Republic of Chile
República de Chile
LOCATION AND SIZE.
A coastal country located in the southwest region of South America, Chile has an area of 756,950 square kilometers (292,258 square miles) and a total coastline of 6,435 kilometers (3,998 miles). Chile shares its northern border with Peru and its eastern border with Bolivia and Argentina. Comparatively, the area occupied by Chile is nearly twice the size of California. Chile's capital city, Santiago, is located at the country's latitudinal mid-point. By bus, Santiago is approximately 1.5 hours inland from the Pacific Ocean and 1.5 hours west of the Andes Mountains foothills. From its northern border to its southernmost tip, Chile covers a diverse geographic array. In the north is the Atacama Desert, one of the driest places on earth, while the southern tip points towards the polar ice of Antarctica.
The population of Chile was estimated at 15,153,797 in July of 2000 with an annual growth rate of 1.7 percent, an increase of 7.9 percent from the 1994 population of 13,950,557. In 2000 the birth rate stood at 17.19 per 1,000 while the death rate stood at 5.52 per 1,000. According to the Population Reference Bureau, with a projected annual population growth rate of 1.29 percent, the population is expected to reach 19.55 million by the year 2025 and 22.21 million by 2050.
A majority of the Chilean population is mestizo (of mixed European and American Indian descent). In 1848 the Law of Colonization was passed by Spanish colonists interested in attracting foreign immigrants. Consequently, a large German population relocated to Southern Chile and mixed with the Mapuche Indians who inhabited the region. Miscegenation (intermarriage between different races) was prevalent throughout the country between Mapuches and other Europeans. Immigration also produced significant populations of Palestinians, Jews, Italians, Asians, Yugoslavs, and Greeks. Because of this great racial diversity, most Chileans feel that there is little racial prejudice in their country. However, prejudice based on class status is very prevalent in the urban centers.
The population of Chile is highly stratified with the middle class being the largest social sector. The importance of surnames, private schools, and living in the right neighborhood reveals a society that places much emphasis on class. The upper class in Chile consists of aristocrats, big business executives, and highly trained professionals making US$6,000 or more per month and constituting approximately 10 percent of the population. The middle class consists of small-business people, lower-rank professionals, public employees, and teachers. This group averages between US$600-$5,000 per month and constitutes 60 percent of the population. The lower class includes indigenous groups, retirees, students, small farmers, and servants. These people make between US$75-$500 per month and make up 30 percent of the population.
The population of Chile is highly urbanized, with 86 percent of the population residing in urban areas. The
The nation's rail system consists of 6,782 kilometers (4,214 miles) of railroads. Four international railways run to northwestern Argentina, Bolivia, and Peru. Two of these lines run from Chile to Bolivia (from Arica to La Paz) and from Antofogasta to La Paz via the Calama Desert. Except for these 2 international routes, passenger service to areas north of Santiago is not permitted. The Chilean State Railways (Empresa de Ferrocarriles del Estado) operates under the auspices of the Ministry of Transport and Telecommunications. Congress approved privatization of EFE's train services. However, the infrastructure remains under state control.
Although Chile's railroad system is the fourth-largest network in Latin America, it is a comparatively slow and inefficient method of transportation. Roads are the principal means of moving people and freight given that the Pan-American Highway is in excellent condition and runs the length of the country. In 1960 the first paved road was completed, linking the extreme north with Puerto Montt, located at the far southern tip of the Central Valley (Valle Central). Transversal roads run east and west from the north-south highways. Chile's network of roads totals approximately 79,025 kilometers (49,103 miles). Of this total network 9,913 kilometers (6,160 miles) are paved, 33,140 kilometers (20,592 miles) are gravel roads, and 35,972 kilometers (22,352 miles) are improved and unimproved earth roads. The Santiago and Central Valley regions are the areas most frequently traveled. There are about 1.1 million motorized vehicles of all kinds in Chile, including approximately 700,000 automobiles and 300,000 trucks and buses. Chile's national bus service and Santiago's
|Country||Newspapers||Radios||TV Sets a||Cable subscribers a||Mobile Phones a||Fax Machines a||Personal Computers a||Internet Hosts b||Internet Users b|
|a Data are from International Telecommunication Union, World Telecommunication Development Report 1999 and are per 1,000 people.|
|b Data are from the Internet Software Consortium ( http://www.isc.org ) and are per 10,000 people.|
|SOURCE: World Bank. World Development Indicators 2000.|
metro system run on time and are considered excellent.
