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Chile

2007 Schools Wikipedia Selection. Related subjects: Central & South American
Countries; Countries

   SOS Children works in Chile. For more information see SOS Children in
   Chile
   República de Chile
   Republic of Chile

   Flag of Chile Coat of arms of Chile
   Flag          Coat of arms
   Motto: Por la Razón o la Fuerza
   (Spanish: "By right or might")
   Anthem: Himno Nacional
   Location of Chile
   Capital Santiago^1
   33°26′S 70°40′W
   Largest city Santiago
   Official languages Spanish
   Government Democratic republic
    - President Michelle Bachelet
   Independence From Spain
    - First Nat. Gov. Junta September 18, 1810
    - Declared February 12, 1818
    - Recognized April 25, 1844
   Area
    - Total 756,950 km² ( 38th)
   292,183 sq mi
    - Water (%) 1.07%^2
   Population
    - June 2006 estimate 16,432,674 ( 60th)
    - 2002 census 15,116,435
    - Density 21/km² ( 184th)
   54/sq mi
   GDP ( PPP) 2005 estimate
    - Total $193,213 million ( 43rd)
    - Per capita $11,937 ( 56th)
   HDI  (2004) 0.859 (high) ( 38th)
   Currency Peso ( CLP)
   Time zone — ( UTC-4)
    - Summer ( DST) — ( UTC-3)
   Internet TLD .cl
   Calling code +56
   ^1 The legislative body operates in Valparaíso
   ^2 Includes Easter Island and Isla Sala y Gómez; does not include
   1,250,000 km² of claimed territory in Antarctica

   Chile, officially the Republic of Chile (Spanish: República de Chile ),
   is a country in South America occupying a long and narrow coastal strip
   wedged between the Andes mountains and the Pacific Ocean. The Pacific
   forms the country's entire western border, with Peru to the north,
   Bolivia to the northeast, Argentina to the east, and the Drake Passage
   at the country's southernmost tip.

Origin of the name

   There are various theories about the origin of the word Chile.
   According to one theory the Incas of Peru, who had failed to conquer
   the Araucanians, called the valley of the Aconcagua "Chili" by
   corruption of the name of a tribal chief ("cacique") called Tili, who
   ruled the area at the time of the Incan conquest. Another theory points
   to the similarity of the valley of the Aconcagua with that of the Casma
   Valley in Peru, where there was a town and valley named Chili. Other
   theories say Chile may derive its name from the indigenous Mapuche word
   chilli, which may mean "where the land ends," "the deepest point of the
   Earth,", or "sea gulls;" or from the Quechua chin, "cold," or the
   Aymara tchili meaning "snow." Another meaning attributed to chilli is
   the onomatopoeic cheele-cheele—the Mapuche imitation of a bird call.
   The Spanish conquistadors heard about this name from the Incas and the
   few survivors of Diego de Almagro's first Spanish expedition south from
   Peru in 1535-36 called themselves the "men of Chilli."

History

   The Mapuche were the original inhabitants of central and southern Chile
   Enlarge
   The Mapuche were the original inhabitants of central and southern Chile

   About 10,000 years ago, migrating Native Americans settled in fertile
   valleys and along the coast of what is now Chile. The Incas briefly
   extended their empire into what is now northern Chile, but the area's
   barrenness prevented extensive settlement.

   In 1520, while attempting to circumnavigate the earth, the Portuguese
   Ferdinand Magellan, discovered the southern passage now named after
   him, the Strait of Magellan. The next Europeans to reach Chile were
   Diego de Almagro and his band of Spanish conquistadors, who came from
   Peru in 1535 seeking gold. The Spanish encountered hundreds of
   thousands of Indians from various cultures in the area that modern
   Chile now occupies. These cultures supported themselves principally
   through slash-and-burn agriculture and hunting. The conquest of Chile
   began in earnest in 1540 and was carried out by Pedro de Valdivia, one
   of Francisco Pizarro's lieutenants, who founded the city of Santiago on
   February 12, 1541. Although the Spanish did not find the extensive gold
   and silver they sought, they recognized the agricultural potential of
   Chile's central valley, and Chile became part of the Viceroyalty of
   Peru.
   Pedro de Valdivia
   Enlarge
   Pedro de Valdivia

   Conquest of the land that is today called Chile took place only
   gradually, and the Europeans suffered repeated setbacks at the hands of
   the local population. A massive Mapuche insurrection that began in 1553
   resulted in Valdivia's death and the destruction of many of the
   colony's principal settlements. Subsequent major insurrections took
   place in 1598 and in 1655. Each time the Mapuche and other native
   groups revolted, the southern border of the colony was driven
   northward. The abolition of slavery in 1683 defused tensions on the
   frontier between the colony and the Mapuche land to the south, and
   permitted increased trade between colonists and the Mapuche.

