Chile is the best-evaluated economy in Latin America and, indeed, one of the best-evaluated among emerging economies worldwide. Its sustained economic growth and social progress have been highlighted by different international organizations and in 2010 it became the first South American country to join the Organisation for Economic Co-operation and Development (OECD).
In the eight years from 2004 to 2011, Chile’s GDP grew at an average annual rate of 4.8%, according to the Central Bank of Chile. In 2011, despite the first effects of the European crisis which were felt in the latter part of year, GDP expanded by 6.0% to US$248.6 billion. As a result, per capita income reached US$14,413 and, in purchasing power parity terms (PPP), US$16,171. On the basis of recent performance, the Chilean Central Bank anticipated that Chile would grow by 5.5% in 2012, while the International Monetary Fund (IMF), predicted growth of 5.0% for 2012 and 4.4% for 2013. If this trend is maintained, Chile will have South America’s second highest per capita income by 2016.
Chile is also an attractive country in which to do business because of its highly open economy. It has signed 23 free trade agreements with 60 countries, which collectively represent more than 86% of the world’s GDP, and holds double taxation agreements with 24 countries, including the United Kingdom.
Chile’s advantages as a place in which to do business have been further highlighted by the Doing Business 2012 Report. According to this report Chile is the easiest Latin America economy in which to do business ranking 56 places above the regional average, and its performance on protecting investors and starting a business are among the best in the world.
A Reliable Partner
Chile is a safe and reliable place in which to do business. This is borne out by risk ratings agencies which have maintained their high ratings for Chile, highlighting its low level of public debt, the health of its financial system and its solid institutions.
Chile’s sovereign ratings (as of December 2012)
Fitch Ratings: A+
Standard & Poors: AA-
A Competitive Country
Chile has a consolidated position as Latin America’s most competitive economy. This is mainly due to its sustained economic growth and openness to trade which have set it apart internationally as a free and dynamic market. Its performance is reflected in the rankings of institutions that monitor countries’ competitiveness. In the 2012 World Competitiveness Yearbook published by the Institute for Management Development (IMD), Chile took 28th place out of 59 economies, maintaining its leadership within Latin America.
Attractive Business Climate
Thanks to its political and economic stability, legal security and excellent growth prospects, Chile has maintained an attractive and dynamic business climate for investors. Its openness to trade is demonstrated through the 23 free trade agreements it holds with 60 countries. According to Forbes’ annual Best Countries for Business list, Chile is the best-positioned country in Latin America (ranked number 17 overall). In this position, Chile is among the 20 best economies to do business in.
A Transparent Country
Chile is known for its transparency and this is reflected in international rankings that highlight the low level of corruption in the country and, particularly, its finances, due to government efforts to raise standards in administration of the state. In Transparency International’s 2011 Corruption Perceptions Index, Chile obtained a score of 7.2 points, ranking among the 25 best-placed economies.
- Ontario Teachers’ Pension Plan
“Chile has everything we look for, an open and transparent business environment that welcomes foreign investment, a good and healthy political environment and its regulator and regimes are well-established and predictable. It’s a great place to invest. We’re very happy with our experience so far and think that Chile compares well with any of the other countries and markets we look at around the world, whether in Latin America, among emerging markets in general, or developed economies. In that sense, Chile has been a good country for our business.”
Senior Vice-President Of Infrastructure, Ontario Teachers’ Pension Plan
- Brookfield Asset Management Inc.
“There are several main factors in our decision to invest capital in Chile: The nature of the asset to be acquired in the infrastructure sector; The stability of the regulatory framework with respect to the ownership of the asset; The stability of the political system; The integrity and work ethic of the people of Chile; The existence of the rule of law. All of these factors, taken together, created a favourable investment climate in which to deploy our capital.”
Senior Managing Partner, Brookfield Asset Management Inc.