Country Analysis Report – Chile

Chile ranks as one of the most successful Latin American nations. Like most Latin American neighbors, Spain colonized it. The arrangements during the colonial era significantly disrupted its social and demographic characteristics. After attaining independence, the country was ruled by a Marxist regime. However, since the overthrow of the Marxist regime and subsequent transition to a democratically elected government, Chile has attained steady growth, significantly reduced poverty, and ensured people’s democratic representation in government.

Chile’s Climate

Chile’s climate varies significantly across different parts of the country. The variation is attributable to Chile being the world’s longest country from North to South (Moss, 2022). As a result, varying climatic conditions are experienced across different latitudes in the country.  Based on the varying latitude and altitude, the country has four macro-bioclimates; Mediterranean, tropical, temperate, and antiborealis (Moss, 2022). From these macro bio-climates, Chile has 127 diverse terrestrial ecosystems and 96 marine ecosystems on the country’s Coast. A cold alpine climate characterizes the Southern part of the country. When one moves further North to Central Chile, one will likely experience a temperate Mediterranean climate. Further in the North, the climate is dry. On the other hand, the Eastern part of the country which is largely an Island experiences a humid and subtropical climate. Summers in Chile begin from December to March, while winter runs from June to October. Notably, Chile experiences pronounced seasonal differences, with rains persisting from May to August, while the rest of the year experiences sun.

Population Centers

A majority (90%) of the Chilean population occupies the middle third of the country, which is around Chile’s capital, Santiago. On the other hand, the far North of the country anchored around the Atacama Desert, and the extreme South are relatively underpopulated. Fertile lands and a favorable temperate climate have attracted most Chileans to settle in Central Chile to practice farming and other productive economic activities. Armed with state support and a favorable climate, Chileans have engaged in extensive farming activities that have contributed to its economic prosperity. The location of the capital city, Santiago, in the central region, has encouraged settlement as people migrate from rural areas to seek opportunities in the city.

The far south is characterized by a humid and cold climate, making the area less attractive for settlement. Besides, the Southern region’s rugged terrain makes most Chileans avoid the area. The population distribution in Chile highlights the impact of the interaction between climate and population distribution. Most people prefer to stay in areas with arable lands. As the economy of these areas improves, it leads to migration to leverage the existing economic opportunities.

Linguistic, Ethnic, and Religious Characteristics

Genetically, a significant Chilean population comprises of half European descent and half American descent. To that end, white and non-indigenous groups make up about 88.9% of Chile’s population (CIA, 2022). Another ethnic group is Mapuche, whose population is 9.1% of Chile’s entire population. Others include Aymara (0.7%), and non-indigenous groups which make up 1% (CIA, 2022). Chile’s culture is relatively homogenous and has been significantly influenced by the Mapuche ethnic group.

The official national language in Chile is Spanish, largely because Spain colonized the country. The official language is shared across most South American countries. However, unlike most South American neighbors, Chile is mostly homogenous, with most people speaking Spanish. The country’s linguistic aspect has not been affected since not many outsiders have immigrated to Chile.

According to the CIA (2022), most Chileans are Roman Catholics, with about half of the population professing the region. The alignment to the religion is partly attributable to the impact of Spain’s colonialism and imposition of religious values on people. Another notable religious affiliation is evangelical religious affiliation (CIA, 2022). Notably, a third of Chileans are not affiliated with any religious group (CIA, 2022). From these figures, Chile has the most people who align with the Evangelical religion in Latin America. Besides, the country has the most non-religious affiliated individuals throughout Latin America.

Key Historical Events and their Impact on Population and Culture

Spain’s colonization of Chile shaped multiple aspects of Chilean realities including religion, social structures, and culture. During the colonial period, Spain wanted to colonize the entire Chile. However, they faced persistent resistance from the Indigenous Mapuche people, leading to them being allocated lands through the Treaty of Quilin (Moya-Santiagos & Quiroga-Curín, 2022). Later on, post-independence, Europeans and elite Chileans displaced the Mapuche people from their indigenous lands, leading to only 5% of the country’s land remaining under the control of the indigenous people (Moya-Santiagos & Quiroga-Curín, 2022). Members of the Mapuche ethnic group were expelled to villages, with some having to work on settlers’ farms to make a living. The expulsion of the Mapuche not only led to a territorial decrease but also caused social and cultural disruption.

Subsequently, Chile’s return to democracy set the pace for actions to restore Indigenous people’s rights. Chileans voted to return to democracy through a referendum in 1989 (Moya-Santiagos & Quiroga-Curín, 2022). After the vote, parliament formed the National Corporation for Indigenous Development (CONADI). Later on, CONADI in collaboration with the Chilean Education Ministry, established a Bilingual Intercultural Education Program designed to integrate the indigenous people into mainstream Chilean society (Moya-Santiagos & Quiroga-Curín, 2022). CONADI has since implemented multiple other actions to include indigenous people in a pluralist society.

