Transcript Chile

Chile
Advantages And
Opportunities
Javier Becker
Ambassador of Chile to
Thailand
About Chile
Chile, land of opportunities
Investments
Trade
FTA Chile - Thailand
About Chile
SNAPSHOTS

Population: 17,1137 millions.

Total surface: 756,102.4 km²

GDP 2011: US$248,411 Bn, current prices.

GDP 2012: US$ 272,119 Bn, current prices (estimated)

Current per capita income (2011): US$17,221 (PPP)

President of the Republic: Sebastian Piñera

Term of office: 4 years

We have a bicameral system.

The next presidential election will be held on November 17th,
2013.
4
CHILE A DIVERSE COUNTRY
Northern Chile has a desert
climate noted for wide
temperature swings.
It is also known for its
vast mining wealth.
Central Chile is home to
Santiago, the nation’s
capital. The region is a
major industrial and
agricultural hub.
In the south, the prevailing rains
and cold weather help nurture
rich fisheries and forest
resources.
ASTRONOMICAL CAPITAL OF THE WORLD
Natural laboratory of unique
conditions, with more than 330
cloudless nights per year.
68% of global astronomy
infrastructure shall be located
in Chile by 2018, with an
investment of USD 6
billion
OTHER NATURAL LABORATORIES
The Atacama Desert is a
unique location for
development of solar
energy, it has the highest
rate of radiation in the world
and it is the driest desert with places where it has not
rained in more than 400
years.
Punta Arenas is the
nearest access port to
Antarctica, placing it as a
logistical and strategic
center for development
of science, tourism and
fishing in the Antarctic.
Chile is one of the most
seismically active countries
in the world, making it a
unique location for
development and testing of
seismic engineering.
ECONOMIC GROWTH

We expect the Chilean Economy will grow 4.5% in
2012 and 5.0% in 2013 (rate in 2011, 6.3%)

Chile aims to be a developed economy in 2018, with
a per capita GDP of US$22,000, under the course of
an average growing rate of 6%.

Current per capita income (2011): US$17,221 (PPP)
8
LATIN AMERICA AND CHILE: GDP per capita

Thanks to advances in the last 25 years, our GDP per capita
increased from 23% 1980 to 34% in 2011 respect to U.S.A.

The importance is not only to be in the forefront, but also to realize
that it is easy to lose track.
Compared Per Capita Incomes
(GDP per capita PPP, % with respect to USA)
9
MONETARY SITUATION

Chile´s Central Bank is independent with inflation
target regime.

The Central Bank has the capacity to make
counter-cyclical policies. The current interest rate is
5.0%.

Foreign Reserves: US$ 41,97 Bn (dec. 2011)

We expect the inflation rate will be 3,5%-3,8% in
2012, after reaching 4.4% in 2011.
10
Indicators of financial sector development

Pension funds assets: US$ 134.9 Bn (54% of 2011
GDP)

Assets Under Management institucional investors:
US$208.5 Bn (84% 2011 GDP)

Stock market capitalization: US$ 229.9 Bn (92%
2011 GDP)

The long term interest rates are low: the current
10Y nominal rate is 5.2%

Banking assets/ GDP: 109%
11
FISCAL SITUATION

In 2011, the fiscal surplus was 1.4% of GDP, while Gross
Fiscal Debt was 11.2% of GDP.

Net external debt is negative (-US$10,96 Bn at 2011).

Chile faces favorable conditions in financial markets: both
Credit Default Swaps (5Y at 95 bp) and country risk (150 bp at
March 12) are the lowest within LATAM countries.

Sovereign wealth Funds are higher than US$20 Bn (including
treasury assets).

Tax Burden: 21,1% of GDP (less than the OECD average)
12
SOME GLOBAL CLASSIFICATIONS AND RANKINGS OF CHILE

Index of Economic Freedom: N°7 (1st in LATAM)

Global Innovation Index: N°38 (1st in LATAM)

Doing Business 2012: N° 39 (1st in LATAM)

Competitiveness Index: N°31 (1st in LATAM)

Corruption Perception Index: N° 22 (1st in LATAM)

Global FDI Inflows: Nº 19 (3rd in LATAM)

Human Development Index: N°44 (1st in LATAM)

