The U.S. Chile Partnership Presentation Kit AmCham Chile - - PowerPoint PPT Presentation

The U.S. – Chile Partnership Presentation Kit

AmCham Chile Presentation Kit September, 2009 www.amchamchile.cl

The U.S. – Chile Partnership Presentation Kit

AmCham Chile Presentation Kit August 2011

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Presentation Kit Overview

1. Chile Geography & Demographics 2. Chilean Political & Economic System 3. U.S. – Chile Trade 4. Investing in Chile 5. Chile Rankings

AmCham Chile Presentation Kit August 2011

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Presentation Kit Overview

1. Chile Geography & Demographics 2. Chilean Political & Economic System 3. U.S. – Chile Trade 4. Investing in Chile 5. Chile Rankings

AmCham Chile Presentation Kit August 2011

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Geography of Chile

Chile is a country on 3 continents:

1) Continental Chile (South America) 2) Chilean Antarctica 3) Easter Island (Oceania)

Continental Chile is divided into four main geographical regions:

1) Northern Atacama Desert 2) Fertile Central Valley 3) Lakes Region 4) Islands and Fjords

Total Area: 469,756 sq. miles 756,950 sq. km

Capital: Santiago – Ranked 2nd out of 140 Latin American cities in the Economist Intelligence Unit´s 2009 Liveability Survey.

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Northern Chile

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Central Valley

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Lakes Region

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Southern Chile: Fjords

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Demographics

• Population: 16.889 million (July 2011 est.)
• Labor Force: 7.6 million (2010 est.)
• Infant Mortality Rate: 7.34/1000 (2011 est.)
• Language: Spanish
• Religion:
• Catholic 70%
• Evangelical or other Christian 15%
• None 8%
• Other 5%

Sources: CIA World Factbook (www.cia.gov)

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2010 UN Human Development Index

1 Norway 4 USA 26 UK 45 Chile 46 Argentina 54 Panama 56 Mexico 63 Peru 75 Venezuela 77 Ecuador 79 Colombia 89 China

Source: United Nations Development Program (www.hdr.undp.org)

The United Nations Human Development Index synthesizes four primary development statistics, which measure health, education, and income. Some of the values for Chile are:

• Life expectancy at birth: 78.8 years
• Adult literacy rate: 96.9%
• Combined primary, secondary and tertiary

education enrollment ratio: 82.5%

AmCham Chile Presentation Kit August 2011

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Presentation Kit Overview

1. Chile Geography & Demographics 2. Chilean Political & Economic System 3. U.S. – Chile Trade 4. Investing in Chile 5. Chile Rankings

AmCham Chile Presentation Kit August 2011

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Chile’s Political System

A representative democracy, divided into three branches: Executive Legislative Judicial

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Public Order and Safety in Chile

+21.5% 49,406 40,655 Drug Law Violation Arrests 2010

• 3.9%

3498 3641 Serious Offense Case Rate 2010 (per 100

thousand inhabitants)

• 32%

12.2% 17.8% Fear Rate- “High Level” Fear

• 12%

33% 37.5% Victimization Rate Variatio n 2010 2009

Source: Ministry of the Interior and Public Security (www.seguridadpublica.gov.cl) Fundación Paz Ciudadana (www.pazciudadana.cl)

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Chile: A Strong Economy

• Sustained long-term economic growth – resumed

strongly in 2010, despite earthquake

• High domestic savings rate
• Political and institutional stability
• Prudent economic policy
• Solid banking system
• Foreign capital concentrated in medium and long term

investments

• Most pro-market economy in Latin America

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2010 GDP Per Capita

at Purchasing Power Parity

Source: International Monetary Fund (www.imf.org)

Purchasing Power Parity (PPP) calculates GDP so that it takes into account the relative cost of living and inflation rates of countries, rather than using currency exchange rates which may distort the real differences in income. Thus, PPP GDP provides a measure of relative purchasing power of per capita GDPs. These 2010 values are IMF estimates.

