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Chile

History

Beginnings

It doesn't sound like much: a small child's footprint left in a marshy field. However, it took just one little huella found in Chile's Monte Verde, near Puerto Montt, to rock the foundations of archaeology in the Americas during the 1980s. The footprint was estimated to be 12,500 years old, and other evidence of human habitation in Chile dated back still further - perhaps as far as 33, 000 years.

These highly controversial dates pooh-poohed the long-accepted Clovis paradigm, which stated that the Americas were first populated via the Bering land bridge some 11,500 years ago, after which the Clovis people scattered southwards. This footprint suddenly opened the way for a wave of new theories suggesting multiple entries, different routes, or coastal landings by the first peoples. Following a landmark 1998 convention, the Monte Verde site was acknowledged as the oldest inhabited site in the Americas, although more recent discoveries, notably in New Mexico, are now thought to date back as far as 40,000 years.

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Early cultures

Most pre-Columbian remains have been recovered in the north of Chile, preserved by the extreme desert aridity. Most famous is the nomadic Chinchorro culture, which left behind the oldest known intentionally preserved mummies.

In the canyons of the north desert, sedentary Aymara farmers cultivated maize, grew potatoes and tended llama and alpaca; their descendants still practice similar techniques in Parque Nacional Lauca. Another important civilization in Chile's northern reaches was the Atacameño culture. They too left remarkably well-preserved remains, from mummies to ornate tablets used in the preparation of hallucinogenic substances. Other important cultures that left enormous geoglyphs, rock etchings and ceramics still visible in Chile's northern reaches include the El Molle and the Tiwanaku. Meanwhile, Chango fisherfolk occupied northern coastal areas, and Diaguita peoples inhabited inland river valleys.

The invasive Inka culture enjoyed a brief ascendancy in northern Chile, but their rule barely touched the central valley and the forests of the south, where the sedentary farmers (Picunche) and shifting cultivators (Mapuche) fiercely resisted any incursions. Meanwhile the Cunco fished and farmed on the island of Chiloé and along the shores of the gulfs of Reloncaví and Ancud.

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Invasion

In 1495, unbeknownst to the indigenous peoples of the Americas, the land was already being earmarked by two superpowers of the day - Spain and Portugal. Thousands of miles away, the papal Treaty of Tordesillas was signed, sealed and it delivered all territory west of Brazil to Spain. By the mid-16th century, the Spaniards dominated most of the area from Florida and Mexico to central Chile. Few in number, the conquerors were determined and ruthless, exploiting factionalism among indigenous groups and frightening native peoples with their horses and firearms. But their greatest ally was infectious disease, to which the natives lacked immunity.

The Spaniards' first ill-fated foray into northern Chile was led over frozen Andean passes in 1535 by Diego de Almagro. He chose the harshest of routes, and many men and horses froze to death. However, his subsequent retreat north laid the groundwork for an expedition by Pedro de Valdivia in 1540. Valdivia and his men trawled south through the parched desert, reaching Chile's fertile Mapocho Valley in 1541. There they subdued local indigenous groups and founded the city of Santiago on February 12. Only six months later, the indigenous peoples struck back, razing the town and all but wiping out the settlers' supplies. But the Spaniards clung on, and the population burgeoned. By the time of his death in 1553, at the hands of Mapuche forces led by the famous caciques (chiefs) Caupolicán and Lautaro, Valdivia had founded numerous settlements and laid the groundwork for a new society.

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Colonial Chile

Lust for gold and silver was always high on the Spaniards' agenda, but they soon realized that the true wealth of the New World consisted of the large indigenous populations. Disdaining physical labor themselves, they exploited indigenous peoples through the encomienda system, by which the Crown granted individual Spaniards rights to indigenous labor and tribute. This system was established in northern Chile (then part of Peru). The indigenous population in this northern region was easily controlled, ironically because they were highly organized and more accustomed to similar forms of exploitation.

The Spaniards also established dominance in central Chile, but the semi-sedentary and nomadic peoples of the south mounted vigorous resistance and even into the late 19th century the area remained unsafe for white settlers. Crossing the Andes, the Mapuche had tamed the feral horses that had multiplied rapidly on the fine pastures of the Argentine pampas; they soon became expert riders, which increased their mobility and enhanced their ability to strike.

