Chile: the balanced view : a recopilation of articles about the Allende years and after

available (seríous doubts about Chile's likelihood or capacity for repayment) and illegiti– mate ones (economic warfare in defense of prívate corporations or in order to promote a military coup). While no finally conclusive, a revíew of the policies of various institutíons duríng this period may be helpful in making this assessment. IV In January 1971, The Inter-American Development Bank approved two loans to Chile, $7 million for the Catholic University in Santíago and $4.6 mili ion for the Uniyersidad Austral in Valdivia. These were the last lOa loans made to Chile during the Allende administration, although according to figures published in the Senate ITT hearings, $54 million from earlier loans was also disbursed by the Bank between Oecember 1970 and Oecember 1972.(4) Loan proposals submitted by earlier Chilean administrations for a $30 million petroct¡emical complex and for electric power and natural gas projects were "under study" throughout the period, but never came up before the 10B board for a vote. The Allende government also submitted proposals foreducationalloans to the Catholic Univer– sity of Val paraíso and the Universidad del Norte, and these prpposals too were never acted' on. It appears almost certain that U.S. influence was exercised to delay the submission of Chilean projects to the Bank board, on which the United States controlled 40 percent ofthe votes, sufficíent to block approval at least of the university loans under Bank rules requiring a two-thirds affirmative vote for this lending category. On the other hand, non U.S. Bank officíals now assert that by the time of the.coup the two uníversíty projects were well on the way to being financed by the Bank using Norwegian resources, and that very substantial politica!' pressures from member-nations were building up for some kind of loan to Chile before the IJext annual meeting of the 10B, scheduled for Santiago in early 1974. What the U.S. position would have been by that time can only be speculated. What is not true, however, or at least is misleading, is the report carried by The New York Times and other newspapers that following the September 1973 coup the Bank promptly approved $65 million worth of new loans, a move which would have lent weight to the charge of a prompt and decisive U.S. policy reversal; it appears from Bank sources that the $65 míllion figure was based only on tentatíve budget planning for 1974, and at thís writing no new 10B loans to the military government have been approved. Turning to the World Bank, it sent several missions to Chile in early 1971 to review projects which were under consideratíon. Chile had IDeen the first recipient of a World Bank loan shortly after that institution's establishment and in 25 years had received approxima– tely $250 mili ion in World Bank assistance. In February 1971, at the annual country review conducted by the Inter-American Committee of the Alliance for Progress (CIAP) the Wotld Bank representative noted that there was "an element of uncertainty in the short-run economic outlook" and warned that "the basic criteria of rationality and efficacy apply to social ist as well as capitalist oriented economies." The issue of economic rational ity was relevant to the Bank's consideration of a pending loan for electric power; when the Allende government, concerned to keep the inflation rate down, rejected Bank advice to raise its rates for electricity, the Bank dropped further consíderation of this loan. Consideration of the second stage of a cattle breeding program was postponed in April 1971, when it was díscovered that there were sufficient funds in an earl ier loan to last at least another year. This left only a fruít and víneyard development project on the Chile docket, and this project moved rapidly through the preparatíon and appraisal stages so that by September it was nearly ready to be considered by the Bank's board of directors. In the íntervening period, however, the Chilean Congress had natíonalízed the copper mines, and in late September Chile was notified that although work on the loan was nearly completed there were questioris concerning both Chile's credit-worthiness and the pen- (4)Hearings. p. 533. Overlhe same period Chile's paymenls lo the IDB for interes! and amortiza!ion on past loans totalled $44 million. 114