1 Qatar US$ 88.559 7 USA US$ 47.248 27 Spain US$ 29.742 51 Argentina US$ 15,854 56 Chile US$ 15.001 59 Mexico US$ 14.430 70 Venezuela US$ 11.829 71 Brazil US$ 11.239 83 Colombia US$ 9.566 85 Peru US$ 9.330 93 Ecuador US$ 7.776

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Poverty Reduction in Chile

39 33 28 23 22 20 19 14 15 5 10 15 20 25 30 35 40 45 1990 1992 1994 1996 1998 2000 2003 2006 2009

%

Poverty as % of Population Indigence as % of Population

Sources: Chile Ministry of Planning (www.mideplan.cl/casen/)

Chile considers an individual to be living in poverty if his or her income is below that needed to obtain basic necessities, and to be indigent if it is below that needed to obtain a minimal caloric intake level. In 2009, 3.7% of the population met this measure of indigence.

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Chile GDP Year Over Year Growth by %

* Año 2011 sólo 1er trimestre. Source: Banco Central de Chile (www.bcentral.cl)

4,5 3,4 2,2 6,0 5,6 4,6 4,6 9,8 3,7 3,9 3,2

• 0,8
• 1,7

6,6 5,2

• 4
• 2

2 4 6 8 10 12 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011*

%

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Chile Unemployment & Inflation

9,7 7,1 7,2 4,7 7,8 6,4 9,9 10,0 9,3 7,8 7,1 9,8 9,7 10,1 9,5 7,8 3,0

• 1,4

2,4 2,6 3,7 7,1 2,8 2,6 4,5 2,3 1,1

• 2

2 4 6 8 10 12 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 June 2011

%

Unemployment Inflation

Source: Banco Central de Chile (www.bcentral.cl) *The data series use different methodologies over time and there is currently no official combination.

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Chile National Budget Surplus & Deficit

• 6.000.000
• 4.000.000
• 2.000.000

2.000.000 4.000.000 6.000.000 8.000.000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

CHP$ Million

Source: Chile Ministry of Finance, Budget Directorate (www.dipres.cl)

The 2006 Fiscal Responsibility Law mandates that Chile maintain a 0.5% of GDP long-term structural budget surplus. 2005-2008 yearly surpluses were applied to Sovereign Wealth savings funds.

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Chilean Peso vs. US Dollar

460 509 539 635 689 610 560 530 522 522 559 510 457 691

1 201 401 601 801 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 August 1, 2011 Pesos to US$ (Yearly Average)

Source: Banco Central de Chile (www.bcentral.cl)

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Unidad de Fomento (UF)

• The Unidad de Fomento is a monetary Unit of Account. The

UF was created in 1967 to help track the over-all cost of international loans, and was later extended to domestic bank loans, private financing, and other investments or contracts.

• The exchange rate between the UF and the Chilean peso is

constantly indexed to inflation so that the value of the UF remains constant. (UF value as of August 9, 2011: CLP $21, 960)

• The UF has become the predominant measure for determining

the cost of construction, values of housing, and any secured loan.

• A similar currency unit, generally used for the payment of taxes,

fines, or customs duties, is the Unidad Tributaria Mensual (UTM) – literally, monthly tax unit. (UTM value for August 2011: CLP $38,518)

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Chilean Pension System

• Implemented in 1980, it was the first comprehensive retirement

and welfare system managed primarily by the private sector.

• Workers’ pension accounts are managed by Administradoras de

Fondos de Pensiones (AFPs), which receive a mandatory 10% of monthly pre-tax earnings. The self-employed may contribute voluntarily, and salaried workers can add additional contributions.

• Upon a worker’s retirement, their AFP finances their pension,

either through gradual withdrawals or the purchase of an annuity.

• AFP funds may gain or lose value depending on market conditions,

but 2008 reforms enhanced the government safety net for retirees outside the system, and for retirees whose fund payments fail to meet minimum income standards.

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Chilean Labor Supply

Chile balances strong protection for workers’ rights with market flexibility for management.

• Chile receives an score of 18 on a scale of 0-100 (lower score =

more favorable for business) in the World Bank´s Doing Business 2010 Rigidity of Employment Index, which measures difficulty of hiring, rigidity of hours and difficulty of redundancy. The Latin American average is 40, and the OECD average is 26.

• According to the World Bank, the Cost of Redundancy in Chile is

52 weeks of salary. The Latin America average is 64 weeks of salary, and the OECD average is 27 weeks.

• Chile has fully adopted all conventions of the International

Labour Organization’s Declaration on Fundamental Principles and Rights at Work.

