Republic of Chile República de Chile
1973–1990
Flag Coat of arms
Motto: Por la razón o la fuerza ("By reason or by force")
Anthem: Himno Nacional de Chile ("National Anthem of Chile")
Chilean territory in dark green; claimed but uncontrolled territory in light green
Capital	Santiago
Common languages	Spanish
Government	Unitary presidential republic under an authoritarian military dictatorship
President
• 1974–1990	Augusto Pinochet
President of the Junta
• 1973–1981	Augusto Pinochet
• 1981–1990	José Toribio Merino
Legislature	Government Junta
Historical era	Cold War
• Coup d'etát	11 September 1973
• Constitution	11 March 1981
• Plebiscite	5 October 1988
• Transition to democracy	11 March 1990
Area
• Total	756,096.3 km2 (291,930.4 sq mi) (37th)
Population
• 1973	10,095,485
• 1980	11,178,817
• 1990	13,187,821
HDI (1980)	0.640 medium
Currency	Chilean escudo (1973–75) Chilean peso (1975–90)
ISO 3166 code	CL
Preceded by Succeeded by Presidential Republic (1925–1973) Chilean transition to democracy

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Early history Monte Verde Origin of the Mapuche Early Mapuches Incas in Chile
Colonial times Conquest Colonial Chile Captaincy General Arauco War Destruction of the Seven Cities
Nation-building Patria Vieja War of Independence Reconquest Patria Nueva Civil war (1829–1830) War of the Confederation
Republican period Conservative Republic Colonization of the Strait of Magellan Liberal Republic Occupation of Araucanía War of the Pacific
Parliamentary period 1891 Chilean Civil War Parliamentary Republic 1924 coup d'état
Presidential period 1925 coup d'état Presidential Republic Radical governments Allende and UP era
Pinochet regime 1973 coup d'état Military dictatorship
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An authoritarian military dictatorship ruled Chile for seventeen years, between 11 September 1973 and 11 March 1990. The dictatorship was established after the democratically elected socialist government of Salvador Allende was overthrown in a coup d'état backed by the United States on 11 September 1973. During this time, the country was ruled by a military junta headed by General Augusto Pinochet. The military used the breakdown of democracy and the economic crisis that took place during Allende's presidency to justify its seizure of power. The dictatorship presented its mission as a "national reconstruction". The coup was the result of multiple forces, including pressure from conservative groups, certain political parties, union strikes and other domestic unrest, as well as international factors.^[A]

The regime was characterized by the systematic suppression of political parties and the persecution of dissidents to an extent unprecedented in the history of Chile. Overall, the regime left over 3,000 dead or missing, tortured tens of thousands of prisoners,^[2] and drove an estimated 200,000 Chileans into exile.^[3] The dictatorship's effects on Chilean political and economic life continue to be felt. Two years after its ascension, neoliberal economic reforms were implemented in sharp contrast to Allende's leftist policies. The government was advised by the Chicago Boys, a team of free-market economists educated in the United States. Later, in 1980, the regime replaced the 1925 Constitution with a new constitution in a controversial referendum. This established a series of provisions that would eventually lead to the 1988 Chilean national plebiscite on October 5 of that year.

In that plebiscite, 55% of voters rejected the proposal of extending Pinochet's presidency for another eight years. Consequently, democratic presidential and parliamentary elections were held the following year. The military dictatorship ended in 1990 with the election of Christian Democrat candidate Patricio Aylwin. However, the military remained out of civilian control for several years after the junta itself had lost power.^[4][5]

