A Century of Upheavals

From democracy to military rule and back to democracy – the 20th century saw extraordinary reversals in Chile’s political, social, and economic arenas.

The civil war of the 1890s tilted the balance of power in favor of the Congress and against the presidents, who were reduced to refereeing the fights for cabinet posts among the parties. But by this time there were new actors on the political scene. The railways had made travel easier and the towns were growing, and with them a new cultural and social life. A new middle class was organizing in the recently founded Radical Party. A strong force within it were the freemasons, whose lodges were political debating centers.

A new working class was forming, too. Industry had grown up in the early and mid-century in specific centers – everything from biscuit and pasta factories in Valparaíso that supplied passing ships, to breweries started by German settlers in the south. The new railways needed workshops, and the growing towns needed textiles, shoes, soap, and furniture. Business boomed, as did the numbers of urban artisans.

It was getting ever harder to scratch a living in the countryside, so many peasants were drawn to the nitrate mines of the north. Once there, they were often trapped, earning low wages paid in tokens that could only be exchanged for goods in the company store. Schools, a police force, and courts were practically non-existent. Alcohol was easier to come by than water in the northern mining camps of the pampas (lowlands).

Birth of the trade unions

It was in these harsh conditions that the modern Chilean trade union movement was born, evolving out of the early mutual aid societies. The miners formed the basis for Chile’s early political movements, anarchist at first and later socialist. One figure stands out in that early history of working-class organization. Luis Emilio Recabarren, a former print worker, traveled the country as a union organizer. He got an audience among the miners for his political message by publishing newspapers which carried news from other parts of the country. They helped the immigrants isolated in the pampas to keep in touch with their homes, and also provided a means of communication between groups of workers in the cities, the mines, and the countryside, who until then had been isolated from one another. In 1912, Recabarren founded the Chilean Socialist Workers’ Party. After the Russian Revolution in 1917, it was the basis of the Chilean Communist Party.

In 1969, the musician Luis Advis composed a famous oratorio based on the tragedy at Santa María de Iquique which he performed and recorded with his folk music group, Quilapayún.

Recabarren traveled to Russia, and met Lenin and Trotsky, as well as trade union and political leaders from across the world. He was elected to the Chilean parliament twice during this period, though he was never allowed to take his seat. Although he was a key figure in the early history of the Chilean left, Recabarren’s relationship with the Communist Party was always difficult. Political difficulties may well have been the cause of his suicide in 1928.

Nitrate workers, Antofagasta.

Museo Historico Nacional

Desert slaughter

The massacre at Santa María de Iquique, a remote mining town in northern Chile, has come to symbolize the struggle of Chile’s mineworkers in the early 1900s. In 1907, the miners went on strike for better pay and conditions. When an envoy was sent from central government to speak with them, the miners and their families gathered in the town center to hear what he had to say. Four-and-a-half thousand of them were crammed into the local school, and 1,500 more were in Plaza Manuel Montt. An eyewitness gave a chilling account of what happened as squads of soldiers began to appear in the plaza.

“On the central balcony… stood 30 or so men in the prime of life, quite calm, beneath a great Chilean flag, and surrounded by the flags of other nations. They were the strike committee… All eyes were fixed on them just as all the guns were directed at them. Standing, they received the shots. As though struck by lightning they fell, and the great flag fluttered down over their bodies.”

Most thought that was the end of the incident. But, said the witness, “There was a moment of silence as the machine guns were lowered to aim at the schoolyard and the hall, occupied by a compact mass of people who spilled over into the main square… There was a sound like thunder as they fired. Then the gunfire ceased and the foot soldiers went into the school, firing, as men and women fled in all directions.”

The army general later reported that there had been 140 victims. The eyewitness quoted talked to doctors and others involved, and estimated the figure at 195 dead and 390 wounded. Others reported many more.

