CHILE INFLATION AND SCARCITIES THREATEN ALLENDE’S RULE

Press, Volume CXII, Issue 33063, 2 November 1972, Page 14

CHILE INFLATION AND SCARCITIES THREATEN ALLENDE’S RULE

(By

FRANK TAYLOR,

writing to the "Daily Telegraph.” London, from Santiago)

(Reprinted from the "Daily Telegraph" by arrangement) It says much for the self-discipline and political restraint of the Chilean people that the strains and tensions of the past fortnight have not been allowed to push their country over the brink of chaos. Little of this can.be said to be due to the wisdom of the politicians. When the lorry-owners’ stoppage began to spread to other sectors of the economy, the Opposition political parties could hardly wait to get their supporting private radio stations into action with even* kind of calumny against the Marxist-Socialist Government of President Allende.

The resignation of President Allende’s Cabinet is the latest move in Chile’s troubled political and economic situation. This article from a correspondent in Santiago gives a background to what is now happening in a country that elected a Marxist President to power.

In the kind of period of high political tension through which Chile is currently going, radio networks can be a powerful influence on the ordinary man. In response President Allende himself allowed his customary cloak of cool statesmanship to drop by declaring that the country was on the verge of civil war. He clearly regretted having made such a remark and afterwards took the earliest opportunity to say that the “workers” had come to the country’s rescue. But in Chile’s confused economic situation it is difficult to assess where the political lines are drawn these days, so far as the working man is concerned. For example, the Government and the Left-wing newspapers which support it, repeatedly branded the stoppage as a “bosses’ strike,” the suggestion being that the big haulage companies had got together to lock out their drivers and squeeze an already hard-pressed economy even further by cutting food and fuel supplies. Most owner-drivers

But this conveniently overlooks the fact that the majority of trucks in Chile are operated by ownerdrivers. These are “little men” whose only asset is a lorry that more often than not gives the impression that it is about to breathe its last, either for the lack of spare parts or sheer antiquity. These men, as much as the big company owners, were violently opposed to the establishment of a State-run transport agency, which was the cause of the dispute. In addition, the lorry men quickly drew the support of small shopkeepers, offices and even bank staffs. Since nearly all the banks in Chile are now run by the State, their workers were taking a bold political step in refusing to abandon the lorry owners’ cause when pressured to do

so. Add to these a large pro-| portion of doctors, lawyers and other professional groups and the so-called “bosses’ j strike” takes on an entirelyi different meaning. It must be clear to most; people now that all those ( who took part in the stop-i page (apart from the lorry men) did so not so much because they felt strongly I about the Government’s| plans for a transport | agency, but because they 1

felt the time had come to demonstrate their opposition to President Allende’s policies in general. Many or the small shopkeepers, for instance, had been smouldering for months over the high prices paid to Government distribution agencies for goods and the low-profit margins enforced by price control. Rising prices By the same token, the bank clerks, like many others, have been feeling the pinch of rising prices, scarcity of goods and the parlous food situation which has housewives visiting five or six supermarkets a day in search of the very basic items.

The lorry men’s stoppage and the support which it gathered have promoted two distinct lines of thought in Santiago. One is that those opposed to the Government seized the opportunity to show their displeasure and threw all their weight behind a move which they thought would paralyse the country. There are many in the Opposition Christian Democratic party who obviously thought just that. The other school believes that the oppositionists have by no

imeans marshalled al! their 'forces, preferring to let the (current situation serve as a i warning to the Government for the future. I If the first of these theories | is true, that Allende's | opponents drew on all the i support they muster, then the President must be a very i happy man. For the country (certainly was not paralysed, | the essential services kept (working, food and fuel supplies, admittedly spasmodic.

i did keep on reaching the major centres, the lower-class workers from the poorer city areas and the “poblaciones.” the shanty-towns outside the main cities, did maintain their faith in the Government. Time for showdown In other words, if the Opposition believed the time had come for a showdown and that they would win, they must now realise that the Government, for all the hardships it has brought to many, still retains a hard core of support that is not about to swing to the Right. In fact, many observers feel that Allende can probably still count on the little more than one-third of the country’s voters who supported him at the polls two years ago.

Those who subscribe to the second theory believe that the Government has received a sobering warning about the power of the middle-class in Chile. In this they are probably correct, for it has always been one of Allende’s major aims to capture the support of this sector. He knows that if he is to “socialise” Chile by ; democratic means, as he says he will, he must draw support away from the Christian Democrats and the other Opposition parties. But the events of the past two weeks suggest that he has made no inroads of this nature at all. Both the ruling MarxistSocialist coalition and the Opposition parties are now looking to the Congressional elections next March as possibly providing the key to Chile’s future. Half the 50seat Senate and all of the 150-seat House of Deputies will be at stake and the different parties have decided to band together under the flags of “Opposition” and "Government” to carry out the fight. Control of paper Much, of course, can happen between now and the elections. Allende could make some political gesture towards his opponents, such as giving a cast-iron guarantee that the paper-manufacturing company which supplies newsprint to all the major newspapers and magazines will not be grabbed as part of his wholesale nationalisation plan. The issue has become of major importance since Government control of the company would give Allende power to cut off newsprint supplies to the Opposition press. He has said many times that the freedom of expression must be protected in Chile but there is no shortage of people in his ruling Coalition who would have no qualms about choking off all criticism tomorrow. Many private radio stations, most of which support the Opposition, are already in financial difficulties because of the latest round of statutory wage increases. The stations are being gradually deprived of advertising as the State takes over private companies and then advertises their products only on the Government network. But whatever happens in the political arena, all would now seem to depend on the economic situation. The cost of living rose by 99.8 per cent during the first nine months of the year and is expected to top 140 per cent by the end of December. This would mean that the wage increases granted earlier this month to meet the cost-of-living rise will be outstripped by about another 40 per cent in three months time. Few credits Neither is the reserves prospect any better. President Allende and his officials are quick to blame Washington’s influence in the world financial market for the falling-off in credits available to Chile. (For example, the Chilean Central Bank President, Mr Inostroza, said that his country had not received a single new credit from the World Bank in the past 22 months. He said this was due to pressure from the United States in retaliation for the nationalisation (without compensation) of American-owned copper mines in Chile.

But the World Bank’s view is that the Allende Government’s method of running the Chilean economy does not produce the minimum conditions on which the Bank makes loans. The Bank’s i President, Mr Robert Mc(Namara. pointed out that to lobtain further credits. Chile (must show that it has “a I properly administered economy and a capacity to usa 'new funds effectively.”