Rise to power

There has been a large amount of debate over the extent of US government involvement in destabilising the Allende government.^[6][7] Recently declassified documents show evidence of communication between the Chilean military and US officials, suggesting covert US involvement in assisting the military's rise to power. Some key figures in the Nixon administration, such as Henry Kissinger, used the Central Intelligence Agency (CIA) to mount a major destabilization campaign.^[8] As the CIA revealed in 2000, "In the 1960s and the early 1970s, as part of the US Government policy to try to influence events in Chile, the CIA undertook specific covert action projects in Chile ... to discredit Marxist-leaning political leaders, especially Dr. Salvador Allende, and to strengthen and encourage their civilian and military opponents to prevent them from assuming power".^[9] The CIA worked with right-wing Chilean politicians, military personnel, and journalists to undermine socialism in Chile.^[10] One reason for this was financial, as many US businesses had investments in Chile, and Allende's socialist policies included the nationalization of Chile's major industries. Another reason was the propagandized fear of the spread of communism, which was particularly important in the context of the Cold War. The rationale was that US feared that Allende would promote the spreading of Soviet influence in their 'backyard'.^[11] As early as 1963, the U.S. via the CIA and U.S. multinationals such as ITT intervened in Chilean politics using a variety of tactics and millions of dollars to interfere with elections, ultimately helping plan the coup against Allende.^[12][13][14]

On 15 April 1973, workers from the El Teniente mining camp had ceased working, demanding higher wages. The strike lasted 76 days and cost the government severely in lost revenues. One of the strikers, Luis Bravo Morales, was shot dead in Rancagua city. On June 29, the Blindados No. 2 tank regiment under the command of Colonel Roberto Souper, attacked La Moneda, Chile's presidential palace. Instigated by the neo-fascist organization Fatherland and Liberty, the armoured cavalry soldiers hoped other units would be inspired to join them. Instead, armed units led by generals Carlos Prats and Augusto Pinochet quickly put down the coup attempt. In late July, 40,000 truckers, squeezed by price controls and rising costs, tied up transportation in a nationwide strike that lasted 37 days, costing the government US$6 million a day.^[15] Two weeks before the coup, public dissatisfaction with rising prices and food shortages led to protests like the one at the Plaza de la Constitución which had been dispersed with tear gas.^[16] Allende also clashed with Chile's largest circulation newspaper, the CIA-funded El Mercurio.^[B] The newspaper was investigated for tax evasion and its director arrested and interviewed.^[18] The Allende government found it impossible to control inflation, which grew to more than 300 percent by September,^[19] further dividing Chileans over the Allende government and its policies.

Upper- and middle-class right-wing women also played a role in the opposition against the Allende government. They co-ordinated two prominent opposition groups called El Poder Feminino ("female power"), and Solidaridad, Orden y Libertad ("solidarity, order, and freedom").^[20][21] The women carried out the ‘March of the Empty Pots and Pans’ in December 1971.

On August 22, 1973, the Chamber of Deputies passed, by a vote of 81 to 47, a resolution calling for President Allende to respect the constitution. The measure failed to obtain the two-thirds majority in the Senate constitutionally required to convict the president of abuse of power, but the resolution still represented a challenge to Allende's legitimacy. The military viewed themselves as guarantors of the constitution and elements within the armed forces considered that Allende had lost legitimacy as Chile's leader.^[22] As a result, reacting to demand for intervention from opponents of the government, the military began planning for a military coup which would ultimately take place on September 11, 1973. Contrary to popular belief, Pinochet was not the mastermind behind the coup. It was, in fact, naval officers who first decided that military intervention was necessary to remove President Allende from power.^[23] Army generals were unsure of Pinochet's allegiances, as he had given no prior indication of disloyalty to Allende, and thus was only informed of these plans on the evening of 8 September, just three days before the coup took place.^[24] On 11 September 1973, the military launched a coup, with troops surrounding La Moneda Palace. Allende died that day of suspected suicide.

