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Educational
System
Chile
Brief History
Location West of Bolivia
West of Argentina
South of Peru
Bordering on Pacific
Ocean
Chile is a Pac Rim
country.
Capital is Santiago
Specific Facts
Population of over 16 million
Spanish is the primary spoken language
GDP is 49% industry and 44% services
Labor force is 7 million, primarily in services
With 8.3% unemployment
Significant Factors
18.2% of the population is below the poverty
line
Inflation rate (CPI) is 2.1%
21% of total GDP is accounted for in
investment
10.5 million out of 16 million have cell phones
6.7 million out of 16 million are online
Political Overview of 1970ies
 In 1970, Salvador Allende (Marxist) is elected
 Nixon orders CIA to intervene
 Chilean military officers plan a coup, Commander-
in-chief General Rene Scheider disagrees and gets
assassinated
 1973, Political deadlock, street demonstrations and
work stoppage.
 1/3 of US embassy on CIA payroll
 August 23, Allende promotes Pinochet to
Commander-in-Chief
 On September 11 Pinochet performs the coup and
seizes control of government until 1990
This time…
Chile used an open trade system
Low import tariffs
Low exchange rate controls
Low trade controls
Low restrictions on capital flight
Land Market Reforms
 While under Marxist rule, 50% of total land
was public
 Privatization began in 1974 and
encouraged small farms to be managed
by owners
 1978 ban on corporate ownership of land
lifted
 28% of land was returned to prior owners
 The remainder was auctioned
Debt Crisis
1982 the Debt Crisis hit Chile
Unemployment above 20%
Most banks went bankrupt
Chile in severe distress
1983 financial sector of market was
nationalized
Subsidizing and rescue of banks caused
Central Bank deficits, leading to increased
inflation
Response to Crisis
1985 Pinochet went with economists whom
advocated free markets and
macroeconomic disciplines
Adopted new policies
-reestablish growth
-reduce debt
-increase financial and manufacturing
sectors
Relief
 With these new policies, capital flight controls, the
help of the International Monetary Fund (IMF), and
the World Bank Chile was able to cope with and
end the Debt Crisis.
Reasons for Success of Chile
 Fiscal discipline
 Inflation control
 Strong financial and capital markets
 Excellent trade-export system
 Investment in institutions and education
Questions and Comments
FIN!
Thank you for your time! 

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Chile

  • 3. Location West of Bolivia West of Argentina South of Peru Bordering on Pacific Ocean Chile is a Pac Rim country. Capital is Santiago
  • 4. Specific Facts Population of over 16 million Spanish is the primary spoken language GDP is 49% industry and 44% services Labor force is 7 million, primarily in services With 8.3% unemployment
  • 5. Significant Factors 18.2% of the population is below the poverty line Inflation rate (CPI) is 2.1% 21% of total GDP is accounted for in investment 10.5 million out of 16 million have cell phones 6.7 million out of 16 million are online
  • 6. Political Overview of 1970ies  In 1970, Salvador Allende (Marxist) is elected  Nixon orders CIA to intervene  Chilean military officers plan a coup, Commander- in-chief General Rene Scheider disagrees and gets assassinated  1973, Political deadlock, street demonstrations and work stoppage.  1/3 of US embassy on CIA payroll  August 23, Allende promotes Pinochet to Commander-in-Chief  On September 11 Pinochet performs the coup and seizes control of government until 1990
  • 7. This time… Chile used an open trade system Low import tariffs Low exchange rate controls Low trade controls Low restrictions on capital flight
  • 8. Land Market Reforms  While under Marxist rule, 50% of total land was public  Privatization began in 1974 and encouraged small farms to be managed by owners  1978 ban on corporate ownership of land lifted  28% of land was returned to prior owners  The remainder was auctioned
  • 9. Debt Crisis 1982 the Debt Crisis hit Chile Unemployment above 20% Most banks went bankrupt Chile in severe distress 1983 financial sector of market was nationalized Subsidizing and rescue of banks caused Central Bank deficits, leading to increased inflation
  • 10. Response to Crisis 1985 Pinochet went with economists whom advocated free markets and macroeconomic disciplines Adopted new policies -reestablish growth -reduce debt -increase financial and manufacturing sectors
  • 11. Relief  With these new policies, capital flight controls, the help of the International Monetary Fund (IMF), and the World Bank Chile was able to cope with and end the Debt Crisis.
  • 12.
  • 13. Reasons for Success of Chile  Fiscal discipline  Inflation control  Strong financial and capital markets  Excellent trade-export system  Investment in institutions and education
  • 15. FIN! Thank you for your time! 