Valdivia and saw the imposing of a nation wide curfew. In October a group of 12 young men, among them Jos� Gregorio Liendo, were brought from the Complejo Forestal y Maderero Panguipulli in the Andes to be executed in Valdivia by firing squad due to alleged participation in the assault on Neltume police station and "guerrilla activities".
After the Great Chilean Earthquake Valdivia's economy and political status declined. Much of the city was destroyed and many inhabitants left. By 1974, the military junta reorganized the political divisions of Chile and declared Valdivia a province of the Los Lagos Region with Puerto Montt as the regional capital. Many Valdivians resented the decision, and felt theirs should have been the legitimate regional capital�while Valdivia was founded in 1552, and had resisted pirate attacks, hostile natives and several earthquakes, Puerto Montt was a relatively new city founded only in 1853 (three hundred and one years later).
Since the liberalization of the economy in Chile in the 1980s the forestry sector in Valdivia boomed, first by exporting wood chips to Japan from Corral and then by producing woodpulp in Mariquina (50 km northeast of Valdivia). This led to deforestation and substitution of native Valdivian temperate rainforests to plant pines and eucalyptus, but also created new jobs for people with limited education. Valdivia also benefitted from the development of salmon aquaculture in the 90s, but to a much lesser extent than places such asPuerto Montt and Chilo�
