| Miracle Of Chile |
Article Index for Miracle |
Website Links For Miracle |
Information AboutMiracle Of Chile |
| CATEGORIES ABOUT MIRACLE OF CHILE | |
| economic history of chile | |
| economic booms | |
| augusto pinochet | |
| neoliberalism | |
| 1970s in chile | |
| 1980s in chile | |
|
MIRACLE OR NOT? Pinochet, under the advice of a group of Chilean Economists who had studied at the University of Chicago Department of Economics (the Chicago Boys ), implemented a set of economic reforms that included Deregulation and Privatization . They abolished the Minimum Wage , rescinded Trade Union rights, privatized the Pension system, state Industries , and Bank s, and abolished Tax es on Wealth and Profit s. Pinochet justified such reforms by promising to "''make Chile not a nation of Proletarians , but a nation of Entrepreneur s''." The copper mines, however, remained in state hands -- revenues were used to support the Chilean military. Supporters of Friedman's view argue that subsequent events in Chile have vindicated his Monetarist philosophy: Chile's economy is noticeably stronger and more advanced than those of other Latin American nations. Chile's annual growth in per capita real income from 1985 to 1996 averaged 5%, far above the rest of Latin America. {Link without Title} . Friedman's detractors, on the other hand, use the term ''Miracle of Chile'' in a sarcastic fashion, "'' Cinderella 's pumpkin did not really turn into a coach. The Miracle of Chile is just another Fairy Tale .''" ''( 1 -- P.72 )''. The unemployment rate in Chile increased from 4.3 % in 1973 , to 34.6% in 1983 . Meanwhile, Real Wage s declined by 40%. The regime also promised that a market economy would eliminate homelessness, but the percentage of Chileans without adequate housing grew from 27% to 40% from 1972 to 1988, and there was an increase in diseases such as Typhoid and Viral Hepatitis that has been attributed to the government's slashes in public health funding. The economy went into recession of the early 1980s, and the ensuing stock market collapse destroyed the pensions that were privatized under Pinochet. However, the economic downturn was not confined to Chile, as a widespread recession also struck several other Latin American countries. Economist Arnold C. Harberger said in an interview with Jeffery Sachs that "Chile led the continent in climbing out of this recession. It was the only debt-crisis country that got back to the pre-crisis levels of GDP before the end of the decade of the '80s." {Link without Title} After recovery, the economy underwent a significant boom in the '90s, after Pinochet's regime had ended. While enacting certain reforms, the three successive civilian administrations that followed Pinochet, including that of recent Socialist president Ricardo Lagos , have not tried to dismantle all of Pinochet's reforms, leading some supporters to suggest that the regime's economic policy has been justified to some extent. Some people have criticized Friedman for assisting the Pinochet government with economic reforms, citing the regime's widely condemned Human Rights record and Authoritarianism (see Chile Under Pinochet ). Friedman has tried to defended himself against such criticisms, stating that he had given nearly similar speeches and promoted the same policies in China and Yugoslavia , and pointing out that his visit was nearly completely unrelated to the political side of the regime. Friedman also says that the main idea behind his speeches in Chile was that free markets would "undermine political centralization and political control." He says that the "Chilean economy did very well, but more important, in the end the central government, the military junta, was replaced by a democratic society. So the really important thing about the Chilean business is that free markets did work their way in bringing about a free society." [http://www.pbs.org/wgbh/commandingheights/shared/minitextlo/ufd_reformliberty_full.html The experience of Chile in the 1970s and 1980s, and more particularly the model of authoritarian political control combined with Neoliberal economic policies, has influenced the policies of the Communist Party Of China and has been invoked as a model by economic reformers in other countries, such as Boris Yeltsin in Russia and in other Eastern Europe an post-Communist societies. The Chilean social security program has been invoked by Conservatives in the U.S. as an example to follow, in spite of the mentioned criticisms. From the point of view of Political Economy , Alice Amsden argues, that Allende did not try to set up a kind of " Developmental State " that appeared in many fast-growing East Asia n countries. Developmental state refers to a state in which government sets up a program to modernize and industrialize country's economy by relying more or less on state intervention. Since the developmental state has been absent, Amsden argues, that the structural change of economy has not happened in an adequate manner and economic growth has been very modest compared to east Asian countries such as South Korea . Chile's most important economic sectors are still in the field of primary production (like minerals) that are far less productive than dominant sector of countries that have gone through the complete process of industrialization. SEE ALSO REFERENCES #'' The Best Democracy Money Can Buy '' by Greg Palast ( 2002 ) EXTERNAL LINKS
Articles Criticism
|
|
|