The U.S. – Chile Partnership Presentation Kit The U.S. – Chile Partnership Presentation Kit AmCham Chile Presentation Kit September, 2009 www.amchamchile.cl
Presentation Kit Overview 1. Chile Geography & Demographics 2. Chilean Political & Economic System 3. U.S. – Chile Trade 4. Investing in Chile 5. Chile Rankings AmCham Chile Presentation Kit August 2011 2
Presentation Kit Overview 1. Chile Geography & Demographics 2. Chilean Political & Economic System 3. U.S. – Chile Trade 4. Investing in Chile 5. Chile Rankings AmCham Chile Presentation Kit August 2011 3
Geography of Chile Chile is a country on 3 continents: 1) Continental Chile (South America) 2) Chilean Antarctica 3) Easter Island (Oceania) Continental Chile is divided into four main geographical regions: 1) Northern Atacama Desert 2) Fertile Central Valley 3) Lakes Region 4) Islands and Fjords Total Area: 469,756 sq. miles 756,950 sq. km Capital: Santiago – Ranked 2nd out of 140 Latin American cities in the Economist Intelligence Unit´s 2009 Liveability Survey. AmCham Chile Presentation Kit August 2011 4
Northern Chile AmCham Chile Presentation Kit August 2011 5
Central Valley AmCham Chile Presentation Kit August 2011 6
Lakes Region AmCham Chile Presentation Kit August 2011 7
Southern Chile: Fjords AmCham Chile Presentation Kit August 2011 8
Demographics • Population: 16.889 million (July 2011 est.) • Labor Force: 7.6 million (2010 est.) • Infant Mortality Rate: 7.34/1000 (2011 est.) • Language: Spanish • Religion: - Catholic 70% - Evangelical or other Christian 15% - None 8% - Other 5% Sources: CIA World Factbook (www.cia.gov) AmCham Chile Presentation Kit August 2011 9
2010 UN Human Development Index The United Nations Human Development Index 1 Norway synthesizes four primary development statistics, 4 USA which measure health, education, and income. 26 UK Some of the values for Chile are: 45 Chile 46 Argentina • Life expectancy at birth: 78.8 years 54 Panama 56 Mexico • Adult literacy rate: 96.9% 63 Peru • Combined primary, secondary and tertiary 75 Venezuela education enrollment ratio: 82.5% 77 Ecuador 79 Colombia 89 China Source: United Nations Development Program (www.hdr.undp.org) AmCham Chile Presentation Kit August 2011 10
Presentation Kit Overview 1. Chile Geography & Demographics 2. Chilean Political & Economic System 3. U.S. – Chile Trade 4. Investing in Chile 5. Chile Rankings AmCham Chile Presentation Kit August 2011 11
Chile’s Political System A representative democracy, divided into three branches: Executive Judicial Legislative AmCham Chile Presentation Kit August 2011 12
Public Order and Safety in Chile 2009 2010 Variatio n Victimization Rate 37.5% 33% -12% Fear Rate- “High 17.8% 12.2% -32% Level” Fear Serious Offense 3641 3498 -3.9% Case Rate 2010 (per 100 thousand inhabitants) Drug Law Violation 40,655 49,406 +21.5% Arrests 2010 Source: Ministry of the Interior and Public Security (www.seguridadpublica.gov.cl) Fundación Paz Ciudadana (www.pazciudadana.cl) AmCham Chile Presentation Kit August 2011 13
Chile: A Strong Economy • Sustained long-term economic growth – resumed strongly in 2010, despite earthquake • High domestic savings rate • Political and institutional stability • Prudent economic policy • Solid banking system • Foreign capital concentrated in medium and long term investments • Most pro-market economy in Latin America AmCham Chile Presentation Kit August 2011 14
2010 GDP Per Capita at Purchasing Power Parity Purchasing Power Parity (PPP) 1 Qatar US$ 88.559 calculates GDP so that it takes 7 USA US$ 47.248 into account the relative cost of 27 Spain US$ 29.742 living and inflation rates of 51 Argentina US$ 15,854 countries, rather than using currency exchange rates which 56 Chile US$ 15.001 may distort the real differences 59 Mexico US$ 14.430 in income. Thus, PPP GDP 70 Venezuela US$ 11.829 provides a measure of relative 71 Brazil US$ 11.239 purchasing power of per capita GDPs. 83 Colombia US$ 9.566 85 Peru US$ 9.330 These 2010 values are IMF estimates. 93 Ecuador US$ 7.776 Source: International Monetary Fund (www.imf.org) AmCham Chile Presentation Kit August 2011 15