Despite the Crown's distant disapproval Valdivia began rewarding his followers with enormous land grants, resembling the feudal estates of his Spanish homeland of Extremadura. Such estates (latifundios), many intact as late as the 1960s, became an enduring feature of Chilean agriculture and society.

Mestizo children of mixed Spanish and indigenous parentage soon outnumbered the indigenous population as many died through epidemics, forced-labor abuses and warfare. Chile's neo-aristocracy encouraged the landless mestizo population to attach themselves as inquilinos (tenant farmers) to large rural estates.

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Revolution

Independence movements that sparked into life between 1808 and 1810 were born from the emergence of the criollo (creole) class - American-born Spaniards who increasingly longed for self-government. To facilitate tax collection, Madrid decreed that all trade to the mother country must pass overland through Panama rather than directly by ship. This cumbersome system hampered commerce and eventually cost Spain its empire.

During colonial times, Chile was judged a subdivision of the ponderous Viceroyalty of Peru, which was based in Lima. This subdiv- ision, called the Audiencia de Chile, had jurisdiction from present-day Chañaral south to Puerto Aisén, in addition to the present-day Argentinean provinces of Mendoza, San Juan and San Luis. But, despite formally being under the thumb of Lima, in practice Chile developed in near isolation from Peru, creating an identity that is distinct from its northern neighbor.

Independence movements ignited throughout South America to expel Spain by the 1820s. From Venezuela, a criollo army under Simón Bolívar fought its way west and south toward Peru. The Argentine liberator José de San Martín marched over the Andes into Chile, occupied Santiago and sailed north to Lima.

San Martín appointed Bernardo O'Higgins second-in-command of his forces. O'Higgins, the illegitimate son of an Irishman who had served the Spaniards as Viceroy of Peru, became supreme director of the new Chilean republic. San Martín helped drive Spain from Peru, transporting his army in ships either seized from the Spaniards or purchased from Britons or North Americans who knew that the Spaniards' loss could mean their commercial gain. Thus it was that Scotsman Thomas Coch- rane, a colorful former Royal Navy officer, founded and commanded Chile's navy.

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The early republic

Battered, bruised, but buoyed up by their newborn independence, South American republics began to shape themselves in line with the old Spanish administrative divisions. Chile was but a fraction of its present size, consisting of the intendencias (administrative units of the Spanish Empire) of Santiago and Concepción, and sharing ambiguous boundaries with Bolivia, Argentina, and the hostile Mapuche nation south of the Río Biobío.

Chile managed to wriggle free of the economic black hole suffered by many Latin American countries during this period. It achieved relative political stability, and set about rapid development of agriculture, mining, industry and commerce.

O'Higgins dominated Chilean politics for five years after formal independence in 1818, but the landowning elite that first supported him soon objected to increased taxes, abolition of titles and limitations on inheritance. O'Higgins was forced to resign in 1823, and went into exile in Peru where he died in 1842.

The embodiment of landowning interests was Diego Portales, interior minister and de facto dictator until his execution following an uprising in 1837. His custom-drawn constitution centralized power in Santiago, limited suffrage to the propertied and established indirect elections for the presidency and senate. Portales' constitution lasted, with piecemeal changes, until 1925.

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Expansion & mineral wealth

A pivotal boost to the country's fortunes came with the War of the Pacific (1879-84), in which Chile annexed vast areas of land from Peru and Bolivia. The battles began after Bolivia prohibited a Chilean company from exploiting the nitrate deposits in the then Bolivian-owned Atacama. Chile retaliated by seizing the Bolivian port of Antofagasta and wresting the Tacna and Arica provinces from Peru; thus they robbed the Bolivians of all access to the Pacific. This fiercely fought campaign is still celebrated by Chileans with as much gusto as it is bitterly resented by Peruvians and Bolivians.

Santiago's intervention proved a bonanza. The nitrate boom brought great prosperity to Chile, or at least to certain sectors of Chilean society. British, North American and German investors supplied most of the capital. Railroads revolutionized Chile's infrastructure, and the economy boomed. Later, when the nitrate bubble burst, this land would again provide Chile with a get-out-of-jail-free card: copper is still the power behind the Chilean economy. The development of northern ports such as Iquique and Antofagasta also added to Chile's success.

