CHILE: Balance Sheet

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No ordinary business notice was the letter posted by the Finance Ministry in Santiago last week, urging government contractors to stop in and pick up their monthly checks—cashable immediately. In Chile, where contractors are resigned to waiting years for the government to pay, it was a sign of real progress. In the nine months since Paper Tycoon Jorge Alessandri, 63, moved in as President on a free-enterprise platform, the longtime degeneration of the national economy has been halted, even reversed in spots. Items on the ledger:

¶ Industrial output rose 10%. v. an 8.5% drop in the last two years. Copper production, source of 30% of Chile's income, is up 37%.

¶ Chile's 1959 budget has been balanced at $440.6 million, first time since 1950.

¶ Foreign credit flowing into the economy, with $280 million in new funds—$130 million from the U.S., $100 million from West Germany, $50 million from France.

¶ Domestic currency, freed by Alessandri, has stabilized at 1,052 pesos to the dollar (up from the 1958 low of. 1,200). Foreign-exchange reserves are .back to $30 million, highest since January 1950.

¶ Strikes have dropped drastically, a fortnight ago idled only 238 workers v. a 1958 average of 2,500 a day.

With a year-long grant of dictatorial powers over the economy (TIME. March 23), Alessandri has also cut back 5% of the overstaffed civil service, paid $96 million long owed to private contractors by the government, and clamped down on tax evaders. The one place where his regime has fallen short is in the battle against inflation. In the new President's first six months, living costs jumped 22.2%. largest increase since 1955. Alessandri argues that the rise was premeditated; before launching his austerity program, he raised wages an average 32.5%, because "it was a social and political impossibility to permit rising living costs to be thrown totally on the shoulders of the working classes." From now on, says Alessandri, "the rhythm of inflation will slow down," as proof, points out that while January living costs jumped by a spectacular 4.7%, the June rise dropped to 2.1%.

The President is politically secure, with 98 votes to 49 in the house, 29 to 16 in the Senate. And, for the moment, at least, Jorge Alessandri's countrymen are willing to go along with his program. Says a top industrialist: "This is our last chance. Whether we approve of his high-handed, aggressive and independent ways or not, we have got to help him."