   The drive for independence from Spain was precipitated by usurpation of
   the Spanish throne by Napoleon's brother Joseph in 1808. A national
   junta in the name of Ferdinand—heir to the deposed king—was formed on
   September 18, 1810. The junta proclaimed Chile an autonomous republic
   within the Spanish monarchy. A movement for total independence soon won
   a wide following. Spanish attempts to re-impose arbitrary rule during
   what was called the " Reconquista" led to a prolonged struggle.
   Bernardo O'Higgins
   Enlarge
   Bernardo O'Higgins

   Intermittent warfare continued until 1817, when an army led by Bernardo
   O'Higgins, Chile's most renowned patriot, and José de San Martín, hero
   of the Argentine War of Independence, crossed the Andes into Chile and
   defeated the royalists. On February 12, 1818, Chile was proclaimed an
   independent republic under O'Higgins' leadership. The political revolt
   brought little social change, however, and 19th century Chilean society
   preserved the essence of the stratified colonial social structure,
   which was greatly influenced by family politics and the Roman Catholic
   Church. A strong presidency eventually emerged, but wealthy landowners
   remained extremely powerful.
   War of the Pacific: The Battle of Iquique on May 21, 1879
   Enlarge
   War of the Pacific: The Battle of Iquique on May 21, 1879

   Toward the end of the 19th century, the government in Santiago
   consolidated its position in the south by ruthlessly suppressing the
   Mapuche Indians. In 1881, it signed a treaty with Argentina confirming
   Chilean sovereignty over the Strait of Magellan. As a result of the War
   of the Pacific with Peru and Bolivia (1879–83), Chile expanded its
   territory northward by almost one-third, eliminating Bolivia's access
   to the Pacific, and acquired valuable nitrate deposits, the
   exploitation of which led to an era of national affluence. The Chilean
   Civil War in 1891 brought about a redistribution of power between the
   President and Congress, and Chile established a parliamentary style
   democracy. However, the Civil War had also been a contest between those
   who favored the development of local industries and powerful Chilean
   banking interests, particularly the House of Edwards who had strong
   ties to foreign investors. Hence the Chilean economy partially
   degenerated into a system protecting the interests of a ruling
   oligarchy. By the 1920s, the emerging middle and working classes were
   powerful enough to elect a reformist president, Arturo Alessandri
   Palma, whose program was frustrated by a conservative congress.
   Alessandri Palma's reformist tendencies were partly tempered later by
   an admiration for some elements of Mussolini's Italian Corporate State.
   In the 1920s, Marxist groups with strong popular support arose.

   A military coup led by General Luis Altamirano in 1924 set off a period
   of great political instability that lasted until 1932. The longest
   lasting of the ten governments between those years was that of General
   Carlos Ibáñez del Campo, who briefly held power in 1925 and then again
   between 1927 and 1931 in what was a de facto dictatorship, although not
   really comparable in harshness or corruption to the type of military
   dictatorship that has often bedeviled the rest of Latin America, and
   certainly not comparable to the violent and repressive regime of
   Augusto Pinochet decades later. By relinquishing power to a
   democratically elected successor, Ibáñez del Campo retained the respect
   of a large enough segment of the population to remain a viable
   politician for more than thirty years, in spite of the vague and
   shifting nature of his ideology. When constitutional rule was restored
   in 1932, a strong middle-class party, the Radicals, emerged. It became
   the key force in coalition governments for the next 20 years. During
   the period of Radical Party dominance (1932–52), the state increased
   its role in the economy. In 1952, voters returned Ibáñez del Campo, now
   reincarnated as a sort of Chilean Perón, to office for another six
   years. Jorge Alessandri succeeded Ibáñez del Campo in 1958, bringing
   Chilean conservatism back into power democratically for another term.

