Economy

The Chilean economy is highlighted among the most stable and booming economies in the world. The market stimulates free trade and open competition, at the same time that the authorities foster and protect fiscal discipline. The growth of the last decade has reached close to 5% annually.

The sustained growth confirms that the economy in Chile is one of the most open and dynamic, a situation that has allowed them to sign free trade agreements with markets that represent almost two thirds of the world’s population.

The most significant contributors to the growth of the recent decade are fiscal responsibility and the social programs that have significantly reduced poverty, increasing the amount of young adults who enter college by four.

Economic Model

The Chilean model has been internationally recognized by noted and prestigious experts and communication sources (see articles). All of them highlight the economic success of the country, the fiscal discipline, and the powerful social programs.

It is all due to an economy that is open, competitive, oriented towards free trade, and has strong exportation policies. It is not by coincidence that Chile is one of the countries that has signed the most free trade agreements in the last few years, among the European Union, the US, South Korea, Canada, and China.

With goal of ensuring that economic success benefits all of the inhabitants of the country; programs with an emphasis on social reform have been implemented. There are initiatives in all of the distinct areas of socioeconomic activity. One of the most relevant is the AUGE (Universal access for integral services and Explicit Guarantees), a public heath system that guarantees more and better heath coverage for all Chileans.

The economy also shows advances in construction of social housing and in abundant programs geared towards providing access to education. The poverty index has diminished significantly in the last 15 years, from 38% in 1990 to 13.7% in 2006. Inequity still exists in terms of income, a problem that has united everyone in a common search for a solution to inequality.

One policy in particular, focused on accumulating reserves to be used as a support in time of economic instability, has allowed Chile to remain stable in the face of global economic crisis. The rational use of funds generated from copper and the systematic saving of economic surplus have made it possible for Chile to save more than 12% of the GDP and get congressional approval for a budget readjustment of 5.7% for 2009.

According to reports of the International Monetary Fund, the Gross Domestic Product per capita indicator makes Chile the leader among Latin America countries, with US$ 14.673 in 2007.

Productive Sectors

Chile has an ample offering of products, services, and opportunities. Wines of world renowned quality, appetizing apples, globally distributed videogames, vaccines that prevent diseases that attack salmon, numerous locations for the filming of James Bond, are only an example of the diversity found in Chile.

Mining

The late president Salvador Allende once defined copper as the income of Chile, for the enormous influence of the production of that natural resource in the economy of the country. This red metal continues to be the pillar of the Chilean economy and mining continues to be the principal productive sector.

Chile generates a third of a world’s copper production. During recent decades, it has diversified its mining exports, adding large volumes of molybdenum, gold, lithium, iodine and derivatives of the saltpeter.

According to figures from the National Society of Mining (Sonami), mining exports brought in US$ 40.250 million in 2008 and the industry represented 17,5 % of the entire GDP of the country.

Agriculture

The productive agricultural activity has grown in such a way that all the programs aim to turn Chile into an agricultural power. A notable example is the farming of salmon and trout, making the country the second largest exporter in the world, second only to Norway.

Equally prolific is the production of fruits, which are actively commercialized in international markets. In particular, apples and grapes of different types and flavors, kiwis and varieties of berries, the last of which has allowed to Chilean researchers to provide valuable contributions to the cultivation of the blueberries.

The exportation of fruit to Europe has doubled since 1990, equaling approximately 35% of the exports, a figure similar to the exports to the United States. During the 2007-2008 season, Chile exported a total volume of 2.4 million tons of fruit.

Nature gave Chile exceptional climatic conditions and a special variety of terrain. It is not strange then that Chile produces high quality wine and is the one of the most important wine exporters of the new world.

However, the exportations are not all for the wine industry of Chile. A wine produced in the Apalta valley was nominated the best wine in the world in 2008 by a US specialty magazine. This award, and its production with a type of grape that has disappeared from other continents, strengthen Chile as the vanguard of the country leaders in the wine industry. In 2007, alone Chilean wines were exported to markets as significant as Great Britain, the United States, and Canada for record earnings of US$ 1.256 million.

Export totals

Mining and agricultural production are joined by the other industrial activities like fishing, cellulose, and tourism. All contribute to the growth and in the stability of the economy. In 2008, total exports for the country reached the US$ 68 billions.

Trade Agreements

Opening its doors to the world has been a determining factor in the economy’s success. The reduction of tariffs, association agreements, complementarity economics, partial scope agreements, and in particular the signing of free trade agreements, allow the country access to markets with more than 4,000 million potential consumers.

The agreements signed facilitate commerce with several country associations (Mercosur, 1996; European Union, 2002), as well as with individual nations (Canada, 1996; the United States, 2003; China, 2005; Japan, 2007, and Australia, 2008).