Chile, officially the Republic of Chile (Spanish: ), is a country in South America occupying a long and narrow coastal strip wedged between the Andes mountains and the Pacific Ocean. It borders Peru to the north, Bolivia to the northeast, Argentina to the east, and the Drake Passage at the country's southernmost tip. It is one of only two countries in South America that does not have a border with Brazil. The Pacific forms the country's entire western border, with a coastline that stretches over 6,435 kilometres. Chilean territory extends to the Pacific Ocean which includes the overseas territories of Juan Fernández Islands, the Sala y Gómez islands, the Desventuradas Islands and Easter Island located in Polynesia. Chile claims of territory in Antarctica.
Chile's unusual, ribbon-like shape — long and on average wide — has given it a hugely varied climate, ranging from the world's driest desert — the Atacama — in the north, through a Mediterranean climate in the centre, to a snow-prone Alpine climate in the south, with glaciers, fjords and lakes. The northern Chilean desert contains great mineral wealth, principally copper. The relatively small central area dominates the country in terms of population and agricultural resources. This area also is the cultural and political center from which Chile expanded in the late 19th century, when it incorporated its northern and southern regions. Southern Chile is rich in forests and grazing lands and features a string of volcanoes and lakes. The southern coast is a labyrinth of fjords, inlets, canals, twisting peninsulas, and islands. The Andes Mountains are located on the eastern border.
Prior to the coming of the Spanish in the 16th century, northern Chile was under Inca rule while the indigenous Araucanians (also known as Mapuches) inhabited central and southern Chile. Although Chile declared its independence in 1810, decisive victory over the Spanish was not achieved until 1818. In the War of the Pacific (1879-83), Chile defeated Peru and Bolivia and won its present northern regions. It was not until the 1880s that the Araucanian Indians were completely subjugated. The country, which had been relatively free of the coups and arbitrary governments that blighted the South American continent, endured a 17 year military dictatorship (1973-1990), one of the bloodiest in 20th-century Latin America that left more than 3,000 people dead and missing.
Currently, Chile is one of South America's most stable and prosperous nations. Within the greater Latin American context it leads in terms of competitiveness, quality of life, political stability, globalization, economic freedom, low perception of corruption and comparatively low poverty rates. It also ranks high regionally in freedom of the press, human development and democratic development. Its status as the region's richest country in terms of gross domestic product per capita (at market prices) is however countered by its high level of income inequality, as measured by the Gini index.
About 10,000 years ago, migrating Native Americans settled in fertile valleys and along the coast of what is now Chile. The Incas briefly extended their empire into what is now northern Chile, but the area's barrenness prevented extensive settlement.
In 1520, while attempting to circumnavigate the earth, the Portuguese Ferdinand Magellan, discovered the southern passage now named after him, the Strait of Magellan. The next Europeans to reach Chile were Diego de Almagro and his band of Spanish conquistadors, who came from Peru in 1535 seeking gold. The Spanish encountered hundreds of thousands of Native Americans from various cultures in the area that modern Chile now occupies. These cultures supported themselves principally through slash-and-burn agriculture and hunting. The conquest of Chile began in earnest in 1540 and was carried out by Pedro de Valdivia, one of Francisco Pizarro's lieutenants, who founded the city of Santiago on February 12, 1541. Although the Spanish did not find the extensive gold and silver they sought, they recognized the agricultural potential of Chile's central valley, and Chile became part of the Viceroyalty of Peru.
Conquest of the land that is today called Chile took place only gradually, and the Europeans suffered repeated setbacks at the hands of the local population. A massive Mapuche insurrection that began in 1553 resulted in Valdivia's death and the destruction of many of the colony's principal settlements. Subsequent major insurrections took place in 1598 and in 1655. Each time the Mapuche and other native groups revolted, the southern border of the colony was driven northward. The abolition of slavery in 1683 defused tensions on the frontier between the colony and the Mapuche land to the south, and permitted increased trade between colonists and the Mapuche.
Cut off to the north by desert, to the south by the Mapuche (or Araucanians), to the east by the Andes Mountains, and to the west by the ocean, Chile became one of the most centralized, homogeneous colonies in Spanish America. Serving as a sort of frontier garrison, the colony found itself with the mission of forestalling encroachment by Araucanians and by Spain's European enemies, especially the British and the Dutch. In addition to the Araucanians, buccaneers and English adventurers menaced the colony, as was shown by Sir Francis Drake's 1578 raid on Valparaíso, the principal port. Because Chile hosted one of the largest standing armies in the Americas, it was one of the most militarized of the Spanish possessions, as well as a drain on the treasury of Peru.
The drive for independence from Spain was precipitated by usurpation of the Spanish throne by Napoleon's brother Joseph in 1808. A national junta in the name of Ferdinand—heir to the deposed king—was formed on September 18, 1810. The junta proclaimed Chile an autonomous republic within the Spanish monarchy. A movement for total independence soon won a wide following. Spanish attempts to re-impose arbitrary rule during what was called the "Reconquista" led to a prolonged struggle.
Intermittent warfare continued until 1817, when an army led by Bernardo O'Higgins, Chile's most renowned patriot, and José de San Martín, hero of the Argentine War of Independence, crossed the Andes into Chile and defeated the royalists. On February 12, 1818, Chile was proclaimed an independent republic under O'Higgins' leadership. The political revolt brought little social change, however, and 19th century Chilean society preserved the essence of the stratified colonial social structure, which was greatly influenced by family politics and the Roman Catholic Church. A strong presidency eventually emerged, but wealthy landowners remained extremely powerful.
