Make that 17 years. From 1973 to 1990, Pinochet ruled with absolute authority, routing the leftist opposition and rousing a dormant economy with privatization and deregulation. Growth has averaged 6 percent per year since 1985 with low inflation, Latin America’s best record. But to regain Chile’s edge in the global marketplace, Pinochet let industries pollute and exploit natural resources with virtually no limits. Environmentalists were seen as antigrowth troublemakers: “Scratch a green, find a red,” went the motto. Finance Minister Hernan Buchi lured investors by lauding the lack of restrictions as part of Chile’s “low production costs.” Some 700 laws and 2,000 regulations were on the books, but only one official had the job of enforcing them. “There was an excess of faith in the market as a regulator,” says Juan Escudero, general secretary of Santiago’s Decontamination Commission. “It was chaos.”
Both blessed and cursed by Chile’s growth, President Patricio Aylwin now faces a daunting task: protect the environment without sacrificing the economy. Nowhere can the challenge be seen more clearly than in Santiago–if anything can be seen clearly these days. A thick layer of contaminants settles almost daily over the city, trapped by cold air and mountains on all sides. The causes of the filth: haphazard development and an out-of-control bus system that Pinochet began deregulating in 1975. Two thirds of the smog’s harmful elements come from the 11,000 privately owned buses that spew diesel fumes through the city. The government bought out 2,600 of the worst offenders. But pollution still reached lethal levels for two days in July, forcing the government to shut schools and factories and to warn parents to keep their children indoors. The government now hopes to put the brakes on the bus mess by selling routes, favoring operators with newer buses and lower fares.
The smog not only obscures the view of the majestic snowcapped Andes, it threatens to fog up Chile’s economic future. A recent U.S. government report warned that Chile’s lack of environmental standards and regulations could hurt its long-desired free-trade agreement with the United States. Partly in response, Aylwin’s government has gone green: proposing new measures requiring all new vehicles to use catalytic converters, charging cars for driving downtown, creating a “pollution bourse” in which companies buy and sell the right to pollute. A broad environmental-protection bill is moving through the legislature, albeit as slow as sludge. But after 17 years of neglect, it signals a change in the atmosphere.