In this era of shifting boundaries, treaties with the Mapuche (1881) also brought temperate southern territories under Chilean authority. At much the same time, Chile had to abandon much of Patagonia to Argentina but sought a broader Pacific presence, and annexed the tiny remote Easter Island (Isla de Pascua, or Rapa Nui) in 1888.

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Civil war

Mining expansion created a new working class, as well as a class of nou- veaux riches, both of which challenged the political power of the landowning oligarchy. The first political figure to tackle the dilemma of Chile's badly distributed wealth was President José Manuel Balmaceda, elected in 1886. Balmaceda's administration undertook major public works projects: revolutionizing infrastructure and improving hospitals and schools. However, he met resistance from a conservative Congress, which in 1890 voted to depose him. Naval Commander Jorge Montt was elected to head a provisional government.

More than 10, 000 Chileans died in the ensuing civil war, in which Montt's navy controlled the country's ports and eventually defeated the government, despite army support for Balmaceda. After several months' asylum in the Argentine embassy, Balmaceda shot himself.

Although they weakened the presidential system, Balmaceda's immediate successors continued many of his public works projects and also opened Congress to popular rather than indirect elections. Major reform, though, wouldn't come until after WWII.

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20th century

The Chilean economy soon suffered for its crippling dependence on nitrate revenue. New petroleum-based fertilizers were developed making mineral nitrates all but obsolete. To add to the country's misery the opening of the Panama Canal in 1914 nearly eliminated traffic around the Horn, which had been so important to ports such as Valparaíso, Antofagasta and Iquique.

Despite economic hardship, the election of President Arturo Alessandri Palma seemed a hopeful sign for Chile's working class. To reduce landowners' power, he proposed greater political autonomy for the provinces, and taxes to finance better working conditions, health, education and welfare. However, conservatives obstructed the reforms and army opposition forced Alessandri's resignation in 1924.

The dictatorial General Carlos Ibáñez del Campo held power for a few years, but his poor economic policies (exacerbated by global depression) led to widespread opposition, forcing him into Argentine exile in 1931.

After Ibáñez's ouster, political parties realigned. Several leftist groups briefly imposed a socialist republic and merged to form the Socialist Party. Splits between Stalinists and Trotskyites divided the Communist Party, while splinter groups from radical and reformist parties created a bewildering mix of new political organizations. For most of the 1930s and '40s the democratic left dominated Chilean politics, and government intervention in the economy through Corfo, the state development corporation, became increasingly important.

Meanwhile, the early 20th century saw North American companies gain control of the copper mines, the cornerstone - then and now - of the Chilean economy. WWII augmented the demand for Chilean copper, promoting economic growth even as Chile remained neutral.

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Land reform

A revealing set of statistics from the 1920s state that around 75% of Chile's rural population still depended on haciendas (large rural landholding), which controlled 80% of the prime agricultural land. Inquilinos (tenant farmer) remained at the mercy of landowners for access to housing, soil and subsistence. Their votes belonged to landowners, who naturally used them to maintain the status quo. Haciendas had little incentive to modernize, and production stagnated - a situation that changed little until the 1960s.

Former dictator Ibáñez del Campo started land reform when he returned from exile and won the presidency back democratically in 1952; he tried to reduce landowners' control over the votes of their tenants and laborers. He also revoked an earlier law banning the Communist Party, before his government faltered and fell.

The subsequent jostling over power brought several important figures into the spotlight. In 1958 socialist Salvador Allende headed a new leftist coalition known as FRAP (Frente de Acción Popular, or Popular Action Front). Meanwhile Eduardo Frei Montalva represented the newly formed Democracia Cristiana (Christian Democrats), another left-leaning reformist party whose philosophical basis was Catholic humanism.

The old order feared these new leftists, and the conservative and liberal parties decided to join forces as a result. They chose Jorge Alessandri, son of former president Arturo Alessandri, to head a coalition between the two parties.

Alessandri scraped through the election with less than 32% of the vote, while Allende managed 29% and Frei 21%. An opposition Congress forced Alessandri to accept modest land-reform legislation, beginning a decade-long battle with the haciendas.