   The 1964 presidential election of Christian Democrat Eduardo Frei
   Montalva by an absolute majority initiated a period of major reform.
   Under the slogan "Revolution in Liberty," the Frei administration
   embarked on far-reaching social and economic programs, particularly in
   education, housing, and agrarian reform, including rural unionization
   of agricultural workers. By 1967, however, Frei encountered increasing
   opposition from leftists, who charged that his reforms were inadequate,
   and from conservatives, who found them excessive. At the end of his
   term, Frei had accomplished many noteworthy objectives, but he had not
   fully achieved his party's ambitious goals.
   Salvador Allende (1970-1973)
   Enlarge
   Salvador Allende (1970-1973)

   In 1970, Senator Salvador Allende Gossens, a Marxist physician and
   member of Chile's Socialist Party, who headed the " Popular Unity" (UP
   or "Unidad Popular") coalition of the Socialist, Communist, Radical,
   and Social-Democratic Parties, along with dissident Christian
   Democrats, the Popular Unitary Action Movement (MAPU), and the
   Independent Popular Action, won a plurality of votes in a three-way
   contest. Despite pressure from the government of the United States, the
   Chilean Congress, keeping with tradition, conducted a runoff vote
   between the leading candidates, Allende and former president Jorge
   Alessandri and chose Allende by a vote of 153 to 35. Frei refused to
   form an alliance with Alessandri to oppose Allende, on the grounds that
   the Christian Democrats were a workers party and could not make common
   cause with the oligarchs.

   Allende's program included advancement of workers' interests; a
   thoroughgoing implementation of agrarian reform; the reorganization of
   the national economy into socialized, mixed, and private sectors; a
   foreign policy of "international solidarity" and national independence;
   and a new institutional order (the "people's state" or "poder
   popular"), including the institution of a unicameral congress. The
   Popular Unity platform also called for nationalization of foreign
   (U.S.) ownership of Chile's major copper mines.

   An economic depression that began in 1967 peaked in 1970, exacerbated
   by capital flight, plummeting private investment, and withdrawal of
   bank deposits by those opposed to Allende's socialist program.
   Production fell and unemployment rose. Allende adopted measures
   including price freezes, wage increases, and tax reforms, which had the
   effect of increasing consumer spending and redistributing income
   downward. Joint public-private public works projects helped reduce
   unemployment. Much of the banking sector was nationalized. Many
   enterprises within the copper, coal, iron, nitrate, and steel
   industries were expropriated, nationalized, or subjected to state
   intervention. Industrial output increased sharply and unemployment fell
   during the Allende administration's first year.

   Other reforms undertaken during the early Allende period included
   redistribution of millions of hectares of land to landless agricultural
   workers as part of the agrarian reform program, giving the armed forces
   an overdue pay increase, and providing free milk to children. The
   Indian Peoples Development Corporation and the Mapuche Vocational
   Institute were founded to address the needs of Chile's indigenous
   population.

   The nationalization of U.S. and other foreign-owned companies led to
   increased tensions with the United States. The Nixon administration
   brought international financial pressure to bear in order to restrict
   economic credit to Chile. Simultaneously, the CIA funded opposition
   media, politicians, and organizations, helping to accelerate a campaign
   of domestic destabilization. By 1972, the economic progress of
   Allende's first year had been reversed and the economy was in crisis.
   Political polarization increased, and large mobilizations of both pro-
   and anti-government groups became frequent, often leading to clashes.

   By early 1973, inflation was out of control. The crippled economy was
   further battered by prolonged and sometimes simultaneous strikes by
   physicians, teachers, students, truck owners, copper workers, and the
   small business class. A military coup overthrew Allende on September
   11, 1973. As the armed forces bombarded the presidential palace
   (Palacio de La Moneda), Allende reportedly committed suicide . A
   military government, led by General Augusto Pinochet Ugarte, took over
   control of the country. The first years of the regime were marked by
   serious human rights violations. On October 1973, at least 70 persons
   were murdered by the Caravan of Death. At least a thousand people were
   executed during the first six months of Pinochet in office, and at
   least two thousand more were killed during the next sixteen years, as
   reported by the Rettig Report. Some 30,000 were forced to flee the
   country, and tens of thousands of people were detained and tortured, as
   investigated by the 2004 Valech Commission. A new Constitution was
   approved by a highly irregular and undemocratic plebiscite
   characterized by the absence of registration lists, on September 11,
   1980, and General Pinochet became President of the Republic for an
   8-year term.
   Michelle Bachelet (2006–), first woman president
   Enlarge
   Michelle Bachelet (2006–), first woman president

   In the late 1980s, the regime gradually permitted greater freedom of
   assembly, speech, and association, to include trade union and limited
   political activity. The right-wing military government pursued
   decidedly laissez-faire economic policies. During its nearly 17 years
   in power, Chile moved away from economic statism toward a largely free
   market economy that saw an increase in domestic and foreign private
   investment, although the copper industry and other important mineral
   resources were not returned to foreign ownership. In a plebiscite on
   October 5, 1988, General Pinochet was denied a second 8-year term as
   president (56% against 44%). Chileans elected a new president and the
   majority of members of a two-chamber congress on December 14, 1989.
   Christian Democrat Patricio Aylwin, the candidate of a coalition of 17
   political parties called the Concertación, received an absolute
   majority of votes (55%). President Aylwin served from 1990 to 1994, in
   what was considered a transition period.

