CHILE: POLITICAL PROSPECTS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP03T02547R000100260001-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 15
• Document Creation Date: December 20, 2016
• Document Release Date: May 4, 2007
• Sequence Number: 1
• Publication Date: December 1, 1981
• Content Type: REPORT

Approved For Release 2007/05/06: CIA-RDP03TO2547R000100260001-3
National
Foreign
Assessment
Center
Secret
Chile: Political Prospects
Secret
ALA 81-10044
December 1981
COPY 315
 Approved For Release 2007/05/06: CIA-RDP03TO2547R000100260001-3
Approved For Release 2007/05/06: CIA-RDP03T02547R000100260001-3
 Approved For Release 2007/05/06: CIA-RDP03TO2547R000100260001-3
""E" National Secret
FF
'= Foreign
Assessment
Center
Chile: Political Prospects
Information available as of l November 1981
has been used in the preparation of this report.
This paper was prepared b~ of the
Office of African and Latin American Analysis.
Comments and queries are welcome and may be
addressed to the Chief, South America Division,
ALA,
the Directorate of Operations
This paper was coordinated with the National
Intelligence Officer for Latin America and with
Secret
ALA 81-10044
December 1981
25X1
 Approved For Release 2007/05/06: CIA-RDP03TO2547R000100260001-3
Secret
Chile: Political Prospects
25X1
Key Judgments The prospects for orderly government in Chile for the remainder of the
decade are good, but in the longer term its chances are not as bright as the
current stability might suggest.
A new constitution guarantees President Augusto Pinochet nine more years
in office and gives him the option of standing for an additional eight-year
term. Barring a crisis, such as a severe economic downturn, Pinochet is
likely to remain in power, largely on his own terms, for the remainder of
the decade.
Perhaps the most significant threat to continued orderly government over
the long term is that which is inherent in one-man rule. No successor has
been groomed and, if Pinochet left the scene abruptly, the military would
have trouble replacing him. A period of government by military junta,
dominated by the Army, probably would ensue.
Pinochet probably will continue on the course he has pursued since seizing
power from Marxist President Salvador Allende eight years ago, that is:
? Attempt to construct a political system that is both stable and resistant to
a resurgence of Marxism.
? Continue efforts to stamp out leftist political and guerrilla movements.
? Revitalize the economy with a basically free market approach.
Two key factors have contributed to Pinochet's success so far-he has
cultivated the military, and he apparently has persuaded most Chileans
that he is the only sure alternative to the chaos that prevailed during
Allende's tenure. The improved economy and the disarray and distrust
among opposition political forces have further enhanced his prospects for
staying in power.
Chile will face serious problems, however, in resuming democratic govern-
ment. The political polarization that has existed in Chile for several
decades has been deepened by the repressive policies and controversial
programs of both Allende and Pinochet. Political institutions have been
damaged by the prolonged ban on political activity, and it is uncertain how
the political tensions of the past two decades will be vented. Leftist groups,
especially those adept at maneuvering clandestinely, have remained active
and would pose a threat to weak democratic political and labor
organizations.
iii Secret
ALA 81-10044
December 1981
 Approved For Release 2007/05/06: CIA-RDP03TO2547R000100260001-3
Chile at present faces no foreign policy problem that is likely to shake
Pinochet's regime or force him to make a major shift in domestic policies.
Pinochet's stronger domestic position in recent years has lessened his
concern about international approval; at the same time, Chile's standing in
the international community has improved. Recent US moves that could
lead to warmer relations, such as the Congressional lifting of sanctions
against Chile, have been especially well received in Santiago.
 Approved For Release 2007/05/06: CIA-RDP03TO2547R000100260001-3
CPrrPt
25X1
Chile: Political Prospects
In September 1980 the Chilean people approved a
new constitution devised by the government of Presi-
dent Augusto Pinochet. In line with the new constitu-
tion, Pinochet was inaugurated in March 1981 to
begin a transition process from military rule to plural-
istic politics that is to last until 1990, when he will
have the option of standing for an eight-year term as a
civilian president. While Pinochet has a high sense of
commitment to resolving chronic political and consti-
tutional problems, his transition plan is likely to
increase polarization and leave the country poorly
prepared for a resumption of democratic government.
The Pinochet Transition Scheme
Pinochet appears motivated by three factors:
? A desire to cling to power.
