Four years have gone by since the Christian Democrat régime of Eduardo Frei took power in Chile. In every election since, the voters, especially the urban workers and the rural peasantry, those most concerned with basic social reforms, have expressed their disapproval of Frei’s policies. In the municipal elections of 1967 the Christian Democratic candidates obtained 36 per cent of the vote, almost 20 per cent less than in the presidential elections of 1964 and 7 per cent less than they obtained in the congressional elections.footnote1 In a senatorial by-election in the provinces of O’Higgins-Colchagua in June 1967 Frei’s handpicked candidate and leading ideologist of the right-wing of the party, Jaime Castillo Velasco, was defeated by a marxist candidate. The results of a senatorial by-election in southern Chile, considered one of the more traditional and under-developed areas and made up of many smallholders, created the greatest surprise. Here, in 1964, Frei gained over 60 per cent of the vote. The Christian Democrats led by Frei nominated a recent convert who was not long ago a member of the right wing Conservative Party, rejecting a staunch supporter of radical agrarian reform, for this by-election. The candidate supported by the Frei government was defeated, gaining less than 40 per cent of the vote, by a left-wing Radical with Communist support. In union election after union election (steel, metallurgy, or cement) the pro-Frei state—if it existed at all—has been defeated. In industries such as the copper mines where there was a minority of pro-Frei union leaders prior to his term of office they have been defeated (many Christian Democratic trade unionists have attempted, usually unsuccessfully, to disassociate themselves from Frei’s mano dura hard hand policy toward the working class).

In November 1967 the police and army opened fire and killed or injured at least twenty-two persons participating in a general strike called by the leftist-led Central Labour Federation (cutch) to protest the Frei government’s forced savings scheme. Over eight hundred citizens were arrested. The central point in dispute was the government’s plan to cut down on the purchasing power of the wage-earning classes. By withholding a quarter of an expected wage increase (granted to keep wages up to price rises) the Frei government claimed this scheme would reduce inflationary pressures and create investment capital. The burden for achieving monetary stability and development under Frei as under previous oligarchical régimes largely falls on those least able to bear it—the wage-earning classes.

To understand the substantial and persistent decline in popularity of the Frei government it is necessary to survey its performance in several key areas. The average per capita gross national product for the past two years (1966, 1967) grew at the rate of 2.2 per cent, below even the 2.5 per cent minimum established by the Alliance for Progress. The growth in 1966 was basically due to the rise in the price of copper and to the performance of the public sector which showed a considerable increase in consumption and investment. In 1967 the sharp decline in the economy—registering a negative per capita growth rate—coincided with the drop in copper prices. Instead of diversifying her exports Chile has become increasingly dependent on copper. Mineral products accounted for 85 per cent of total Chilean exports. In 1967 copper alone accounted for 70 per cent and industrial goods 14 per cent. In the short run Frei has done very little to alleviate the Chilean economy’s vulnerability to external fluctuations in prices.

In 1965–66 government sources indicate a 12.6 per cent raise in real income. However, this improvement in the standard of living was not mainly the result of government policy. The level established by law for 1966 stipulated a real increase of only 2.5 per cent over 1965. In other words, increased salaries were the result of concessions obtained by wage and salaried workers either through negotiations or struggle in many cases against government and police harrassment. In 1967 very little if any increase in income was expected. The short-term limited gains in income redistribution between 1965–67 were countered by regressive tax trends and continued unemployment. Direct taxes accounted for a reduced share of total budgetary tax revenues, declining from 35 per cent in 1965 to 33 per cent in 1966. Sales taxes which accounted for 23 per cent of revenues in 1965, accounted for 24 per cent in 1967. The proportion of unemployed in the construction trades was 13 per cent in June 1965 and 4 per cent in industry, while in June 1967 unemployment reached 17 and 5.3 per cent in these same sectors.

Industrial growth during the Frei government has been unsteady. While industrial production increased seven per cent in 1966 it declined 10 per cent in the first months of 1967. The impetus for development has not come from the domestic private sector. Private sector savings were negative in 1966 and 1967 (–14.8). Public savings have accounted for an increasing proportion of gross savings, jumping from 27 per cent in 1965 to 46 per cent in 1967. Equally important Frei’s development program has become increasingly dependent on foreign financing, external sources accounting for 7 per cent in 1965 and 15 per cent in 1967.