Country Investment Report: Chile

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in order to ensure that they are able to protect their people. One of the ways in which they have done this is by creating a democratic political system which allows all citizens to voice their opinion. Chile has scored a 1 on a 1-10 scale in the Freedom Index according to CountryWatch ( ). This is primarily due to the fact that they contain a stabilized government which works to sustain human rights. This puts them up with United States, Canada, Spain and other highly developed nations. In addition, the police force in Chile is thought to be the most reliable in Latin America.

Chile also ranks extremely high in transparency. Out of all the countries in the world, it ranks #22 in transparencies. This is the highest ranking country in South America. They even outrank the United States in this category. The great amount of transparency in the country has also allowed it to minimize corruption. Below is a chart that shows the 2011 Corruption Perceptions Index

Openness to Foreign Investment

With advancements in their economic standing, Chile has taken advantage of trading and developing ties with many nations. In May 2010, Chile became the first Latin American nation to join the Organization for Economic Co-Operation and Development. They currently have 22 trade agreements with 59 different countries. One of the greatest benefits to investment in Chile is their economic policies. They contain only a flat rate of 6% on imports. Foreign investors receive the same treatment as the Chilean population.

In addition, Chile also exports many of its goods, giving its economy a healthy boost. Copper mining alone accounts for 60% of the total exports, as Chile contains the largest copper mine in the world. Chile is the world’s largest exporter of fresh grapes, plums, and fresh fish fillets; second largest exporter of frozen pacific salmon, avocados, and other frozen fish. Due to its close ties with its partnering nations, Chile has continued to grow annually in exports as well ( ).

There have already been some major investments from major American companies. For example, Coca-Cola announced in 2012 that they plan to invest $1.3 billion in Chile, including a bottling plant as well as infrastructure improvements. Google will also invest $150 million in order to develop a call center in Chile. One of America’s leading life insurance companies, Principal Financial Group, will purchase a Chilean pension fund manager, Cuprum. (eiu) This proves that many leading organizations have faith in Chile’s growth and progress. These investments will only help promote more business ventures in the country.

The chart below shows how Chile’s improvement in economic freedom has helped drive the nation in increasing foreign investment. The index of economic freedom has sharply increased over the past 3 years and now maintains an average that is well above the world average.

Skilled Workforce

An educated and efficient workforce is necessary for any country to sustain growth. The Chilean population has continued to strive in order to develop the skills needed to compete in the global economy. 52% of the workers in the country have a technical or college education, which is the highest among all countries in Latin America. In addition, the country maintains a 96.5% literacy rate ( kpmg). Some of the major skills that the workforce contains are in mining, agriculture and fishing. This is vital as these industries account for the majority of exports for the country.

It is also important to note that Chilean workers have rights. A typical workweek in the country consists of 45 hours. There is also a high flexibility in wage determination. All relations between employers and employees are governed by labor laws. Pension, sickness, maternity and disability are covered by either employers or social security institutions. In recent times, many worker rights in countries such as Bangladesh and China have been questioned. Foreign investment in these nations is at risk due to the treatment of workers. Therefore, it is critical that emerging economies are keeping an eye on sustaining labor laws which favor their population.

Conclusion

To conclude, Chile has proven to be a lucrative investment opportunity. As one of the worlds emerging economies, it continues to evolve and provide investors with multiple options in order to earn high returns. Due to consistent economic growth, social progress, openness to foreign investment and a skilled workforce, Chile remains the top choice for investment.

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