In one of his first moves upon taking office last weekend, Chile's new president, Mr. Ricardo Lagos, reopened the presidential palace to the Chilean people. It is a symbolic gesture by the country's first socialist president since former Gen. Augusto Pinochet launched a coup against Salvador Allende in 1973. Upon seizing power, the general closed the palace to the public for security reasons. Mr. Lagos' decision symbolizes the openness of his administration and its regard for ordinary people. While restoring the tradition is a nice touch, symbolism is one thing, genuine reform another. Still, the country is changing. The Chilean people seem ready to face their past. They now have the opportunity.

Mr. Lagos' first task is to get the economy back on track. It should not be difficult. Chile's embrace of open markets made it the pacesetter for the developing world, and yielded 7.3 percent growth annually from 1990 to 1998. But in the first nine months of 1999, a combination of rising oil prices and slumping copper-export revenues produced the country's first recession in two decades. Gross domestic product shrank 2.6 percent. The number of poor is half of what it was in 1987, but one in five Chileans -- 21.7 percent of Chile's 14.5 million citizens -- still lives in poverty.

While discontent with the economy's performance helped push Mr. Lagos into the presidency, prospects were looking up before he took office. Unemployment has fallen from its peak of 11.5 percent and growth is projected to reach 6 percent this year. But the challenge is not just returning to growth, but transforming Chile into an industrialized economy. The country's impressive performance has been based on robust exports, but the quality of those exports must improve. To achieve that, Chile must develop its infrastructure and cut its dependence on primary industries such as agriculture and mining.