Toward the end of the nineteenth century, the government in Santiago consolidated its position in the south by ruthlessly suppressing the Mapuche during the Occupation of Araucanía. In 1881, it signed a treaty with Argentina confirming Chilean sovereignty over the Strait of Magellan. As a result of the War of the Pacific with Peru and Bolivia (1879–83), Chile expanded its territory northward by almost one-third, eliminating Bolivia's access to the Pacific, and acquired valuable nitrate deposits, the exploitation of which led to an era of national affluence. The Chilean Civil War in 1891 brought about a redistribution of power between the President and Congress, and Chile established a parliamentary style democracy. However, the Civil War had also been a contest between those who favored the development of local industries and powerful Chilean banking interests, particularly the House of Edwards who had strong ties to foreign investors. Hence the Chilean economy partially degenerated into a system protecting the interests of a ruling oligarchy. By the 1920s, the emerging middle and working classes were powerful enough to elect a reformist president, Arturo Alessandri Palma, whose program was frustrated by a conservative congress. Alessandri Palma's reformist tendencies were partly tempered later by an admiration for some elements of Mussolini's Italian Corporate State. In the 1920s, Marxist groups with strong popular support arose.
A military coup led by General Luis Altamirano in 1924 set off a period of great political instability that lasted until 1932. The longest lasting of the ten governments between those years was that of General Carlos Ibáñez del Campo, who briefly held power in 1925 and then again between 1927 and 1931 in what was a de facto dictatorship, although not really comparable in harshness or corruption to the type of military dictatorship that has often bedeviled the rest of Latin America, and certainly not comparable to the violent and repressive regime of Augusto Pinochet decades later. By relinquishing power to a democratically elected successor, Ibáñez del Campo retained the respect of a large enough segment of the population to remain a viable politician for more than thirty years, in spite of the vague and shifting nature of his ideology. When constitutional rule was restored in 1932, a strong middle-class party, the Radicals, emerged. It became the key force in coalition governments for the next 20 years. During the period of Radical Party dominance (1932–52), the state increased its role in the economy. In 1952, voters returned Ibáñez del Campo, now reincarnated as a sort of Chilean Perón, to office for another six years. Jorge Alessandri succeeded Ibáñez del Campo in 1958, bringing Chilean conservatism back into power democratically for another term.
The 1964 presidential election of Christian Democrat Eduardo Frei Montalva by an absolute majority initiated a period of major reform. Under the slogan "Revolution in Liberty", the Frei administration embarked on far-reaching social and economic programs, particularly in education, housing, and agrarian reform, including rural unionization of agricultural workers. By 1967, however, Frei encountered increasing opposition from leftists, who charged that his reforms were inadequate, and from conservatives, who found them excessive. At the end of his term, Frei had accomplished many noteworthy objectives, but he had not fully achieved his party's ambitious goals.
In 1970, Senator Salvador Allende Gossens, a Marxist physician and member of Chile's Socialist Party, who headed the "Popular Unity" (UP or "Unidad Popular") coalition of the Socialist, Communist, Radical, and Social-Democratic Parties, along with dissident Christian Democrats, the Popular Unitary Action Movement (MAPU), and the Independent Popular Action, won a plurality of votes in a three-way contest. Despite pressure from the government of the United States, the Chilean Congress, keeping with tradition, conducted a runoff vote between the leading candidates, Allende and former president Jorge Alessandri and chose Allende by a vote of 153 to 35. Frei refused to form an alliance with Alessandri to oppose Allende, on the grounds that the Christian Democrats were a workers party and could not make common cause with the oligarchs.
Allende's program included advancement of workers' interests; a thoroughgoing implementation of agrarian reform; the reorganization of the national economy into socialized, mixed, and private sectors; a foreign policy of "international solidarity" and national independence; and a new institutional order (the "people's state" or "poder popular"), including the institution of a unicameral congress. The Popular Unity platform also called for nationalization of foreign (U.S.) ownership of Chile's major copper mines.
An economic depression that began in 1967 peaked in 1970, exacerbated by capital flight, plummeting private investment, and withdrawal of bank deposits by those opposed to Allende's socialist program. Production fell and unemployment rose. Allende adopted measures including price freezes, wage increases, and tax reforms, which had the effect of increasing consumer spending and redistributing income downward. Joint public-private public works projects helped reduce unemployment. Much of the banking sector was nationalized. Many enterprises within the copper, coal, iron, nitrate, and steel industries were expropriated, nationalized, or subjected to state intervention. Industrial output increased sharply and unemployment fell during the Allende administration's first year.
Other reforms undertaken during the early Allende period included redistribution of millions of hectares of land to landless agricultural workers as part of the agrarian reform program, giving the armed forces an overdue pay increase, and providing free milk to children. The Indian Peoples Development Corporation and the Mapuche Vocational Institute were founded to address the needs of Chile's indigenous population.
The nationalization of U.S. and other foreign-owned companies led to increased tensions with the United States. The Nixon administration brought international financial pressure to bear in order to restrict economic credit to Chile. Simultaneously, the CIA funded opposition media, politicians, and organizations, helping to accelerate a campaign of domestic destabilization. By 1972, the economic progress of Allende's first year had been reversed and the economy was in crisis. Political polarization increased, and large mobilizations of both pro- and anti-government groups became frequent, often leading to clashes.
By early 1973, inflation was out of control. The crippled economy was further battered by prolonged and sometimes simultaneous strikes by physicians, teachers, students, truck owners, copper workers, and the small business class. A military coup overthrew Allende on September 11, 1973. As the armed forces bombarded the presidential palace (Palacio de La Moneda), Allende reportedly committed suicide. A military government, led by General Augusto Pinochet Ugarte, took over control of the country. The first years of the regime were marked by serious human rights violations. On October 1973, at least 72 people were murdered by the Caravan of Death. At least a thousand people were executed during the first six months of Pinochet in office, and at least two thousand more were killed during the next sixteen years, as reported by the Rettig Report. Some 30,000 were forced to flee the country, and tens of thousands of people were detained and tortured, as investigated by the 2004 Valech Commission. A new Constitution was approved by a highly irregular and undemocratic plebiscite characterized by the absence of registration lists, on September 11, 1980, and General Pinochet became President of the Republic for an 8-year term.
