SEflRET
8
Since my last letter three major events impacting directly r indirectly on the USG have occupied center stage on the Chilean scene:.
rejected the binding internationalby the Queen of England that awarded three islands Beagle Channel to Chile and commenced naval maneuversdisputed area in an effort to intimidate Chile.has justice on her side, she is mindful of Argentinesuperiority and the threat to her northern border fromChile is prudently taking the initiativeettlement with Argentina with respect tolimits south of the Beagle Channel--the realcontention.
4 January President Pinochet held athe December UN General Assembly resolutionby the USG) condemning Chile for human rights Theote of confidence thatin what appears to have been an honesta "loaded" question--has strengthened his handwill probably make him less responsive to While nationalism and the blatant hypocrii?'of the
UN were factors in the vote, it confirmed other indicators that this military government is popular with the majorittvaf,Chileans. Although this may seeV incredible to some inlits" inter -national image and Chile's democratic, traditions,act that our policy makers should not ignore. ttribute itsto the following factors: ost Chileans have not yet recovered from the trauma of the Allende period; thus, theythe order and tranquility of this regime to the uncertaintyemocratically elected leader;he regime's economic policies have been dramatically successful; the rate of inflation, whichuringast year, had droppedSI7 and is programmed to be cut to half that figure this year; GNP is rising steadily, Chile nowop credit rating with international banks, and new foreign investment is beginning to come in;he human rights situation in Chile bears little resemblance to the image abroad; Chileans are aware of'this.
EQB-RELEASE
c. The investigation ofmonth old Letelier assassination in Washington is headinglimax, with the USG and Chile apparentlyollision course unless the latter decides to be forthcoming in producing information concerning two Chilean suspects in the case. The letters rogatory issued by the USG made front-page headlines in today local press.
SECRET
Sincerely,
Original document.
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