Social inequalities

Experiences like these, combined with the organizing work of Recabarren, laid the foundations of Chile’s strong trade union tradition. At one stage, before and during World War I, sections of the ruling classes gave some consideration to the implementation of basic social welfare legislation – the nitrates industry, after all, was booming as a result of the war. But the discovery of artificial nitrates had a powerful impact on Chile, putting a swift end to the boom, and all such proposals were shelved.

Agriculture was stagnant, dominated by huge landed estates whose owners lived either in town or in Europe, and had little interest in raising productivity or modernizing. Import figures for 1907 show the ruling class’s priorities: 3.7 million pesos were spent on importing agricultural and industrial machinery, while 6.8 million went on the purchase of French champagne, jewels, silk, and the latest perfume from Paris. As tax revenues from nitrates declined and the foreign debt grew, increasing numbers of ordinary Chileans found themselves without work or the possibility of it, and facing poverty and collapsing living standards.

Power struggles

In conditions of growing social conflict, there often emerge leaders who claim to bridge the conflicting interests of all social classes. In Chile, that “figure above society” was Arturo Alessandri, the son of an Italian immigrant.

Typically, his rhetoric was nationalistic and deliberately vague, enabling him to appeal to different sections of Chilean society at the same time. His election to the presidency in the early 1920s did not give him the power over Congress he aspired to, and in deepening conditions of crisis he turned to the younger and more restless sections of the army.

The result was a military coup in 1928, which gave military caudillo Colonel Carlos Ibáñez del Campo dictatorial powers. His models were Mussolini and Spain’s José Primo de Rivera, and he was a fierce critic of the traditional political structures, especially the parties, some of whose leaders he “invited” to leave the country. But he was even more fiercely anti-Communist, and had Communists and union leaders arrested and deported. It was a return to authoritarianism such as Chile had not seen since the years of Diego Portales.

In a sense, the coup brought an end to a system of power which had observed the democratic rules but within a limited framework, in which power was simply exchanged between sections of the ruling classes. Chile has a reputation for a long democratic tradition; yet this was pushed aside in the 1920s, as it would be again in the 1970s, with considerable ease.

Ibáñez set about creating a powerful state sector of the economy, establishing the national airline and a daily government newspaper La Nación. This was an attempt to shift resources into new areas of the economy, placing them under national control and overcoming the resistance of the traditional ruling classes, using the state as an instrument of economic control.

Recession and social unrest

This was a bad time to be increasing state expenditure. With the Wall Street Crash in 1929 and the world recession that followed, the Chilean economy went into a crisis. Nitrate sales had long been declining, and now the expanding copper industry was also hit as the Great Depression squeezed its markets. There was widespread unemployment and social unrest. The government set up an emergency employment program, and printed money to pay for it. Inflation rose, and so did the protests.

Ibáñez was forced to resign. He left for exile in July 1931, but his elected successor was promptly overthrown by a military-civilian junta. In June 1932, a “Socialist Republic” was installed by Colonel Marmaduque Grove. Grove belonged to a group of radical young officers whose aim was to bring about a redistribution of wealth, particularly through land reform, that would set the economy to work again. The new republic lasted only 100 days, however, before Grove was exiled to Easter Island and Arturo Alessandri returned with a draconian program in October 1932. He purged the army of dissident elements, clamped down on trade unions, banned strikes, and closed down the opposition press.

Although Grove’s social experiment had achieved very little, some proposals had reached the statute book: 40 years later, President Salvador Allende would begin to implement some of the changes that Grove had envisaged.

Recovery and reform

A new Chilean government, elected in 1938, offered a program of mild economic and social reform. Headed by a Radical, Pedro Aguirre Cerda, it enjoyed the support of both the Communist and the Socialist parties, but disputes later broke the alliance. Aguirre Cerda’s elected successor, another radical, quickly outlawed the Communists.

During World War II, and later in the Korean War, the US government bought copper from US-owned copper companies in Chile at a special low price, which meant a substantial loss of tax revenues for the Chilean state.

