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

received from the USSR, Eastern Europe, Communist China, Western Europe, Japan and Latin America-an amount which totalled nearly $950 million during the same período Moreover, this shift in Chile's sources oftrade credits and aid was not a reaction to U.S. policy, but the intended result ofthe Allende Government's foreign economic policy which aimed at a "more intensive diversíficatíon of trade and aid relations."(7) Chile made a succesful effort to strengthen its economic relations with the socialist World, Latin America, and the capital ist countries-with the exception of the United States. Allende's Government was convinced that Chile was far too dependent on U.S. aid and trade and thus favored a weakening of economic ties.(8) It was, of course, politicatly convenient for Allende to pretend that Chile was being "strangled" or "blockaded" economically by "U.S. imperialism," butthere is no reason why his word should be taken al face value when contrary evidence is available. The facts show that Allende not only was not "strangled" economically, but received almost $1 billion in trade and aid credits from far more diversified sources of supply than previous Chilean Governments. It has been alleged that U.S. commercial banks were also involved in concerted efforts to "strángle" the Chilean economy and provoke a mililary coup. How the individual loan decisions of hundreds of prívate American banks were controlled and coordinated by the U.S. Government, or others, to disrupt the Chilean economy is never explained by those who make such sweeping and farfetched charges. There was, of course, no campaign by private American banks against the Allende regime, and this was confirmed by Senator Frank Church's ITT hearings(9) in April 1973. Many American and European private banks moved to reduce their éxposure in Chile soon alter (and some, like Chase Manhattan Bank, before) Allende was elected Presi– dent.(1 O) As economic conditions in Chile deteriorated, there was a reduction or halting of further credits to Chile. Private foreign banks decided that the falling foreign exchange reserves, and accelerating inflation made the Allende Government and private sector borrowers poor credit risks. The November 1971 moratori um on payments to the Export– Import Bank and U.S Government agencies declared by Allende was hardly designed to enhance the credit standing of Chile. Oespite the deepening economic crisis from 1972 onwards, however, a few American banks, such as the Bank of America, continued to extend some credits to Chile as late as 1973. As for the Allende Government, official spokesmen in 1971 and 1972 commented favorably on the cooperative attitude of Ameri– can private banks in reaching understandings about the nationalization of U.S. banks and in helping to refinance Chile's external public debt.(11) Critics 01 U.S. policytend to emphasize the reduction in development aid authorization by the U.S. Government and multilateral lending agencies as evidence 01 hostile and disruptive actions against the Allende regime. But it is the flow 01 loan disbursements, not authorizations, that have the immediate balance-of-payments impact. While U.S. Govern– ment and multilateral aid disbursements declined in 1971-73 by about $300 miJlion compared with three prior years (1968-70), there was no suspension 01 disbursements, and Chile received an inllow 01 U.S. official and multilateral capital 01 ábout $140 million in 1971-72. Thus, a review 01 the available statistics shows that the decline in U.S. Government (AIO and Export-Import Bank) and multilateral aid (IBRO and 10B) authori.zations for the Allende regime was more than olfset by the increase in development and trade credits from (7)See the interview 01 Ernesto Torrealba Morales -Executive Secretary 01 the Advisory Committee on Foreign Economic Relations 01 lhe Ministry 01 Foreign Relations- in Ercilla (Santiago, 28 Feb. 6 March, 1973) which outlines Chile's trade and aid strategy. (8)Ibíd. (9)Mulrinaríonal Corporaríons and Uníted Srares Fareígn Paliey, Hearings before Ihe Subcommiltee on Multina– lional Corporations 01 the Senate Committee on Foreign Relations. 93rd Congress, Part 1, March-April, 1973. (10)Ibíd, pp. 366·7 (11)UPI (Santiago) August 15, 1971 and UPI (Washington) June 14. 1972. 158