2. Editorial Note
On December 24, 1968, Ambassador to Chile Edward Korry spoke at a Country Team meeting at length regarding National Intelligence Estimate 94–69 and criticized many of the findings of the NIE (Document 1). He based his discussion on a November draft he had read in Washington. Korry remarked, “it is troublesome to note the striking absence of any mention of the fact that Chile is one of the few surviving democracies in Latin America. This fact has important implications for the incoming Administration, and is central to any assessment of the success of our policies in Latin America, which are designed to promote and assist stable, democratic governments. The fact that Chile has maintained democratic stability under President [Eduardo] Frei is an achievement when one takes into account developments in recent months in Peru and Brazil. Chile has a noisy democracy which is not wholly effective but its maintenance of institutional order is not a minor achievement.”
[Page 4]Korry went on to note: “The plaint of the writers of the NIE that the economic system has not functioned effectively is in some instances identical with the Embassy’s. But other superficial judgments, which tend to overlook the achievements within the context of Chilean history, are not helpful. The future of Chile is not exceedingly bright but it remains of value to the US to have some democratic friends in its orbit. This helps demonstrate the differences between US and Soviet objectives and purposes and this is overlooked in the NIE.”
The minutes concluded the following: “The NIE report is resplendent with hindsight views on economic developments which one need not be so smug about—they are easy enough to see. But why, asked the Ambassador, had the ‘estimators’ failed to alert us to the poor performance of the Chilean economy in 1967 until long after all the returns were in and the development was public knowledge. The NIE carries the disturbing implication that the US can walk away from it all in Chile now that the Frei Government is in trouble and the political horizon does not reveal any outstanding leaders to consolidate the positive accomplishments of the past four years. It is indeed difficult to justify economic assistance to a country in which the future is not bright on every front. But this is an overly simplistic perspective and tends to overlook our reasons for committing ourselves to Chile. Our policy has been basically successful (although President Frei was definitely oversold) and we have stopped or at least stalled Castroism in Latin America. If, for example in Chile, Allende had been successful in 1964 we would regard the hindsight criticism of the NIE about economic performance as irrelevant. As long as the democratic, constitutional system of Chile survives, as long as fundamental reforms are being carried forward, as long as the economy functions reasonably well, the USG investment is worthwhile.” (Department of State, ARA/AP/C Desk Files 1966–1968, Lot 71D18, Political 7—Country Team Minutes)
In airgram 60 from Santiago, February 22, Korry further criticized NIE 94–69 and took the unusual action of commenting on it “because of the possible influence it would have on a new Administration, because of the distorted view it could provide of the results of the nationwide Congressional elections in a week’s time and because, frankly, I am dismayed by the lack of attention to words and their significance.” Korry went on to say, “the document gives no importance to the constitutional and democratic nature of Chile; perhaps in strategic terms it does not merit any particular importance, but I for one do not share a view that perhaps involuntarily denigrates the significance of a still viable democracy.” He concluded: “since the quality of the referenced document is of such demonstrably dubious value, I would recommend that the authoring agency send some competent economists to Chile to study the facts. In view of the extraordinary gap between their views [Page 5] and the views of this Mission (which was not consulted at any time), I would welcome such a visit. My second recommendation, and earnest hope, is that this airgram will be circulated to all who received the original document.” In response to paragraph B of the NIE’s Conclusion, Korry noted that the Santiago stock market had just reached its highest level ever, that a growth rate of 5 percent was expected, that the budget had grown 6 percent in real terms in spite of extraordinary drought-related expenditures, and that trade liberalization was increasing. (Airgram A–60, February 22; National Archives, Nixon Presidential Materials, NSC Files, Box 773, Country Files, Latin America, Chile, Vol. I)