In the late 1980s, the regime gradually permitted greater freedom of assembly, speech, and association, to include trade union and limited political activity. The right-wing military government pursued free market economic policies. During Pinochet's nearly 17 years in power, Chile moved away from state involvement, toward a largely free market economy that saw an increase in domestic and foreign private investment, although the copper industry and other important mineral resources were not returned to foreign ownership. In a plebiscite on October 5, 1988, General Pinochet was denied a second 8-year term as president (56% against 44%). Chileans elected a new president and the majority of members of a two-chamber congress on December 14, 1989. Christian Democrat Patricio Aylwin, the candidate of a coalition of 17 political parties called the Concertación, received an absolute majority of votes (55%). President Aylwin served from 1990 to 1994, in what was considered a transition period.
In December 1993, Christian Democrat Eduardo Frei Ruiz-Tagle, the son of previous president Eduardo Frei Montalva, led the Concertación coalition to victory with an absolute majority of votes (58%). Frei Ruiz-Tagle was succeeded in 2000 by Socialist Ricardo Lagos, who won the presidency in an unprecedented runoff election against Joaquín Lavín of the rightist Alliance for Chile. In January 2006 Chileans elected their first woman president, Michelle Bachelet Jeria, of the Socialist Party. She was sworn in on March 11, 2006, extending the Concertación coalition governance for another four years.
Chile's Constitution was approved in a highly irregular national plebiscite in September 1980, under the military government of Augusto Pinochet. It entered into force in March 1981. After Pinochet's defeat in the 1988 plebiscite, the Constitution was amended to ease provisions for future amendments to the Constitution. In September 2005, President Ricardo Lagos signed into law several constitutional amendments passed by Congress. These include eliminating the positions of appointed senators and senators for life, granting the President authority to remove the commanders-in-chief of the armed forces, and reducing the presidential term from six to four years.
Chileans voted in the first round of presidential elections on December 11, 2005. None of the four presidential candidates won more than 50% of the vote. As a result, the top two vote-getters—center-left Concertación coalition's Michelle Bachelet and center-right Alianza coalition's Sebastián Piñera—competed in a run-off election on January 15, 2006, which Michelle Bachelet won. She was sworn in on March 11, 2006. This was Chile's fourth presidential election since the end of the Pinochet era. All four have been judged free and fair. The President is constitutionally barred from serving consecutive terms.
Chile's bicameral Congress has a 38-seat Senate and a 120-member Chamber of Deputies. Senators serve for 8 years with staggered terms, while Deputies are elected every 4 years. The current Senate has a 20-18 split in favor of pro-government Senators. The last congressional elections were held in December 11, 2005, concurrently with the presidential election. The current lower house—the Chamber of Deputies—contains 63 members of the governing center-left coalition and 57 from the center-right opposition. The Congress is located in the port city of Valparaíso, about 140 kilometers (84 mi.) west of the capital, Santiago.
Chile's congressional elections are governed by a binomial system that rewards large representations. Therefore, there are only two Senate and two Deputy seats apportioned to each electoral district, parties are forced to form wide coalitions and, historically, the two largest coalitions (Concertación and Alianza) split most of the seats in a district. Only if the leading coalition ticket out-polls the second-place coalition by a margin of more than 2-to-1 does the winning coalition gain both seats. In the 2001 congressional elections, the conservative Independent Democratic Union surpassed the Christian Democrats for the first time to become the largest party in the lower house. In 2005, both leading parties, the Christian Democrats and the UDI lost representation in favor of their respective allies Socialist Party (which became the biggest party in the Concertación block) and National Renewal in the right-wing alliance. The Communist Party again failed to gain any seats in the election. (See Chilean parliamentary election, 2005.)
Chile's judiciary is independent and includes a court of appeal, a system of military courts, a constitutional tribunal, and the Supreme Court. In June 2005, Chile completed a nation-wide overhaul of its criminal justice system. The reform has replaced inquisitorial proceedings with an adversarial system more similar to that of the United States.
Chile is divided into 15 regions, each of which is headed by an intendant appointed by the President. Every region is further divided into provinces, with a provincial governor also appointed by the President. Finally each province is divided into communes which are administered by municipalities, each with its own mayor and councilmen elected by their inhabitants for four years.
Each region is designated by a name and a Roman numeral, assigned from north to south. The only exception is the region housing the nation's capital, which is designated RM, that stands for Región Metropolitana (Metropolitan Region).
A long and narrow coastal Southern Cone country on the west side of the Andes Mountains, Chile stretches over 4,630 kilometers (2,880 mi) north to south, but only 430 kilometers (265 mi) at its widest point east to west. This encompasses a remarkable variety of landscapes.
The northern Atacama Desert contains great mineral wealth, primarily copper and nitrates. The relatively small Central Valley, which includes Santiago, dominates the country in terms of population and agricultural resources. This area also is the historical center from which Chile expanded in the late nineteenth century, when it integrated the northern and southern regions. Southern Chile is rich in forests, grazing lands, and features a string of volcanoes and lakes. The southern coast is a labyrinth of fjords, inlets, canals, twisting peninsulas, and islands. The Andes Mountains are located on the eastern border. Chile is the longest (N-S) country in the world (over ), and also claims of Antarctica as part of its territory. However, this latter claim is suspended under the terms of the Antarctic Treaty, of which Chile is signatory.
Chile controls Easter Island and Sala y Gómez Island, the easternmost islands of Polynesia, which it incorporated to its territory in 1888, and Robinson Crusoe Island, more than from the mainland, in the Juan Fernández archipelago. Easter Island is nowadays a province of Chile. Also controlled but only temporally inhabited (by some local fishermen) are the small islands of Sala y Gómez, San Ambrosio and San Felix, these islands are notable because they extend Chile's claim to territorial waters out from its coast into the Pacific.
The climate of Chile comprises a wide range of weather conditions across a large geographic scale, extending across 38 degrees in latitude, making generalisations difficult. According to the Köppen system, Chile within its borders hosts at least seven major climatic subtypes, ranging from desert in the north, to alpine tundra and glaciers in the east and south east, humid subtropical in Easter Island, Oceanic in the south and mediterranean climate in central Chile. There are four seasons in most of the country: summer (December to February), autumn (March to May), winter (June to August), and spring (September to November).