? A deep revulsion against former President Salvador
Allende and the Marxism he represented.
? A commitment to establish a political system that
will preclude a resurgence of Marxist leadership.
The political system envisioned in Pinochet's new
constitution is basically democratic and, except for
banning Marxist parties, does not differ radically
from the pluralistic system of the past. To avoid the
executive-legislative stalemates that had long plagued
Chilean politics, the constitution strengthens the posi-
tion of the president and precludes the election of
minority party presidents by requiring a runoff be-
tween the leading candidates
Figure 1. Gen. Augusto Pinochet casts his vote in
the national constitutional plebiscite, September
1980.
emerging, he will easily be nominated and approved in
the plebiscite. Should the junta's nominee be reject-
ed-which seems unlikely under current circum-
stances-the military government would continue to
rule for one year and then would convoke general
elections. 25X1
Historical Perspective
Pinochet justifies the long period of continued restric-
tion on political activity as necessary to restructure
the political system. Chile traditionally has HAX1
fragmented political spectrum in which any one party
only rarely won a parliamentary majority. Constitu-
tional provisions allowing the election of a president
with only a plurality of the popular vote further
encouraged the tendency toward narrow-based minor-
ity governments. Allende was elected in 1970, for
example, with only 36 percent of the vote. Coalition
governments were commonplace and, given shifting
party alliances, often unstable. Opposition groups in
congress impeded decisive executive action, and by
The transitory articles that will govern the period
until 1990, however, are not conducive to a successful
return to democracy. Rather than a phased return to
elective rule, the articles allow Pinochet to continue to
ban political activity until 1989. The junta will then
nominate a president who is to be approved in a
plebiscite for an eight-year term. Only then will
congressional elections be called. Pinochet, who is now
65, probably assumes that with the power of incum-
bency and his ability to keep a strong opponent from
 Approved For Release 2007/05/06: CIA-RDP03TO2547R000100260001-3
Figure 2. President Augusto Pinochet reads oath of office du
inauguration of new constitution, March 198/
the 1940s, despite the country's reputation as one of
Latin America's most successful democracies, many
Chileans had come to view their political process as
ineffective.
Disillusionment led many voters to distrust all politi-
cians and political parties, while some turned to the
Communists and Socialists in the hope that these
nontraditional parties could solve Chile's problems.
' Chileans hoped this trend might be reversed when Eduardo Frei of
the Christian Democrats came to office in 1964 with an absolute
majority of the vote and the apparent political strength to tackle
basic economic and constitutional reforms. Although Frei accom-
plished a considerable portion of his program, political antagonisms
probably increased during his administration because he was
unable to fulfill the high expectations of his working and middle
class supporters. Moreover, his policies alarmed entrenched con-
servatives. Indicative of the increasing polarization, extremist
groups of both the right and left be an operating in Chile during his
administration.
Marxists had a strong base of support in the labor
movement, which they controlled from its inception in
the 1920s. As Chilean trade unions grew into some of
the largest and most powerful in Latin America,
leftist electoral influence also expanded. Communists
and Socialists polled more than one-fifth of the vote in
each of the seven presidential and congressional con-
tests between 1958 and 1973, a record unmatched
elsewhere in Latin America during that period.
In 1970, the left at last elected Salvador Allende, who
had come in second twice before. Under Allende,
however, poorly managed public finances and the
rapid nationalization of private industry led to break-
downs in public services, severe shortages of consumer
goods, and an inflation rate that was among the
 Approved For Release 2007/05/06: CIA-RDP03TO2547R000100260001-3
Secret
highest in the world. The conflict between the execu-
tive, the congress, and the courts was aggravated by
the formation of paramilitary groups backed by
Allende's extremist supporters. Despite these condi-
tions, however, 43 percent of the electorate voted for
Allende's coalition of Communists, Socialists, and
several smaller parties in the congressional elections
that were held only six months before the coup in
September 1973 that ousted Allende and led to his
death.
The military turned on Allende's followers with un-
precedented ferocity. Several thousand leftists were
killed during and immediately after the coup, and
many tens of thousands fled into exile or went intc
hiding. Political activity was ruthlessly stamped out,
and any expression of Marxism was, and remains,
vigorously prohibited.