The military installed themselves in power as a Military Government Junta, composed of the heads of the Army, Navy, Air Force and Carabineros (police). Once the Junta was in power, General Augusto Pinochet soon consolidated his control over the government. Since he was the commander-in-chief of the oldest branch of the military forces (the Army), he was made the titular head of the junta, and soon after President of Chile. Once the junta had taken over, the United States immediately recognized the new regime and helped it consolidate power.^[8]

Dictatorship's crimes against humanity

Suppression of political activity

On September 13, the junta dissolved the Congress and outlawed or suspended all political activities in addition to suspending the 1925 constitution. All political activity was declared "in recess". The Government Junta immediately banned the socialist, Marxist and other leftist parties that had constituted former President Allende's Popular Unity coalition^[25] and began a systemic campaign of imprisonment, torture, harassment and/or murder against the perceived opposition. Eduardo Frei, Allende's predecessor as president, initially supported the coup along with his Christian Democratic colleagues. However, they later assumed the role of a loyal opposition to the military rulers. During 1976–77, this repression even reached independent and Christian Democrat labour leaders who had supported the coup, several were exiled.^[26] Christian Democrats like Radomiro Tomic were jailed or forced into exile.^[27][28] Retired military personnel were named rectors of universities and they carried out vast purges of suspected left-wing sympathisers.^[29] With such strong repression, the Catholic church became the only public voice allowed within Chile. By 1974, the Commission of Peace had established a large network to provide information to numerous organisations regarding human rights abuses in Chile. As a result of this, Manuel Contreras, Director of DINA, threatened Cardinal Silva Henriquez that his safety could be at risk if the Church continued to interfere which in turn resulted in death threats and intimidation from agents of the regime.^[30]

A key provision of the new constitution of 1980 aimed at eliminating leftist factions, “outlawed the propagation of doctrines that attack the family or put forward a concept of society based on the class struggle”. Pinochet maintained strict command over the armed forces and could depend on them to help him censor the media, arrest opposition leaders and repress demonstrations. This was accompanied by a complete shutting down of civil society with curfews, prohibition of public assembly, press blackouts, draconian censorship and university purges.^[31]

Human rights violations

The military rule was characterized by systematic suppression of all political dissidence. Scholars later described this as a "politicide" (or "political genocide").^[32] Steve J. Stern spoke of a politicide to describe "a systematic project to destroy an entire way of doing and understanding politics and governance".^[33]

Estimates of figures for victims of state violence vary. Rudolph Rummel cited early figures of up to 30,000 people killed.^[34] However, these high estimates have not held to later scrutiny.

In 1996, human rights activists announced they had presented another 899 cases of people who had disappeared or been killed during the dictatorship, taking the total of known victims to 3,197, of whom 2,095 were reported killed and 1,102 missing.^[35] Following the return to democracy with the Concertacion government, the Rettig Commission, a multipartisan effort by the Aylwin administration to discover the truth about the human-rights violations, listed a number of torture and detention centers (such as Colonia Dignidad, the ship Esmeralda or Víctor Jara Stadium), and found that at least 3,200 people were killed or disappeared by the regime. Later, the 2004 Valech Report confirmed the figure of 3,200 deaths but reduced the estimated number of disappearances. It tells of some 28,000 arrests in which the majority of those detained were incarcerated and in a great many cases tortured.^[36] In 2011, the Chilean government officially recognized 36,948 survivors of torture and political imprisonment, as well as 3,095 people killed or disappeared at the hands of the military government.^[37]

The worst violence occurred within the first three months of the coup, with the number of suspected leftists killed or "disappeared" (desaparecidos) reaching several thousand.^[38] In the days immediately following the coup, the Assistant Secretary of State for Inter-American Affairs informed Henry Kissinger that the National Stadium was being used to hold 5,000 prisoners. Between the day of the coup and November 1973, as many as 40,000 political prisoners were held there^[39][40] and as late as 1975, the CIA was still reporting that up to 3,811 were imprisoned there.^[41] 1,850 of them were killed, another 1,300 are still missing to this day.^[40] Some of the most famous cases of desaparecidos are Charles Horman, a U.S. citizen who was killed during the coup itself,^[42] Chilean songwriter Víctor Jara, and the October 1973 Caravan of Death (Caravana de la Muerte) wherein at least 70 people were killed.

