POLITICAL AND ECONOMIC OUTLOOK

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83-00423R000600210001-1
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 2
• Document Creation Date: November 9, 2016
• Document Release Date: February 2, 1999
• Sequence Number: 1
• Publication Date: June 1, 1953
• Content Type: REPORT

#P proved Fort- Release 1999/09/I. 004FC'~Q9
X91 - 3" ' ti
1WT Pi Lit; A,;
COUNTRY: Chile
SUBJECT: Political and Economic Outlook
PLACE
ACQUIRED
DATE
ACQUIRED
DATE OF
INFO: May 52 - Jun 53
25X1A6a
25X1X6
25X1X6
Although the Ibanez regime is still without a majority in the Chilean
congress, I do not look for any major upheaval in Chilean politics.
Opposition to the government is so widely scattered in small
olitical parties of divergent views that there is little or no
chance of the formation of an effective opposition bloc. Should
a revolt be attempted by one of the opposition parties, I am con-
fident that Ibanez, who has strong support from the military, could
crush it without difficulty. I would not be surprised to see him
use an attempted revolt as an excuse for grabbing off dictatorial
powers.
The Chilean man-in-the-street is not nearly as enthusiastic about
the Ibanez regime as he was in its early days, because the regime
has failed to fulifill its promises of economic betterment for
the masses, There is a good deal of anti-US sentiment among the
common people) but I doubt that it is Communist inspired, nor do
I feel that the masses are particularly interested in a Communistic
form of society. Anti-US feeling stems rather from a sense of
inferiority and economic dependence on the US. There could well
be a shift to the left in Chilean political sentiment, but, in
my opinion, it will not go very far left of center. 25X1A2g
c"eve"?2?t06' ins0riM.to US ti:ca Is
an) s cr t"e possible interest of
25X1 X6 YOU ana13It Jc',s net wrrent dissemi-
nation by report.
Approved For Release 1999/09/10 : CIA-RDP83-00423ROO0600210001-1
 ? Approved For Release 1999/09/10: CIA-RDP83-1300600210001-1
w. r k ,
3. Chile needs roughly US $250,000,000 to develop its economy.
Ibanez and the men around him know that the only possible
source for such a substantial amount of capital is the US.
Accordingly, it is doubtful that they will do anything to
jeopardize their reasonably good relations with the US.
Economically, Chile's needs are roughly as follows, in
order of priority:
(a) Better communications, particularly roads; many
new routes are needed, as well as improvement and
modernization of existing roads.
(b) Greater electric power capacity.
(c) Increased coal production. Chile now imports
about 500,000 tons of coal annually.
(d) Irrigation projects which would permit greater
food production.
4. Chile's economy badly needs a good land reform program. which
will be very difficult to put througi. Much o"Fie land
in the large "fundos" lies idle, because the estate owners
lack the initiative to cultivate it. As a result, Chile
has to spend precious foreign exchange to import food
products.
5. Conditions at the CAP steel plant are fairly good. Rolled
steel production is at an annual rate of around 200,000 tons,
of which about 30% must be marketed abroad. At present gone
l95 7,'rolled steel is being stocked in warehouses due to a
slackening of export demand. Argentina would bud as much
steel yQ-arA_Wtlling ng to ship but lacks the exchange to pay
_. There have been onlFin inor -1-a- `""rciu"'t 7at ~e
CAP plant so far. The Chilean steelworkers have shown no
25X1X6
particular inclination to join the National Labor Confederation
which receives strong support from the Communists.
~( ## 25X1A2g
On US Offlcf201
/s ern ,
`.4ef iitl4 Pi a,^ iii' a !`~je Ss~~r y-:eN~ r?- W
~Yi~t~v:i
WPM
Approved For Release 1999/09/10 : CIA-RDP83-00423R000600210001-1