The Realities of Governing
From the beginning, the military regime appears to
have had a clearer understanding of what it wanted to
destroy from the past than what it might create in its
stead. For example, Pinochet has been unable to
devise a satisfactory substitute for the traditional
parties. Intrigued with the corporate system of repre-
sentation in Franco's Spain, Pinochet approved the
formation of a National Unity Movement in 1975,
which he probably hoped to use as an electoral vehicle
for his own future civilian candidacy. The Movement
generated little popular enthusiasm, however, and
Pinochet dropped the idea. The new constitution
permits the formation of political parties, and junta
members have said that they will be allowed to
resume their political activities by the end of the
transition period.)
Part of the difficulty stems from the military's suspi-
cion that the left still has a strong base of support that
would surface should controls be lifted. Although
many Chileans are grateful for an end to the chaos of
the Allende years, it is probably true that the left still
retains the support of the third of the electorate it has
historically controlled
The military's problems are compounded by the lega-
cy of hatred created in the bloody aftermath of
Allende's ouster. The regime's fear of revenge re-
stricts its ability to create ground rules for resuming
political activity. Improvements in the military gov-
ernment's human rights record during the past five
years have not diminished the hostility of the families
and political groups persecuted in the early years. The
continuing restrictions on political activity and the
regime's continued harassment of even its non-Marx-
ist critics have created other enemies. Any political
system the regime ultimately creates is unlikely to be
wholly able to satisfy the military's need for rotec-
tion from retribution. 5X1
Another factor complicating the transition is25X1
Pinochet's own apparent desire for a lifetime presi-
dency. Although he has not publicly acknowledged
this goal, his actions suggest he will not quit office as
long as his health holds up, his military backing
remains strong, his civilian opponents remain divided
and ineffective, and the econom continues t 1uce
gains for the average Chilean 25P
Pinochet's Military Base
The Chilean military had prided itself on its reputa-
tion as one of the most professional and apolitical
armed forces in Latin America. Chilean soldiers are
well trained, have relatively high morale, and have an
enviable record of success in the country's foreign
wars. The Chilean military has taken charge of the
government only three times since the I 830s; only
Uruguay of the South American countries has spent
fewer years in this century under military rule than
Chilel 25X1
From the start, Pinochet has maneuvered shrewdly
and successfully to maintain the crucial support of the
military-in particular the Army, which is the largest
and most powerful of the services. Although '
chet's hardline policies and capricious, personalistic
style of government have generated some concern
within the militar , this does not represent a threat to
his rule.
25X1
Nonetheless, many officers almost certainly would
prefer more moderate policies than Pinochet has
pursued. A definite, so-called blando-duro (ikr1e-
hardline) division exists among them, with perhaps a
majority of those in the Navy and Air Force sharing
 Approved For Release 2007/05/06: CIA-RDP03T02547R000100260001-3
the blando sentiments. Military blandos believe that
Pinochet's highly authoritarian regime is inconsistent
with Chile's democratic tradition. Many of them fear
that the forced depoliticization of the country will
eventually increase polarization, rather than diminish
it. In the Army, whose officers are more directly
under Pinochet's influence, institutional loyalty and
concern for careers encourage a tougher position in
line with regime policies
Pinochet's sometimes highhanded manipulation of the
military establishment itself is offensive to some
officers, both blandos and duros. Pinochet insists on
making all major appointments within the govern-
ment and the Army, basing his choice more on loyalty
to himself than ability and service records. In recent
Army promotions to general officer, for example, two
outstanding colonels were passed over in favor of less
capable men more closely associated with Pinochet.
Despite some criticism of such tactics, most officers
share Pinochet's concerns about reducing leftist influ-
ence, building a sound economy, and providing consti-
tutional safeguards against political instability and
Marxism. Moreover, Chilean officers place an unusu-
ally high value on discipline and thus tend to obey
Pinochet's orders. Finally, military attitudes are
strongly influenced by evidence of public acceptance
of the regime. Two referendums and the twice-yearly
Gallup polls commissioned by the government have
been favorable, helping to keep Pinochet's credibility
high
The absence of a strong counterweight to Pinochet
within the military also deters the growth of dissi-
dence within its ranks. For example, Gen. Raul
Benavides, who took Pinochet's seat as the Army
representative on the junta in March when the new
constitution elevated the President to a position above
the ruling council, is an unassertive officer with a
consistent record of support for Pinochet. Of the other
junta members, National Police Chief Cesar
Mendoza and Adm. Jose Merino of the Navy seldom
voice forceful opposition. Air Force Chief Jorge
Matthei is more outspoken but keeps his criticism
within bounds. He is aware of the limited clout of the
Air Force in comparison with the Army and is
mindful that his predecessor, a Pinochet critic with
ties to centrist politicians, sank into oblivion after
being dumped from the junta three years ago. X1
The Toothless Politicians
Even if the ban on political activity had not muzzled
them, Chile's politicians are so divided and lacking in
confidence that they might not present a viable 25X1
alternative to Pinochet's continued rule. Antagonisms
between political groups have consistently impeded
efforts to form a cohesive and effective opposition.