   In December 1993, Christian Democrat Eduardo Frei Ruiz-Tagle, the son
   of previous president Eduardo Frei Montalva, led the Concertación
   coalition to victory with an absolute majority of votes (58%). Frei
   Ruiz-Tagle was succeeded in 2000 by Socialist Ricardo Lagos, who won
   the presidency in a unprecedented runoff election against Joaquín Lavín
   of the rightist Alliance for Chile. In January 2006 Chileans elected
   their first woman president, Michelle Bachelet Jeria, of the Socialist
   Party. She was sworn in on March 11, 2006, continuing the Concertación
   coalition governance for another four years.

Politics

   Map of Chile
   Enlarge
   Map of Chile

   Chile's Constitution was approved in a highly irregular national
   plebiscite in September 1980, under the military government of Augusto
   Pinochet. It entered into force in March 1981. After Pinochet's defeat
   in the 1988 plebiscite, the Constitution was amended to ease provisions
   for future amendments to the Constitution. In September 2005, President
   Ricardo Lagos signed into law several constitutional amendments passed
   by Congress. These include eliminating the positions of appointed
   senators and senators for life, granting the President authority to
   remove the commanders-in-chief of the armed forces, and reducing the
   presidential term from six to four years.

   Chileans voted in the first round of presidential elections on December
   11, 2005. None of the four presidential candidates won more than 50% of
   the vote. As a result, the top two vote-getters—centre-left
   Concertación coalition’s Michelle Bachelet and centre-right Alianza
   coalition’s Sebastián Piñera—competed in a run-off election on January
   15, 2006, which Michelle Bachelet won. She was sworn in on March 11,
   2006. This was Chile’s fourth presidential election since the end of
   the Pinochet era. All four have been judged free and fair. The
   President is constitutionally barred from serving consecutive terms.

   Chile's bicameral Congress has a 38-seat Senate and a 120-member
   Chamber of Deputies. Senators serve for 8 years with staggered terms,
   while Deputies are elected every 4 years. The current Senate has a
   20-18 split in favour of pro-government Senators. The last
   congressional elections were held in December 11, 2005, concurrently
   with the presidential election. The current lower house—the Chamber of
   Deputies—contains 63 members of the governing center-left coalition and
   57 from the centre-right opposition. The Congress is located in the
   port city of Valparaíso, about 140 kilometers (84 mi.) west of the
   capital, Santiago.

   Chile's congressional elections are governed by a binomial system that
   rewards large representations. Therefore, there are only Senate and two
   Deputy seats apportioned to each electoral district, parties are forced
   to form wide coalitions and historically, the two largest coalitions
   (Concertación and Alianza) split most of the seats in a district. Only
   if the leading coalition ticket out-polls the second-place coalition by
   a margin of more than 2-to-1 does the winning coalition gain both
   seats. In the 2001 congressional elections, the conservative
   Independent Democratic Union surpassed the Christian Democrats for the
   first time to become the largest party in the lower house. In 2005,
   both leading parties, the Christian Democrats and the UDI lost
   representation in favour of their respective allies Socialist Party
   (which became the biggest party in the Concertación block) and National
   Renewal in the right-wing alliance. The Communist Party again failed to
   gain any seats in the election. (See Chilean parliamentary election,
   2005.)

   Chile's judiciary is independent and includes a court of appeal, a
   system of military courts, a constitutional tribunal, and the Supreme
   Court. In June 2005, Chile completed a nation-wide overhaul of its
   criminal justice system. The reform has replaced inquisitorial
   proceedings with an adversarial system more similar to that of the
   United States.

Administrative divisions

   Chile is divided into 13 regions, each of which is headed by an
   intendente appointed by the President. Every region is further divided
   into provinces with a Gobernador Provincial, also appointed by the
   President. Finally each province is divided into municipalities. which
   are sometimes referred to as comunas, each with its own mayor, and
   councilors, known as concejales elected by their inhabitants.

   Each region is designated by a name and a Roman numeral, assigned from
   north to south. In general, the Roman numeral is used, rather than the
   name. The only exception is the region where Santiago is situated,
   which is designated RM, that stands for Región Metropolitana,
   Metropolitan Region.

   In 2005, the Chilean congress passed a reform to create two new
   regions, one in the north, around the city of Arica, and one in the
   south centered around Valdivia (aka Region of the Rivers). Being
   designated by numerals XIV and XV, both break the geographical
   numerical order from north to south. There is speculation that the
   numeral system will be dropped in favour of their formal names.

