The Economic Jaguar

"From the center of the Earth

Upon hearing the signal,

We, the metal Lazaruses rise to dance

We were asleep,
It was hard to wake up
When the Lord and Owner
summoned his minerals.

Halá Halá!
The metal Lazarus!

Fast or slow dance they
The metal bears:
The black butts, the red and white,
The saffron.

It goes...comes and goes!
The metal Lazarus!

Smelting at Chuquicamata Copper is a sudden fit,
Silver is maternal,
Iron is Pelayo;
And gold is Abderrahman.

The mineral people
Dance by a flashing blaze:
Lightning comes and goes
As in a tempest."
-Gabriela Mistral

It's hard to believe. Chile, a country which in 1973 was brought to revolution because of a dying economy, is today looked upon as a Latin American economic role model. With the help and guidance of "The Chicago Boys," a group of Chilean men trained in Economics in the United States in the late 1950's, Chile has managed quite a change in a very short time. While agriculture, fisheries, and tourism certain have played a vital role, mining has perhaps had the greatest impact:

Principal copper mines in operation
Mine	Location	Exploitation	1979 Production (Metric Tons)
Chuquicamata	II Region	Open Pit	507,200
El Teniente	VI Region	Underground	278,200
El Salvador	III Region	Underground	78,100
Andina	V Region	Underground	46,700
Mantos Blancos	II Region	Open Pit and Underground	35,700

Disputada	V Region and Metropolitan Region	Underground	20,900
Lo Aguirre	Metropolitan Region	Open Pit	17,000
Sagasca	I Region	Open Pit	14,000

Principal iron mines in operation
Mine	Location	Exploitation	1979 Production (MT's)
El Algorrobo	III Region	Open Pit	2,800,000
El Romeral	IV Region	Open Pit	3,550,000
Los Colorados	III Region	Open Pit	1,000,000

Nitrate plants in operation
Plant	Location	1979 Production (Metric Tons)
Plant	Location	Nitrate	Iodine	Sodium Sulfate
María Elena	II Region	180,000	900	70,000
Pedro de Valdivia	II Region	460,000	1,600	--

Principal coal mines in operation
Mine	Location	Exploitation	Production (Tons/Day)
Lota	VIII Region	Underground	1,500
Schwager	VIII Region	Underground	800
Colico	VIII Region	Underground	350
Leu	VIII Region	Underground	400
Trongol	VIII Region	Underground	250

Copper projects for the future or under development
Mine	Location	Probable Exploitation	Estimated production (MT's)
Los Bronces	Metropolitan Region	Open pit	240,000
Los Pelambres	IV Region	Open pit	150,000
Quebrada Blanca	I Region	Open pit	100,000
Andacollo	IV Region	Open pit	75,000
Cerro Colorado	I Region	Open pit	30,000
El Indio	IV Region	Open Pit and Underground	12,000

Chilean Pesos The Chilean monetary unit is the Peso. The current exchange rate between the Chilean peso and the US dollar is approximately 462 to 1 in this time, although it fluctuates on a regular basis. In Chile, many prices for more expensive services are actually quoted in dollars. I was told the reason for this is that the dollar is a much more stable benchmark.

The reasons for Chile's economic success are complex, but several key factors seem to be evident. These include:

Privatization of the Economy
Privatization of the Social Security System
A Free Trade Ethic
Sound Fiscal Management
Independent Monetary Policy, and
Political Stability

The chart below shows the significant growth in Chile's real Gross Domestic Product (GDP) over the past six years. While the percent has fluctuated, a real economic growth pattern has definitely emerged.

% Real Gross Domestic Product Growth 1991-1996

Another positive factor has been Chile's well-balanced exports to various regions of the world. This provides great stability in the fact of an ever-changing world market.

% Exports by Region

Chile's annual merchandise exports have also shown an impressive growth spurt over the last five years, climbing from $2.5 billion in 1992 to $4.1 billion in 1996. Inward foreign investment experienced an even larger gain, soaring from $981 million in 1991 to $4.5 billion in 1996.

As can be seen by the graph below, according to the percentage of annual increase in Chile's Consumer Price Index, the country is now enjoying greater price stability.

Consumer Price Index

Finally, the overall economic policies of the past years have achieved an impressive reduction in Chile's poverty rate.

Poverty Rate

Since the military takeover of 1973, Chile has experienced the extremes of transition. On the one hand, violence produced for Communists, Marxist, Socialists moderate left and extreme left's people. On the other, it cannot be denied that the policies of the Pinochet Goverment have brought Chile up from its financial disasters from 1964 until 1973, and set the country on a pedestal as a shining economic example of the potential of a developing nation. Nevertheless, one of the great unanswerable questions remains: Will the good fortune be lasting? Or is the current economic boom only a temporary respite from more problems and conflict?