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Chile: Latin American tiger?

Marketing Presentation
by

Mariya Trifonova

on 7 January 2014

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Transcript of Chile: Latin American tiger?

CHILE

Country Facts
Part of Spanish Colonial Empire (1536-1810)
Patricio Aylwin (1989-1993):
a center-left government

Social Measures
Among highest health standard in Latin America
Life expectancy: 74 years
Good education standards compared to other LA countries

Demography
Population: 17.46 Мillion (2012), 14.6 Million (1996)
Homogenous population
70 % "mestizos"
20 % of European decent (better off in socio-economic terms)
5 % merindians
% of young people (under 20 %)
49.9% in 1960
38.5% in 1992
Very high literacy rate: 96.5%
Historical Facts
1536: Spanish penetration began
1541: Santiago was founded by Pedro de Valdivia,
no gold or silver found
forced labor system established
remained poor
under the Viceroyalty of Peru until the second half of the 18th century.
Independence declared on September 18, 1810
Based on Jim Harvey's speech structures
Kalina Angelova Magi Spasova Mariya Trifonova
Natural Resources: mineral rich country
world's largest reserves of copper
2nd largest reserves of lithium

Land available for agriculture

Proximity to Ocean-fishing (1/2 of the world's total catch of sardines, 2nd largest Salomon producer)


Konstantin Yanov Nikolay Dragov Teodor Mladenov
Geography
Physical Characteristics
Supreme Dictator Bernardo O’Higgins
1817-1823
Political Chaos
(1833-1839)
Diego Portales
(1830-1836)
General Augusto Pinochet
Military dictatorship (1973-1988)
1982 Crisis
Structural
reforms
Stabilization policies
Social
Policies
Balancing the budget
Decreasing inflation
Stabilizing the currency
Trade liberalization

Privatization

Shifting tax burden from producers to consumers

Liberalizing domestic capital market

Reforming labor code
Labor code

Social security

Education

Health care

Agriculture

Justice system

Administrative and regional decentralization
Initial reforms
1973 - 1982
Hernan Büchi
Eduardo Frei Ruiz-Tagle
(1993-1999)



KEY SUCCESS FACTORS
A
B
C
D
E
F
G
H
E
Thank you for your attention!
MERCOSUR – NO "KOSUR"?
Trade liberalization

Privatization

Shifting tax burden from producers to consumers

Liberalizing domestic capital market

Reforming labor code
Labor code

Social security

Education

Health care

Agriculture

Justice system

Administrative and regional decentralization
Chile on the Crossroad
Advantages:
Customs Union from 1991 planned to become a common market, 200 mln consumers, 1trln $ combined GDP, potential EU-MERCOSUR Agreement,
Historical ties and block integration, higher negotiation leverage;
well positioned to export higher value added products and services;
much less administration than the free trade area;

"Kosuri":
Common external tariff would override Chile’s flat tariff – the “fortress” Mercosur;
Membership would override bilateral FTAs and NAFTA opportunity;
No reliable mechanisms to handle trade disputes;
Potential burden for the agricultural sector – not price competitive;
Danger of trade diversion instead of trade creation – being a Mercosur member could cut the chance for hemisphere wide trade;
NAFTA – "Fuel" for Chile?
Labor code

Social security

Education

Health care

Agriculture

Justice system

Administrative and regional decentralization
Benefits:

Free Trade Area since 1994, no common external tariff; rules of origin; no substantial limits of sovereignty;
Very large market – use of comparative advantages – agriculture, minerals, labour intensive manufacturing;
Access to tariff and quotas protected market niches (processed food);
Dispute Resolution System, stable rules, predictability;

The negative sides:


Disparity in bargaining power;
Unsustainability, environmental harms;
Market size and distance concerns;
Chile –
neither chilly nor chilli

the art of being unique
Mercosur’s Associate Member - 1996

Tariffs with Mercosur down by 1/3 but flat tariff rate of 11% to all non-members kept

No full membership in either block

Bilateral FTAs

Chile today
Arturo Alessandri
1920-1924
1932-1938
Eduardo Frei
1964 -1970
Salvador Allende
1970-1973
g
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