Date: Thu, 10 Sep 98 10:03:02 CDT
From: Institute for Public Accuracy <email@example.com>
Subject: 25 Years After Coup, Chile as "Model"
Institute for Public Accuracy
(202) 347-0020 * http://www.accuracy.org
915 National Press Building, Washington, D.C. 20045
25 years after coup, is Chile a model for social security?
Special Citation Will Be Presented Thursday in Washington
From Institute for Public Accuracy
Tuesday, September 8, 1998
WASHINGTON -- Twenty-five years after a military junta
seized power in Chile, a special presentation in Washington on
Thursday will focus attention on a prominent U.S. think tank that
touts a former high official in the Chilean dictatorship as a
visionary for privatization of Social Security in the United
The current co-chair of the Cato Institute's Project on
Social Security Privatization, Jose Pinera, was Chile's Minister
of Labor and Social Security from 1978 to 1980. According to
Cato, Pinera "was the architect of that country's successful
pension reform." After a coup toppled Chile's democratically
elected government on Sept. 11, 1973, Chile privatized its
pension system. Now, some U.S. advocates of privatizing Social
Security cite Chile as a model.
A news conference on Thursday, Sept. 10 (at 11 a.m. in
front of the Cato Institute, 1000 Massachusetts Ave., N.W., in
Washington) will present a special citation to the Cato Institute
for its embrace of Pinera in view of his role in Chile's
In the aftermath of the coup, led by Gen. Augusto Pinochet,
"Chile's institutions were destroyed, including the Congress, the
press and trade unions," recalls Saul Landau, a scholar and
documentary filmmaker. "Troops burned books deemed subversive.
The junta began a systematic terror campaign, arresting,
torturing and murdering thousands of `suspected subversives.' A
Chilean government agency estimates that the reign of terror
between 1973 and 1990 resulted in the deaths of some 2,300
As for the privatization of Chile's pension system, "the
25-year Chile experiment provides good warnings for the U.S.
debate," says Teresa Ghilarducci, an associate professor of
economics at the University of Notre Dame who has studied Chile's
pension reform. "Only half of Chilean workers are covered," she
notes, and "employers don't pay a penny."
John B. Williamson, a professor of sociology at Boston
College who has done extensive research on Chile's pension
system, says that glowing reports about privatization in Chile
"have emphasized the positive without adequate attention to the
downside. What we are not hearing much about is what happens to
these retirement accounts when there is a sharp contraction in
the stock market of the sort that many emerging nations have
recently been experiencing." He adds that "Chile has one of the
most unequal income distributions in the world, and privatization
is increasing not decreasing the level of that inequality."
Among those available for interviews are:
TERESA GHILARDUCCI, firstname.lastname@example.org
SAUL LANDAU, email@example.com
JOHN B. WILLIAMSON, firstname.lastname@example.org
For more information, contact Sam Husseini at the Institute
for Public Accuracy, (202) 347-0020.