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Capital Santiago1
33°26? S 70°40? W Largest city Santiago Official language(s) Spanish From Spain
September 18, 1810
February 12, 1818
April 25, 1844 Area
• Total
• Water (%)
16,136,137 (60th)
15,116,435
21/km² (153rd)
{{{population_densitymi²}}}/mi² 2004 estimate
$183,286 million (42nd)
$11,300 (59th) 0.854 (37th) – high Currency Time zone
• Summer (DST) — (UTC-4)
— (UTC-3) Internet TLD .cl Calling code +56 |
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Chile Information
Main article: History of Chile
About 10,000 years ago, migrating Native Americans settled in fertile valleys and along the coast of what is now Chile. The Incas briefly extended their empire into what is now northern Chile, but the area's remoteness and the fierce opposition of the native population prevented extensive settlement.
 Pedro de Valdivia
Pedro de Valdivia
In Santiago, was founded in 1541 by Pedro de Valdivia, one of Francisco Pizarro's lieutenants. Although the Spanish did not find the extensive gold and silver they sought, they recognized the agricultural potential of Chile's central valley, and Chile became part of the Viceroyalty of Peru.
Conquest of the land that is today called Chile took place only gradually, and the Europeans suffered repeated setbacks at the hands of the local population. A massive Mapuche insurrection that began in 1553 resulted in Valdivia's death and the destruction of many of the colony's principal settlements. Subsequent major insurrections took place in 1598 and in 1655. Each time the Mapuche and other native groups revolted, the southern border of the colony was driven northward. The abolition of slavery in 1683 defused tensions on the frontier between the colony and the Mapuche land to the south, and permitted increased trade between colonists and Mapuches.
The drive for independence from Spain was precipitated by usurpation of the Spanish throne by Napoleon's brother Joseph, in 1808. A national junta in the name of Ferdinand—heir to the deposed king—was formed on September 18, 1810. The junta proclaimed Chile an autonomous republic within the Spanish monarchy. A movement for total independence soon won a wide following. Spanish attempts to reimpose arbitrary rule during what was called the Reconquista led to a prolonged struggle.
 Bernardo O'Higgins
Bernardo O'Higgins
The movement toward independence began in 1810 under the leadership of Juan Martínez de Rozas and Bernardo O'Higgins. The first phase (1810–14) ended in defeat at Rancagua, largely because of the rivalry of O'Higgins with José Miguel Carrera and his brothers. In 1817, José de San Martín, with incredible hardship, brought an army over the Andes from Argentina to Chile. The following year he won the decisive battle of Maipú over the Spaniards.
Toward the end of the 19th century, the government in Santiago consolidated its position in the south by ruthlessly suppressing the Bolivia (1879–83), Chile expanded its territory northward by almost one-third, eliminating Bolivia's access to the Pacific, and acquired valuable nitrate deposits, the exploitation of which led to an era of national affluence. The Chilean Civil War in 1891 brought about a redistribution of power between the President and Congress, and Chile established a parliamentary style democracy. However, the Civil War had also been a contest between those who favored the development of local industries and powerful Chilean banking interests, particularly the House of Edwards who had strong ties to foreign investors. Hence the Chilean economy partially degenerated into a system protecting the interests of a ruling oligarchy. By the 1920s, the emerging middle and working classes were powerful enough to elect a reformist president, Arturo Alessandri Palma, whose program was frustrated by a conservative congress. Alessandri Palma's reformist tendencies were partly tempered later by an admiration for some elements of Mussolini's Italian Corporate State. In the 1920s, Marxist groups with strong popular support arose.
A military coup led by General Luis Altamirano in 1924 set off a period of great political instability that lasted until 1932. The longest lasting of the ten governments between those years was that of General Carlos Ibáñez, who briefly held power in 1925 and then again between 1927 and 1931 in what was a de facto dictatorship, although not really comparable in harshness or corruption to the type of military dictatorship that has often bedeviled the rest of Latin America, and certainly not comparable to the violent and repressive regime of Augusto Pinochet decades later. By relinquishing power to a democratically elected successor, Ibáñez del Campo retained the respect of a large enough segment of the population to remain a viable politician for more than thirty years, in spite of the vague and shifting nature of his ideology. When constitutional rule was restored in 1932, a strong middle-class party, the Radicals, emerged. It became the key force in coalition governments for the next 20 years. During the period of Radical Party dominance (1932–52), the state increased its role in the economy. In 1952, voters returned Ibáñez, now reincarnated as a sort of Chilean Perón, to office for another 6 years. Jorge Alessandri succeeded Ibáñez in 1958, bringing Chilean conservatism back into power democratically for another term.
