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

indication 01 his determination to bypass the legislature in carrying out the Popular Unity program, and Irom the time 01 the adoption 01 the amendment onward, the Christian Democrats began to cooperate with the rightist parties in opposing the executíve. One method was to impeach ministers lor violation or (more often) nonenlorcement 01 the law. The lirst 01 many such impeachments took place ín January 1972. Another method was to ~resent a u~ited electoral fro~t against the government.lnlormal cooperatíon between the nghtlst partles and the Christian Democrats led to striking victories in two by-elections in January 1972, and a month later these groups formed the Democratic Conlederation (Confederación Democrática- CODE) to prepare joint lists for the 1973 congressional electlons. A thlrd area of cooperatíon was in marches and demonstrations against the government, the most famous 01 which wasthe March of Empty Pots in December 1971, in which thousands 01 housewives, mostly 01 middle-class background, marched, banging pots to protest lood shortages. . . Those shortages had developed because the predicted economic difficulties resulling Irom the Vuskovic policy began to emerge in late 1971. The balance-of-payments surplus had been depleted al such an alarmíng rale (in 1971 Ihere was a delicil 01 $ 315 million, while in 1970 there had been a surplus 01 $ 91 million) thal in November 1971 the Allende ,government callad a moralorium on payment 01 ils foreign debts. Chilehad already experienced dillicullies in securing loans from the Inter-American Development Bank, the World Bank ánd the Export-Import Bank as a result 01 its failure to compensate the Anaconda and Kennecott copper companies lor Ihe nationalization of their major mines.. The debt moratorium was bound to make it considerably more difficult for Chile lo secure foreign credits, particularly for the short term.(9) In December 1971, the Chilear'l govern– ment finally permitted a partiai devaluatíon of the Chilean escudo so as to decrease the distortions created by its overvaluation, but Ihis created pressure on prices 01 goods manufactured with imported components. Shortages of certain fooe! items --especially cooking oil, detergents, sugar,toothpaste, and cigarettes- were ascribed by the govern– ment to upper-class hording and lO increased consumption by low-income groups; howe– ver, the dislocations in the counlryside associated wilh Ihe very rapid expansion of the agrarian reform (Allende took over almost as much land ín his first year in office as Frei had in six years) clearly had something to do with the prQblem as well, and the situation could be expected to get worse with Ihe harvest in early 1972. A 100-percent increase in the money supply as a result of the governmenl's deficít spending was also beginníng to produce inflationary pressures now that the unused capacity 01 Chílean industry had been taken up by the 1971 expansiono Mosl importan!. a sharp drop in in\festment (Allende said it had declined by 7.7 percent, but opposition economists claimed ít had lallen by 24.2 percent) meant Ihat the spectacular growth rate achieved in 1971 would be sharply reduced in 1972. . . . Yet the degree of Ihe incipient crisis Was not ímmediately evident lrom the figures for' 1971. Industrial growth had reached 8.3 percent, agrarian production (based on planlings before Allende's accession to power) had increased by 5.3 percent, and uhemployment had dropped to record lows. The Communist Party in a report to a Popular Unity "cónclave" in early 1972 warned that "very stróng inflationary pressures could make our situation acute", but the government took no aclion to deal wilh the problem. Thé continuing optimism of government policymakers at Ihis time was expressed al. a Round Table in Santiago sponsored by the University of Sussex and.the'Chilean Planning Office in Marcb 1972, In Ihe course of discussíon Radomiro Tomi¿, the deleated Christian Democratic presidenlial candidate, asserted Ihat the Allende government had committed a "fatal political error" in failing to establish ah "institutional majoríty" in the Congress through a "far-reaching agreement between socialists inspíredby Christianity and those inspired by Marxism -that is, between the Christian Democrats and Popular Unity- in the periad (9)On Ihe inacctJracy 01 Ihe lerm "invisible blockade" lo describe the,Allende government's credil problems, see Paul E: Sigmund, "The 'Invisible Blockade' and Ihe Overthrowof Allende," Foreign Affairs (New York), January 1974, pp,322-40 . , , ..", . . Editor,s Nole: This article by Professor SlgmtJnd IS reproduced In Part Two of Ihis book, 26