History of Chile
 | The neutrality of this article is disputed. |
Early history
Chilean territory was among the last to be populated in the Americas.
Prehispanic Chile was home to over a dozen different indigenous peoples. Despite such diversity, it is possible to classify them into three major cultural groups: The northern peoples, who developed rich handicrafts and were influenced by pre-Incan cultures; the Mapuche culture, who inhabited the area between the river Choapa and the island of Chiloé, and lived primarily off of agriculture; and the Patagonian culture, composed of various nomadic tribes, who supported themselves through fishing and hunting.
As the Incan Empire expanded, it was only able to integrate the northern part of Chile. Incan attempts to colonize Central Chile were unsuccessful, having met fierce resistance by Mapuche warriors. The Lircay river subsequently became the boundary between the Incan empire and the Mapuche lands.
The first European to sight Chilean territory was Ferdinand Magellan who crossed the Strait of Magellan on November 1 1521. However, the title of discoverer of Chile is usually assigned to Diego de Almagro. De Almagro was Francisco Pizarro's partner, and he received command of the southern part of the Incan Empire (Nueva Toledo). He organized an expedition that brought him to central Chile in 1537, but he found little of value to compare with the gold and silver of the Inca. Left with the impression that the inhabitants of the area were poor, he returned to Peru, later to die in a Civil war.
After this initial excursion there was little interest from colonial authorities in further exploring modern-day Chile. However, Pedro de Valdivia, captain of the army, realizing the potential for expanding the Spanish empire southward, asked Pizarro permission to invade and conquer the southern lands. With a couple of hundred men, he subdued the local inhabitants and founded the city of Santiago de Nueva Extremadura, now Santiago in 1542.
Although de Valdivia found little gold in Chile, he could see the agricultural richness of the land. He continued his explorations of the region west of the Andes and founded over a dozen towns. The greatest resistance to Spanish rule came from the Mapuche culture, who repeatedly burned many of the first settlements.
Valdivia died in the battle of Tucapel, but the Chilean conquest was well underway. His successors would establish the Bio Bio river as frontier between Mapuche and the Spanish colony. The cities grew up and Chilean lands became an important source of food to the Viceroyalty of Peru.
Independence
The drive for independence from Spain was precipitated by usurpation of the Spanish throne by Napoleon's brother Joseph Bonaparte. A national junta in the name of Ferdinand--heir to the deposed king--was formed on September 18, 1810. Spanish attempts to reimpose arbitrary rule during what was called the Reconquista led to a prolonged struggle under Bernardo O'Higgins, Chile's most renowned patriot. Chilean independence was formally proclaimed on February 12, 1818.
The XIX Century
The political revolt brought little social change, however, and 19th century Chilean society preserved the essence of the stratified colonial social structure, family politics, and the influence of the Roman Catholic Church. The system of presidential power eventually predominated, but wealthy landowners continued to control Chile.
Toward the end of the 19th century, the government in Santiago consolidated its position in the south by persistently suppressing the Mapuche. In 1881, it signed a treaty with Argentina confirming Chilean sovereignty over the Strait of Magellan, but meaning the lost by Chile of all of oriental Patagonia, and a considerable fraction of the territory it had during colonial times. As a result of the War of the Pacific with Peru and Bolivia (1879-1883), Chile expanded its territory northward by almost one-third and acquired valuable nitrate deposits, the exploitation of which led to an era of national affluence.
In the 1870s, the church influence started to diminish slightly, with the passing of several laws that took some old roles of the church into the State's hands, like the registry of births and marriages.
In 1886, José Manuel Balmaceda was elected president. His economic policies visibly changed the existing liberal policies. He began to violate the constitution and slowly began to establish a dictatorship. Congress decided to depose Balmaceda, who refused to step down. Jorge Montt directed an armed conflict against Balmaceda, which soon extended into the Chilean Civil War of 1891. Defeated, Balmaceda fled to the Argentine embassy, where he committed suicide. Montt became the new president.
20th century
By the 1920s, the emerging middle and working classes were powerful enough to elect a reformist president, whose program was frustrated by a conservative congress. Continuing political and economic instability resulted in a coup and quasi-dictatorial rule of General Carlos Ibáñez (1924-32).
When constitutional rule was restored in 1932, a strong middle-class party, the Radicals, emerged. It became the key force in coalition governments for the next 20 years. In the 1920s, Marxist groups with strong popular support developed. During the period of Radical Party dominance (1932-52), the state increased its role in the economy.
Another new force that emerged was the Nazi Party. The party was created on 1932, during the anarchy that succeeded the fall of Ibáñez's government. Months before the elections, Nazi leader González von Marées surpsingly criticized the policies of Hitler and the Third Reich. However, that same year, the Nazis led a revolt which ended on the supression of it and the arrest of various Nazi leaders.
