Allende’s Chile and the Inter-American Cold War (29 page)

However, Allende did not convince the far Left within the government or outside it. Although he maintained personal—and in the case of his nephew, Andres Pascal Allende, familial—contacts with the MIR’s leaders, his relationship with the party as a whole reached a crisis point in early 1972. By this stage, the party had already been excluded from the GAP and was increasingly open in its denunciation of government vacillation.
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But when it publicly opposed the Communist governor of Concepción and a student died during intra-Left clashes in May, the UP as a whole publicly vowed to distance itself from the MIR’s divisive tactics.
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Unsurprisingly, antigovernment forces ridiculed the notion that the UP and the MIR could be divided.
El Mercurio
, which was still receiving significant covert funds from the United States, pointedly asked “what authority … the defenders of continental armed subversion and those who admire Fidel Castro’s regime without any reservations” had to criticize others who had “taken up the same revolutionary flags.”
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As opposition leaders informed U.S. Embassy staff, they planned to launch a “campaign of intensive scandal-mongering” to attack Allende’s vulnerable “image and credibility” as a democrat.
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A key way of doing so was to emphasize Allende’s Cuban ties. Castro’s speeches in Chile had clearly demonstrated that the Cubans sympathized with the PS and the MIR. Indeed, the Cuban leader would openly explain to one visiting French politician that “the Chileans would not be able to stay where they were” if they wished to make a socialist revolution and would have to abandon the “swamp of institutions” that bogged them down.
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More than that, however, the opposition was effectively turning what the U.S. ambassador called “minor occurrences” into breaking stories of Cuban arms transfers.
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When packages on board a Cubana aircraft had been unloaded at Santiago’s airport without passing through customs in early 1972, this had caused a public outcry. Furthermore, because government officials were at the airport on the day the airplane had arrived, the opposition was able to use the incident to impeach Allende’s minister
of the interior, Hernán del Canto, and the head of Chile’s Police Investigations Branch, Eduardo “Coco” Paredes.
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In their campaign of “scare-mongering,” the opposition also had ample means of dissemination; it controlled 115 out of 155 radio stations, four out of six national newspapers, and fifty out of sixty-one regional newspapers.
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Meanwhile, intense scrutiny of Cuban activities in Chile, and the crisis between the government and Miristas, led to significant tensions between Allende and the Cubans. In May 1972 this escalated when Allende asked Cuba to suspend its military assistance to the MIR. The DGLN’s desk officer for Chile, Ulises Estrada, remembers hearing this news while he was in Romania accompanying Castro on his tour of Eastern Europe, but he was instantly sent to Santiago in an effort to try and persuade the president to change his mind. When he arrived, he put forward the Cuban leadership’s view that the MIR’s preparations for armed insurgency could play an essential role in defending the government from opposition attacks or military intervention. Indeed, Havana was so convinced that the MIR should be involved that when Estrada arrived in Santiago, the message he delivered to Allende was that, if Cuba could not arm the MIR, it would suspend training to
all
parties in what turned out to be “a very long conversation.”
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Ultimately, Estrada remembered that a compromise was reached with Allende whereby Cuba would continue offering armed training to the MIR (in Pinar del Río, Cuba’s western province, and in Chile) but would provide it with no new arms until or unless there was a coup, at which point the Cubans would hand over a stockpile that they would now begin assembling in Santiago. The Cubans also urged the MIR’s leader, Miguel Enríquez, to be “careful” about attacking the government.
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Even so, for Cuba as well as Allende, the task of juggling between different left-wing factions in Chile was becoming increasingly problematic as the gap between them widened.

Meanwhile, when it came to the United States, the UP had yet to respond to the appeal Letelier had made in November 1971 to define a new cohesive strategy of compromise. On that occasion, Letelier had warned that the lack of a carefully defined strategy vis-à-vis Washington could well lead to a situation in which the Chileans “lost control” of U.S.-Chilean relations and ended up being controlled by others.
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Only a couple of months later, his prediction had appeared to be coming true. As 1972 began, so, too, did a barrage of lawsuits and credit freezes in the United States supposedly in response to Chilean expropriations, which left Santiago playing a game of catch-up.
