Chile Wealth, Inequality, and International rankings

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Space Cat
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Re: Chile Wealth, Inequality, and International rankings

Post by Space Cat » Fri Aug 23, 2019 7:48 pm

A nice chart of inequality in relation to GDP per capita. One more confirmation that Pinochet's period set the country back:

ECqX-IlW4AAwD57.jpg
Source: Oscar Landerretche

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Re: Chile Wealth, Inequality, and International rankings

Post by Space Cat » Sat Aug 24, 2019 5:09 pm

A map of countries that have free-trade agreements with US, China or both. Chile is in a rather exclusive club:
1f2lymctu0i31.png

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Re: Chile Wealth, Inequality, and International rankings

Post by admin » Mon Aug 26, 2019 12:59 pm

and while argentina might be one of the worse performing credit in the world, chile is the best performing in the EM world:

https://www.bloomberg.com/news/articles ... nd=premium
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Re: Chile Wealth, Inequality, and International rankings

Post by 41southchile » Tue Aug 27, 2019 8:44 am

Space Cat wrote:
Fri Aug 23, 2019 7:48 pm
A nice chart of inequality in relation to GDP per capita. One more confirmation that Pinochet's period set the country back:


ECqX-IlW4AAwD57.jpg

Source: Oscar Landerretche
How exactly did it set the country back ? (Genuine question) Gini rose yes, but Pinochets reforms laid the foundation for what were some of Chiles boom years, where that graph shows it particularly high in late 80s through the 90s was when the country was growing at over 5 percent nearly every year .
Many Families had their first ever member go university in that decade, there was more commercial opportunities and businesses for many people.
I maybe wrong, but the way I see it (and in not convinced by the Gini measure) is the country got richer during the late 80s and 90s. Yes some got left behind economically (others did really well), but that happens everywhere, those at the bottom are a by product of the system, like pollution or other externalities of businesses, ( just a cold way of seeing it.) By the time the 2000s rolled around the country had more wealth and was able to offer more social services such as housing subsidies, grants and education subsidies, which started to lower the Gini measurement, you can't do those things if you are a poor county and have no income, maybe I've completely misread the graph? Or do you mean specifically during Pinochet's time when PIB went back for a few years (not that it moved much before that either) , but then it took off after that. Not defending everything from that time, just interested in trying to understand.
Please elaborate on how said confirmation set the country back exactly I maybe misreading the graph
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Re: Chile Wealth, Inequality, and International rankings

Post by Huelshoff » Tue Aug 27, 2019 11:42 am

The story of the Pinochet years is complicated. As the data above indicates, there was a sharp increase in income inequality during the period of the dictatorship, but there was a lot of income inequality before the Allende years too. Chilean economist Ricardo Ffrench-Davis wrote in about 1990 what I think was an excellent critique of the Pinochet economic policy--as one of the original Chicago Boys, he knew what he was talking about. He argues that what set the Pinochet regime on the path to more stable economic growth was the rejection of the straight-up monetarism that led to the recession in 1982 in favor of policies more in line with neo-Keynesian prescriptions. And don't forget that Pinochet never privatized CODELCO, even though its nationalization contributed to the coup in the first place. By implication, Ffrench-Davis argued that what led to the post-dictatorship growth was the move away from neo-liberal policies in the later years of the dictatorship. As the data above indicates, though, these policies did not reverse the growth in income inequality, even if they might well have helped to create the conditions necessary for it to fall once democracy was restored and governments took steps to address it. Looking at that graph, what is really striking is how both inequality has fallen and wealth has grown with the restoration of democracy in Chile. Part of that story rests in the growth of Chile's export economy, fueled by its participation in numerous free trade agreements. I used to do research on the impacts of those agreements, and almost everyone I interviewed in the foreign ministry boasted that Chile signed more agreements than any other country in the world (I don't know if that is still true). They had some unexpected side effects, like empowering women in the rural sector, but that is another story.

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Re: Chile Wealth, Inequality, and International rankings

Post by eeuunikkeiexpat » Tue Aug 27, 2019 12:15 pm

Huelshoff,

That is one of the best one paragraph summaries I've read on the topic.

Salud, hope your Chile transition is going well.
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Re: Chile Wealth, Inequality, and International rankings

Post by Space Cat » Tue Aug 27, 2019 12:17 pm

For hating communists so much, his government somehow tried managing the economy manually for the first years (of course, it was unsuccessful). The reforms he implemented with the help of the famous Chicago Boys sent Chile into a crisis in 1982:
It was the worst economic crisis in Chile since the 1930s Great Depression. Chile's GDP fell 14.3%, and unemployment rose to 23.7%.
The situation stabilized only when more sane economists took control, closer to 1984, i.e. 11 years after the coup were simply lost on trying to learn how to rule a country.

The real development started when the dude got his ass out with "NO" despite all the propaganda efforts how Chile will become a new Cuba without him. The best growth the country has ever seen happened in two decades of the center-left governments.

And it's not only economy: authoritarian regimes also suppress free expression and cripple the culture. Looking at the media created during the military government's period I often have deja vu's of the cheesy and close-minded Soviet stuff.

I've also heard some interesting discussions on how the whole Dieciocho style and customs were forced while authentic regional cultures were suppressed but that's a sensitive topic which I'm not qualified to explain properly.

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Re: Chile Wealth, Inequality, and International rankings

Post by Huelshoff » Tue Aug 27, 2019 12:22 pm

Thanks. As for the transition, well, its going. As you know better than me, everything takes a week longer, or maybe two, than it should. Lost my cell service two weeks ago after Movistar screwed up the registration of my sim card, and they still can't get it straight....

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Re: Chile Wealth, Inequality, and International rankings

Post by 41southchile » Tue Aug 27, 2019 5:24 pm

eeuunikkeiexpat wrote:
Tue Aug 27, 2019 12:15 pm
Huelshoff,

That is one of the best one paragraph summaries I've read on the topic.

Salud, hope your Chile transition is going well.
Was going to say the same thing, thanks Huelsholf, some great information there to carry on learning.
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Re: Chile Wealth, Inequality, and International rankings

Post by admin » Tue Aug 27, 2019 5:42 pm

regarding the free trade agreements, last count I have is chile has around 160, and a bunch more are in the late stages of completion. chile is easily got one of the highest rates of in the bag free trade agreements in the world.

Argentina has just mercosur, and it looks like bolsonario just killed the EU-mercosur agreement.

for all the political anti-free trade agreement b.s. these days around the world, free trade agreements (done right), bring stability. Among other things, it stops politicians from playing political games with economic issues (e.g. chump); or, at least keeps them in check.
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Re: Chile Wealth, Inequality, and International rankings

Post by eeuunikkeiexpat » Tue Aug 27, 2019 9:34 pm

I believe there is a difference between one-on-one trade deals vs. bloc/multi-country/hemisphere/whatever trade deals.

Trump has a valid point favoring the first over the others and Chile has done just that.
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Re: Chile Wealth, Inequality, and International rankings

Post by 41southchile » Wed Aug 28, 2019 10:59 pm

Chile has some of the least affordable house prices for the average citizen, (dont know if that sounds right, ) anyway, affordability is classed as , severely unreachable, worse than NZ and UK apparantly according to a study.
https://www.emol.com/noticias/Economia/ ... Chile.html
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