Among various causes to Pinochet's decision to resume this procedure, the situation in the Soviet Union, where Mikhail Gorbachev had initiated the glasnost and the perestroika democratic reforms, which would finally lead to the fall of the Berlin Wall in 1989 and to the official end of the Cold War, is clearly an important factor. The Cold War had important consequences in South America, considered by the United States to be a full part of the Western Bloc, called "free world", in contrast with the Eastern Bloc, a division born with the end of World War II and the Yalta Conference. Following the 1959 Cuban Revolution and the local implementation in several countries of Che Guevara's foco theory, the US waged a war in South America against the "Communists subversives," leading to support in Chile of the right-wing, which would culminate with Pinochet's coup in 1973 in Chile. In a few years, all of South America was covered by similar military dictatorships, called juntas. In Paraguay, Alfredo Stroessner was in power since 1954; in Brazil, left-wing President João Goulart was overthrow by a military coup in 1964; in Bolivia, General Hugo Banzer overthrew leftist General Juan José Torres in 1971; in Uruguay, considered the "Switzerland" of South America, Juan María Bordaberry seized power in the June 27, 1973 coup. A "Dirty War" was waged all over the continent, culminating with Operation Condor, an agreement between security services of the Southern Cone and other South American countries to repress and assassinate political opponents. Militaries also took power in Argentina in 1976, and then supported the 1980 "Cocaine Coup" of Luis García Meza Tejada in Bolivia, before training the Contras in Nicaragua where the Sandinista National Liberation Front, headed by Daniel Ortega, had taken power in 1979, as well as militaries in Guatemala and in El Salvador. In the 1980s, however, the situation progressively evolved in the world as in South America, despite a renewal of the Cold War from 1979 to 1985, the year during which Gorbatchev replaced Konstantin Chernenko as leader of the USSR.
Another alleged reason of Pinochet's decision to call for elections was the April 1987 visit of Pope John Paul II to Chile, during which he visited Santiago, Viña del Mar, Valparaíso, Temuco, Punta Arenas, Puerto Montt and Antofagasta. According to George Weigel, he held a meeting with Pinochet during which they treated of the theme of the return to democracy. John Paul II would have allegedly pushed Pinochet to accept a democratic opening of the regime, and would even have called for his resignation. This has been contested however by critics, who claimed John Paul II never said a word concerning human right violations in Chile during his visit. The Polish Pope was a known opponent to Communism, and during his reign the Vatican had harshly condemned the Liberation theology, by the voice of Cardinal Ratzinger (current Pope Benedict XVI), then head of the Congregation for the Doctrine of the Faith.
Whatever the case, political advertisement was legalized on September 5, 1987, and became a key element of the campaign for the "NO" to the referendum, which countered the official campaign which presaged a return to a Popular Unity government in case of a defeat of Pinochet. Finally, the "NO" to Pinochet won with 55,99% of the votes, against 44,1% of the votes. Pinochet thought in not recognizing the results and of declaring state of siege , but the United States and Germany, informed of the military plans not to recognize the results, pressured Chile in continuing with the Constitutional process . Thus presidential and legislative elections were called for the next year.
Furthermore, in July 1989, a constitutional referendum took place after long negotiations between the government and the opposition. If approved, 54 constitutional reforms were to be implemented, among which the reform of the way that the Constitution itself could be reformed, the restriction of state of emergency dispositions, the affirmation of political pluralism, the strengthening of constitutional rights as well as of the democratic principle and participation to the political life. All parties in the political spectrum supported the reforms, with the exception of the small right-wing Avanzada Nacional, and the reforms were passed with 91.25% of the vote
Representing the Concertación coalition which supported the return to democracy, gathering the Christian Democrat Party (PDC), the Socialist Party (PS), the Party for Democracy (PPD) and the Social Democrat Radical Party (PRSD), Christian Democrat Patricio Aylwin won a sweeping victory in the first democratic elections, in December 1989, since the 1970 election won by Salvador Allende. Patricio Aylwin had gathered around him 3,850,023 votes (55.17%), while the center-right supermarket tycoon Francisco Javier Errázuriz, who represented the UCCP party, managed to take 15.05% of the vote, which had as main effects to lower right-wing candidate Hernán Büchi's score to 29.40% (approximatively 2 millions votes, almost half than Patricio Aylwin).
