Consolidation in Chile

The process of democratization in Chile, a process that recently culminated in the first democratic elections in 20 years, did not start from scratch. Chile has a democratic tradition of long standing, which broke down in 1973 after more than a decade of severe political polarization. It took perhaps ten years after the 1973 coup for democratic stirrings to make themselves felt, and another seven for us to reestablish democracy. Now we find ourselves favorably situated to consolidate our democratic political system at the same time that we achieve sustainable economic growth with social equity. I think I can say with some confidence that we are on the way to achieving both of these goals.

The primary ground for my confidence is the basic consensus that we have achieved as a nation on the need for democracy and the market. The Left has abandoned its attacks on democracy as mere "bourgeois formality"; with the threat to democracy from the Left subsiding, the threat from the Right has subsided too. The old dichotomy of capitalism versus state socialism has also lost its polarizing power. All significant actors now agree on the need for a relatively open market economy.

Another reason for optimism is the peaceful character of the transition. This was possible not only because of our democratic tradition, but also because of the presence of strong institutions. Social organizations such as unions and professional associations initiated the mass protests that forced liberalization on the reluctant Pinochet regime. Political parties with strong roots in society then took up the slack once a modicum of liberalization had been won. They challenged the regime at the polls and eventually put together a coalition that could win the elections and lead a democratic government.

Achieving a peaceful transition required making some compromises. We accepted a number of "safety valves" left in place by the outgoing regime to ease its exit. Holdovers from the old regime would retain a certain degree of political power; change would have to be gradual and limited. What we got in return for these concessions was a reasonably level playing field that gave us a chance to win the elections, which we did.

Our project now is to continue building a normal, nonconfrontational political system that combines continuity with gradual and peaceful change. Hence the governing coalition's continued acceptance of the rule that it takes a special majority in Congress for major institutional reform. Hence the government's willingness to be flexible within the framework of its program. The basic consensus that we have achieved has enabled us to keep pursuing the successful open-market policies that had already been put in place under our predecessors. We have steered a steady macroeconomic course, thus ensuring continuity and responsible management in economic policy. The Aylwin administration spent its first year in office carefully nurturing entrepreneurial trust; as a result, investment rates are high, and should go up even further in the future. The inflation forecast for this year, following 1990 adjustments designed to cool the overheated economy, is only 15 to 17 percent—far lower than the typical rates of the 1980s. Prospects for growth are good.

Our demonstrated concern for social equity has also helped to win popular support. Recently, we took a giant step toward placing business-labor relations on a nonconfrontational footing by reforming labor-relations law on the basis of a three-way consensus among government, unions, and management.

Tense labor relations are hardly the only problem inherited from the past. There have also been what I call "turbulences" in our relations with the military. Thus far, disputes between the government and the military have been resolved in the context of a clear insistence on our part that the president's authority under the existing Constitution must be respected. At the same time, we have been careful not to force the military into a corner.

A similar caution has marked our efforts to come to grips with the thorny question of human rights violations committed under the old regime. Thanks to the dedicated work of the highly respected Commission for Truth and Reconciliation—a special task force...