Good Times in the 'Southern Cone'

December 05, 1993|By JOSEPH R. L. STERNE

Santiago, Chile. -- For Argentina and Chile, these are the best of times. They are especially sweet because they have come after some of the worst of times -- military dictatorship, leftist terrorism, murder, torture, mass "disappearances," economic breakdown, political polarization and, in Argentina's case, humiliation by Britain in the Falklands-Malvinas war.

Against this raw background, current prosperity and political calm under reasonably democratic governments are savored fervently in both countries. Free-market economic policy prevails in the Southern Cone of the hemisphere, and, as in Mexico, it has opened doors to foreign investment, reducing trade barriers and prodding the privatization of inefficient state-owned industries.

Argentina (population: 33 million) and Chile (population: 13.3 million) are the economic tigers of South America, nations eager to use Pacific Rim techniques to hasten their transition from the Third World to the First World, from underdevelopment to flourishing industrialized democracy.

Two concurrent political developments underscore this dramatic transformation.

In Argentina, President Carlos Menem, 63, has won the right to seek a second term in 1995 by forging an agreement with his principal opponents on constitutional reforms that should solidify the democratic center for years to come. In Chile, President Patricio Aylwin, 74, is preparing to hand over his office following a remarkably quiet election Saturday between two candidates who promise little change in his successful economic policies.

It was not always thus.

In Santiago, a bustling city of 5 million people set against the smog-hazed Andes Mountains, Chilean soldiers still parade before the Presidential Palace at 10 a.m. on even-numbered days. Not so long ago they symbolized the imposing power of Gen. Augusto Pinochet, for 16 years the military dictator of Chile after his forces overthrew the Marxist government of Salvador Allende. A visitor can still discern where shells struck the palace walls on Sept. 11, 1973, a date inscribed in Chile's collective memory as clearly as Americans recall the assassination of John F. Kennedy.

But the patches on the walls are fading, and so is General Pinochet. Although he remains commander of the army and although he was able to rattle the government as recently as May 28 by a comic-opera show of force, Chile's long democratic tradition -- now reinforced -- seems secure.

The air force and the navy are not in the Pinochet camp. The election of a successor to President Aylwin is going along without a hitch. If the old general can keep his position until 1997, as mandated by the constitution he imposed in 1980, he too will then fade away -- hoping to be remembered as a savior of the nation.

Despite the awful repressions of the Pinochet era -- the mass jailings without recourse, the denial of civil rights and the undoubted atrocities -- the military regime can claim credit for turning around the economy.

Under the influence of the "Chicago Boys" -- conservative theorists from the University of Chicago -- Chile was the first Latin American country to adopt the free-market reforms now enthusiastically embraced by Argentina, Mexico and Peru. The country has enjoyed exceptional growth for a full decade under the guidance of Finance Minister Alejandro Foxley.

It is the only Latin American country to be given a Triple B investment-grade rating by Standard and Poor. Seven of its companies trade on the New York Stock Exchange. Capital inflow is strong, 40 percent coming from the United States and Canada, and Chile is now itself investing in Argentina and other Latin nations.

But General Pinochet's legacy, to give him his due, is not only economic. His constitution, which decrees a "binomial system" in which each citizen votes for two members of Parliament from his district, has broken up the traditional three-way left-center-and-right split in Chilean politics. This was a pattern that paralyzed the country with each election and put into office presidents with only a one-third mandate -- the last of whom was the ill-fated President Allende.

The binomial system is forcing the creation of two broad coalitions, one on the right and one on the left, that have to seek support from swing votes in the center. As a result, the current election pits Eduardo Frei, the son of a president, against Arturo Allesandri, the grandson and nephew of two other presidents, in a contest notable for its lack of fire or fervor. The issues are muted, the rallies few, and billboards and fliers almost non-existent. It is almost as if the country just wants Mr. Frei to win as expected, and to get on with the task of continuing present policies.

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