The Concertación coalition would dominate Chilean politics for the next two decades, with its most recent victory being the 2006 election of Socialist candidate Michelle Bachelet. It established in February 1991 the National Commission for Truth and Reconciliation, which released in February 1991 the Rettig Report on human rights violations during Augusto Pinochet's dictatorship. This report, contested by human rights NGOs and associations of political prisonners, counted 2,279 cases of "disappearances" which could be proved and registered. Of course, the very nature of "disappearances" made such investigations very difficult, while many victims were still intimidated by the authorities, and did not dare go to the local police center register themselves on lists, since the police officers were the same than during the dictatorship.
The same problem arose, several years later, for the Valech Report, released in 2004 and which counted almost 30,000 victims of torture, among testimonies from 35,000 persons. However, the Rettig Report did list important detention and torture centers, such as the Esmeralda ship, the Víctor Jara Stadium, Villa Grimaldi, etc. The registering of victims of the dictatorship, and then, in the 2000s, trials of militaries guilty of human right violations, would dominate the struggle for the recognition of crimes committed during the dictatorship by human rights NGOs and associations of political prisonners, whom many resided in exile.
Beside implementing the Rettig Commission, Aylwin's government established a Comisión Especial de Pueblos indígenas (Special Commission of Indigenous People), whose report provided the intellectual framework of the "Indigenous Law" (ley indígena) or law n° 19 253, promulgated on September 28, 1993 , which recognized in particular the Mapuche people as inherent part of the Chilean nation. Other indigenous people officially recognized included Aymaras, Atacameñas, Collas, Quechuas, Rapa-Nui, Yámanas and Kawashkars. Despite this state proclamation of indigenous rights, conflicts brought by land-occupations and Mapuche's claims lead to state repression and the use of the anti-terrorist law against Mapuche activists, a law voted by the military junta.
The right-wing, grouped in the Alliance for Chile, also held primaries opposing Sebastián Piñera (National Renewal, RN, the largest right-wing party at the time), who had supported the "NO" during the 1988 plebiscite on the return to civilian rule, to Arturo Alessandri Besa, former member of the National Party (PN, opposed to Eduardo Frei in the 1970 presidential election) and currently representant of the Independent Democrat Union (UDI). Alessandri won those, and thus represented the Alliance for Chile against the Concertación.
Others candidates included José Piñera, former Minister in the early 1980s who had implemented the law granting property of copper to the Chilean Armed Forces, and future co-chairman of the 1995 Project on Social Security Choice of the Cato Institute, a libertarian US think-tank, who presented himself as an independent (6%); ecologist Manfred Max-Neef (5,55%), representant of the Left-Wing Democratic Alternative (which gathered the Communist Party (PCC), MAPU (part of the Popular Unity coalition of Allende) and the Christian Left Party); Eugenio Pizarro Poblete (less than 5%); and finally Cristián Reitze Campos of the left-wing Humanist Party (1,1%).
On 28 May, 1993, the Boinazo took place, during which paratroopers surrounded the Chilean Army headquarters located close-by to the Palacio de la Moneda . The motive of the military uprising was the opening of investigations concerning the "Pinocheques", or checks received by Pinochet for a total amount of $3 million in the frame of kickbacks from an arms deal . But, unnoticed at the time, a few days before, Jorge Schaulsohn, President of the Chamber of Deputies, had also denounced irregularities during arms trade committed by the Chilean Army through the intermediary of the FAMAE (Factories and Arsenals of the Army of Chile) — much later connected to the Gerardo Huber case, who was assassinated the year before .