After a decade of impressive growth rates, Chile began to experience a moderate economic downturn in 1999, brought on by unfavorable global economic conditions related to the Asian financial crisis, which began in 1997. The economy remained sluggish until 2003, when it began to show clear signs of recovery, achieving 4.0% real GDP growth. The Chilean economy finished 2004 with growth of 6.0%. Real GDP growth reached 5.7% in 2005 before falling back to 4.0% growth in 2006. Higher energy prices as well as lagging consumer demand were drags on the economy in 2006. Higher Chilean Government spending and favorable external conditions (including record copper prices for much of 2006) were not enough to offset these drags. For the first time in many years, Chilean economic growth in 2006 was among the weakest in Latin America. GDP expanded 5.1% in 2007.
Chile has pursued generally sound economic policies for nearly three decades. The 1973-90 military government sold many state-owned companies, and the three democratic governments since 1990 have continued privatization, though at a slower pace. The government's role in the economy is mostly limited to regulation, although the state continues to operate copper giant CODELCO and a few other enterprises (there is one state-run bank). Chile is strongly committed to free trade and has welcomed large amounts of foreign investment. Chile has signed free trade agreements (FTAs) with a whole network of countries, including an FTA with the United States, which was signed in 2003 and implemented in January 2004. Over the last several years, Chile has signed FTAs with the European Union, South Korea, New Zealand, Singapore, Brunei, China, and Japan. It reached a partial trade agreement with India in 2005 and began negotiations for a full-fledged FTA with India in 2006. Chile conducted trade negotiations in 2007 with Australia, Malaysia, and Thailand, as well as with China to expand an existing agreement beyond just trade in goods. Chile hopes to conclude FTA negotiations with Australia and the expanded agreement with China in 2008. Negotiations with Malaysia and Thailand are scheduled to continue throughout 2008. The members of the P4 (Chile, Singapore, New Zealand, and Brunei) also plan to conclude a chapter on finance and investment in 2008. The economic international organization the OECD agreed to invite Chile to be among four countries to open discussions in becoming an official member.
High domestic savings and investment rates helped propel Chile's economy to average growth rates of 8% during the 1990s. The privatized national pension system (AFP) has encouraged domestic investment and contributed to an estimated total domestic savings rate of approximately 21% of GDP. However, the AFP is not without its critics, who cite low participation rates (only 55% of the working population is covered), with groups such as the self-employed outside the system. There has also been criticism of the inefficiency and high costs due to a lack of competition among pension funds. Critics cite loopholes in the use of pension savings through lump sum withdraws for the purchase of a second home or payment of university fees as fundamental weaknesses of the AFP. The Bachelet administration plans substantial reform, but not an overhaul, of the AFP during the next several years.
Unemployment stubbornly hovered in the 9%-10% range after the start of the economic slowdown in 1999, above the 7% average for the 1990s. Unemployment finally dipped to 7.8% for 2006, and has kept falling in 2007, averaging 6.8% monthly (up to August). Wages have risen faster than inflation as a result of higher productivity, boosting national living standards. The percentage of Chileans with household incomes below the poverty line—defined as twice the cost of satisfying a person's minimal nutritional needs—fell from 45.1% in 1987 to 13.7% in 2006, according to government polls. Critics in Chile, however, argue true poverty figures are considerably higher than those officially published, due to the government's use of an outdated 1987 household budget poll, updated every 10 years. According to these critics, using the 1997 household budget data, the poverty rate rises to 29%. Using the relative yardstick favoured in many European countries, 27% of Chileans would be poor, according to Juan Carlos Feres of the ECLAC. Despite enjoying a comparatively higher GDP and more robust economy compared to most other countries of Latin America, Chile also suffers from one of the most uneven distributions of wealth in the world, ahead only of Brazil in the Latin American region and lagging behind even of most developing sub-Saharan African nations. Chile's top 10 richest percentile possesses 47 percent of the country's wealth. In relation to income distribution, some 6.2% of the country populates the upper economic income bracket, 15% the middle bracket, 21% the lower middle, 38% the lower bracket, and 20% the extreme poor.
Chile's independent Central Bank pursues an inflation target of between 2% and 4%. Inflation has not exceeded 5% since 1998. Chile registered an inflation rate of 3.2% in 2006. The Chilean peso's rapid appreciation against the U.S. dollar in recent years has helped dampen inflation. Most wage settlements and loans are indexed, reducing inflation's volatility. Under the compulsory private pension system, most formal sector employees pay 10% of their salaries into privately managed funds.
Total foreign direct investment (FDI) was only $3.4 billion in 2006, up 52% from a poor performance in 2005. However, 80% of FDI continues to go to only four sectors: electricity, gas, water and mining. Much of the jump in FDI in 2006 was also the result of acquisitions and mergers and has done little to create new employment in Chile. The Chilean Government has formed a Council on Innovation and Competition, which is tasked with identifying new sectors and industries to promote. It is hoped that this, combined with some tax reforms to encourage domestic and foreign investment in research and development, will bring in additional FDI and to new parts of the economy. As of 2006, Chile invested only 0.6% of its annual GDP in research and development (R&D). Even then, two-thirds of that was government spending. The fact that domestic and foreign companies spend almost nothing on R&D does not bode well for the Government of Chile's efforts to develop innovative, knowledge-based sectors. Beyond its general economic and political stability, the government also has encouraged the use of Chile as an "investment platform" for multinational corporations planning to operate in the region, but this will have limited value given the developing business climate in Chile itself. Chile's approach to foreign direct investment is codified in the country's Foreign Investment Law, which gives foreign investors the same treatment as Chileans. Registration is simple and transparent, and foreign investors are guaranteed access to the official foreign exchange market to repatriate their profits and capital.
2006 was a record year for Chilean trade. Total trade registered a 31% increase over 2005. During 2006, exports of goods and services totaled U.S. $58 billion, an increase of 41%. This figure was somewhat distorted by the skyrocketing price of copper. In 2006, copper exports reached a historical high of U.S. $33.3 billion. Imports totaled U.S. $35 billion, an increase of 17% compared to the previous year. Chile thus recorded a positive trade balance of U.S. $23 billion in 2006.
