popular Unitario--MAPU), a Mapuche leftist party, quit CPD in June 1993. Christian Left (Izquierda Cristiana--IC), a minor leftist party and CPD member. Humanist-Green Alliance Party (Partido Alianza Humanista Verde-- PHV) also left CPD in 1993. Center--PDC had most followers in 1993, with 35.5 percent of overall votes. Radical Party (Partido Radical- -PR) supporting Frei Ruiz-Tagle in 1993. Right--National Renewal (Renovación Nacional--RN). Independent Democratic Union (Unión Democrática Independiente--UDI), political voice of former military regime's economic and political elite. Although RN dominant rightist party, it and UDI main rivals for leadership of right. Union of the Centrist Center (Unión de Centro Centro--UCC), also a rightist party. On July 3, 1993, center-right parties--RN, UDI, UCC, National Party (Partido Nacional--PN), and Liberal Party (Partido Liberal--PL)--agreed to form coalition called Union for the Progress of Chile (Unión por el Progreso de Chile). However, center-right remained in disarray prior to December 1993 elections.
Foreign Relations: Pro-West, pro-democracy. Maintains relations with more than seventy countries. Since restoration of democratic government in 1990, has reestablished political and economic ties with other Latin American countries, North America, Europe, and Asia. United States-Chilean relations have improved considerably since return to democracy and progress on issue of 1976 assassination in Washington of former Chilean ambassador to United States Orlando Letelier and United States citizen Ronnie Moffitt. Although shunning multilateral regional integration schemes, entered into bilateral tariff-cutting accords with individual Latin American countries--including Argentina, Bolivia, Colombia, and Mexico--in early 1990s, as well as negotiated framework trade agreement with United States in October 1990. Since joining Rio Group in 1990, has played active role in promoting democracy within inter-American system.
International Agreements and Membership: Member, Agency for the Prohibition of Nuclear Weapons in Latin America and the Caribbean; Asia Pacific Economic Cooperation; Customs Cooperation Council; Economic Commission for Latin America and the Caribbean ( ECLA--see Glossary); General Agreement on Tariffs and Trade; Group of Eleven; Group of 77; Inter-American Development Bank; International Atomic Energy Commission; International Bank for Reconstruction and Development (IBRD); International Civil Aviation Organization; International Confederation of Free Trade Unions; International Criminal Police Organization; International Development Association; International Fund for Agricultural Development; International Labor Organization; IMF; International Maritime Satellite Organization; International Monetary Organization; International Office for Migration; International Telecommunications Satellite Organization; International Telecommunications Union; Latin American Economic System; Latin American Integration Association; League of Red Cross and Red Crescent Societies; Organization of American States; Organization of Copper Exporting Countries; Pacific Economic Cooperation Council; Rio Group; United Nations and its main affiliated organizations; Universal Postal Union; World Confederation of Labor; World Federation of Trade Unions; World Health Organization; World Intellectual Property Organization; World Meteorological Organization; and World Tourism Organization.
NATIONAL SECURITY
Armed Forces: Despite seventeen years of military rule (1973-90), still exceptionally professional and generally free of factionalism or partisan politics. In 1992 combined strength at least 91,800 (including 54,000 army, 25,000 navy, and 12,800 air force). Army reserves additional 50,000.
Defense Budget: Defense budget averaged US$1 billion annually in 1990-93. Annual average imports of major conventional arms US$212 million in 1987-91; as a percentage of national imports in 1990, 3.0 percent.
Military Units: Army organized into seven military areas (Áreas Militares--AMs)--headquartered in Antofagasta, Santiago, Concepción, Valdivia, Punta Arenas, Iquique, and Coihaique--and seven divisions, one for each AM. Navy organized into four naval zones, headquartered in Iquique, Punta Arenas, Talcahuano, and Valparaíso. Operational command included Fleet, Submarine Command, and Transport Force. Navy included Navy Infantry Corps (4,200 marines), Naval Aviation (750 members), and Coast Guard (1,500 members). Air Force organized into three commands--Combat, Personnel, and Logistics--four air brigades, and twelve groups or squadrons. Air brigades headquartered in Iquique, Santiago, Puerto Montt, and Punta Arenas. Also operated an airbase on King George Island, Antarctica.
Military Equipment: Ground forces equipped with fortyseven AMX-13 light tanks and twenty-one AMX-30 medium battle tanks from France; fifty M-41, sixty M-24, and 150/M51 Super-Sherman tanks from United States/Israel; and 500 armored personnel carriers (APCs) from Brazil and 100 from United States. Navy ships include four missile destroyers, two missile frigates, and four submarines. Marines equipped with forty French APCs. Air force equipment includes sixteen F-5 fighters from United States, fifteen Dassault Mirage fighters from France, and thirty-two Hawker Hunters from Britain, as well as twenty Chilean-made strike aircraft and sixtyeight trainers (made partially or wholly by Chile).
Police: Official name: Forces of Order and Public Security. Consist of two separate law-enforcement forces: Carabineros (national, 31,000-member paramilitary police force) and Investigations Police (national, 4,000-member plainclothes organization). Carabineros organized into three main zones-- Northern, Central, and Southern--with marine and air sections. Investigations Police operated in support of Carabineros and intelligence services of armed forces. For example, Investigations Police operated an antinarcotics force. In addition to law enforcement and traffic management, Carabineros engaged in narcotics suppression, border control, and counterterrorism. Italy and Spain pledged to help Aylwin government finance and train civilian-based security force capable of combatting terrorist threat.
Insurgents: Three main terrorist groups still sporadically active in 1993: pro-Cuban Movement of the Revolutionary Left (Movimiento de la Izquierda Revolucionaria), United Popular Action Movement-Lautaro (Movimiento de Acción Popular Unitario-Lautaro), Lautaro Youth Movement (Movimiento Juvenil Lautaro), Manuel Rodríguez Patriotic Front (Frente Patriótica Manuel Rodríguez), and Maoist-oriented Manuel Rodríguez Patriotic Front-Autonomous (Frente Patriótica Manuel RodríguezAutónomo ). None a serious threat to national security, but each capable of occasional acts of terrorism.
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INTRODUCTION
THE SOUTHERNMOST NATION of Latin America and one of the longest and narrowest nations in the world, Chile may derive its name from the indigenous Mapuche word "Chilli," which may mean "where the land ends. The Mapuche's own name means "people (che) of the land (mapu)." Another meaning attributed to Chilli is the onomatopoeic cheele-cheele--the Mapuche imitation of a bird call. The Spanish conquistadors heard about Chilli from the Incas of Peru, who had failed to conquer the land inhabited by the Araucanians, of which the Mapuche in central Chile was the most warlike group. The few survivors of Diego de Almagro's first Spanish expedition south from Peru in 1535-37 called themselves the "men of Chilli."
As native American tribes became for the United States, the Araucanians, who mastered horsemanship and Spanish military strategy, became part of Chile's "noble savage" lore. This is exemplified by the legend of the Mapuche warrior Lautaro (the Chilean equivalent of the North American Apache Geronimo) in the epic poem "La Araucana," written, initially on bark, in the 1560s by Spanish soldier-poet Alonso de Ercilla y Zúñiga. This conquistador may have been the first to employ the term "Araucanian" (araucano, from arauca, the Inca word for enemy), which has been widely used as a general term for Chile's indigenous peoples. The Spaniards and their criollo successors continued to wage warfare against the Mapuche until 1883, when the government was forced to grant them autonomy. The Mapuche population has increased significantly in the twentieth century, to about 928,000 in 1992, but they have not had much cultural influence on the largely European and mestizo (see Glossary) population of Chile.
Despite its geographical isolation by formidable barriers--the Andes Mountains on its eastern flank, the Atacama Desert in its northernmost area, and the Pacific Ocean on its western side-- Chile, after Uruguay, traditionally has been one of South America's best educated and most stable and politically sophisticated nations. Chile enjoyed constitutional and democratic government for most of its history as a republic, particularly after adoption of the 1833 constitution. After a period of quasi-dictatorial rule in the 1920s and early 1930s, Chile developed a reputation for stable democratic government. Like Uruguayans, Chileans have benefited from state-run universities, welfare institutions, and, beginning in 1952, a national health system. Sociologist J. Samuel Valenzuela points out in "The Society and Its Environment" chapter that Chilean universities, for example, contributed to the Chileans' strong sense of national identity.
