👉Is Chile already a developed Country or just another Banana Republic without Bananas ?

The economic foundations in Chile are pretty solid. Economic freedom is high, international trade freedom is pretty much a national dogma, and there are no serious threats to property rights (something not common in Latin America). Chile is known as the ‘Jaguar’ economy –because of its macroeconomic stability and success in reducing poverty by half in just 15 years. If you compare the Chilean economy with the economies in the rest of South America, it is good. Additionally, it is the most stable. Those fluctuations in copper because of China have had an impact. However, the government, is somewhat known for trying to bring in foreign investment. Also, Chile has a low debt . It is not yet a net debtor. So if things get bad, the government has plenty of room to reactivate the economy via state expenses. Another factor? Chilean population is catching up with other OECD countries in college access, not yet in quality of education. Also, the "brute" growth is pretty much done, infrastructure is not perfect but is reliable -especially during earthquakes- and that's much more of what we can say of even other OECD countries. There is still a surprising level of poverty, especially among the Mapuche minority. And the economy is still too reliant on mining, even though these are currently providing prosperity. I think Chile needs to make a push to develop value added and high tech manufacturing and the entrepreneurial sector. Despite Chile being one of the wealthiest nations in Latin America, yet protesters have been in the streets for three weeks, calling for an end to the high cost of living and inequality. A 2017 United Nations report found the top 1 percent in Chile owns 33 percent of the country’s wealth. Welcome to The Atlantis Report. Some economists and analysts consider Chile to be the only developed country in South America. However, I myself think that is extremely misleading. Yes, Chile has the highest per-capita income, lowest homicide rate, highest HDI, most economic freedom among their southerner peers… But it is not so different from them in many aspects. Poverty in Chile is still noticeable and present in many of the foggy, desert areas of the north of the country. Many villages lack direct freshwater supply, which by the way, was the scenario of a significant intervention by the Canadian NGO Fog Quest to harvest water from this fog to provide locals with easier-to-obtain fresh water. Also, though a high-income economy, Chile’s income distribution is as bad as Brazil’s, which means not everyone has such a “high-income” as suggested. Now, here is the big, however. In terms of poverty, Chile is a striking contrast to its South American neighbors. In 2008, only 2.7% lived on less than $2 a day, the literacy rate was at a developed country status, and life expectancy was much higher than elsewhere in Latin America. The country’s economy is stable, growing, and if this trend is maintained, it will transform the country into a significantly developed nation. So to summarize, Chile may not be as sophisticated as Europe’s advanced nations, but it is undoubtedly heading up there. If the country is already developed or not, perhaps it is still hard to determine. Whether Chile or Uruguay is the most developed country -economically speaking- in Latin America, is debatable. But we all can agree that it must be one of the two. Historically, both countries share many things, in spite of their recent differences. A stable society ,better in Chile than in Uruguay.A considerable level of social coherence.More in Uruguay than in Chile, important immigration in the 1890 - 1930 period .Once again, more in Uruguay than in Chile. Both countries were stable and perfect for the production of goods demanded in Europe in the late 19th and early 20th centuries. This allowed them (and Argentina and Southern Brazil) to take a significant lead in the economic development process. Chile has been leading the Latin American economy, in per capita terms, since at least 1910. Now, unlike Argentina and Uruguay, Chile had a communist government. I believe that for most of the recent history of the country. This has been a great deal and distanced the Chilean politics from the Argentinian and Uruguayan ones. After the communist government came, Pinochet’s free-market experiment (which was mostly reversed after the 1982 crisis), and after his departure, the country re-gained the political stability that characterized it for most of its history and bet on the neoliberal approach. Which (like in Colombia and Peru) has had mixed results. Overall, Chile has decent governance, a not-as-corrupt government, and a considerable lead won in the 1890 - 1960 period and not yet lost. However, the Uruguayan more “leftist” approach has been similarly successful, albeit with different benefits and costs. The economy of Chile depends on mining (of copper, gold, silver, lithium, etc.) is the most important field in terms of capital involved. The main exports are raw materials (refined ores, agricultural exports, etc.) .Chile has good commercial relationships with the US and Europe and China and most of the Pacific Coast of Asia, including Singapore and Australia, New Zealand, and Japan. Currently, mining is not generating much profit (and right now doesn’t have much influence is fiscal policy since the state’s mining company is yielding 0 benefit). Still, the field is responsible for the entry of foreign currency into the country. Contributing to keeping a positive balance of trade and relatively high value of the local currency . Other important activities are farming and food production, fishing (at industrial scale), pulp and paper (the forest industry), Construction (real state), banking, and financial services. Since Chile is an underdeveloped country, it doesn’t count with a prominent high-tech manufacturing sector. Chile is a country with successful performance in basic production: Agriculture, building, transportation, water supply, manufacturing, basic house equipment, clothes, and shoes. The bottleneck for development Chile is energy. They depend on, let's say, unstable neighbors and such prevent the best performance. Last year they were importing cryogenic gas with success, but such is expensive. Regarding the fiscal policy and employment, retail and commerce are the most important fields, providing most of the employment and most of the fiscal income through VAT (19%), while contributing an essential part of the GDP through consumption. Chile has