WHAT'S NEXT IN CHILE?

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90T00435R000100110010-9
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 5
• Document Creation Date: December 27, 2016
• Document Release Date: March 8, 2013
• Sequence Number: 10
• Publication Date: November 3, 1988
• Content Type: MISC

? Declassified in Part - Sanitized Copy Approved for Release 2013/03/08 : CIA-RDP90T00435R000100110010-9 STAT
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WHAT'S NEXT IN CHILE?
by Jose' S. Sorzano
Earlier this month Chileans went to the polls in record
numbers to give a simple 'YES' or 'NO' answer to the question of
whether General Augusto Pinochet should extend his fifteen year
rule for almost another decade. The verdict went against Pinochet
with 43% of Chileans voting 'YES' and 55% voting 'NO'.
The conduct of the plebiscite was impeccable. Of the
slightly more than eight million Chileans eligible to vote almost
seven and a half million registered and an amazing 92% turned out
to vote. The voting was monitored by thousands of party
representatives and foreign observers and no significant
questionable practices were reported.
Ensuring an honest vote was but the latest in a sequence of
steps taken by the military-backed government to implement the
constitutionally mandated transition to democracy. In the face of
international skepticism the government enacted the laws
regulating party organization, presided over a massive voter
registration, granted prime time TV access to the opposition (in
a more lively format than our "debates"), and ensured order for
the plebiscite that put an end to its days in office.
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Not many military regimes can point to such a record. But
it is precisely this record which indicates that the democratic
transition will not be interrupted but will continue with the
government now starting to implement the measures necessary to
conduct the 1990 multiparty presidential elections automatically
triggered by the victory of the 'NO'.
Guessing how that election is going to shape up is more
difficult. During the last fifteen years Chile's society and
economy have undergone profound transformations. In that same
period there have been no competitive elections to measure
relative political strengths. There are several cues, however,
which suggest some likely scenarios.
The results of the plebiscite point to the broad political
coalition that opposed Pinochet as the current front runner.
Despite the obvious problems in welding together a working
alliance between sixteen parties ranging from the extreme left to
the moderate right they waged an effective and ultimately
victorious campaign. In doing so they had to overcome the natural
advantage of incumbents and the voters' fear that a decision
against Pinochet would bring back the chaos, violence, inflation
and scarcity of the last days of the Allende government. Their
moderation, ability to maintain unity and an astute TV campaign
(reminiscent of Reagan's soothing "Its morning in America" 1984
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presidential campaign theme) reassured voters that there was
nothing to fear about the "return of happiness".
On the other side are the political forces that supported
Pinochet by voting 'YES' in the plebiscite. Despite the
advantages of incumbency Pinochet faced almost impossible odds.
He had to overcome Chile's history of a fractured electorate and
obtain an absolute majority. He failed. Yet, he still received
43% of the vote. That level of popular support would have won a
multi-candidate election (Allende won the presidency in 1970 with
just 36% of the vote) It is also much higher than the level of
support that could be obtained by most, if not all, of the
current democratically elected Latin American presidents if they
could seek re-election.
This surprising level of support is mostly a reflection of
the popularity of the free market economic policies implemented
during Pinochet's tenure. Chileans today enjoy a smaller, less
suffocating, less corrupt government. The economy is now export-
oriented and Chileans are confident that they can compete
favorably in the world market. The positive economic results-
unique in Latin America - show five consecutive years of growth
averaging over five percent. Inflation and unemployment are down
to single digits and the external debt is being reduced. These
palpable results have led to a widespread acceptance of free
market economic policies. Even Pinochet's adversaries
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acknowledged the political appeal of market policies during the
campaign and promised to continue them once they assumed office.
The appeal of the market policies and the relatively high
level of support for Pinochet suggest that the next elections
will much more closely contested than commonly assumed and that
they may produce results opposite to those of the plebiscite.
Indeed, the results of the plebiscite indicate that support
for both the 'YES' and 'NO' positions was more or less evenly
distributed throughout Chilean society straddling class lines
and previous electoral divisions. This suggests that after all
the changes in Chile the new cleavage line in Chilean politics
may lie between those that generally support the changes effected
by Pinochet and those who do not.
In that light, the 43% of the electorate that voted 'YES'
constitute a very solid basis for putting together a winning
coalition in the forthcoming presidential elections. On the other
hand, although numerically superior, the 55% that voted 'NO'
represents a coalition of disparate elements. The key for both
sides will be to preserve unity but it will be more difficult for
the 'NO' to preserve its present strength. Much will also depend
on the candidates that will emerge with neither side having an
easy time picking a single candidate around whom to rally.
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In the likely event that no candidate obtains the required
absolute majority in the elections, then the second round between
the two top finishers will be a replay of the plebiscite with one
candidate promising to continue the successful policies of the
Pinochet regime and the other running on the need for change. But
with Pinochet not on the ticket it will be easier for the
candidate that advocates the continuation of previous policies to
obtain the support of those who previously voted 'NO' than vice-
versa.
A scenario similar to this may be influencing the market in
Chile. Despite the victory of the 'NO' there has been no capital
flight (Chileans are allowed to have dollar accounts in local
banks), the dollar is down against the peso and foreigners have
continued to pump money into Chile since the plebiscite. This
indicates a measure of confidence on the part of those that
desire the continuation of free market policies in Chile. They
must calculate that the odds are that the next government of
Chile will be democratically elected and committed to economic
growth through free market policies. This outcome, were it come
to pass, would serve as a beacon to the other Latin American
democracies currently stagnating in a self-imposed economic
morass.
Ambassador Sorzano was an observer during the October 5
plebiscite. He served until last June as Senior Director for
Latin America in the National Security Council.
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