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Why do our Governments ignore Chile's success?

By Miguel Octavio | The Devil's Excrement

27.04.05 | I have always wondered why Latin American Governments, including ours, always talk about neoliberals policies that have hurt our countries, when the reality is that what they call neoliberal is nothing more than a few attempts to improve economic conditions via macroeconomic adjustments without really getting down to changing the way these countries really work. But I have always wondered why most of these Government officials simply ignore Chile, probably the most successful country economically in the last decade.

I was reminded of all this by Gerver Torres’ article in Sunday’s El Universal about that country. While the point of his article was to ask if that was a socialist country, I would like to summarize its highlights in terms of economic and social achievements.

To begin with, Chile has the lowest poverty levels of the region at 20%. Yes, still too high, but the lowest in the region. Unemployment is 9% and salaries have increased in real terms by 50% since 1990. Contrasts that with Venezuela’s numbers under Chavez alone, poverty has increased and salaries have been reduced in real terms.

Chile has one of the highest investment rates in the region at 23% of GDP and is the one that attracts the highest investment per capita in the whole region.

Inflation, that perverse tax on the poor in most of the region including Venezuela, is only 2.2% in Chile. Interest rates are clearly low, helping the economy grow and the people improve their standard of living.

Chile also has a very good social security system, which not only provides pensions for its inhabitants, but provides a lot of the funds needed for investment in that country, without the need for the Government to borrow internationally.

In terms of economic freedom Chile occupies today the 11th. position in the world. This for a country that had horrible numbers only thirty years ago.

What is hard to understand is why, with an example like that, our Governments look for failed policies and ideologies that have repeatedly been tried without any cases of success anywhere in the world.

Meanwhile, Chile simply chugs along, becoming more like a developed country under the indifferent eyes of the Government and Government officials in the region. Why?

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