Leftist guerrilla groups and their sympathizers were also hit hard during the military regime. The MIR commander, Andrés Pascal Allende, has stated that the Marxist guerrillas lost 1,500–2,000 fighters that were either killed or had simply disappeared.^[43] Among the people that were killed or had disappeared during the military regime were at least 663 MIR guerrillas.^[44] The Manuel Rodríguez Patriotic Front stated that 49 FPMR guerrillas were killed, and hundreds tortured.^[45]

According to the Latin American Institute on Mental Health and Human Rights, 200,000 people were affected by "extreme trauma"; this figure includes individuals executed, tortured, forcibly exiled, or having their immediate relatives put under detention.^[46] 316 women have reported to having been subjected to rape by soldiers and agents of the dictatorship, however the number is believed to be much larger due to the preference of many women to avoid talking about this. Twenty pregnant women have declared to have suffered abortion due to torture.^[47] In the words of Alejandra Matus detained women were doubly punished, first for being "leftists" and second for not conforming to their ideal of women usually being called "perra" (lit. "bitch").^[48]

In addition to the violence experienced within Chile, many people fled from the regime, while others have been forcibly exiled, with some 30,000 Chileans being deported from the country.^[49][50][51] particularly to Argentina, however, Operation Condor, which linked South American dictatorships together against political opponents, meant that even these exiles could be subject to violence.^[52] Some 20,000–40,000 Chilean exiles were holders of passports stamped with the letter "L" (which stood for lista nacional), identifying them as persona non grata and had to seek permission before entering the country.^[53] According to a study in Latin American Perspectives,^[54] at least 200,000 Chileans (about 2% of Chile's 1973 population) were forced into exile. Additionally, hundreds of thousands left the country in the wake of the economic crises that followed the military coup during the 1970s and 1980s.^[54] In 2003, an article published by the International Committee of the Fourth International claimed that "Of a population of barely 11 million, more than 4,000 were executed or 'disappeared', hundreds of thousands were detained and tortured, and almost a million fled the country".^[55]

There were also internal exiles who due to a lack of resources could not escape abroad.^[56] In the 1980s a few left-wing sympathisers hid in Puerto Gala and Puerto Gaviota, Patagonian fishing communities with a reputation of lawlessness. There they were joined by delinquents who feared torture or death by the authorities.^[56]

Several scholars including Paul Zwier,^[57] Peter Winn^[58] and human rights organizations^[59] have characterized the dictatorship as a police state exhibiting "repression of public liberties, the elimination of political exchange, limiting freedom of speech, abolishing the right to strike, freezing wages".^[60]

Fake combats

Starting in the late 1970s the regime began to use a tactic of faking combats, usually known by its Spanish name: "falsos enfrentamientos".^[61] This meant that dissidents who were murdered outright had their deaths reported in media as if they had occurred in a mutual exchange of gunfire. This was done with support of journalists who "reported" the supposed events; in some cases, the fake combats were also staged. The faked combat tactic ameliorated criticism of the regime implicitly putting culpability on the victim. It is thought that the killing of the MIR leader Miguel Enríquez in 1974 could be an early case of a faked combat. The faked combats reinforced the dictatorship narrative on the existence of an "internal war" which it used to justify its existence.^[62] A particular fake combat event, lasting from September 8 to 9 1983, occurred when forces of the CNI lobbed grenades into a house, detonating the structure and killing the two men and a woman who were in the building. The agents would later state, with help from the Chilean press, that the people in the house had fired on them previously from their cars and had escaped to the house. The official story became that the three suspects had caused the explosion themselves by trying to burn and destroy incriminating evidence. Such actions had the effect of justifying the existence of heavily armed forces in Chile and the dictatorship's conduct against such "violent" offenders.^[63]