Chile supports an extensive tourist infrastructure through the use of bus transportation from the extreme north of the country to the southern Lake District. A bus trip from the capital city of Santiago to Puerto Montt takes about 17 hours. Although it is a significant amount of time to spend on a bus, the views are extraordinary, Chileans make great conversation, and once you reach the south you get to see one of the most beautiful places on earth. It is almost untouched by capitalist industrialization and the people are comfortingly and inspiringly simple. A portable CD player is a totally foreign object to them.
Chile has 4 major state-owned water utilities that are in desperate need of substantial investment to improve efficiency. Starting in 1998 the government began considering the possibility of selling approximately 35 percent of the utilities to private firms. Partially privatizing this sector would allow private companies to invest capital in the restructuring of the utilities. Such contributions would improve drinking water services, sewers, and sewage treatment. These changes require substantial investment in order to be realized. According to the Communication and Culture Secretariat of Chile, a planned investment of US$1.56 billion by the year 2000 was expected to substantially improve the water sector in Chile. This significantly exceeds the US$235 million that was spent in 1998.
Chile's extensive coastline has very few naturally protected bays. In general the sea is rough and the topography is abrupt. A total of 95 percent of Chilean exports and 87 percent of international trade is done through port facilities. As of 1999, Chile had 36 operational ports: 10 were state-owned and offered public service; the other 26 were privately-owned ports, of which only 15 offered public service. These ports tend to focus on trade and shipping.
Port infrastructure, equipment, technology, and services have been clearly inadequate to efficiently serve the growing demands of globalization and international trade. As a result, the Chilean Congress approved a Port Law in December of 1997. This legislation was intended to foster competition and improve the capacity, efficiency, and competitiveness of the state-owned ports. The law mandated the conversion of 10 state-owned ports, previously managed by Emporchi (Chilean Port Authority), into 10 independent companies. These new companies are now fully responsible for port management, development, financial administration, and assets. However, the ports are still owned by the state. Chile has limited inland waterways, navigable for only about 725 kilometers (450 miles), and located mainly in the southern Lake District.
Air transport has become an important way of moving people and freight through Chile, given its territorial extremes. Chile has 351 usable airports but only 48 of them have paved runways. The international airport is located in the capital, Santiago. Eighteen international airlines serve through Santiago. Chile has 2 national airlines. The first is Línea Aérea Nacional de Chile (LAN Chile), which was privatized in 1989 and merged with Southeast Pacific in 1992. LAN Chile serves major cities in Chile and also carries passengers to international destinations. The second, Linde Aérea del Cobre (Ladeco), is owned by the country's copper company and handles the majority of domestic travel.
Power shortages occurred frequently in 1999 and to some degree in 1998. Shortages are typically a result of drought conditions since most of the country depends heavily on hydroelectricity. Power rationing had to be instigated in Santiago and some other regions for a while. In April 1999, blackouts would occur for up to 3 hours a day. The government did not intervene in the situation because private corporations own the electric companies, and the government did not want to scare investors away. However, the blackouts continued to be severe enough that the government fined 10 power companies for not meeting the terms of their contracts. New power plant construction, started in 1996, will continue through at least 2008. According to the most recent projections of the Comision Nacional de Energia (National Energy Commission [CNE]), electricity demand will grow over 8 percent yearly into the next century. Thus, the electricity sector has grown much faster than the overall Chilean economy.
Chile has an excellent telecommunications infrastructure supporting the use of cable, fax machines, telephones, and the Internet (in 1999 there were 26 Internet service providers). The phone system is completely digital and there are 8 international long distance carriers and 3 cellular telephone networks.