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Christian Democratic period

The 1964 presidential election was a choice between Allende and Frei, who drew support from conservative groups who detested the leftist physician. During the campaign, both parties promised agrarian reform, supported rural unionization and promised an end to the hacienda system. Allende was undermined by leftist factionalism and Frei won comfortably.

Genuinely committed to social transformation, the Christian Democrats attempted to control inflation, balance imports and exports, implement agrarian reform and improve public health, education and social services. However, their policies threatened both the traditional elite's privileges and the radical left's working-class support.

The Christian Democrats had other difficulties. The country's economy had declined under Jorge Alessandri's presidency, and limited opportunities in the countryside drove the dispossessed to the cities, where spontaneous squatter settlements, or callampas (mushrooms), sprang up almost overnight. Attacks increased on the export sector, then dominated by US interests. President Frei advocated 'Chileanization' of the copper industry (getting rid of foreign investors in favor of Chileans), while Allende and his backers supported the industry's nationalization (placing the industry under state control).

The Christian Democrats also faced challenges from violent groups such as the Movimiento de Izquierda Revolucionario (MIR; Leftist Revolutionary Movement), which began among upper-middle-class students in Concepción. MIR's activism appealed to many urban laborers who formed the allied Frente de Trabajadores Revolucionarios (Revolutionary Workers Front). Activism also caught on with peasants who longed for land reform. Other leftist groups supported strikes and land seizures by Mapuche Indians and rural laborers.

Frei's reforms were too slow to appease leftists and too fast for the conservative National Party. Despite better living conditions for many rural workers and good gains in education and public health, the country was plagued by inflation, dependence on foreign markets and capital, and inequitable income distribution. The Christian Democrats could not satisfy rising expectations in Chile's increasingly militant and polarized society.

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Allende's rise to power

In this discomforting political climate, a new leftist coalition was gathering its forces. With Allende at its head, the Unidad Popular (UP) was shaping a radical program that included the nationalization of mines, banks and insurance, plus the expropriation and redistribution of large landholdings.

The 1970 election saw one of Chile's closest ever results. Allende squeezed 36% of the vote, against the National Party's 35%. Under the constitution, if no candidate obtained an absolute majority, Congress had to confirm the result. Christian Democrats weighed in behind Allende, and thus he became the world's first democratically elected Marxist president.

But the country - and for that matter Allende's own coalition - was far from united. UP consisted of socialist, communist and radical parties that disagreed on their objectives. Lacking any real electoral mandate, Allende faced an opposition Congress, a suspicious US government, and right-wing extremists who even advocated his overthrow by violent means.

Allende's economic program, accomplished by evading rather than confronting Congress, included the state takeover of many private enterprises and massive income redistribution. By increasing government spending, the new president expected to bring the country out of recession. This worked briefly, but apprehensive businessmen and landowners, worried about expropriation and nationalization, sold off stock, machinery and livestock. Industrial production nose-dived, leading to shortages, hyperinflation and black marketeering.

Peasants, frustrated with an agrarian reform, seized land and agricultural production fell. The government had to use scarce foreign currency to import food.

Chilean politics grew increasingly polarized and confrontational, as many of Allende's supporters resented his indirect approach to reform. MIR intensified its guerrilla activities, and stories circulated in Santiago's factories about the creation of armed communist organizations.

Expropriation of US-controlled copper mines and other enterprises, plus conspicuously friendly relations with Cuba, provoked US hostility. Later, hearings in the US Congress indicated that President Nixon and Secretary of State Kissinger had actively undercut Allende by discouraging credit from international finance organizations and supporting his opponents. Meanwhile, according to the memoirs of a Soviet defector published in 2005, the KGB withdrew support for Allende because of his refusal to use force against his opponents.

Faced with such difficulties, the Chilean government tried to forestall conflict by proposing clearly defined limits on nationalization. Unfortunately, neither extreme leftists, who believed that only force could achieve socialism, nor their rightist counterparts, who believed only force could prevent it, were open to compromise.

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Rightist backlash

In 1972 Chile was paralyzed by a widespread truckers' strike, supported by the Christian Democrats and the National Party. As the government's authority crumbled, a desperate Allende invited constitutionalist army commander General Carlos Prats to occupy the critical post of interior minister, and he included an admiral and an air-force general in his cabinet. Despite the economic crisis, results of the March 1973 congressional elections demonstrated that Allende's support had actually increased since 1970 - but the unified opposition nevertheless strengthened its control of Congress, underscoring the polarization of Chilean politics. In June 1973 there was an unsuccessful military coup.

