Chile's Place in Latin America

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Britkid
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Chile's Place in Latin America

Post by Britkid » Fri May 04, 2018 3:45 pm

Feel sorry for Argentina after seeding the recent news mentioned in the other thread and elsewhere but it makes you think. Could this happen here? Is Chile just another mediocrely run Latin American country a decade or two away from disaster that just happens to be in a good moment now?

I copied into excel the data from the Good Country Index, the corruptions perception index, the Freedom House rankings, the Economist democracy rankings, and added a ranking on CO2 emissions and another for animal rights and averaged them to create a ranking of countries from most to least ethical.

Here's what I got.

Global Rank
22 Uruguay
23 Chile
79 Colombia
82 Peru
84 Brazil
85 Bolivia
86 Ecuador
88 Paraguay
89 Argentina
90 Guyana
97 Suriname
162 Venezuela

Uruguay and Chile are very high on my list.

Uruguay scored 98 out of 100 from Freedom House on its freedom status, putting it 9th in the world on that list. I am quite surprised to see Uruguay easily beating other South American countries (apart from Chile) in almost every ethical-rated ranking. I had no idea.

If we exclude European countries, Chile is doing very nicely indeed compared to the rest of the world, being the 6th highest non-European country.

7 Costa Rica
14 Mauritius
15 Barbados
18 New Zealand
22 Uruguay
23 Chile

Chile and Uruguay are basically identical, then there is a very large gap. Then almost all the others are bundled together with a virtually similar ranking - every other major South American country ranks 79-89 in my list.

Venezuela is lagging everyone else by a lot. It comes dead last in South America in every one of the surveys.

Ethical behavour is a foundation for a strong economy and the ability to do business.

So my conclusion is (based on data rather than personal experience in country):

Chile/Uruguay - live and maybe invest/make a business

Others - travel, maybe live (if you can make it so you can easily leave), don't invest or do business

Venezuela - possibly travel (take some things to give to the poor), don't live
In 2014/2015 I blogged about my life in Chile. http://web.archive.org/web/201601121940 ... age_id=268

41southchile
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Re: Chile's Place in Latin America

Post by 41southchile » Sat May 05, 2018 8:20 am

Very interesting thanks for posting, with regard to your first question though could this happen here ? Is Chile just another mediocraly run country in Latin America having a good moment ? You have showed why, but In my personal opinion I would also say nofor the reasons below but first, here is an article from from this week's economist explaining the situation in Argentina
The Economist | The crisis of Argentine gradualism
https://www.economist.com/news/americas ... rsc=dg%7Ce
I think Chile is very different to the way most other countries are run in Latin America, and some of that is due to the foundations that Pinochet (economic model and reforms) put down, it is what it is, and even with nearly 30 years of democracy, the majority of that time the country has been run by the left yet while they made some needed social Changes, the basic economic model still exists that that has seen a large percentage of people lifted out of poverty over that time and many other Chileans with a much better (i.e materially, educational and financial) standard of life than their parents generations. Just look at how accustom most have become to the standards and freedom's they enjoy now that's why Guiller was not elected last year. Despite the complaints by many there is not an alternative economic model anywhere (capitalism is it folks) that will make Chile a better society. It also goes deeper than recent history too I think but that's another chapter, I e the state institution's and rule of law here.
In the Lakes Region Chile for 6 years. It looks like New Zealand in some ways, and is nearly at the bottom of the world too, but there the similarities end.

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Re: Chile's Place in Latin America

Post by admin » Sat May 05, 2018 9:21 am

Except uruguay is boring as all hell, on every single level i could find.

Is there a ranking for that?

Uruguay's entire economy is based on laundering / hiding money for the residents of the neighboring basket cases. Drive the highways, and you see almost zero economic activity that is not directly related to the off-shore money hiding biz. No trucks going to and from factories. No taxi rushing ececutives to their offices. Nothing.

Chile has a real functioning economy.

Chile, prior to the whole allende / pinochet mess, had a long history of stable democracy and fairly open markets. It was the allende economic debacal, and the pinochet regime over reaction to that, that cemented in the minds of chileans what way they wanted to go. Even the left realized they did not want the communist / socialist extreme. At the same time i believe the right in chile realized chile needs to invest in social programs to develope. Both to keep the unwashed masses from showing up at their doors with pitch forks, and you can't get rich from a bunch of people with no money.

Point is, chile developed something that most developing countries in latin america and the world lack: a large and politically stable center. Yea they quibble about the details, but for the most part the vast majority of the country tends to move politically in the same general direction. Education reform, for example. You dont see the pinera administration calling to end bachelets programs; but, they do have their own ideas about how to go about it and how to pay for it. Same with tax reform. Public Health care. So on, and so on.

The allende / pinochet years, made chileans resolve to reject and guard against extreamism, both left and right. It also forced chile to implement economic checks and balances, independent central bank, independent goverment auditor office, transparency laws, tax system that is very hard to avoid or evade, etc. Probably most important to stability is Hard coded in to law economic policies that keep budget deficits and spending in check. It becomes fairly hard for any administration to get too crazy with spending. Yea bachelet spent a lot of money, but like the current debate over the 5.5 billion that is unfunded, it is a drop in the bucket. That is like an afternoon of u.s. goverment spending.