Politics and power within the dictatorship

Pinochet–Leigh conflict

During the 1970s, junta members Gustavo Leigh and Augusto Pinochet clashed on several occasions, dating back from the beginning of the 1973 Chilean coup d'état. Leigh criticized Pinochet for having joined the coup very late and then subsequently pretending to keep all power for himself. In December 1974, Leigh opposed the proposal to name Pinochet president of Chile. Leigh recalls from that moment that, "Pinochet was furious: he hit the board, broke the glass, injured his hand a little and bled. Then, Merino and Mendoza told me I should sign, because if not the junta would split. I signed." Leigh's primary concern was Pinochet's consolidation of the legislative and executive branches of government under the new government, in particular, Pinochet's decision to enact a plebiscite without formally alerting the other junta members.^[64] Leigh, although a fervent supporter of the regime and hater of Marxist ideology, had already taken steps to separate the executive and legislative branches. Pinochet was said to have been angered by Leigh's continued founding of a structure to divide the executive and legislative branches, eventually leading to Pinochet consolidating his power and Leigh being removed from the regime.^[65] Leigh tried to fight his dismissal from the military and government junta but on July 24, 1978, his office was blocked by paratroopers. In accordance with legal rights established by the junta government, its members could not be dismissed without evidence of impairment, hence Pinochet and his ally junta members had declared Leigh to be unfit.^[64][66] Airforce General Fernando Matthei replaced Leigh as junta member.^[67]

Another dictatorship member critical of Pinochet, Arturo Yovane, was removed from his post as minister of mining in 1974 and appointed ambassador at the new Chilean embassy in Tehran.^[68]

Civilian collaborators

Over time the dictatorship incorporated civilians into the government. Many of the Chicago boys joined the government, and Pinochet was largely sympathetic to them. This sympathy, scholar Peter Winn explains, was indebted to the fact that the Chicago boys were technocrats and thus fitted Pinochet's self-image of being "above politics".^[69] Pinochet was impressed by their assertiveness as well as by their links to the financial world of the United States.^[69]

Another group of civilians that collaborated extensively with the regime were the Gremialists, whose movement started in 1966 in the Pontifical Catholic University of Chile.^[70] The founder of the Gremialist movement, lawyer Jaime Guzmán, never assumed any official position in the military dictatorship but he remained one of the closest collaborators with Pinochet, playing an important ideological role. He participated in the design of important speeches of Pinochet and provided frequent political and doctrinal advice and consultancy.^[71] Guzmán declared to have a "negative opinion" of National Intelligence Directorate (DINA) director Manuel Contreras. According to him this lead him into various "inconviniencies and difficulties".^[72] From its side DINA identified Guzmán as an intelligent and manipulative actor in a secret 1976 memorandum.^[73] The same document posits Guzmán manipulated Pinochet and sought ultimately to displace him from power, to lead himself a government in collaboration with Jorge Alessandri.^[73] DINA spied on Guzmán and kept watch on his everyday activities.^[73] According to Oscar Contardo Guzmán was identified as gay within a portfolio held by the DINA.^[74]

According to scholar Carlos Huneeus, the Gremialists and the Chicago Boys shared a long-term power strategy and were linked to each other in many ways.^[70] In Chile it has been very hard for the outside world to fully understand the role that everyday civilians played in keeping Pinochet's government afloat, partly because there has been scant research into the topic and partly because those who did help the regime from 1973 to 1990 have been unwilling to explore their own part. One of the exemptions is a Univision interview with Osvaldo Romo Mena, a civilian torturer in 1995 recounting his actions. Osvaldo Romo died while incarcerated for the murder of three political opponents. For the most part, civilian collaborators with Pinochet have not broken the code of silence held by the military of the 1970s to 1990s.^[75]

Constitution of 1980

Establishing a new constitution was a core issue for the dictatorship since it provided a mean of legitimization.^[4] For this purpose the junta selected notable civilians willing to join the draft commission. Dissidents to the dictatorship were not represented in the commission.^[76]

Chile's new constitution was approved in a national plebiscite held on September 11, 1980. The constitution was approved by 67% of voters under a process which has been described as "highly irregular and undemocratic",^[77] and was neither free nor fair.^[78] Critics of the 1980 Constitution argue that the constitution was created not to build a democracy, but to consolidate power within the central government while limiting the amount of sovereignty allowed to the people with little political presence.^[78] The constitution came into force on March 11, 1981.

