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Volume 51 / Social Sciences

ECONOMICS: CHILE AND PERU

CHILE

PATRICIO AYLWIN, A MEMBER OF THE Christian Democratic Party representing a coalition of 17 political parties, won the Chilean presidential elections on Dec. 14, 1989 and assumed office on March 11, 1990. Thus came to an end the rule of Gen. Augusto Pinochet Ugarte, by far the most controversial as well as the most powerful and distinct government in modern Chilean economic history. President Aylwin inherited from President Pinochet the most modern, most rapidly growing, and most market-oriented economy in Latin America; a system in which economic rights had been advanced and respected as nowhere else in Latin America, with visible, positive economic consequences. On the other hand, after the chaotic Allende years, Pinochet perpetuated a system in which the protection of basic political, human, and social rights was either grossly inadequate or non-existent.

The truly formidable challenge facing President Aylwin is to help promote and establish the basic human, political, and economic rights that will lead to a stable Chilean democracy. The seven percent growth of per capita income in 1989, the sixth year of recovery and growth, is far above Chile's historical growth rate of 1.6 percent. Unless it is sustained, however, it will be very difficult to raise the per capita income of the poorest 40 percent of households by 10 percent or more, which is necessary if income distribution is to be improved.

The dominant theme of the studies annotated below is that post-1982 Chilean economic policy has been eminently successful. However, it is also agreed that much needs to be done to improve a highly inequitable distribution of income. Research concentrates heavily on such topics as the determinants of income growth, informal labor markets, transition to political democracy, evaluation of the 1973-90 free market experiment, and econometric analysis of segments of production and capital formation. Although the quantity of economic studies is generally modest, the quality is excellent overall.

Among the studies annotated, the following stand out in terms of their lasting contribution to Chilean economic historiography: Arturo Fontaine Aldunate's Los economistas y el Presidente Pinochet (item bi 89015307), which provides a classic description of the human actors formulating economic policy under Pinochet; Carlos Hurtado's De Balmaceda a Pinochet (item bi 89015316), which provides an excellent historical overview of economic development from Balmaceda to Pinochet; David Hojman's "Land Reform, Female Migration and the Market for Domestic Service in Chile" (item bi 89002774), which examines the female labor market; Oscar Muñoz Gomá's Chile y su industrialización: pasado, crisis y opciones (item bi 88001588), which contains an excellent treatment of the industrial sector; Mary Anne Pitts' Economic development in Chile under two growth strategies, 1925-1968 (item bi 88001508), which provides an excellent treatment of the export sector; and Markos Mamalakis' Historical statistics of Chile: v. 5, Money, banking, and financial services (item bi 90006944) and v. 6, Government services and public sector and a theory of services (item bi 90006945).

PERU

TO CALL THE ECONOMIC SITUATION of Peru during 1989 "critical" would be an understatement. With its per capita income falling by 12.4 percent (for a cumulative 24.7 percent during 1981-89), the consumer price index rising by an annual hyperinflationary rate of 2,948.8 percent, the real minimum urban wage falling to 26.7 percent of its 1980 level, and the value of its imports falling by 31.0 percent as compared to 1988, Peru in 1989 appears to be disintegrating economically, socially, and even politically.

The literature reviewed in the present volume reveals the following trends. First, a persistent expansion of the activities of the State beyond production of collective and semipublic commodities and into private ones. Second, utilization of State production to cater primarily to the middle and upper classes, with very little contact with or impact on the marginals and semicapitalistic, rural family enterprises. Third, a rise of the quasi-autonomous economic spheres of the underground economy, part of which is the jungle narcocapitalism of the Peruvian hinterland. Fourth, a highly unstable political, social, and economic democracy, with political, social, and economic rights respected erratically and inadequately. The process of modernization is partial and inconclusive. Furthermore, there exists democratization in the political domain but hardly in the economic and social ones.

The favorite topics of the literature reviewed are the rural-agricultural sector, mining and petroleum, public enterprises, the informal sector, foreign debt, labor- and capital-market segmentation, and public policy. Thanks to considerable external financing, there are many volumes of conference proceedings. In view of the scarcity of long-term historical studies, however, foundations would contribute more to Peruvian welfare by supporting basic long-term research in Peruvian economic historiography.

Among the many first-rate studies, the following stand out in terms of their contribution to our understanding of the Peruvian process of economic development: Jane Collins' Unseasonal migrations: the effects of rural labor scarcity in Peru (item bi 88003029), a superb examination of a segment of Peru's labor market; Alfonso Quiroz's La deuda defraudada: consolidación de 1850 y dominio económico en el Perú (item bi 88003027), which analyzes the negative impact of the State on capital markets; Alfred Saulniers' Public enterprises in Peru: public sector growth and reform (item bi 88001579), a superb examination of the State-owned-enterprise segment of Peru's public sector; Luis Alva Castro's Economía peruana, 1985/1986: retos y respuestas (item bi 89015296), which provides information on President Garcia's economic policies; and Manuel Lajo's La reforma agroalimentaria: antecedentes, estrategia y contenido (item bi 89015321), which demonstrates the negative effects of discrimination against agriculture.

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