Chile’s economy is based on the export of minerals, which is worth about half of the total export of the country. The most valuable resource is copper, and the country is considered the world’s largest producer. Agriculture provides jobs for about 15% of the population; it accounts for about 6% of the national wealth, but produces less than half of the domestic needs. The country’s primary agricultural area is The Vale of Chile; its vineyards are the basis of Chile’s wine industry. Grapes, apples, onions are among the chief crops. The economy also relies on beef and poultry production, sheep rising is very common, and produces wool and meat for domestic use and for ...view middle of the document...
Chile also is strongly committed to free trade and has opened their window to large amounts of foreign investment. They have signed free trade agreements (FTA) with a lot of countries. Starting FTA’s with the United States in 2003, and also with the European Union, South Korea, New Zealand, Singapore, China, Brunei and Japan. In 2005, Chile reached partial trade agreements with India, and a full-fledged FTA in 2006. And in 2007, they signed agreements with Malaysia, Thailand, and Australia.
Unemployment rates floated between 8% and 10% in the 1990’s. It decreased to 7.8% at the end of 2006. Some people blame the government for the high unemployment rates, due to the complicated and restrictive labor laws. But overall, Wages have increased faster than inflation due to higher productivity, improving national living standards. The percentages of the Chileans with incomes below the poverty lines (defined as twice the cost of satisfying a family of four’s minimal nutritional need) fell from 46% in 1987 to around 18% by 2004.
Chile’s central bank targets inflation rate between 2% and 4%, the peso has been appreciating against the U.S dollars in recent years, this helped dampen inflation.
2008’s recession impact on Chile
The reduction of export demand caused by the recession had an impact of Chile; Total export fell by 30.1% in 2009. Investments were expected to fall by 13%. Unemployment reached 10% by the end of 2009. The credit freeze had little impact on Chile and Latin America. The world lost around $36 trillion in stock market directly following the credit freeze, but only recovered cutting $22 trillion worth losses. Latin America recovered dramatically. After being down 40% for a loss of $149 million, the Chilean market is now only down 0.97%.
Domestic demand increased to grow at 6.1% in 2012, and GDP will grow from 4.4% to 5% afterwards. In 2012, the employment grew 1.7% to make the unemployment rate settle at 6.1%. Wages continue to rise 6% year-to-year, more than double the increase in inflation.
In 2010, Chille was struck by an 8.8 rechtar earthquake, causing losses of 526 Chileans. The damage was more than 50 cities and 900 towns. Over 4000 Schools and 40 hospitals were damaged, causing losses of around $30 billion, equal to 18% of Chile’s GDP. The government pledged to reconstruct the whole infrastructure damaged in the coming 4 years, in addition on working on the original plan, which is developing the country for a better living. The reforms were implemented to increase economic growth rate 6% and create one million new jobs between 2010-2014. From 2010 to 2012, the average growth rate rose to 5.7% anually. In 2013, Chille is the fastest growing country in Latin America.
Chile is one of the most exotic countries that lie in the Southwestern part of South America. Chile, like any other country, has its own geography, people and culture, food, climate, ecosystem, and resources. Chile faces the South...