Removal of César Mendoza

In 1985, due to the Caso Degollados scandal ("case of the slit throats"), General César Mendoza resigned and was replaced by General Rodolfo Stange.^[67]

Youth policy

One of the first measures of the dictatorship was to set up a Secretaría Nacional de la Juventud (SNJ, National Youth Office). This was done on October 28, 1973, even before the Declaration of Principles of the junta made in March 1974. This was a way of mobilizing sympathetic elements of the civil society in support for the dictatorship. SNJ was created by advice of Jaime Guzmán, being an example of the dictatorship adopting a Gremialist thought.^[79] Some right-wing student union leaders like Andrés Allamand were skeptical to these attempts as they were moulded from above and gathered disparate figures such as Miguel Kast, Antonio Vodanovic and Jaime Guzmán. Allamand and other young right-wingers also resented the dominance of the gremialist in SNJ, considering it a closed gremialist club.^[80]

From 1975 to 1980 the SNJ arranged a series of ritualized rallies in Cerro Chacarillas reminiscent of Francoist Spain. The policy towards the sympathetic youth contrasted with the murder, surveillance and forced disappearances the dissident youth faced from the regime. Most of the documents of the SNJ were reportedly destroyed by the dictatorship in 1988.^[79]

Women during the dictatorship

In 1962 under the presidency of Christian Democrat Eduardo Frei Montalva, the women's section expanded pre-existing neighbourhood 'mothers' centres' (which initially helped women to purchase their own sewing machines) to help garner support for their social reforms amongst the poorer sections. By the end of the 1960s, there were 8,000 centres involving 400,000 members.^[81] Under Allende they were reorganised under the rubric National Confederation of Mothers' Centres (Confederación Nacional de Centros de Madres, COCEMA) and leadership of his wife, Hortensia Bussi, to encourage community initiatives and implement their policies directed at women.^[82]

Opposition

Attacks on military personnel

One of the first armed groups to oppose the dictatorship was the MIR, Movimiento de Izquierda Revolucionaria. Immediately after the coup MIR-aligned elements in Neltume, southern Chile, unsuccessfully assaulted the local Carabineros station. Subsequently, MIR conducted several operations against the Pinochet government until the late 1980s. MIR assassinated the head of the Army Intelligence school, Lieutenant Roger Vergara, with machine gun fire in the late 1970s. The MIR also executed an attack on the base of the Chilean Secret Police (Central Nacional de Informaciones, CNI), as well as several attempts on the lives of carabineros officials and a judge of the Supreme Court in Chile.^[83] Throughout the beginning years of the dictatorship the MIR was low-profile, but in August 1981 the MIR successfully killed the military leader of Santiago, General Carol Urzua Ibanez. Attacks on Chilean military official increased in the early 1980s, with the MIR killing several security forces personnel on a variety of occasions through extensive use of planted bombs in police stations or machine gun use.^[84]

Representing a major shift in attitudes, the CPCh founded the FPMR on 14 December 1983, to engage in a violent armed struggle against the junta.^[85] Most notably the organisation attempted to assassinate Pinochet on the 7 September 1986 under 'Operation XX Century' but were unsuccessful.^[86] The group also assassinated the author of the 1980 Constitution, Jaime Guzmán on 1 April 1991.^[87] They continued to operate throughout the 1990s, being designated as a terrorist organisation the U.S. Department of State and MI6, until supposedly ceasing to operate in 1999.^[88]

Church opposition to human rights violations

The Catholic Church, which at first expressed its gratitude to the armed forces for saving the country from the horrors of a "Marxist dictatorship" became, under the leadership of Cardinal Raúl Silva Henríquez, the most outspoken critic of the regime's social and economic policies.^{[citation needed]}

