In SantiagoChile's President Ricardo Lagos talks to Ibrahim Nafie about healing the wounds of dictatorship and of what it means to be a leftist presiding over a free market economy Your leftist government presides over a highly de-regulated, free market economy which is also intensely integrated in the global economy. Would you explain the thinking behind your policy? The major point is that we are a small country. We are 50 million people and the only way to develop our economy is to use our human resources and to integrate them into the world. This means a tremendous investment in education and in health but it means, also, that we have to compete on the world stage because the domestic market is small. At the same time our geographical location is rather unusual. Chile, during the 19th and 20th centuries, was something of an island. We have the Andes to our west, desert to the north and the Pacific Ocean. Where was the centre? The centre used to be the Mediterranean and then after WWII the world stage moved from the Mediterranean to the North Atlantic. The major change in world trade is that it moved to Europe and the United States. And after that came the emergence of Asia, Japan and today China. Suddenly we discover that the major growth in world trade is taking place in the Pacific, for the first time ever. The ocean before us is where world trade is moving and thus, for the first time, we faced the challenge of how we might act as a bridge between the growing Asian economies and Latin America. That meant that we had to be a part of that world. It is an opportunity, and therefore we opened up, though at the same time our heart is pink. I don't believe in neo-liberal policies. I believe in sound macro-economic management. But that doesn't mean that you are a rightist or left wing. It means that you're doing what you have to do. The difference is that the neo-liberals believe in the market for everything. Well, the market might be good in defining what kind of shoes we are going to have but it is not going to solve problems in areas where goods and services have to be available for everybody. Decisions in that part of the economy must in a democracy be made by citizens. When I say I want 12 years compulsory education, and I introduce that change in Chile, it is because we are in a position to guarantee 12 years compulsory education to everybody. Or the reforms we have introduced in health, or the provision of drinkable water in rural areas -- it is the same. Drinkable water in rural areas is expensive to provide, so it must be provided by the state. We define drinkable water as a good that has to be provided to everybody. We should understand that the market may be a useful tool in some spheres but in the kind of society that we are building it is the citizen who has the last word. And in a democracy it is the citizen who defines what kind of goods and services are public goods and services, and if they are public then they have to be available to everybody. So that's why I respond, when some tell me that I seem a bit right-wing given my economic policies, that no, I am not right-wing. We pursue growth so we can also have equity. We have been able to reduce poverty. Forty per cent of Chileans used to live beneath the poverty line. Now it is 18 per cent, and I hope that by the end of the term of my government [in 2006] the 220,000 families who currently under the poverty line will no longer be in that place. Would you elaborate on some of the lessons learned by the Chilean left from the tragic experience of the Popular Unity government under the late Salvador Allende? A few moments ago I was on the phone with the widow of Salvador Allende. We are very good friends and she had sent me a message of condolence for my mother's death and I called her to say thank you. I think that the main lesson is that if you want to make a profound change in a society you need to have the political backing of a majority in that society. In some cases, in a democracy, you may be able to form a government but you do not have the backing of the majority. That was the case at the time of Allende. Now we have a broad coalition of Socialists with Christian Democrats -- very unusual in European terms -- which first defeated General Pinochet in a plebiscite [in 1998, a majority voted no to a new term for Pinochet, opening the way to multi- candidate presidential elections]. Then we discovered that it was essential to have a broad majority to produce the changes that we've been able to produce in Chile. That is the lesson. We discovered that because of a broad majority we could move forward. Let me put it another way. At the time of the conflict with Iraq we said no in the Security Council; we said 'no [to the Americans], you need the backing of the world community.' In other words, if you want to make changes that are important, you need the backing of the majority of any society's different sectors. I think that during Allende's time we did not understand that very well. It was also a very different world then, what with the Cold War. The left is now in government in seven Latin American countries, excluding Cuba. Does Latin America offer a new model in this respect? I don't think that it is possible to talk of a model. Let me say that this is probably the result of policies adopted in most of Latin America during the 1990s. Even though they were able to stimulate growth the policies pursued did not promote equality within these societies. So, when they were talking every day about how their economies were growing; when people saw on TV that there was growth, they didn't see that growth coming into their houses. They did not have better shoes, or better access to education and health, so the sense grew that the policies were flawed. And in a democracy you have change. I think what happened in Brazil, Argentina, in Venezuela and Uruguay has to do very much with that. Ours was the only coalition that was able to stay in power; we started