(10 Jun 1975) Chile is currently undergoing the most serious economic crisis in it’s history. The nation of 10 million is being ravaged by a runaway inflationary rate. In April alone the cost of living rose by 20.8 per cent. The military government announced drastic measures to reduce spending. Among the measures are reductions in public spending, reduction of the public work force by 20 per cent, hefty tax increases and a cut back in the amount of money in circulation. The Chilean Escudo is currently one of the weakest currencies in the world and in the last year has been devalued 10 times, losing more than 50 per cent of its value. Next month, there will be a universal 70 per cent pay increase. Many factories, businesses and services are expected to close their doors as a result, due to the inability of owners to afford such outlays. Economists partly blame the situation on the overnight change in Chile’s basic economic structure. For decades the national economy was subsidised by the government but following the military takeover, in 1973, a devastating free-market policy was initiated.
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