Geography

   Lake Chungará and Parinacota volcano in the north
   Enlarge
   Lake Chungará and Parinacota volcano in the north
   Osorno volcano in the south
   Enlarge
   Osorno volcano in the south

   A long and narrow coastal Southern Cone country on the west side of the
   Andes Mountains, Chile stretches over 4,630 kilometers (2,880  mi)
   north to south, but only 430 kilometers (265 mi) at its widest point
   east to west. This encompasses a remarkable variety of landscapes.

   At 292,240 mi² (756,950 km²), Chile is the world's 38th-largest country
   (after Turkey). It is comparable in size to Zambia, and is somewhat
   larger than the US state of Texas.

   The northern Atacama desert contains great mineral wealth, primarily
   copper and nitrates. The relatively small Central Valley, which
   includes Santiago, dominates the country in terms of population and
   agricultural resources. This area also is the historical centre from
   which Chile expanded in the late 19th century, when it integrated the
   northern and southern regions. Southern Chile is rich in forests,
   grazing lands, and features a string of volcanoes and lakes. The
   southern coast is a labyrinth of fjords, inlets, canals, twisting
   peninsulas, and islands. The Andes Mountains are located on the eastern
   border. Chile is the longest (N-S) country in the world (over
   4,200 km / 2,600 mi), and also claims 1,250,000 square kilometers
   (482,628  sq. mi) of Antarctica as part of its territory. However, this
   latter claim is suspended under the terms of the Antarctic Treaty, of
   which Chile is signatory.

   Chile controls Easter Island and Sala y Gómez Island, the easternmost
   islands of Polynesia, which it incorporated to its territory in 1888,
   and Robinson Crusoe Island, more than 600 kilometers (375 mi) from the
   mainland, in the Juan Fernández archipelago. Easter Island is nowadays
   a province of Chile. Also controlled but uninhabited are the small
   islands of Sala y Gómez, San Ambrosio and San Felix, these islands are
   notable because they extend Chile's claim to territorial waters out
   from its coast into the Pacific.

Time zones

   Because of the distance between the mainland and Easter Island, Chile
   uses 4 different UTC offsets:
     * The mainland uses UTC-4, and in summer as daylight saving time
       UTC-3.
     * Easter Island uses UTC-6, and in summer as daylight saving time
       UTC-5.

Economy

   Santiago is Chile's financial center
   Enlarge
   Santiago is Chile's financial centre

   After a decade of impressive growth rates, Chile experienced a moderate
   downturn in 1999, brought on by the global economic slowdown. The
   economy remained sluggish until 2003, when it began to show clear signs
   of recovery, achieving 3.3% real GDP growth. The Chilean economy
   finished 2004 with growth of 6.1%. Chile was on track to achieve real
   GDP growth of around 6% in 2005, mainly due to record-level copper
   prices.

   Chile has pursued generally sound economic policies for nearly three
   decades. The 1973-90 military government sold many state-owned
   companies, and the three democratic governments since 1990 have
   continued privatization, though at a slower pace. The government's role
   in the economy is mostly limited to regulation, although the state
   continues to operate copper giant CODELCO and a few other enterprises.
   Chile is strongly committed to free trade and has welcomed large
   amounts of foreign investment. Chile has signed free trade agreements
   (FTAs) with several important economies, including an FTA with the
   United States, which was signed in 2003 and implemented in January
   2004. Over the last several years, Chile has signed FTAs with the
   European Union, South Korea, New Zealand, Singapore, Brunei, and the
   People's Republic of China. It reached a partial trade agreement with
   India in 2005 and began negotiations for full-fledged FTAs with India
   and Japan in 2006. High domestic savings and investment rates also
   helped propel Chile's economy to average growth rates of 8% during the
   1990s. The privatized national pension system (AFP) has encouraged
   domestic investment and contributed to an estimated total domestic
   savings rate of approximately 21% of GDP. However, the AFP is not
   without its critics, who cite low coverage rates (only 55% of the
   working population is covered) with whole groups such as the
   self-employed outside the system. There has also been criticism of the
   inefficiency and high costs due to a lack of competition among pension
   funds. Critics cite loopholes in the use of pension savings through
   lump sum withdraws for the purchase of a second home or payment of
   university fees as fundamental weaknesses of the AFP.
   Chile's GDP growth since 1980
   Enlarge
   Chile's GDP growth since 1980