Throughout the 1970-90 period, however, Chilean national identity was tested as the country was subjected to profound political, economic, and social changes. Although the country began the 1970s by embarking on what soon proved to be a disastrous experiment in socialism, it ended the 1980s with a widely acclaimed free-market economy and a military government that had committed itself, albeit inadvertently, through a plebiscite, to allowing a transition to democracy in 1990. Since the restoration of democracy, Chile has served as a model for other developing nations and the East European countries that are attempting to make a similar transition to democratic government and an antistatist, free-market economy. Yet the Chileans endured rough times before finding an economic prescription that works for them.
During the ill-fated Popular Unity (Unidad Popular) government of its Marxist president, Salvador Allende Gossens (1970-73), Chile experienced uncharacteristic economic and political turbulence. As economic and political conditions deteriorated rapidly in August 1973, the Chilean Armed Forces and even the moderate Christian Democratic Party (Partido Demócrata Cristiano--PDC), Chile's largest single party, began to view the Allende government's socialist economic policies as a threat to the constitutional order that the armed forces felt duty-bound to uphold, at whatever cost. On September 11, 1973, the armed forces shocked the world by attacking the lightly defended presidential palace, La Moneda, with army troops and aerial bombardment. Led by newly appointed army commander General Augusto Pinochet Ugarte, the bloody coup seemed incongruously violent for a country of Chile's democratic and civil traditions, especially considering that Allende had been elected democratically and had won a substantial 43 percent of the vote in the March 1973 congressional elections. Not having fought a real war since the War of the Pacific (1879-83) against Peru and Bolivia, the army seemed to welcome a pretext for reminding Allende's supporters of the military option contained in their own national motto, "By reason or by force."
In the "Historical Setting" chapter, historian Paul W. Drake summarizes various explanations for Allende's downfall and the coup as posited by analysts of the different political tendencies. Drake takes a similarly egalitarian approach to assessing blame by noting that "there was ample blame to go around," and that "groups at all points on the political spectrum helped destroy the democratic order by being too ideological and too intransigent." Prior to the coup, Chilean society became polarized between Allende's supporters and the growing opposition, particularly during the culmination of the constitutional crisis in August 1973. In political terms, society was divided into three hostile camps--the Marxist left, the Christian Democratic center, and the conservative right. In "The Economy" chapter, economists Sebastian Edwards and Alejandra Cox Edwards blame the Allende government's downfall to a large extent on its disregard of "many of the key principles of traditional economic theory." In their analysis, Allende's UP government did this not only in its monetary policies but also in its lack of attention to the role that the real exchange rate plays in a country's international competition and balance of payments.
The Allende episode has remained politically charged during the past two decades, as evidenced by the march by Socialists and Communists on La Moneda and their skirmishes with police on the occasion of the twentieth anniversary of Allende's overthrow. A peculiar aspect of the historiography of the military coup, one that is illustrative of the political sensitivities surrounding it, is how Allende's death has been described. Some scholars have mentioned both versions of his death--the official military account that he committed suicide and the left-wing version that he was assassinated by the military. Others, including historian Mark Falcoff, have used the more noncommittal phrase that Allende "died in the coup." Thanks in large part to the assassination myth that Cuban president Fidel Castro Ruz and Colombian novelist Gabriel García Márquez helped to create, the left-wing version is still widely believed. Available evidence, however, is adequate to reasonably conclude that Allende committed suicide with the AK-47 assault rifle given him by Castro. Scholars such as Paul E. Sigmund and James Dunkerley believe it was suicide, and reference sources and mainstream news media tend to use this version. For example, in a New York Times report on the twentieth anniversary of the coup, correspondent Nathaniel C. Nash states that Allende "killed himself rather than be taken."
It is fairly well known that Allende was a long-time admirer of Chilean president José Manuel Balmaceda Fernández (1886-91), who shot himself to death while inside the Argentine legation on September 19, 1891, the day after his term ended. Balmaceda committed suicide as a result of his defeat in the Civil War of 1891 between his supporters and those of Congress. In contrast to Peruvian president Alberto Fujimori's bloodless "self-coup" in April 1992, in which he dissolved the National Congress for being "obstructionist," Balmaceda's attempt to establish a strong executive and destroy the National Congress (Congreso Nacional; hereafter, Congress) resulted in the deaths of 10,000 Chileans. Yet Balmaceda's economic nationalism made him a hero of the left. In the weeks before the 1973 military coup, Allende, who like Balmaceda had overstepped his constitutional authority, had made his obsession with suicide as a last resort known to various individuals, including French president François Mitterrand. The coup and Allende's death were a tragic denouement to a chapter in Chilean history that most Chileans probably would like to forget, just as they would like to forget the repression that followed.
After the overthrow of the Allende government, Chile was plunged into a long period of repressive military rule. According to the National Commission on Truth and Reconciliation (the Rettig Commission), an eight-member investigatory body created by the government of Patricio Aylwin Azócar (1990-94), the armed forces and security forces were responsible for the deaths of 2,115 Chileans in the years following the 1973 coup, as well as the systematic torture or imprisonment of thousands of other opponents of the Pinochet regime.
Beginning with the Allende government and continuing with the military regime of General Pinochet (1973-90), Chile underwent two decades of social, economic, and political restructuring. As political scientist Arturo Valenzuela points out in the "Government and Politics" chapter, the Pinochet regime, ironically, proved to be "the longest and most revolutionary government in the nation's history." Although the Pinochet regime adopted a system of local government administration based on corporatism (see Glossary), it avoided the corporatist economic policies often associated with authoritarian military rulers and favored by Chile's industrial bourgeoisie and landowning class. Instead, Pinochet listened to economic guidance offered by students of the University of Chicago's Milton Friedman, a spokesman for monetarists (see Glossary). This connection developed because of the Catholic University of Chile's exchange program with the University of Chicago, whose Chilean graduates won Pinochet's ear. Determined to transform Chile's statist economy, Pinochet embraced the free- market, export-oriented economic model recommended by the so-called "Chicago boys" (see Glossary). These policies called for integrating the Chilean economy into the world economy, privatizing nationalized industries as well as the social security and health sectors, sharply reducing the number of public employees, adopting monetarist policies, deregulating the labor market, and carrying out a sweeping tax reform, among other measures.
By the late 1980s, the Chilean economy was again booming, and other developing countries were looking to it as an economic model. The regime's drive to privatize was an important indicator of the transition to a market economy. Of about 550 firms under state control in the 1970s, fewer than fifty remained so by the end of 1991. Whether Chile's structural transformations could have been carried out by a democratic government is unclear. By the early 1990s, Argentina's democratically elected president, Carlos Saul Menem, had achieved comparable reforms without sacrificing democracy or human rights. However, the success of the Pinochet model in Chile probably had less to do with authoritarianism per se than it did with the authoritarian implementation of antistatist, free-market policies.
Fortunately for the future of Chilean democracy, Pinochet was unable to carry out his plan to permanently abolish traditional political parties and institutions and continue ruling as Chile's president for most of the 1990s. His mistake (and Chile's gain) was to hold a plebiscite on a key provision of the Pinochet constitution, which voters had approved on September 11, 1980. The 1980 constitution provided for the gradual restoration of democracy by 1989, but it would have extended Pinochet's presidency through most of the 1990s. An overconfident Pinochet proceeded with the constitutionally mandated plebiscite on October 5, 1988, and was shocked when nearly 55 percent of registered voters indicated their preference for open elections in late 1989, while only 43 percent voted for allowing Pinochet to remain president through 1997. According to Arturo Valenzuela, the opposition basically outfoxed Pinochet and won the plebiscite "following Pinochet's rules."
Aylwin, a Christian Democrat, easily won the long-awaited presidential election on December 14, 1989, as the candidate of the Coalition of Parties for Democracy (Concertación de Partidos por la Democracia--CPD), winning 55.2 percent of the vote. In concurrent congressional elections, the CPD also won a majority of elected seats in both houses of Congress. However, the coalition was unable to offset the nine Pinochet-designated senators, making the CPD's plans to further reform the military-designed constitution unattainable for the foreseeable future.
