Chile: Effects of the adjustment policies on the agriculture and forestry sector

Abstract

In this article the author analyses the situation of Chile’s agriculture and economy in tw o periods. In the first, from the end of 1973 to June 1981, the economy grew at a high rate, in flation fell, wages rose, fiscal surpluses were achieved and reserves builtup. In contrast, unemployment grew sharply, investment and saving fell, income distribution deteriorated, and the private sector’s debt reached very high levels. The balance-of-payments deficit, the worsening of the terms of trade, the higher interest rates and the very large foreign debt acted as detonators of a crisis which stamped its mark on the second period. This period, from 1981 on, is characterized by the introduction of various adjustment measures designed to correct the imbalances w ithout altering the essential nature of the adopted model.