208 CultureShock! Chile
THE ECONOMY
Chile is often referred to as the star of Latin America in
terms of its economic performance and Chileans do have
a right to be proud. In the wake of free-market reforms
that promoted non-traditional industries, foreign trade and
privatisation, Chile is one of the fastest growing economies in
Latin America. GDP growth has been steady and impressive
and the country currently enjoys a trade surplus. Foreign
debt is being paid down and remains low by Latin American
standards. Inflation has been reduced, hovering between 2 and
4 per cent, and the unemployment rate is relatively low.
Chile’s geographical location has always contributed to
the isolation of the country. This remoteness has greatly
affected its economy as well as other aspects of Chilean
life. Prior to the late 1970s, the market had been closed.
The country was dependent on one single export product—
copper. However, the change over the past decades has
been drastic. Chile now exports thousands of products,
which are gaining recognition the world over. And on
the flip side, Chileans now have access to a wider array
of consumer goods. The country is more affluent than
ever before. Unfortunately, while Chileans in general are
doing better, poverty still affects about 18 per cent of the
population and the gap between the ‘haves’ and the ‘have-
nots’ is widening. In fact, it is one of the most severe in all
of Latin America.