Patricio Aylwin - Presidency

Presidency

Patricio Aylwin was elected president of the Republic on December 14, 1989.

Although Chile had officially become a democracy, the Chilean military remained highly powerful during the presidency of Aylwin, and the Constitution ensured the continued influence of Pinochet and his commanders. This prevented his government from achieving many of the goals it had set out to achieve, such as the restructuring of the Constitutional Court and the reduction of Pinochet's political power. His administration did initiate direct municipal elections, the first of which were held in June 1992. In spite of the severe limits imposed on Aylwin's government by the Constitution, over four years it "altered power relations in its favor in the state, in civil society, and in political society."

The Aylwin Government did much to reduce poverty and inequality during its time in office. A tax reform was introduced in 1990 which boosted tax revenues by around 15%, and enabled the Alywin Government to increase government spending on social programs from 9.9% to 11.7% of GDP. By the end of the Alywin Government, unprecedented resources were being allocated to social programs, including an expanded public health programs, vocational and training programs for young Chileans, and a major public housing initiative.

A new Solidarity and Social Investment Fund was set up to direct aid towards poorer communities, and social spending (especially on health and education) increased by around one-third between 1989 and 1993. A new labor law was also enacted in 1990, which expanded trade union rights and collective bargaining, while also improving severance pay for workers. The minimum wage was also increased, as were family allowances, pensions, and other benefits. Between 1990 and 1993, real wages grew by 4.6%, while the unemployment rate fell from 7.8% to 6.5%. Spending on education increased by 40% while spending on health increased by 54%. The incomes of poor Chileans increased by 20% in real terms (above the rate of inflation) under the Aylwin Government, while increases to the minimum wage meant that it was 36% higher in real terms in 1993 than in 1990. A slum clearance program was also initiated, with over 100,000 new homes built each other under the Alywin Government, compared with 40,000 per annum under the Pinochet Government.

In education, improvements were made in the 1,500 primary schools in the poorest districts, with investment in better maintenance, increases in teacher’s salaries, and the purchasing of new books. Government scholarships were introduced that paid for books, transportation, and student’s meals, while also providing prizes like bicycles for those who excelled. For students who had to join the work force to support themselves and/or their families, work-study programs were created, contracting with employers to hire students and provide them with on-the-job training and a modest salary, subsidized by the government.

In health, funds were allocated to refurbish hospitals in the poorest areas and for improving medical treatment centers around the country, enabling them to pay their workers higher salaries and stay open for longer periods of time.

As a result of the social and economic policies pursued by the Alywin Government, the numbers of Chileans living in poverty significantly decreased, with a United Nations report estimating that the percentage of the population living in poverty had fallen from around 40% of the population in 1989 to around 33% by 1993.