The radicals boosted the state sector of the economy substantially, with a steel industry and a nationwide electrification program. But in the countryside, government intervention had a negative effect. Strict price controls on farm produce meant that the landowners had little incentive to invest and produce more. Public opinion was beginning to sense that farming would simply never take off under ruling-class ownership and that the only hope was to take away the land and give it to those who could produce.

The other conflict that began to loom was the ownership of the copper mines. The main deposits had always been owned and worked by US corporations. Control of such a major source of national wealth was bound to become an issue.

The caudillo returns

By the late 1940s, party infighting and petty corruption had again paved the way for a “strong man.” Carlos Ibáñez was returned to power by the electorate in 1952, demanding “a fundamental change of direction,” and brandishing a symbolic broom with which he would sweep away politicking and corruption. He had the support of a redoubtable figure, María de la Cruz and her Feminine Party of Chile – women got the vote, finally, in 1949 and promptly strengthened the conservative forces.

Ibáñez had the personal charisma to get himself elected, but no organized support. He tried to get the Constitution reformed to give more power to the presidency, failed, and sat out the rest of his term in political impotence. In 1958, Arturo Alessandri’s son, Jorge, succeeded the old general, elected almost entirely on the strength of his father’s name. He was Chile’s last elected president from the political right for over 50 years.

The Christian Democrats

The center and the left were now grouped in two easily definable camps. In one were the Socialist and the Communist parties – full-blooded Marxist-Leninists who talked of armed struggle to overthrow “the bourgeois state,” but who were actually engaged in building up their electoral strength to win it by peaceful means.

Their rival, proposing very similar reforms in, for example, land ownership and nationalization of the copper mines, was the Christian Democrat Party. It developed in the 1930s out of a movement started by a group of young Catholics from the Conservative Party, initially with vaguely Fascist leanings, who called themselves the Falange Nacional. By the end of the 1950s their ideas had been modified to Christian socialism and they were growing rapidly among both the middle and working classes. They had strong links to the Catholic Church and a comparably strong anti-Communist message. There was not a vast difference between the programs of the two camps.

In the early 1960s when the influence of the Cuban revolution was sweeping through Latin America, the Christian Democrats throughout the region appeared to many people to be the best answer to the Marxist threat. The Chilean Christian Democrat Party was the first of its kind in Latin America to get into government, in 1964, with a good deal of North American financial support. The following year they won a solid majority in Congress, with party leader Eduardo Frei Montalva becoming the first president in Chilean history to have at least theoretical control over both the executive and the legislature.

Success went to their heads, and they boasted that Christian Democrats would govern for the next 30 years (like their Italian counterparts). However, the Frei government made two powerful enemies: the old landowning class, who opposed its attempt at land reform, and the military, who felt underpaid and unappreciated. An army general, Roberto Viaux, led an uprising in 1969 to protest against their conditions.

The old political right, which had helped vote Frei into office, now withdrew to reform itself into a new party, the Nationals. Tensions within Frei’s own party led to a split in 1969, and his left-wingers, who felt that the reforms had not gone far enough, went off to join the Marxists.

Dr Salvador Allende.

Courtesey of the University ofChile

The Allende years

In 1970 a left-wing coalition known as Popular Unity put forward as their candidate a middle-class doctor turned socialist senator, Salvador Allende. Allende won his fourth attempt at the presidency by a paper-thin margin (36.3 percent). One of the first electoral promises he honored was to give every poor child in Chile a pair of shoes, and to provide free milk in schools.

But the new government faced formidable enemies in the United States. President Nixon’s government pumped in approximately US$8 million in covert financing over the next three years to boost the opposition and to help, for example, to keep the anti-Allende publishing group El Mercurio in business.

At home the government had some early successes. In 1971, it got all-party support in Congress for the nationalization of the copper mines. But Allende’s decision not to pay compensation to the North American owners sparked an official US boycott of non-military aid and credits for Chile. The US government also tried to ban Chilean copper from world markets.

