Globalization in Chile!

"Globalization is a series of social, economical, technological, cultural, and political changes that promote interdependence and growth. Globalization raises the standard of living in developing countries, spreads technological knowledge, and increases political liberation. The main cause of globalization is influence from other, more developed, countries. Globalization is a historical process that results from human innovation and technological progress"(Harris, 2002).

The aim of the essay is critically analyse a country's experience of globalization. The country that has been chosen is Chile. In order to provide the reader with all necessary information needed, it has been decided to provide the information step-by-step. Firstly, an historical review of Chile development since the mid-1900s, until the end of the presidency under Ricardo Lagos in 2006 will be analyzed. From there, a profound evaluation of the economy of Chile and where does the country stand in term of globalization nowadays. Finally, How does Chile will experience globalization with the new president Sebastien Pinera the first right-wing leader since the departure of dictator Augusto Pinochet in 1990.

Since the mid-1900s, Chile was a successfully established democratic country and was considered as a high success, a stable and uninterrupted case of democratic rule. However, in 1970 Salvador Allende was elected President on a populist platform, He was the first democratically elected Marxist president (Profile: Salvador Allende, 2003). His Unidad Popular coalition had the goal of transforming Chile into a socialist society. Unequal income distribution was the major problem of Chile, the solution for economic advisor of Allende involved a revolutionary reforms, the nationalization of the mining, banking and agricultural sectors and much of the manufacturing sector along with a policy of expansionary aggregate demand. Between 1970 and 1972 public sector employment grew at an average of 11.4 percent per year. Unions were very powerful and able to negotiate wages for entire industries. Labor law was highly protective during Allende's regime: it was difficult to lay off workers, severance costs were high, and strikes could continue indefinitely. Also, wages were generally adjusted 100 percent to past inflation (Conway et Al, 1997). The populist policies did spur growth in 1971, the real GDP grew at 7.7 percent, unemployment fell to 4 percent and real wages increased 23 percent (Conway et Al, 1997). This growth was short-lived. By 1972 real GDP was declining, and continued massive government spending increased the fiscal deficit to over 30 percent in 1973. To finance the enormous deficit the government loans to Banco Central, which subsequently printed money: Banco Central's claims on the central government increased tenfold from 1970 to 1972, helping inflation reach a 600 percent annual rate (Appendix 2). Black markets developed