The 1964 presidential election of Christian Democrat Eduardo Frei Montalva by an absolute majority initiated a period of major reform. Under the slogan "Revolution in Liberty," the Frei administration embarked on far-reaching social and economic programs, particularly in education, housing, and agrarian reform, including rural unionization of agricultural workers. By 1967, however, Frei encountered increasing opposition from leftists, who charged that his reforms were inadequate, and from conservatives, who found them excessive. At the end of his term, Frei had accomplished many noteworthy objectives, but he had not fully achieved his party's ambitious goals.
In MAPU), and the Independent Popular Action, won a plurality of votes in a three-way contest. Despite pressure from the government of the United States, the Chilean Congress, keeping with tradition, conducted a runoff vote between the leading candidates, Allende and former president Jorge Alessandri and chose Allende by a vote of 153 to 35. Frei refused to form an alliance with Alessandri to oppose Allende, on the grounds that the Christian Democrats were a workers party and could not make common cause with the oligarchs.
Allende's program included advancement of workers' interests; a thoroughgoing implementation of agrarian reform; the reorganization of the national economy into socialized, mixed, and private sectors; a foreign policy of "international solidarity" and national independence; and a new institutional order (the "people's state" or "poder popular"), including the institution of a unicameral congress. The Popular Unity platform also called for nationalization of foreign (U.S.) ownership of Chile's major copper mines.
An economic depression that began in 1967 peaked in 1970, exacerbated by capital flight, plummeting private investment, and withdrawal of bank deposits by those opposed to Allende's socialist program. Production fell and unemployment rose. Allende adopted measures including price freezes, wage increases, and tax reforms, which had the effect of increasing consumer spending and redistributing income downward. Joint public-private public works projects helped reduce unemployment. Much of the banking sector was nationalized. Many enterprises within the copper, coal, iron, nitrate, and steel industries were expropriated, nationalized, or subjected to state intervention. Industrial output increased sharply and unemployment fell during the Allende administration's first year.
Other reforms undertaken during the early Allende period included redistribution of millions of hectares of land to landless agricultural workers as part of the agrarian reform program, giving the armed forces an overdue pay increase, and providing free milk to children. The Indian Peoples Development Corporation and the Mapuche Vocational Institute were founded to address the needs of Chile's indigenous population.
The nationalization of U.S. and other foreign-owned companies led to increased tensions with the United States. The Nixon administration brought international financial pressure to bear in order to restrict economic credit to Chile. Simultaneously, the CIA funded opposition media, politicians, and organizations, helping to accelerate a campaign of domestic destabilization. By 1972, the economic progress of Allende's first year had been reversed and the economy was in crisis. Political polarization increased, and large mobilizations of both pro- and anti-government groups became frequent, often leading to clashes.
By early 1973, inflation was out of control. The crippled economy was further battered by prolonged and sometimes simultaneous strikes by physicians, teachers, students, truck owners, copper workers, and the small business class. A military coup overthrew Allende on September 11, 1973. As the armed forces bombarded the presidential palace (Palacio de La Moneda), Allende reportedly committed suicide. A military government, led by General Augusto Pinochet Ugarte, took over control of the country. The first years of the regime were marked by serious human rights violations. On October 1973, at least 70 persons were murdered by the Caravan of Death. At least a thousand people were executed during the first six months of Pinochet in office, and at least two thousand more were killed during the next sixteen years, as reported by the Valech Report. Some 30,000 were forced to flee the country. A new Constitution was approved by a highly irregular and undemocratic plebiscite characterized by the absence of registration lists, on September 11, 1980, and General Pinochet became President of the Republic for an 8-year term. In the late 1980s, the regime gradually permitted greater freedom of assembly, speech, and association, to include trade union and limited political activity. The right-wing military government pursued decidedly laissez-faire economic policies. During its nearly 17 years in power, Chile moved away from economic statism toward a largely free market economy that saw an increase in domestic and foreign private investment, although the copper industry and other important mineral resources were not returned to foreign ownership. In a plebiscite on October 5, 1988, General Pinochet was denied a second 8-year term as president. Chileans elected a new president and the majority of members of a two-chamber congress on December 14, 1989. Christian Democrat Patricio Aylwin, the candidate of a coalition of 16 political parties called the Concertación, received an absolute majority of votes. President Aylwin served from 1990 to 1994, in what was considered a transition period.
