The Chilean Model

Sebastian Piñera, president of Chile

Nobel laureate Mario Vargas Llosa was right when he characterized Chile as a not-yet developed country, but one that is not a developing country either.
North Americans, Europeans and other South Americans are typically in awe when visiting Chile’s capital Santiago for the first time. It’s a city where things mostly work, with First World standards both in the private and public sector.
While much of that is due to Chileans’ unique culture, credit also goes to the various governments the country has had in recent history and the overall policies they implemented.
For more than 20 years, Chile has been Latin America’s freest country. It has had the region’s freest economy, according to the index of economic freedom from the Heritage Foundation and Wall Street Journal. And it is one of only three countries in Latin America that shows full respect for political rights and civil liberties, according to Freedom House.
Chile has Latin America’s most competitive economy, according to the World Economic Forum. When it comes to taxes, labor environment and transport infrastructure, it also beats out its Latin American neighbors, according to benchmarking indexes from Latin Business Chronicle.
Chile is more transparent and has less corruption than the United States, according to German corruption watchdog Transparency International. It ranks as one of the three safest countries in Latin America, according to the Latin Security Index from FTI Consulting and Latin Business Chronicle, and is the regional leader when it comes to health and education, according to the 2010 Human Development Index from the United Nations Development Program (UNDP).
Chile’s current president, Sebastian Piñera, has vowed to make Chile even more impressive. His overall goal is to boost economic growth to an annual average rate of 6 percent so that Chile can reach a GDP per capita on par with the average of the member countries of the Organization for Economic Co-operation and Development (OECD) by 2018.
Piñera’s goal of boosting growth is part of a seven-point plan that includes the creation of one million new jobs, boosting the fight against crime and drug trafficking, eliminating extreme poverty and reducing the rates of inequality, improving the quality of health and education, modernizing the state and revitalizing democracy.
Although these goals are highly ambitious, Piñera may just be able to achieve them. Before becoming president in March 2010, he was a very successful businessman. Piñera built up the Visa and MasterCard businesses in Chile and had been involved in a broad range of industries, from real estate and media to sports and aviation. He was a major shareholder of airline LAN until he sold his stock after winning the presidential elections.
He showed his leadership skills from day one, when he had to address the reconstruction and recovery from the February 2010 earthquake that killed more than 500 people. Later that year, when an accident trapped 33 miners deep under the Atacama Desert, Piñera drew on his background as a successful businessman and implemented a plan that led to the successful rescue of all the miners in October. “The leadership of our president was essential,” maintained Enrique Cibie, former CEO of Masisa and a Latin Trade BRAVO Business Award winner.
While Piñera is not guaranteed similar success in achieving his ambitious goals, he has had some victories so far. Last year, Chile’s economy grew by 5.2 percent, the country’s best result since 2005. This year, the International Monetary Fund estimates growth of 6 percent.
Independent of Piñera’s record, Chile clearly is a role model for Latin America because it represents the benefits of having a “market democracy” — a country that combines political freedom with a free market.

Joachim Bamrud,
Executive Editor


Changes at Latin Trade Group
The Latin Trade Group, publisher of Latin Trade magazine, is strengthening its focus on live events as well as print and digital content. Jane Bussey, editorial director of Latin Trade, has been named editorial director responsible for the Latin Trade Symposium and BRAVO Business Awards.

Joachim Bamrud, editor-in-chief of the digital publication Latin Business Chronicle, has been named executive editor of the Latin Trade Group, overseeing editorial content and strategy for Latin Trade magazine (latintrade.com) and Latin Business Chronicle (latinbusinesschronicle.com).

Photo courtesy of Tiziana Fabi/AFP/Getty Images/Newscom

Joachim Bamrud
Joachim Bamrud is the executive editor of the Latin Trade Group and a former editor-in-chief of Latin Business Chronicle and Latin Trade magazine.
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