Income Inequality: N°3, on OECD.
13
Chile, land of opportunities
LAND OF OPPORTUNITIES
According to the latest international rankings and reports from
organizations like the OECD, World Bank and The Economist
Intelligence Unit, Chile has been recognized as:
•The most stable and secure country in South America
•A good partner to do business
•A country open to the world that promotes free trade
Ernst & Young placed Chile among the countries with the
fastest growing economy, along with China, India, Russia and
Brazil.
According to the recent 2012 version of the "Doing Business"
ranking, Chile advanced from place 62 to 27 in the index of
business start ups.
LAND OF OPPORTUNITIES
First place to invest in Latin
America
1
2
3
Chile
Peru
Brazil
Source: Studies based on data of the IDB.
Multilateral Investment Fund, The Economist.
Santiago, second best city
to do business in Latin
America
1
2
3
Miami (USA)
Santiago (Chile)
Sao Paulo (Brazil)
Urban Competiveness Index
Source: América Economía magazine, 2010.
LAND OF OPPORTUNITIES
2012 Index of Economic Freedom
Chile is one of the
10 countries with a
high percentage of
economic freedom.
95
89,9
90
87,5
85
83,1
82,1
81,1
79,9
80
78,3
Economies
(7th
among 184 economies )
Source: The Heritage Foundation (http://www.heritage.org/index/)
76,3
USA
76,9
Ireland
Mauritius
Chile
Canada
Switzerland
65
Australia
Singapore
70
Hong Kong
75
New Zealand
77,0
LAND OF OPPORTUNITIES
New Zealand
1
Finland
3
Sweden
4
Singapore
5
Australia
8
Canada
10
Chile
22
United States
24
Uruguay
25
Costa Rica
50
Brazil
73
Peru
80
Colombia
80
Mexico
100
Argentina
100
Corruption Perceptions Index 2011
(22nd among 183 economies )
Source: Transparency International, 2011 (www.transparency.org)
Among the least corrupt
countries in the world with
high levels of
transparency.
LAND OF OPPORTUNITIES
Chile maintains "A +" by Standard & Poor's
2012
Chile's ratings are supported by the low level of
fiscal debt, political stability and a very flexible
and strong economy.
Projections:
A low level of fiscal debt, along with growing local
financial markets should support the stability and
growth of GDP in Chile, despite the growing
external uncertainty and potentially slow global
growth in coming years.
Source: www.standardandpoors.com
Investments
A PLACE TO INVEST IN
During the past 25
years Foreign Direct
Investment (FDI)
has played a key
role in Chile´s
economic growth
and development.
Maintaining its upward
trend, FDI has helped
to increase Chile’s
competitiveness, not
only through resources
and new markets but
also through
technological
development and
specialized know-how.
A PLACE TO INVEST IN
Successful track record of foreign investment
12.0
8.7
7.6
7.5
6.5
5.8
6.1
7.7
7.4
7.1
2009
2010
2011
5.9
5.8
5.0
3.8
1998
1999
2000
2001
2002
2003
2004
2005
Foreign Direct Investment (FDI) in Chile
2011, US$17.5 Bn
(1998-2011, 6.9% average as % of GDP)
2006
2007
2008
Source: Central Bank of
Chile (www.bcentral.cl)
A PLACE TO INVEST IN
Foreign Direct Investment in Chile: By sector.
Food
Industry
3%
Insurance
4%
Chemical
Industry
4%
Retail
6%
Other
13%
Communica
tions
9% Financial
Services
9%
Source: Foreign Investment Committee
Mining
34%
Electricity,
gas & water
18%
Materialized Foreign
Investment D.L. 600
By Sector 1974-2011
USD 82.021 million
CHILE – THAILAND FREE TRADE AGREEMENT
1000

Thailand is the first commercial partner
of Chile in ASEAN, showing the
excellent relationship between our
countries.
900
800


The FTA will allow Chilean products to
enter a 67 million consumer's market
with a high income per capita.
Chilean products such as, fish, seafood,
beef, pork and chicken meat, cheese,
condensed milk, fresh fruit, paper,
cardboard and fishmeal will enter to the
Thailand market with no tariffs.
Meanwhile, 90% of all exported
Thailand products will also enter Chile
at 0% tariff.
700
USD Millions

600
Exportaciones(Fob)
500
400
300
200
100
0
Importaciones(Cif)
Intercambio
Comercial.
WHAT TO EXPECT?

It is expected that the implementation of this agreement will also
create a platform for Thailand‘s expansion into Latin-America.

This FTA contributes also to enhance the Chilean business
relations with other Asian countries and ASEAN members (FTA
with Singapore, Brunei, Malaysia, Vietnam, South Korea, China,
Japan) thus bringing new opportunities for trade and to position
Chile in the Asian region.
•
The experience shows that FTAs stimulate trade between
countries:
 Longstanding friendship and cooperation and growing trade relationship
between Thailand and Chile
 Further liberalizing trade
 Strengthening of their economic partnership will
bring economic and social benefits
create new opportunities for employment
improve the living standards of their people
-
create new business opportunities
Conclusions

Crossing the threshold of development this decade remains an
ambitious goal, but plausible.

There are circumstances highly favorable external and internal
to this goal and for foreign and domestic investment.

Sustain the program is to lead to the mountain: requires vision,
will, skill and drive.

Come on, you can. It’s up to you.

Take the chance: THE MOMENT IS NOW. Let’s contribute,
together, to enlarge our people’s choices.
26
Conclusions

Crossing the threshold of development this decade remains an
ambitious goal, but plausible.

There are circumstances highly favorable external and internal
to this goal and for foreign and domestic investment.

Sustain the program is to lead to the mountain: requires vision,
will, skill and drive.

Come on, you can. It’s up to you.

Take the chance: THE MOMENT IS NOW. Let’s contribute,
together, to enlarge our people’s choices.
27