The telecommunications sector in Chile changed dramatically once it became privatized in 1989. As a result, private companies were forced to compete on the open market. Competition caused these businesses to provide their services in the most efficient and effective manner possible in order to ensure customer satisfaction. Since privatization, the number of phone lines increased from 800,000 in 1990 to 3.1 million in 1999. Cellular phones were introduced in 1990, and by the end of 1999 there were more than 2 million being used nationwide. Long distance calls made within the country increased from 500 million minutes in 1990 to almost 3 billion minutes in 1999. Long distance calls made to other countries increased from 50 million minutes in 1990 to almost 250 million minutes in 1999.
The Internet has become efficient in Chile due to heavy U.S. investment, but penetration is still limited given that only about 24 percent of homes have a computer. However, computer use is expected to grow 6 percent in the year 2001, as consumer confidence resumes after the Y2K scare. Chilean imports of computer equipment were estimated at approximately US$400 million for 1999. Imports have been gradually increasing over the past few years. The Internet is used mainly for education and entertainment purposes with only about 7 percent of Internet users shopping on-line. Furthermore, local access charges on Internet usage make logging on expensive. Nevertheless, Chile has the most developed telecommunications infrastructure in Latin America and is attempting to further develop its Internet infrastructure through private investment in order to become the preferred country for Internet investments.
The radio is Chile's principal way of reaching the mass population. An estimated 93 percent of the nation's population listens to the radio; the percentage is higher in the metropolitan Santiago area, estimated at 97 percent. Radio broadcasts are the prime source for current news for a majority of the population. New stations have a large budget used to maintain professional news staff to meet the news demands of the country. There are an estimated 17 million radio sets in Chile, far surpassing the estimated population of the country.
In 1970 Chile was exporting US$33 million in agriculture, forestry, and fishing products. By 1991 exports had increased substantially to US$1.2 billion. Currently, exports of agricultural products constitute approximately 6 percent of the total GDP. However, this sector of the economy is extremely susceptible to fluctuations in world demand.
Chile is the region's leading fruit exporter, with the agricultural sector employing about 14 percent of the workforce in 1997 and contributing around 6 percent to the GDP in 1999. The fruit industry is the most developed and high-profile agricultural industry. Chile is said to be the world's largest exporter of table grapes, not counting the ones used in the well-developed wine industry. Both of these industries benefit from the favorable conditions of the country's fertile and well-drained soil, cheap labor, and in recent years, government policies. About 25 percent of grapes eaten in the United States are imported from Chile, as well as 35 percent of kiwi fruit and 10 percent of nectarines. Other major crops include apples, apricots, pears, and avocados. About 50 percent of Chile's fruit production is exported, mainly to the United States and Europe. One of the greatest advantages of this sector is that it coincides with the northern hemisphere's winter season. Between 1989-91, exports of fresh fruits reached significant importance. Grape exports to the northern hemisphere during the winter season were a virtual Chilean monopoly until Argentina began to compete. The fruit packing industry also expanded, providing seasonal employment to thousands of workers.
Chilean wines have earned a prestigious position among international wine connoisseurs. The quality of these wines have earned Chile a spot as one of the world's leading wine producers, behind Italy and France. Chilean wine exports increased significantly between 1987 and 1998 (from 14 million liters to 229 million liters). In 1993-98, wine exports increased from US$129 million to US$500 million. Favorable climate and soil conditions make growing premium grapes an asset for this sector of the Chilean economy. Chile's microclimates (climates of a very small area) provide outstanding soil, sunlight, temperature, and moisture conditions for wine production.
Additionally, the industry has introduced new technologies and attained a highly skilled labor force . Industry upgrades in technology and production processes have been facilitated through foreign investment in local operations. France, the United States, Australia, and the United Kingdom have had successful Chilean operations since 1979.
Chile's extensive coastline makes it one of the world's greatest fishing nations. The natural conditions— including favorable currents, tides, rainfall, and inland water—provide for a large harvest of fish products. Chile has developed an advanced technology for use in fishing and aquaculture. Most Chilean fish products are now shipped frozen and pre-packaged. In 1994 Chile was the largest producer of finfish and shellfish with a 7 million ton catch, approximately 6 percent of the world's total. Fishing accounts for 2 percent of Chile's GDP and 11 percent of its global exports. In 1985 the sale of frozen and pre-packaged products stood at 1,120 tons. By 1998 this figure had significantly increased to 294,062 tons.