The next month, truckers and other rightists once again went on strike, supported by the entire opposition. Having lost military support, General Prats resigned, to be replaced by the relatively obscure General Augusto Pinochet Ugarte, whom both Prats and Allende thought loyal to constitutional government.

On September 11, 1973 Pinochet unleashed a brutal golpe de estado (coup d'état) that overthrew the UP government and resulted in Allende's death (an apparent suicide) and the death of thousands of Allende supporters. Police and the military apprehended thousands of leftists, suspected leftists and sympathizers. Many were herded into Santiago's National Stadium, where they suffered beatings, torture and even execution. Hundreds of thousands went into exile.

The military argued that force was necessary to remove Allende because his government had fomented political and economic chaos and because - so they claimed - he himself was planning to overthrow the constitutional order by force. Certainly, inept policies brought about this 'economic chaos, ' but reactionary sectors, encouraged and abetted from abroad, exacerbated scarcities, producing a black market that further undercut order. Allende had demonstrated commitment to democracy, but his inability or unwillingness to control factions to his left terrified the middle class as well as the oligarchy. His powerful last words, part of a radio address just before the attacks on the government palace, La Moneda, expressed his ideals but underlined his failure:

My words are not spoken in bitterness, but in disappointment. There will be a moral judgment on those who have betrayed the oath they took as soldiers of Chile…They have the might and they can enslave us, but they cannot halt the world's social processes, not with crimes, nor with guns…May you go forward in the knowledge that, sooner rather than later, the great avenues will open once again, along which free citizens will march in order to build a better society. Long live Chile! Long live the people! Long live the workers! These are my last words, and I am sure that this sacrifice will constitute a moral lesson that will punish cowardice, perfidy and treason.

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Military dictatorship

Many opposition leaders, some of whom had encouraged the coup, expected a quick return to civilian government, but General Pinochet had other ideas. From 1973 to 1989, he headed a durable junta that dissolved Congress, banned leftist parties and suspended all others, prohibited nearly all political activity and ruled by decree. Assuming the presidency in 1974, Pinochet sought to reorder the country's political and economic culture through repression, torture and murder. The Caravan of Death, a group of military that traveled by helicopter from town to town, mainly in northern Chile, killed many political opponents, many of whom had voluntarily turned themselves in. Detainees came from all sectors of society, from peasants to professors. Thousands were 'disappeared' during the 17-year regime.

The CNI (Centro Nacional de Informaciones, or National Information Center) and its predecessor DINA (Directoria de Inteligencia Nacional, or National Intelligence Directorate) were the most notorious practitioners of state terrorism. International assassinations were not unusual - a car bomb killed General Prats in Buenos Aires a year after the coup, and Christian Democrat leader Bernardo Leighton barely survived a shooting in Rome in 1975. Perhaps the most notorious case was the 1976 murder of Allende's foreign minister, Orlando Letelier, by a car bomb in Washington, DC.

By 1977 even air force general Gustavo Leigh, a member of the junta, thought the campaign against 'subversion' so successful that he proposed a return to civilian rule, but Pinochet forced Leigh's resignation, ensuring the army's dominance and perpetuating himself in power. By 1980 Pinochet felt confident enough to submit a new, customized constitution to the electorate and wagered his own political future on it. In a plebiscite with narrow options, about two-thirds of the voters approved the constitution and ratified Pinochet's presidency until 1989, though many voters abstained in protest.

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Return to democracy

The cracks in the regime began to appear around 1983, when leftist groups dared to stage demonstrations and militant opposition groups began to form in the shantytowns. Political parties also started to regroup, although they only began to function openly again in 1987. In late 1988, trying to extend his presidency until 1997, Pinochet held another plebiscite, but this time voters rejected him. In multiparty elections in 1989, Christian Democrat Patricio Aylwin, compromise candidate of a coalition of opposition parties known as the Concertación para la Democracia (Concertación for short), defeated Pinochet protégé Hernán Büchi, a conservative economist.