By contrast argentina for example, swings constantly from one political extreme to another; and with it, one economic extreme or the other. Same with peru, brazil, colombia, mexico, etc. In between the chaose that causes, is a massive political power vacume that gets filled by coruption and outright organized crime. The goverment institutions hardly function, so mafias of various types fill the roll.
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Re: Chile's Place in Latin America

Post by admin » Sat May 05, 2018 9:50 am

Here is an example from todays news. Here is the ppd political party, famious for the no vote and the far left colition they formed, in a leaked internal post-mortam review of their election loss reflecting on how they went too far left and failed to focus on jobs, employment, and overall development. They are super critical of bachelet's administration rudderless manegment, lack of organization, failure to communicate, failure to keep an eye on development and economics.


How refreshing to see a political party modifying their idielogy to match the wants and needs of the populas, rather than trying to force a political square peg in to the round idelogical hole.

https://www.df.cl/noticias/economia-y-p ... 75559.html
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Re: Chile's Place in Latin America

Post by admin » Sat May 05, 2018 10:27 am

My long-term bet for chile is the exact opposite of the typical developing country boom and bust like argentina and the rest.

I am investing in chile, under the thesis that well before i kick the bucket and can cash out, chile is universally recognized as a developed country by all criteria that might matter.

That i am going to cash-out and retire by selling my land, stocks, my buisnesses some day, and sooner rather than later, after having bought in at emerging market prices, sell at developed market prices.

Pinera is claiming 2025 chile will hit developed market status. Not so sure about that, but chile is not far. Obviously a lot of things have to go just right over the next decade, but there is serious progress and i am far from the only one that thinks so.

Oecd just removed chile from the list of countries eligiable for development loans because chile's average income hit $12,500 dollars. In fact, it might be detrimental to chile's development to be prematurly recognized as a developed country, for things like loans and international development programs.

Other stats:
http://www.oecdbetterlifeindex.org/countries/chile/

I would also caution about the stats you see floating around the international media and organizations. They are often apples and rotten orenges comparisons, for one simple reason: corruption.

The stats across latin america, and many other developing countries, simply can not be trusted. The imf for example just sanctioned venezuela for not providing economic data. They lie about everything from the murder rate to the exchange rate. Argentina's goverment stats department was sanctioned not too long ago by the world bank. Meanwhile, anyone that knows china is aware that china lies about their polution levels they report, and pretty much everything else. Is it fair to rank chile up against countries reporting politically massaged numbers or no numbers at all? Often the rankings are just statistical giestimates for a bunch of countries chile is listed alongside.

Point is, chile i believe takes a lot of international critism and is down ranked frequenty in international rankings simply because they are reporting numbers at all for various metrics, let alone mostly reliable and verfiable numbers.
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mem
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Re: Chile's Place in Latin America

Post by mem » Sat May 05, 2018 1:40 pm

The one thing that I think Chile needs to be doing differently above other priorities is to start stock piling gold reserves...just like russia, china, etc. They have far too much trust in the USD for reserves. But since chile is a wannabe the US country, they dont seem to think that is important.

Chile is still the richest significant nation in all of central and south america per capita

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Re: Chile's Place in Latin America

Post by eeuunikkeiexpat » Sat May 05, 2018 2:10 pm

I believe it was the IMF and/or the World Bank who ordered Chile to sell all it's gold a couple decades back.
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mem
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Re: Chile's Place in Latin America

Post by mem » Sat May 05, 2018 2:42 pm

What the heck...

I just looked at south american gold tonnage reserves

Chile has 0.2 tons
Most other countries like peru, argentina, Ecuador, brazil, etc have at least 30 tons, some over 50. Wow

Chile is way begind the curve...shocked argentina has so much gold tonnage

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Re: Chile's Place in Latin America

Post by nwdiver » Sat May 05, 2018 3:26 pm

mem wrote:
Sat May 05, 2018 2:42 pm
What the heck...

I just looked at south american gold tonnage reserves

Chile has 0.2 tons
Most other countries like peru, argentina, Ecuador, brazil, etc have at least 30 tons, some over 50. Wow

Chile is way begind the curve...shocked argentina has so much gold tonnage
Chile has copper reserves ;) ............

I believe the "gold standard" is so last millenia
It's all about the wine.

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eeuunikkeiexpat
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Re: Chile's Place in Latin America

Post by eeuunikkeiexpat » Sat May 05, 2018 3:28 pm

Tell that to the Chinese and Russians and Germans and on and on
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mem
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Re: Chile's Place in Latin America

Post by mem » Sat May 05, 2018 3:33 pm

Bah...even as far back as 2000 chile only jad 2.3 tons of gold. At the same time uruguay had over 33 tons

Now chile has 0.2 and uruguay 0.1.

Meh....even paraguay had over 8 tons. Venezuela still has almost 200 tons and thats after liquidating close to 100 tons in the last couple years. Imagine if venezuela didnt have those gold reserves....

With argentinas gold reserves they should be able to at least get by in the near to mid term if they start dumping those.

I just really dislike chile being such a gold pauper. Chile doesnt have that insurance/backstop...but perhaps it will actually benefit private individuals in chile who are numismatic collectors. Perhaps the price of gold will soar over spot in chile just like it did during india demonetization debacle if the time comes that chilean government and private citizens decide its necessary to begin accumulating gold during a major event regarding the USD world reserve

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Re: Chile's Place in Latin America

Post by nwdiver » Sat May 05, 2018 3:35 pm

eeuunikkeiexpat wrote:
Sat May 05, 2018 3:28 pm
Tell that to the Chinese and Russians and Germans and on and on
They have to put money somewhere......
It's all about the wine.

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