CHILE: HOW TO BECOME AN ECONOMIC STAR OF THE PACIFIC REGION?

Abstract

Chile is the state actor that became the regional power to be reckoned with despite a relatively small population and tense geopolitical relations with three neighbours – Argentina, Peru, and Bolivia, – while the pecularities of the national topography make the task of economic development considerably harder. Moreover, at the first sight, the dictatorship of Augusto Pinochet with its notorious repressions hardly could lure foreign investors. The article explains which commodities and services helped the country to reach one of the highest per capita levels in South America

The authors focus on the specific features of Chile’s geopolitical location by highlighting key points of its political and economic interactions with Argentina, Bolivia, and Peru, and also identify important segments of the state’s tourism business which turn it into a significant point of cultural and tourist development in the Latin American region. In this vein, the importance of cooperation between Chile and other states in the region in the field of air transportation is emphasized, since this collaboration allows them to actually dominate the airspace and establish numerous tourist and cargo transportations.

The importance of mining which allows Chile establishing cooperation with other regional actors in this sector is emphasized. In addition, the authors highlight the sphere of agriculture where Chilean farmers emphasize fishing, fruit growing and wine production, as well as the subsequent export of these goods abroad due to the small consumption capacity of the domestic market.

Considering Chile’s foreign policy interactions with external partners, the authors stress the importance of cooperation with China and the US. These states are noted to have a significant influence on the development of the Chilean economy because they cooperate with it in all critically important sectors. However, the uncontrolled growth of Chinese import flows and the excessive presence of Chinese multinational corporations in the territory of Chile cause certain concerns both in Chile and on the part of the United States.

Nevertheless, the authors conclude that the state’s balanced economic policy in the region allowed Chile to gain a worthy place in the economic structure of Latin American trade and increase the pace of its own development.