While not large, Chile’s economy is one of the region’s most stable and dynamic. For nearly two decades, it has enjoyed almost uninterrupted growth, though growth rates have fallen from upwards of 7 percent into the 4–5 percent range. Statistics are lagging, but for 2004, estimated GDP was US$94.1 billion (about US$4,910 per capita), though this disguises considerable income disparities. Inflation for 2005 was only 3.7 percent, despite dramatic energy price increases, and was projected at just 2.7 percent for 2006.
According to the Banco Central (Central Bank), the total foreign debt is about US$45 billion; the publicly held portion is only about 2 percent of GDP. In recent years, the peso has held its own with the euro and gained against the U.S. dollar.
In 2005, the World Economic Forum’s competitiveness evaluation rated Chile among the region’s top economies. In addition to a global rating of 23rd, Chile ranked 15th in macroeconomics, 22nd in institutions, and 29th in business environment. It ranked 35th in technology, but telephones are so reasonably priced that even Chileans of limited means have them (but not necessarily Internet connections, as a home computer is often beyond their budget).
In a similar survey by the International Institute for Management Development, Chile finished first among Latin American economies and 19th in the global rankings—ahead of several European countries, including the United Kingdom. Rankings criteria included technological infrastructure and development, government efficiency, educational quality, and workforce productivity.
Perhaps the economy’s most obvious weakness is its dependence on mining and particularly copper. It’s also vulnerable to energy shortages, getting less than 5 percent of its petroleum and natural gas from domestic sources; it also depends on erratic rainfall to fill its hydroelectric reservoirs, which produce 60 percent of the energy in the Central Interconnected Power System (SIC), which delivers electricity to 93 percent of the population. South-central Chile’s heavy rainfall and extensive rivers make hydroelectricity the cheapest energy source, but at considerable environmental cost.
Despite its macroeconomic achievements, contemporary Chile has its critics. Journalist María Monckeberg’s polemic El Saqueo de Los Grupos Económicos al Estado de Chile (The Plundering of the Chilean State by Economic Groups), published in 2001, takes a muckraking approach toward the dictatorship’s privatizations. According to Monckeberg, Pinochet’s cronies:
appropriated the big state-owned companies at a time when there were no freedoms, no real parliament, no unions and not a single newspaper that realized what was going on or was free to print it. Given those circumstances, the bottom line is they were free to do whatever they wanted.