Chile’s varied climate and topography explain the richness and diversity of its natural resources, which are distributed throughout the country: mineral deposits in the north and central zones. The forests of the center and south give the country its enormous timber potential. Chile’s central zone offers fertile soil for agriculture and ranching. And all along its extensive coastline, rich and varied fish populations abound.
Fishing and Aquaculture
Mining is the leading sector of the economy. The existence of vast ore deposits and reserves, along with a favorable legal framework for investment, offering stability, equality and legal protection to both domestic and international investors, has enable the country to attract large multinational mining companies.
Chile is a center for mining “mega-projects.” Large-scale mining operators are active in the country: from mine constructors and investors to service industries, such as company providing capital goods, engineering equipmentor high-technology software.
Chile also claims the highest rank on the overall Investment Attractiveness Index with a score of 94 points out of a possible 100. Chile’s ranking is a result of the country’s top score on the Mineral Potential Index (100) and high score on the Policy Potential Index (85). (Annual Survey of Mining Companies 2002/2003, The Fraser Institute, Canada, December 30, 2002)
Read the study at http://www.fraserinstitute.ca/shared/readmore.asp?sNav=nr&id=500
In agriculture Chile has been able to make the most of its comparative advantages: geographic location, soil conditions and climate. The opening of the Chilean economy has led to significant increases in total cultivated area, production volume, investment levels, technological development, workforce absorption, market extension and product diversification. Productivity has risen with the introduction of new technologies: agribusiness is highely developed and expanding rapidly.
During the past two decades, Chilean agriculture has enjoyed record growth in diversification, production and investments, while the value of its exports has tripled.
Forty-five percent of Chile’s territory is woodland; 13.4 million hectares are covered with native forests. The forestry industry operates chiefly on the basis of plantations. The original forests, rich in fine woods and composed of slow-growth species, require careful exploitation to prevent indiscriminate felling and the extinction of rare species.
Cellulose is the principal product: Chile is the world’s second-largest exporter. This is followed by wood chips and lumber in sheets and planks, while important secondary products include wood pulp, machined pieces for carpentry, newsprint, bathroom tissue, panels, veneers, furniture and toys.
With 4.500 kilometers of coastline, Chile is one of the world’s leading producers and exporters of fish and shellfish.
Factors such as the richness and purity of Chilean waters, along with temperature, acidity, currents, tides and rainfall all play a role in this success.
The main marine products for export are: salmon, trout, hake, cod, conger eel, grouper and albacore. In the category of mollusks and crustaceans, the main exports are: abalone, sea urchin, scallops, octopus, lobster, and several varieties of crab.
Fishing in Chile grew at more than 10% per year over the last decade,with fish meal as its most important product. Chile has one of the world’s five largest fishing industries, with 88% of total capture resulting from industrial fishing and the remaining 12% taken by small-scale activity.
During the 1990’s, fish farming has been consolidating as a result of rapid investment in this sector and the favorable conditions that exist for this activity, particularly in Region X. By mid-2001, Chile was the second largest salmon producer in the world after Norway.
In Chile, private enterprise is responsible for electric power generation, transmission and distribution, in keeping with the country’s free-market economic policy, while the State plays a subsidiary role as regulator and supervisor.
As of December 2001, Chile’s electric power sector consisted of a total of 26 generating companies, five transmission companies and 36 distribution firms, which between them meet aggregate national demand, which in 1999 amounted to 36,084 GWh.
Demand is supplied territorially by four interconnected grid systems. These are, from north to south: (i) the Interconnected System of the North (SING), which covers the territory between the cities of Arica (Region I) and Antofagasta (Region II) and accounts for 33% of installed capacity in the country; (ii) the Interconnected Central System (SIC), which extends from Taltal (Region II) to Chiloé (Region X) and has 66.2% of total capacity; (iii) the Aysén System (Region XI), which supplies electric power to Region XI and accounts for 0.2% of the country’s installed capacity; and (iv) the Magallanes system (Region XII), with 0.6% of total capacity.
The Interconnected System of the North (SING) is predominantly a thermal generation system with power plants fuelled by coal, oil and diesel. Since 1999, it has been using combined-cycle plants fired by natural gas. There are also two hydroelectric plants. Of total consumption, 90% is accounted for by large mining and industrial companies. The northern grid (SING) is operated by three distribution companies supplying a total of 218,553 customers.
The Interconnected Central System (SIC) is the country’s leading electric power provider, supplying 90% of the population. The system is largely hydrothermal 60.5% operates with hydroelectric plants and 39.5% with thermal (coal, oil, diesel) and combined- cycle plants based on natural gas. Power is transmitted along cables belonging to the generating companies, and on power lines belonging to the transmission companies. There are 31 distribution firms supplying a total of 3,658,049 customers.
Energy is an essential element for the country’s economic and social development. Over the last ten years, not only has the country’s growth rate risen, but rates of annual energy demand have also increased.