The Chilean fishing industry produces high quality fish meal, fish oil, salmonids, sea bass, Antarctic whiting, kingclip, swordfish, sea urchin, oysters, scallops, and king crab. Finfish and shellfish exports in 1998 were worth US$1.6 billion, an increase of 31 percent over 1997 exports. About 52.7 percent of 1998 exports were harvested at sea with 47.3 percent being produced through inland aquaculture.
Chile is one of the top 15 aquaculture nations in the world. Since the 1980s Chilean aquaculturalists have worked hard to become the second largest producers of salmon and trout. They raise Coho, Atlantic, and Chinook salmon, as well as rainbow trout. The industry is made up of 90 firms operating 185 farms in over 47,000 hectares of inland waters. Importers of refrigerated and frozen Chilean salmon include Japan (60 percent), the United States, Brazil, and the European Union. In 1998 salmon sales provided approximately 42 percent of industry revenue and accounted for greater than 4 percent of global country exports.
Chilean forestry is extremely successful due to its natural resource endowments. Chile's competitive advantage is due to an abundance of water, diversified climates throughout the country, and fertile soil. For example, the locally grown Radiata Pine reaches maturity in 15 to 30 years, much faster than in its own native homeland of Monterey, California. Moreover, the industry growth can be attributed to extensive research and species introduction coordinated through the efforts of public and private universities, government agencies, and private institutions.
In 1998 forest exports reached an impressive US$1.66 billion, although this was down 9.3 percent from 1997. These export levels are achieved by 100,000 workers in approximately 800 small, medium-sized, and large firms that make up the industry. In 1998 Chile sold forest products to 95 countries, with Asia leading at 34.8 percent, followed by North America with 24 percent, and Europe at 23 percent. The United States was the single largest buyer with imports totaling US$358 million.
The success of the forestry industry has attracted much foreign investment and has contributed to the globalization that is characteristic of the Chilean economy. In 1998 a U.S.-based company, Boise Cascade, undertook a joint venture with the Chilean company Maderas Condor. Both companies invested US$150 million to build a new plant in Valdivia, the lake region of Chile. Additionally, the Canadian firm ForAction International, together with the Chilean company Moreno Vial Ltda., started building a wood production and export plan in the town of Curanilahue, which involves a US$30 million investment.
Chile is the world's largest producer of copper, constituting 28 percent of the world's reserves. It has the world's most productive mine, located in the northern region in the city of Chuquicamanta. The Chilean economy is also very dependent on copper, and this industry employs about 6 percent of the Chilean workforce. According to the International Monetary Fund (IMF), in 1997 copper accounted for 42 percent of exports and 8 percent of the country's GDP. Major external investment in Chilean copper mining and the many industries across the world that require copper indicate that this sector will continue to play an important role in Chile's economy. North America and Western Europe are the biggest users of copper, constituting a combined world demand of 59 percent.
Corporacion Nacional del Cobre de Chile (CODELCO) is the largest company in Chile engaged in extracting and selling copper from state-owned mines. CODELCO is owned by the Chilean government and received annual profits of around US$1 billion per year during the 1990s. It is responsible for producing 10 percent of the world's copper.
Before the 1970s most copper mines were owned by American multinational corporations ; in 1971 these mines were nationalized by the Chilean government. CODELCO was created in 1976 by the military government to run the nationalized copper mines. Thus, the Chilean government had a monopoly over the large mines, accounting for 85 percent of copper production.
Beginning in 1980 the military government began to loosen its grip on the copper mines, permitting foreign investment in the new large mines. As a result, foreign direct investment in the mining sector grew from approximately US$90 million between the years 1974-89 to US$803 million in 1990. Between the years 1989-95 more than half of the foreign direct investment in Chile went directly to the mining sector. This pattern reflects a strong international demand for copper, a metal that is used in the construction industry, in air conditioning, and in manufacturing electronic equipment. Copper is also used in the automotive industry for electrical equipment and in telecommunications to build copper cables.