in 1990 and were able to remain in power and we hope that we will continue after my term expires [in 2006] and this, I think, is because we have been able to deliver the other part of the equation. The differences between the various models in Latin America are striking. If you are living, say, in Brazil, which is huge, almost a continent, with so many millions of people, the market is massive, so instead of opening the economy the first thing they tried to do was to preserve their own market for Brazilians. They have tariffs that are much higher than ours, but this is simply because the realities, the economic realities of the countries are different. We have been able to conclude free trade agreements with the United States and with Europe before Brazil because for us it has been much easier. For these reasons it is difficult to talk of a Latin American model. Yet all our countries have learned, as the Latin American left has learned, that we need to keep economic accounts in order. There has been very little retribution for abuses committed under the military dictatorship. How is Chile coming to terms with that dark period in its history? I think we have been able to advance a lot. There are four major areas of concern: first, with regards to those who were assassinated or who disappeared during the dictatorship. My predecessor President Aylwin appointed a presidential commission, the so-called Truth and Reconciliation Commission -- the idea of which was to some extent adopted by our South African friends -- which issued a report presented about what happened. This was followed by the provision of compensation to the widows and other family members of the victims. There were also measures adopted to compensate Chileans forced into exile, with compensation provided to Chileans returning from exile. A third group was made up of those who lost their jobs as a result of being expelled by the junta. Three laws have been passed in parliament already to make amends to such people. The last aspect of our dealing with this period is, in my opinion, the most important. I appointed a commission to present a report on what happened to political prisoners under the dictatorship. Thirty-five thousand people testified to the commission. Twenty-eight thousand were registered as people who had been imprisoned, and most of them were tortured. This is probably the most complete report, as far as I know, of what happened under the dictatorship. It was very moving, at times very hard to read because it includes descriptions of the detention centres, and of the kind of torture that was performed in such places. It is a very complete report, and I think that after it Chile was in a much better position to look ahead. That is why I say there is no tomorrow without yesterday. Let me add that the Presidential Commission which I appointed was headed by a bishop of the Catholic Church, a man who in the old days was able to face up to the dictatorship. The Church in Chile, by the way, played a very important role in defending human rights. And the members of the commission belonged to all political trends in Chile, from the left and the right. I think it was a very good experience. After the report was issued parliament approved compensation to the victims. But more important is that the tribunals now are working, and many of those who committed human rights abuses are in prison. Declassified CIA documents revealed to a large degree the extent of US complicity in the military coup in 73, and the abuses that followed it, not only in Chile but across Latin America through Operation Condor. Would you comment? I think that Operation Condor represented the state of the art of dictatorship, if you will allow me to put it that way; for in that operation you had several dictatorships being integrated. On the other hand, it seems to me that this whole period was rooted in the assumptions of the Cold War. The Cold War justified everything: 'I can do anything to you because you represent evil; you are on the wrong side of history.' Fortunately the Cold War is over, and now we live in a different world. Still, these revelations reveal the kind of excesses that men were capable of committing during that period of history. How successful have your efforts been to introduce constitutional reforms to deepen democracy and reduce the role of the military in the Chilean state structure? I would say that we have not been very successful in amending the constitution. We have been much more successful in making our military forces understand that, in today's world, it is only democracy that allows you to walk on this planet. This morning I received the commander-in- chief of the Turkish armed forces. I was in Turkey recently and I invited him, and this morning he was here, along with the commander-in-chief of the Chilean army. And I would say that now they understand and accept that it is the civilian government that has the right to make decisions about military issues, about defence. I hope that this year, which will be my last in office, that constitutional amendments will finally be approved. But as regards the military, the constitutional amendments will in effect recognise something that already exists in Chile. What is Chile's perspective on the architecture of the global economy, and what needs to be done to make it more equitable and humane? If we are to live in a global world; if globalisation is a fact that we have to face, then we must have rules governing the process. If globalisation is not governed by rules, then rules will be imposed by the those with the greatest power. This is a fact of history. And this is why multilateral institutions are so important for us. This is why the role of the United Nations and other international and regional bodies is so important. It is only through the rules of such bodies that you can have norms governing things such as trade, financial markets, capital flows. Multilateralism is not only a question of security