Social discontent

The political tension grew. When Fidel Castro visited Chile in November 1971, upper- and middle-class women held the first “march of the empty saucepans” to demonstrate against food and other shortages. A year later, the shortages were even worse and truck owners went on strike following a government proposal to create a state transportation system.

Doctors, shopkeepers, and bus owners joined in, and industrialists staged lockouts. Workers in small factories reacted by taking over their workplaces. Neighborhood committees set up their own retail networks, bringing goods direct from the factories. By this time the opposition had convinced itself that Allende was out to install a full-blooded Marxist state. The far left of Allende’s own Socialist Party encouraged this view – ironically, the Communists were moderators in the unruly coalition, committed to a “peaceful road to socialism.”

US Secretary of State Henry Kissinger condemned Allende’s reform program, saying that he did not see why the US should stand idly by “and let a country go Communist due to the irresponsibility of its own people.”

The tanks roll in

In March 1973, despite the growing chaos, the government won an increased majority (44 percent) in the parliamentary elections. The opposition decided that it could not wait until the next presidential elections, which were scheduled for 1976. In late August, Congress declared the government unconstitutional. Days later, on the morning of September 11, tanks rolled into the streets of Santiago, and the military took over the radio stations and announced a curfew, calling on President Allende to resign.

Besieged in the presidential palace with only a few advisers, Allende refused to resign. Photographs from the palace show him in a helmet and armed with a machine gun given to him by Fidel Castro, and the popular image remains of Allende fighting to the end. In his final broadcast to the nation, he ordered his supporters not to resist, yet he himself refused an offer of a safe conduct to the airport and exile. Allende’s doctor testified that he died by his own hand, alone, in the ruined palace which the air force had bombed.

Pinochet’s rise to power

The Chilean coup sent shock waves around the world. For some, the 1970 elections had proved the possibility that social change could occur peacefully, gradually, and via the ballot box. That hope now lay in ruins. Chile’s reputation as a haven of democracy in a subcontinent given to resolving its political problems by violent means had now lost its legitimacy – in fact, military intervention had been a feature of 20th-century political life in the country.

The Italian film Il Postino was based on the novel Ardiente Paciencia, by Chilean novelist Antonio Skármeta, which depicted the weeks following the 1973 Pinochet coup.

Though the coup was led by a junta of the heads of all the armed forces, it was Augusto Pinochet who would emerge over the following two years as its undisputed head. And it was he who was largely responsible for the violence that followed the coup. The military took power quickly, pursuing and detaining all those who had led the trade unions, popular organizations, student groups, and cultural movements most identified with the Allende regime.

The descent into brutality

The particularly brutal murder of the singer Víctor Jara came to symbolize thousands of other, equally violent deaths, as the foreign journalists who were herded into the National Stadium together with Jara and other suspected left-wingers to suffer beatings and torture, would later testify. Thousands of people were murdered, many more were tortured, and hundreds of thousands went into exile to escape persecution.

All opposition activity was banned. The last demonstration in Chile for some 10 years was the funeral of Chile’s great poet Pablo Neruda, who died just two weeks after the coup. The 3,000 mourners who marched between ranks of soldiers through the streets of Santiago shouted slogans against the military and carried placards bearing the names of Neruda and Allende. Thereafter there would be no more public expressions of hostility to Pinochet until the 1980s.

Initially, churches provided refuge for those who could not find asylum in foreign embassies. From its formation in 1976, the Vicariate of Solidarity, organized by the Catholic Church, helped the victims of repression to find legal aid and became a focus for protests against the human rights abuses that continued in the years following the coup.

