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

debt payments due in 1973 would be renegotiated at the end of 1972. (The 1973 debts were still being renegotiated at the time of Allende's overthrow, and no payments were made to any debtors in 1973 pending successful conclusion of the negotiations. No payments at all were made to the United States after November 1971, since Chilean and U.S. negotiators could not arrive at the bilateral agreement called for by the April1972 meeting.) Chile also agreed in Paris to accept "the principies of payment of a just compensation for all nationalizations in conformity with Chilean and international law," a formula which left a good deal of leeway for divergent interpretation in the copper dispute, In addition, and of great significance in assessing the practical consequE1nces of U,S, actions, Chile also had surprising success in securing loans from countries other than the United States-and these were by no means restricted to the Soviet Union, Eastern Europe and China, In November 1972 Finance Minister Millas reported that Chile had obtained short-term credits amounting to $250 mil/ion from Canada, Argentina, Mexico, Australia and Western Europe and $103 mili ion from the U.S,S,R. He also mentioned $446 million in long-term loans from the U,S.S,R., Eastern Europe and China as wel/ as $70 million in long-term loansfrom other Latin American countries, and unspecified amounts "of greaf importance" from Western European countries, The Chilean government publicatíon, Chile Economic News, listed a total of over $200 millíon in loans and credits from Great Britain, Spain, France, Holland, Belgium, Sweden and Fínland during the pedod between Novem– ber 1971 and December 1972, Even allowing for some overlap in these figures, ít thu~ appears that the principal result of the half-hearted American effort to put pressure on the Chileans to persuade them to come to terms with the copper companies was a considera– ble increase in alternative sources of loans and credit to Chile, which more than counterba– lanced reductions from U,S, and U,S, influenced sources, Why were so many countries wi lIing to loan Chile money? Although the IMF report on Chile written for the Club of Paris neg0tiations in early 1972 is confidential, reportedly it was sufficiently optimistic about Chile's economic future so that it could be used to persuade reluctant lenders, More important. most of the loans were tied to the purchase of goods in the countries concerned and thus formed part of a government policy of encouragement of exports, Final/y, as one banker put it in an interview with a reporter for the North American Congress for Latin Ameríca, "Chileans are the world's most charming mendicants," The result of the extensive borrowing by the Allende government -much of it to finance food irnports, which rose from $165 million in 1970 to $535 million in 1972-was to increase the Chilean debt in three years from $2,4 billion to $3,4 billion-an increase which, if combined with the expenditure of foreign reserves inherited from the Frei government, substantial/y exceeds the total indebtedness incurred in the preceding si)\-year presiden– tial term.(12) In fact, on August 30, 1973, Al/ende had more short-term credíts available to him ($574 mil/ion) than at the time of his election to office ($310 million),(13) VII The argument that an American invisible blockade was responsible for or a major contríbuting factor to the overthrow of Allende ís therefore not persuasive. Certainly new American aid as wel/ as new loans from the Inter-American Development Bankand the World Bank dropped off sharply, although assistance from the IMF in 1971 and 1972 was considerable and "pipeline" aid continued from the other agencies. The termination of Export-Import Bank loans and guarantees and the gradual reduction of short-term credits from American banks also created serious problems in the flow of spare parts, which (12)Ei Mercurio (International Edition), AugusI12-19, 1973. (13)Qué Pasa (Santiago). Oclober 25, 1973. The Chilean Foreign Minister. in his speech lo Ihe Uniled Nalions on OClober 9. 1973. placed Ihe 1970 debl al $ 2,6 billion bUI agreed wilh Ihe figure of $ 3.4 billion for 1973. Since Ihe lallerfigure is described by both sourcesas Ihe projecled debtaltheend of 1973. it'may be inflaled by including in it unexpended' foreign credits ' 119