Chilean mining companies are also beginning to explore opportunities in other parts of Latin America, specifically Argentina, Bolivia, and Peru. International demand affects the price of copper. In 1998-99 the Asian financial crisis reduced that region's demand for copper, causing the price to significantly decrease. The Asian economies rebounded and the price of copper increased with a positive short-term outlook for the industry.
Northern Chile also has significant amounts of rich, high-grade iron-ore deposits located mainly in Coquimbo. Most of this ore is exported, with the surplus being used by the local iron and steel industry. Chile is also the leading nitrate supplier in the world, with large deposits of the mineral in the Atacama Desert. Nitrate is used for fertilizers and in the production of explosives. The mining and export of this mineral flourished during the last part of the 19th century and the beginning of the twentieth century. Chile produces gold, silver, molybdenum, manganese, zing, lead, bauxite, sulfur, potash, uranium, cobalt, antimony, and tungsten.
Chile's textile and garment industry faces strong international competition from Asian manufactures such as China, India, and Indonesia. In order to remain competitive, Chile has broadened its export market and sought new trading partners. In 1998 the top exports were denim cloth, polyester viscose, and combed wool. The leading purchasers of these exports were Argentina, Bolivia, and Brazil. Despite international competition, this sector of the Chilean economy has been able to remain efficient and has even expanded production and sales. Between the years 1993 to 1997, garment exports rose from US$148.2 million to US$208.6 million.
The textile sector has been growing due to Chile's new international trade agreements. MERCOSUR (a free trade agreement between Argentina, Brazil, Uruguay, Paraguay, and Chile) has been the greatest benefit to this industry, accounting for 37 percent of all foreign sales in 1998. The leading buyers of Chilean-made garments in 1998 were Argentina (purchasing US$33.1 million worth of men's and women's suits, ensembles, and hosiery), followed by Bolivia (US$27.8 million), and Mexico (US$21.9 million).
Chile has approximately 2,000 textile and garment companies, with around 30 of them having foreign sales of greater than US$1 million. Some of the top exporters of 1998 include Machasa—Chile's largest producer of denim fabrics—with US$23.1 million in sales, wool fabric manufacturers Bellavista Oveja Tome with US$16.3 million, and Textiles Pollak Hermanos with US$12.3 million.
As of 2000, the textile sector of Chile was the most labor-intensive of industries, with around 160,000 workers. The Textile Institute of Chile, a trade organization, estimated that 9 to 10 new jobs are created with every US$10,000 invested in this industry.
There has been strong growth in this sector over the past few years, encouraging foreign investment in plants and capital. This industry has over 2,000 firms and provides 100,000 jobs. Metal manufacturing is central to Chilean development efforts, constituting 6 percent of the GDP. Leading export items in 1998 included copper wire (US$75.4 million), automotive vehicles (US$63.9 million), automotive gearboxes (US$39.7 million), and machine parts (US$38 million).
In 1998 this industry earned US$883.2 million from exports, increasing from US$722.4 million in 1996 and US$456.9 million in 1993. Metal manufacturing consists of 2,000 companies, based mostly in central and southorn Chile, and about 20 percent of the total industry work-force. There is a general consensus that Chile has remained competitive in this sector as a result of technological innovation, easily accessible raw material sources, and skilled local engineers. Some of these companies are also partly foreign-owned, keeping in tune with Chile's desire to attract foreign direct investment. For example, Brazil contributed US$80 million in 1997 to build a new hot-rolled steel plant in the town of Colina.
The construction sector in Chile is predominantly import-driven. Foreign manufacturers supply over 95 percent of the Chilean market for construction equipment. In 1998 construction accounted for 3 percent of the country's GDP. In 1999, due to a regional recession, the Chilean construction sector was one of the worst performers of the year. Housing construction has an average demand of 140,000 units and 110 million square feet of lumber per year. Over the last decade, new housing construction has averaged 11 percent annual growth while construction as a whole averaged 9 percent growth. During 1998-1999 construction growth declined dramatically, but current signals indicate that by 2001 it should be back on its old growth path. Construction of retail and wholesale space (including warehousing) has also experienced remarkable expansion. As of 2000, new malls (in cities where none existed), large "hypermarkets," and new industrial development projects are regaining their once frantic activity around major cities. Currently, the Chilean government is also promoting the construction of a storm-sewer system for Santiago and other large cities. These projects will require large private investments. Private investors have also announced new large investments in high-rise office buildings. Such projects are expected to be worth close to US$1.5 billion. Future urban developments are expected to contribute US$500 million in private investment over the next 10 years.
