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

and halted Export-Import Bank loans -but not credit insurance or guarantees- to the Allende Government. The U.S Government also opposed development assistance to Chile in the multilateral lending agencies such as the Inter-American Oevelopment Bank (IOB) and the World Bank (IBRO). U.S. expropriation policy, set forth in President Nixon's statement on U.S. Economic Assistance and Investment Security in Deve/oping Nations of January 19, 1972, was not specifically directed against Chile, but against the rising economic nationalism that threatened American inv~stments around the world. In fact, the first application of the new policy was Iraq and not Chile. Nevertheless, Chile was the first major test of U.S. expropria– tion policy. The U.S. applied some economic leverage -and would have been derelict in its responsibilities to protect American creditors and investors if it had not- to obtain repay– ment of unpaid debts and compensation for nationalized properties, including copper properties. The U.S. Government conditioned the rescheduling of Chile's foreign debt, loans from the Export-Import Bank, U.S. bilateral aid and credits from the multilateral lending agencies on the orderly payment of debt to the U.S. Government and its agencies and the satisfactory settlement of the claims of American firrns whose properties were confiscated. This policy has been characterized as "economic reprisal", "economic aggression", or "economlc blockade" by the Allende Government and its friends abroad."They argued that it constituted a threat to Chile's self-determination and a violation of the principie ot non-intervention. Such a distorted and unrealistic concept of "self-determination" and "non-intervention, if it became widely accepted, would grant immunity to the illegal acts and the flouting of accepted international legal norms by sovereign governments. They could abridge international recognized legal rules and procedures without running any risk of penalty from suffering damages. Confiscatlon.of forelgn property without compensation raises some fundamental ques– tions about a government's economic policies, its attitudes toward the fulfillment of contrac– tual obligations and its credit-worthiness. These questions are raised not merely by the country or investors immediately affected but by other countries whose investments and contracts are potentially threatened by the same treatment. The Allende Government, and some other governments, have consistentiy refused to face these elementary facts of international life, at some cost to their people in terms of economic growth and prosperity foregone due to arbitrary and confiscatory policies. NO U.S. WAR OF ATTRITION AGAINST ALLENDE Immediately after the fall of the Allende regime, a concerted worldwide campaign was launched lo capitalize politically on the tragic end of President Salvador Allende and to distort the truth about the factors responsible for the military coup. In this campaign, all or most of the blame for the military coup d'état was placed on the U.S. Government. A frequently repeated charge is that the U.S. Government helped to bring about the fall of the Allende regime by waging a "war of economic attrition" or engaging in efforts to "politically and economically destabilize" Chile. Some of the more imaginative defenders of this thesis go so far as to claim that "the United States bears major responsibility for what happened in Chile. "(6) Why? Because U.S. policy (formed by a dark alliance between Wall Street, the U.S. Treasury, and, of course, the CIA) acíed to "economically strangle" the country. The mechanism was simple: the United States prevented Allende from obtaining foreign loans and hard currency it needed to supply the Chilean middle class with its accustomed "Iuxuries and necessities." Naturally, the Chilean middle class became angry (6)A perhaps extreme example 01 this genre 01 Allende apologetics can be lound in Laurence Birn's article "Death in Chile" in the New York Review ofBooks, November 1, 1973. 156