In December 1993, Christian Democrat Eduardo Frei Ruiz-Tagle, the son of previous president Eduardo Frei Montalva, led the Concertación coalition to victory with an absolute majority of votes. President Frei's administration was inaugurated in March 1994.
A presidential election was held on December 12, 1999, but none of the six candidates obtained a majority, which led to an unprecedented runoff election on January 16, 2000 between Ricardo Lagos and Joaquín Lavín of the rightist Alliance for Chile. Ricardo Lagos Escobar of the Socialist Party led the Concertación coalition to a narrow victory, with 51.31% of the votes. He was sworn in March 11, 2000, for a 6-year term.
Chile's current president-elect is the former health and later defense minister Michelle Bachelet, daughter of Alberto Bachelet, an air force general who was captured and tortured in the military coup of 1973 and died shortly after. Ms. Bachelet continues the center-left Coalition of Parties for Democracy government in their fourth term. She is the first and so far the only woman president in the country's history. She won the 2006 runoff election against center-right candidate Sebastián Piñera after none of the four main candidates obtained the necessary 50% of the votes in the first round of voting. Bachelet will be sworn in for a four-year term, instead of a six-year term, following reforms to the Constitution in 2005.
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Main article: Regions of Chile
Chile is divided into 13 regions, each of which is headed by an intendente appointed by the President. Every region is further divided into provinces with a Gobernador Provincial, also appointed by Santiago. Finally each province is divided into various Comunas each with its own mayor, elected by their inhabitants.
Each region is designated by a name and a Roman numeral, assigned from north to south. In general, the Roman numeral is used, rather than the name. The only exception is the region where Santiago is situated, which is designated RM, that stands for Región Metropolitana, Metropolitan Region.
In 2005, the Chilean congress passed a reform to create two new regions, one in the north, around the city of Valdivia (aka Region of the Rivers). Being designated by numerals 14 and 15, both break the geographical numerical order from north to south. There is speculation that the numeral system will be dropped in favor of their formal names.
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Main article: Economy of Chile
After a decade of impressive growth rates, Chile experienced a moderate downturn in 1999 brought on by the global economic slowdown. The economy remained sluggish until 2003, when it began to show clear signs of recovery, achieving 3.3% real GDP growth. The Chilean economy finished 2004 with growth of 6.1% and its economic growth in 2005 was 6.3%.
Chile has pursued generally sound economic policies for nearly three decades. The 1973-90 military government sold many state-owned companies, and the three democratic governments since 1990 have continued privatization at a slower pace. The government's role in the economy is mostly limited to regulation, although the state continues to operate copper giant Codelco and a few other enterprises. Chile is strongly committed to free trade and has welcomed large amounts of foreign investment. Chile has signed Free Trade agreements (FTAs) with several important economies, including an FTA with the United States, which was signed in 2003 and implemented in January 2004. High domestic savings and investment rates also helped propel Chile's economy to average growth rates of 8% during the 1990s. The privatized national pension system has encouraged domestic investment and contributed to an estimated total domestic savings rate of approximately 21% of GDP in 2003.
Unemployment has hovered in the 8%-10% range in recent years, well above the 5%-6% average for the 1990s. Unemployment remained at 8.8% at the end of 2004 in spite of strong economic growth. Wages have risen faster than inflation as a result of higher productivity, boosting national living standards. The share of Chileans with incomes below the poverty line--defined as twice the cost of satisfying a person's minimal nutritional needs--fell from 46% of the population in 1987 to 18.8% in 2003.
Chile's independent Central Bank pursues a policy of maintaining inflation between 2% and 4%. Inflation has not exceeded 5% since 1998. Chile registered inflation of 2.4% in 2004 and is expected to see a 2.5% increase in 2005. Most wage settlements and spending decisions are indexed, reducing inflation's volatility. Under the compulsory private pension system, most formal sector employees pay 10% of their salaries into privately managed funds.
Total foreign direct investment rose to $7.1 billion in 2004, up from $2.5 billion in 2003. Both foreign and domestic investment in Chile had declined during the country’s period of slower economic growth from 1999-2003, but appear to be recovering strongly. The Chilean Government committed, in early 2002, to undertake a series of microeconomic reforms designed to create new incentives for private investment. The government also has encouraged the use of Chile as an "investment platform" for multinational corporations planning to invest in the region. Chile's welcoming attitude toward foreign direct investment is codified in the country's Foreign Investment Law, which gives foreign investors the same treatment as Chileans. Registration is simple and transparent, and foreign investors are guaranteed access to the official foreign exchange market to repatriate their profits and capital. The U.S.-Chile Free Trade Agreement offers a number of other investor protections.