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Although Chilean legal experts had replaced political representatives in negotiations with Allende’s blessing, their technical approach
to resolving Chile’s financial battles failed to override the fundamental clash between Nixon’s new, tougher stance on expropriation and Allende’s refusal to overturn his “excess profits” ruling on the compensation Chile would offer to private U.S. copper companies.
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Capitulation to U.S. pressure was still not an attractive prospect for Allende, in terms of either his ideals or his domestic political standing. When, in November 1971, Letelier had personally urged the UP to consider entering into bilateral negotiations with the United States to discuss questions of compensation, debt negotiations, arbitration, and the status of North American investments in Chile, his proposals met with little enthusiasm.
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Then, in February 1972, when Allende had decided to pay compensation to Kennecott’s subsidiary, the Braden Copper Company, after strong U.S. State Department warnings that this would ease Chile’s chances of renegotiating its debt, this was heavily criticized.
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As the U.S. ambassador in Santiago, Nathaniel Davis, observed, the decision had been taken with “extreme difficulty by an ill-coordinated Chilean leadership.”
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Indeed, while Cuban advisers in Chile urged Allende to pay up and reach some kind of modus vivendi in this instance, some of the president’s closest advisers were unhappy. After hearing the president was paying, Allende’s daughter Beatriz vowed to take back the Portocarrero painting she had given him when he nationalized copper without offering any compensation, believing that he had gone back on his word.
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Beyond the issue of dealing with U.S. copper companies and lawsuits, preparing for multilateral debt negotiations in Paris scheduled in April was increasingly taking over the Chilean Foreign Ministry’s time. As the United States was the holder of the largest portion of Chile’s debt—48 percent of it—the ministry wanted to bring it on board or at least prevent Washington from sabotaging its chances of a favorable multilateral settlement.
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As Chilean diplomats prepared to meet with their creditors in Paris, they thus spent much of their time contacting Europeans and trying to “prevent U.S. maneuvers” to undermine Santiago’s position.
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By this stage, the Chileans had at least some evidence to suggest either that Washington would not attend or that it would pressure its European allies into adopting a tougher stance. They were also conscious that U.S. Treasury officials were pressuring the State Department to adopt a hard line and had basically taken over the United States’ approach to debt negotiations. In addition, growing U.S. congressional support for punishing expropriation without compensation worried Santiago’s policy makers. With Chile and Peru clearly in mind, for example, the U.S. Congress had passed the González Amendment that
required U.S. representatives in international financial institutions to vote against loans to countries where expropriation occurred without “adequate compensation.” The United States, it seemed to Letelier, had very obviously substituted “Dominican gunboat-diplomacy” for “credit diplomacy” as a means of intervention.
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By this stage, Allende’s government was particularly susceptible to such economic pressure. In the first four months of 1972, the cost of living had risen 10 percent, Chile had less than $100 million in foreign exchange reserves left, and opposition leaders were pointing to a predicted budget deficit of $600–$700 million by the end of the year, of which external debt repayments that the UP was trying to reschedule accounted for only $300 million.
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At the grass-roots level, opposition spokesmen remarked with some surprise that “the poor and humble voter never talked about food but always about liberty.”
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But as U.S. ambassador Davis observed, food shortages were becoming a “significant psychological (but not nutritional) problem” among wealthier sectors of Chilean society—the core of Allende’s opposition—serving as a useful excuse for antigovernment demonstrations.
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Given this deteriorating political and economic situation at home, the Chilean Foreign Ministry continued to court the idea of easing the country’s financial situation by establishing a healthier balance of trade and aid between what it saw to be the four power blocs in global affairs, the United States, Western Europe, China, and the Soviet Union.
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In January, Allende had written to Leonid Brezhnev vaguely accepting an invitation to visit the Soviet Union but strongly emphasizing his hopes that the imminent arrival of a high-level Soviet delegation in Chile would increase Soviet-Chilean economic ties.