When Aylwin (1990-94) took office as president on March 11, 1990, he inherited one of the strongest economies in Latin America, although the gross domestic product ( GDP--see Glossary) growth rate in 1990 was only 2.1 percent. In addition to continuing Pinochet's free-market policies, Aylwin enhanced the former regime's foreign trade policy by further reducing import tariffs from 15 percent to 11 percent. Whereas the free-market policies adopted by Uruguay in 1990 met with strong resistance from a population accustomed to a generous cradle-to-grave welfare system, in Chile similar policies met with support from all sectors of society. Chile emerged not only as a showcase of a successful transition to moderate democratic government but also as a widely admired economic model for the developing world, achieving a GDP growth rate of 5.5 percent in 1991, with an unemployment rate of only 6.5 percent, and an unprecedented 9 percent GDP growth rate in 1992. The GDP growth rate reportedly slowed to about 5.5 percent in 1993, but the economy remained strong. In 1993 unemployment was only 5 percent, and inflation was down to 12 percent. Moreover, thanks to the economic policy of President Aylwin's minister of finance, Alejandro Foxley Riesco, total investment in Chile in 1993 was an impressive 27 percent of GDP, while Chile invested a comparable percentage of its GDP in other countries, including Argentina.
Chile's economic reforms had their downside. As Samuel Valenzuela points out, the Pinochet regime's social and economic policies led to increased socioeconomic inequalities, and urban and rural poverty remained extensive. The severe structural transformations, combined with the two harsh recessions and high debt-service obligations, aggravated the already high inequality of income distribution. More than 40 percent of the population, or about 5 million Chileans, remained poor, with 1 million of them living in extreme poverty (see Glossary). According to Chilean sociologists Cristóbal Kay and Patricio Silva, who was health undersecretary in the early 1990s, extreme poverty still affected nearly 55 percent of the rural population in 1990. The standard of living of many Chileans was further reduced by the declining quality of schooling and health care and inadequate land reform. Although the regime made heavy investments in programs for the very poor, thus helping to lower the infant mortality rate and raise life expectancy, its land reform measures were not particularly effective. Chile in 1987 remained in the category of countries with high inequality in the distribution of landholdings, with a Gini coefficient (see Glossary) of 0.64, according to the United Nations Development Programme.
The Aylwin government funneled at least 20 percent more resources into social programs, such as education, housing, and health, by raising taxes and seeking foreign assistance. Under the Aylwin government, the income of the lowest quintile of the population increased by 30 percent in 1990-93. By 1992 the proportion of Chileans living in poverty had decreased to 33 percent, from 45 percent in 1985. This amounted to 4.2 million Chileans living in poverty in 1993, with 1.2 million living in extreme poverty.
The Aylwin government also continued the privatization of social security, begun by the military regime in 1981. By the end of Aylwin's term, Chile's pension reform was the envy of the world. Officials from developing as well as developed nations were visiting Chile to see how it was done. By 1994 the system was managing assets of US$19.2 billion, giving Chile a savings rate similar to some Asian nations. Thanks in large part to its pension fund, Chile now has a strong capital market consisting of stocks, bonds, and other financial instruments.
As a democratic political model, the Aylwin government had a major handicap, namely the military, which, according to Arturo Valenzuela, has served as a virtual autonomous power within the government. With the help of its rightist allies in Congress, the military demonstrated its influence by derailing the Aylwin government's cautious but determined attempts to prosecute military officers for past human rights abuses. Aylwin refused to support the enactment of a blanket amnesty law, such as the one approved by Uruguay's General Assembly for military officers accused of human rights abuses committed between 1973 and 1978.
The military's rightist allies in Congress also thwarted the Aylwin government's attempts to enact reforms, such as one that would have eliminated the designated senators and another that would have replaced the military-designed binomial electoral system (see Glossary) with a system of proportional representation. Despite his setbacks in enacting reforms, Aylwin made good use of the strong presidential powers provided by the Pinochet-designed constitution. For example, he succeeded in enacting a constitutional reform law restoring the country's tradition of elected local governments and another limiting the power of the military courts to trying only those military personnel on active duty.
Aylwin's generally very successful presidency, particularly his handling of the economy, assured a continuation of democratic government under another politically moderate president, especially the well-regarded son of Eduardo Frei Montalva (1964-70), one of Chile's most respected presidents. Eduardo Frei Ruiz-Tagle entered politics only in 1989, when he ran successfully for a Senate seat from Santiago. Until the late 1980s, he had devoted his career to hydrology as a partner in Sigdo Koppers, an engineering firm. He was elected PDC president in 1991, winning 70 percent of the vote. Although a consensus candidate for the PDC presidency, Frei was particularly favored by the PDC's right-wing faction, popularly known as the guatones (fat men). The party's other factions- -the left-wing's chascones (bushy-haired men) and the center's renovadores (renewalists)--favored other candidates.
On May 23, 1993, Frei defeated his Socialist Party (Partido Socialista) rival, Ricardo Lagos Escobar, to obtain the CPD's presidential nomination, with a lopsided vote of 60 percent to 38 percent. Thanks in part to Aylwin's strong performance in the social, economic, and political areas, in part to Frei's political inheritance, and in part to continued divisiveness among the rightist parties, there was never any doubt that Frei would win. As chairman of the Senate's key Finance and Budget Committee, Frei earned a reputation as a fiscal moderate. His positive public rating, according to a Center for Public Studies (Centro de Estudios Públicos--CEP)-Adimark poll of July 1993, was a remarkable 75 percent, even higher than Aylwin's 73 percent positive rating.
Indeed, Frei's coalition easily won the presidential election on December 11, 1993, with nearly 58 percent of the vote, compared with 24 percent for Arturo Alessandri Besa, Frei's closest challenger and candidate of the newly formed center-right coalition called the Union for the Progress of Chile (Unión por el Progreso de Chile). Frei received the largest popular mandate of any Chilean leader since 1931. The election was a sort of reverse replay of the 1958 election, when Frei's father was defeated by Alessandri's uncle, Jorge Alessandri Rodríguez (president, 1958-64). Moreover, Frei Ruiz-Tagle allied himself with the PS, whereas his father joined in an alliance with the right, specifically the National Party (Partido Nacional). In sharp contrast to the presidential elections of September 4, 1970, the unexciting elections of December 11, 1993, lacked left-wing and right-wing rhetoric. The vast majority of Chileans, enjoying Latin America's strongest economy, were apparently content to let the government remain in the hands of the political center, namely Frei Montalva's son. Although Frei Ruiz-Tagle, unlike his late father, is not distinguished for his public oratory, Chileans regarded his low- key, nonconfrontational, and statesmanlike campaigning style, as well as his penchant for consensus-building, as positive traits.
Frei Ruiz-Tagle appears to have a better chance than Aylwin had to make the executive stronger vis-a-vis the military, not only because of his powerful mandate but also because the political right is becoming less protective of the military's prerogatives within the military-designed political system. Nevertheless, daunting challenges in the form of military resistance face Frei in his plans to seek to amend the Pinochet-era constitution. These plans include abolishing the eight "designated" Senate seats, reforming the electoral system, and making the army commander, General Pinochet, and the other military commanders accountable to elected officials. Frei's political agenda also includes less politically sensitive goals, such as improving secondary and higher education, consolidating Chile's political democracy, modernizing public services, and giving priority to rural development and eradication of poverty.
On the foreign front, Frei appeared to be inclined to reverse Chile's disinterest in regional trade pacts. In particular, his government was reassessing the potential benefits of joining the Southern Cone Common Market (Mercado Común del Cono Sur-- Mercosur; see Glossary) and expected that Chile would become an associate member by January 1995. After the United States Congress ratified the North American Free Trade Agreement ( NAFTA--see Glossary) in November 1993, Chile began lobbying to join a similar agreement with the United States (one which would drop the "North" from NAFTA), citing President Bill Clinton's position that Chile is "next in line" to join NAFTA. Total bilateral trade between Chile and the United States amounted to US$4.1 billion in 1993.
