Page:CREST-Allendes Chile Supply Demand Gap.pdf/5

Approved For Release 2006/04/19 ; CIA-RDP85T00875RO01700040058-3
SECRET

6. because of sharply reduced investment or actual disinvestment in many enterprises; shortages of raw materials, parts, and other inputs; worsening labor discipline; snarls in the distribution system; and - perhaps most important - the governments inability to manage effectively the many activities taken over (see Table l). Government ownership and control, already widespread even by Latin American standards in the pre-Allende period, has about doubled in the last two years and now encompasses at least one-half of GDP. In some spheres - notably mining, large-scale manufacturing, electric power, communications, and banking - state control is virtually complete.

Table 1
Chile: increase in State Control Since 1970

---

	Percent of Gross Domestic Product	Percent of Output Under State Control
	1970	1970	1972[1]
Total	100.0	27	50-60
Agriculture	6.9	20[2]	50[3]
Mining	11.1	45	97
Manufacturing	27.7	25	45
Construction	4.1	51[4]	90[5]
Wholesale and retail trade	20.4	1	26
Transport, storage, and communications	4.7	37	69
Banking	1.5	67	96
Electricity, gas, and water	1.8	60	95
Public administration	5.8	100	100
Other services	143	12	42
Ownership of private dwelling	1.7	0	0

1. estimated
2. Share of agricultural product vs capacity in agarian reform settlements and other state-owned farms.
3. Share of agricultural product vs capacity in agarian reform settlements and other state-owned farms.
4. Estimated share of construction projects financed by the state.
5. Estimated share of construction projects financed by the state.

Down on the Farm

7. Agricultural performance has been even worse than some of the regime's critics predicted. Although good crop conditions and excessive cattle slaughtering pushed farm output to a record level in 1970/71, it has

4
Approved For Release 2006/04/19 ; CIA-RDP85T00875RO01700040058-3
SECRET