Source: World Bank: Group (www.doingbusiness.org), International Labour Organization (www.ilo.org)

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Innovation & Entrepreneurship

Chile invests in its future by encouraging public and private business innovation and creativity.

• The InnovaChile program from the Chilean Economic Development

Agency (CORFO), which provides:

• Subsidies to support and encourage innovation in new and

existing companies

• Programs to enhance technical research and training in a wide

variety of sectors, including high-tech manufacturing, energy and environment, food production, telecom, and tourism

• The Innovation Forum (“Foro Innovación”)
• A nonprofit business-university partnership encouraging

innovation through high-impact public initiatives

• Many other nonprofit groups...like AmCham Chile

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Energy Production

• Public electricity production and transmission is 100% owned

and operated by the private sector, with the Chilean government offering cash incentives for new investment.

• Heavy reliance on renewable energy: 38% of electrical

production capacity comes from hydroelectrical sources, as of December 2008.

• Renewable Energy Act of 2008 mandates that 10% of all energy

sold by 2024 come from Nonconventional Renewable Energy (NCRE), like biomass, mini-hydro, geothermal, wind, and solar.

• Right to sell to the national power market is guaranteed for all

renewable energy projects, and limited-size NCRE projects are exempted from transmission tolls.

Source: Chile National Energy Comission (www.cne.cl)

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Chile Joins the OECD

• In January, 2010, Chile joined the Organization for

Economic Cooperation & Development – one of only 7 countries to join since 1973, and the first in South America.

• Recognition of the economic, financial, regulatory, and

environmental gains made by Chile over the past 15 years.

• Provides higher international prestige and lower perception
• f country risk, leading to greater international investment

and lower borrowing costs.

• Gives Chile an “equal voice” at the table with regard to

macroeconomic policymaking, and access to innovative new ideas on education, job creation, and many others.

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Presentation Kit Overview

1. Chile Geography & Demographics 2. Chilean Political & Economic System 3. U.S. – Chile Trade 4. Investing in Chile 5. Chile Rankings

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Trade Agreements

12 Free Trade Agreements Free Trade Agreements Under Negotiation or Pending Implementation (P.I.)

Source: Govt. of Chile General Directorate for International Economic Affairs (www.direcon.cl)

Chile has 21 trade agreements with 58 nations with 87% of World GDP

9 Other Trade Agreements

• United States
• China
• South Korea
• Mexico
• Panama
• Colombia
• Peru
• Turkey
• European Union (27 members)
• P4 (3 nations)
• Mercosur (4 full members)
• Cuba
• Ecuador
• Venezuela
• Australia
• European Free Trade Assn. (4 nations)
• Central America (4 nations)
• Canada
• Bolivia
• India
• Japan
• Vietnam (under negotiation)
• Malaysia (P.I.)
• Nicaragua (P.I.)

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U.S. – Chile Free Trade Agreement (FTA)

• Signed in 2003 and entered into force on January 1,

2004.

• Eliminated tariffs on 87 percent of bilateral trade

immediately, with 100% duty-free trade within a maximum of 12 years (2016).

• Includes committments by both countries on non-

tariff issues, such as intellectual property rights, services, investment, temporary entry of business/ technical workers, and telecommunications.

• Result: Bilateral trade tripled in the first five

years.

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• 4.000
• 2.000

2.000 4.000 6.000 8.000 10.000 12.000 14.000 16.000 18.000 20.000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

US$ Million

• 40%
• 20%

0% 20% 40% 60% 80% 100% 120% 140% 160% 180% 200%

Total Bilateral Trade Trade Balance with the U.S. % Change in Bilateral Trade From 1997

Bilateral Trade Chile-U.S. 1997-2010

FTA

Source: Govt. of Chile General Directorate for Export Promotion (www.prochile.cl)

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$7.945 $14.510 $15.688 $12.830 $15.789 $5.974 $18.733 $10.956 $ 0 $ 4.000 $ 8.000 $ 12.000 $ 16.000 $ 20.000 2003 2004 2005 2006 2007 2008 2009 2010

US$ Million

Exports to US Imports from US Total Bilateral Trade

Bilateral Trade Chile-U.S. 2003-2010

FTA

Source: Govt. of Chile General Directorate for Export Promotion (www.prochile.cl)

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2010 Chilean Export Destinations

Source: Lexis-Nexis (www.legalpublishing.cl)

Japan 11% Taiwan 3% Mexico 3% Holland 4% Italy 4% Brazil 6% USA 10% South Korea 6% Other 30% China 23%

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Top 10 Exports to the U.S.