Political Structure

Chile has a presidential system similar to the US’s, and a bicameral parliament to ensure checks and balances. Such presidential systems are designed to ensure policy stability even when the balance of power changes (Hutchison et al., 2014). Although the system can slow the policy-making process, it ensures stability even with regime changes. The Chilean system is so effective that it has allowed incremental improvement of policy decisions targeting citizens. Since the return to democracy in 1989, Chile has maintained this system, leading to positive changes.

Another notable aspect of Chile’s political structure is the tendency to build strong national parties. National elections are organized in two phases; presidential and parliamentary, encouraging parties to come together to increase their chances of ascending to power. Since the 1989 referendum plebiscite, Chile has had two main coalitions. On the one hand, the center and left-wing parties, which opposed the return to democracy in 1989 are collaborating to date (Hutchison et al., 2014). On the other hand, the right-wing parties, which supported the referendum plebiscite collaborate to date (Hutchison et al., 2014). By coalescing around two major coalitions, the parties have upheld the principle of checks and balances. The president cannot make arbitrary decisions without involving parliament, and in most cases, these coalitions negotiate in parliament to reach bipartisan decisions.

Economic Status

According to the International Monetary Fund (n.d.) Chile’s GDP currently stands at 328.72 billion US dollars. That translates into a 16.37 thousand US dollars GDP per capita. In 2023, Chile’s GDP was ranked 52^nd relative to other countries worldwide. On the other hand, the country’s purchasing power parity is $674.39. Another key economic indicator is the current unemployment rate which is 8.5%.

In light of the figures above, one can conclusively say that the country is performing relatively well economically. Some reasons for Chile’s economic health include solid macroeconomic policies and robust institutions (The World Bank, 2022). Over the past decade, the economic growth in Chile has averaged two percentage points (The World Bank, 2022). This year (2024), GDP growth is expected to hit 2.5% (The World Bank, 2022). However, adjustments implemented on electricity tariffs slightly pushed up the inflation rate to 4%, but it is expected to return to the 3% target by 2026, the first quarter (The World Bank, 2022). Some reforms that will bolster the country’s growth include increased technology adoption, education improvement, labor force equality, and enhanced job quality. Notably, Chile’s future economic prospects look bright as the country looks to leverage its immense green energy resources endowment as the world transitions to renewable energy.

Key Economic Sectors and Exports

According to the CIA (2022), the mining sector is one of the leading bedrock of Chile’s economy. Mining was cited as the leading contributor to GDP growth in the first quarter of 2024, and that has been the case for many years. Notably, Chile’s economy is largely driven by exports. Today, the country is the world’s leading copper exporter.

Moreover, agriculture contributes significantly to the country’s economy. The agricultural boosts Chile’s GDP and creates employment. Citizens from Southern and Central Chile mainly engage in agriculture and livestock farming. In particular, fruit and vegetable exports have greatly and positively impacted the Chilean economy.  The growth of the export of vegetables and fruits is attributable to deliberate policies by the Chilean government targeting Asian, European, and North American markets. The country’s proximity to the Southern hemisphere allows it to offer out-of-season fruits.

Also, the services sector (which contains subsectors) contributes 54.3% to the GDP and employs about 70% of Chile’s workforce. The services sector is on an upward trajectory owing to improvements in communication and information technology, education, and the uptake of specialist skills. Under the services sector, tourism, telecommunication, and retail pose the most promising outcomes.

Prospects of Foreign Investment in Chile

The resource endowment and open economic policies have rendered Chile an attractive destination for foreign direct investment. By 2020, the FDI to GDP ratio hit 98% (OECD, 2024). One of the reasons I would invest in Chile if I were heading an organization is due to the country’s significant mineral endowment (OECD, 2024). Also, Chile’s green energy resources endowment is advantageous given the worldwide consensus to shift to renewable energy (OECD, 2024). Since Chile has an open economy, there are limited entry constraints, making it easier for foreign companies to enter.

Notable Business Issues

Despite Chile’s attractiveness for foreign direct investments, the country still faces challenges that can affect businesses. For instance, government reform proposals likely to affect investments in the healthcare, insurance, and pension sectors are in the pipeline (US Department of State, 2024). In the same breath issues concerning intellectual property (IP) rights will affect business. Chile has yet to comply with IP regulations set under the United States-Chile Free Trade Area (US Department of State, 2024). That implies that businesses planning to expand to Chile may face problems such as imitation. Further, red tape and bureaucratic processes regarding environmental licensing permits, Indigenous consultation, and unending court processes are time-consuming and pose uncertainty to prospective investors (US Department of State, 2024). Also, the political uncertainty and violence experienced recently pose serious threats to investors planning to move to set up business in Chile.