The 1964 presidential election of Christian Democrat Eduardo Frei Montalva by an absolute majority initiated a period of major reform. Under the slogan "Revolution in Liberty," the Frei administration embarked on far-reaching social and economic programs, particularly in education, housing, and agrarian reform, including rural unionization of agricultural workers. By 1967, however, Frei encountered increasing opposition from leftists, who charged that his reforms were inadequate, and from conservatives, who found them excessive.
1970-1973
In 1970, Salvador Allende gained the presidency of Chile. He receive a plurality of the votes cast, getting 36% of the vote against Allesandri's 34% and Tomic's 27%.
Allende was a Marxist and member of Chile's Socialist Party, who headed the "Popular Unity" (UP) coalition of socialists, communists, radicals, and dissident Christian Democrats.
His program included the nationalization of most remaining private industries and banks, massive land expropriation, and collectivization. Allende's proposal also included the nationalization of U.S. interests in Chile's major copper mines. Allende had two main competitors in the election - Radomiro Tomic, who ran a left-wing campaign with much the same theme as Allende's, and the right wing Jorge Alessandri. Immediately after the election the US government began a campaign seeking to undermine Allende's presidency and Chile's economy. Domestic production declined; severe shortages of consumer goods, food, and manufactured products were widespread; and inflation reached 1,000% per annum. Mass demonstrations, recurring strikes, violence by both government supporters and opponents, and widespread rural unrest ensued in response to the general deterioration of the economy. The Movimiento de Izquierda Revolucionaria evolved during this period, being a violent leftist organization which carried out armed bank robberies to "benefit the poor." Allende did little, if anything, to stop the movement. During this period artistic and social movements flourished.
Since Allende lacked the political majority needed to implement his socialist vision for Chile, he resorted to an obscure law passed in the 1930s during the short period of the socialist republic. Decree Law 520 was passed in 1932 to give the government emergency powers to temporarily requisition goods or temporarily take over management of companies whose health was important to the economy. Allende used the decree law to seize companies and land owned by oppostion members. This procedure could not be used directly to transfer the ownership of the company. But in practise, this was many times the outcome. The Chilean Comptroller General was the independent body that was supposed to determine the validity of the decree laws, but Allende used “decrees of insistence,” to remove the obstacle of a negative review by this body. The military also used the decree law after the coup.
By 1973, Chilean society had split into two hostile camps. A military coup overthrew Allende on September 11, 1973. As the armed forces bombarded the presidential palace, Allende died. Reports are divided as to whether he committed suicide with a machine gun given to him by his friend Fidel Castro or was assassinated.
In the aftermath of the coup, many Allende supporters began to allege that the president's overthrow had been the result of an US-orchestrated scheme. The CIA denies having actively supported the coup and claims that it was merely informed of it. Classified documents indicate that the CIA was at least supportive of a coup to overthrow Allende, though not necessarily in favour of bringing Pinochet himself to power.
Following the coup in 1973, Chile was ruled by a military regime which lasted until 1990. The army established a junta, made up of the army commander, General Augusto Pinochet; the navy commander, Admiral José Toribio Merino; the air commander, Gustavo Leigh; and the director of the carabineros; César Mendoza.
The military government pursued decidedly laissez faire economic policies. During its 16 years in power, Chile moved away from a largely state controlled economy towards a free-market economy, increasingly controlled by a few economic groups, that fostered an increase in domestic and foreign private investment.
1973-1978
After the coup, Chileans witnessed perhaps the most brutal and large-scale repression in Latin American history. The four-man junta headed by General Augusto Pinochet abolished civil liberties, dissolved the national congress, banned union activities, prohibited strikes and collective bargaining, and erased the Allende administration's agrarian and economic reforms. The junta jailed, tortured, and executed thousands of Chileans, perhaps up to 30,000 people in the first two years. The secret police, DINA (Dirección de Inteligencia Nacional)—with guidance from Colonel Walter Rauff, an ex-Nazi who supervised mass-killings at Auschwitz—spread its network throughout the country and carried out targeted assassinations abroad. The junta also set up at least six concentration camps.
The regime outlawed or suspended left and center political parties and suspended dissident labor and peasant leaders and clergymen. Eduardo Frei and other Christian Democratic leaders initially supported the coup. Later, they assumed the role of a loyal opposition to the military rulers, but soon lost most of their influence. Meanwhile, left-win Christian Democratic leaders like Radomiro Tomic were jailed or forced into exile. The church, which at first expressed its gratitude to the armed forces for saving the country from the danger of a "Marxist dictatorship," became increasingly critical of the regime's social and economic policies.
