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 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
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.
The Frei government’s economic stabilization programme was temporarily mildly successful, reducing inflation to a 25.9 per cent increase in 1965 and 17 per cent in 1966. In 1967, however, inflation doubled the 12 per cent rate which Frei had set for that year. Further instability may result from attempts by wage and salaried groups to catch up with expected loss in income due to inadequate readjustments and the forced savings scheme proposed by the government.
A similar pattern appears regarding the social reforms proposed by the government. In 1964 Chile had a shortage of 600,000 houses—mostly citizens who resided in shacks and huts (callampas, conventillos, rucas, chozas, etc). According to the revolutionary rhetoric of the Christian Democrats 360,000 homes were to be built in six years. In 1965 government projections were close to the actual output, 52,100 houses were built out of the 53,850 planned. In 1966 only one-half of the plan was realized. In 1967 it is estimated that only 22,000 of the estimated 59,000 houses were built. Much more serious, however, is the fact that the programme of building low-income housing has been a greater failure than is shown by the aggregate figures. While in 1965, 22,000 low-income houses were built against the 31,000 projected, in 1966 only 8,500 were built out of the 40,000 projected. Housing loans continue to flow to the more affluent strata of society. Public housing construction declined from 36,000 in 1965 to approximately 10,000 in 1967. Given a population growth rate of 2.5 per cent per year the housing programme of the Frei government is hardly holding its own.