2010

2010 Rank Description 2010 (FOB) US$ 2009 (FOB) US$ Percent Change 1 Copper 2.159.975.933 1.485.656.112 45% 2 Grapes and Raisins 489.347.670 501.943.583

• 3%

3 Fish 428.939.261 521.951.707

• 18%

4 Wine 243.009.363 241.580.361 1% 5 Gold 216.241.241 226.462.078

• 5%

6 Other Fresh Fruit and Nuts 212.223.067 135.462.798 57% 7 Cut Lumber 149.776.135 118.645.402 26% 8 Service Exports 137.968.872 150.039.918

• 8%

9 Fresh Stone Fruit (apricot, cherry, plum, peach, e 117.130.603 99.799.864 17% 10 Corn 111.839.715 92.483.255 21%

Source: Lexis-Nexis (www.legalpublishing.cl)

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Chilean Imports by Country

2010

Argentina 9% Brazil 9% South Korea 6% Japan 6% Mexico 4% Others 32% China 16% USA 18%

Source: Lexis-Nexis (www.legalpublishing.cl)

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Top 10 Imports From the U.S.

2009 vs 2010

Source: Lexis-Nexis (www.legalpublishing.cl)

2010 Rank Description 2010 (CIF) US$ 2009 (CIF) US$ Percent Change 1 Refined Oil 2.026.221.268 1.860.701.649 9% 2 Vehicles for Goods or Materials Transport 606.485.289 402.707.395 51% 3 Excavation and Earth-moving Machinery 378.431.905 202.062.504 87% 4 Passenger Vehicles 218.678.560 103.368.475 112% 5 Computers and Electronic Equipment 166.935.519 156.475.450 7% 6 Polymers of Ethylene 166.635.522 92.394.666 80% 7 Parts for Excavation & Earth-moving Machinery 154.980.609 141.196.640 10% 8 Wheat 116.893.353 53.005.466 121% 9 Shafts, cranks, gears, clutches, flywheel, pulleys etc 116.676.423 107.436.156 9% 10 Automotive Parts 114.631.652 98.887.736 16%

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Top 5 Exporters and Importers

Chile - U.S. 2010

Top Chilean Importers

(% value of imports) 1) Copec (12.42%) 2) Enap (9.98%) 3) Finning (7.77%) 4) Codelco (1.70%) 5) Komatsu (1.60%)

Top Chilean Exporters

(% value of exports) 1) Codelco (19.22%) 2) Minera Spence (4.60%) 3) Molibdenos y Metales (2.90%) 4) Anglo American (2.30%) 5) Panales Arauco (2.10%)

Source: Lexis-Nexis (www.legalpublishing.cl)

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Presentation Kit Overview

1. Chile Geography & Demographics 2. Chilean Political & Economic System 3. U.S. – Chile Trade 4. Investing in Chile 5. Chile Rankings

AmCham Chile Presentation Kit August 2011

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General Investment Environment

as measured by the World Economic Forum

4,4 4,4 4,2 3,4 3,1 5,6 4,5

1 2 3 4 5 6 Chile Mexico Brazil Colombia Peru Bolivia Venezuela

The General Investment Environment is a component of the World Economic Forum’s Infrastructure Private Investment Attractiveness Index for Latin America, most recently published in 2007. Chile is also ranked highest in the overall Index.

Source: World Economic Forum (www.weforum.org)

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A Springboard into Latin America

• Chile offers the best business environment and infrastructure in the
• region. The government aggressively promotes offshoring and

Foreign Direct Investment (FDI).

• AT Kearney ranks Chile 10th worldwide for offshoring attractiveness

(2011 Global Services Location Index).