Frei Ruiz-Tagle finally won the election in the first turn, held in December 1993, with an absolute majority of almost 58%, and more than 4 millions votes against Arturo Allesandri who gathered around 1,700 000 votes (24.4%). Eduardo Frei took office in March 1994 and presided for a 6-year term, until 2000. During his term, it was not possible to judge any military for his role during the dictatorship, while large sectors of the Chilean society remained Pinochetista.
Following an agreement between Pinochet and Andrés Zaldívar Larraín, president of the Senate, the latter voted to abolish the date of 11 September as a National Holiday which celebrated the 1973 coup. Supporters of Pinochet had blocked until then any such attempt. The same year, Pinochet traveled to London for an operation. Once there, he was arrested on the orders of Spanish judge Baltasar Garzón, provoking world-wide attention, not only because of the past history of Chile and South America, but also because this was one of the first arrest of a dictator based on the universal jurisdiction principle. Pinochet tried to defend himself by referring to the State Immunity Act of 1978, an argument rejected by British judicial system. However, UK Home Secretary Jack Straw took the responsibility to release him on medical grounds, and refused to extradite him to Spain. Pinochet returned to Chile in March 2000. Upon descending the plane on his wheelchair, he quickly stood up and saluted the cheering crowd of supporters, including an army band playing his favorite military march tunes, which was awaiting him at the airport in Santiago. President Ricardo Lagos, who had just been sworn in on March 11, said the retired general's televised arrival had damaged the image of Chile, while thousands demonstrated against him.
Representing the Concertación coalition for democracy, Ricardo Lagos had won the election just a few months before, by a very tight score of less than 200,000 votes (51,32%) against Joaquín Lavín (less than 49%), who represented the right-wing Alliance for Chile. None of the six candidates had obtained an absolute majority on the first turn held on December 12, 1999. Lagos was sworn in March 11, 2000, for a 6-year term.
In June 2000, the Congress voted a new law which granted anonymity to members of the armed forces who provide information on the desaparecidos .
In 2002 Chile signed an association agreement with the European Union (comprising FTA, political and cultural agreements), in 2003, an extensive free trade agreement with the United States, and in 2004 with South Korea, expecting a boom in import and export of local produce and becoming a regional trade-hub.
Meanwhile, the trials concerning human rights violations during the dictatorship continued. Pinochet was stripped of his parliamentary immunity in August 2000 by the Supreme Court, and indicted by judge Juan Guzmán Tapia. Tapia had ordered in 1999 the arrest of five militaries, including General Pedro Espinoza Bravo of the DINA, for their role in the Caravan of Death following the 11 September coup. Arguing that the bodies of the "disappeared" were still missing, he made jurisprudence which had as effect to lift any prescription on the crimes committed by the militaries. Pinochet's trial continued until his death on December 10, 2006, with an alternance of indictments for specific cases, lifting of immunities by the Supreme Court or to the contrary immunity from prosecution, with his health a main argument for, or against, his prosecution. The Supreme Court affirmed in March 2005 Pinochet's immunity concerning the 1974 assassination of General Carlos Prats in Buenos Aires, which had taken place in the frame of Operation Condor. However, he was deemed fit to stand trial for Operation Colombo, during which 119 political opponents were "disappeared" in Argentina. The Chilean justice also lifted his immunity on the Villa Grimaldi case, a detention and torture center in the outskirts of Santiago. Pinochet, who still benefited from a reputation of righteousness from his supporters, lost legitimacy when he was put under house arrest on tax fraud and passport forgery, following the publication by the US Senate Permanent Subcommittee on Investigations of a report concerning the Riggs Bank in July 2004. The report was a consequence of investigations on financial fundings of the September 11, 2001 attacks in the US. The bank controlled between USD $4 million and $8 million of Pinochet's assets, who lived in Santiago in a modest house, dissimulating his wealth. According to the report, Riggs participated in money laundering for Pinochet, setting up offshore shell corporations (referring to Pinochet as only "a former public official"), and hiding his accounts from regulatory agencies. Related to Pinochet's and his family secret bank accounts in United States and in Caraïbs islands, this tax fraud filing for an amount of 27 million dollars shocked the conservative sectors who still supported him. Ninety percent of these funds would have been raised between 1990 and 1998, when Pinochet was chief of the Chilean armies, and would essentially have come from weapons traffic (when purchasing Belgian 'Mirage' air-fighters in 1994, Dutch 'Léopard' tanks, Swiss 'Mowag' tanks or by illegal sales of weapons to Croatia, in the middle of the Balkans war.) His wife, Lucía Hiriart, and his son, Marco Antonio Pinochet, were also sued for complicity. For the fourth time in seven years, Pinochet was indicted by the Chilean justice.
