As the seventh largest economy in the Western Hemisphere, Chile enjoys levels of stability and prosperity that are among the highest in the region. Chile’s solid macroeconomic policy framework has smoothed adjustment to economic cycles, contributing to relatively low unemployment, resilient household consumption, and a stable financial sector. Due to its attractive investment climate, trade openness, and reputation for strong financial institutions and sound policies, Chile also boasts the strongest sovereign bond rating in Latin America. The country’s economy grew 4 percent in 2018, and the forecast for Chile’s economic growth in 2019 is in the range of 3 percent to 4 percent.
Chile has successfully attracted Foreign Direct Investment (FDI) despite its relatively small domestic market. The country’s market-oriented policies have created significant opportunities for foreign investors to participate in the country’s economic growth. Chile has a sound legal framework and there is general respect for private property rights. Sectors that attract significant FDI include mining, finance/insurance, chemical manufacturing, and wholesale trade. Mineral, hydrocarbon, and fossil fuel deposits within Chilean territory are restricted from foreign ownership, but companies may enter into contracts with the government to extract these resources. Corruption exists in Chile but on a much smaller scale than in most Latin American countries, ranking of 27 out of 180 countries in Transparency International’s 2018 Corruption Perceptions Index.
Although Chile is an attractive destination for foreign investment, challenges remain. Despite a general respect for intellectual property (IP) rights, Chile has not fully complied with its IP obligations set forth in the U.S.-Chile FTA. Environmental permitting processes, indigenous consultation requirements, and cumbersome court proceedings have made large project approvals increasingly time consuming and unpredictable, especially in cases with political sensitivities. The current administration has prioritized attracting foreign investment and is implementing measures to streamline the process, including the creation of an investment projects management office in the Ministry of Economy.
Table 1: Key Metrics and Rankings
|TI Corruption Perceptions Index||2018||27 of 180||http://www.transparency.org/research/cpi/overview|
|World Bank’s Doing Business Report||2019||56 of 190||http://www.doingbusiness.org/en/rankings|
|Global Innovation Index||2018||47 of 126||https://www.globalinnovationindex.org/analysis-indicator|
|U.S. FDI in partner country (USD million, stock positions)||2017||$25,884||http://www.bea.gov/international/factsheet/|
|World Bank GNI per capita (USD)||2017||$13,610||http://data.worldbank.org/indicator/NY.GNP.PCAP.CD|