The National Party, the chief conservative party,
scorns both the centrist Christian Democrats and the
radical leftists and has voluntarily submitted to the
political ban. The majority of Christian Democrats
reject both accommodation with the government and
alignment with the extreme left. The Communists and
Socialists, longtime rivals for votes and control of the
labor movement, cannot agree on a common anti- 25X1
regime strategy. The Communists favor a broad anti-
regime front and an accord with the Christian Demo-
crats, but are unlikely to succeed in this effort. X1
In this confused and polarized political situation,
Pinochet plays on popular fears of a return to the
chaos and leftwing extremism of the Allende days. He
undercuts centrists by continually reinforcing the
widespread perception that they, along with the left,
were to blame for the political, economic, and social
deterioration that preceded the coup.
Conservatives. A significant factor in the relative ease
with which Pinochet maintains control is the consist-
ent support given him by Chilean conservatives, who
traditionally have constituted about one-third of the
electorate. The National Party played an active role
in opposing Allende and, by the time of the coup, most
of its leaders favored not just Allende's overthrow, but
more fundamental political changes, such as outlaw-
ing the Communist Party. While many leading indi-
vidual conservatives are outspoken regime apologists,
the National Party has been even more valuable to
Pinochet simply by complying with his ban on public
political activity. Its president, Sergio Onefre Jarpa,
has insisted that the party abide by the prohibition,
despite misgivings among some members
25X1
25X1
 Approved For Release 2007/05/06: CIA-RDP03TO2547R000100260001-3
Secret
Most conservatives are in basic agreement with the
government's notions of political restructuring and are
willing to accept restrictions on their political activity
as long as they lead to a reversal of the leftist trends of
the precoup years. The regime's free market economic
policies also appeal to National Party leaders, who
include some of the country's top industrialists. For
the most part, the industrialists are content to ignore
politics and tend to their business affairs during a
period of expanding economic opportunities.
A
While the Nationals' solid support for the regime
furthers political stability for the moment, their re-
nunciation of politics bodes ill for the future of the
party system that will be needed if civilian govern-
ment is to return. Formed only seven years before the
coup when two main conservative groups merged, the
party does not have sufficiently strong foundations to
survive a lengthy period of neglect. National Party
leaders probably assume that Pinochet will reward
their support by maneuvering them into advantageous
positions to inherit power, but their lack of organiza-
tion could prove costly. They may find themselves
without an effective voice and without workable ties
to other political parties, leaving the one-third of the
electorate whose allegiance they hold with no viable
party to represent its viewsi
Christian Democrats. Former President Eduardo
Frei's centrist Christian Democratic Party (PDC),
which also represents approximately one-third of the
voters, originally backed the coup as necessary to end
the Allende debacle. The party moved into the opposi-
tion, however, once the repressive nature of the
regime became clear. Furthermore, it became evident
shortly after the coup that the military would not give
the PDC access to power. Although they try to avoid
unnecessarily antagonizing the military government,
Christian Democrats have defied the ban on political
activity by circulating party documents, holding lead-
ership meetings, and generally keeping the party
machinery in working order
Figure 3. Eduardo Frei, former President and
present leader of Christian Democratic Partt.I X 1
were in office, and who then failed to prevent
Allende's election.' Frei, who won the presidency in a
landslide in 1964, is probably still Pinochet's most
serious potential rival and is the most frequent target
It is not clear how successful an unfettered PlX1
would be in organizing an opposition, but the results
of the constitutional plebiscite-won by the govern-
ment by a 2-to-1 margin-suggest that most centrists
as well as conservatives voted in favor of the constitu-
tion. While the lack of a clear alternative gave an
unfair advantage to the regime, the outcome suggests
the government may have been successful in discredit-
ing the party and may have made inroads into PDC
control of the center. 5X1
Demoralized by the margin of the constitution's pas-
sage, as well as by what they see as Pinochet's
growing international acceptability, Christian tT-
crats seem uncertain how to proceed. Some PDC
leaders initially believed the party should attempt to
PDC leaders have been discredited by Pinochet's
charge that they were stooges who aided Marxism by
carrying out socialist economic policies when they
' Allende's election was decided in congress because no candidate
won a popular majority. The Christian Democrats, following a long
established custom voted for Allende, the front-runner at the polls.
