Chile macroeconomy

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Summary

Introduction        2

1.        What is the economic Situation in Chile?        2

a.        Technological Situation        3

b.        SOCIAL SITUATION        3

2.        FUTURE MACROECONOMIC EXPECTATIONS        4

a.        Business Environment        4

b.        What about the government?        5

c.        Renewable energies: the revolution in Chile        5

d.        Where to invest in the renewable energies?        6

CONCLUSIONS        6

Introduction

Chile is a presidential and democratic state governed by the Political Constitution (1981). There are three public parts of power: executive, judicial and legislative power.

As a growing economy, new problems are emerging such as ecology and social requirements. Chile is one of the most profitable country in South America, mainly due to mining sector.

The question of developing a sustainable economy has never been so crucial. The country is still full of natural resources, not only fossil resources but renewable (wind, water, sun).

How could this fast-developing country continue to grow implementing sustainable measures?  

It is a huge challenge for the government and for the local companies as well. In addition to that, it is consider as one of the most important revolution in the history of the country.

1. What is the economic Situation in Chile?

Chile is considered the 41st biggest export economy in the world. As maintained by data collected from The Observatory of Economic Complexity (OEC) in 2016.

Chile exported $ 62.1 milliards and imported $ 57.5 milliards, resulting in a positive trade balance of $ 4.64 milliards. In 2016, Chile's GDP was $ 247 milliards and its GDP per capita was $ 23.2 thousand (OEC, 2016).

Similarly, the World Trade Organization (WTO) state that Chile is the country with the most commercial agreements signed in all latin America, a total of 26, reaching 64 economies that in turn represent 85% of the Gross Domestic Product and 63% of the population of the planet about 4,600 million people after the blocks of the European Union and EFTA (Switzerland, Liechtenstein, Iceland and Norway); The main exports are Refined Copper , copper ore, wood chemical pulp sulphate , fish fillets and Wine of which its main destinations are China, the United States, Japan ,South Korea and Brazil.

(WTO, 2018)

1.  Technological Situation

Chile is a country that is beginning to move to a knowledge economy, Due, in part, to information and communication technologies, which fulfill an increasingly relevant in the transmission of information and knowledge. Technology transfer is the main way of obtaining technology by companies and the State itself. According to the World Innovation Index 2018 made by the world intellectual property organization places, Chile as the number one in Latin America and 47th worldwide, the ranking Highlights the quality of regulation, registration in higher education, access to credit, companies that offer formal training, creation of new companies and flows of entry and exit of foreign direct investment (WIPO, 2018). Similarly the World Economic Forum at their Global Information Technology Report of 2016 situates Chile in 38th place on the list with 4.6 out of 7 in its networked readiness index and mentions that the political and regulatory environment is the strongest pillar.

In Chile there is a National System of Science, Technology, Knowledge and Innovation which is in charge of carrying out, promoting or supporting relevant activities related to science, technology and innovation, that actually recently to be exact in August of this year created the Ministry of Science, Technology, Knowledge and Innovation that is the secretary of State that is responsible for advising and collaborating with the President of the Republic in the design, drafting, coordination, implementation and evaluation of policies, plans and programs to promote and strengthen science, technology and innovation. Derived from scientific-technological research.

1.  SOCIAL SITUATION

Chile has made a great progress in the last decade in terms of improving the quality of life of its citizens. Since the 1990s, the country has had a record of solid growth and poverty reduction (OECD, 2018).

According to the “Social Progress Imperative” in the Social Progress Index of 2018 it positions Chile is in the place 34 out of 146 countries with a score of 80.61 / 100. Talking about more specific aspects and dividing by sectors according to the OECD in the “Better life Index”:

• HOUSING

In Chile, families spend on average 19% of their gross income on maintaining their housing, the average has 1.9 rooms per person and 90.6% of people live in houses with private access to indoor toilets with water discharge. 

• EDUCATION

The government has spent 4.9% of GDP on education, 65% of adults between 25 and 64 years old have finished upper secondary education. 

• HEALTH

Life expectancy at birth in Chile is 79 years and speaking of the health system, 57% of the inhabitants answered that it was good. 

• INCOME

In Chile, the average net household income per capita is lower than the OECD average of 30,563 USD and, speaking of the family net financial patrimony per capita, it is estimated at 21,409 USD.

• EMPLOYMENT 

About 62% of the working-age population (between 15 and 64 years old) has a paid job that is paid approximately about 28 434 USD a year, much lower than the OECD average of 44 290 USD and workers face a risk of 8.1% loss of income if unemployed.

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