Introduction
Chiles is ranked first in South America and 56 in the world according to its Gross National Income of $14,670. Chile has been known to have a stable economy as a result of various transformation strategies the state made, influencing the economy. The country of Chile is also rich in minerals such as copper and Lithium. Copper contributes up to 20% of the income Chile acquires (Silva 2019). Chile is also involved in other income-generating strategies such as fish processing and the production of wine. In this paper, I will craft a portfolio on the economic state of Chile, state influences to its stable state, and give a sense of its future economic prospects.
A Portrait of Chile's Economy
Chile has an economic score on freedom of 74.5, therefore, becoming the number 18 most free in the index according to the year 2019. This score shows an increase of 0.2 points from the records of 2018. Chile relies on exported products to make up to a third of its GDP. The primary commodity exported from Chile is copper, and it makes up to 20% of the revenues earned by the government. The country's economic status has been increased by up to 5% annually from 2003 to 2013. This decrease has been linked to the global financial crisis. In 2017 Chile's growth was approximately reported to be 1.4%. This drop was a result of the decline in copper prices. In 2018, the growth rate slowed by 4%, and the GDP dropped by 1.8% in the first half of 2019. This drop is associated with some external conditions and a few delays in the state's reforms.
Factors Influencing Chile's Economic Success
The government of Chile since the year 1990 has consistently has aimed at achieving the country's initial respect for civil liberties and human rights that had been lost at the time of military regime. In the field of economy, the same has been applied with regard to the market role and the condition of the administration (Silva 2019). The state of Chile focused on modernizing and broadening the process of reform, ensuring it covers education and health sectors. The state also focused on maintaining minimum rates of inflation.
Trade Openness and the Flat Tariff Rate System
Chile is open to foreign trade, which favors its economic growth due to its small size and population. Chile implemented a process of reducing import tariffs, and in 1979 a reduction of 10% on the tax on each import at that time was enacted. The decrease in duty and the transparency that came with the flat system were essential to achieving the competitiveness that companies in Chile needed to emerge top in the world market. These low flat rates also created a platform for local markets to compete. them
Strong Private Sectors
Chile made some reformations towards building and reconstructing its private sector. The policies existing before this reformation undermined the capital of most companies in the private sector in Chile. This reformation was therefore aimed at destabilizing these companies. The state took this initiative because these countries would pay taxes once they were back to functioning. Therefore, besides recapitalizing, the state of Chile implemented a policy on income tax that only affected returns from the companies.
Mining
Mining plays a significant role in boosting the economy of Chile. Chile is rich in minerals such as copper, lithium. Copper is the principal trade and export commodity offered by Chile with the CODELCO, which controls most deposits being among the largest firms in Chile (Madariaga 2016). Private sectors have been allowed to take part in the exploiting of ores hence stiffening the production rate competition. Besides mining, Chile is also well known for the production of wine, fruits, and fish.
A Sense of Chile's Future Economic Prospects
The economy of Chile has been on the rise in the past several years despite the drop in 2009 and 2017 due to external factors and a reduction in the price for copper. Chile shows great signs in becoming a developed country in the next ten years. However, the population of Chile poses a challenge to the future of Chile's economy. The structure consists of an aging population, which is in contrast to the expectations of a developing country.
Conclusion
In conclusion, Chile is considered the first country in South America according to its Gross National Income and 56 in the world rank. Chile has a stable economy due to various factors, such as reformations and its wealthy land. Some of the changes that led to the rise of Chile include recapitalizing the private sector and lowering of flat tariff rates (Madariaga 2016). The area of Chile is rich in minerals such as copper and Lithium, besides wine and food production. In the next ten years, Chile shows excellent signs of developing fully and becoming an industrialized country. In conclusion, Chile has a GNI of $14,670, ranking first in South America due to its reformation strategies on the economy and its mineral fertile land.
References
Silva, E. B. (2019). The state and capital in Chile: Business elites, technocrats, and market economics. Routledge. DOI: https://doi.org/10.2307/2952144
Madariaga, A. (2016). Mechanisms of neoliberal resilience: comparing exchange rates and industrial policy in Chile and Estonia. Socio-Economic Review, 15(3), 637-660. DOI: 10.1093/ser/mww015
Cite this page
Research Paper on Chile's Economy. (2023, Mar 04). Retrieved from https://proessays.net/essays/research-paper-on-chiles-economy
If you are the original author of this essay and no longer wish to have it published on the ProEssays website, please click below to request its removal:
- Sixth Merger and Acquisition Wave After the Financial Crisis: Reasons and Effects
- Impacts of Globalization and Technology on the Performance of Dunkin Donutsre
- Essay Example on Business Leaders: Making Smart Decisions for Societal Benefits
- Is Capitalism a Force for Good or Evil in Modern Economies That Practice It Today?
- Essay Example on Average CEO Salary at 6-Member Corporation: EPS 5
- ROWE: Flexible Schedules for Increased Productivity - Essay Sample
- Free Essay on Globalization's Impact on Peasant Farmers: Economic and Social Disparities