The military seized on the widespread discontent and the Chamber's resolution to launch the September 11, 1973 coup d'état (see 1973 coup in Chile) and install themselves in power as a Military Government Junta, composed of the heads of the Army, Navy, Air Force and Carabineros (police).
Once the Junta was in power, General Augusto Pinochet soon consolidated his control over the government. Since he was the commander-in-chief of the oldest branch of the military forces (the Army), he was made the titular head of the junta, and soon after President of Chile.
Following their takeover of power, the Government Junta formally banned the socialist, Marxist and other leftist parties that had constituted former President Allende's Popular Unity coalition. On September 13, the junta dissolved the Congress and outlawed or suspended all political parties. All dissident leaders, from any walk of life, were suspended. All political activity was declared in "recess".
Pinochet expressed contempt for the Christian Democratic Party's call for a quick return to civilian democracy. However, he did not ban the party. Eduardo Frei, Allende's Christian Democratic predecessor as president, initially supported the coup along with other Christian Democratic leaders. Later, they assumed the role of a loyal opposition to the military rulers, but soon lost most of their influence.
Meanwhile, left-wing Christian Democratic leaders like Radomiro Tomic were jailed or forced into exile. The Catholic church, which at first expressed its gratitude to the armed forces for saving the country from the danger of a "Marxist dictatorship" became, under the leadership of Raúl Cardinal Silva Henríquez, the most outspoken critic of the regime's social and economic policies. Nonetheless, even Pope John Paul II has been criticized for his perceived leniency towards the Pinochet regime.
The military junta began to change during the late 1970s. Due to problems with General Pinochet, General Gustavo Leigh was expelled from the junta in 1978 and replaced by General Fernando Matthei. In 1985 due to the Caso Degollados scandal ("case of the slit throats"), General César Mendoza resigned and was replaced by General Rodolfo Stange.
Chile was drastically transformed from an economy isolated from the rest of the world, with strong government intervention, into a liberalized, world-integrated economy, where market forces were left free to guide most of the economy's decisions. This period was characterized by several important economic achievements: inflation was reduced greatly, the government deficit was virtually eliminated, the economy went through a dramatic liberalization of its foreign sector, and a strong market system was established.
From an economic point of view, the era can be divided into two periods. The first, from 1973 to 1982, corresponds to the period when most of the reforms were implemented. The period ended with the international debt crisis and the collapse of the Chilean economy. At that point, unemployment was extremely high, above 20 percent, and a large proportion of the banking sector had become bankrupt. During that period, an economic policy that emphasized export expansion and growth was implemented. The second period, from 1982 to 1990, is characterized by economic recovery and the consolidation of the free-market reforms.
Pinochet's policies were lauded internationally for transforming the Chilean economy and bringing about an "economic miracle". British Prime Minister Margaret Thatcher credited him with bringing about a thriving, free-enterprise economy, while at the same time downplaying the Junta's human rights record, condemning an "organised international Left who are bent on revenge." Pinochet certainly did achieve macroeconomic success with his reforms, hindered somewhat by recession in the early 1980s. GDP growth remained steady, and Chile began a process of integration into the international economy. However, as discussed below, many social costs were paid by the lower strata of Chilean society.
The cuts indirectly caused a significant rise in many preventable diseases and mental health problems. These included rises in typhoid (121%,) viral hepatitis, and an increase in the frequency and seriousness of mental ailments among the unemployed. .
Exchange rate depreciations and cutbacks in government spending produced a depression. Industrial and agricultural production declined. Massive unemployment, estimated at 25% in 1977 (it was only 3% in 1972), and inflation eroded the living standard of workers and many members of the middle class to subsistence levels. The under-employed informal sector also mushroomed in size. The long-term goal of reducing inflation was achieved in spite of the aforementioned costs.
Under these new policies, the rate of inflation dropped from about 1,000% per year to about 10% per year. While this was still a high rate of inflation, it allowed the economy to start recovering. From 1984 to 1990, Chile's gross domestic product grew by an annual average of 5.9%, the fastest on the continent. Chile developed a good export economy, including the export of fruits and vegetables to the northern hemisphere when they were out of season, and commanded high prices.
"Overall, the impact of neoliberal policies has reduced the total proportion of students in both public and private institutions in relation to the entire population, from 30 per cent in 1974 down to 25 per cent in 1990, and up only to 27 per cent today. If falling birth rates have made it possible today to attain full coverage at primary and secondary levels, the country has fallen seriously behind at tertiary level, where coverage, although now growing, is still only 32 per cent of the age group. The figure was twice as much in neighbouring Argentina and Uruguay, and even higher in developed countries—South Korea attaining a record 98 per cent coverage. Significantly, tertiary education for the upper-income fifth of the Chilean population, many of whom study in the new private universities, also reaches above 70 per cent."
