Pinochet staged a coup against the lected leftist government in 1973. After which he assassinated over 2,000 commies and their supporters.
However, he refused to have his government seize control of the economic engine of his nation:
In 1973, the Chilean economy was deeply hurt by several reasons, including the economic sanctions imposed by the Nixon administration,[36] inflation was hundreds of percents, the country had no foreign reserves, and GDP was falling.[37] By mid 1975, the government set forth an economic policy of free-market reforms which attempted to stop inflation and collapse. He declared that he wanted "to make Chile not a nation of proletarians, but a nation of proprietors."[38] To formulate the economic rescue, the government relied on the so-called Chicago Boys.
The economic policies espoused by the Chicago Boys and implemented by the junta initially caused several economic indicators to decline for Chile's lower classes.[39] Between 1973 and 1989 , there were large cuts to incomes and social services. Wages decreased by 8%.[40] Family allowances in 1989 were 28% of what they had been in 1970 and the budgets for education, health and housing had dropped by over 20% on average[40] The junta relied on the middle class, the oligarchy, huge foreign corporations, and foreign loans to maintain itself.[41] The oligarchy recovered most of its lost industrial and agricultural holdings, for the junta sold to private buyers most of the industries expropriated by Allende's Popular Unity government. This period saw the expansion of monopolies and widespread speculation.
Financial conglomerates became major beneficiaries of the liberalized economy and the flood of foreign bank loans. Large foreign banks reinstated the credit cycle, as the Junta saw that the basic state obligations, such as resuming payment of principal and interest installments, were honored. International lending organizations such as the World Bank, the IMF, and the Inter-American Development Bank lent vast sums anew.[40] Many foreign multinational corporations such as International Telephone and Telegraph (ITT), Dow Chemical, and Firestone, all expropriated by Allende, returned to Chile.[40] Pinochet's policies eventually led to substantial GDP growth, in contrast to the negative growth seen in the early years of his administration. Foreign debt also grew substantially under Pinochet, rising 300% between 1974 and 1988.
His government implemented an economic model that had three main objectives: economic liberalization, privatization of state owned companies, and stabilization of inflation. In 1985, the government started with a second round of privatization, it revised previously introduced tariff increases and gave a greater supervisory role for the Central Bank. Pinochet's market liberalizations have continued after his death, led by Patricio Aylwin.[11]
http://en.wikipedia.org/wiki/Augusto_PinochetThe questions of course are: was Allende a Chavez in the making and does the result justify the method?
