World Bank categorizes Chile as a high-income country. Aside from being the most prosperous country in South America, its economy is also the most stable. Chile ranks among top countries in several metrics such as per capita income, economic freedom, competitiveness, and low levels of corruption. The country was Latin America’s leader in per capita income on nominal GDP as of 2010 and became the first nation in South America to become a member of OECD. Between 2009 and 2010, Chile was world’s 30th most competitive nation according to the global competitiveness report. It was the leading in the whole of Latin America which was higher than the neighboring countries like Brazil which was the 56th, Mexico which was the 60th, and Argentina which was the 85th. The World Bank also ranked Chile in position 34 in the world in the ease of doing business. Some of the largest industries in Chile include the following.
Agriculture plays a significant role in the economy of Chile and contributed 4.9% of the country's GDP and employed approximately 13.6% of the labor force in the country as of 2007. Some of the major sectors in agriculture include fishing, logging, and forestry. Some of the agricultural produce from Chile include onions, oats, corn, wheat, pears, apples, grapes, garlic, asparagus, beef, timber, fish, wool, and poultry among others. Given the country's orientation that stretches from far north to the south the country experiences seven different climatic conditions that make the country to produce different agricultural commodities throughout the year. Most parts of the country are mountainous and limit the extent of agricultural practice and the arable land it approximately 2.62% of the total country’s land area. In the northern part of the country, cultivation is mainly dependent on irrigation while the central valley and in the southern part cultivation is replaced by silviculture, aquaculture, cattle, and sheep farming. Chile now ranks as the world’s 2nd largest producer of salmon, and by 2007 the country share of the world production of salmon stood at 22% compared to 1990s when it accounted for only 10%.
Mining in the country is one of the strongest pillars of the economy, and the Chilean government has been supporting foreign investment in the mining sector. Laws and regulations in the industry have been made to create a favorable environment for foreign investors. The country has huge deposits of copper and Chile is now known as the world capital of copper mining. The country accounts for a third of the world output of copper. Most of the mining in the country is found mostly in Norte Grande which span a large part of the Atacama Desert. Other than copper, Chile also mines other minerals like gold, silver, iron, coal, and molybdenum. The mining industry in Chile accounts for 6.7% of the GDP as of 1992. In the 1960s, copper export represented about 80% of the total exports and as of 1991 the mining exports, in general, accounted for 48% of all the exports in the country.
The service industry in Chile has been growing steadily in the past years, and this is because of the huge development in communication and information technology, increase in knowledge and specialized skills among the working population, and access to education. Chile has a strong foreign policy that recognizes the importance of service sector to the economy and has led to the signing of free trade area agreement with its neighboring countries. The service industry in the country includes maritime and tourism, consulting, and retail which includes shopping centers supermarkets and department stores. Other sub-sectors in the service industry include engineering, informatics, construction, and education among others.
The finance sector in Chile has been growing throughout the past decades as a result of the reforms in the banking sector which was adopted in 1997. The government also managed to liberalize capital markets in the country in 2001, and more pending legislation is expected to liberalize even farther from the financial sector in the country. In the past decade, only the citizens of Chile have enjoyed innovative financial tools, for instance, home equity loans, leasing, currency futures options, and debit cards among others. These new financial products have also led to an increase in the use of the traditional financial instruments like credit cards and loans. Chile private pension system has assets worth about $70 billion, and this has been an essential source of capital for investment in the country’s capital market. The 2009 global financial crisis, however, led to the loss of $21 billion of the pension system.
Tourism in the country has experienced substantial growth for several years, and in 2006 the country received approximately 2.25 million visitors while in 2007 the numbers grew to 2.5 million. The arrival of tourists by land was 55.3%, while those arriving by air was 40.5% and those arriving by sea were 4.2%. There are many natural landscapes in the country such as the Atacama Desert, Chilean Patagonia, and some of the oldest forests in the country. Some of the interesting places to visit include 48 natural reserves, 30 protected parks, and 15 natural monuments. From as early as 1990, tourism in the country has become an essential source of income for the country. In 2005, the sector grew by 13.6% and generated about $500 million which was about 1.33% of the country's national GDP. World Tourism Organization puts Chile as the 8th most visited country in the Americas as of 2010. In the same year, about 2.8 million tourists visited the country generating approximately $1.6 billion, and most of these tourists originated from countries in South American like Argentina, and recently most visitors are originating from Europe and particularly Germany.
In 2017, a total of 6.5 million tourists visited the country which was an increase of 13.3% from the previous year, and Argentina remained the most popular country of origin followed by Brazil. Tourists spend an average of 10 nights in the country, and the government is attributing the rise of tourism to the promotional campaigns and development of new products and tourist destinations. In 2017, world Travel Awards ranked Chile as the best for adventure travel in the world because of its natural and eco-tourism attractions in the country. In 2018, the country projects that tourism will continue to increase and they are expecting about 7 million visitors. The Lonely Planet listed Chile as number one destination to visit in 2018 and points out some of the beautiful places such as the city of Valparaiso, Patagonia to the south, and the northern part of the Atacama Desert.
About the Author
Benjamin Elisha Sawe holds a Bachelor of Arts in Economics and Statistics and an MBA in Strategic Management. He is a frequent World Atlas contributor.
Your MLA Citation
Your APA Citation
Your Chicago Citation
Your Harvard CitationRemember to italicize the title of this article in your Harvard citation.