important flaws. I'm going to divide it into two, fundamentals and short-term. #1). Fundamentals. Even though the Chilean economy has diversified a lot since the '90s, there's still so much copper exports-dependence. Not that commodities dependence is always a bad thing (New Zealand became a first world country, mostly with agriculture-exports capital). Another fundamental problem of the Chilean economy has a serious productivity problem. There are sectors where Chilean economy is a pioneer or a pretty well-established player, wine production and retail in the first and technology adoption in the second category, but in most areas ,finances, manufactures, etc., Chile has problems integrating new technologies, not because of not enough capital, but,because of two structural problems of Chilean economy: 1. Concentration (you don't have incentives to innovate unless you have to compete). And 2. Not many middle-class owners that grow to become mid-enterprises that can compete locally. I have to say that there are efforts in finances - but they are still pretty limited. It is a good sign that the country is moving in that direction anyway. #2). Short-term. As you may know, South-America is not in good shape these last years. As you may also know, Chile is a South American country . Their main trade partners, excluding the US, are in bad shape. Brazil, but more specially: China . Why Brazil? It is not such an export-import partner, is because the crisis in Brazil is spreading and lagging down investment opportunities around South America. And Chile is pretty-much addicted to foreign investment. Really, I'm not exaggerating. It is like the heroine of the Chilean economy. And China, well, pretty much they stopped demanding that much copper, so less money is coming in (like 50% less), so they don't have that capital entrance, and for a 17million 300billion gdp country, that's a hard thing. Anyway, wine and tourism are thriving, and agriculture-related exports also, and they are producing the first tech , but of course, it does not compensate. Poverty is still very present. There’s a lot of homeless people in Chile . Education, too, is a problem. You want a good education for your kids? You will have to pay a very expensive private school to have the same education as a public school in Europe. There are semi-private schools for the middle class that cost a little less and have almost an education as good as a developed country. And there are public schools where the teachers are most concerned about the knives and the drugs that students bring to a school than teaching. For health, the same thing. You want good health care? You have to pay a lot for it. Another thing I have noticed is how the country doesn’t care about art, sport, or culture. They don’t fund scientific projects or studies.The scientists or artists go abroad to find recognition or funds. And how can I talk about Chile without mentioning the politic and corruption?. Even if a lot of their neighbors (Venezuela, Colombia, Argentina, Mexico) tells us that they don’t have their “level” of corruption, it's something that does not let the country move forward . So, I would say that even if Chile has a lot of problems , mostly inequalities, I think it is in the path of becoming a developed country. The people are so friendly, relaxed, hopeful, and resourceful. Even if they struggle every day with their jobs and the lack of money, they’re still so optimistic and happy. There are problems -of course, Chile is still a developing country, but the economic fundamentals are strong. And now let's look at some economic figures. GDP (nominal) per capita, IMF calculations: $14,314. 52 out of 186, about the same as Argentina. GDP per capita is the most commonly used and easiest to understand the comparative measure of standards of living between countries. It’s a good starting point, but it’s an imperfect way to envision living standards for the average citizen. GDP (PPP) per capita, IMF calculations: $24,588. 56 out of 187, a bit more than Romania, and a bit less than Turkey. PPP measures adjust for differences in costs of living, comparing how much it costs to buy essential goods in services in a given country relative to the United States. A Chilean with the same income as an American could, all else being equal, buy more stuff with that money. This is also a pretty rough measure since the cost of living varies dramatically within a country, it’s tough to define what is “essential,” and PPP may overstate purchasing power in an increasingly global economy. Human Development Index: VERY HIGH. 38 out of 188 countries , tied with Saudi Arabia. Developed by the UNDP, the HDI considers average income, life expectancy, and education. Inequality-adjusted HDI: MEDIUM. 43 out of 151 countries , about the same as Argentina. Also, put out by the UNDP, IHDI tries to capture the effects of inequality to reflect the experience of the average citizen. By this measure, only 18 countries (Canada plus 17 European countries) are ranked higher. Median wealth per adult (PPP): $20,141. 43 out of 141 countries, between Uruguay and the UAE. Credit Suisse calculates the value of assets owned by the median adult in a given country (savings, land, house—everything), adjusted for purchasing power. If they’re right, about half of the population would be wealthier than this, and half would be poorer. Democracy index: Flawed democracy. Tied with Portugal, about the same as Japan and France. Economist Intelligence Unit ranking based on “experts’ assessments” on a 60-point questionnaire. Corruption Perceptions Index: Less corrupt. 24 out of 176 countries , just behind France. Compiled by Transparency International based on surveys and expert assessments. So what are we to make of this? In the global context, I’d argue that Chile is a developed economy…more or less. Chileans are relatively wealthy, healthy, and free. If you’re born Chilean, you can consider yourself pretty lucky. To a certain extent, though, “development” is in the eye of the beholder. Depending on what is most important to you, you could make the case either way. Chile is something of a banana republic without the bananas. Because its economy relies largely on the export of raw materials, with very little manufacturing or advanced technology. This was The Atlantis Report. Please Like. Share. And Subscribe. Thank You.






















The Financial Armageddon Economic Collapse Blog tracks trends and forecasts , futurists , visionaries , free investigative journalists , researchers , Whistelblowers , truthers and many more