Frei's coalition maintained a majority (seventy) of the 120 seats in the lower house of Congress, the Chamber of Deputies, but fell short of the eighty it needed for a two-thirds voting bloc. Its lack of majority support in the forty-six-member Senate also seemed to preclude passage of constitutional amendments, which require a three-fifths majority in both houses. Like its predecessor, the Frei government's efforts are likely to be hampered by the nine nonelected senators appointed by the Pinochet regime (of whom only eight are still serving) and by the binomial electoral system, which the military adopted for the 1989 elections in order to strengthen the hand of the rightists.
Furthermore, unlike Chile's pre-coup democracy, its democracy of the 1990s is expected to remain fettered by a military with a strong institutional role in government, a military that will not likely tolerate a departure from the economic policies that constitute the principal accomplishment of its seventeen years in power. Even Frei's stated intention to push legislation to relieve the Copper Corporation (Corporación del Cobre--Codelco) of its constitutional obligation to give the armed forces 10 percent of its annual earnings entails a risk of antagonizing the military. In 1993 this contribution amounted to US$190 million, almost one-fifth of the total defense budget. However, one casualty of a financial scandal at Codelco that broke in January 1994 could be the army. The copper unions asked the army to give up its 10 percent share of Codelco's annual sales as a patriotic gesture. Although the army ignored this request, Congress was planning to discuss military spending later in the year, leaving open the possibility that the army could be compelled to make the sacrifice to head off additional budget cuts.
Frei's relations with the military may determine how successful he is in achieving his stated objectives, but confrontation with the military did not appear to be his style. Indeed, in his address to Congress on May 21, 1994, Frei avoided the most controversial issue, his lack of power to appoint or dismiss the military commanders. The only feasible resolution of the dilemma of Pinochet's continuing influence in government may need to await the general's scheduled retirement in 1997. Even then, however, Chile's transition to democracy will not be fully consolidated until reform of constitutional anachronisms, such as the immunity of military commanders to presidential dismissal, the binomial electoral system, and the designated senators.
August 31, 1994
Rex A. Hudson
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Chapter 1. Historical Setting
FROM ONE OF THE MOST neglected outposts of the Spanish Empire, Chile developed into one of the most prosperous and democratic nations in Latin America. Throughout its history, however, Chile has depended on great external powers for economic exchange and political influence: Spain in the colonial period, Britain in the nineteenth century, and the United States in the twentieth century.
Chile's dependence is made most evident by the country's heavy reliance on exports. These have included silver and gold in the colonial period, wheat in the mid-nineteenth century, nitrates up to World War I, copper after the 1930s, and a variety of commodities sold overseas in more recent years. The national economy's orientation toward the extraction of primary products has gone hand in hand with severe exploitation of workers. Beginning with the coerced labor of native Americans during the Spanish conquest, the exploitation continued with mestizo (see Glossary) peonage on huge farms in the eighteenth and nineteenth centuries and brutal treatment of miners in the north in the first decade of the twentieth century. The most recent victimization of workers occurred during the military dictatorship of Augusto Pinochet Ugarte (1973-90), when unions were suppressed and wages were depressed, unemployment increased, and political parties were banned.
Another persistent feature of Chile's economic history has been the conflict over land in the countryside, beginning when the Spaniards displaced the indigenous people during their sixteenthcentury conquest. Later chapters of this struggle have included the expansion of the great estates during the ensuing four centuries and the agrarian reform efforts of the 1960s and 1970s.
Politically, Chile has also conformed to several patterns. Since winning independence in 1818, the nation has had a history of civilian rule surpassed by that of few countries in the world. In the nineteenth century, Chile became the first country in Latin America to install a durable constitutional system of government, which encouraged the development of an array of political parties. Military intervention in politics has been rare in Chile, occurring only at times of extraordinary social crisis, as in 1891, 1924, 1925, 1932, and 1973. These interventions often brought about massive transformations; all the fundamental changes in the Chilean political system and its constitutions have occurred with the intervention of the armed forces, acting in concert with civilian politicians.
From 1932 to 1973, Chile built on its republican tradition by sustaining one of the most stable, reformist, and representative democracies in the world. Although elitist and conservative in some respects, the political system provided for the peaceful transfer of power and the gradual incorporation of new contenders. Undergirding that system were Chile's strong political parties, which were often attracted to foreign ideologies and formulas. Having thoroughly permeated society, these parties were able to withstand crushing blows from the Pinochet regime of 1973-90.
Republican political institutions were able to take root in Chile in the nineteenth century before new social groups demanded participation. Contenders from the middle and lower classes gradually were assimilated into an accommodating political system in which most disputes were settled peacefully, although disruptions related to the demands of workers often met a harsh, violent response. The system expanded to incorporate more and more competing regional, anticlerical, and economic elites in the nineteenth century. The middle classes gained political offices and welfare benefits in the opening decades of the twentieth century. From the 1920s to the 1940s, urban laborers obtained unionization rights and participated in reformist governments. In the 1950s, women finally exercised full suffrage and became a decisive electoral force. And by the 1960s, rural workers achieved influence with reformist parties, widespread unionization, and land reform.
As the political system evolved, groups divided on either side of six main issues. The first and most important in the nineteenth century was the role of the Roman Catholic Church in political, social, and economic affairs. Neither of the two major parties, the Conservative Party and the Liberal Party, opposed the practice of Catholicism. However, the Conservatives defended the church's secular prerogatives; the Liberals (and later the Nationals, Radicals, Democrats, and Marxists) took anticlerical positions.
The second source of friction was regionalism, although less virulent than in some larger Latin American countries. In the north and south, reform groups became powerful, especially the Conservatives holding sway in Chile's Central Valley (Valle Central), who advocated opposition to the establishment. Regional groups made a significant impact on political life in Chile: they mobilized repeated rebellions against the central government from the 1830s through the 1850s; helped replace a centralizing president with a political system dominated by the National Congress (hereafter, Congress) and local bosses in the 1890s; elected Arturo Alessandri Palma (1920-24, 1925, 1932-38) as the chief executive representing the north against the central oligarchy in 1920; and cast exceptional percentages of their ballots for reformist and leftist candidates (especially Radicals, Communists, and Socialists) from the 1920s to the 1970s. Throughout the twentieth century, leaders outside Santiago also pleaded for administrative decentralization until the Pinochet government devolved greater authority on provincial and municipal governments and even moved Congress from Santiago to Valparaíso.
The third issue dividing Chileans--social class--grew in importance from the nineteenth century to the twentieth century. Although both the Conservatives and the Liberals represented the upper stratum, in the nineteenth century the Radicals began to speak on behalf of many in the middle class, and the Democrats built a base among urban artisans and workers. In the twentieth century, the Socialists and Communists became the leaders of organized labor. Along with the Christian Democratic Party, these parties attracted adherents among impoverished people in the countryside and the urban slums.
In the twentieth century, three other issues became salient, although not as significant as divisions over social class, regionalism, or the role of the church. One was the cleavage between city and country, which was manifested politically by the leftist parties' relative success in the urban areas and by the rightist groups in the countryside. Another source of strife was ideology; most Chilean parties after World War I sharply defined themselves in terms of programmatic and philosophical differences, often imported from abroad, including liberalism, Marxism, corporatism (see Glossary), and communitarianism (see Glossary). Gender also became a political issue and divider. After women began voting for president in 1952, they were more likely than men to cast ballots for rightist or centrist candidates.
As Chile's political parties grew, they attracted followers not only on the basis of ideology but also on the basis of patronclient relationships between candidates and voters. These ties were particularly important at the local level, where mediation with government agencies, provision of public employment, and delivery of public services were more crucial than ideological battles waged on the national stage. Over generations, these bonds became tightly woven, producing within the parties fervent and exclusive subcultures nurtured in the family, the community, and the workplace. As a result, by the mid-twentieth century the parties had politicized schools, unions, professional associations, the media, and virtually all other components of national life. The intense politicization of modern Chile has its roots in events of the nineteenth century.
During the colonial period and most of the twentieth century, the central state played an active role in the economy until many of its functions were curtailed by the military government of General Pinochet. State power was highly centralized from the 1830s to the 1970s, to the ire of the outlying provinces.
Although normally governed by civilians, Chile has been militaristic in its dealings with native people, workers, and neighboring states. In the twentieth century, it has been a supporter of arbitration in international disputes. In foreign policy, Chile has long sought to be the strongest power on the Pacific Coast of South America, and it has always shied away from diplomatic entanglements outside the Americas.