Chile does not possess a wide range of conventional energy resources (oil, hydroelectric power, nuclear, etc) and is therefore a net energy importer. Nonetheless, its special geographical characteristics provide great potential for hydroelectric power.
Chile’s Telecommunications Infrastructure: Ready for the net era (By Christian Nicolai, Undersecretary of Telecommunications)
In the 1990’s, investment in Chile’s telecommunications industry hit a record level. In the second half of the decade, average annual investment reached US$ 1 billion. During 2001, the amount was US$ 0.9 billion, a high value in a tough year for the ICT market world wide.
This has given Chile an important advantage over other Latin America countries.
A third of Chile’s telecom investment has gone into the the mobile telephony market. As a result, the country had 5.3 million mobile suscribers by December 2001, exceeding the country’s 3.6 million fixed telephone lines. That meant a penetration rate of 34.0% for mobile services and of 23.1% for fixed telephony, again putting Chile in a lead over other Latin America countries.
New fiber optic cable links has also improved Chile’s communications with the rest of the world. In less than a year, national bandwith jumped to 40 GBps, up from 2.5 GBps, and operating companies anticipate a further leap to 1.2 TBps in the near future. Due to this international broadband availability, Chile was ranked first among 65 countries, ahead of Argentina, Brazil, Mexico, Malaysia and Poland, by The Economist (November, 2001).
Internet-related services have shown strong growth that is in keeping with government policy.
From the beginning of his administration, President Ricardo Lagos has stressed the importance of the incorporation of new communications and information technologies. Commuted Internet connections increased 11 times.
Over the next few years, we anticipate that a significant portion of new investment in telecommunications will go to develop the Wireless Local Loop telephony system. This will help to create virtually universal access to basic telephony services and IP supported services.
The advantages of WLL include deployment speed, lower costs in areas where underground pipes are highly congested and broadband availability in places where the terrain is rugged. Other broadband wireless technologies, like Local Multipoint Distribution Services (LMDS) may also be used by businesses to implement corporate networks.
Information and communications technologies (ICTs) offer important benefits both to individuals and businesses, but the government is aware of the risk of a digital divide that could deepen social differences if some sectors of society lag behind in the adoption of these new technologies. Similarly, there is the risk of a global divide if developing countries fail to incorporate new technology with the same speed and intensity as industrialized countries.
Conscious of the government’s duty to ensure that all sectors of society and all parts of the country have access to ICT’s the Undersecretariat of Telecommunications (SUBTEL) has promoted a law that allows the State to subsidize Infocenters that provide Internet access and other communications technologies in rural areas and for low-income urban communities. During year 2001, subsidies will be granted for this task.
In addition, we are also working on a number of digital solidarity initiatives. As part of this plan, we have invited leading public and private businesses to work together to establish community centers, using recycled computers equipped with Internet access.
SUBTEL favors regulation only when it is necessary to correct information asymmetries and to protect consumers rights. This general guideline is also the basis for our Internet regulation policy under which access providers are obliged to disclose the quality of their connections so that consumers can make informed choices and demand fulfillment of the contracted service.
It must be pointed out that, in our endeavour to ensure that ICTs contribute to our country’s progress, we have set out to advance and consolidate the development of fixed wireless telephony and digital television, as well as the unbundling of networks and to prepare a regulatory frame work for convergence.
At the same time, our policy aims to extend access to telecommunications to all Chile’s citizens, independently of where they live, to increase the availability of information technologies through community or individual solutions and to foster the development of secure infrastructure for communications network operations. This ongoing task is vital for Chile’s future within the framework of today’s Information Society.
Ready for E-Business
The 2001 E-Business Readiness Ranking of The Economist Intelligence Unit (EIU) measures the relative preparedness of the world’s main markets for the e-business era. In assessing e-business readiness country by country, the EIU weighs six categories: connectivity, general business environment, adoption of e-commerce by consumers and business, legal and regulatory environment, support to e-services, and social and cultural infrastructure.
In evaluating the business environment in 60 countries, the EIU screens 70 different indicators covering criteria such as the strength of the economy, political stability, regulatory climate, taxation policies and openness to trade and investment. “Connectivity” assessment takes into account not only the state of the existing telecommunications network but also other factors that affect Internet access, such as dial-up costs and literacy rates. A country’s average score across the two measures yields its e-business-readiness tally.
According to this research, Chile is in 29th place among 90 ranked nations. Within Emerging Economies, the country is ranked in 9th place after Singapore, Hong Kong, Taiwan, South Korea, Israel, Greece, Czech Republic and Hungary. Moreover, it is the top-ranked Latin American country, followed by Argentina (31st), Mexico (34th), Brazil (36th), Colombia (38th), Venezuela (47th), and Ecuador (50th).
Chile in the 2002 EIU’s E-Readiness rankings
|1st AMONG LATIN AMERICAN COUNTRIES|
|8th AMONG EMERGING ECONOMIES|
|28th AMONG 60 RANKED COUNTRIES|
Source: Economist Intelligence Unit (http://www.eiu.com/)