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Volume 53 / Social Sciences

ECONOMICS: CHILE AND PERU


MARKOS MAMALAKIS, Professor of Economics, University of Wisconsin-Milwaukee

CHILE

SINCE 1985 CHILE HAS ACHIEVED AN AVERAGE of 5.6 percent real annual growth in its gross domestic product, one of the highest rates in Latin America, and in 1992 its rate of inflation had fallen below 20 percent. In relation to its gross national product and exports, Chile's foreign debt is one of the lowest in Latin America. Under President Patricio Aylwin, Chile revised its labor laws to increase workers' rights in key areas. Furthermore, social investment, which represents more than half of total government expenditure, aims to meet pressing health, education, and housing needs.

Chile has been rapidly returning to the cherished democratic traditions which have distinguished it for more than 150 years. Chilean society is once again noted for its moderation, compromise, cooperation, continuity in economic policy (albeit with gradual adjustments), and unquestionable respect for basic human, political, and economic rights. In addition, there is also the possibility of a free trade agreement between Chile and the US.

Both the quantity and quality of economic studies generated by universities, research institutes, and government entities have been steadily improving. Polemic treatises, which were so common and popular before 1973, have been almost totally absent during the democratic Aylwin presidency. The topics most frequently researched include unemployment and labor markets, poverty and income distribution, liberalization, privatization and deregulation, agriculture, forestry, fishing, mining, industry and trade, capital markets, foreign investment and external debt, regional development, and the transition to democracy.

Although all annotated studies are of first rate quality, the following make unique and lasting contributions to Chilean economic historiography: 1) Corporación de Fomento de la Producción: 50 años de realizaciones, 1939-1989 contains an excellent presentation and analysis of the Chilean Development Corporation (item bi 92009157); 2) Mazzei de Grazia carefully examines the commercial and industrial corporations of Concepción (item bi 92009179); 3) Vera provides a comprehensive bibliography on the Chilean economy (item bi 92012197); 4) O'Brien carefully traces the nature and ramifications of the successive involvements of the Guggenheims in Chilean nitrate and copper (item bi 90009779); 5) Parada provides an excellent analysis of Chilean capital markets during 1950-85 (item bi 90009381); and 6) Goldsworthy contributes an excellent study of the relationship between technology transfer and research in Chilean agriculture since 1964 (item bi 90010286).

PERU

As of 1993, and throughout recent decades, Peru has been a political, social, and economic system in perpetual, widespread conflict: the government has acted against the private sector, the urban against the rural population, agriculture against industry, the poor against the rich, nationals against foreigners, the formal against the informal segment of society, and the violent Shining Path against the State.

Large tracts of Peruvian territory are controlled by drug traffickers and the Shining Path guerrillas, whose terrorist campaign has penetrated most of Peru. Dismal poverty and widespread unemployment remain endemic. Within this environment of chaos and economic disintegration, President Alberto Fujimori went on national television in April 1992 to announce an autogolpe - a "self-coup." With military backing, Fujimori dissolved Congress, suspended civil liberties, and established government by decree, thereby suspending Peru's fragile democracy.

On Saturday, Sept. 12, 1992, Peruvian police captured former philosophy professor Abimael Guzmán Reynoso, the leader of the Maoist guerrilla movement Shining Path, and seven other top cadres. It remains to be seen whether the capture of "Presidente Gonzalo," as Guzmán is known within his secretive movement, will usher in the end of terrorism and insurgency which have cost Peru as many as 25,000 lives and possibly $22 billion in economic losses. If stability and cooperation are to prevail, much more than capture of the most important guerrilla leader in Latin America will be necessary.

In spite of the grave social, economic, and political problems clouding Peru's landscape, there has been a large output of books, articles, monographs, databases and compendia forthcoming in recent years. Especially noteworthy are the many excellent studies on migration, the informal sector, agriculture and rural development, the public sector, trade, the major contours of the Belaúnde, Velasco, Morales and García presidencies, poverty, and income distribution. Lasting contributions to Peruvian economic historiography are made by the following outstanding studies: 1) Berry demonstrates that a Peruvian-type primary export strategy cannot be counted on to reduce significantly the income gap between rich and poor (item bi 91000135); 2) Burga provides an excellent history from 1895-1935 of the wool market and of the House of Ricketts, traders in wool (item bi 88001515); 3) Evolución de la economía peruana presents an historical, statistical review of Peruvian economic development during 1895-88 (item bi 92009178); 4) El sesgo antiexportador de la política comercial peruana: un estudio de protección efectiva de la minería demonstrates that increased protection since the 1960s, with a brief interruption during the experiment with trade liberalization from 1979-81, has favored domestic production of consumer nondurables but penalized export sectors, especially traditional ones (item bi 92009151); and 5) Arce Meza offers a systematic empirical analysis of Peru's budgetary history during 1920-74 (item bi 91007723).


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