The junta embarked on a radical program of liberalization and privatization, slashing tariffs as well as government welfare programs and deficits. The new economic program was designed by a group of technocrats known as the Chicago boys because many of them had been trained or influenced by University of Chicago professors.
The junta's efforts to restore the market economy created extreme hardship. The regime's wage controls did not abate the world's highest rate of inflation; between September 1973 and October 1975, the consumer price index rose over three thousand percent. Exchange rate depreciations and cutbacks in government spending produced a depression. Industrial and agricultural production declined. Massive unemployment, estimated at 25 percent in 1977 (it was only 3 percent in 1972), and inflation eroded the living standard of workers and many members of the middle class to subsistence levels. The underemployed informal sector also mushroomed in size.
The economy grew rapidly from 1976 to 1981, fueled by the influx of private foreign loans until the debt crisis of the early 1980s. But despite high growth in the late 1970s, income distribution became more regressive. While the upper 5 percent of the population received 25 percent of the total national income in 1972, it received 50 percent in 1975. Wage and salary earners got 64 percent of the national income in 1972 but only 38 percent at the beginning of 1977. Malnutrition affected half of the nation's children, and 60 percent of the population could not afford the minimum protein and calories per day. Infant mortality increased sharply. Beggars flooded the streets.
The junta's economics also ruined the Chilean small business class. Decreased demand, lack of credit, and monopolies engendered by the regime pushed many small and medium size enterprises into bankruptcy. The curtailment of government expenditures created widespread white-collar and professional unemployment. The middle class began to rue its early support of the junta but appeared reluctant to join the working class in resistance to the regime.
The junta relied on the army, the police, the oligarchy, huge foreign corporations, and foreign loans to maintain itself. As a whole, the armed services received large salary increases and new equipment. The oligarchy recovered most of its lost industrial and agricultural holdings, for the junta sold to private buyers most of the industries expropriated by Allende's Popular Unity government. This period saw the expansion of monopolies and widespread speculation.
Financial conglomerates became major beneficiaries of the liberalized economy and the flood of foreign bank loans. Large foreign banks received large sums in repayments of interest and principal from the junta; in return, they lent the government millions more. International lending organizations such as the World Bank, the IMF, and the Inter-American Development Bank lent vast sums. Foreign multinational corporations such as International Telephone and Telegraph (ITT), Dow Chemical, and Firestone, all expropriated by Allende, returned to Chile.
1978-present
Chile's main industry, copper mining, remained in government hands, but new mineral deposits were open to private investment. Capitalist involvement was increased, pension funds and healthcare were privatized, and Superior Education was liberalized. 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 14%, and unemployment reached 33%. At the same time a series of massive protests were organized trying to cause the fall of the regime, without success.
The military junta began to change during the late 1970s. Due to problems with Pinochet, Leigh was expelled from the junta in 1978 and replaced by General Fernando Matthei. Due to a scandal, Mendoza resigned in 1985 and was replaced by Rodolfo Stange.
Problems with Argentina coming from the 19th century reached a high in 1978, with disagreements over the Beagle Canal. The two countries agreed to papal mediation over the canal. Chilean-Argentine relations remained bad, however, and Chile helped the United Kingdom during the Falklands War.
Chile's constitution was approved in a September 1980 national plebiscite. It entered into force in March 1981. It established than in 1988 there would be a plebiscite in which the voter would accept or reject an only candidate proposed by the Military Junta. Pinochet was, as expected, the candidate proposed, and he was denied a second 8 year term.
After Pinochet's defeat in the 1988 plebiscite, the constitution was amended to ease provisions for future amendments to the constitution, create new senators, and diminish the role of the National Security Council and equalized the number of civilian and military members--four members each. Many among Chile's political class consider these and other provisions as "authoritarian enclaves" of the constitution and have pressed for reform.
In December 1989, Christian Democrat Patricio Aylwin, running as the candidate of a multiparty, Concertacion coalition, was elected president. In the 1993 election, Eduardo Frei Ruiz-Tagle of the Christian Democratic Party was elected president for a 6-year term leading the Concertacion coalition, and took office in March 1994. Exceptionally close presidential elections in December 1999 required an unprecedented runoff election in January 2000. Ricardo Lagos Escobar of the Socialist Party and Party for Democracy led the Concertacion coalition to a narrow victory and took office in March 2000.
In 2003 Chile signed an association agreement with the European Union (comprising FTA, political and cultural agreements), an extensive free trade agreement the United States, and in 2004 with South Korea, expecting a boom in import and export of local produce and becoming a regional trade-hub.