Consolidating the rebirth of democracy, Aylwin's relatively uneventful four-year term expired in 1994. His elected successor was Eduardo Frei Ruiz-Tagle, son of the late president Eduardo Frei Montalva, for a six-year term. The Concertación maintained Pinochet's free-market reforms, while struggling with a limiting constitution in which the military still held considerable power. Pinochet's military senate appointees could still block reform, and he himself assumed a senate seat upon retirement from the army in 1997 - at least in part because it conferred immunity from prosecution in Chile. This constitutional hangover from the dictatorship was finally swept away in July 2005 when the president was granted the right to fire armed forces' commanders and abolish unelected senators.

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The Pinochet saga

The September 1998 arrest of General Pinochet in London at the request of Spanish judge Báltazar Garzón, who was investigating deaths and disappearances of Spanish citizens in the aftermath of the 1973 coup, caused an international uproar.

Following the arrest, US president Bill Clinton released files showing 30 years of US government covert aid to undermine Allende and create the stage for the coup d'état. Pinochet was put under house arrest, and for four years lawyers argued whether or not he was able to stand trial for crimes committed by the Caravan of Death, based on his health and mental condition. Both the Court of Appeals (in 2000) and the Supreme Court (2002) ruled him unfit to stand trial. As a consequence of the court's decision - that he suffers from dementia - Pinochet stepped down from his post as lifetime senator.

It seemed the end for judicial efforts to hold him accountable for human rights abuses. But in 2004 Pinochet gave a TV interview in which he appeared wholly lucid. A string of court decisions subsequently stripped Pinochet of his immunity from prosecution as a former head of state. One of the key human rights charges subsequently brought against him revolved around his alleged role in Operation Condor, a coordinated campaign by several South American regimes in the 1970s and 1980s to eliminate their leftist opponents.

Since then, Chileans have witnessed a string of yo-yoing court decisions - first stripping his immunity, subsequently reversing the ruling, then again deciding that he can stand trial. Revelations made in early 2005 about Pinochet's secret foreign bank accounts - in which he squirreled away more than US$27 million - added to the charges against him, as well as implicating his wife and son. It was also revealed that the judge investigating the former dictator's bank accounts had received death threats.

Despite the intense legal activity, many Chileans are doubtful that Pinochet will ever reach trial. His health continues to decline, with a mild stroke in July and reaching the age of 90 in November 2005. What seems certain is that Pinochet will not go to his grave with any of the dignity and respect that he must once have envisaged as leader.

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The international stage

The Concertación narrowly scraped through the 2000 elections for their third term in office. Their candidate, the moderate leftist Ricardo Lagos, joined a growing breed of left-leaning governments elected across South America, all seeking to put a little or a lot more space between themselves and Washington. Lagos became an important figure in this shift in 2003 when he was one of the most determined members of the UN Security Council to oppose war in Iraq. It was a move that won him much approval with Chileans, and quieter respect from other world leaders. Predictably, however, it earned him no points with Washington.

Proof that a more united South America was increasingly banding together to contest US hegemony came when Chile's socialist interior minister José Miguel Insulza was elected to lead the 34-member OAS (Organization of American States) in 2005. The US had initially thrown their weight behind candidates from El Salvador and Mexico. However, when it became apparent that Chile's candidate would win, the US made a speedy show of backing him. Face-saving maneuvers aside, Insulza's election marks the first time since the OAS was founded in 1948 that the US-backed nominee has not won.

Soon after, US Secretary of State Condoleezza Rice attempted to coax the leaders of Chile and Brazil into denouncing controversial Venezuelan president Hugo Chavez. But, in an exhibition of South American unity, Brazil's government responded that it would continue to respect Venezuela's sovereignty. Chile, meanwhile, organized independent talks with Venezuela during which the two governments pledged to work together.

While Chilean alliances with many South American countries have been strengthening, relations with neighboring Peru and Bolivia remain at best fragile. Recent spats with Peru have included the alleged sale of arms by Chile to Ecuador and the battle over pisco rights. Meanwhile President Ricardo Lagos said in 2004 that continuing poor relations with Bolivia - who lost all ocean access in the War of the Pacific - had been a 'great failure' of his presidency.