The main destinations for Chilean exports were the Americas (U.S. $39 billion), Asia (U.S. $27.8 billion) and Europe (U.S. $22.2 billion). Seen as shares of Chile's export markets, 42% of exports went to the Americas, 30% to Asia and 24% to Europe. Within Chile's diversified network of trade relationships, its most important partner remained the United States. Total trade with the U.S. was U.S. $14.8 billion in 2006. Since the U.S.-Chile Free Trade Agreement went into effect on January 1, 2004, U.S.-Chilean trade has increased by 154%. Internal Government of Chile figures show that even when factoring out inflation and the recent high price of copper, bilateral trade between the U.S. and Chile has grown over 60% since then.
Total trade with Europe also grew in 2006, expanding by 42%. The Netherlands and Italy were Chile's main European trading partners. Total trade with Asia also grew significantly at nearly 31%. Trade with Korea and Japan grew significantly, but China remained Chile's most important trading partner in Asia. Chile's total trade with China reached U.S. $8.8 billion in 2006, representing nearly 66% of the value of its trade relationship with Asia.
The growth of exports in 2006 was due mainly to a strong increase in sales to the United States, the Netherlands, and Japan. These three markets alone accounted for an additional U.S. $5.5 billion worth of Chilean exports. Chilean exports to the United States totaled U.S. $9.3 billion, representing a 37.7% increase compared to 2005 (U.S. $6.7 billion). Exports to the European Union were U.S. $15.4 billion, a 63.7% increased compared to 2005 (U.S. $9.4 billion). Exports to Asia increased from U.S. $15.2 billion in 2005 to U.S. $19.7 billion in 2006, a 29.9% increase.
During 2006, Chile imported U.S. $26 billion from the Americas, representing 54% of total imports, followed by Asia at 22%, and Europe at 16%. Mercosur members were the main suppliers of imports to Chile at U.S. $9.1 billion, followed by the United States with U.S. $5.5 billion and the European Union with U.S. $5.2 billion. From Asia, China was the most important exporter to Chile, with goods valued at U.S. $3.6 billion. Year-on-year growth in imports was especially strong from a number of countries—Ecuador (123.9%), Thailand (72.1%), Korea (52.6%), and China (36.9%).
Chile's overall trade profile has traditionally been dependent upon copper exports. The state-owned firm CODELCO is the world's largest copper-producing company, with recorded copper reserves of 200 years. Chile has made an effort to expand nontraditional exports. The most important non-mineral exports are forestry and wood products, fresh fruit and processed food, fishmeal and seafood, and wine.
Successive Chilean governments have actively pursued trade-liberalizing agreements. During the 1990s, Chile signed free trade agreements (FTA) with Canada, Mexico, and Central America. Chile also concluded preferential trade agreements with Venezuela, Colombia, and Ecuador. An association agreement with Mercosur—Argentina, Brazil, Paraguay, and Uruguay—went into effect in October 1996. Continuing its export-oriented development strategy, Chile completed landmark free trade agreements in 2002 with the European Union and South Korea. Chile, as a member of the Asia-Pacific Economic Cooperation (APEC) organization, is seeking to boost commercial ties to Asian markets. To that end, it has signed trade agreements in recent years with New Zealand, Singapore, Brunei, India, China, and most recently Japan. In 2007, Chile held trade negotiations with Australia, Thailand, Malaysia, and China. In 2008, Chile hopes to conclude an FTA with Australia, and finalize an expanded agreement (covering trade in services and investment) with China. The P4 (Chile, Singapore, New Zealand, and Brunei) also plan to expand ties through adding a finance and investment chapter to the existing P4 agreement. Chile's trade talks with Malaysia and Thailand are also scheduled to continue in 2008.
After two years of negotiations, the United States and Chile signed an agreement in June 2003 that will lead to completely duty-free bilateral trade within 12 years. The U.S.-Chile FTA entered into force January 1, 2004 following approval by the U.S. and Chilean congresses. The bilateral FTA has inaugurated greatly expanded U.S.-Chilean trade ties, with total bilateral trade jumping by 154% during the FTA's first three years.
Chile unilaterally lowered its across-the-board import tariff for all countries with which it does not have a trade agreement to 6% in 2003. Higher effective tariffs are charged only on imports of wheat, wheat flour, and sugar as a result of a system of import price bands. The price bands were ruled inconsistent with Chile's World Trade Organization (WTO) obligations in 2002, and the government has introduced legislation to modify them. Under the terms of the U.S.-Chile FTA, the price bands will be completely phased out for U.S. imports of wheat, wheat flour, and sugar within 12 years.
Chile is a strong proponent of pressing ahead on negotiations for a Free Trade Area of the Americas (FTAA) and is active in the WTO's Doha round of negotiations, principally through its membership in the G-20 and Cairns Group.
Chile's financial sector has grown quickly in recent years, with a banking reform law approved in 1997 that broadened the scope of permissible foreign activity for Chilean banks. The Chilean Government implemented a further liberalization of capital markets in 2001, and there is further pending legislation proposing further liberalization. Over the last ten years, Chileans have enjoyed the introduction of new financial tools such as home equity loans, currency futures and options, factoring, leasing, and debit cards. The introduction of these new products has also been accompanied by an increased use of traditional instruments such as loans and credit cards. Chile's private pension system, with assets worth roughly $70 billion at the end of 2006, has been an important source of investment capital for the capital market. Chile maintains one of the best credit ratings (S&P A+) in Latin America. There are three main ways for Chilean firms to raise funds abroad: bank loans, issuance of bonds, and the selling of stocks on U.S. markets through American Depository Receipts (ADRs). Nearly all of the funds raised through these means go to finance domestic Chilean investment. The government is required by law to run a fiscal surplus of at least 1% of GDP. In 2006, the Government of Chile ran a surplus of $11.3 billion, equal to almost 8% of GDP. The Government of Chile continues to pay down its foreign debt, with public debt only 3.9% of GDP at the end of 2006.
Chile's Armed Forces are subject to civilian control exercised by the President through the Minister of Defense. The President has the authority to remove the commanders-in-chief of the armed forces.