Free-market economics

By 1977 it was clear that Pinochet’s regime had its own economic as well as political agenda. The crude anti-Communism of the earlier years now combined with a new economic philosophy of neo-liberalism, or complete openness to the world market – ideas advocated by Milton Friedman and a group of his Chilean acolytes known as the “Chicago boys”. Their recipe was free-market policies and the “trickle-down effect” – the theory that wealth created by the private sector would flow down and benefit the workers. These policies were imposed by a military dictatorship in a country without a Congress, without a free press, and with restricted labor organizations – ideal, if abnormal, conditions for such an experiment.

But the regime’s economists made some bad mistakes, even on their own terms. In the late 1970s, the Finance Ministry fixed Chile’s exchange rate for more than two years, and lifted controls on bank lending. When the peso finally had to be devalued, there was a near-fatal bank crash. As a result, the state had to bail out most of the private banks, but many companies went bankrupt, mortgage repossessions soared, and an economic recession followed, lasting until the mid-1980s. The high unemployment and economic hardship of this period were key factors in mounting discontent with the dictatorship.

Crisis and disintegration

In 1983 trade unions again began to call strikes, and there was widespread protest as gross domestic product (GDP) collapsed. All political organizations remained illegal, and most of the left-wing groups had been destroyed after the coup. In this new climate of protest, however, they began to reorganize.

The Communist Party had taken a moderate line under Allende, and had argued after 1973 that the coup happened because things had gone too far too fast in the Allende years. The party now turned in a radical direction as a new generation of young people joined its ranks. By 1985, the creation of the Manuel Rodríguez Patriotic Front marked a commitment to armed struggle, which culminated in the failed attempt to assassinate Pinochet in 1986.

Thereafter the old enemies came together in a series of agreements to build a joint campaign for a “No” vote in Pinochet’s 1988 plebiscite, which was designed to confirm him in power for another eight years at least. In the event, and to the dictator’s evident surprise, 54 percent of the Chilean people voted “No.”

Elections followed in 1989, amid intense negotiations at a number of levels. The pace and direction of the return to democracy had to be agreed on by businessmen and trade unionists, Christian Democrats, and Communists who supported the “No” campaign – people whose purposes were very different. The hopes for a peaceful transition led the campaign into a series of talks with Pinochet. While he yielded the presidency, and formal authority, it could hardly be said that he relinquished power.

The end of the party for Pinochet

A new constitution written by the dictatorship in 1980 remained largely in force; the judiciary was dominated by Pinochet’s appointees; some senators would continue to be nominated directly by the armed forces, giving them a controlling voice in parliament; the financial gains Pinochet had made as president would remain untouched. Pinochet stayed on until 1998 as head of the army and, while a commission of investigation would seek the truth about the “disappeared” and the human rights abuses that had occurred under his rule, there would be neither revenge nor restitution.

The memories of the 1973 coup and its aftermath were sufficiently fearsome for the suggestion of renewed military intervention to silence any complaints. Thus it was that Pinochet could display such absolute confidence and certainty when, in March 1998, he retired as commander-in-chief of the army, at the age of 82. He had already been named senador vitalicio – a senator for life – and in this capacity was given effective immunity from prosecution for crimes against human rights committed in Chile during his regime, for which there were some 200 cases pending in the Chilean courts.

It was with the same confidence that he left for Britain in September 1998 for medical treatment. Pinochet’s period in power had largely coincided with the governments of Margaret Thatcher in Britain, and her relationship with him had always been cordial and admiring – as had US President Ronald Reagan’s with them both.

In the meantime, a series of cases had been brought before courts elsewhere on behalf of the families of Pinochet’s non-Chilean victims. Among the cases pending was one brought before a Spanish court by a team of lawyers including Joan Garcés, ex-adviser to Allende. While Pinochet was in London, the Spanish Justice Ministry initiated extradition proceedings with Britain, and he was placed under house arrest. An extraordinary chain of events was set in motion, as the House of Lords in London confirmed by a majority that he had a case to answer under international law, and later overturned their own ruling when it was revealed that one of the Law Lords had links with the human rights group Amnesty International. Meanwhile, journalists and commentators began to revisit the experience of Chile in 1973, while those Chileans still in their countries of exile even after 1990 emerged in demonstrations.

