The economic legacy of Augusto Pinochet

Any satisfaction at Augusto Pinochet’s passing is tempered with “bitter regret” that he was never brought to justice for the murder of 3,200 people and the torture and exile of thousands more, says The Guardian. The Chilean dictator, who ruled his country from 1973 until 1990 – in 1988 he lost a referendum he had been forced to call on his continued rule – personified state terror “with his sinister dark glasses and Ruritanian uniform”. Pinochet was a soldier with “very limited intellectual acumen”, says Alvaro Vargas Llosa in The Wall Street Journal, but for all his human rights abuses, he did manage to preside over an economic transformation. The economy was in a mess when he took over and he “fortuitously” hired a group of economists influenced by Milton Friedman, whom he had never heard of, to sort it out.

As a result, Pinochet ended up implementing more pervasive neoliberal reforms than Thatcher and Reagan, selling off state industries, slashing tariffs and introducing private-pension provision and school vouchers. The drawback, says Llosa, was that Pinochet probably postponed the advent of free markets elsewhere in Latin America “because most governments feared being associated” with him. Chile’s centre-left governments in the 1990s maintained his policies, thus ensuring rapid growth, but the country may have begun to “backslide” on his economic legacy, according to Martin Hutchinson on Breakingviews. Productivity growth has slowed to an annual 1% since 1998, down from 3.9% in the previous decade, and while the current government is committed to open markets, government funding is to be introduced into the pension system and public spending will climb by 2% of GDP by 2009.
 
Meanwhile, Pinochet’s reputation has crumbled, even among those who once revered him, says Economist.com. Former supporters of the dictator feel betrayed by revelations over the past few years that he “secretly stuffed $27m in foreign bank accounts”. Pinochet may not have died convicted, says Rupert Cornwall in The Independent, “But he died in disgrace.”


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