The Chilean authorities took control in August 2005 of the Colonia Dignidad concentration camp, directed by ex-Nazi Paul Schäfer.
President Ricardo Lagos signed in 2005 the Trans-Pacific Strategic Economic Partnership free trade agreement with Brunei, New Zealand and Singapore. This P4 agreement has entered into force in May 2006. All country members are part of the Asia-Pacific Economic Cooperation (APEC) forum.
Over 50 reforms to Pinochet's Constitution were approved in 2005, which eliminated some of the remaining undemocratic areas of the text, such as the existence of non-elected Senators (institutional senators, or senators for life) and the inability of the President to remove the Commander in Chief of the Armed Forces. These reforms led the President to controversially declare Chile's transition to democracy as complete. However, the anti-terrorist measures of it remained in force, and have been used against the Mapuches. Furthermore, the military still received money from the copper industry.
In 2006, the Concertación again won the presidential election: Michelle Bachelet, Chile's first woman president, beat Sebastián Piñera (Alliance for Chile), with more than 53% of the votes. Bachelet's first political crisis occurred with massive student protests, who were demanding free bus fare and the waiving of the university admissions test (PSU) fee, while the longer term demands included: the abolition of the Organic Constitutional Law on Teaching (LOCE), the end to municipalization of subsidized education, a reform to the Full-time School Day policy (JEC) and a quality education for all. The protests peaked on May 30, 2006 when 790,000 students adhered to strikes and marches throughout the country, becoming Chile's largest student demonstration of the past three decades, a sure sign of the progress of the Chilean transition to democracy..
In June 2007, General Raúl Iturriaga, the former deputy director of the DINA, condemned to a five years sentence for the abduction of Luis Dagoberto San Martin in 1974, rebelled from the Chilean justice and entered clandestinity. He was finally caught and detained in August 2007 .
The CUT trade-union federation called for demonstrations in August 2007. These went on during the night, and at least 670 people were arrested (including journalists and a mayor , and 33 carabineros injured . The protest were aimed against Bachelet's government free market policies. The Socialist Senator Alejandro Navarro was injured by the police during the demonstrations , although it later emerged that he had hit and kicked police and is currently under investigation by the Senate Ethics Committee . Senators from the opposition have requested that Navarro and other congressmen which participated in the protest be removed from Congress for violating the constitutional article which bans congressmen from participating demonstrations which "violate the peace" .
According to the correspondent of the BBC, Horacio Brum, about three million workers, roughly half the workforce, earn the minimum wage of $260 (£130) a month . Arturo Martínez , general secretary of the CUT, requested explanations from the government, and accused it of having stirred up the tension . Politicians from the center-right Alianza and even from the governing center-left Concertación have in turn criticized the CUT for the violence of the protest.
The protests of September 11, 2007, were even more violent, despite the fact that Augusto Pinochet had died the previous year. One policeman and father of two, Cristián Vera, was shot and killed by one of the protesters. Both the center-right Alianza and the governing center-left Concertación decried the violence and the government introduced new measures to combact street gangs which it accused of exacerbating the violence. Potential presidential candidate Sebastián Piñera criticized the participants of both protests for their use of guns and molotov cocktails, calling their actions "almost terrorist" .