Chile Economy 1961

By | December 14, 2021

Explorations. – In 1955-56 an exploratory expedition was carried out in the Chilean part of Tierra del Fuego, under the direction of his father AM De Agostini and with the participation of the geographer G. Morandini. Among other things, the ascents to the peaks of M. Sarmiento and M. Italia were carried out, topographical and geological surveys, glaciological and morphological investigations, meteorological observations, etc. were carried out.

Population. – The census of April 24, 1952 gave 6 million 206,544 residents; according to an estimate, these in 1959 would have risen to 7,400,000 (10 per km 2).

Economic conditions. – Among the crops, of recent development is that of sugar beet, especially in the province of Bío-Bío; sugar production increased dramatically (22,000 tons in 1955-56; 235,000 in 1957-58). Fishing has also had a considerable development, with a product of 64,700 tons. in 1948 it rose to 212,600 in 1957. As a result, the fish preservation and canning industries, as well as the fishmeal production, which has 28 factories, have had a boost. Whaling, which has Corral as its main base, is very active; in 1956-57, 2512 whales were captured.

Sheep farming is becoming increasingly important in southern Chile, and the export of wool reached 120,000 quintals in 1957. For Chile 2013, please check physicscat.com.

During the Second World War, the production of copper greatly increased (for many years now it has become the most important mineral product in Chile), which in 1943 was 497,000 tons. Production then decreased until 1950 (362,000 tons), then increased again to 485,600 tons. in 1957, almost entirely exported. Another cupriferous deposit was recently discovered in Aysen. The production of iron minerals and above all that of oil is also increasing, which since 1949 has been extracted from deposits discovered in Punta Delgada at the entrance to the Strait of Magellan and in Tierra del Fuego at Cerro Manantiales (80,000 tons in 1950, 726,000 in 1958). In Concón there is a refinery, where however imported oil is also processed. A 72 km long oil pipeline leads to Caleta Clarencia for embarkation.

Significant progress took place in industrial development, especially in the textile industry, the sugar factory and the steel industry (382,000 tons of pig iron and 389,000 tons of steel were produced in 1957).

Communications. – In 1953 the new Salta (Argentina) -Antofagasta railway was opened to traffic. The railway network in 1957 had a development of 10,576 km, and that of the ordinary roads of 65,000 km, of which about 43,500 can be traveled by vehicles. The merchant navy consisted of 111 ships which had a total of 246,000 tons. of tonnage. In September 1953, Chile declared Arica a free port, granting Bolivia special facilities for its trade.

Foreign trade. – In the five-year period 1953-1957 the value of exports was considerably higher than that of imports: $ 369.8 million for the former (excluding precious metals) and $ 459.9 million for the latter. In 1955 copper exports accounted for 66.8% of the total export value, sodium nitrate 11.3%, other mining products 9.7% and timber 3.4%. Over 40% of both exports and imports are absorbed by the USA, followed at a distance by Great Britain and West Germany.

Finances. – The uncontrolled expansion of bank credit and the persistent deficit of the state budget, which in recent years has grown more than the rate of monetary devaluation measured by prices, have contributed to fuel the process of open inflation that has characterized the Chilean economy in the last decade. But while it was accompanied by a recovery in production until 1953, it subsequently coincided with a stagnation of economic activities, due to a maldistribution of income and to the speculative orientations of the largest savers (towards real estate and luxury constructions). A slowdown in industrial activities has therefore not been followed by an intensification of agricultural production, to which the possibilities for sustainable development of the country remain ultimately linked. Among the causes of decline of a cyclical nature, it is worth mentioning the decrease, from 1956 onwards, in the price of copper, which resulted in the reduction of mining. The sector that was most affected by the circumstances was the mining sector, on which about 3/4 of the currency revenues and 1/3 of the state revenues depend.

