Why Chile?Ratings and Rankings

The Global Competitiveness Report 2009-2010

Chile leads the Latin America and Caribbean region in competitiveness at a still remarkable 30th place, although it has lost some ground in the last two years, with a four-position fall overall. The country’s successful early and timely market liberalization and trade opening, as well as consistent macroeconomic management have resulted in extremely high growth rates over the last two decades or so. Notably, thanks to the countercyclical policies followed in recent times of high commodity prices, Chile is now, more than any other economy in the region, able to stimulate the economy in the current slowdown with a comprehensive stimulus package. Besides sound macroeconomic fundamentals (19th), Chile’s performance in the GCI is especially boosted by efficient and transparent institutions (35th); highly developed infrastructure (30th); and well-functioning goods (26th), labor (41st), and financial markets (32nd) —the latter displaying the soundness of its banking system (4th) and the largest pension industry in the region. Completing the picture, Chile also boasts a sophisticated business sector (39th), effectively absorbing technology and knowledge coming from abroad, notably through FDI (21st for FDI and technology transfer). The main area requiring improvement for Chile going forward remains the unsatisfactory quality of its educational system, notwithstanding increasing investment in education and rising educational attainment rates. Despite a slight improvement in both cases, primary and higher education continue to be assessed fairly poorly at 96th and 45th ranks, respectively, pointing to the need for further upgrading if Chile is to catch up with best practice countries and establish an innovation-conducive environment.

Infrastructure Private Investment Attractiveness Index

Chile is the best performer in the region, both in terms of the attractiveness of its environment for private investment in infrastructure and development of its infrastructure network. Nevertheless, the indexes highlight a number of areas in which there is room for improvement.

Financial Development Report 2009

Chile comes in two ranks below Panama at 31st place this year. The high degree of overall stability in the country’s financial system (4th) surpasses the level present in any other Latin American country included in the FDI. Chile’s very stable banking system (3rd), fairly stable currency, and moderately low risk of a sovereign debt crisis all work to augment its financial stability. Financial markets represent the least-developed area of Chile’s financial system. This is particularly so in the case of the country’s bond market (40th). Commercial access to capital in the country (8th) is significant, while retail access is more constrained (28th), leading to a moderate level of overall financial access (25th).