CHAPTER 2
DAWN OF NEOLIBERIALISM Before the introduction of Neoliberalism to Chile, the economy was struggling, there was a widespread discount, and a hunger for change. After consecutive failed campaigns, Salvador Allendes’ socialist party won the election by a plurality of 36% votes. A man with a vast amount of experience in politics, dating over 30 years, co-founding Chile’s first socialist party in 1933. Allende was the first democratically elected Marxist in Latin America. Immediately, he implemented his social program “Chilena al Socialism.” A radical attempt to nationalise the country and continue Chile’s trajectory of reducing the housing deficit. Large scale industries like banking and copper mines returned to state control, to the dismay of the US. One of the central objectives of the Salvador Allende government, in the face of housing policy was to build and repair homes in poor condition and improve the urban conditions of the poorest sector. The regulation of the application and housing allowance regime is modified through the Popular Savings Plan. Allende was a Cuban sympathiser and had strong ties with the communist party of the Soviet Union, reflected in 1972 when he received the Lenin Peace Prize. Despite their shared political interest there were still fundamental differences in approaches. After the earthquake in 1972 the KGB’s support for Allende was further illustrated by their economic intervention. Over US$100 million in credit was donated along with many natural and capital resources to help revive the shaken nation. Throughout Allende’s premature career as President, the United States of America under Richard Nixon, wanted him out, as it apposed their neoliberal ideologies and ordered covert CIA operations “to make the Chilean economy scream” (Kornbluh, P. 2003). The US played a significant role from the start, in attempting to prevent Allende’s inauguration, this was opposed by the Commander In Chief of the Chilean army, Rene Schneider. As a constitutionalist, the decorated and respected official, wished to continue the Chilean military’s long apolitical history. In 1970 he was assassinated by CIA funded coup plotters. In 1973, Allende was advised to elect Augusto Pinochet to be the commander in chief by his predecessor Carlos Prats, as Fig. 2 Salvador Allende’s Inauguration. Foreground: Salvador Allende. Background: General Augusto Pinochet (Vergara Perucich, F. 2013)
he was convinced Pinochet was a constitutionalist (see fig. 2). 16
