Chile's 9/11 shows political freedom is crucial for development | Heraldo Muñoz
11 Sep 2013
Forty years after Chile’s 9/11, when General Augusto Pinochet overthrew democratically elected President Salvador Allende, many people still ask me: Wasn’t he responsible for the economic miracle that made Chile a success story?
After the coup in Egypt in July, a Wall Street Journal editorial argued that "Egyptians would be lucky if their new ruling generals turn out to be in the mold of Chile's Augusto Pinochet," who, it said, "took power amid chaos but hired free-market reformers and midwifed a transition to democracy."
Indeed, Pinochet personified a disturbing contradiction. He won praise for transforming the economy into one of the most prosperous in Latin America.
The main problem for Pinochet's apologists was his brutality and corruption. If only he had modernized Chile's economy without assassinating, torturing and exiling tens of thousands of dissidents and getting caught hiding offshore bank accounts.
But the groundwork for Pinochet's economic modernization was laid by his predecessors—under democratic rule. Land reform in the 1960s and early '70s allowed the military regime to boost agroindustry and an export-oriented economy. By 1970 the illiteracy rate was below 10 percent, malnutrition and infant mortality had been declining for decades and Chile had several solid state institutions.
The return of democracy in 1990 started to remedy the social costs of the Pinochet era. In the next two decades, Chile grew at over 5 percent per year, almost doubling its growth rates of the three previous decades. From 1990 to 2011 the poverty rate plummeted from 40.8 to 9.9 percent; meat consumption jumped from 36.6 to 84.2 kilos per capita; the amount of homes owning refrigerators and washing machines rocketed, respectively, from 55 to 92 percent and from 37 to 82 percent.
But Chile is still among the 15 most unequal countries in the world, according to UNDP figures, although pro-poor subsidies alleviate the income inequality gap. Much more needs to be done to reduce social and economic inequalities, including through affordable, quality education and tax reform.
Could Chile have reached prosperity without Pinochet? My answer is yes. Many Latin American countries that endured economic crises in the 1970s and '80s, including Brazil and Peru, introduced tough economic reforms.
A Pinochet-type regime is not a necessary evil. No nation needs a tyrant to modernize and attain well-being. As Nobel laureate Mario Vargas Llosa has written, reforms imposed by dictatorships always result in "atrocities that leave civic and ethical sequels infinitely costlier than the status quo." In the end, economic liberty seldom thrives in the absence of political freedom.
Talk to us: How can democracy help boost social and economic development?