In March 2000, the British Home Secretary agreed to the release of Pinochet on the grounds of ill health, opening the way for his return to Chile. The local courts later removed his immunity from prosecution, but then declared that the former dictator was unfit to stand trial.

Forced to resign his Senate seat and, subsequently, further discredited by the revelation of secret multimillion-dollar bank accounts held abroad in his name and those of family members, the former dictator gradually disappeared from public life and died in December 2006.

An economic example

By the late 1980s, the Chilean economy was well on the way to recovering from the 1982–3 crisis. Exports were growing rapidly, with the development of the forestry, fruit farming and wine industries that were later to play a key role in driving the country’s economic growth. There was also a lot of interest from foreign investors and the dictatorship’s creation of a private pension (AFP) system to replace the former state pay-as-you-go system had laid the foundations of an active capital market.

Income distribution, however, remained extremely unequal and one of the first challenges of the center-left Concertación coalition, which took office in March 1990 under Christian Democrat Patricio Aylwin (1990–4), was to attempt to narrow the huge gap between the very rich and the very poor, without upsetting Chile’s healthy balance of payments and finances. The coalition accepted the main tenets of the macroeconomic policies of the “Chicago boys” and even the Socialist Party admitted that “the market has the main role in assigning resources”.

With the grudging assent of the right-wing political parties, the Aylwin government raised corporate and income taxes to finance improvements in health and education. The new government also battled some fairly timid labor reforms through Congress to help improve wages and working conditions, and give the unions more strength to defend their members. These were much more controversial than the tax increases. The business community insisted that low wages for miners, forestry, and industrial workers were crucial if Chile’s exports were to remain competitive in world markets.

At the same time, Chile began to recover the international integration denied it under Pinochet because of repudiation of his dictatorship’s human rights violations. The free trade agreements subsequently signed with the country’s main markets, including the United States, the European Union, Japan, and China, played a key role in the sustained growth of its exports.

Road to development

Aylwin was succeeded in 1994 by President Eduardo Frei, a son of the 1960s Christian Democrat president, heading a government of the same center-left coalition, the Concertación. As well as launching major school and criminal justice reforms, President Frei, a civil engineer by profession, concentrated on projects like improving roads and airports (usually through private concessions), and on privatizing ports and water companies. These reforms vastly improved infrastructure – laying the foundations for the international-standard highways seen in Chile today – and increased productivity as the key to the international competitiveness of the small Chilean economy.

President Ricardo Lagos (2000–6) headed the Concertación’s third government. A moderate socialist, he sought to combine economic growth with greater social justice and to extend the benefits of increased prosperity not only to the urban poor, but also to provincial Chile. Despite slower economic growth from 1999 through 2003, owing mainly to the weakness of international export markets, his government introduced unemployment insurance and embarked on a major reform of public and private health services in a bid to increase their efficiency and achieve greater equality of access to care, guaranteeing timely and low-cost attention for a growing number of important illnesses.

A national census, carried out in 2002, revealed a radical improvement in material welfare since the previous census a decade earlier. Ninety-six percent of Chile’s homes had access to electricity, up by a fifth on 1992, and 91 percent had drinking water, representing an increase of more than a quarter. Similarly, 82 percent had a refrigerator, as compared with 55 percent in 1992, while 79 percent had a washing machine, as compared with 48 percent a decade earlier.

Fees at Chile’s top private schools, at around US$700 per month, are over ten times the per-pupil subvention received by state schools in Chile.

Impatience for change

By 2006, the poverty rate had, moreover, dropped to less than 14 percent, down from 40 percent in 1990 and per capita income had reached US$8,900, up from just US$2,400 in 1990 (by 2010, it was running at almost US$12,000). However, despite the impact on living standards, the unequal distribution, combined with improvements in education, only fueled social demands. According to a government survey in 2009, the richest tenth of the population received 40.2 percent of national income while, at the same time, seven out of ten university students were the first in their family to go on to higher education.