GAS AND OIL.
Chile is not a major oil or gas producer, having only occasionally derived more than 50 percent of its consumption from its own reserves. Local oil production in 1992 contributed only 11 percent of total oil consumption and continues declining, while consumption and imports increase. Chile has oil and natural gas fields near the Straits of Magellan and Tierra del Fuego, on the country's southern coast. However, reserves in these sites are quickly being depleted. The National Petroleum Enterprise (Empresa Nacional de Petrole [ENAP]) was created as a Chilean government enterprise in 1950. The objective of its creation was to develop activities related to exploration, importation, and distribution of crude oil products. ENAP has continually sought new ways to meet domestic demand for petroleum by engaging in production contracts with Argentine, Brazilian, Colombian, and Ecuadorian companies. In 1982 domestic production was at 2.48 million cubic meters. In 1986 4.358 million cubic meters of gas were produced. By 1990 production had declined to 1.38 million cubic meters. ENAP estimates for production in 1998 were not expected to reach more than half a million cubic meters. Thus, for that year 90 percent of Chile's consumption was to be imported by ENAP. Since Chile has been experiencing solid economic growth over the last couple of decades, its oil demands have consistently been met through imports from other countries. Petroleum exploration efforts undergone in Chile have proven to be unsuccessful. In 1999 ENAP's general manager issued a statement indicating that exhaustive exploration had failed to find new oil fields and that currently exploited deposits would be depleted within 6 years. Thus, Chile will continue to depend on imports for its gas and oil needs
Chile is a popular spot for tourism with its extensive natural attractions and exceptional services, with the summer months of January and February being the most popular. Tourists can choose from an array of natural climates including deserts, temperate regions, lake districts, beaches, glaciers, and native forests. Natural wonders and excellent hotel and transportation infrastructures supported 1.8 million tourist visits in 1998. About 45 percent of the tourists come from Argentina. During the summer months Argentineans come to Chile to enjoy the vast array of beaches, Vina del Mar being one of the most popular. Chilean revenues from tourism were estimated at US$1.2 billion in 1998, up 7 percent from 1997. Spain, Germany, and France constitute the majority of European visitors. Two-thirds of all visitors come to Chile for vacations. Due to increased political stability and economic growth in the 1990s, there has been a significant increase in business travelers and convention attendees, accounting for 23 percent of total visitors. The average visitor stays 11 days and spends US$55 per day.
Accommodations in Chile are exceptional with some 1,700 hotels providing over 200,000 jobs. Tourism has been particularly strong in and around metropolitan Santiago. It has 15 five-star hotels—12 in Santiago and 3 in the nearby Valle Nevado ski resort. Chile has 15 ski resorts, making up the most comprehensive skiing infrastructure in Latin America. Another popular spot is the San Rafael Lagoon. Tours take visitors on cruise ships through channels and archipelagos of Aysen, entering into an inlet of the Pacific Ocean to the final attraction, the striking 30,000-year-old San Rafael Glacier. Torres del Paine National Park is located in southernmost Chile and offers striking views of glaciers and challenging climbs.
The Chilean government actively promotes expansion of the tourism industry. The National Forestry Corporation (CONAF) is inviting private foreign operators to provide a wide range of services within Chile's Wildlife Preserve System. Many foreign investors have also started building upscale hotels in Santiago and northern Chile. For example, Marriott International—a U.S. corporation—is building a US$96 million, 42-story, 250-room hotel in Santiago's upscale east end.
BANKING AND FINANCE.