The commander in chief of the Chilean Army is General Oscar Izurieta Ferrer. The Chilean Army is 45,000 strong and is organized with an Army headquarters in Santiago, seven divisions throughout its territory, an Air Brigade in Rancagua, and a Special Forces Command in Colina. The Chilean Army is one of the most professional and technologically advanced armies in Latin America.
Admiral Rodolfo Codina directs the 23,000-person Navy, including 2,500 Marines. Of the fleet of 29 surface vessels, only eight are operational major combatants (frigates). Those ships are based in Valparaiso. The Navy operates its own aircraft for transport and patrol; there are no Navy fighter or bomber aircraft. The Navy also operates four submarines based in Talcahuano.
Gen. Ricardo Ortega Perrier heads a force of 12,500. Air assets are distributed among five air brigades headquartered in Iquique, Antofagasta, Santiago, Puerto Montt, and Punta Arenas. The Air Force also operates an airbase on King George Island, Antarctica. The FACH took delivery of the final 2 of 10 F-16s, all purchased from the U.S., in March 2007. Chile also took delivery in 2007 of a number of reconditioned Block 15 F-16s from the Netherlands, bringing to 18 the total of F-16s purchased from the Dutch.
After the military coup in September 1973, the Chilean national police (Carabineros) were incorporated into the Defense Ministry. With the return of democratic government, the police were placed under the operational control of the Interior Ministry but remained under the nominal control of the Defense Ministry. Gen. Eduardo Gordon is the head of the national police force of 40,964 men and women who are responsible for law enforcement, traffic management, narcotics suppression, border control, and counter-terrorism throughout Chile.
Since the early decades after independence, Chile has always had an active involvement in foreign affairs. In 1837 the country aggressively challenged the dominance of Peru's port of Callao for preeminence in the Pacific trade routes, defeating the short-lived alliance between Peru and Bolivia, the Peru-Bolivian Confederation (1836-39) in the War of the Confederation. The war dissolved the confederation while distributing power in the Pacific. A second international war, the War of the Pacific (1879-83), further increased Chile's regional role, while adding considerably to its territory.
During the nineteenth century, Chile's commercial ties were primarily with Britain, a country that had a decisive influence on the organization of the navy. The French influenced Chile's legal and educational systems and had a decisive impact on Chile, through the architecture of the capital in the boom years at the turn of the century. German influence came from the organization and training of the army by Prussians.
On June 26, 1945 Chile participated as a founding member of the United Nations being among 50 countries that signed the United Nations Charter in San Francisco. With the military coup of 1973, Chile became isolated politically as a result of widespread human rights abuses.
Since its return to democracy in 1990, Chile has been an active participant in the international political arena. Chile completed a 2-year non-permanent position on the UN Security Council in January 2005. Jose Miguel Insulza, a Chilean national, was elected Secretary General of the Organization of American States in May 2005. Chile is currently serving on the International Atomic Energy Agency (IAEA) Board of Governors, and the 2007-2008 chair of the board is Chile's ambassador to the IAEA, Milenko E. Skoknic. The country is an active member of the UN family of agencies and participates in UN peacekeeping activities. It is currently bidding for a seat on the UN Human Rights Council. Chile hosted the Defense Ministerial of the Americas in 2002 and the APEC summit and related meetings in 2004. It also hosted the Community of Democracies ministerial in April 2005 and the Ibero-American Summit in November 2007. An associate member of Mercosur and a full member of APEC, Chile has been an important actor on international economic issues and hemispheric free trade.
The Chilean Government has diplomatic relations with most countries. It settled its territorial disputes with Argentina during the 1990s. Chile and Bolivia severed diplomatic ties in 1978 over Bolivia's desire to reacquire territory it lost to Chile in 1879-83 War of the Pacific. The two countries maintain consular relations and are represented at the Consul General level.
Chile's 2002 census reported a population of 15,116,435. Its growth has been declining since 1990, due to a decreasing birth rate. By 2050 the population is expected to reach approximately 20.2 million. About 85% of the country's population lives in urban areas, with 40% living in Greater Santiago. The largest agglomerations according to the 2002 census are Greater Santiago with 5.4 million people, Greater Valparaíso with 804,000 and Greater Concepción with 666,000.
The bulk of the Chilean population is largely of an homogeneous mestizo stock, the product of miscegenation between colonial Spanish immigrants and Amerindian females (including the Atacameños, Diaguitas, Picunches, Araucanians or Mapuches, Huilliches, Pehuenches, and Cuncos). Chile's racial structure can be classified as 30% white, 5% Native American and 65% predominantly white mestizos. Whites are mostly Spanish in origin (mainly Castilians, Andalusians and Basques), and to a much lesser degree from Chile's various waves of immigrants (Italians, Germans, Jews, Yugoslavians, Arabs, etc.). The number of foreigners in the country was always small, totalling 600 in the whole colonial period. The 1960 census reported 105,000 foreigners (55% Spanish, German, Italians or Argentines, in that order). Small as they were, they rapidly mixed in with the local population. The black population was negligible, reaching a high of 25,000 during the colonial period; their racial contribution is less than 1%. The current Native American population is relatively small (see below) according to the censuses; their numbers are boosted when taking into consideration those that are similar physically and those associated to them either linguistically or socially.
|Those belonging to recognised indigenous communities (2002)|
The 1907 census reported 101,118 Araucanian Indians, or 3.1% of the total country population. Only those that practiced their native culture or spoke their native language were considered, irrespective of their "racial purity.
At the 1992 census, a total of 10.33% of the total Chilean population surveyed declared themselves indigenous, irrespective of whether they currently practiced a native culture or spoke a native language; almost one million people (9.61% of Chileans) declared themselves Mapuche, 0.50% declared to be Aymara, and 0.23% reported as Rapanui.
At the 2002 census, only indigenous people that still practiced a native culture or spoke a native language were surveyed: 4.6% of the population (692,192 people) fit that description; of these, 87.3% declared themselves Mapuche.