I 25X1
 Approved For Release 2007/05/06: CIA-RDP03TO2547R000100260001-3
reach an accommodation with the government. (De-
spite his attacks, Pinochet had once indicated an
interest in having the party's support if it could be
secured at little cost.) These leaders hope such an
accommodation now would lead Pinochet to speed up
democratization. They are particularly anxious be-
cause their most popular leader, Frei, is 70 years old
and may not be able to lead the party much longer
Other Christian Democratic Party chiefs, given their
gloomy political prospects, believe the party has little
to lose by aligning itself with the Communist Party or
other elements of the former Allende coalition. The
PDC has occasionally cooperated with the leftist
parties since Pinochet took over, but has never formed
a permanent alliance. The Communists, who favor
such an accord, argue that only a broad front of all
antiregime forces has a serious chance of forcing
Pinochet to make concessions.
Frei, who has maintained control of the PDC's dispar-
ate elements for 25 years by skillfully balancing
opposing factions, is likely to reject accommodation
with either the left or the regime. The majority of
Christian Democrats probably will follow Frei's lead
and continue their policy of independent defiance,
recognizing that any course they choose has little
chance to bring about a major political opening in the
near future.
The Left. The Chilean left is likely to be a greater
concern for future governments than for the current
military regime, whose powerful position and repres-
sive policies have held it in check. Many leftist
leaders, particularly in Allende's Socialist Party, were
killed during and immediately after the coup, and
within two or three years security forces had largely
neutralized the Movement of the Revolutionary Left
(MIR) and other semiterrorist groups. Of the major
leftist organizations, the Communist Party, which had
a well-established clandestine network, escaped with
the least damage to its leadership and party appara-
tus
Forced to operate largely from abroad, surviving
leftist leaders have been unable to direct a successful
opposition movement. The negative image of the left
in the eyes of most Chileans impedes its efforts to gain
new adherents or to form an alliance with centrists.
Old grudges between Communists and Socialists, and
the Socialists' own internal factionalism, have ham-
pered attempts to unify existing leftist support 25X1
Leftist guerrilla movements have been even less effec-
tive in mobilizing public opposition to the regime. The
MIR spent several years rebuilding itself abroad,
recruiting adherents among Chilean exiles. Many of
the recruits received training in Cuba or the Middle
East. In 1979 the MIR launched its largest terrorist
campaign since the early postcoup period. It carried
out numerous bank robberies and attacks on public
buildings and was probably involved in several mur-
ders. The campaign, however, failed to generate popu-
lar support, and security forces have continued to
round up members of MIR cells. Moreover, the
MIR's activity in Chile continues to be undercut by
the defection of exiles who return from overseas and
find economic conditions better than they expected.
Many of these returnees simply fade out of the
guerrilla movement. Others continue to take part in
attacks, largely on targets of opportunity, but so far
have proved to be no threat to the regime
The MIR's actions, in fact, may be serving the cause
of the government more than that of the left. The
MIR has kept alive the specter of the extremism of
the Allende days and given proof of the need to
continue restrictions until the terrorist threat is ended.
The MIR has yet to make a concerted effort to go
after key government officials or members of the
foreign business or diplomatic communities. Were it
to do so, it might indeed begin to undermine the
public confidence upon which the re ime's economic
success rests.
Despite its ineffectual role against the military gov-
ernment, the left still has a power base among labor
and youth and could again exercise considerable
influence. Although avowed Marxists probably will
not reenter politics for years, they could have a
significant impact through the infiltration of other
parties. The Communist Party is particularly adept at
25X1
25X1
 Approved For Release 2007/05/06: CIA-RDP03TO2547R000100260001-3
Secret
Figure 4. Chilean soldier opens door to 4 -foot
shaft leading to underground compartment used
to hide guerrillas and store food, arms and
medical supplies.
maneuvering in a restrictive environment. It was
banned from 1948 to 1958, but on the day the ban
was lifted, six congressional deputies left their seats
among the other parties to form the Communist
congressional caucus.)
