Chile II: A Latin success story

Aired January 2009

In the vastness of South America, a spectacular country stretches from the most barren of deserts to most frigid Antarctic frontier. Chileans believe that when God had finished creating the earth, there was a little of everything left, so God threw it down in a narrow strip and called it Chile. Embracing glacial wilderness and moonscapes, lakes and volcanoes, beaches and salt flats, this fantastically diverse country is not just a land of contrasts. It is the land of extremes.

But there is more to Chile than a kaleidoscope of panoramas. Chile offers something none of its South American neighbors have: a politically stable government and a highly developed economy.

What is the secret to this nation’s success, and how can Chile be an even more prominent player in the global stage?

How can this most beautiful of countries harness tourism to its fullest potential?

And can Chilean companies strike a positive balance between growth and environmental conservation?

A surprising country in more ways than one. This is Chile, a Latin American Success Story.

INTRODUCTION

Chile lies in the southeastern part of South America, between the Andes Mountains and the Pacific Ocean, stretching for 2,604 miles and encompassing impressive climatic and geographical contrasts. It borders Peru and Bolivia to the north and Argentina to the East. Its capital city is Santiago.

Chile is a modern Latin American success story. Several reports and rankings by independent international institutions and sovereign rating agencies confirm Chile’s position as one of the most competitive countries in the world because of its dynamic and low-risk business environment.

Economic growth has been accompanied by low inflation and strong international reserves. This achievement is expedited by Chile’s commitment to economic liberalization and free-market policies, as well as of its pledge to maintain sound and responsible economic and political management.

Some 15.6 million people live in Chile, with one third of them in the capital, Santiago. The high professional standards of the Chilean workforce are a key factor in the international competitiveness of the country’s firms, with skills that have evolved in line with the demands of the country’s international integration. All of these are key factors that favorably impress foreign investors.

TRADE AND INFRASTRUCTURE

The Valle del Casablanca near Santiago, home to some of Chile’s most exclusive vineyards. Chile is one of the world’s leading exporters of fine wines, and is indicative of the fact that the country has a strong, export-oriented economy. In 2004, a free-trade agreement was signed between Chile and the United States.

Efficient transport and logistical infrastructure are all keystones of Chile’s export-driven development strategy, and are crucial in bridging the geographic distance that exists between Chile and other business centers throughout the world. And, within Chile, these services are equally important to ensure that all the country’s inhabitants share in the benefits of economic growth. A good example is Santiago’s spotless metro system, currently being upgraded by the Spanish concession company, OHL.

The private sector has participated actively in the development of public infrastructure, not only delivering rapid progress in an area that could otherwise have become a bottleneck for Chile’s economic expansion but have, at the same time, freeing fiscal resources for other social priorities, while opening up new opportunities for foreign and local investors.

HYDRO-ENERGY

Patagonia. Tucked away at South America’s southern frontier, where the great Andes mountain range takes one last, dramatic breath before plunging into the Pacific Ocean. The very name holds a fascination for many people, for it is here where nature, long left to its own devices, grows wild, barren and beautiful.

In northern Patagonia, the Carretera Austral Highway leads you to the region of Aysen, the final region in the country to be opened up to development in the early twentieth-century. Aysen remains very sparsely populated and still has the slight feel of a land untouched.

Chile is a land of breathtaking beauty but very limited energy resources. Chilean power companies have been forced to find new energy sources since Argentina began cutting natural gas exports to Chile in 2004. HidroAysen, a joint venture between Chilean power generators Endesa and Colbun SA, is proposing a solution of utmost importance to the country’s future energy supply.

But the project is not without its share of controversy, with detractors claiming this is a business that will bury large woods areas, will appropriate a natural resource, will interfere in tourism, and cause environmental damage, something HidroAysen is keen to address.

The HidroAysen project moves forward in a time where Chile faces an energy crisis and the need to increase its generation to meet the growing demand, expected to increase 5% annually until 2030. Truly a very interesting time for hydropower in Chile.

TOURISM

The Atacama Desert in northern Chile. Harshly beautiful, inhospitably dry, and compellingly vast. As desolate and otherworldly as it is, this region contains a wealth of superb attractions and is, along with Patagonia, one the country’s primary tourist magnets.

Chile is a country distinct from the rest of the continent and one that defies many people’s expectations. For once, the superlatives ring true. This is South America’s wild grandeur.