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Essay on chile economy
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Chilean Economic Shock Therapy
Chile is seen to be the quintessential model of liberal restructuring in Latin America in the late twentieth century. After the overthrow of the socialist regime of Salvador Allende in 1973, Chile’s government has implemented an authoritative economic restructuring program that replaced state intervention with market incentives and opened Chile to the global economy. This four-phase process transformed the economy from highly protective industrialized to an open free market economy based on agricultural exports. The process by which the Chilean economy was stabilized was termed “shock therapy.” Like other dramatic economic policy changes, the “therapy” caused the underlying social problems of Chile to immediately surface. Real wages were cut in half, and public spending in preventive health care, primary education, and public housing were drastically cut. Unemployment, “soared to an average of 17.6 percent of the workforce, and hyperinflation averaged 350 percent.” (Sheahan 1997, 12) While in its inception C
growth, it also exacted a tremendous toll on Chilean workers, peasants, and sections of the middle-class, worsening poverty and inequality. It took the process four-phases to mediate the economy’s growth to equilibrium, unlike Russia which is still feeling the affects of their radical economic policies.
The “shock therapy” process entailed the rapid and efficient liberalization of capital markets and prices and the elimination of most restrictions on trade. Tariffs were cut to a uniformed percentage, and the exchange system was consolidated. The government implemented a “crash privatization” process under which “more than 300 firms with a value of $1 billion were returned to private ownership by the end of 1984.”
( Bosworth 1994, 5) The budget deficit was cut sharply from 25 percent of the GDP to 1 percent, and labor market relations were restructured by labor union suppression. The unions were severely weakened by legislation and then allowed to operate under new confining labor laws. These laws included limited means to negotiate over wages, collective bargaining and other issues regarding the working class.
The effects of the anti-labor union laws were far reaching indeed. Chile faced a severe economic crisis that saw the GDP fall by more than 14 percent. However, by 1986 the second phase of the “...
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...o building a “developmental state.” Other democratizing Latin American countries like Brazil, Peru, or Argentina have only been able to elect popular presidents who have broad executive, if not authoritarian powers. These countries as with Russia will only demonstrate a limited capacity to make the necessary reforms because of their lack of internal cohesiveness.
Bibliography:
Bosworth, Barry, Rudiger Dornbusch, and Raul Laban. 1994. The Chilean Economy: Policy Lessons and Challenges. Washington, D.C.:Brookings Institution.
Collins, Joseph, and John Lear. 1995. Chile’s Free-Market Miracle: A Second Look. Oakland, Cal:.Food First.
Hojman, David. 1999. The Political Economy of Development and Democracy in the 1990’s. Pittsburgh, Pa.: University of Pittsburgh Press.
Scully, Timothy. 1996. Constructing Democratic Governance: South America in the 1990’s. Baltimore.: The John Hopkins University Press.
Sheahen, John. 1987. Patterns of Development in Latin America: Poverty, Repression, and Economic Strategy. Princeton, N.J. Princeton University Press.
Weyland, Kurt. 1997. “Growth with Equity in Chile’s New Democracy,”Latin American Research Review, vol. 32 no. 1.
At first, the working class heavily supported Allende's campaign. A new movement of younger worker influence occurred during this time period, allowing Allende to accomplish many of the things he did. For instance, in the Yarur factory there was the "strike of 1962" which was the workers rebellion to the new Taylor system of the new generation of workers. They also rebelled because of the "union question" which revolved around three things: job security, free unions, and the elimination of the Taylor system. These were all things that Allende promised to fix, so naturally after a 9 week strike the people of the Yarur factory supported Allende and the promises he gave. All the workers in the Yarur factory were also deeply affected by the characteristics of postwar Chile: "dependency and stagflation, economic inequality and social inequality, the concentration of wealth and the persistence of poverty, the hegemony of the rich and the powerlessness of the poor" (54). These characteristics were the reasons that the working class suffered in Chile, as well as the...
The first turning point in hope for the Chilean road to socialism was that of the election of Salvador Allende as president, which gave many Yarur workers the belief that a ‘workers government’ was on their side. “For the first time, a self-proclaimed ‘workers government’ ruled Chile, dominated by the Left and Pledged to socialist revolution” (Winn, 53). Allende’s role as president gave identity to the Yarur workers that they were being represented and because of so, their struggles of working in the factory conditions set by Amador Yarur would come to an end. This identification with Allende as being represented by there own voice became the first stepping-stone to the demand for socialization of the factory. “The election of a ‘Popular Government’ was a signal...
Benitez, Gerardo, Latin American Perspectives: The Maquiladora Program Its Challenges Ahead, THE WHARTON JOURNAL, December 11, 1995.