Cultural Analysis

According to Kelm (2009), Chileans place little emphasis on the first impression. Unlike the US which places significant value on making a first impression, Chilean clients do not. As a result, when one is meeting clients, they should not dress flamboyantly. Dressing to make an impression may appear like wanting to look more important than them, potentially negatively affecting negotiations. Also, whereas the US is highly individualistic, Chile has a collectivist culture. One of the implications of this cultural alignment on businesses is CSR participation. Chileans want businesses to play their CSR roles as an obligation. On the other hand, Chileans exhibit a warm reception and expect reciprocity. Therefore, visitors should not be too formal when interacting with Chileans.

Conclusion

Conclusively, Chile is one of the most economically robust Latin American nations. The country’s political structure has supported stable and effective policies since the inception of democracy. Key economic sectors in Chile include agriculture, mining, and the service sector (tourism, telecommunication, and retail). With its open economy, Chile is a perfect destination for foreign direct investment (FDI).  Given the country’s significant natural resource endowment Chile’s growth prospects are promising.

References

CIA. (2022). Chile – The World Factbook. Www.cia.gov. https://www.cia.gov/the-world-            factbook/countries/chile/

Hutchison, E. Q., Thomas Miller Klubock, Milanich, N. B., & Winn, P. (2014). The Chile reader: history, culture, politics. Duke University Press.

International Monetary Fund. (n.d.). Chile Datasets. Www.imf.org.             https://www.imf.org/external/datamapper/profile/CHL

Kelm, O. R. (2009). Teaching the Cultural Aspects of International Business. Journal of   International Education in Business, 2(1), 33–47.   https://doi.org/10.1108/18363261080001593

Moss, S. (2022, March 1). Weatherwatch: the many climate zones of Chile. The Guardian.             https://www.theguardian.com/news/2022/mar/01/weatherwatch-many-climate-zones-         chile

Moya-Santiagos, P., & Quiroga-Curín, J. (2022). An overview of Indigenous peoples in Chile      and their struggle to revitalize their native languages: the case of Mapudungun. London       Review of Education, 20(1). https://doi.org/10.14324/lre.20.1.10

OECD. (2024). FDI Qualities Review of Chile. OECD. https://www.oecd.org/en/publications/fdi-            qualities-review-of-chile_98bf1829-en/full-report.html

The World Bank. (2022, May 23). The World Bank in Chile. World Bank.             https://www.worldbank.org/en/country/chile/overview

US Department of State. (2024). 2024 Investment Climate Statements: Chile. United States          Department of State. https://www.state.gov/reports/2024-investment-climate-     statements/chile/

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Term Project: Country Analysis Report

For this class, you will be creating a Country Analysis Report. You will be expected to research your information in academically acceptable sources and then prepare a paper.

IMPORTANT: You must make sure that all of your answers are written in your own words. All assignments will be checked by plagiarism and generative-AI checkers. Plagiarized or AI-generated submissions will receive maximum penalty allowed by Monroe College, including but not limited to automatic failure of this course. Please do not plagiarize or use AI-generated text. It is just not worth it.

Choose a country

Please choose any country of your choice other than the country where you reside. You CANNOT complete this project on home country, either. The country of your choice must be foreign to you.

Using the Monroe College’s virtual library, other academic sources, or the CIA Factbook (https://www.cia.gov/the-world-factbook/), research and answer the following 10 questions/problems regarding the country that you have chosen up during the second. All of the following questions/problems must be answered in your paper.

Country Analysis Report – Chile

1. Describe the climate in this country. Are there different climates in different parts of the country? If so, describe what is causing these differences.
2. What are this country’s major population centers, and where are they located? Is one part of the country more densely populated than other parts? If so, why is this the case?
3.  If you were to visit this country, what languages would you expect to hear, and what types of religious services might you attend? Would you expect to see much racial and ethnic diversity, or would the population be relatively homogeneous?
4.  What are some key events in this country’s history? How has the country’s history affected its current population and culture? Is the nation currently feeling the impact of certain historical events, patterns, or decisions?
5. Describe the country’s political structure. Who is in charge of making decisions? Do the people get a chance to participate in political life? Describe current political conditions in this country. What types of political controversies or difficulties has this country faced or is it currently facing? How is this country getting along with other countries in its region and in the world?
6. How has this country’s economy been faring in the past few years? What has happened to unemployment, consumer prices, and GDP, and what do these figures reveal about the country’s economic health? Where does this country fit into the ranking of all countries for GDP per capita?
7. What are this country’s key economic sectors? In what ways is each of these sectors important to the overall economic health of the country? Which of these sectors, if any, represent significant sources of export revenue?
8. What are the prospects for foreign investment in this country’s economy? If you were in charge of a large business in your own country, would you want to do business in this country? Why or why not?
9. What are the most significant issues facing this country that as business professionals we should be aware of?
10. Describe the unique characteristics of the culture. What are the differences with the American culture? As international travelers, what must cultural rules must we be aware of or follow?