   Unemployment has hovered in the 8%-10% range in recent years, well
   above the 5%-6% average for the 1990s. Unemployment remained at 8.8% at
   the end of 2004 in spite of strong economic growth. Most international
   observers blame the high unemployment rate on Chile’s complicated and
   restrictive labor laws. Wages have risen faster than inflation as a
   result of higher productivity, boosting national living standards. The
   percentage of Chileans with incomes below the poverty line—defined as
   twice the cost of satisfying a person's minimal nutritional needs—fell
   from 46% in 1987 to around 18.8% in 2005 as proclaimed by the then
   president Ricardo Lagos. Critics in Chile, however, argue true poverty
   figures are considerably higher than those officially published. In
   2006, according to statistics released by Chile's CAS Informática,
   around 58% of Chileans lived near or below poverty levels; 20.6% in
   extreme poverty. Despite enjoying a comparatively higher GDP and more
   robust economy compared to most other countries of Latin America, Chile
   also suffers from one of the most uneven distributions of wealth in the
   world, ahead only of Brazil in the Latin American region and lagging
   behind even of most developing sub-Saharan African nations. Chile's top
   10 richest percentile possesses 47 percent of the country's wealth. In
   relation to income distribution, some 6.2% of the country populates the
   upper economic income bracket, 15% the middle bracket, 21% the lower
   middle, 38% the lower bracket, and 20% the extreme poor.

   Chile's independent Central Bank pursues a policy of maintaining
   inflation between 2% and 4%. Inflation has not exceeded 5% since 1998.
   Chile registered an inflation rate of 2.4% in 2004. In 2005, inflation
   reached an estimated 3.7%. Stronger than expected domestic demand
   coupled with higher worldwide energy prices led to most of the
   inflationary rise in 2005. The Chilean peso’s rapid appreciation
   against the U.S. dollar in 2004 and 2005 helped keep down inflation
   while at the same time the strengthening peso played a role in the
   stronger than expected domestic consumption. Most wage settlements and
   spending decisions are indexed, reducing inflation's volatility. Under
   the compulsory private pension system, most formal sector employees pay
   10% of their salaries into privately managed funds.

   Total foreign direct investment rose to $7.1 billion in 2004, up from
   $2.5 billion in 2003. Both foreign and domestic investment in Chile had
   declined during the country’s period of slower economic growth from
   1999-2003, but both now appear to be recovering strongly. The Chilean
   Government committed in early 2002 to undertake a series of
   microeconomic reforms designed to create new incentives for private
   investment. The government also has encouraged the use of Chile as an
   "investment platform" for multinational corporations planning to
   operate in the region. Chile's welcoming attitude toward foreign direct
   investment is codified in the country's Foreign Investment Law, which
   gives foreign investors the same treatment as Chileans. Registration is
   simple and transparent, and foreign investors are guaranteed access to
   the official foreign exchange market to repatriate their profits and
   capital. The U.S.-Chile Free Trade Agreement offers a number of other
   investor protections.

Foreign Trade

   Chuquicamata is the largest open pit copper mine in the world
   Enlarge
   Chuquicamata is the largest open pit copper mine in the world

   Chile's economy is highly dependent on international trade. In 2005,
   exports accounted for about 39% of GDP. That figure was somewhat
   distorted by world-record copper prices. Chile’s overall trade profile
   has traditionally been dependent upon copper exports, and the rise in
   copper prices has reinforced it further. The state-owned firm CODELCO
   is the world's largest copper-producing company with recorded copper
   reserves of 200 years. Chile has made an effort to expand
   nontraditional exports. In 1975, non-mineral exports made up just over
   30% of total exports, whereas now they account for about 60%. The most
   important non-mineral exports are forestry and wood products, fresh
   fruit and processed food, fishmeal and seafood, and wine. The trade
   balance for 2005 showed a surplus of $8 billion. Total exports in 2005
   were $38 billion, up nearly 20% from 2004. Chile's export markets are
   fairly balanced among Europe (25.1%), Asia (33.1%), Latin America
   (15.7%), and North America (19%). The U.S., the largest national
   market, takes in 17.3% of Chile's exports. Since the implementation of
   the U.S.-Chile FTA in January 2004, bilateral trade has increased 85%.

   Asia has been the fastest-growing export market in recent years. For
   example, Chile’s number two, three, and four trading partners are
   China, Japan, and South Korea, respectively. Chile’s recent FTAs with
   Asian trading partners and plans to sign more in 2006 underscore the
   growing importance of Asia to Chile’s trade portfolio.

   Chilean imports increased 32% in 2005, to $30 billion (est.),
   reflecting a positive change in consumer demand and overall economic
   recovery. Capital goods made up about 66% of total imports. The United
   States provided 13.7% (est.) of Chilean imports in 2005. Chile
   unilaterally lowered its across-the-board import tariff—for all
   countries with which it does not have a trade agreement—to 6% in 2003.