Poverty Reduction in Chile 45 39 40 33 35 28 30 23 22 25 % 20 19 20 15 14 15 10 5 0 1990 1992 1994 1996 1998 2000 2003 2006 2009 Poverty as % of Population Indigence as % of Population Chile considers an individual to be living in poverty if his or her income is below that needed to obtain basic necessities, and to be indigent if it is below that needed to obtain a minimal caloric intake level. In 2009, 3.7% of the population met this measure of indigence. Sources: Chile Ministry of Planning (www.mideplan.cl/casen/) AmCham Chile Presentation Kit August 2011 16
Chile GDP Year Over Year Growth by % 12 9,8 10 8 6,6 6,0 5,6 5,2 6 4,6 4,6 4,5 3,9 3,7 3,4 3,2 % 4 2,2 2 -0,8 0 -1,7 -2 -4 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011* * Año 2011 sólo 1 er trimestre. Source: Banco Central de Chile (www.bcentral.cl) AmCham Chile Presentation Kit August 2011 17
Chile Unemployment & Inflation 12 10,1 10,0 9,9 9,8 9,7 9,7 9,5 9,3 10 7,8 7,8 7,8 7,2 8 7,1 6,4 7,1 7,1 6 % 4 3,0 4,7 4,5 3,7 2 2,8 2,4 2,6 2,6 2,3 1,1 0 -1,4 -2 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 June 2011 Unemployment Inflation Source: Banco Central de Chile (www.bcentral.cl) *The data series use different methodologies over time and there is currently no official combination. AmCham Chile Presentation Kit August 2011 18
Chile National Budget Surplus & Deficit 8.000.000 6.000.000 4.000.000 CHP$ Million 2.000.000 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 -2.000.000 -4.000.000 -6.000.000 The 2006 Fiscal Responsibility Law mandates that Chile maintain a 0.5% of GDP long-term structural budget surplus. 2005-2008 yearly surpluses were applied to Sovereign Wealth savings funds. Source: Chile Ministry of Finance, Budget Directorate (www.dipres.cl) AmCham Chile Presentation Kit August 2011 19
Chilean Peso vs. US Dollar 801 691 635 689 Pesos to US$ (Yearly Average) 610 560 530 522 522 559 510 457 460 509 539 601 401 201 1 August 1, 2011 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Banco Central de Chile (www.bcentral.cl) AmCham Chile Presentation Kit August 2011 20
Unidad de Fomento (UF) • The Unidad de Fomento is a monetary Unit of Account. The UF was created in 1967 to help track the over-all cost of international loans, and was later extended to domestic bank loans, private financing, and other investments or contracts. • The exchange rate between the UF and the Chilean peso is constantly indexed to inflation so that the value of the UF remains constant. (UF value as of August 9, 2011: CLP $21, 960) • The UF has become the predominant measure for determining the cost of construction, values of housing, and any secured loan. • A similar currency unit, generally used for the payment of taxes, fines, or customs duties, is the Unidad Tributaria Mensual (UTM) – literally, monthly tax unit. (UTM value for August 2011: CLP $38,518) AmCham Chile Presentation Kit August 2011 21
Chilean Pension System • Implemented in 1980, it was the first comprehensive retirement and welfare system managed primarily by the private sector . • Workers’ pension accounts are managed by Administradoras de Fondos de Pensiones (AFPs), which receive a mandatory 10% of monthly pre-tax earnings. The self-employed may contribute voluntarily, and salaried workers can add additional contributions. • Upon a worker’s retirement, their AFP finances their pension, either through gradual withdrawals or the purchase of an annuity. • AFP funds may gain or lose value depending on market conditions, but 2008 reforms enhanced the government safety net for retirees outside the system, and for retirees whose fund payments fail to meet minimum income standards. AmCham Chile Presentation Kit August 2011 22
Chilean Labor Supply Chile balances strong protection for workers’ rights with market flexibility for management. • Chile receives an score of 18 on a scale of 0-100 (lower score = more favorable for business) in the World Bank ´ s Doing Business 2010 Rigidity of Employment Index, which measures difficulty of hiring, rigidity of hours and difficulty of redundancy. The Latin American average is 40 , and the OECD average is 26 . • According to the World Bank, the Cost of Redundancy in Chile is 52 weeks of salary. The Latin America average is 64 weeks of salary, and the OECD average is 27 weeks. • Chile has fully adopted all conventions of the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work. Source: World Bank: Group (www.doingbusiness.org), International Labour Organization (www.ilo.org) AmCham Chile Presentation Kit August 2011 23
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