Foreign Trade
Chile's economy is highly dependent on international trade. In 2004, exports accounted for about 34% of GDP. Chile has traditionally been dependent upon copper exports; the state-owned firm Codelco is the world's largest copper-producing company. Nontraditional exports have grown faster than those of copper and other minerals. In 1975, non-mineral exports made up just over 30% of total exports, whereas now they account for about 60%. The most important non-mineral exports are forestry and wood products, fresh fruit and processed food, fishmeal and seafood, and wine. The trade balance for 2004 showed a historic surplus $9 billion, considerably higher than 2003. Total exports in 2004 were $32 billion, a 52.1% increase from $20.4 billion in 2003. Chile's export markets are fairly balanced among Europe (25.1%), Asia (33.1%), Latin America (15.7%), and North America (19%). The U.S., the largest national market, takes in 17.3% of Chile's exports. Asia has been the fastest-growing export market in recent years.
Chilean imports increased 30% in 2004, to $23 billion, reflecting a positive change in consumer demand and economic recovery. Argentina contributed 16%. Chile unilaterally lowered its across-the-board import tariff for all countries with which it does not have a trade agreement to 6% in 2003.
Higher effective tariffs are charged only on imports of wheat, wheat flour, and sugar as a result of a system of import price bands. The price bands were ruled inconsistent with Chile's WTO obligations in 2002 and the government has introduced legislation to modify them. Chile will have to phase out the price bands within 12 years under the terms of the U.S.-Chile FTA.
Successive Chilean governments have actively pursued liberalizing trade agreements. During the 1990s, Chile signed FTAs with Brunei (P4).
Finance
Chile's financial sector has grown faster than other areas of the economy over the last few years; a banking reform law approved in 1997 broadened the scope of permissible foreign activity for Chilean banks. The Chilean government implemented a further liberalization of capital markets in 2001. Chileans have enjoyed the recent introduction of new financial tools such as home equity loans, currency futures and options, factoring, leasing, and debit cards. The introduction of these new products has been accompanied by increased use of traditional instruments such as loans and credit cards. Chile's private pension system, with assets worth roughly $54 billion in late 2004, has provided an important source of investment capital for the capital market. Chile maintains one of the best credit ratings (Standard & Poor's A+) of countries in Latin America. There are three main ways Chilean firms raise funds abroad: bank loans, bond issue, and the selling of stock on U.S. markets through American Depository Receipts (ADR's). Nearly all of the funds raised go to finance investment. The government is paying off its foreign debt. The combined public and private foreign debt was roughly over 50% of GDP at the end of 2004—low by Latin American standards.
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Since its return to democracy in 1990, Chile has been an active participant in the international political arena. Chile completed a 2-year non-permanent position on the UN Security Council in January 2005. Chile is an active member of the UN family of agencies and participates in UN peacekeeping activities. Chile hosted the Defense Ministerial of the Americas in 2002 and the APEC summit and related meetings in 2004. Chile hosted the Community of Democracies ministerial in April 2005. An associate member of Mercosur and a full member of APEC, Chile and has been an important actor on international economic issues and hemispheric free trade.
The Chilean Government has diplomatic relations with most countries. It settled its territorial disputes with Bolivia severed diplomatic ties in 1978 over Bolivia's desire to reacquire territory it lost to Chile in 1879-83 War of the Pacific. The two countries maintain consular relations.
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 Pablo Neruda was Chile's second winner of the Nobel Prize in Literature
Pablo Neruda was Chile's second winner of the Nobel Prize in Literature
Main article: Culture of Chile
Northern Chile was an important center of culture in the medieval and early modern Inca empire. Afterwards, their culture was dominated by the Spanish during the Colonial and early Republican period. Other European influences, primarily English and French, began in the 19th century and have continued until today, as in other Western societies.
The national dance is the cueca. Another form of traditional Chilean song, though not a dance, is the tonada. Arising from music imported by the Spanish colonists, it is distinguished from the cueca by an intermediate melodic section and a more prominent melody. In the mid-1960s native musical forms were revitalized by the Parra family with the Nueva Canción Chilena, which was associated with political activists and reformers.
Chileans call their country País de Poetas which means land of poets. Gabriela Mistral, was the first Chilean to win a Nobel Prize for literature. Chile's most famous poet, however, is Pablo Neruda, who also won the Nobel Prize and is world-renowned for his extensive library of works on romance, nature, and politics. His three highly individualistic homes, located in Isla Negra, Santiago and Valparaiso are popular tourist destinations.
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