Salvador Allende

Salvador Allende Gossens (July 26, 1908–September 11, 1973) was President of Chile from 1970 until 1973, when he died of a gunshot wound, under circumstances that remain a matter of dispute, during the violent Chilean coup of 1973.

Presidency

After his inauguration, Allende began to carry out his platform of implementing sweeping socialist programs in Chile, called La vía chilena al socialismo ("the Chilean Way to Socialism"). This included nationalization of large-scale industries (notably copper mining and banking), a thorough reform of the health care system, a reform of the educational system, a program of free milk for children, and a furthering of his predecessor Eduardo Frei Montalva's agrarian reform. http://icarito.latercera.cl/icarito/2003/912/pag1a.htm

Related Topics:
Nationalization - Copper mining - Banking - Health care - Eduardo Frei Montalva - Agrarian reform

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Chilean presidents were allowed a maximum of six years, which may explain Allende's haste to restructure the economy. Not only did he have a significant restructuring program organized, it had to be a success if a successor to Allende was going to be elected.

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A new excess profit tax was created. The government announced a moratorium on foreign debt payments and defaulted on debts held by international creditors and foreign governments. Allende also froze all prices while raising salaries at the same time. The government's efforts to pursue these reforms led to strong opposition by landowners, some middle-class sectors, the rightist National Party, the Roman Catholic Church (which was displeased with the direction of the educational reforms http://www.iglesia.cl/iglesiachile/2003/1973/aplenenu.html), and eventually the Christian Democrats.

Related Topics:
Debt - Roman Catholic Church

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The land reforms that Allende highlighted as one of the central policies of his government had already begun under his predecessor Eduardo Frei Montalva, who had expropriated between one-fifth and one-quarter of all properties liable to takeover . The Allende government's intention was to seize all holdings of more than eighty basic irrigated hectares . Allende also intended to improve the socio-economic welfare of Chile's poorest citizens. A key element was to provide employment, either in the new nationalised enterprises or on public works projects.

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In the first year of Allende's term, the short-term economic results of Minister of the Economy Pedro Vuskovic's expansive monetary policy were unambiguously favorable: 12% industrial growth and an 8.6% increase in GDP, accompanied by major declines in inflation (down from 34.9% to 22.1%) and unemployment (down to 3.8%). However, these results were not sustained and in 1972 the Chilean escudo had runaway inflation of 140%. The combination of inflation and government-mandated price-fixing led to the rise of black markets in rice, beans, sugar, and flour, and a "disappearance" of such basic commodities from supermarket shelves. http://icarito.latercera.cl/icarito/2003/912/pag1b.htm

Related Topics:
Pedro Vuskovic - GDP - 1972 - Black market

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In 1971, following the re-establishment of diplomatic relations with Cuba, despite a previously established Organization of American States convention that no nation in the Western Hemisphere would do so (the only exception being Mexico, which had refused to adopt that convention), Cuban president Fidel Castro started a month-long visit to Chile. This visit, in which Castro participated actively in the internal politics of the country, holding massive rallies and giving public advice to Allende, was used by those on the political right to support their view that "The Chilean Way to Socialism" was an effort to put Chile on the same path as Cuba.

Related Topics:
1971 - Cuba - Organization of American States - Western Hemisphere - Mexico - Fidel Castro

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October 1972 saw the first of what were to be a wave of confrontational strikes by some of the historically well-off sectors of Chilean society. A strike by owners of trucks was joined by small businessmen, some (mostly professional) unions, and some student groups. Other than the inevitable damage to the economy, the chief effect of the 24-day strike was to bring the head of the army, general Carlos Prats, into the government as Interior Minister. http://icarito.latercera.cl/icarito/2003/912/pag1b.htm. A CIA report released in 2000 admitted that the CIA financed this trucker's strike.

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In addition to the earlier-discussed provision of employment, Allende also raised wages on a number of occasions throughout 1970 and 1971. These rises in wages were negated by continuing increases in prices for food. Although price rises had also been high under Frei (27% a year between 1967 and 1970), a basic basket of consumer goods rose by 120% from 190 to 421 escudos in one month alone, August 1972. In the period 1970-72, while Allende was in government, exports fell 24% and imports rose 26%, with imports of food rising an estimated 149% . Although nominal wages were rising, there was not a commensurate increase in the standard of living for the Chilean population.

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The falls in exports were mostly due to a fall in the price of copper. Chile was at the mercy of international fluctuations in the value of its single most important export. As with almost half of developing countries, more than 50 per cent of Chile's export receipts were from a single primary commodity . Adverse fluctuation in the international price of copper negatively affected the Chilean economy throughout 1971-2. The price of copper fell from a peak of $66 per ton in 1970 to only $48-9 in 1971 and 1972 . This fall in the value of copper would combine with a lack of economic aid to bring about the economic conditions that led to events later in 1973.

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Throughout his presidency, Allende remained at odds with the Chilean Congress, which was dominated by the Christian Democratic Party. The Christian Democrats had campaigned on a left-wing platform in the 1970 elections, but they began to drift more and more towards the right during Allende's presidency, eventually forming a coalition with the right-wing National Party. They continued to accuse Allende of leading Chile toward a Cuban-style dictatorship and sought to overturn many of his more radical reforms. Allende and his opponents in Congress repeatedly accused each other of undermining the Chilean Constitution and acting undemocratically.

Related Topics:
1970 - Right-wing

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Allende's increasingly bold socialist policies (partly in response to pressure from some of the more radical members within his coalition), combined with his close contacts with Cuba, heightened fears in Washington. The Nixon administration began exerting economic pressure on Chile via multilateral organizations, and continued to back Allende's opponents in the Chilean Congress. Almost immediately after his election, Nixon directed CIA and U.S. State Department officials to "put pressure" on Allende's government, however it is not certain to what degree this influenced Allende's downfall.

Related Topics:
Cuba - Washington - Nixon administration - CIA - U.S. State Department

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