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Chile

Published on Thursday,16 July 2015

1.Overview


Two decades ago, Chile made the commitment to advance with economic  reform, proactive social investments, transparent public sector  management and stable consensual governance.
 

In 2011, the government proposed seven structural reforms in the areas  of education and health, poverty and crime reduction and reform of the  state, the political system and the environmental system.
 

Chile is one of Latin America’s fastest growing economies. During the  past 15 years, the country recorded an average annual per capita growth  of 4.1 percent. Per capita income doubled in real terms during this  period.
 

Chile has consolidated macroeconomic stability in part through the  adoption of a floating exchange rate and the establishment of strict  inflation targets. The application of a carefully calibrated fiscal  policy has been crucial in balancing an expansion of social programs  with fiscal discipline.


The country’s financial system is large and well-diversified compared  with other countries in the region. It is considered to have a solid  regulatory and supervisory framework, as well as the capacity for  recovery in the event of crises.
 

During the second half of 2008, growth decelerated as global demand for  Chilean exports declined and the terms of exchange deteriorated. Real  GDP growth decreased to 3.7% in 2008 and contracted -1.5% in 2009.
 

A strong fiscal stimulus package financed with the savings accumulated  during the years of high copper prices, together with a flexible  monetary policy, supported an early economic recovery beginning in the  last quarter of 2009. At the end of that year, Chile became the first  South American country to join the OECD.


Nevertheless, the disturbances associated with the devastating  earthquake of February 2010 led to a -2.1 percent contraction in the  first quarter of 2010. The economy rebounded vigorously, however,  recording a growth of 5.2 percent in 2010, driven by reconstruction and  investment. Domestic consumption spurred continued growth in 2011, which  reached 2.8 percent in the first quarter.


Chile faces two considerable challenges: enhance productivity and  achieve equality of opportunities. Chile's growth slowed from an average  of 7.6 percent in 1986-1997 to 3.5 percent in 2000-2009. In addition,  productivity growth and investment levels experienced a downward trend  throughout much of the past decade.
 

The second challenge is the need to tackle inequality. While Chile has  made substantial progress in reducing poverty (15 percent in 2009), the  average income of the richest 20 percent of Chileans was 12 times that  of the poorest 20 percent in 2009. Although Chile has actively invested  in social protection programs, middle- and low-income households remain
vulnerable to crises. Despite the significant improvement recorded over  the past 20 years, infrastructure and public services are still out of  reach for many Chileans.


For the Government of Chile, education at all levels is a fundamental  pillar of economic and social progress. Nearly a million of the  country’s 17 million inhabitants are enrolled in tertiary education and a  fourth of these students come from low-income households.
 

Over the past decade, the number of students from the two lowest-income  quintiles has tripled. A 2009 OECD and World Bank review of tertiary  education reported that Chile requires second-generation reforms that  focus on more complex challenges, such as linking financing to  performance and accountability, and improving the quality and pertinence  of classroom teaching.


The Government of Chile has launched an ambitious development agenda to  support the country's ultimate goal of achieving high-income developed  status by 2018. The government plans to emphasize three strategic areas  during 2010-2014: i) achieving greater competitiveness, including the  modernization of the state; ii) increasing job creation and improving  job quality; and iii) promoting investment. Moreover, the government is  committed to other important reforms aimed at strengthening social  policies and protecting the environment.
Source: World Bank

2. Statistics

           

2010*

Population, total (millions)

17.1

Population growth (annual %)

1

Surface area (sq. km) (thousands)

756.09

Life expectancy at birth, total (years)

79

Mortality rate, infant (per 1,000 live births)

8

GNI (current US$) (billions)

197.3

GNI per capita, Atlas method (current US$)

10,120

Unemployment, total (% of total labor force)

8

External debt stocks (% of GNI)

46

Literacy rate, adult female (% of females ages 15 and above)

99

Literacy rate, adult male (% of males ages 15 and above)

99

CO2 emissions (metric tons per capita)

4

Source: World Bank Development Indicators


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