November 4, 2006


Chile's Driving Force: Once imprisoned by Pinochet, the new Socialist president Michelle Bachelet wants to spread the wealth initiated by the dictator's wrenching economic policies (Jonathan Kandell, November 2006, Smithsonian)

[P]inochet's despotic but economically successful legacy remains troublingly ambiguous to many Chileans. Led by young, free-market policy makers, Pinochet privatized everything from mines to factories to social security. He welcomed foreign investment and lifted trade barriers, forcing Chilean businesses to compete with imports or close down. The reforms were wrenching. At one time, a third of the labor force was unemployed. But since the mid-1980s, the economy has averaged almost 6 percent annual growth, raising per capita income for the 16 million Chileans to more than $7,000—making them among the most prosperous people in South America—and creating a thriving middle class. Today, only 18.7 percent of the population lives below the poverty line, compared, for example, with 38.7 percent in Brazil and 62.4 percent in Bolivia. At this pace, Chile, within a generation, will become Latin America's most prosperous nation.

Neighboring countries, many of which embrace populist, left-wing economic policies, tend to resent Chile's growing prosperity, rooted as it is in the policies put in place by the region's most notorious dictator. "We can't go around rubbing our neo-capitalism in the faces of other Latin Americans," says Raul Sohr, a Chilean novelist and leading center-left political commentator. "Bachelet certainly won't do that."

At home, however, neo-capitalism has taken root. The democratically elected governments that have succeeded Pinochet in Chile have barely tinkered with the economic model he ushered in. "Voters figure that the same economic policies will continue no matter who gets elected," says former economics minister Sergio de Castro, 76, who forged many of the Pinochet-era reforms. "So, if the left wants to appropriate the model we created, well that's just fine."

There's nothing ambiguous about accepting the legacy of peace and prosperity he gave you. It's just selfish not to share what works with your blighted neighbors.

Posted by Orrin Judd at November 4, 2006 9:47 PM
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