CABLE TO(Sanitized) FROM THE DIRECTOR

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80T00702A001000040004-2
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 10
• Document Creation Date: December 12, 2016
• Document Release Date: January 16, 2002
• Sequence Number: 4
• Publication Date: December 16, 1978
• Content Type: CABLE

Approved For Release 2002/05/07: CIA-RDP80T00702AO01 gt~ 0004-2
CONFIDENTIAL FRP: , i , , , , ,
25X18 ONE ARTICLE FROM OER'S ECONOMIC INTELLIGENCE WEEKLY REVIEW
25X1 NDING 15 DECEMBER 1978. REQUEST ARTICLE BE PASSED TO AMBASSADOR,
CM, ECONOMIC SECTION AND OTHER WORKING LEVEL STATE OFFICERS.
25X1
CHILE: REFORM PROGRAM REVITALIZING THE ECONOMY.
(C).
1. THE PINOCHET GOVERNMENT'S THOROUGHGOING ECONOMIC
REFORM PROGRAM HAS REVERSED ALLENDE'$ SOCIALIST REVOLUTION
AND TRANSFORMED CHILE INTO A MARKET-ORIENTED, FREE-TRADE
ECONOMY. SANTIAGO HAS RESTORED ECONOMIC GROWTH, BROKEN
HYPERINFLATION, AND AT LEAST TEMPORARILY ELIMINATED
PAYMENTS PROBLEMS, INDUSTRY AND AGRICULTURE ARE BECOMING
MORE INTERNATIONALLY COMPETITIVE, THE COUNTRY IS NOW
LIVING WITHIN ITS MEANS, AND OVERRIDING DEPENDENCE ON
COPPER EXPORTS HAS BEEN GREATLY REDUCED, WITH US BANKERS
AND BUSINESSMEN IN THE VANGUARD, GROWING INTERNATIONAL
BUSINESS CONFIDENCE IN THE JUNTA'S PROGRAM HAS PAVED THE
WAY FOR NEW.LOANS AND NEW DIRECT INVESTMENT, ENABLING
THE JUNTA TO RELAX AUSTERITY POLICIES THAT HAVE HIT HARD
AT THE POOR,.(C),
2, THE US LETELIEP INVESTIGATION, POSSIBLE ARMED
CONFLICT WITH ARGENTINA, AND/OR THE REGIONAL
INTER-AMERICAN LABOR ORGANIZATION'S PLANNED BOYCOTT OF
Approved For Release 2002/05/07 : CIA-RDP80T00702AO01000040004-2
25X1A
 Approved For Release 2002/05/07 : CIA-RDP80T00702AO01000040004-2
CONFIDENTIAL
CHILEAN PRODUCTS COULD TRIGGER INTERNATIONAL PAYMENTS
PROBLEMS It 1979. NONETHELESS KE EXPECT THE ECONOMtC
GAINS AND STRUCTURAL IMPROVEMENTS OF THE REFORM PROGRAM
TO CONTINUE. APACE, TO MAINTAIN ECONOMIC GROWTH IN tHE 6-PERCENT
TO 7-PERCENT RANGE BEYOND NEXT YEAR THE CHILIAN JUNTA MUST
TAKE STEPS TO BOOST DOMESTIC SAVINGS AND INVESTMENT FROM THEIR
STILL RELATIVELY LOW LEVELS.
DRAMATIC TURNAROUND.
3, THE CHILEAN ECONOMY HAS RECOVERED FROM THE CHAOS
OF THE LAST YEARS OF THE ALLENDE GOVERNMENT, COMPREHENSIVE
ECONOMIC REFORMS ALONG WITH STRINGENT AUSTERITY MEASURES
HAVE BROUGHT INFLATION UNDER FIRM CONTROL, RESTORED
CHILE'S ECONOMIC CREDIT RATING, AND FOSTERED ECONOMIC
'GROWTH;
INFLATION IS DOWN FROM TRIPLE-DIGIT LEVELS IN
THE- MID-1970S TO 30 PERCENT IN 1978,
THE EXTERNAL ACCOUNTS WILL POST A $500 MILLION
SURPLUS THIS YEAR COMPARED WITH THE $100 MILLION DEFICIT
RECORDED IN 1973,
REAL ECONOMIC GROWTH IN 1978 WILL. HIT ABOUT
6 PERCENT IN CONTRAST TO A #7-PERCENT DECLINE IN 1973, (C)
REFORM PROGRAM.