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Biblioteca

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Estado de Avance del Programa de Reprivatización en Chile

The severe recession in the Chilean economy starting as of mid-1981 through approximately the same period in 1983 led to a significant involvement of the government in the course of productive activities in order to attenuate the effects of the crisis. This government intervention, which was particularly important in the financial sector, translated into a violent regression with respect to the re-privatization strategy followed through the beginning of the recession. In fact, consequent with the development model adopted, which gave the government a subsidiary role, companies were being re-privatized from the beginning of its implementation, which was violently reversed as a result of the recession. This phenomenon was particularly notable in the case of the financial sector. The deteriorated situation of the private sector after the recession combined with the critical attitude of the community as to the efficiency and stability of the decisions by private players because of the same phenomenon, constitute important restrictions that the economic authority had to face in order to define the future of financial and social security institutions regarding which the government had taken over direct or indirect control. This was in addition to the public enterprises, regarding which there was a historical control of ownership and management. The objective of the study is to identify the principal restrictions and measures adopted as part of the second stage of the re-privatization process. In particular, the analysis identifies the financial sector, pension fund asset management companies and public enterprises. Highlights of the privatization process under way as a result are: (a) The total re-privatization of the social security system that had been intervened; (b) The re-privatization of intervened banks, except for 50% of Banco de Chile and Banco de Santiago, which is expected to conclude in mid-1987; and (c) The partial privatization of large government-owned companies, including Cap, Entel, Soquimich, CTC, Chilectra Metropolitana and all of Ecom.