Chilean economy in the shit

Chile had a chronic balance of payments deficit; the economy was totally dependent on foreign borrowing resulting in a massive overseas debt. Servicing this debt as well as internal government debts contributed to increasing inflation. The Chikean government, along with the bourgeoise, was resting on the top of a potentially highly explosive situation; a fact reflected in the spending of 25% of the country's annual revenue on the armed forces and police. Keeping the Peace in Chile meant keeping the profits for the bourgeoise and United States.

Despite an election programme aimed at control of the Chilean economy Allende's comming to power did not relieve many of the basic problems. A programme of nationalisation of foreign and domestic monopolies in industry (notably the copper mining field) provided many job opportunities and unemployment was halved and production initially lifted in heavy industry. Land reform were instigated, a new port built with Cuban and Soviet assistance and a number of political prisoners freed. Chile was however moving towards Soviet dependence rather than USA. Inflation could not be halted and rapidly rose to world record proportions. Food supplies were scarce and production in the newly state-run industries began to fall. The failure to control the economy, despite initial wage rises, and a dropping standard of living meant that the middly classes began to turn towards the right