• Over 4000 companies from 64 countries have investments in Chile

(300+ U.S. companies in Chile)

• Business clusters in Chile: shared services, corporate headquarters,

IT development & support, call centers

• 45+ companies use Chile as a platform for services

in the region

Sources: Chile Foreign Investment Committee (www.inversionextranjera.cl), AT Kearney (www.atkearney.com)

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Multinationals with Regional Operations in Chile

Many multinationals use Chile as their platform to enter Latin America:

• Altec
• Citigroup (software development)
• Delta (call center)
• General Electric
• IBM (on demand solution Center)
• International Paper
• James Hardie
• BHP Billiton (shared business

center)

• Kodak
• Miller-Heiman Consulting
• Motorola
• Nestlé
• Packard Bell (assembly plant)
• RR Donnelley
• Sodexho
• Unilever
• Oracle

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Double Taxation Agreements

24 Implemented Tax Treaties

Source: Govt. of Chile General Directorate for International Economic Affairs (www.direcon.cl)

Bilateral tax treaties limit the double taxation that would otherwise occur on international business and personal income.

• Argentina
• Belgium
• Brazil
• Canada
• Colombia
• Croatia
• Denmark
• Ecuador
• France
• Ireland
• Malaysia
• Mexico
• New Zealand
• Norway
• Paraguay
• Peru
• Poland
• Portugal
• South Korea
• Spain
• Sweden
• Switzerland
• Thailand
• United Kingdom

8 Tax Treaties Under Negotiation

• Australia *
• Austria*
• Germany
• India
• Italy
• Russia *
• United States *
• Uruguay

* Signed, pending implementation

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A Liberal Investment Environment

Outside investors have a choice of 2 main regulatory mechanisms:

• The Foreign Investment Statute, or Decree Law 600 (DL600).
• Investors sign a formal contract with the State of Chile which

guarantees extensive contractual rights.

• Allows 100% foreign ownership, with profit remittance any time,

and capital remittance after one year.

• Minimum investment of US$2.5 to 5 million
• Of the total US$103.7 billion in FDI between 1974 and 2008,

67% (US$69.9 billion) was made under a DL600 contract.

• Chapter XIV of the Compendium of International Exchange

Regulations (CFER). Investment is made under a looser regulatory framework, with fewer specified contractual rights. Minimum investment is $10,000.

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FDI as Percentage of GDP

• Avg. 2006-2009

24,9% 30,3% 27,6% 26,2% 62,0%

0,0 10,0 20,0 30,0 40,0 50,0 60,0 70,0

Percentage World Developed Economies Developing Economies Latin America Chile

Source: World Investment Report, United Nations Conference

• n Trade and Development (www.unctad.org)

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FDI in Chile by Country 1974-2009

(Under DL600)

US 27% Switzerland 2% UK 9% Spain 19% Canada 17% Australia 5% Other 11% Italy 2% Japan 4% The Netherlands 2% France 2%

Source: Chile Foreign Investment Committee (www.foreigninvestment.cl)

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FDI in Chile 1998-2009

(Under DL600)

Source: Chile Foreign Investment Committee (www.foreigninvestment.cl) 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 US$ Millions Total US

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Mexico 41% Brazil 24% Chile 9% Argentina 6% Venezuela 6% Colombia 3% Other 5% Panama 3% Peru 3%

2009 U.S. FDI in Latin America

Source: U.S. Bureau of Economic Analysis (www.bea.gov)

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1974-2009 Worldwide Materialized FDI

in Chile by Sector (Under DL600)

* Services include financial, commerce, hospitality, business services, insurance

Source: Chile Foreign Investment Committee (www.foreigninvestment.cl)

20% 10% 9% 6% 4% 3% 3% 3% 2% 8% 32%

Mining Electricity, gas & water Financial services Communication Wholesale and retail trade Chemicals Food, beverages and tobacco Insurance Other manufacturing industries Construction Other

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1974-2009 U.S. Materialized FDI

in Chile by Sector (Under DL600)

Source: Chile Foreign Investment Committee (www.foreigninvestment.cl)

* Services include financial, commerce, hospitality, business services, insurance

28% 16% 14% 9% 8% 5% 4% 4% 4% 2% 6% Mining & quarrying Wholesale & retail trade Electricity, gas & water Communications Financial services Chemical, rubber & plastics Food, beverages & tobacco Insurance Other Services Wood & paper products Other

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2009 U.S. Materialized FDI

in Chile by Sector (Under DL600)

Source: Chile Foreign Investment Committee (www.foreigninvestment.cl)

