Page:CREST-Allendes Chile Supply Demand Gap.pdf/5

  because of sharply reduced investment or actual disinvestment in many enterprises; shortages of raw materials, parts, and other inputs; worsening labor discipline; snarls in the distribution system; and - perhaps most important - the governments inability to manage effectively the many activities taken over (see Table l). Government ownership and control, already widespread even by Latin American standards in the pre-Allende period, has about doubled in the last two years and now encompasses at least one-half of GDP. In some spheres - notably mining, large-scale manufacturing, electric power, communications, and banking - state control is virtually complete.

Down on the Farm

Agricultural performance has been even worse than some of the regime's critics predicted. Although good crop conditions and excessive cattle slaughtering pushed farm output to a record level in 1970/71, it has 