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

In spite of what Allende said, the evidence would seem to make it doubtful that there ever existed any coordinated effort to deny Chile credit, except in a very general sense that the capitatjst wortd was, not surprisingly, far from supportive of the Allende regime's objectives. As Paul Sigmund concluded in his article, "The Invisible Blockade and the Overthrow of Allende:" ...there appears to be no substantial evidence in the ITI papers or hearings of an effort by the government or by private companies or banks to create an economic crisis to prevent Allende from coming to power in 1970.(57) In the first place, it was not until over one year after Allende's election that Nixon issued his formal pOlicy statement in January, 1972 that "unless there were 'major factors' to thé contrary, the United States would not itself extend new bilateral economic benefits and would oppose multilateral loans to countries expropriating significant United States inte– rests without taking 'reasonable steps' toward compensation."(58) As for pressure to stop International Monetary Fund loans, in April, 1972 Allende turned down a stand-by credit from that financial institution because he felt that the terms of the agreement involved an unacceptable level of intervention in the country's internal affairs. The Fund, jt seems, wanted Allende to impose greater control on public spending.(59) In terms of the Inter– American Development Bank, the United States controlled only 40 percent of the votes, not a majority, and could not simply impose its wishes arbitrarify. Further $54 mili ion from earlier loans was disbursed by the Bank during Allende's first two hears in office.(60) Over the past 25 years, the Wortd Bank had issued almost 250 millíon dollars in assistance to Chile, but in February, 1971 it issued a warning with regard to Allende's economic pOlicies sayíng that there was "an element of uncertainty in the short-run econo– mic outlook" and that "the basic critería of rationality and efficacy apply to socialist as well as capitalist oriented economies."(61) Nevertheless, between July, 1970 and June, 1973, the World Bank sent slightly morethan $46 million to Chile; while the International Monetary Fund during the same period sent loans to Chile totaling $82.3 milJion to help compensate for the drop in the world price of copper. Although short-term lines of credit to Chile from American banks had dropped from $219 million to $32 million by November, 1972, this was not the result "of a coordinated strategy but of many individual responses to an increasingly cloudy economic outlook in Chile."(62) It is true that the costumary sources of external aid for Chile from the capitalist nations did not pledge oontinuing foreign assistance on an unconditional basis. However, even though lines of credit to Chile were reduced by western countries, it was certainly not true that the lines of credit had been "abruptly" cut off.(63) Further, even though credit to Chile from capitalist nations was reduced during Allende's three years in office, it was increased dramatica/ly from socialist countries and many other nations that were sympathetic to Allende's efforts at installing a socialist regime. As of March, 1973, the Allende regime had (57)Paul Sigmund. "The Invisible Blockade and Ihe Overthrow 01 Allende", Foreign Affaírs (January, 1974), p. 324. (58)lbid.• p. 325. (59)Bolsa Review, VI (April, 1972), p. 215. (60)Sigmund. "The Invisible Blockade", p. 327. In January, 1971 lhe Inler-American Oevelopment Bank also approved loans to Chile 01 Over 11.6 millíon dollars. (61 )Ibid. (62)lbid., pp. 329-333. The Chase Manhattan's representalivetestified that "Ihe Chileans made an honest effortto pay American banks in the )lear or so following the eleclion" but a deteriorating economic siluation forced the reduclion of credits between the first and last Quarter 011971 from 31.9 million to 5 million. Manufacturers Hanover said tha!. "We cancelled lines or withdrew little by litlle over a períod of ayear and a hal!." (63)ln hís speech before the United Nations on December 4, 1972, Allende said: "Until my government took office, Chile received a new inflow 01 reSOurces of approximately 30 million dollars per year in the lorm of loans granted by international linance organizations such as Ihe World Bank and the Inter-American Development Bank. This source 01 finance has now been cut off a!::lrup)ly." 192