Forestry Mining & quarrying Chemical, rubber & plastics Wholesale & retail trade Communications Financial services Insurance Engineering & business serv. Other Services US$ (in thousands)

0 20.000 40.000 60.000 80.000 100.000 120.000 2.640.000 2.680.000 2.700.000

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Others 9% Australia 1% Panama 1% Mexico 1% United States 7% Brazil 20% Argentina 29% Colombia 14% Peru 18%

1990-2010 Chile Outbound FDI Destinations

Total Invested: US $56.8 billion

Source: Govt. of Chile General Directorate for International Economic Affairs (www.direcon.cl)

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Presentation Kit Overview

1. Chile Geography & Demographics 2. Chilean Political & Economic System 3. U.S. – Chile Trade 4. Investing in Chile 5. Chile Rankings

AmCham Chile Presentation Kit August 2011

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Chile: The Safest Place to Invest in Latin America

• Highest Sovereign Risk Rating in Latin

America from each of the 3 primary ratings agencies (S&P, Fitch, & Moody’s).

• Ranked 18th (tied) in the Economist

Intelligence Unit Risk Ranking as of Feb. 2010 – highest in Latin America, and higher than the U.S., Japan, and the U.K.

Sources: Chile Ministry of Finance (www.hacienda.gov.cl); Economist Intelligence Unit (www.eiu.com)

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2010 Corruption Perceptions Index

from Transparency International

Source: Transparency International (www.transparency.org)

7,2 7,1 3,7 3,5 6,1 2,8 3,1 9,3 1 2 3 4 5 6 7 8 9 10

New Zealand Chile USA Spain Brazil China Mexico Bolivia

The Corruption Perception Index ranks 180 countries by their perceived levels of corruption, as determined by Transparency International using expert assessments and opinion surveys. (Higher Score = superior)

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97,0 83,4 80,6 76,8 71,4 56,3 42,2 Brazil Mexico Chile Peru USA Bolivia China

2010 Revenue Watch Index

from the Revenue Watch Institute

This index measures government disclosure in the management of oil, gas, and minerals. It is an assessment and comparison of information published by governments about revenues, contract terms and other key data. It is an important tool for increased public disclosure about natural resource management, and greater government accountability. Chile was placed in the highest group with “comprehensive transparency”.

Source: Revenue Watch Institue (www.revenuewatch.org)

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2010-2011 Survey of Mining Companies

from the Fraser Institute

1 2 8 35 40 49 60 78 Alberta Nevada Chile Mexico Colombia Brazil Argentina Venezuela

This index measures investment attractiveness in the mining sector taking into account such factors as taxation, and regulation. The survey measures 79 jurisdictions throughout the world. Chile ranks 8th in the survey and is the only country outside of North America to consistently rank in the top 10.

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Information & Communications Technology

2010 E-Readiness Ranking

from the Economist Intelligence Unit

2010 ICT Development Index

From the Int´l Telecom. Union

1 Sweden 19 USA 25 Spain 49 Argentina 54 Chile 60 Brasil 61 Venezuela 63 Colombia 75 Peru 77 Mexico

These studies rank the quality of a country’s Information and Communications Technology (ICT) infrastructure, and the ability of its population to use it effectively. Different methodologies result in different scores.

Sources: Economist Intelligence Unit (www.eiu.com) and the International Telecommunications Union (www.itu.int)

1 Sweden 3 USA 26 Spain 30 Chile 41 Mexico 42 Brazil 46 Argentina 50 Colombia 53 Peru 55 Venezuela

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2011 Ease of Doing Business Rankings

(Latin America subregion)

Source: World Bank: Group (www.doingbusiness.org)

1 2 3 4 22 26 32

Mexico Peru Colombia Chile Argentina Brazil Venezuela

This World Bank survey provides objective measures of business regulations and their enforcement across 181 world economies. The subregion of Latin America contains 34 countries in Central and South America and the Caribbean.

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2010-11 Global Competitiveness Ranking

from the World Economic Forum

30 42 58 66 68 73 87 4 USA Chile Spain Brazil Mexico Colombia Peru Argentina

This widely-cited ranking defines competitiveness as the set of institutions, policies, and factors that determine the level of productivity of a country. The level of productivity, in turn, sets the sustainable level of prosperity that can be earned by an economy.

