Source: Li Jianqiu’s world (ID: Li jianqiudeshijie)
In recent years, Latin America has suddenly turned left. Gabriel borich, who advocates the establishment of a welfare society, won the 2021 general election and embarked on the constitutional reform of Chile, which has been delayed for many years. At present, Chile’s constitution is still a legacy of the Pinochet era, with a large number of neoliberal components.
The direction of this reform is to make the country more welfare oriented, which will guarantee the rights of health care, education, housing, clean environment and women’s / indigenous rights. It is known as one of the most progressive constitutions in the world.
The reason for Chile’s reform of the constitution is also obvious. In 2019, the price of Chile’s subway tickets only increased by 4 cents, which caused the people to be dissatisfied with Chile’s neoliberal economic system and growing inequality. From this perspective, it seems that it is the people’s hope to make Chile move in a more welfare direction.
As a result, the opposition took the lead with nearly 62% of the votes, while the support rate of the pro camp was slightly higher than 38%, and the voting result exceeded the expectations of the conservative opposition camp.
Gabriel borrich was ridiculed by the opposition, saying that the failure of the referendum was also your failure.
“Pinochet” on twitter became a hot search. Many Chileans and Latin Americans suddenly regarded Pinochet as a hero.
Gustavo petro, the leftist who came to power in Colombia, said when evaluating Chile’s rejection of the new constitution this time:
“Pinochet is alive again”
When I was working on quora, I talked with several Chileans. Chileans don’t like to talk about Pinochet. This person is a very divisive person in Chile. So far, there are still many close friends. One Chilean asked, “is your Chinese understanding of Chile limited to Pinochet?”
“Of course not. There are also copper mines and cherizi.”
In fact, for a small country like Chile, it’s good to have a person like Pinochet for everyone to talk about.
Pinochet is actually not a particularly strong politician. The reason why he became famous is nothing more than the strong boasting of American economists, such as Milton Friedman and Hayek.
Let’s not talk about equality and inequality, but let’s talk about economic growth. South Korea under the leadership of Chun Doo Hwan came to power in 1980. In that year, South Korea’s GDP accounted for 0.577% of the world. When Chun Doo Hwan stepped down in 1987, South Korea’s GDP accounted for 0.8548% of the world.
Then compare Pinochet. When Pinochet mutinied in 1973, Chile’s GDP accounted for 0.3616% of the world. When he stepped down in 1990, Chile’s GDP accounted for 0.1454% of the world.
From any angle, Pinochet’s so-called “economic miracle” is not worth refuting. If Chile under Pinochet’s administration is an “economic miracle”, then South Korea under Chun Doo Hwan’s administration is an “economic myth”, and South Korea under Park Chung Hee’s administration is… The advent of Jesus?
I can’t find a word to describe it.
Pinochet can also make excuses:
“How many presidents have you changed in Latin America? Have you changed? Change the soup without changing the makeup?”
“Park Chung Hee has a reason to say that. Who did he bring? He brought East Asians.”
“Who are these people I’m taking? You asked me to take them?”
“What is the economic level of Latin America? In such a few countries, what nationalization are you and Allende doing? Can he do it? I can’t. I don’t have the ability. Do you know?”
“If we continue to lose to South Korea, we will lose to China after losing to South Korea.”
Chilean miracle
The real miracle of Chile was achieved after Pinochet stepped down. Chile’s GDP has climbed from 0.1454% of the world GDP in 1990 to 0.3299% now.
The figure below is more obvious.
So how to explain?
For small countries like Chile, the economic growth brought about by their own reform is far less important than changes in the world economy and politics and fluctuations in commodities.
Pinochet: there was a very important reason for the annual decline of GDP in that year, that is, the Latin American collective economic crisis in that year.
Uruguay accounted for 0.0851% of the world GDP in 1973 and 0.0408% in 1990
Brazil was 1.7953% in 1973 and 1.7152% in 1990
Argentina: 1.1285% in 1973 and 0.6205% in 1990
These are not all Wolong and Phoenix.
Let’s look at two indicators. One is the interest rate of the Federal Reserve:
It is obvious that the Fed kept raising interest rates from the 1970s until the 1980s, when the Fed’s interest rate was above 5%. It was not until the 1990s that the interest rate dropped again.
The high interest rate has led to the high price of US dollars. Chile’s GDP in 1973 was only 1640 US dollars per capita in US dollars. If it returns to this number again, it will reach 1760 US dollars in 1987. At this time, it is only three years before Pinochet stepped down.
After the interest rate peak in 1990, Chile’s per capita GDP rose rapidly, from $2494 in 1990 to $5107 in 1995.
It is not only interest rates that affect Chile’s GDP, but also copper mine prices. This is the price of copper ore from 1980 to 2010
As shown in the figure, the price of copper ore has been in a low position since 1980, and it did not improve until 1987-1988. Chile’s per capita GDP exceeded the high level in 1973, just in 1987.
After 2003, due to China’s demand, the price of copper mine rose by a large margin. Let’s look at Chile’s per capita GDP
It really fits perfectly.
In particular, the two copper mine highs in 2011 and 2012 happened to be the highest per capita GDP in Chile, and it was not until 2021 that it really surpassed again.
Unfortunately, since April this year, the price of copper ore has dropped by a large margin, and it has dropped by more than 20% now. It seems that there is a trend of further decline in the future. Moreover, the US Federal Reserve raises interest rates, and the Chilean Peso exchange rate also falls and falls. As the new Chilean President, life will not be easy.
Countries like Chile, rather than arguing about Allende or Pinochet, should pray for the Federal Reserve to cut interest rates quickly and copper prices to reach another high, which is more useful than anything.
The time when Gabriel borich took office is definitely a very bad time, because the opposition will definitely use the decline of Chile’s per capita GDP as an excuse to attack him.