Relative to its overall population, Chile never experienced any large scale wave of immigrants. The total number of immigrants to Chile, both originating from other Latin American countries and all other (mostly European) countries, never surpassed 4% of its total population. This is not to say that immigrants were not important to the evolution of Chilean society and the Chilean nation. Basque families who migrated to Chile in the 18th century vitalized the economy and joined the old Castilian aristocracy to become the political elite that still dominates the country. Some non-Spanish European immigrants arrived in Chile — mainly to the northern and southern extremities of the country — during the 19th and 20th centuries, including English, Germans, Irish, Italians, French, Croatians and other former Yugoslavians. The prevalence of non-Hispanic European surnames among the governing body of modern Chile are a testament to their disproportionate contribution and influence on the country. Also worth mentioning are the Korean, and especially Palestinian communities, the latter being the largest colony of that people outside of the Arab world. The volume of immigrants from neighboring countries to Chile during those same periods was of a similar value.
After independence and during the republican era, English, Italian, and French merchants established themselves in the growing cities of Chile and incidentally joined the political or economic elites of the country. The official encouragement of German and Swiss colonization in the Lake District (Los Lagos Region) during the second half of the 19th century was exceptional. Small numbers of displaced eastern European Jews and Christian Syrians and Palestinians fleeing the Ottoman Empire arrived in Chile. Today they spearhead financial and small manufacturing operations. Croats have also immigrated to Chile and have formed a notable ethnic identity.
Currently, immigration from neighboring countries to Chile is greatest. Chile’s 2002 census counted 184,464 immigrants in the country, 26 percent of whom were from Argentina, 21 percent from Peru and 6 percent from Bolivia. Emigration of Chileans has decreased during the last decade: It is estimated that 857,781 Chileans live abroad, 50.1% of those being in Argentina, 13.3% in the United States, 8.8% in Brazil, 4.9% in Sweden, and around 2% in Australia, with the rest being scattered in smaller numbers across the globe.
Northern Chile was an important center of culture in the medieval and early modern Inca empire, while the central and southern regions were areas of Mapuche cultural activities. Through the colonial period following the conquest, and during the early Republican period, the country's culture was dominated by the Spanish. Other European influences, primarily English, French, and German began in the 19th century and have continued to this day. German migrants influenced the Bavarian style rural architecture and cuisine in the south of Chile in cities such as Valdivia and Puerto Montt.
Chile's most popular sport is association football (soccer). Chile has appeared in seven FIFA World Cups which includes hosting the 1962 FIFA World Cup where the national football team finished third. Other results achieved by the national football team include four finals at the Copa América, one silver and two bronze medals at the Pan American Games, a bronze medal at the 2000 Summer Olympics and two third places finishes in the FIFA under-17 and under-20 youth tournaments. The main soccer clubs are Colo-Colo, CF Universidad de Chile and CD Universidad Católica. Colo-Colo is the country's most successful club, winning 41 national tournaments and three international championships, including the coveted Copa Libertadores South American club tournament.
Tennis is the country's most successful sport. Its national team won the World Team Cup clay tournament twice in 2003-04, and played the Davis Cup final against Italy in 1976. At the 2004 Summer Olympics the country captured gold and bronze in men's singles and gold in men's doubles. Marcelo Ríos became the first Latin American man to reach the number one spot in the ATP singles rankings in 1998. Anita Lizana won the US Open in 1937, becoming the first women from Latin America to win a grand slam tournament. Luis Ayala was twice a runner-up at the French Open and both Ríos and Fernando González reached the Australian Open men's singles finals.
Rodeo is the country's national sport and is practiced in the more rural areas of the country. A sport similar to hockey called chueca was played by the Mapuche people during the Spanish conquest. Skiing and snowboarding are practiced at ski centers located in the Central Andes, while surfing is popular at some coastal towns.
Polo is professionally practiced within Chile and in 2008 Chile achieved top prize in the World Polo Championship a tournament where the country has earned both second and third places medals in previous editions.
Popular among Chileans is basketball a sport in which the Andean country has earned a bronze medal in the first men's FIBA World Championship held in 1950 and winning a second bronze medal when Chile hosted the 1959 FIBA World Championship. Chile hosted the first FIBA World Championship for Women in 1953 finishing the tournament with the silver medal.
Tourism in Chile has experienced sustained growth over the last few decades. In 2005, tourism grew by 13.6%, generating more than 4.5 billion dollars of which 1.5 billion is attributed to foreign tourists. According to the National Service of Tourism (Sernatur), 2 million people a year visit the country. Most of these visitors come from other countries in the American continent, mainly Argentina; followed by a growing amount from the United States, Europe, and Brazil with a growing amount of Asians from South Korea and PR China.
The main attractions for tourists are places of natural beauty situated in the extreme zones of the country: San Pedro de Atacama, in the north, is very popular with foreign tourists who arrive to admire the Incaic architecture and the altiplano lakes of the Valley of the Moon. In Putre, also in the North, there is the Chungará Lake, as well as the Parinacota and the Pomerape volcanoes, with altitudes of 6,348 m and 6,222 m, respectively. Throughout the central Andes there are many ski resorts of international repute, like Portillo and Valle Nevado. In the south, the main tourist sites are the Chiloé Archipelago, Patagonia, the San Rafael Lagoon, with its many glaciers, and the Towers of Paine national park. The central port city of Valparaíso, with its unique architecture, is also popular. Finally, Easter Island in the Pacific Ocean is probably the main Chilean tourist destination.
For locals, tourism is concentrated mostly in the summer (December to March), and mainly in the coastal beach towns. Arica, Iquique, Antofagasta, La Serena and Coquimbo are the main summer centres in the north, and Pucón on the shores of Lake Villarrica is the main one in the south. Due to its proximity to Santiago, the coast of the Valparaíso Region, with its many beach resorts, receives the largest amount of tourists. Viña del Mar, Valparaíso's northern affluent neighbor, is popular due to its beaches, casino, and its annual song festival, the most important musical event in Latin America.
In November 2005, the government launched a campaign under the brand "Chile: All Ways Surprising," intended to promote the country internationally for both business and tourism.