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PRECOLUMBIAN CIVILIZATIONS
At the time the Spanish arrived, a variety of Amerindian societies inhabited what is now Chile. No elaborate, centralized, sedentary civilization reigned supreme, even though the Inca Empire had penetrated the northern land of the future state. As the Spaniards would after them, the Incas encountered fierce resistance from the indigenous Araucanians, particularly the Mapuche tribe, and so did not exert control in the south. During their attempts at conquest in 1460 and 1491, the Incas established forts in the Central Valley of Chile, but they could not colonize the region. In the north, the Incas were able to collect tribute from small groups of fishermen and oasis farmers but were not able to establish a strong cultural presence.
The Araucanians, a fragmented society of hunters, gatherers, and farmers, constituted the largest native American group in Chile. A mobile people who engaged in trade and warfare with other indigenous groups, they lived in scattered family clusters and small villages. Although the Araucanians had no written language, they did use a common language. Those in what became central Chile were more settled and more likely to use irrigation. Those in the south combined slash-and-burn agriculture with hunting.
The Araucanians, especially those in the south, became famous for their staunch resistance to the seizure of their territory. Scholars speculate that their total population may have numbered 1 million at most when the Spaniards arrived in the 1530s; a century of European conquest and disease reduced that number by at least half. During the conquest, the Araucanians quickly added horses and European weaponry to their arsenal of clubs and bows and arrows. They became adept at raiding Spanish settlements and, albeit in declining numbers, managed to hold off the Spaniards and their descendants until the late nineteenth century.
The Araucanians' valor inspired the Chileans to mythologize them as the nation's first national heroes, a status that did nothing, however, to elevate the wretched living standard of their descendants. Of the three Araucanian groups, the one that mounted the most resistance to the Spanish was the Mapuche, meaning "people of the land."
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CONQUEST AND COLONIZATION, 1535-1810
Politics and War in a Frontier Society
Chile's first known European discoverer, Ferdinand Magellan, stopped there during his voyage on October 21, 1520. A concerted attempt at colonization began when Diego de Almagro, a companion of conqueror Francisco Pizarro, headed south from Peru in 1535. Disappointed at the dearth of mineral wealth and deterred by the pugnacity of the native population in Chile, Almagro returned to Peru in 1537, where he died in the civil wars that took place among the conquistadors.
The second Spanish expedition from Peru to Chile was begun by Pedro de Valdivia in 1540. Proving more persistent than Almagro, he founded the capital city of Santiago on February 12, 1541. Valdivia managed to subdue many northern Amerindians, forcing them to work in mines and fields. He had far less success with the Araucanians of the south, however.
Valdivia (1541-53) became the first governor of the captaincy general of Chile, which was the colonial name until 1609. In that post, he obeyed the viceroy of Peru and, through him, the king of Spain and his bureaucracy. Responsible to the governor, town councils known as cabildos administered local municipalities, the most important of which was Santiago, which was the seat of a royal audiencia (see Glossary) from 1609 until the end of colonial rule.
Seeking more precious metals and slave labor, Valdivia established fortresses farther south. Being so scattered and small, however, they proved difficult to defend against Araucanian attack. Although Valdivia found small amounts of gold in the south, he realized that Chile would have to be primarily an agricultural colony.
In December 1553, an Araucanian army of warriors, organized by the legendary Mapuche chief Lautaro (Valdivia's former servant), assaulted and destroyed the fort of Tucapel. Accompanied by only fifty soldiers, Valdivia rushed to the aid of the fort, but all his men perished at the hands of the Mapuche in the Battle of Tucapel. Valdivia himself fled but was later tracked down, tortured, and killed by Lautaro. Although Lautaro was killed by Spaniards in the Battle of Mataquito in 1557, his chief, Caupolicán, continued the fight until his capture by treachery and his subsequent execution by the Spaniards in 1558. The uprising of 1553-58 became the most famous instance of Araucanian resistance; Lautaro in later centuries became a revered figure among Chilean nationalists. It took several more years to suppress the rebellion. Thereafter, the Araucanians no longer threatened to drive the Spanish out, but they did destroy small settlements from time to time. Most important, the Mapuche held on to their remaining territory for another three centuries.
Despite inefficiency and corruption in the political system, Chileans, like most Spanish Americans, exhibited remarkable loyalty to crown authority throughout nearly three centuries of colonial rule. Chileans complained about certain policies or officials but never challenged the regime. It was only when the king of Spain was overthrown at the beginning of the nineteenth century that Chileans began to consider self-government.
Chileans resented their reliance on Peru for governance, trade, and subsidies, but not enough to defy crown authority. Many Chilean criollos (creoles, or Spaniards born in the New World) also resented domination by the peninsulares (Spaniards, usually officials, born in the Old World and residing in an overseas colony), especially in the sinecures of royal administration. However, local Chilean elites, especially landowners, asserted themselves in politics well before any movement for independence. Over time, these elites captured numerous positions in the local governing apparatus, bought favors from the bureaucracy, co-opted administrators from Spain, and came to exercise informal authority in the countryside.
Society in Chile was sharply divided along ethnic, racial, and class lines. Peninsulares and criollos dominated the tiny upper class. Miscegenation between Europeans and the indigenous people produced a mestizo population that quickly outnumbered the Spaniards. Farther down the social ladder were a few African slaves and large numbers of native Americans.
The Roman Catholic Church served as the main buttress of the government and the primary instrument of social control. Compared with its counterparts in Peru and Mexico, the church in Chile was not very rich or powerful. On the frontier, missionaries were more important than the Catholic hierarchy. Although usually it supported the status quo, the church produced the most important defenders of the indigenous population against Spanish atrocities. The most famous advocate of human rights for the native Americans was a Jesuit, Luis de Valdivia (no relation to Pedro de Valdivia), who struggled, mostly in vain, to improve their lot in the period 1593-1619.
Cut off to the north by desert, to the south by the Araucanians, to the east by the Andes Mountains, and to the west by the ocean, Chile became one of the most centralized, homogeneous colonies in Spanish America. Serving as a sort of frontier garrison, the colony found itself with the mission of forestalling encroachment by Araucanians and by Spain's European enemies, especially the British and the Dutch. In addition to the Araucanians, buccaneers and English adventurers menaced the colony, as was shown by Sir Francis Drake's 1578 raid on Valparaíso, the principal port. Because Chile hosted one of the largest standing armies in the Americas, it was one of the most militarized of the Spanish possessions, as well as a drain on the treasury of Peru.
Throughout the colonial period, the Spaniards engaged in frontier combat with the Araucanians, who controlled the territory south of the Río Bío-Bío (about 500 kilometers south of Santiago) and waged guerrilla warfare against the invaders. During many of those years, the entire southern region was impenetrable by Europeans. In the skirmishes, the Spaniards took many of their defeated foes as slaves. Missionary expeditions to Christianize the Araucanians proved risky and often fruitless.
Most European relations with the native Americans were hostile, resembling those later existing with nomadic tribes in the United States. The Spaniards generally treated the Mapuche as an enemy nation to be subjugated and even exterminated, in contrast to the way the Aztecs and the Incas treated the Mapuche, as a pool of subservient laborers. Nevertheless, the Spaniards did have some positive interaction with the Mapuche. Along with warfare, there also occurred some miscegenation, intermarriage, and acculturation between the colonists and the indigenous people.
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The Colonial Economy
The government played a significant role in the colonial economy. It regulated and allocated labor, distributed land, granted monopolies, set prices, licensed industries, conceded mining rights, created public enterprises, authorized guilds, channeled exports, collected taxes, and provided subsidies. Outside the capital city, however, colonists often ignored or circumvented royal laws. In the countryside and on the frontier, local landowners and military officers frequently established and enforced their own rules.
The economy expanded under Spanish rule, but some criollos complained about royal taxes and limitations on trade and production. Although the crown required that most Chilean commerce be with Peru, smugglers managed to sustain some illegal trade with other American colonies and with Spain itself. Chile exported to Lima small amounts of gold, silver, copper, wheat, tallow, hides, flour, wine, clothing, tools, ships, and furniture. Merchants, manufacturers, and artisans became increasingly important to the Chilean economy.
