Chilean describes his country’s economy

Press, 27 July 1981, Page 16

Chilean describes his country’s economy

Mr J. J. Barnett, a retired businessman from Chile, wrote this article in response to a report which appeared on July 23. Mr Barnett said his family had lived in Chile for three generations. “There are many things about Chile I do not agree with,” he said. “However, the good things that have happened in recent years should also be highlighted.” Mr Barnett wrote as follows:

As a Chilean enjoying a short holiday in New Zealand it has saddened me to read Mr Paul Bruce’s article printed in “The Press” last Thursday. I have not come to New Zealand armed with a mass of statistics and economic data of the sort that might have allowed me to refute adequately Mr Bruce’s arguments, but clearly he has been misled into looking at only one side of the Chilean coin. His article, to say the least, is unbalanced. The socio-economic situation in Chile today is far from being ideal, but why paint it worse than it actually is? As Mr Bruce appears elsewhere in your newspaper as having represented the New Zealand Greenpeace organisation during his visit to my country, he presumably had access to Government sources of information. But he does not seem to use such information, or if he does he uses it only in a negative way. As a result, he paints a one-sided picture of Chile for your readers. One gets, for instance, the impression from the article that beggars are appearing for the first time on the streets of Chilean cities. Sadly enough, throughout South America, there have always been beggars, and Chile has never been the exception. There are no statistics, to my knowledge, on beggars, but I do not believe that their numbers have increased in Chile of late. The unemployment figure of II per cent sounds grim enough (it is about on a par with England), but it has improved considerably over the figure of more than 20 per cent of a few years ago. I do not know when Mr Bruce - was in Chile, but the unemployment figure was

down to a traction over 10 per cent when I left the country in late April. Incidentally, these figures are published each month in Chilean daily newspapers so Mr Bruce had access to more' up-to-date statistics than those published “early this year” to which he refers. The number of people registered under the “minimum employment scheme” in Chile has been coming down of late quite steadily, as such persons find more remunerative jobs. The municipal council of my own district of Santiago has been unable to recruit as many workers as it would like under the scheme. This is a good sign. Mr Bruce quotes figures on industrial production which show a modest drop of 2.6 per cent over recent years. The exclusion, however, of our main productive activity — mining — from these figures makes them unreliable. He also omits to remind his readers that over the period he is reviewing the entire world has been suffering a severe economic recession. Might this not in some way mitigate the relatively poor Chilean performance? Mr Bruce comments on our increased food import bill in Chile, but does not relate his figures to new agricultural production in other areas of farming. Chile does not direct its farmers to grow this or that crop. They are free to move into whichever areas of farming they find most suitable and remunerative. Of late there has been a significant swing across to cattle raising, but it will take a year or two before the herds are built up and beef exports

begin to take a place in our foreign trade figures. I know you will agree that it is the net figure that is important — that is, the difference between agricultural imports and exports — and not just the amount of food imported. I maintain that a more revealing “economic indicator” is the over-all trade payments situation, and this has shown a favourable balance over recent years. Surely if one has a surplus of money between income and expenditure, food is not a bad way of spending such money? And more so, if by encouraging imports of food items one is able to keep down the prices of domestic equivalents, and thereby ease inflationary pressures on the housewife’s shopping basket. For example, Irish butter today costs less in Chile than local brands of butter. Finally, and perhaps most destructive of all Mr Bruce’s criticism, he points to Chile’s inflation figure of nearly 30 per cent a year, and compares it unfavourably with the international average. Surely it is relevant to mention that in 1973 when the present military Government seized power from the previous Marxist regime, the inflation rate was running at about 800 per cent a year. The rate topped out soon after that at just over 1000 per cent a year. Would it not have been fairer to compare Chile’s inflation with the South African average? I am sure we would have appeared in a better light. Or more favourable still would have been a comparison with two of our immediate neighbours, countries,where inflation is running near 100 per cent a year in one case, and over 100 per cent in the other.