Chile

Chile did claim its independence from the Spanish in 1810, but did not really get it until 1818. A war with Peru and Bolivia followed, as did the subjugation of the Araucanian Indians who lived in Chile. In 1973, a military rebellion defeated the rule of Salvador ALLENDE, a Marxist. Augusto PINOCHET, the leader of the coup, then led until 1990. In the 1990s, Chile’s economy was growing the fastest in Latin America. Currently, Michelle BACHELET of the Concertacion coalition is president; this coalition has been in power since 1990. Thorough economic strategies and consistency has brought continual growth to Chile, low poverty rates, and have assured for the country’s dedication to a democratic government.

Main Airports

Santiago (SCL) (Arturo Merino Benitez)

U.S. Embassy

2800 Andres Bello Avenue, Las Condes
tel. 562-330-3000

Statistics

GDP: purchasing power parity:

$187.1 billion (2005 est.)

GDP - real growth rate:

6% (2005 est.)

GDP - per capita: purchasing power parity:

11,300 (2005 est.)

Inflation rate (consumer prices):

3.1% (2005 est.)

Labor force:

6.3 million (2005 est.)

Exports:

$38.03 billion f.o.b. (2005 est.)

Exports - partners:

US 15.8%, Japan 11.5%, China 11.1%, Netherlands 5.8%, South Korea 5.5%, Brazil 4.4%, Italy 4.2%, Mexico 4% (2005)

Imports:

$30.09 billion f.o.b. (2005 est.)

Imports - partners:

Argentina 14.8%, US 14.6%, Brazil 11.7%, China 7.8%, South Korea 4.8%, Yemen 4.4% (2005)

Population:

16,134,219 (July 2006 est.)

Population growth rate:

0.94% (2006 est.)

Population Below Poverty Line:

18.2% (2005)

Major Industries:

copper, other minerals, foodstuffs, fish processing, iron and steel, wood and wood products, transport equipment, cement, textiles

Employing Workers: 58*

Registering Property: 30*

Enforcing Contracts: 73*

Closing a Business: 107*

*2006 World Bank rank out of 175 countries

Starting a Business

The table below shows the number of steps and the amount of time needed to start a business, on average

Indicator	Chile	Region
Procedures (number)	9	10.2
Time (days)	27	73.3

Chile Risk Assessment

Country Rating

Rating: A2

The political and economic situation is good. A basically stable and efficient business environment nonetheless leaves room for improvement. Corporate default probability is low on average.

Risk Assessment

Amid the world economic slowdown, the Chilean economy should grow at a more moderate rate this year. A good employment picture will continue to buoy household consumption growth, albeit at a slower pace. Public consumption and investment should moreover increase, with government officials leveraging the windfall from high copper prices to accentuate social spending and infrastructure modernisation. New copper and cellulose production capacity will also make a contribution. High food and energy prices compounded by the firmness of private consumption have, however, generated inflationary pressures that resulted in a tightening of monetary policy.

Strict application in recent years of a fiscal surplus rule has facilitated reducing public debt down to five per cent of GDP, with two stabilisation and investment funds set up in 2007 to improve management of the resulting surpluses. Furthermore, although sales of copper continue to dominate foreign trade, sales of other products like salmon, woodpulp and wood have been booming. The dynamism of Asian demand will give them further impetus notably under free trade agreements concluded with China late 2006 and Japan a year later. The country is, however, still very dependent on imports of Argentine gas with uncertainty clouding its supply. External accounts will nonetheless continue to show large surpluses despite profit repatriation by foreign companies, while foreign debt ratios, essentially attributable to private borrowing, have continued to improve.

In office since March 2006 and a member of the centre-left coalition in power since 1990, President Michelle Bachelet's popularity has been in decline due notably to problems with the capital's new public transportation system, Transantiago. The president moreover has to contend with many political and social challenges. The pace of reform, particularly of the education, health, and pension systems, could lag in the run-up to municipal elections late this year and the presidential election end 2009.

In this context, the mining and paper industries, construction, food, distribution and financial services have outperformed. The Coface payment experience on companies has been very satisfactory and their solvency has remained good, except for weaknesses in a few sectors like textiles and clothing industry.

STRENGTHS

• The world's leading copper producer, Chile is endowed with abundant mining, agricultural, piscicultural (notably salmon) and forestry resources, as well as comparative advantages in those areas.
• The country has benefited from economic expansion for the past twenty years, coupled with a relative consensus on the orthodox economic policy pursued.
• The growing number of free-trade agreements has facilitated geographic and sectoral diversification of exports.
• Political stability, quality institutions and infrastructure, and a solid financial system have fostered foreign investment in the country and its development as a regional platform.

• The economy remains too dependent on copper exports (half total sales abroad) and low added-value sectors.
• To meet its energy needs the country remains dependent on foreign sources, particularly Argentine gas, pending the production start-up of a liquefied natural gas facility in 2009/2010.
• The income gap — still among the world's highest due especially to disparities in the education system — has been a source of social tensions.

• Agriculture
• Apparel
• Arts & Crafts
• Automobile
• Bags, Cases & Boxes
• Chemicals
• Computer Hardware & Software
• Construction & Real Estate
• Consumer Electronics
• Electrical & Electronics
• Energy & Environment
• Food & Beverage
• Furniture & Furnishing
• Health & Medicine
• Home Supplies
• Industrial Supplies
• Lights & Lighting
• Machinery
• Mineral & Materials
• Office Supplies
• Security & Protection
• Service
• Sports & Entertainment
• Telecommunications
• Textile
• Toys
• Transportation