Why do our Governments ignore Chile’s success?

April 26, 2005


I have
always wondered why Latin American Governments, including ours, always talk
about neoliberals policies that have hurt our countries, when the reality is
that what they call neoliberal is nothing more than a few attempts to improve
economic conditions via macroeconomic adjustments without really getting down
to changing the way these countries really work. But I have always wondered why
most of these Government officials simply ignore Chile, probably the most successful
country economically in the last decade.

I was
reminded of all this by Gerver Torres
article
in Sundays El Universal about that country. While the point of his
article was to ask if that was a socialist country, I would like to summarize
its highlights in terms of economic and social achievements.

To begin
with, Chile
has the lowest poverty levels of the region at 20%. Yes, still too high, but
the lowest in the region. Unemployment is 9% and salaries have increased in
real terms by 50% since 1990. Contrasts that with Venezuelas numbers under Chavez
alone, poverty has increased and salaries have been reduced in real terms.

Chile has on of the highest investment rates
in the region at 23% of GDP and is the one that attracts the highest investment
per capita in the whole region.

Inflation,
that perverse tax on the poor in most of the region including Venezuela, is only 2.2% in Chile. Interest
rates are clearly low, helping the economy grow and the people imprve their
standard of living.

Chile also
has a very good social security system, which not only provides pensions for
its inhabitants, but provides a lot of the funds needed for investment in that
country, without the need for the Government to borrow internationally.

In terms
of economic freedom Chile
occupies today the 11th. position in the world. This for a country
that had horrible numbers only thirty years ago.

What is
hard to understand is why, with an example like that, our Governments look for
failed policies and ideologies that have repeatedly been tried without any
cases of success anywhere in the world.

Meanwhile,
Chile
simply chugs along, becoming more like a developed country under the
indifferent eyes of the Government and Government officials in the region. Why?

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