These pent-up demands came to the fore under President Michelle Bachelet (2006–10), a socialist who headed the Concertación’s fourth term and was the country’s first woman president. Only a matter of months after she took office, marches and sit-ins organized by secondary schoolchildren in support of better state education mushroomed into the largest show of civil defiance since the Pinochet days. The movement was another symptom of the maturing of Chilean democracy – with no memory of the Pinochet dictatorship, the schoolchildren lacked their parents’ fears for its potential fragility.

After initially floundering in face of the protests, Bachelet went on to focus on “social protection” as the theme of her government. The first major overhaul of the private pension (AFP) system left in place by the Pinochet dictatorship increased the role of state in supporting low-income senior citizens and, as it comes into gradual effect, is significantly increasing their (albeit still meager) pensions. Her government’s creation of new state childcare centers for poor families also laid the foundations for an increase in women’s participation in the labor force which had been very low, even by Latin American standards. In addition, she continued to reduce the housing deficit, with a greater emphasis on the standards of the social housing built by private companies with state support and their future owners’ participation in the process.

However, despite these spending increases, her government also maintained the fiscal and macroeconomic discipline that had characterized Chile since 1990. In a key step, it established two offshore sovereign wealth funds into which part of fiscal revenues are paid when the price of copper – a key source of government income – is high. This was one of the complaints of the protesting schoolchildren who accused the government of “tightfistedness” but it stood Chile in good stead in 2009 when its small, open economy was hit by the international crisis and GDP contracted by 1.7 percent. Mitigating the impact of the crisis, the government used part of these savings to finance a fiscal stimulus plan worth US$4 billion that, relative to GDP, was one of the largest such plans in the world.

Regional Relations

Globalization has served Chile’s small economy well, not only opening up new export markets for products that range from salmon, wine, and fresh fruit to wood pulp and copper, but also bringing in the foreign investment that has helped to finance economic growth.

Chafing at their small market, many Chilean companies have expanded to other Latin American countries, including Argentina, Peru, Colombia and, to a lesser extent, Brazil. This is particularly true of the retail sector but, as land in Chile has become more expensive, its two main forestry companies have also acquired plantations in Argentina, Uruguay and Brazil.

Despite difficult relations in the past, Chile’s relations with Argentina today are strong, bound by cooperation and economic ties between provinces on either side of their long border. In the 2000s, they even survived Argentina’s unilateral reduction in the natural gas exports, forcing many Chilean power plants to use more expensive and more polluting oil-based fuels.

Relations with its northern neighbors are, however, more fragile for reasons that date back to Chile’s victory in the 19th century War of the Pacific. Bolivia still views the loss of its seacoast in this war as limiting its economic development and, although a growing number of Chileans consider that it should be granted a corridor to the coast, general public opinion would be overwhelmingly against such an initiative. Peru, meanwhile, has taken a dispute about its sea border to the International Court of Justice. Its ruling, expected in 2013, will − whichever way it goes − be a major political challenge for the governments of both countries.

The right returns

Bachelet ended her term with record popularity ratings and may run again in the next presidential election in 2013 (consecutive periods are not permitted under Chile’s constitution). However, after 20 years in office, the Concertación was tired, had lost much of its original mystique and was widely perceived as having become complacent in power. The result was the election of President Sebastián Piñera who took office in March 2010 at the head of center-right Alianza por Chile coalition. This was the first time that Chile had elected a president from the right since the 1950s.

A former businessman and billionaire, Piñera comes from the National Renewal Party, the smaller, more centrist party in the government coalition where its partner is the Independent Democratic Union, many of whose older members served under the Pinochet dictatorship. His position, close to the center of the political spectrum, and his family ties with the Christian Democrat Party and his opposition to the dictatorship in its latter days were important factors in his triumph.