The junta relied on the middle class, the oligarchy, huge foreign corporations, and foreign loans to maintain itself. Under Pinochet, funding of military and internal defence spending rose 120% from 1974 to 1979. Due to the reduction in public spending, tens of thousands of employees were fired from other state-sector jobs. The oligarchy recovered most of its lost industrial and agricultural holdings, for the junta sold to private buyers most of the industries expropriated by Allende's Popular Unity government. This period saw the expansion of monopolies and widespread speculation.
Financial conglomerates became major beneficiaries of the liberalized economy and the flood of foreign bank loans. Large foreign banks reinstated the credit cycle, as the Junta saw that the basic state obligations, such as resuming payment of principal and interest installments, were honored. International lending organizations such as the World Bank, the IMF, and the Inter-American Development Bank lent vast sums anew. Many foreign multinational corporations such as International Telephone and Telegraph (ITT), Dow Chemical, and Firestone, all expropriated by Allende, returned to Chile.
Having come to power with the self-proclaimed mission of fighting communism, Pinochet found common cause with the military dictatorships of Bolivia, Brazil, Paraguay, Uruguay, and later, Argentina. The six countries eventually formulated a plan that became known as Operation Condor, in which one country's security forces would target active Marxist subversives, guerrillas, and their alleged sympathizers in the allied countries. Pinochet's government received tacit approval and material support from the United States. The exact nature and extent of this support is disputed. (See U.S. role in 1973 Coup, U.S. intervention in Chile and Operation Condor for more details.) It is known, however, that the American Secretary of State at the time, Henry Kissinger, practiced a policy of supporting coups in nations which the United States viewed as leaning toward Communism.
The new junta quickly broke off the diplomatic relations with Cuba that had been established under the Allende government. Shortly after the junta came to power, several communist countries, including the Soviet Union, North Korea, North Vietnam, East Germany, Poland, Czechoslovakia, Hungary, Bulgaria, and Yugoslavia, severed diplomatic relations with Chile (however, Romania and the People's Republic of China both continued to maintain diplomatic relations with Chile). The government broke diplomatic relations with Cambodia in January 1974 and renewed ties with South Korea in October 1973 and with South Vietnam in March 1974.
Chile was on the brink of being invaded by Argentina (also ruled by a military government) as the Argentina Junta started the Operation Soberania on 22. December 1978 because of the strategic Picton, Lennox and Nueva islands at the southern tip of South America on the Beagle Canal. A full-scale war was prevented only by the call off of the operation by Argentina due to military and political reasons. But the relations remained tense as Argentina invaded the Falklands (Operation Rosario). Chile along with Colombia, were the only countries in South America criticized the use of force by Argentina in its war with the U.K. over the Falkland Islands. Chile actually helped the United Kingdom during the war. The two countries (Chile and Argentina) finally agreed to papal mediation over the Beagle canal that finally ended in the Treaty of Peace and Friendship of 1984 between Chile and Argentina (Tratado de Paz y Amistad). Chilean sovereignty over the islands and Argentinian east of the surrounding sea is now undisputed.
The U.S. was significantly friendlier with Pinochet than it had been with Allende, and continued to give Chile substantial economic support between the years 1973–1979, while simultaneously expressing opposition to the junta's repression in international forums such as the United Nations. The U.S. went beyond verbal condemnation in 1976, after the murder of Orlando Letelier in Washington D.C., when it placed an embargo on arms sales to Chile that remained in effect until the restoration of democracy in 1989. Presumably, with international concerns over Chilean internal repression and previous American hostility and intervention regarding the Allende government, the U.S. did not want to be seen as an accomplice in the junta's "security" activities. Prominent U.S. allies Britain, France, and West Germany did not block arms sales to Pinochet, benefitting from the lack of American competition.
Green deputies Noël Mamère, Martine Billard and Yves Cochet on September 10, 2003 requested a Parliamentary Commission on the "role of France in the support of military regimes in Latin America from 1973 to 1984" before the Foreign Affairs Commission of the National Assembly, presided by Edouard Balladur. Apart of Le Monde, newspapers remained silent about this request . However, deputy Roland Blum, in charge of the Commission, refused to hear Marie-Monique Robin, and published in December 2003 a 12 pages report qualified by Robin as the summum of bad faith. It claimed that no agreement had been signed, despite the agreement found by Robin in the Quai d'Orsay
When then Minister of Foreign Affairs Dominique de Villepin traveled to Chile in February 2004, he claimed that no cooperation between France and the military regimes had occurred .
