Country Profile: Chile

Chile occupies a ribbon of land that extends down the Pacific coast of South America. Stretching from the topics almost to the Antarctic, and rising from sea level to the highest peak in the Western Hemisphere, Chile is renowned for its rich natural diversity. The country's small economy is relatively stable, unlike those of its neighbours. Economic growth is driven by exports based on the country's rich mineral resources and its agriculture, forests, fisheries and factories. Copper dominates, particularly as the world price for the metal has hit an all-time high, but global demand for Chilean fruit, wine and fish is also strong. Chile was the first South American country to negotiate free-trade agreements with the European Union and the United States. Since hosting the Asia-Pacific Economic Co-operation (APEC) Summit in November 2004, Chile has strived to establish better trade links with Singapore, New Zealand and China.

Chileans enjoyed Latin America's longest tradition of political stability and civil liberty until 1973, when a bloody coup overthrew Salvador Allende and his elected Marxist government. Sixteen years of dictatorship under General Augustus Pinochet restored political stability and relative prosperity but at a price, with as many as 80,000 people tortured or murdered. Democracy returned in 1989 when power was peacefully transferred to a new government chosen in multi-party elections. Economic reforms during the 1990s helped to alleviate some poverty, but a fifth of Chileans still subsist on less than a dollar a day. Despite promises from the current president, Ricardo Lagos, to do more for the poor, his administration's recent efforts to reduce unemployment (currently exceeding 8 per cent) and concentration of wealth have failed to have any measurable impact.

Fruit...

Chile's population, consisting largely of people of mixed Spanish and indigenous descent, is highly urbanised with more than 40 per cent living in or near the capital, Santiago. The city was established by the Spaniards to capitalise on the fertile land in the Central Valley in which it lies. While only 3 per cent of the whole country is currently cultivated, agricultural production has increased significantly since the early 1980s with the introduction of modern farming methods. Land reform begun in the 1960s has been instrumental in breaking up large tracts of land under the control of rich landowners and increasing the number of smallholder farmers.

The area immediately north and south of Santiago is the heartland of Chilean agriculture, growing predominantly orchard and berry fruits for export and grapes for wine, but also such grains as wheat and maize, as well as potatoes. Fruit production is the fourth most important industry in Chile with a wide variety of fruits grown for marketing in the Northern Hemisphere during its winter months. As markets have expanded beyond the US, growers have had to improve production techniques to achieve higher productivity, better quality and longer shelf life. The fruit-packing industry has expanded greatly in recent years, providing seasonal employment for thousands of workers, particularly women with little or no formal education. In the arid regions of the north, fruit and vegetables are grown year-round, whilst livestock dominates in the Patagonian region in the south. The pastures in the valleys around Osorno in south-central Chile are well suited for raising cattle, and the Magallanes grasslands that lie in the rainshadow of the Andes are best suited to extensive sheep grazing. Sheep are also raised in large numbers on Tierra del Fuego, the southern island shared with Argentina.

...and forestry

Forestry products account for a fifth of Chile's annual exports, but forests are concentrated in the hands of a few major companies, predominantly those connected with the flourishing paper industry. About 90 per cent of all the wood harvested comes from plantations of radiata pine, now the most abundant tree species in the country, but industry expansion is putting native forests at risk. Chile's native forests include the world's second largest expanse of temperate rainforest, which features several rare and endemic tree species. Despite some re-planting, Chile lost over 4.5 million hectares of forest in the decade from 1985 to 1995, and exploitation of native forest continues. Pressure from an international campaign led by the conservation group Forest Ethics has resulted in the signing of an agreement by two major logging companies to protect over a million hectares of native forests.

The forests and agricultural land of southern Chile is the traditional home of the Mapuche, the largest of the indigenous tribes of Chile, who account for 10 per cent of the population. Much of their ancestral land now belongs to timber companies, and the Mapuches complain of false land titles and damage to the environment and their traditional way of life. Several Mapuche leaders stood trial in 2004 for alleged acts of terrorism, despite international protests, and were finally acquitted. Their struggle to establish their rights and reclaim some of the land continues.

Pinochet, Chile's notorious ex-dictator now aged 89, has been declared fit to stand trial, but his regime left scars that are still evident almost two decades later. Whilst Chile's economy and exports continue to grow, the country is paying a price. Two-thirds of mining and forestry resources are foreign-owned, as is much of Chile's growing salmon-farm industry. Environmental regulations are frequently ignored, and workers' rights are poorly protected. Despite its natural wealth and economic stability, Chile has much to do to bridge the divisions between rich and poor.

1st July 2005

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