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However, subsequent bilateral talks did not go well, not least because the Soviets had regarded the Chileans as having been wildly optimistic about what the Soviet Union could provide. Specifically, the UP had proposed increasing annual trade between Chile and the USSR from 7.8 million rubles (approximately $5 million) in 1971, achieved mainly as a result of Soviet wheat and tractor exports, to $300 million by 1975. Moreover, although the Chileans suggested that they would pay for immediate Soviet imports
after
presidential elections in 1976, they also hoped to sell Chilean products to Moscow in the meantime and demanded immediate payment in hard currency. In a specially commissioned report for the Soviet Politburo, the Latin American Institute at the USSR’s Academy of Social Sciences thus noted that the Chilean plan implied the USSR would have to comply with conditions it had not granted any other developing
country. Considering the USSR was desperate for grain itself in 1972, the authors of this report noted, Soviet leaders were not attracted by the prospect of providing long-term credits or exporting great quantities of items that were already in short supply in the USSR.
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Meanwhile, the UP’s leaders could not agree on the Soviet Union as an alternative source of economic support. Sectors of the coalition—often the very ones that opposed making a deal with Washington—regarded the prospect of becoming increasingly dependent on the Soviet Union skeptically. Carlos Altamirano, general secretary of the Socialist Party, exhibited “nothing but scorn for the Russians and their system” when he met Britain’s ambassador in Santiago. According to Altamirano, Fidel Castro had privately lamented Cuba’s dependency on the USSR to him while in Chile. The Cuban leader had apparently bemoaned that “he had no alternative but to turn to the Russians” and found them “extraordinarily slow-moving and rigid”—“Every time he asked for urgently needed equipment,” Altamirano recounted, “he was told that he could not have it for several years because all supplies had been allocated well in advance and changes could not be made without wrecking the current plans. Castro wanted to build up trade with Western Europe and also said that he would like to restore relations, particularly in the economic field, with the United States, though of course the Americans would have to accept him … [and] this would [not] be possible as long as Mr Nixon was President.”
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Although Castro’s objections to the USSR may have been astute, Altamirano does not appear to have offered any alternatives to seeking support from the Soviets. And while Nixon remained president, and the Soviets stalled, the UP’s economic difficulties continued to mount.

In this context, many Chileans—and Allende in particular—hoped that the Third World would collectively act to change the international balance of power and give Chile greater leeway to attract support. UNCTAD III was to be the largest conference on trade and development ever held, comprising 141 delegations and giving the UP an opportunity to show the world Chile’s democratic character while negotiating a better deal for the Third World.
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Chilean diplomats insisted that transforming the system of global trade and creating a better situation for worldwide economic development was “a similar and parallel fight” to the one going on in Chile, and even the Brazilian ambassador in Santiago was forced to acknowledge that the conference offered the UP international “recognition.”
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The East German Embassy in Santiago reached a similar conclusion, optimistically noting
that the conference would give Chile a positive “opportunity to strengthen its position in the ‘Third World.’”
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Even so, before the conference, it had been unclear precisely what the Chileans were hoping to gain from UNCTAD III beyond recognition and prestige. Six months earlier, Foreign Minister Almeyda had publicly stated that, as well as embarking on “conventional” negotiations, the global South should use its “moral authority” to confront and denounce “the incongruence and irrationality” of an unjust international system.
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After the disappointments of the G77 meeting in Lima in October 1971, Chile’s representative in Geneva, Hernán Santa Cruz, had nevertheless become highly skeptical of the conference’s potential. In keeping with his own proposals of what could be done to improve the G77’s chances before the conference opened, he visited European capitals, where he emphasized constructive negotiation rather than confrontation, and thirteen African countries, where he tried to mobilize a unified Third World coalition.
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But as he had warned Almeyda before taking off on these trips, within the Third World it had become clear that there was a group of members that were wary of pushing for too much from developed countries at UNCTAD III. There were also other obstacles. As Santa Cruz wrote, not only were poorer African countries more concerned with how they could catch up with other countries
within
the G77 itself, but the Soviet bloc and the People’s Republic of China were not as involved as they could be in supporting the G77’s efforts. Meanwhile, North Korea and North Vietnam were absent from UNCTAD, Arab countries were distracted by their own problems, and India, the Philippines, Pakistan, Malaysia, Indonesia, Iran, Burma, South Vietnam, Thailand, and Cambodia were all either satellites of the United States or playing a “game of equilibrium.” Santa Cruz consequently warned Almeyda that the G77 was unlikely to adopt a united radical posture and forcefully exert its demands on developed countries.
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