The Spanish spoken in Chile is distinctively accented and quite unlike that of neighbouring South American countries due to the dropping of final syllables and 's' sounds, and the soft pronunciation of some consonants. Accent varies only very slightly from north to south; more noticeable are the small differences in accent based on social class or whether one lives in the city or the country. The fact that the Chilean population essentially was formed in a relatively small section of the center of the country and then migrated in modest numbers to the north and south helps explain this relative lack of differentiation, which is now maintained by the national reach of radio and especially of television. The media diffuse and homogenize colloquial expressions.
English language learning and teaching is popular among students, academics and professionals, with some English words being absorbed and appropriated into everyday Spanish speech, although they might seem unrecognizable due to Non-native pronunciations of English.
There are several indigenous languages spoken in Chile: Mapudungun, Quechua, Rapa Nui, Huilliche, Aimará, Kawésqar and Yámana. After the Spanish invasion, Spanish took over as the lingua franca and the indigenous languages have become minority languages, with some now extinct or close to extinction.
The national flower is the copihue (Lapageria rosea, Chilean bellflower), which grows in the woods of southern Chile.
The coat of arms depicts the two national animals: the condor (Vultur gryphus, a very large bird that lives in the mountains) and the huemul (Hippocamelus bisulcus, an endangered white tail deer). It also has the legend Por la razón o la fuerza (By right or might or By reason or by force).
The flag of Chile consists of two equal horizontal bands of white (top) and red; there is a blue square the same height as the white band at the hoist-side end of the white band; the square bears a white five-pointed star in the center representing a guide to progress and honor; blue symbolizes the sky, white is for the snow-covered Andes, and red stands for the blood spilled to achieve independence.
According to the most recent census (2002), 70 percent of the population over age 14 identify as Roman Catholic and 15.1 percent as evangelical. In the census, the term "evangelical" referred to all non-Catholic Christian churches with the exception of the Orthodox Church (Greek, Persian, Serbian, Ukrainian, and Armenian), the Church of Jesus Christ of Latter-day Saints (Mormons), Seventh-day Adventists, and Jehovah's Witnesses. Approximately 90 percent of evangelicals are Pentecostal. Wesleyan, Lutheran, Reformed Evangelical, Presbyterian, Anglican, Episcopalian, Baptist, and Methodist churches are also present.
The Constitution provides for freedom of religion, and other laws and policies contribute to the generally free practice of religion. The law at all levels protects this right in full against abuse, either by governmental or private actors.
Church and state are officially separate. The 1999 law on religion prohibits religious discrimination; however, the Catholic Church enjoys a privileged status and occasionally receives preferential treatment. Government officials attend Catholic events and also major Protestant and Jewish ceremonies.
The Government observes Christmas, Good Friday, the Feast of the Virgin of Carmen, the Feast of Saints Peter and Paul, the Feast of the Assumption, All Saints' Day, and the Feast of the Immaculate Conception as national holidays.
|Publisher||Index||Overall ranking||Lat. Am. ranking||Countries surveyed||% rank.||Date|
|Freedom House||Freedom in the World 2008||Free||—||193||—||2008/01|
|SOPAC/UNEP||2005 Environmental Vulnerability Index||Vulnerable||—||235||—||2005/05|
|Fraser Institute||Economic Freedom of the World - 2008 Annual Report||6||1||141||4||2008/09|
|Heritage Foundation/The Wall Street Journal||2008 Index of Economic Freedom||8||1||157||5||2008/01|
|Fund for Peace||Failed States Index 2008||21 (157)||1 (20)||177||12||2008/07|
|Transparency International||2008 Corruption Perceptions Index||23||1||180||13||2008/09|
|The Economist||The Global Peace Index, 2008||19||1||140||14||2008/05|
|Forbes||Best Countries for Business, 2008||19||1||121||16||2008/06|
|World Health Organization||The world health report 2000 - Health system performance (overall)||33||2||191||17||2000/06|
|The Economist||The World in 2007 - Democracy index, 2006||30||3||167||18||2006/11|
|Yale University/Columbia University||2008 Environmental Performance Index||29||4||149||19||2008/01|
|World Economic Forum||The Global Competitiveness Report 2008-2009's Global Competitiveness Index||28||1||134||21||2008/10|
|World Bank||Logistics Performance Index||32||1||150||21||2007/11|
|World Bank||Doing Business - Ease of Doing Business, 2009||40||2||181||22||2008/09|
|AccountAbility||Responsible Competitiveness Index 2007||24||1||108||22||2007/07|
|UNDP||Human Development Report - Human Development Index 2007/2008||40||2||177||23||2007/11|
|Reporters without borders||Worldwide Press Freedom Index 2007||39||3||169||23||2007/10|
|International Living||Quality of Life Index 2008||48||8||194||25||2008/03|
|World Economic Forum||The Global Information Technology Report 2007-2008's Networked Readiness Index||34||1||127||27||2008/04|
|World Bank||Where is the Wealth of Nations? (2005) - Total wealth per capita||32||4||118||27||2005/09|
|KOF Swiss Economic Institute||KOF Index of Globalization 2008||34||1||122||28||2008/01|
|The Economist||The World in 2005 - Worldwide quality-of-life index, 2005||31||1||111||28||2004/11|
|Unesco||EFA Global Monitoring Report 2008 - EFA Development Index||37||3||129||29||2007/11|
|Yale University/Columbia University||2005 Environmental Sustainability Index||42||9||146||29||2005/01|
|Freedom House||Freedom of the Press 2007||66||2||195||34||2007/05|
|FedEx||The Power of Access - 2006 Access Index||32||1||75||43||2006/05|
|Brown University||Seventh Annual Global e-Government Study (2007)||85||8||198||43||2007/07|
|Economist Intelligence Unit/Business Software Alliance||IT industry competitiveness index 2008||30||1||66||45||2008/09|
|IMD International||World Competitiveness Yearbook 2008||26||1||55||47||2008/05|
|World Economic Forum||The Global Gender Gap Index 2007||86||16||128||67||2007/11|
|A.T. Kearney/Foreign Policy Magazine||Globalization Index 2007||43||2||72||78||2007/12|