Mining was significant, although the volume of gold and silver extracted in Chile was far less than the output of Peru or Mexico. The conquerors appropriated mines and washings from the native people and coerced them into extracting the precious metal for the new owners. The crown claimed one-fifth of all the gold produced, but the miners frequently cheated the treasury. By the seventeenth century, depleted supplies and the conflict with the Araucanians reduced the quantity of gold mined in Chile.
Because precious metals were scarce, most Chileans worked in agriculture. Large landowners became the local elite, often maintaining a second residence in the capital city. Traditionally, most historians have considered these great estates (called haciendas or fundos) inefficient and exploitive, but some scholars have claimed that they were more productive and less cruel than is conventionally depicted.
The haciendas initially depended for their existence on the land and labor of the indigenous people. As in the rest of Spanish America, crown officials rewarded many conquerors according to the encomienda (see Glossary) system, by which a group of native Americans would be commended or consigned temporarily to their care. The grantees, called encomenderos, were supposed to Christianize their wards in return for small tribute payments and service, but they usually took advantage of their charges as laborers and servants. Many encomenderos also appropriated native lands. Throughout the sixteenth and seventeenth centuries, the encomenderos fended off attempts by the crown and the church to interfere with their exploitation of the indigenous people.
The Chilean colony depended heavily on coerced labor, whether it was legally slave labor or, like the wards of the encomenderos, nominally free. Wage labor initially was rare in the colonial period; it became much more common in the eighteenth and nineteenth centuries. Because few native Americans or Africans were available, the mestizo population became the main source of workers for the growing number of latifundios (see Glossary), which were basically synonymous with haciendas.
Those workers attached to the estates as tenant farmers became known as inquilinos. Many of them worked outside the cash economy, dealing in land, labor, and barter. The countryside was also populated by small landholders (minifundistas), migrant workers (afuerinos), and a few Mapuche holding communal lands (usually under legal title).
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WARS OF INDEPENDENCE, 1810-18
Aristocratic Chileans began considering independence only when the authority and legitimacy of the crown were cast in doubt by Napoleon Bonaparte's invasion of Spain in 1807. Napoleon replaced the Spanish king with his brother, Joseph Bonaparte. On the peninsula, Spanish loyalists formed juntas that claimed they would govern both the motherland and the colonies until the rightful king was restored. Thus, Chileans, like other Spanish Americans, had to confront the dilemma of who was in charge in the absence of the divine monarch: the French pretender to the throne, the Spanish rebels, or local leaders. The latter option was tried on September 18, 1810, a date whose anniversary is celebrated as Chile's independence day. On that day, the criollo leaders of Santiago, employing the town council as a junta, announced their intention to govern the colony until the king was reinstated. They swore loyalty to the ousted monarch, Ferdinand VII, but insisted that they had as much right to rule in the meantime as did subjects of the crown in Spain itself. They immediately opened the ports to all traders.
Chile's first experiment with self-government, the Old Fatherland (Patria Vieja, 1810-14), was led by José Miguel Carrera Verdugo (president, 1812-13), an aristocrat in his mid-twenties. The military-educated Carrera was a heavy-handed ruler who aroused widespread opposition. One of the earliest advocates of full independence, Bernardo O'Higgins Riquelme, captained a rival faction that plunged the criollos into civil war. For him and for certain other members of the Chilean elite, the initiative for temporary self-rule quickly escalated into a campaign for permanent independence, although other criollos remained loyal to Spain. Among those favoring independence, conservatives fought with liberals over the degree to which French revolutionary ideas would be incorporated into the movement. After several efforts, Spanish troops from Peru took advantage of the internecine strife to reconquer Chile in 1814, when they reasserted control by winning the Battle of Rancagua on October 12. O'Higgins and many of the Chilean rebels escaped to Argentina.
During the Reconquest (La Reconquista) of 1814-17, the harsh rule of the Spanish loyalists, who punished suspected rebels, drove more Chileans into the insurrectionary camp. More and more members of the Chilean elite were becoming convinced of the necessity of full independence, regardless of who sat on the throne of Spain. As the leader of guerrilla raids against the Spaniards, Manuel Rodríguez became a national symbol of resistance.
When criollos sang the praises of equality and freedom, however, they meant equal treatment for themselves in relation to the peninsulares and liberation from Spanish rule, not equality or freedom for the masses of Chileans. The criollos wanted to assume leadership positions previously controlled by peninsulares without upsetting the existing social and economic order. In that sense, the struggle for independence was a war within the upper class, although the majority of troops on both sides consisted of conscripted mestizos and native Americans.
In exile in Argentina, O'Higgins joined forces with José de San Martín, whose army freed Chile with a daring assault over the Andes in 1817, defeating the Spaniards at the Battle of Chacabuco on February 12. San Martín considered the liberation of Chile a strategic stepping-stone to the emancipation of Peru, which he saw as the key to hemispheric victory over the Spanish. Chile won its formal independence when San Martín defeated the last large Spanish force on Chilean soil at the Battle of Maipú on April 5, 1818. San Martín then led his Argentine and Chilean followers north to liberate Peru; and fighting continued in Chile's southern provinces, the bastion of the royalists, until 1826 (see Genesis of the Armed Forces, 1814-36 , ch. 5).
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CIVIL WARS, 1818-30
From 1817 to 1823, Bernardo O'Higgins ruled Chile as supreme director (president). He won plaudits for defeating royalists and founding schools, but civil strife continued. O'Higgins alienated liberals and provincials with his authoritarianism, conservatives and the church with his anticlericalism, and landowners with his proposed reforms of the land tenure system. His attempt to devise a constitution in 1818 that would legitimize his government failed, as did his effort to generate stable funding for the new administration. O'Higgins's dictatorial behavior aroused resistance in the provinces. This growing discontent was reflected in the continuing opposition of partisans of Carrera, who was executed by the Argentine regime in Mendoza in 1821, like his two brothers were three years earlier.
Although opposed by many liberals, O'Higgins angered the Roman Catholic Church with his liberal beliefs. He maintained Catholicism's status as the official state religion but tried to curb the church's political powers and to encourage religious tolerance as a means of attracting Protestant immigrants and traders. Like the church, the landed aristocracy felt threatened by O'Higgins, resenting his attempts to eliminate noble titles and, more important, to eliminate entailed estates.
O'Higgins's opponents also disapproved of his diversion of Chilean resources to aid San Martín's liberation of Peru. O'Higgins insisted on supporting that campaign because he realized that Chilean independence would not be secure until the Spaniards were routed from the Andean core of the empire. However, amid mounting discontent, troops from the northern and southern provinces forced O'Higgins to resign. Embittered, O'Higgins departed for Peru, where he died in 1842.
After O'Higgins went into exile in 1823, civil conflict continued, focusing mainly on the issues of anticlericalism and regionalism. Presidents and constitutions rose and fell quickly in the 1820s. The civil struggle's harmful effects on the economy, and particularly on exports, prompted conservatives to seize national control in 1830.
In the minds of most members of the Chilean elite, the bloodshed and chaos of the late 1820s were attributable to the shortcomings of liberalism and federalism, which had been dominant over conservatism for most of the period. The abolition of slavery in 1823--long before most other countries in the Americas--was considered one of the liberals' few lasting achievements. One liberal leader from the south, Ramón Freire Serrano, rode in and out of the presidency several times (1823-27, 1828, 1829, 1830) but could not sustain his authority. From May 1827 to September 1831, with the exception of brief interventions by Freire, the presidency was occupied by Francisco Antonio Pinto Díaz, Freire's former vice president. In August 1828, Pinto's first year in office, Chile abandoned its short-lived federalist system for a unitary form of government, with separate legislative, executive, and judicial branches. By adopting a moderately liberal constitution in 1828, Pinto alienated both the federalists and the liberal factions. He also angered the old aristocracy by abolishing estates inherited by primogeniture ( mayorazgo--see Glossary) and caused a public uproar with his anticlericalism. After the defeat of his liberal army at the Battle of Lircay on April 17, 1830, Freire, like O'Higgins, went into exile in Peru.
