30 CultureShock! Chile
became apparent that he was there to stay. In January 1974,
Pinochet announced that the military regime would remain
in power for no less than five years.The Chicago Boys
After having ‘secured’ the country by ridding it of the
communists and socialists, the military immediately turned
to the economy. A number of civilian technocrats who had
been educated at the University of Chicago proposed radical
adjustments in economic policy. The ‘ Chicago Boys’, as
they were known, promoted a free market economy and
a drastic reduction in the role of the state. These policies
were effective in reducing inflation from about 500 per
cent at the time of the coup to 10 per cent in 1982. The
country began to enjoy economic growth and had ended
its unhealthy dependence on copper.
However, there were problems. Lower tariffs and the
removal of import quotas forced inefficient Chilean industries
to compete with international firms. As a result, many
were forced out of business, which led to high levels of
unemployment among the working class. By 1983 unem-
ployment had reached 33 per cent and the country suffered