The excessive expansion of credit was favored by the absence of an organized capital market, which, on the one hand, led the Treasury to finance its deficit almost exclusively with inflationary means; on the other hand, it pushed banks to operate also in the field of medium and long-term loans. With the reform of September 1953, the functions and powers of the central bank were reserved for the Banco Central de Chile, while the various special credit institutions (mortgage, agricultural and industrial) and the only existing savings bank were merged into a new state body: Banco del Estado.

After various partial and in any case ineffective attempts, an elaborate stabilization plan was launched at the beginning of 1956 which involved: 1) the adoption of a restrictive monetary policy, through the setting of monthly limits of credit that can be granted by banks and, subsequently, by raising the official discount rate from 4.50 to 6 per cent.; 2) the adjustment of wages to a level proportionally lower than that of the cost of living; 3) moderation of public spending (by deferring payments for works carried out on behalf of the state); 4) the reform of exchange rates, which in practice meant a 66% devaluation of the weight and the introduction of a new system of import controls (which envisages, among other things, the establishment of term deposits).

The legal parity of the peso was declared to the International Monetary Fund in October 1953, in the measure of 100 pesos to 1 US dollar; but it does not apply to practically any transaction.

With January 1, 1960, a new monetary unit was introduced, the escudo, equal to the previous 1000 pesos.

History. – In recent years, Chile has had to face difficult situations resulting almost always from the worsening of the economic crisis and persistent inflation, the causes of which are mainly attributed to the decline in nitrate exports, following the exploitation of the synthetic product, and to the decline of copper prices on world markets, the two basic products of the Chilean economic structure. The crisis had political repercussions and González Videla’s coalition government faced a series of trade union unrest. In 1948 the Communist Party, accused of fomenting unrest in the country, was declared illegal (2 September) after the Communist ministers were ousted from the government. A military assistance pact was stipulated with the USA (April 9, 1952), which was opposed by public opinion. The mandate of President González Videla took place amid a general discontent skillfully exploited by the nationalists who brought the former dictator (1927-31) gen. Carlos Ibáñez del Campo (September 4, 1952) after an electoral campaign that promised a “new Chile free from US imperialism and ready to join Perón’s Argentina”. Ibáñez, who had also benefited from the support of the Communists, opted for a substantially reformist government, but the combination of nationalism and social demagoguery that inspired his action prevented him from formulating an organic and feasible plan so that, a few months after his installation, in the legislative elections of March 1, 1953, he lost control of the House and the Senate. The strikes and unrest multiplied and more than once the president had to reorganize the ministerial team. In foreign policy Ibáñez signed an economic union with Argentina (July 8, 1953) which remained without practical results, and revived national claims in the Antarctic lands by creating military bases in the “Chilean Antarctica”. In 1955 the state of tension was accentuated, characterized by chain strikes aimed at obtaining wage increases and the proclamation of martial law (1 March). Ibáñez’s inability to halt the inflationary push aggravated the now chronic government instability and the crises continued. Meanwhile, it was officially announced that the cost of living had increased by 93.1% and, following new unrest, Ibáñez decreed the military occupation of industrial establishments. The legislative elections of March 1957 saw the overwhelming victory of the traditional Chilean parties: the radical and the liberal. This failure forced Ibáñez to fall back on governments of technical administration pending the expiry of the mandate. The good relations maintained with the USA were disturbed by an incident on the eve of a trip by Ibáñez to Washington: to protest against the proposed tax on the import of Chilean copper, the president, at the last moment, refused to carry out the visit expected (April 16, 1958). A few days later, Chile authorized the sending of an economic mission to the USSR. In May 1959, the democratic parties hostile to Ibáñez passed a law that allowed the communists to participate again in national consultations. In the elections of September 4, 1959, the victory went to the liberal Jorge Alessandri Rodriguez (who took office on November 3) who just overtook the socialist S. Allende. The first initiative of the new Chilean president was a proposal, put forward in November, aimed at reducing the armaments of all the Latin American republics and devoting the saved funds to the economic and social development of the countries concerned. Alessandri’s proposal was welcomed throughout Latin America and at the US State Department. In February 1960 Alessandri received a visit from President Eisenhower (from Brazil and Argentina).

Chile Economy 1961