o operate under new confining labor laws. These laws included limited means to negotiate over wages, collective bargaining and other issues regarding the working class.The effects of the anti-labor union laws were far reaching indeed. Chile faced a severe economic crisis that saw the GDP fall by more than 14 percent. However, by 1986 the second phase of the shock therapy began a process of sustained recovery under a much more flexible economic construction. The new policy orientation proved successful in terms of generating the Chilean miracle. This was an average annual growth rate of 7.4 percent from 1986-1990. However, while the growth generated sustained increases in exports, and reduced unemployment, the miracle failed to reduce socioeconomic inequalities and poverty. For example, health expenditures alone fell by nearly 30 percent. ( Scully 1996, 401) Workers lacked access to social security and other basic benefits. The first two phases, lasting 17 years did promote economic growth, but without fair distribution; Chile had become a society where a large percent of the population were left without seeing the actual benefits of this miracle.The third and most important phase of the shock therapy was not economic but political. This restructuring was not intended by the existing regime and proved to be the Chilean economys greatest improvement, seeing how politics and economics are interrelated. The center-left democratic opposition bloc made up of seventeen parties, the Concertacion de Partidos por la Democracia (the Concert of Parties for Democracy) headed by Alywin defeated the Pinochet regime, forming a democratic coalition government. The Aylwin administration recognized that mitigating the problem of inequality and poverty and advancing the needs of the popular sector. The new democratic government immediately embarked on a plan to resolve the social deficit. In six short years Alywin and his successor, the current President...