and peace, it is a necessity for a planet that daily gets smaller. Let me give a small example. If you go from Santiago to Punta Arenas in the south of Chile you will find that for children to go out in the sun they have to cover their heads. The ozone layer is so thin over there that not to do so means their skin would burn. What can I do? Where should I go to protest gas emissions from the northern hemisphere? I have told this to President Bush. I said to him: 'Mr Bush I understand your position with regards to the Kyoto Protocol, but if it is not Kyoto, I must have some place to go and complain, and to ask what are we going to do to remedy this.' In the same way that a national community will define some goods as goods that have to be protected, there are other goods that have to be protected on a global level. Some kind of institutional framework has to be developed to do this. This is new. It did not happen in the past but it is going to happen more and more in the future. Chile is unique in the number of unilateral and multilateral free trade agreements it has with the outside world. Would you explain this phenomenon? I have pointed out that as we are a small country we decided to compete on the global market. And we have been able to find some areas in which we can compete well. For instance, we export salmon, we export wine and fruit. Of course, we export copper as well. But more important is that now we are exporting services. We have advanced considerably in the area of information technologies. In Chile today 85 per cent of personal income tax is paid through the Internet. On the Internet you can find what your statement should be according to the Internal Revenue Service. The government will tell you, we believe you are earning such and such, as a way to facilitate your filing of your tax returns. And in doing this we are encouraging small and medium-sized firms to become much more involved in information technology. What are your views on the stalling of the Free Trade Area Agreement of the Americas, especially that Chile is already party to such an agreement with the NAFTA countries? It has been a success for us. We've been able to increase our exports by more than 30 per cent in a single year, so we have no complaints. Nevertheless, the fact that we have such an agreement does not mean that we have solved all the issues concerning trade. For instance, we have been unable to discuss the issue of anti-dumping legislation in the United States, which is going to be discussed at the World Trade Organisation. And over intellectual property rights, we still have some issues to discuss with the United States. It is easier for us to engage with Europe over agricultural issues because in this area our competition with Europe is not as significant as it is for Brazil and Argentina. But I would still say that the fact that we have such an agreement with Europe does not mean that we have no interest in discussing agriculture at the Doha round. These issues should be dealt with on a multilateral level. What is Chile's position on the current calls by several countries to re-draw the global political map, emphasising multilateralism and greater democracy in the United Nations system? Today's institutions represent, to some extent, the world as it existed in 1945. This is why multilateral institutions have to be updated in line with contemporary realities. And I believe that this is what lies behind the reported presented by the commission to UN Secretary-General Kofi Annan to be discussed at the next General Assembly. We are looking forward to this discussion. How does Chile view the forthcoming Arab- South American Summit, and what are your expectations from the Arab side in order to make the summit a success? When you go back to 1945 and recall the Charter of San Francisco, you find that the Pan- American Union on one side, and the Arab League on the other, played an essential role shaping the UN system, along with the big world powers, of course. The forthcoming summit, then, is a revision of what we did some 60 years ago. And I think that in view of the role you are playing in world affairs, and of what we here are trying to do, the time has come to hold this kind of meeting and to discuss, not only on a multilateral but also on a bilateral basis, how our regions can complement one another, and to what extent we have similar views on how the world as a whole should work. And if we are able to do this then I am sure that our common voice is going to be louder and more effective. My country, as you know, has observer status at the Arab League, and this is a reflection of our understanding of the important role the Arab world plays in world affairs. Our political relations are excellent but our economic ties are lagging behind political relations. This is something I discussed with President Mubarak in Cairo last January. How would you evaluate the current state of bilateral ties between Chile and Egypt, and what in your view needs to be done to improve them on all levels? Egypt and Chile have had diplomatic relations since 1929. And during the last two decades, under President Mubarak's leadership, Egypt has been able to modernise substantially. And because we are so open economically we feel that this is a part of the world where there is considerable room for strengthening ties. We used to be self-sufficient in oil in Chile. Now our oil is depleted. Yet the know-how is still there, and this is why we have successful joint ventures in Egypt in the area of oil exploration and exploitation. I think that this is the sort of area in which we can work together. Another area in which I believe we could cooperate is agriculture. When I was in Egypt I found some Chilean businessmen investing in production in Egypt aimed at the European market. This kind of mutual investment can be important for both countries. The time has come to bring our economic relations up to the level of our political and diplomatic relations.