The worst violence occurred in the first three months of the coup's aftermath, with the number of suspected leftists killed or "disappeared" (desaparecidos) soon reaching into the thousands. In the days immediately following the coup, the National Stadium was used as a concentration camp holding 40,000 prisoners. Some of the most famous cases of "desaparecidos" are Charles Horman, a U.S. citizen who was killed during the coup itself, Chilean songwriter Víctor Jara, and the October 1973 Caravan of Death (Caravana de la Muerte) where at least 70 persons were killed. Others operations include Operation Colombo during which hundreds of left-wing activists were murdered and Operation Condor, carried out with the security services of other Latin American dictatorships.
Following Pinochet's defeat in the 1988 plebiscite, the 1991 Rettig Commission, a multipartisan effort from the Aylwin administration to discover the truth about the human-rights violations, listed a number of torture and detention centers (such as Colonia Dignidad, the ship Esmeralda or Víctor Jara Stadium), and found that at least 3,000 people were killed or disappeared by the regime.
A later report, the Valech Report (published in November 2004), confirmed the figure of 3,000 deaths but dramatically reduced the alleged cases of disappearances. It tells of some 28,000 arrests in which the majority of those detained were incarcerated and in a great many cases tortured. Many were exiled and received abroad, in particular in Argentina, as political refugees; however, they were followed in their exile by the DINA secret police, in the frame of Operation Condor which linked South-American dictatorships together against political opponents.
Due to the slit throats case (Caso Degollados), during which three Communist party members were assassinated, César Mendoza, member of the junta since 1973 and representantive of the carabineros, resigned in 1985 and was replaced by Rodolfo Stange. The next year, Carmen Gloria Quintana was severely injured and Rodrigo Rojas DeNegri burnt alive in what became known as the Burnt alive case (Caso Quemados).
Chile under Pinochet was a key participant in the Operation Condor, a campaign of assassination, intelligence-gathering and counter-terrorism, conducted jointly by the Chilean security services and those of Argentina, Bolivia, Brazil, Paraguay, and Uruguay in the mid-1970s. The military governments of these respective countries contended that they were neutralizing leftist subversives, but their definition of the term was extremely broad, and their operations were known to target political dissidents. Some Chilean exiles were followed and murdered by DINA or allied secret services.
According to the Latin American Institute on Mental Health and Human Rights (ILAS), "situations of extreme trauma" affected about 200,000 persons; this figure includes individuals killed, tortured (following the UN definition of torture), or exiled and their immediate relatives. While more radical groups such as the Movement of the Revolutionary Left (MIR) were staunch advocates of a Marxist revolution, it is currently accepted that the junta deliberately targeted nonviolent political opponents as well, making it an archetype of state terrorism.
A court in Chile sentenced, on March 19 2008, 24 former police officers in cases of kidnapping, torture and murder that happened just after a U.S.-backed coup overthrew President Salvador Allende, a Socialist, on September 11 1973.
Pinochet lost the 1988 referendum, where 55% of the votes rejected the extension of the presidential term, against 43% for "Sí", and, following the constitutional provisions, he stayed as President for one more year. Open presidential elections were held on December 1989, at the same time as congressional elections that would have taken place in either case. Pinochet left the presidency on March 11, 1990 and transferred power to political opponent Patricio Aylwin, the new democratically elected president. Due to the same transitional provisions of the constitution, Pinochet remained as Commander-in-Chief of the Army, until March 1998.
Supporters of Pinochet's economic policies contend that the three successive administrations following him contributed to this success by maintaining and continuing the reforms initiated by the junta, but opponents have criticized the neoliberal policies enacted by the junta.
The "Chilean Variation" is still seen by many as the potential model for nations that fail to achieve significant economic growth. The latest is Russia, for whom David Christian warned in 1991 that "dictatorial government presiding over a transition to Capitalism seems one of the more plausible scenarios, even if it does so at a high cost in human rights violations" .
On his 91st birthday in 2006, in a public statement to supporters, Pinochet for the first time claimed to accept "political responsibility" for what happened in Chile under his regime, though he still defended his 1973 coup against Salvador Allende. In a statement read by his wife Lucia Hiriart, he said, Today, near the end of my days, I want to say that I harbour no rancour against anybody, that I love my fatherland above all. ... I take political responsibility for everything that was done . Despite this statement, Pinochet always refused to be confronted to Chilean justice, claiming that he was senile. He died in 2006 while indicted on human rights and corruption charges, but without having been sentenced.