Source: World Economic Forum (www.weforum.org)

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2011 World Competitiveness Scoreboard

from IMD, Geneva

2 25 38 43 44 46 54 59 USA Chile Mexico Peru Brazil Colombia Argentina Venezuela

The IMD World Competitiveness Yearbook (WCY) is the world’s most renowned and comprehensive annual report on the competitiveness of nations, ranking and analyzing how a nation’s environment creates and sustains the competitiveness of enterprises.

Source: Institute for Management Development (www.imd.ch)

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Logistics Performing Index

from the World Bank

3,20 3,10 3,09 3,05 3,02 2,91 2,77 2,68 Brazil Argentina Chile Mexico Panama Costa Rica Colombia Venezuela

Source: World Bank (www.worldbank.org)

The Logistics Performance Index (LPI) is a weighted average of scores in six key dimensions: Efficiency of customs clearance, Quality of related infrastructure, Ease of arranging competitively priced shipments, Competence and quality of logistics services, Ability to track and trace consignments, and Timeliness of shipments’ arrival.

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Latin American Venture Capital Scorecard Ranking - 2011

75 72 63 60 47 47 43 38

Chile Brasil México Colombia Panamá Peru Argentina República Dominicana

The LAVC Scorecard ranks 12 countries based on the following indicators: laws on PE/VC fund formation/operation, tax treatment of funds/investments, protection of minority shareholder rights, restrictions on local institutional investors, protection of intellectual property rights, bankruptcy regulation, capital market development, registration/reserve requirements on inward investments, corporate governance, strength of judicial system, perceived corruption, use of international accounting standards, quality of local accounting industry, and entrepreneurship.

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Rule of Law Index 2011

The World Justice Project

2/19 1/12 27/66 0.59 Effective Criminal Justice 1/19 1/12 18/66 0.65 Access to Civil Justice 1/19 1/12 20/66 0.63 Application of Rules & Regulations 1/19 1/12 16/66 0.63 Size of Government 1/19 1/12 18/66 0.75 Fundamental Rights 10/19 1/12 45/66 0.67 Order and Security 1/19 1/12 18/66 0.76 Absence of Corruption 1/19 1/12 17/66 0.74 Limited Government Power Ranking by Income Group** Regional Ranking* World Ranking Points WJP Rule of Law Index Factors

Source: World Justice Project (www.worldjusticeproject.org)

*Region: México, Chile, Colombia, Argentina, Bolivia, El Salvador, Jamaica, Brasil, Perú, Venezuela, Guatemala y República Dominicana. **Albania, Argentina, Brasil, Bulgaria, Chile, Colombia, República Dominicana, Irán, Jamaica, Kazajstán, Libya, Malasia, México, Perú, Rumania, Rusia, Sudáfrica, Turquía y Venezuela.

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Heritage Foundation Index

• f Economic Freedom

Ranking of Selected Countries 2011

175 138 114 48 46 41 11 9 1

Hong Kong United States Chile Peru Colombia Mexico Brazil Argentina Venezuela Ranking

The Heritage Foundation is a conservative think tank dedicated to promoting free enterprise, limited government and individual freedom. Its measure of Economic Freedom combines 10 components: business, trade, fiscal, monetary, financial, investment, and labor freedom, as well as freedom from corruption, protection of property rights, and low government spending.

Rankings of Selected Countries Over Time

30 40 50 60 70 80 90 1995 1997 1999 2001 2003 2005 2007 2009 2011 Chile Brazil Argentina USA Colombia Venezuela

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Chile in 2010

• January: Chile joins the Organization for Economic Cooperation and Development.
• January: United States – Chile Convention on Double Taxation signed.
• February: 8.8-magnitude earthquake near Concepción and associated tsunami leave

between 450 and 550 dead, 500,000 homeless and US$30 billion in damages. Economic activity is severely impacted and reconstruction costs total $30 billion.

• March: Sebastián Piñera inaugurated as new president
• September: Celebration of Chile’s Bicentennial.
• October: 33 Miners are rescued from the San José copper mine, focusing world media

attention on Chile .

• December: Copper prices reach record highs, causing government to intervene in

USD exchange rate.

• Throughout 2010: Economic recovery continued to be strong despite the global

recession and earthquake setbacks.

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The U.S. – Chile Partnership

www.amchamchile.cl