If the prospects for a more liberal political environ-
ment do not improve, more leftists may turn toward
violence as the only way to oust Pinochet. Communist
Party Secretary General Luis Corvalan, who before
the coup publicly advocated the electoral path to
power, has now endorsed violence. The Cubans main-
tain contact with many leftists, providing training and
logistic support to the MIR, and possibly to other
groups, while the Soviets and East Germans give
funds to a wide range of Chilean exiles.
Figure 5. Construction had begun on a second
underground compartment about 6 by 12 feet at
the time of the raid.
The government's economic recovery program has
brought dramatic improvements. In contrast to the
capital flight, triple-digit inflation, and near
breakdown in many sectors of the economy during
Allende's last two years, Chile has averaged a25t91
8-percent growth rate since 1975, inflation has fallen
to approximately 8 percent, and goods and services
are now generally available. Urban unemployment,
once a major concern, has dropped below 10 percent
this year] I 25X1
Low world market prices for copper, Chile's chief
export, coupled with high interest rates and oil prices,
probably will slow the growth rate to 5 to 6 percent
for the next year or so. This level is respectable for a
developing country with limited petroleum res4
and is not likely to cause widespread popular dissatis-
The Economy and Labor
A chief factor in public acceptance of the Pinochet
regime has been its success in revitalizing the econo-
my and satisfying the needs of consumers who well
remember the economic disruptions and severe short-
ages under Allende. To maintain public approval,
however, the government must weather an anticipated
economic downturn and continue to check unrest
among Chile's historically activist labor unions.
faction. Should the need arise, Chile's good credit
standing would enable it to get foreign assistance.
Austerity measures initiated in 1975 caused corelr-
able hardship among workers, some of whom lost
their jobs as noncompetitive businesses closed when
tariffs were lowered. Despite the generally free mar-
ket outlook of the regime, wages were controlled in
25X1
 Approved For Release 2007/05/06: CIA-RDP03TO2547R000100260001-3
the mid- I970s and did not keep pace with the rise in
costs as price controls were lifted. Greater equilibrium
in prices and wages, however, has been established
during the past two or three years, as the inflation
rate has fallen and austerity measures have been
eased.
At the time of the coup, the labor movement in Chile
was controlled by giant, sectorwide confederations
that served as power bases for leftist union bosses and
a means of mobilizing support for Allende. Although
a majority of Chilean workers were non-Marxist, the
national labor leadership, particularly in the largest
confederation was dominated by Communists and
Socialists.
Most non-Marxist union leaders backed the military
government initially and accepted the tight restric-
tions it put on labor as a necessary hardship. As the
years passed with labor still circumscribed, however,
some became critical of the regime, and both centrists
and leftists have gained at the expense of regime-
appointed labor chiefs. The right to strike, collective
bargaining, and most union elections have now been
restored under a regime-dictated labor code enacted
two years ago. This may enhance rather than dampen
the Chilean labor unions' potential for general politi-
cal activism, especially if the economy were to turn
sour and unemployment begin to rise
Foreign Policy
Chile at present faces no foreign policy problem that
is likely to shake Pinochet's hold on power or force
him to make a major shift in domestic policies.
condemned Chile in 1977, Pinochet responded by
holding a popular referendum. Chileans rejected the
UN findings by a 3-to-1 margin and, in so doing, gave
Pinochet a resounding vote of confidence
Pinochet now feels less concerned about international
disapproval because of his stronger domestic position.
The economic recovery program has attracted foreign
investors and placed Chile in a better bargaining
position with its creditors. Furthermore, a number of
governments, either because they gradually have rec-
ognized the improvement in human rights conditions
in Chile or simply because they have resigned them-
selves to Pinochet's hold on power, have upgraded
state-to-state relations. For example, Britain last year
restored ambassadorial-level relations and lifted its
embargo on arms sales to Chile
25X1
25X1
Pinochet regards the change in US administrations in
January 1981 as the most favorable foreign policy
development in years. Bilateral relations had reached
an all-time low in 1979 when Santiago turned down a
US request for the extradition of three former
Chilean security officials indicted in the assassination
of former Ambassador Orlando Letelier in Washing-
ton. Pinochet apparently decided the rewards for
cooperating with Washington were not sufficient to
risk alienating those in the Army who would have
been seriously embarrassed if former security chief
Manuel Contreras, a career Army officer and the
chief target of the US probe, had been punished.