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Brave new world

Chile's role as an emerging regional leader has been accompanied by a rapid economic turnaround and far-reaching social changes.

The country recovered from a troubled period between 2001 and 2003 to become the brightest economic star of Latin America - boosted by record prices for its key export, copper. Public and foreign debt is low, foreign investment is up, and the government has been busily signing free-trade agreements, notably with the EU and North America; Chile is the first South American state to sign such an agreement with the US. China is another crucial trading partner, and the high price of copper is largely thanks to its rapid industrialization.

Now ranked as the world's 37th most developed country, Chile's healthcare has improved, life expectancy is up, education has increased by 25% and poverty has been halved since 1990. Lagos' government launched pioneering schemes to help alleviate extreme poverty, although the country still has a remarkably high inequality of income. The only other tarnish on Chile's economic crown is its worryingly high dependence on the price of copper. Despite efforts to diversify, copper still accounts for 45% of exports.

Socially Chile is rapidly shedding much of its traditional conservatism. A divorce law was finally passed in 2004 and the death penalty was abolished in 2001. The arts and free press are once again flourishing and women's rights are being increasingly recognized in law. The Lagos administration included more women than ever in powerful positions. Indeed, for a while the 2005 presidential race was dominated by two female front-runners - Michelle Bachelet and Soledad Alvear - despite the fact that Chilean politics have traditionally been male dominated. Bachelet, an interesting figure who was imprisoned and tortured under Pinochet, became Chile's first female leader when Ricardo Lagos stepped down in early 2006. Her election also sees a fourth consecutive term for Concertación, underlining Chile's apparent political stability.

Chile has already changed enormously since the dark days of the dictatorship, developing international influence, expanding economically and casting off conservative shackles socially. However, while squarely facing the future it is yet to fully come to terms with its past.

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Resetting the compass

Soon after Michelle Bachelet took the presidency, divisions within her coalition made pushing through reforms difficult. She also was tested by emerging crises with no easy answer.

First was the introduction of Transantiago, the ambitious new transportation system poised to replace Santiago’s rickety, polluting dinosaur-era buses. The sudden transition was a disaster. Transportation routes were slashed from one day to the next, leaving commuters with additional bus transfers and long waiting periods between buses. Filling the gap, the metro has since been packed to the gills. Although Transantiago was masterminded by the Lagos administration, the fallout cost the new administration its initially strong approval ratings.

The student protests of 2006–07 had a similar effect. Protesting the dismal quality of state schooling, over 600,000 students nationwide – nicknamed pinguinos (penguins) for their uniforms – staged marches, sit-ins and protests, often with teacher support. Violence marred some protests yet they eventually succeeded in shaming the government into a long-overdue education overhaul. Inequity drove the issue: on a national test, private-school fourth-graders were outperforming their public-school counterparts by 50%. Reform, in the form of state grants and a new quality agency for monitoring, is on the way, although some question whether weaker municipalities are equipped to implement it.

At the root of the problem is Chile’s remarkably high income inequality. The number of millionaires doubled in the early 2000s, yet close to 500,000 residents live in extreme poverty. While the poverty has declined by a third since 2003, critics argue that the national poverty line is just too low to give an accurate picture. In 2008, runaway inflation had hit Chile’s poor the hardest –the cost of bread had doubled from 2007 and the prices of staple goods was steadily on the rise.

In January 2008, the police killing of an unarmed Mapuche youth sparked massive demonstrations and vandalism. The youth had been symbolically occupying a privately owned farm near Temuco with over thirty activists. The death came in the wake of a 2005 police killing of a 17-year-old Mapuche that went unprosecuted. With a history of conflict, tensions are again mounting between the state and the Mapuche indigenous community, who today number around one million.

Chile’s seemingly incorruptible image may have been brought down a notch. The state railway company, EFE, went bankrupt, despite an infusion of US$1 billion in state funds, and proposed regional sports complexes similarly tanked when national funding disappeared. Chile’s environmental record might also face scrutiny: the administration has acted in support of extensive mining operations and a number of hydroelectric proposals meant to alleviate growing energy needs that could be extremely destructive to the environment.

Navigating its way through financial highs and domestic woes, Chile may have to reset its north to find its way through mounting social, ecological and economic issues; it’s complicated, but par for the course of progress.

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