The Catholic Church was symbolically and institutionally powerful within Chile. Domestically, it was the second most powerful institution, behind Pinochet's government. While the Church remained politically neutral, its opposition to the regime came in the form of human rights advocacy and through the social movements that it gave a platform to. It achieved this through the establishment of the Cooperative Committee for Peace in Chile (COPACHI) and Vicariate of Solidarity. COPACHI was founded by Cardinal Raul Silve Henriquez, Archbishop of Santiago, as an immediate response to the repression of the Pinochet regime. It was apolitical in a spirit of collaboration rather than conflict with the government. Pinochet developed suspicion of COPACHI, leading to its dissolution in late 1975. In response Silva founded the Vicariate in its place. Historian Hugo Fruhling's work highlights the multifaceted nature of Vicaria.^[89] Through developments and education programs in the shantytown area of Santiago, the Vicaria had mobilised around 44,000 people to join campaigns by 1979. The Church published a newsletter called Solidarity published in Chile and abroad and supplied the public with information through radio stations. Vicaria pursued a legal strategy of defending human rights, not a political strategy to re-democratise Chile.

Jornadas de Protesta Nacional

The Days of National Protest (Jornadas de Protesta Nacional) were days of civil demonstrations that periodically took place in Chile in the 1980s against the military junta. They were characterized by street demonstrations in the downtown avenues of the city in the mornings, strikes during the day, and barricades and clashes in the periphery of the city throughout the night. The protests were faced with increased government repression from 1984, with the biggest and last protest summoned in July 1986. The protests changed the mentality of many Chileans, strengthening opposition organizations and movements in the 1988 plebiscite.

Economy and free market reforms

After the military took over the government in 1973, a period of dramatic economic changes began. The Chilean economy was still faltering in the months following the coup. As the military junta itself was not particularly skilled in remedying the persistent economic difficulties, it appointed a group of Chilean economists who had been educated in the United States at the University of Chicago. Given financial and ideological support from Pinochet, the U.S., and international financial institutions, the Chicago Boys advocated laissez-faire, free-market, neoliberal, and fiscally conservative policies, in stark contrast to the extensive nationalization and centrally planned economic programs supported by Allende.^[90] Chile was drastically transformed from an economy isolated from the rest of the world, with strong government intervention, into a liberalized, world-integrated economy, where market forces were left free to guide most of the economy's decisions.^[90]

From an economic point of view, the era can be divided into two periods. The first, from 1975 to 1982, corresponds to the period when most of the reforms were implemented. The period ended with the international debt crisis and the collapse of the Chilean economy. At that point, unemployment was extremely high, above 20 percent, and a large proportion of the banking sector had become bankrupt. The following period was characterized by new reforms and economic recovery. Some economists argue that the recovery was due to an about-face turnaround of Pinochet's free market policy, since he nationalized many of the same industries that were nationalized under Allende and fired the Chicago Boys from their government posts.^[91]

1975–81

Chile's main industry, copper mining, remained in government hands, with the 1980 Constitution declaring them "inalienable",^[92] but new mineral deposits were open to private investment.^[92] Capitalist involvement was increased, the Chilean pension system and healthcare were privatized, and Superior Education was also placed in private hands. One of the junta's economic moves was fixing the exchange rate in the early 1980s, leading to a boom in imports and a collapse of domestic industrial production; this together with a world recession caused a serious economic crisis in 1982, where GDP plummeted by 14%, and unemployment reached 33%. At the same time, a series of massive protests were organized, trying to cause the fall of the regime, which were efficiently repressed.

1982–83

In 1982-1983 Chile witnessed a severe economic crisis with a surge in unemployment and a meltdown of the financial sector.^[93] 16 out of 50 financial institutions faced bankruptcy.^[94] In 1982 the two biggest banks were nationalized to prevent an even worse credit crunch. In 1983 another five banks were nationalized and two banks had to be put under government supervision.^[95] The central bank took over foreign debts. Critics ridiculed the economic policy of the Chicago Boys as "Chicago way to socialism".^[96] Zdroj:https://en.wikipedia.org?pojem=Military_dictatorship_of_Chile_(1973–1990)
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