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Document Creation Date: 
December 23, 2016
Document Release Date: 
September 17, 2013
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Publication Date: 
November 7, 1989
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PDF icon CIA-RDP90M01243R001300110001-5.pdf196.66 KB
A Declassified in Part - Sanitized Copy Approved for Release 2013/11/08: CIA-RDP90M01243R001300110001-5 ROUTING SLIP TO: ACTION INFO DATE INITIAL 1 DCI 2 DDCI 3 EXDM 4 D/ICS 5 DDI 6 DDA 7 DDO 8 DDS&T 9 Chm/NIC 10 GC 11 IG 12 Compt 13 D/OCA 14 D/PAO 15 D/PERS 16 D/ExStaff 17 p /ALA/DI X 18 Nb/LA X 19 C /LA/DO X 20 21 _ 22 SUSPENSE Date Remarks To 17: This memo arrived via WASHFAX after 1500 today, too late for your PCC meeting. STAT ER 89-4910/1 Executive Secretary 7 Nov 89 Data 2A27 004m Declassified in Part - Sanitized Copy Approved for Release 2013/11/08: CIA-RDP90M01243R001300110001-5 Declassified in Part - Sanitized Copy Approved for Release 2013/11/08: CIA-RDP90M01243R001300110001-5 ER 89-4910/1 PCC DISCUSSION PAPER -- CHILE Introduction Pinochet's defeat in the October 5, 1988 plebiscite set the stage tor the transition to democracy in Chile. Presidential and Congressional elections are scheduled for .December 14, 1989. Christian Democrat. Patricio Aylwin is the tront-runner in the presidential rare. Aylwin if; from the relatively conservative wiho of his party, but he is the Fi candidate of a broad coalition which includer: :ocial sts and declared support from the lommunit Party. Opposing Aylwin are two independents from the center-right: formet Finance Minister Hernan Buchi and businessman Francisco Javier Errazuriz. Considering the wide swings in economic and social policies in Chile over the past twenty years, it is surprising the degree to which the three Chilean presidential candidates agree on maintaining the outlines of the current trep-market economic model while at the same time incred!;ing social spending. Aylwin tavors a slightly larger role for the stdte and restoring power to the unions, hut would encourage the private sector. to remain the primary engine of growth. Buchi would retain current policies hut would increase social spending by relying more on the private sector to provide services. Errazuriz has a more populist approach which promises free health ?and education ? for tne poor and elimination of the mortgage indexation system. There is some consensus among the candidates that the greatest political problem facing the new civilian governMent will be assertingcontrol over Chile's military. However, Aylwin would have the greolest difficulty in this process. AylWiri's coalition has declared its intent to pursue justice in human rights cases and its desire to see President Pinochet retire from his position as Commander in Chiet. Some members of his coalition have questioned the military's role in a democratic society. The new government will Lake power on March 11, 1990. If Aylwin, as expected, is elected the next President et chile, he will need strong support from the U.S. and other countries to bolster himself in negotiating with the military on the transition. This ycc meeting has been called to discuss how the USC should normalize relations with the new civilian government and respond to its likely request tor assistance. DECL: OADR -- I Declassified in Part - Sanitized Copy Approved for Release 2013/11/08 : CIA-RDP90M01243R00130Z) 110001-5 Declassified in Part - Sanitized Copy Approved for Release 2013/11/08: CIA-RDP90M01243R001300110001-5 us xnterutC iLta,Amitsallopri,t ?iintqLjitAt.)pkigroti, ,010_00m.tiotA0 -119....k4plity And 0-00e0 fh-Mlitt areas 6TTh.s. inter.est JeiJ,nd upen ttie Wlity of thtiriw government to gain broad support and establish itS legitita0y in a short period of time. The new government will have to negotiate with the military on three main issues: the pUrpOt, of justice in human rights cases, the future of Pinochet4S Commander in Chief, and the role of the Armed Forces in the new democratic Chile. The civilian politicians and senior miliiafy officers do not trust each other. There is mutual suspicion and great uncertainty abon the intentions of all parties. (And many U.S. congressmen and staff will be suspicious about the real authorities of any elected government, especially while Pinochet remains on the scene.) The U.S. can play a role in this process by encouraging dialog between the civilans and the Military, even thouyh _Lir influence wits c armed services, especially the army, is not great. A second Erioriti_is to _support free market economic. policies encouragin9 continued (.1t_owth. It is important that the Chileans demonstrate to the rest of Latin Ametica that .democracy is not incompatible with sound economic policies and growth. The Pinochet government achieved remarkable economic success at considerable social expense. And, while the adjustment process continues, the question now is whether democracy can ?deliver -- both economically and politically. We also have a strong interest that the Chileans continue sound, responsible external debt management policies. U.S. investors have substantial sums at stake in Chile and are looking to the USG to monitor the situation closely and protect their interests if necessary. In order to broaden our relations with the new government_ we must resolve the Letelier case. This is the key to reopening a security assistance program with Chile and to fully restoring military and political relationships. We are confident that an Aylwin government will want to resolve the case quickly. In sum, the transition to democracy in Chile will create new realities, calling for a review of U.S. policy toward the country. Policy issues to he discussed at the PCC meeting include: -- political support for the new government, -- security assistance, -- economic assistance, --narcotics control agiRtancp, -- restoration of CSP and 0111c eligibility, and support for further Chilean debt reduction operations. SECRy1T. 0111Clit- Mott Declassified in Part - Sanitized Copy Approved for Release 2013/11/08: CIA-RDP90M01243R001300110001-5 Declassified in Part - Sanitized Copy Approved for Release 2013/11/08: CIA-RDP90M01243R001300110001-5 S IS MESSAGE NO. CLASSIF ICAT I ON F ROM- LreAss-IY)04"-) IV04/ (Office symbol) (Officer name) MESSAGE DESCRIPTION S_Eck E. -1 11 (Extension) CD No. F' - (Roolis'nurnber1 TO: (Apency) us-TR_ DELIVER TO: Fr?itf CcoGace4 r (:--(15-04 S7:4 4, II4 (20,; Firee ? ?C'cl ? j/L?14 ie ear/7 /44 el:Yete . FOR: CLEARANCE J INF OF:MAI-10N