THE daring rescue of 33 miners against apparently impossible odds under the full glare of global media attention has helped Chile to capture the world’s imagination. The question for Sebastian Pinera yesterday was whether his country’s economic prospects are also bold and bright enough to make Chile attractive to European investors. The Chilean President’s long-planned visit to London presented him with the chance not only to meet David Cameron but to talk up his nation’s wider potential.
After just seven months in office, Pinera has already had to confront not only the mining accident but the aftermath of the colossal earthquake which struck Chile in February, when he was already president-elect, causing hundreds of deaths and damaging one house in every ten in the area affected. Despite these high-profile disasters, Chile’s fundamentals remain strong. Pinera inherited 18 years of steady economic growth, and an economy that escaped the worst of the global economic crisis. Pinera commented: “We had a very huge crisis in our banking sector in the 80s and we learnt our lesson. We were able to face the new crisis in a very solid way.”
Chile is also currently the beneficiary of high demand for commodities from China, with 45 per cent of Chilean exports in 2009 going to Asia. That is notably true for copper, of which Chile produces 34 per cent of global output. In 2009, Chile’s GDP was $164.615bn (£103.531bn) and GDP grew by 6.5 per cent in the second quarter of 2010.
But Chile is not a country content to rest on its laurels, and Pinera was keen to stress his ambitions for his four-year term in office, saying “We will double or triple investment in science and technology and promote entrepreneurship” and “By 2014, we plan to create 1m jobs”.
Pinera’s business credentials are impeccable, a self-made billionaire who founded Chile’s credit card giant, Bancard, and whose cabinet includes a foreign minister who was previously the director of Chile’s largest retail chain. He is also a Harvard-educated economist. Both facts help to explain his commitment to economic principle rather than the damaging populism beloved of other South American leaders. He stresses that: “Free trade is the best answer; protectionism would be the wrong way to follow.” One of the boldest plans on his domestic agenda is a voucher-based education programme that will allow students to attend the private school of their choice, an innovation still too radical for Britain’s conservatives.
Chile is a democratic beacon in its region, offering a rival Latin American vision that stresses free markets, open trade, optimism, technology and economic growth. Pinera speaks of creating “a society of opportunities”, a rhetoric of hope that aims unashamedly at making his country wealthy and strong. Investors may feel that a kind economic inheritance and a keen business mind give him every chance of succeeding.
SEBASTIAN PINERA | CV
Family: Married, with four children
Education: Undergraduate degree in engineering and
economics from the Pontifical Catholic University of Chile, graduating top of his class; masters and doctorate in
economics, Harvard University
Career: After gaining his doctorate, Pinera returned to Chile where he worked as an economics professor and a consultant to the World Bank. He also pursued a successful career as an entrepreneur, founding Bancard S.A. in 1976 and also investing in LAN airlines and a Chilean television company. He ran unsuccessfully as a presidential candidate in 2005.
CHILE | GLOBAL RANKINGS
• 10: Index of Economic Freedom 2010 (183 countries)
• 18: Enabling Trade Index 2010 (125 countries)
• 28: World Competitiveness Yearbook 2010 (58 countries)
• 25: Corruption Perception index 2009 (180 countries)
• 49: Ease of Doing Business 2010 (183 countries)
• 40: Networked Readiness Index 2009-2010 (133 countries)
• 27: IT Industry Competitiveness 2009 (66 countries)
• 44: Human Development Index 2009 (182 countries)
• 30: Global Competitiveness Index 2010 (139 countries)
Chile scores first in its region on all of the above rankings except for Ease of Doing Business 2010, which places it
second for Latin America behind Colombia