Public Citizen's Global Trade Watch's newest discussion paper - "The Uses of Chile: How Politics Trumped Truth in the Neo-Liberal Revision of Chile's Development"
Summary:
The Latin American country of Chile is often invoked by Beltway pundits and others as a model of a country that has faithfully followed neo-liberalism. This could be seen recently over the debate over Social Security privatization in the United States, where Chile's privatized social security system was upheld as a success story. In order to debunk these arguments, Public Citizen has conducted a review of Chile's actual policy history over the last 30 years. The resultant report examines:
- The policies actually implemented by Chile during its recent decades of growth and finds that Chile, far from being a model of successful neo-liberal policies, is in fact a case study in the virtues of many non-neo-liberal policies.
- The resulting economic outcomes beyond the impressive per capita growth rates and finds steadily-high income inequality as essential services were privatized; export-led growth based on exploitation of a few natural resources - 90 percent being fisheries, copper, wood and other primary products - continued at an unsustainable rate; and the manufacturing sector continued to contract as a share of output.
The paper concludes that many of the neo-liberal policies that the Chilean government did adopt have caused economic harm or have not helped needy sectors of society and the environment, while much of Chile's success in terms of per capita income and export growth can be attributed to the successful use of non-neo-liberal policies.
It is our hope that advocates for fair trade and development both in the United States and abroad will find the paper valuable as they engage in debates over alternatives to the current failed model of globalization.