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8/5/1962 - Chile by Pat M. Holt

NOT FOR PUBUCATION INSTITUTE OF CURRENT WORLD AFFAIRS PMH Ciy Hotel Buenos Aires Argentina August Mr Richard H Nolte Institute Current World Affairs Madison Avenue New York N Y Dear Mr Nole Although Chilean politics amozlg sable democratic Latin America character between right This ranges Latin America biggest Communist Parties Conser vatiwes openly social reforms Alliance Progress cause trouble Chilean economics characterized inflation balance payments deficit chronic become This combination could ordinarily expected result crisis political social upheaval It Certainly going subject Chile tough resilient political structure increasing strains least throh presidential election which already castin shadow But Chile ordinary country In respects European Latin lived present troubles As Communists Popular Front government without letting country One currently ominous Chile spread range political opinion country lacks center group The nearest thing group Christian Democratic Party modeled European parties But Christian Democrats consider themselves leftist party center sense allied Communists Furthermore youngest smallest major Chilean political groupings The other major groups Revolutionary Front Popular Action FRAP after Spanish initials government coalition right FRAP consists alliance National Democratic Socialist Communist Parties Its current leadership Communist strikes people naive Communists election government This remains P H Chile historical experience provide basis FRAP leaders their presidential candidate Socialist Salvador Allende close winning Even Communists participate Allende government there little doubt government would introduce radical changes Chilean That portion FRAP which Communist thinks itself nationalist It would follow independent foreign policy would American business Chile FRAP denies desire expropriate foreign investments advocates nationalization country foreign commerce What means copper industry example govern would leave production alone would marketing This policy based Latin American complaint products abroad prices beyond control while industrial products purchased abroad prices beyond control The policy based belief which supporting evidence government somehow could better world copper prices priwate copper companies These companies incidentally already paying taxes So prices foreign industrial goods concerned Latin American argument stems World War II inflation United States ignores advantages provided buyers growing European Japanese industries FRAP would carry nationalization commerce industry This already nationalized produc Chile sufficlent handful foreign compa Esso Shell distribution buslness Finally FRAP would probably Chile radical reform would couple urban reform This latter would based Santiago estate owned relatively people undeveloped surrounding This monopoly housing space potential housing space rapid urban population growth naturally resulted skyrocketing estate values It points emphasis improving Chile deteriorating school system certain amount demagoguery about equalizing rural urban wages FRAP greatest appeal This appeal increased slowness which government coalition moves attack Chile social economic problems This coalition composed Conservative Liberal Radical Parties In alliance Radicals least conservative Conservatives A visit century Santiago mansion which Conservatives their headquarters gives feeling haing audience PMH Louis XlV Conservative leaders quite frankly thrust Alliance Progress misdirected It great mistake advocate reform because simply stirs people demand changes which upset status United States intentions doubtless meant based misunderstanding situation Chile In short paraphrase Conservative attitude bluntly Conservatives themselves state people party thing Chile crazy gringoes trying upset They perceptive Louis XIV least realized deluge The Conservatives their closeness Catholic Church This obviously source considerable embarrassment substantial segment Cathol hierarchy Chile This hierarchy Latin America means monolithic social actions Jell social doctrines Church tends closer Christian Democrats which about centuries ahead Conservatives For exuple Church which Chile biggest owners started reform program distributing estates people It actively promoting urban housing other cooperatives The government coalition together President Alessandrl after election party independent Alessandri whose father Chile great Radical presidents successful businessman private attacked Chile endemic inflation orthodox policies strongly supported United States International Monetary Fund These policies slowed inflation something about This sufficient progress wages Chile increased which contributed notably present social tranquility Chile present foreign exchange crisis stems relaxation these austere policies consequent exhaustion dollar reserves Alessandri managed stubborn effort adroit political maneuvering browbeat Congress raising taxes Moreover after considerable delay Senate approved reform which expected House month This generally criticized which written landlords something which lords admit moderates insuf ficiently considered Like Latin America reform programs itself adminis tration It complicated bureaucratic structure PH break latlfun consolidate minifundia extend technical assistance provide agricultural credit It provides complicated scheme expropriation lands exemp certain lands expropriation How works really depends goernment wants But forward Those persons solve Chile agricultural problems point It makes passing reference question water rights which great importance because fertile central valley Chile requires irrigation It respects urgent question rural education deterioration which threatening Chile standing Latin America literate countries The literacy officially stated informed people estimate effective literacy rural areas But rarely solve problem One begin somewhere And moderate right Chile begun though somewhat against The question whether right enough power Most people think EVen short attractive political personalities choose presidential candidate President Alessandrl barred Constitution ceeding himself Unless right candidate stronger support seems likely alternative government found Christian Democrats This party mmnaged appeal mainly intellectuals professional classes It trying attract labor meeting tough competition Communists It together winning coalition One September special Santiago vacancy Chamber Deputies caused death Conservative Another significant indication months lmter municipal elections throughout country If Christian Democrats votes these elections presidency They about votes total Alessandrl about It possible whoever presidency confronted problem Alessandri faced namely putting together workable coalition Congress order anything With political system which embraces seven parties small though Chile Constitution gives President substantially power Congress chief executives haVeo A people therefore expect goverrnent Chile similar present presidential congressional roles reversed Aessandr basically censervm President difficulty securing congres slonal approval either conservative monetary policies liberal social policies The president expected further Congress equally intransigent There whether paralysis stability eanwhile Chile though either immediate economic crisis incipient political EVen midwinter countryside tended Santiago solid street crowds dressed store windows goods Under impetus liberal import polcles ancient taxis disappeared replmced model Fords Chevrolets It asserted people Santiago including professlonml economists Chile those other Latin Amerlc countries But Chile still In between sizeable middle class which Chile future Above there tradition public order elections constitutional processes Chileans proud trdltlon comparing themselves favorably other Latin American countries Although people Santiago possibility rightist should elections prospect strikes people about fetched would United Kingdom Chilean pride country democratic traditions would probably prevent nothing would This basic sympathy communism would probably prevent Although cannot Chile grounds complacency feeling solidity about country Its economic social problems urgent neglected years reasonable solutions cannot postponed indefinitely But Ch largely solved polltlcml problems sense developed traditions institutions conspicuous Latin America The question decided yemrs Chile whether these traditions institutions strong enough flexible enough adapt themselves social economic PIH change which coming Chile whether rlght llkes It whether brlttle shattered swept I inclined small escudo Chilean common sense But United States advised prepare itself fatal knocks In process Sincerely Pat Holt PH CHILE S CURRENT POLITICAL LINEUP AS REFLECTED IN CONGRESS Senate Chamber Deputies Gover_nnent Radicals Liberals Conservatives Subtotal C hristian Democrats National Democrats Sociallsts Communists Subtotal People Vanguard I Independents TOTAL