Chile's banking system has changed significantly over the past decade. In the beginning it was relatively exclusive, offering credit only to wealthy Chileans. The rest of the population had to rely on department stores for credit. In the early 1990s the banking sector expanded quickly and began accommodating new account holders and even offering credit cards to average Chileans. Middle-class Chileans are now able to access credit through banks and are offered online "home banking." In 2001, nearly 1 out of every 5 Chileans had a credit card.
The Chilean banking sector is now one of the most developed and promising of the region. But competition from foreign banks is rising as a favorable investment climate has induced many foreign banks to open up shop in Chile. Large numbers of bank mergers have also occurred, raising government concerns over potential monopolies. As of 2001, Spain's Banco Santander Central Hispano (BSCH) controlled both Banco Santiago and Santander Chile, 2 of the largest Chilean banks. BSCH had a market share of nearly 30 percent. Financial authorities have asked it to reduce its share to 20 percent.
During Allende's presidency the financial system of Chile was near collapse. However, under the new dictatorship the financial sector experienced a remarkable boom, improving significantly between 1975-1990, with the implementation of an orthodox economic policy. By 1992 the financial sector had become modern and dynamic. But it was not until 1997 that banking law reform broadened the scope of permissible foreign activity for Chilean banks. Domestically, Chileans have recently begun to enjoy the benefits of new financial tools such as home equity loans, leasing, and debit cards. Increases in the use of traditional instruments, such as loans and credit cards, have also benefitted the Chilean population. Moreover, Chile has a private pension system with estimated assets of over US$30 billion at the end of 1997. Such assets have provided an important source of investment capital for the stock market. There has also been a significant increase in the number of firms with shares traded on the stock market as it continues to grow.
Chile's retail sector is in a state of transition. Small neighborhood stores still hold a substantial market share, yet very large retail outlets such as hypermarkets are carving out an expanding share of sales. The number of large retail outlets has increased substantially in the past decade, and expansion is most apparent in the capital city. Well-designed shopping malls have proven successful in Santiago and other larger cities throughout Chile. Products most commonly displayed in Chile's malls include textiles and apparel, electronic appliances and devices, sporting goods, cosmetics, office supplies, and kitchen utensils.
Chile's retail sector constituted approximately 8.8 percent of the GDP during the 1990s. Sales in this sector rose 4-fold from the mid-1980s through the 1990s, to US$21.50 billion. The retail hotel and restaurant sector of the economy constitutes about 17 percent of the overall GDP. The retail sector is the second highest employer, comprising 18 percent of the workforce, or just under 1 million persons. About half of these workers are in the capital region of Santiago. The remainder are located in the more populated provinces, such as Vina del Mar and La Florida, where malls have been a growth industry since the 1990s.
THE RICH AND THE POOR.
A wealthy Chilean family has a nice house located in one of Santiago's more affluent neighborhoods. The family generally owns fancy cars and their children attend the private Catholic University. A nanny is usually hired to help the mother raise the children and clean the house. Nannies are typically lower-class Chileans or immigrants from Peru or Bolivia. The children of these families normally go on exchange programs to the United States or Europe and are able to speak English well. Wealthy families often travel internationally to places like New York and Florida and domestically to the Chilean beaches and the southern Lake District.
A poor Chilean family generally lives in a shanty neighborhood, and their children do not attend a university. The parents work long hours in either the informal sector or a place of business. Their children usually get jobs at a young age to help support the family. These families do not take extravagant vacations or buy expensive imported products. They live a very hard life.
Chile has no territories or colonies.
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—April J. Guillen
Chilean peso (P). One Chilean peso equals 100 centavos. There are coins of 1, 5, 10, 50, 100, and 500 pesos and notes of 500, 1,000, 5,000 and 10,000 pesos.
Copper, fish, fruits, paper and pulp, chemicals.
Consumer goods, chemicals, motor vehicles, fuels, electrical machinery, heavy industrial machinery, food.
GROSS DOMESTIC PRODUCT:
US$185.1 billion (purchasing power parity, 1999 est.).
BALANCE OF TRADE:
Exports: US$15.6 billion (f.o.b., 1999 est.). Imports: US$13.9 billion (c.i.f., 1999 est.).