Recent US moves that could lead to warmer relations,
such as the Senate's lifting of sanctions against Chile,
have been well received in Santiago. Pinochet has
publicly praised the "good rapprochement" between
the two countries, Chile has resumed participation in
the annual inter-American naval exercises, and the
military services have indicated an interest in resum-
ing cooperation with their US counterparts.
Chile's most pressing foreign policy problem is its
longstanding dispute with Argentina over the Beagle
Channel, where Santiago is particularly vulnerable
because of Argentina's clear military superiority.
Papal mediation of the dispute is at a standstill
following Argentina's rejection of the Pope's proposal
that would have awarded the islands in question to
Chileans generally view with approval their return to
international acceptability following their pariah-like
treatment during Pinochet's first few years. Human
rights violations had given the regime a negative
image and impeded its efforts to buy weapons and
acquire loans. Pinochet saw anti-Chilean sentiment as
a product of Soviet propaganda, but his desire to
regain good standing abroad influenced his decision to
reduce repression after 1976. To his frustration, how-
ever, the improvement was not acknowledged and,
when the UN's annual human rights resolution again
25X1
25X1
22.X1
 Approved For Release 2007/05/06: CIA-RDP03TO2547R000100260001-3
Secret
Chile. Even if the mediation effort were to break
down entirely, however, it probably would not harm
Pinochet's domestic standing as Chileans almost uni-
versally support the government's position.)
Prospects
Authoritarianism will dominate the Chilean political
scene for the next several years. Pinochet has no
intention of leaving office, and for the foreseeable
future he has no reason to expect a crisis worse than
those he has already weathered.
Pinochet is not a political sophisticate, but he has
sound instincts. He has unerringly pursued the two
policies that are crucial to his survival: he has culti-
vated the support of the military, and he has persuad-
ed a majority of Chileans that he is the only sure
alternative to chaos. The government's victory in the
constitutional plebiscite in 1980 and the current de-
moralized state of the opposition indicate that this
approach still works.
Although forces beyond his control, particularly un-
foreseen economic adversity, could alter the situation,
the relatively stable state of the economy and the
country's improving international prospects offer con-
siderable protection for Pinochet. In these circum-
stances, he is not apt to make major policy shifts. His
public statements give no sign that his political ideas
have evolved to any extent over the years. His
strengthened position in fact has convinced him that
his policies have been vindicated. At present, there are
no apparent negative or positive incentives sufficiently
strong to encourage him to hasten the political open-
ing
Perhaps the only significant threat to the regime is
that inherent in one-man rule. Pinochet is 65 and
appears to have no serious health problems. He has
not groomed a successor, however, and if he were to
pass from the scene unexpectedly, the military would
have trouble replacing him. It might resort to junta
rule, at least initially; the Army, as the most powerful
service, would probably retain its dominance
No matter when Pinochet leaves office, Chile prob-
ably will face major difficulties in restoring demo-
cractic government. It is unlikely to make the difficult
transition with the same success as Spain aft25X1
Franco. Pinochet shows no signs of gradually easing
controls, as Franco did beginning in the 1960s, or of
designating a successor 25 1
Chilean politics have long been polarized. Pinochet
believes he is cooling the overheated atmosphere by
banning political activity, but he may be incr25Xg,
rather than decreasing, the polarization. His transi-
tion plan does not offer an opportunity to heal the
political wounds of the last 10 years nor does it
provide an outlet to vent accumulated tension. No
gradual growth in civilian participation is envisioned
such as that which was a major factor in Peru's
successful return to democracy last year.
25X1
In contrast, Pinochet's planned retention of a com-
plete political ban until the end of the transit5X1
period gives civilian politicians no time to rebuild
their constituencies or restructure their rusty parties.
Many politically conscious Chileans share former
President Frei's fear that the enforced inactivity is
likely to sap the strength of democratic political and
labor organizations and could redound to the advan-
tage of the left, especially those groups more adept at
operating clandestinely. In sum, the long-term pros-
pects for Chile are not as bright as the current
stability would suggest.
 Secret Approved For Release 2007/05/06: CIA-RDP03TO2547R000100260001-3
Secret