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ARISTOCRATIC REPUBLICANISM, 1830-91
Scholars have long pondered why Chile was the first country in Latin America to achieve stable civilian rule in a constitutional, electoral, representative republic. They have also asked why Chile was more successful at constitutional government thereafter than its neighbors. One part of the answer is that Chile had fewer obstacles to overcome because it was less disturbed by regional, church-state, and ethnic conflicts. The geographically compact and relatively homogeneous population was easier to manage than the far-flung groups residing in many of the other new states of the hemisphere. As the nineteenth century wore on, slow settlement of the frontiers to the north and south provided a safety valve without creating a challenge to the dominance of the Central Valley.
As with regionalism, the church issue that rent many of the new republics was also muted in Chile, where the Catholic Church had never been very wealthy or powerful. Some historians would also argue that Chilean criollos, because they lived on the fringe of the empire, had more experience at self-government during the colonial period. In addition, the Chilean elite was less fearful than many other Spanish Americans that limited democracy would open the door to uprisings by massive native or black subject classes. At the same time, the ruling class was cohesive and confident, its members connected by familial and business networks. The elite was powerful partly because it controlled the main exports, until foreigners took over trade late in the nineteenth century. The rapid recovery of the export economy from the devastation of the wars of independence also helped, as economic and political success and stability became mutually reinforcing. Capitalizing on these advantages, however, would require shrewd and ruthless political engineers, victory in a war against Chile's neighbors, continued economic growth, and some luck in the design, timing, and sequence of political change.
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The Conservative Era, 1830-61
Members of the first political parties, the Conservatives (pelucones, or bigwigs) and the Liberals (pipiolos, or novices), began to coalesce around the church-state issue. Not only more favorably inclined toward the church, the Conservatives were also more sympathetic than the Liberals toward the colonial legacy, authoritarian government, the supremacy of executive powers, and a unitary state. After their victory at the Battle of Lircay, the Conservatives took charge, spearheaded by a Valparaíso merchant, Diego Portales Palazuelos.
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The Portalian State, 1830-37
Although never president, Portales dominated Chilean politics from the cabinet and behind the scenes from 1830 to 1837. He installed the "autocratic republic," which centralized authority in the national government. His political program enjoyed support from merchants, large landowners, foreign capitalists, the church, and the military. Political and economic stability reinforced each other, as Portales encouraged economic growth through free trade and put government finances in order.
Portales was an agnostic who said that he believed in the clergy but not in God. He realized the importance of the Roman Catholic Church as a bastion of loyalty, legitimacy, social control, and stability, as had been the case in the colonial period. He repealed Liberal reforms that had threatened church privileges and properties.
Portales brought the military under civilian control by rewarding loyal generals, cashiering troublemakers, and promoting a victorious war against the Peru-Bolivia Confederation (1836-39). After defeating Peru and Bolivia, Chile dominated the Pacific Coast of South America. The victory over its neighbors gave Chile and its new political system a psychological boost. Chileans experienced a surge of national enthusiasm and cohesion behind a regime accepted as legitimate and efficacious.
Portales also achieved his objectives by wielding dictatorial powers, censoring the press, and manipulating elections. For the next forty years, Chile's armed forces would be distracted from meddling in politics by skirmishes and defensive operations on the southern frontier, although some units got embroiled in domestic conflicts in 1851 and 1859. In later years, conservative Chileans canonized Portales as a symbol of order and progress, exaggerating the importance of one man in that achievement.
The "Portalian State" was institutionalized by the 1833 constitution. One of the most durable charters ever devised in Latin America, the Portalian constitution lasted until 1925. The constitution concentrated authority in the national government, more precisely, in the hands of the president, who was elected by a tiny minority. The chief executive could serve two consecutive five-year terms and then pick a successor. Although the Congress had significant budgetary powers, it was overshadowed by the president, who appointed provincial officials. The constitution also created an independent judiciary, guaranteed inheritance of estates by primogeniture, and installed Catholicism as the state religion. In short, it established an autocratic system under a republican veneer.
The first Portalian president was General Joaquín Prieto Vial, who served two terms (1831-36, 1836-41). President Prieto had four main accomplishments: implementation of the 1833 constitution, stabilization of government finances, defeat of provincial challenges to central authority, and victory over the Peru-Bolivia Confederation. During the presidencies of Prieto and his two successors, Chile modernized through the construction of ports, railroads, and telegraph lines, some built by United States entrepreneur William Wheelwright. These innovations facilitated the export-import trade as well as domestic commerce.
Prieto and his adviser, Portales, feared the efforts of Bolivian general Andrés de Santa Cruz y Calahumana to unite with Peru against Chile. These qualms exacerbated animosities toward Peru dating from the colonial period, now intensified by disputes over customs duties and loans. Chile also wanted to become the dominant South American military and commercial power along the Pacific. Portales got Congress to declare war on Peru in 1836. When a Chilean colonel who opposed the war killed Portales in 1837, this act and the suspicion that Peruvians were involved in the assassination plot inspired an even greater war effort by the government.
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Two Conservative Presidencies, 1841-61
Chile defeated the Peruvian fleet at Casma on January 12, 1839, and the Bolivian army at Yungay, Peru, on January 20. These Chilean victories destroyed the Peru-Bolivia Confederation, made Chile lord of the west coast, brought unity and patriotism to the Chilean elites, and gave Chile's armed forces pride and purpose as a military with an external mission. The successful war also helped convince the European powers and the United States to respect Chile's coastal sphere of influence. Subsequently, the country won additional respect from the European powers and the United States by giving them economic access and concessions, by treating their citizens well, and by generally playing them off against each other.
Since its inception, the Portalian State has been criticized for its authoritarianism. But it has also been praised for the stability, prosperity, and international victories it brought to Chile, as well as the gradual opening to increased democracy that it provided. At least in comparison with most other regimes of the era, the Portalian State was noteworthy for being dominated by constitutional civilian authorities. Although Portales deserves some credit for launching the system, his successors were the ones who truly implemented, institutionalized, legitimized, and consolidated it. From 1831 to 1861, no other country in Spanish America had such a regular and constitutional succession of chief executives.
Manuel Bulnes Prieto (president, 1841-51), hero of the victories over the Chilean Liberals at the Battle of Lircay in 1830, and over the Bolivian army at Yungay in 1839, became president in 1841. As a decorated general, he was the ideal choice to consolidate the Portalian State and establish presidential control over the armed forces. He reduced the size of the military and solidified its loyalty to the central government in the face of provincial uprisings. As a southerner, he was able to defuse regional resentment of the dominant Santiago area. Although Bulnes staffed his two administrations mainly with Conservatives, he conciliated his opponents by including a few Liberals. He strengthened the new political institutions, especially Congress and the judiciary, and gave legitimacy to the constitution by stepping down at the end of his second term in office. Placing the national interest above regional or military loyalties, he also helped snuff out a southern rebellion against his successor.
Intellectual life blossomed under Bulnes, thanks in part to the many exiles who came to Chile from less stable Spanish American republics. They clustered around the University of Chile (founded in 1842), which developed into one of the most prestigious educational institutions in Latin America. Both foreigners and nationals formed the "Generation of 1842," led mainly by liberal intellectuals and politicians such as Francisco Bilbao Barguin and José Victorino Lastarria Santander. Through the Society of Equality, members of the group called for expanded democracy and reduced church prerogatives. In particular, they defended civil liberties and freedom of the press, seeking to constrain the government's authoritarian powers.
Bulnes presided over continued prosperity, as production from the farms and mines increased, both for external and for internal consumption. In response to foreign demand, especially for wheat during the California and Australia gold rushes, agricultural exports increased. Instead of importing scarce and expensive modern capital and technology, landowners expanded production. They did this primarily by enlarging their estates and absorbing more peasants into their work forces, especially in the central provinces, where the vast majority of Chileans toiled in agriculture. This expansion fortified the hacienda system and increased the numbers of people attached to it. The growth of the great estates also increased the political power of the landed elites, who succeeded in exercising a veto over agrarian reform for a century.
In the mid-1800s, the rural labor force, mainly mestizos, was a cheap and expanding source of labor. More and more of these laborers became tenant farmers (inquilinos). For a century thereafter, many workers would remain bound to the haciendas through tradition, lack of alternatives, and landowner collusion and coercion. Itinerant rural workers and even small landowners became increasingly dependent on the great estates, whether through part-time or full-time work. The landed elites also inhibited industrialization by their preference for free trade and the low wages they paid their workers, which hindered rural consumers from accumulating disposable income. For a century, the lack of any significant challenge to this exploitive system was one of the pillars of the social and political hierarchy.