   Higher effective tariffs are charged only on imports of wheat, wheat
   flour, and sugar as a result of a system of import price bands. The
   price bands were ruled inconsistent with Chile's World Trade
   Organization (WTO) obligations in 2002, and the government has
   introduced legislation to modify them. Also, Chile will have to phase
   out the price bands within 12 years under the terms of the U.S.-Chile
   FTA.
   APEC leaders during the 2004 summit held in Santiago
   Enlarge
   APEC leaders during the 2004 summit held in Santiago

   Successive Chilean governments have actively pursued trade-liberalizing
   agreements. During the 1990s, Chile signed FTAs with Canada, Mexico,
   and Central America. Chile also concluded preferential trade agreements
   with Venezuela, Colombia, and Ecuador. An association agreement with
   Mercosur—Argentina, Brazil, Paraguay, and Uruguay—went into effect in
   October 1996. Continuing its export-oriented development strategy,
   Chile completed landmark free trade agreements in 2002 with the
   European Union and South Korea. Chile, as a member of the Asia-Pacific
   Economic Cooperation (APEC) organization, is seeking to boost
   commercial ties to Asian markets. To that end, it has signed FTAs in
   recent years with New Zealand, Singapore, Brunei, and most recently the
   People's Republic of China. In 2006, Chile has begun FTA negotiations
   with Japan and India.

   After two years of negotiations, the United States and Chile signed an
   agreement in June 2003. The agreement will lead to completely duty-free
   bilateral trade within 12 years. The U.S.-Chile FTA entered into force
   January 1, 2004 following approval by the U.S. and Chilean congresses.
   The bilateral FTA has inaugurated greatly expanded U.S.-Chilean trade
   ties. Chile is a strong proponent of pressing ahead on negotiations for
   a Free Trade Area of the Americas (FTAA) and active in the WTO’s Doha
   round of negotiations, principally through its membership in the G-20
   and Cairns Group.

Finance

   Skyline of Santiago's Financial District
   Enlarge
   Skyline of Santiago's Financial District

   Chile's financial sector has grown faster than other areas of the
   economy over the last few years; a banking reform law approved in 1997
   broadened the scope of permissible foreign activity for Chilean banks.
   The Chilean Government implemented a further liberalization of capital
   markets in 2001. Chileans have enjoyed the recent introduction of new
   financial tools such as home equity loans, currency futures and
   options, factoring, leasing, and debit cards. The introduction of these
   new products has also been accompanied by an increased use of
   traditional instruments such as loans and credit cards. Chile's private
   pension system, with assets worth roughly $54 billion at the end of
   2004, has been an important source of investment capital for the
   capital market.

   Chile maintains one of the best credit ratings (S&P A+) in Latin
   America. There are three main ways for Chilean firms to raise funds
   abroad: bank loans, issuance of bonds, and the selling of stocks on
   U.S. markets through American Depository Receipts (ADRs). Nearly all of
   the funds raised through these means go to finance domestic Chilean
   investment. The government continues to pay down its foreign debt.
   Combined public and private foreign debt was roughly 50% of GDP at the
   end of 2004—low by Latin American standards.

Defense

   F-16 Fighting Falcon of the Chilean Air Force
   Enlarge
   F-16 Fighting Falcon of the Chilean Air Force

   Chile's Armed Forces are subject to civilian control exercised by the
   President through the Minister of Defense. The President has the
   authority to remove the commanders-in-chief of the armed forces.

   The commander in chief of the Chilean Army is Gen. Óscar Izurieta
   Ferrer. The Chilean Army is 55,000 strong and is organized with an Army
   headquarters in Santiago, seven divisions throughout its territory, an
   Air Brigade in Rancagua, and a Special Forces Command in Colina. The
   Chilean Army is one of the most professional and technologically
   advanced armies in Latin America.

   Adm. Rodolfo Codina Díaz directs the 25,000-person Chilean Navy,
   including 5,000 Marines. Of the fleet of 29 surface vessels, only six
   are operational major combatants (destroyers and frigates). Those ships
   are based in Valparaíso. The Navy operates its own aircraft for
   transport and patrol; there are no Navy fighter or bomber aircraft. The
   Navy also operates three submarines based in Talcahuano.
   Scorpène class submarine, SS O'Higgins.
   Enlarge
   Scorpène class submarine, SS O'Higgins.

