Chile - Latin America's Star Performer

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Case Details:

Case Code : ECOA123
Case Length : 14 Pages
Period : 2003
Organization : -
Pub Date : 2003
Teaching Note :Not Available
Countries : Chile, South America
Industry : -

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Because we come from a country that is separated from the rest of the world by the reality of our geography, we embrace with enthusiasm and optimism the phenomenon of globalization that makes us all part of a shared time and space.

- Ricardo Lagos, President1


Chile had long been considered the most promising economy in Latin America. A country blessed with abundant mineral resources, Chile had the largest copper reserves2 and second largest lithium reserves3 in the world. With a long coastline, (Chile was 4300 km long and only 175 km wide) fishing was an important industry for Chile, which was one of the largest salmon producers in the world.

Since 1973, after a military coup and a serious economic crisis, Chile's economy had done well4. Indeed, it had become a case study in economic liberalization and structural reforms for developing countries. Belt tightening measures combined with removal of trade barriers had resulted in low inflation, a stable currency and steady growth through most of the 1990s.

Chile was one of the most open economies in the world, with exports and imports equivalent to about 65% of GDP. The country had one of the most independent Central Banks among emerging markets. Exchange controls had by and large been removed. During the period 1987-98, Chile recorded 11 consecutive years of budget surplus. Chile's ports were considered to be the most efficient in Latin America largely because of privatization. Chile had also led the way in the privatization of the telecom sector in Latin America...

Excerpts >>

1], 14th April 2001

2] (37% of world's copper reserves & 35.4% of international production), 8th June, 2003

3] Bolivia (56.6%), Chile (31.4%).



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