The government’s first months in power were devoted to grappling with the consequences of the February 2010 earthquake and its promised greater efficiency in government was apparent in these early days, particularly in getting public infrastructure back into working order, although it has been less successful in the longer-haul task of rebuilding housing and, according to critics, has failed to take into account the views of the affected families.

Piñera’s popularity surged later in 2010 during the two-month operation to rescue 33 miners trapped underground in the San José gold and copper mine near Copiapó in northern Chile. He personally received the miners as, one-by-one, they were hauled to the surface. The success of the operation was certainly a triumph of perseverance against the odds and of Chilean engineering (although international mining companies operating in Chile also made an important contribution) and was facilitated by Piñera’s ability to take quick decisions and lack of aversion to risk.

In 2011, however, his approval ratings sunk to the lowest level of any president since 1990, despite strong economic growth and virtually full employment. Like President Bachelet, he faced protests about the quality of state education, led this time by university students, rather than schoolchildren. As well as standards, their demands extended to the cost of education − monthly university tuition fees start at around a third of the country’s average wage − and in response, the government agreed to increase the number of state grants and reduce their cost.

In 2010, it was widely assumed that Piñera’s election marked the start of a relatively long period of right-wing government in Chile. However, with the economy set to slow in 2012, it is no longer clear that this will be the case.

Constitutional reform

On many indicators, Chile is close to becoming a developed country. In the UN Development Programme’s 2011 Human Development Index, for example, it ranked in 44th place, only three places below Portugal and in top place within Latin America. Its progress was also recognized in 2010 when it became the first country in South America to join the Organisation for Economic Co-operation and Development (OECD).

Since Argentina ceased to export natural gas, Chile has faced a tight energy supply that has been compounded by public opposition to new coal plants and hydroelectric dams. Electricity prices are among the highest in Latin America.

However, in its last mile to development, it still faces a number of important challenge, including not only the inequality of income distribution but also Chileans’ mounting demand for a greater say in decisions that affect their lives. This has become more acute because the return of the right to power has heightened the perception that the country is closely controlled by a small political-business elite which is, moreover, supported by its main media.

Complaints focus partly on the 1980 constitution. A reform in 2005 repealed some of its least democratic provisions, including the existence of nine non-elected senators who previously sat alongside the 38 elected senators (four appointed by the armed forces, three by the Supreme Court and two by the president). Increased participation in elections has also been facilitated by a reform, which came into force in early 2012, under which voter regulation became automatic for all those aged 18 and over. In a reversal of the country’s previous tradition under which registry had been compulsory, the 1980 constitution made it voluntary and, moreover, requiring a personal visit to an election service office with only limited opening hours in the weeks prior to an election. Partly as a result, only 8.3 million people were registered to vote in the 2009 presidential and congressional elections (out of an estimated population of 16.9 million) as compared to the 7.6 million voters registered for the 1989 elections when the population reached 13.2 million.

The key barrier to increasing the representativeness of democracy is, however, the binominal electoral system, also introduced by the 1980 constitution. Under this system, unique to Chile, each constituency returns two representatives to each house of Congress, with the party or coalition that comes second only needing a third of the vote to take one of the two seats. Designed to force political parties into two broad coalitions and ensure that neither has a large majority, it guarantees that, in most constituencies, the government and opposition coalitions will each take one of the two seats.

This not only means that the political parties, in practice, “designate” their representatives in Congress, it also makes it very difficult for minority parties outside the two main coalitions to obtain representation. Several attempts to reform the system have been made since 1990 but all failed in the face of the vested interest of incumbent members of Congress in maintaining the existing system. President Piñera himself is in favor of reform – like, according to polls, some 60 percent of the population – on the grounds that the system, although useful in providing stability during Chile’s transition to democracy, has now served its purpose. However, his proposal to present a reform bill to Congress during 2012 met with a storm of protest from the Independent Democratic Union and is unlikely to prosper.