Liberals and regionalists unsuccessfully took up arms against Bulnes's conservative successor, Manuel Montt Torres (president, 1851-61). Thousands died in one of the few large civil wars in nineteenth-century Chile. The rebels of 1851 denounced Montt's election as a fraud perpetrated by the centralist forces in and around Santiago. Some entrepreneurs in the outlying provinces also backed the rebellion out of anger at the government's neglect of economic interests outside the sphere of the central landowning elites. Montt put down the uprising with help from British commercial ships.
From 1851 to 1861, Montt completed the construction of the durable constitutional order begun by Portales and Bulnes. By reducing church prerogatives, Montt eased the transition from a sequence of Conservative chief executives to a series of Liberals. As a civilian head of state, he was less harsh with his liberal adversaries. He also promoted conciliation by including many northerners as well as southerners in the government.
Benefiting from the sharp growth in exports and customs revenues in the 1850s, Montt demonstrated the efficacy of the central government by supporting the establishment of railroads, a telegraph system, and banks. He created the first government-run railroad company in South America, despite his belief in laissezfaire . He also initiated the extension of government credit to propertied groups. Under President Montt, school construction accelerated, laying the groundwork for Chile to become one of the most literate nations in the hemisphere. Expanding on the initiative started by Bulnes, Montt also pushed back the southern frontier, in part by encouraging German immigration.
As the next presidential succession approached, a second rebellion ensued in 1859. The rebels represented a diverse alliance, including Liberals who opposed the right-wing government and its encroachments on civil liberties, Conservatives who believed the president was insufficiently proclerical, politicians who feared the selection of a strongman as Montt's successor, and regionalists who chafed at the concentration of power in Santiago. Once again, Montt prevailed in a test of arms, but thereafter he conciliated his opponents by nominating a successor acceptable to all sides, José Joaquín Pérez Mascayano (president, 1861-71).
Under Bulnes and Montt, economic elites had resisted paying direct taxes, so the national government had become heavily dependent on customs duties, particularly on mineral exports. Imports were also taxed at a low level. The most important exports in the early years of independence had been silver and copper, mined mainly in the northern provinces, along with wheat, tallow, and other farm produce. The Chilean elites eagerly welcomed European and North American ships and merchants. Although these elites debated the issue of protectionism, they settled on low tariffs for revenue. Despite some dissent and deviations, the dominant policy in the nineteenth century was free trade--the exchange of raw materials for manufactured items, although a few local industries took root. Britain quickly became Chile's primary trading partner. The British also invested, both directly and indirectly, in the Chilean economy.
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The Liberal Era, 1861-91
Following Pérez's peaceful ten-year administration, Chilean presidents were prohibited from running for election to a second consecutive term by an 1871 amendment to the constitution. Pérez was succeeded as president by Federico Errázuriz Zañartu (1871-76), Aníbal Pinto Garmendia (1876-81), and Domingo Santa María González (1881-86), the latter two serving during the War of the Pacific (1879-83). All formed coalition governments in which the president juggled a complicated array of party components.
The Liberal Party (Partido Liberal--PL), the Conservative Party (Partido Conservador--PC), and the National Party (Partido Nacional--PN) were formed in 1857. Once the Liberal Party replaced the Conservative Party as the dominant party, the Liberal Party was in turn challenged from the left by the more fervent reformists of the Radical Party (Partido Radical--PR). A spin-off from the Liberal Party, the Radical Party was founded in 1861. Reformists of the Democrat Party (Partido Demócrata), which in turn splintered from the Radical Party in 1887, also challenged the Liberal Party. The National Party also vied with the Conservatives and Liberals to represent upper-class interests. Derived from the Montt presidency, the National Party took a less proclerical, more centrist position than that of the Conservatives. Party competition escalated after the electoral reform of 1874 extended the franchise to all literate adult males, effectively removing property qualifications.
Like Montt, most Liberal chief executives were centrists who introduced change gradually. Their administrations continued to make incremental cuts in church privileges but tried not to inflame that issue. Secularization gradually gained ground in education, and Santa María transferred from the church to the state the management birth, marriage, and death records.
Even during internal and external conflicts, Chile continued to prosper. When Spain attempted to reconquer Peru, Chile engaged in a coastal war (1864-66) with the Spaniards, whose warships shelled Valparaíso. Once again, Chile asserted its sway over the west coast of South America. Farming, mining, and commerce grew steadily until the world depression of the 1870s, when Chile again turned to a war against its Andean neighbors.
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War of the Pacific, 1879-83
Chile's borders were a matter of contention throughout the nineteenth century. The War of the Pacific began on the heels of an international economic recession that focused attention on resources in outlying zones. Under an 1866 treaty, Chile and Bolivia divided the disputed area encompassing the Atacama Desert at 24° south latitude (located just south of the port of Antofagasta) in the understanding that the nationals of both nations could freely exploit mineral deposits in the region. Both nations, however, would share equally all the revenue generated by mining activities in the region. But Bolivia soon repudiated the treaty, and its subsequent levying of taxes on a Chilean company operating in the area led to an arms race between Chile and its northern neighbors of Bolivia and Peru.
Fighting broke out when Chilean entrepreneurs and mine-owners in present-day Tarapacá Region and Antofagasta Region, then belonging to Peru and Bolivia, respectively, resisted new taxes, the formation of monopoly companies, and other impositions. In those provinces, most of the deposits of nitrate--a valuable ingredient in fertilizers and explosives--were owned and mined by Chileans and Europeans, in particular the British. Chile wanted not only to acquire the nitrate fields but also to weaken Peru and Bolivia in order to strengthen its own strategic preeminence on the Pacific Coast. Hostilities were exacerbated because of disagreements over boundary lines, which in the desert had always been vague. Chile and Bolivia accused each other of violating the 1866 treaty. Although Chile expanded northward as a result of the War of the Pacific, its rights to the conquered territory continued to be questioned by Peru, and especially by Bolivia, throughout the twentieth century.
War began when Chilean troops crossed the northern frontier in 1879. Although a mutual defense pact had allied Peru and Bolivia since 1873, Chile's more professional, less politicized military overwhelmed the two weaker countries on land and sea. The turning point of the war was the occupation of Lima on January 17, 1881, a humiliation the Peruvians never forgave (see War of the Pacific, 1879-83 , ch. 5). Chile sealed its victory with the 1883 Treaty of Ancón, which also ended the Chilean occupation of Lima.
As a result of the war and the Treaty of Ancón, Chile acquired two northern provinces--Tarapacá from Peru and Antofagasta from Bolivia. These territories encompassed most of the Atacama Desert and blocked off Bolivia's outlet to the Pacific Ocean (see fig. 3). The war gave Chile control over nitrate exports, which would dominate the national economy until the 1920s, possession of copper deposits that would eclipse nitrate exports by the 1930s, greatpower status along the entire Pacific Coast of South America, and an enduring symbol of patriotic pride in the person of naval hero Arturo Prat Chacón. The War of the Pacific also bestowed on the Chilean armed forces enhanced respect, the prospect of steadily increasing force levels, and a long-term external mission guarding the borders with Peru, Bolivia, and Argentina. In 1885 a German military officer, Emil Körner, was contracted to upgrade and professionalize the armed forces along Prussian lines. In subsequent years, better education produced not only a more modern officer corps but also a military leadership capable of questioning civilian management of national development (see Development of the Armed Forces , ch. 5).
After battling the Peruvians and Bolivians in the north, the military turned to engaging the Araucanians in the south. The final defeat of the Mapuche in 1882 opened up the southern third of the national territory to wealthy Chileans who quickly carved out immense estates. No homestead act or legion of family farmers stood in their way, although a few middle-class and immigrant agriculturalists moved in. Some Mapuche fled over the border to Argentina. The army herded those who remained onto tribal reservations in 1884, where they would remain mired in poverty for generations. Like the far north, these southern provinces would become stalwarts of national reform movements, critical of the excessive concentration of power and wealth in and around Santiago.
Soon controlled by British and then by United States investors, the nitrate fields became a classic |