Salvador Allende promised to redistribute Chile's income (only two percent of the population received forty-six percent of the income), nationalize major industries (especially the copper companies), and to expand relations with socialist and communist countries. Allende's presidency presented a threat to the United States; a man with such aspirations would have to stray from United States policies and the policies of all other countries. Allende would neither respect nor consider the work the United States had done for them in the past. The United States would no longer be able to act as a parasite, sucking the money out of Chile. The U.S. decided it must stop this man from rising to power as soon as possible.
...nuel Antonio, Newman, Edward. Democracy in Latin America: (Re)Constructing Political Society. The United Nations University Press, 2001. New York, N.Y.
against their employers, employees were able to go on strike and prove a point. Some
Before the 1960s, four thousand six hundred nine miles southeast of Texas, Chile was known as a stable country compared other Latin American countries until 1962, when the Cold War took effect on this enormous country and Chile became a part of the Alliance for Progress. The Alliance for Progress was created to keep socialistic revolutions out of Latin American countries. In the 1960s, the president of Chile, Eduardo Frei was endorsed by the Johnson administration. Frei was required to pass a radical reform but with Chile becoming more industrialized, Labor Unions requested for higher and reasonable wages. In the end, the Labor Unions were not pleased with the wages that they were receiving which, lead to inflation and higher prices for man made items and labor. With an economic change occurring, the Chilean youth adopted a Leftist view and began to protest against the government with the labor unions. Both ...
When I look at the last argument I feel that it is some thing made up by Boethius, after all he did write the book to console himself. It says that anything that happens to a person be it good or bad is always good. Because bad events make a person more virtuous. These same believes are used in some cults and terrorists groups, they say that through death a person can gain true happiness by going to heaven. The reality is that we are responsible for our own individual life and our actions define us and out future. So if some thing bad happens to a person he should take actions to make things right.
Mignolo, W. D. (2005). The Idea of Latin America (pp. 1-94). Malden, MA: Blackwell Publishing.
"Argentine Political Economic History." San Jose State University Department of Economics. http://www.sjsu.edu/faculty/watkins/argent1.htm (accessed March 17, 2012).
Today, the region’s level of inequality is staggering compared to the rest of the world. However, Latin America has been able to decrease its most troubling issue through economic growth along with proper government spending to support its impoverished citizens. As a result, the region’s economy expanded by 6%, the overall poverty levels returned to the pre-crisis levels with the rate dropping to 32.1% in 2010. The Gini coefficients of individual Latin American nations are comparable with America’s; Uruguay and Venezuela numbers were at .433 and .412, respectively, while the United States had .468 during the late 2000’s (Gasparini and Lustig 3). While the area is not a perfect economic utopia, Latin America is making strides in attempting to do so given the relatively short time they have implemented their policies to redress the inordinate issue of income
When Chile became a democracy in the early 1990s, it experienced a rapid drop in poverty, which corresponded with its economic growth. However, despite continuing growth as Chile approached the turn of the century, the decline in poverty stagnated (see fig 1.) with the number of people in extreme poverty actually increasing from 5.6% to 5.7% in the years 1998-2000, highlighting that growth alone is not sufficient in reducing poverty. The imperative to look beyond economic growth for reducing poverty is reinforced by data from ECLAC, which reveals that Latin American countries with better social indicators than others had lower levels of poverty than those with the lowest social indicators. It was within this context, with the intention of addressing this issue, that Chile Solidario was created.
Wiarda H. J. and Skelley E. M., 2005, Dilemmas of Democracy in Latin America: Crises and Opportunity, Rowman and Littlefield Publishers Inc
ADHD is defined as a “persistent pattern of inattention or hyperactivity— unwary that is more frequently displayed and more severe than is typically detected in individuals at a similar level of development” (American Psychiatric Association [APA], 2000, p. 85). Symptoms must occur at two settings to be diagnosed as ADHD. It typically occurs at school and home, but it could happen anywhere else as well. These indicators become an obstacle on how children perform or work on a social basis and educationally. According to Diagnostic and Statistical Manual of Mental Disorders, hyperactivity includes impatience, being restless, and jittery. Those diagnosed with ADHD, are uneasy when their atmosphere require constant focus, a routine of repetitive, and dull instruction (APA, 2000).Symptoms of ADHD commonly discontinue when children are being rewarded for being obedient, when they are always supervised, in a unique setting, elaborating in activities that draw their attention, or work privately with an adult (APA, 2000, pp. 86–87).Not until recently, does ADHD exist, and now in the 21 centu...
Colombia and Argentina are two similarly-sized South American states, with Colombia lying at the northern end of the continent, contrasting Argentina at the southern end. With a population of roughly 48.2 million (2013), Colombia is the larger of the two nations, comparing to Argentina’s 42.4 million (2013). However, despite this workforce advantage, Argentina outpaces Colombia economically, boasting a GDP of $437 billion annually, compared to $292 billion in Colombia. This translates to a GDP per capita of $10,301 in Argentina and $6,044 in Colombia, In other words, Colombia’s GDP per capita is roughly 60% of Argentina’s. As an effective indicator of the standard of living in a country for the average individual, a researcher can often look