   Gen. Osvaldo Sarabia Vilches heads a force of 12,500. Air assets are
   distributed among five air brigades headquartered in Iquique,
   Antofagasta, Santiago, Puerto Montt, and Punta Arenas. The Chilean Air
   Force also operates an airbase on King George Island, Antarctica. The
   FACH started taking delivery of 10 U.S. F-16 aircraft in 2006, along
   with 6 refurbished second-hand F-16's from the Royal Dutch Air Force.

   After the military coup in September 1973, the Chilean national police,
   also known as Carabineros de Chile, were incorporated into the Defense
   Ministry. With the return of democratic government, the police were
   placed under the operational control of the Interior Ministry but
   remained under the nominal control of the Defense Ministry. Gen. José
   Bernales is the head of the national police force of 30,000 men and
   women who are responsible for law enforcement, traffic management,
   borders surveillance, narcotics suppression and counter-terrorism
   throughout Chile.

   Created in 1933, the Investigation Police of Chile works as a civil
   police agency, similar in scope and function to the American FBI.
   Administratively part of the Ministry of Defense, its function is to
   serve as the investigative arm of the Judicial branch, carrying out the
   actual tasks of investigation and forensic analysis; Carabineros, by
   contrast, enforce the law and prevent crimes as they happen, but do not
   investigate crimes after the fact. Prefecto Arturo Herrera Verdugo is
   currently the head of the Policía de Investigaciones.

Foreign relations

   Since its return to democracy in 1990, Chile has been an active
   participant in the international political arena. Chile completed a
   2-year non-permanent position on the United Nations Security Council in
   January 2005. Chile is an active member of the United Nations family of
   agencies and participates in UN peacekeeping missions. Chile hosted the
   Defense Ministerial of the Americas in 2002 and the APEC Summit and the
   Community of Democracies Ministerial in April 2005. An associate member
   of Mercosur and a full member of APEC, Chile has been an important
   actor on international economic issues and hemispheric free trade.

   The Chilean Government has diplomatic relations with most countries. It
   settled most of its territorial disputes with Argentina during the
   1990s. Chile and Bolivia severed diplomatic ties in 1978 over Bolivia's
   desire to reacquire territory it lost to Chile in 1879-83 War of the
   Pacific. The two countries maintain consular relations.

Demographics

   Chile is a relatively homogenous country and most of its population is
   of predominantly Spanish origin, with varying degrees of native
   Amerindian admixture, the product of the racial mixture between
   colonial Spanish immigrants and the native Amerindian tribes.

   About 85% of the country's population lives in urban areas, with 40%
   living in Greater Santiago. Chile's population growth is among the
   lowest in Latin America, at around 0.97%, it comes third only to
   Uruguay and Cuba.

Indigenous communities

               Those belonging to recognised indigenous communities (2002)
                               Alacalufe 2.622 0,02% Mapuche 604.349 4,00%
                               Atacameño 21.015 0,14% Quechua 6.175 0,04%
                                   Aymara 48.501 0,32% Rapanui 4.647 0,03%
                                     Colla 3.198 0,02% Yámana 1.685 0,01%

   In the 1992 Chilean census, a total of 10.5% of the total population
   surveyed declared themselves indigenous, irrespective of whether they
   currently practiced or spoke a native culture and language; almost one
   million people (9.7% of the total) declared themselves Mapuche, 0.6%
   declared to be Aymara, and a 0.2% reported as Rapanui.

   At the 2002 census, only indigenous people that still practiced or
   spoke a native culture and language were surveyed: 4.6% of the
   population (692,192 people) fit that description; of these, 87.3%
   declared themselves Mapuche..

Immigration

   Population of Chile from 1950, projected up to 2050 (INE)
   Enlarge
   Population of Chile from 1950, projected up to 2050 (INE)

   Relative to its overall population, Chile never experienced any large
   scale wave of immigrants. The total number of immigrants to Chile, both
   originating from other Latin American countries and all other (mostly
   European) countries, never surpassed 4% of its total population. This
   is not to say that immigrants were not important to the evolution of
   Chilean society and the Chilean nation. Some non-Spanish European
   immigrants arrived in Chile - mainly to the northern and southern
   extremities of the country - during the 19th and 20th centuries,
   including English, Germans Irish, Italians, French, Croatians and other
   former Yugoslavians. The prevalence of non-Hispanic European surnames
   among the governing body of modern Chile are a testament to their
   disproportionate contribution and influence on the country. Also worth
   mentioning are the Korean and especially Palestinian communities, the
   latter being the largest colony of that people outside of the Arab
   world. The volume of immigrants from neighboring countries to Chile
   during those same periods was of a similar value.

   Currently, immigration from neighboring countries to Chile is greatest,
   and during the last decade immigration to Chile has doubled to 184,464
   people in 2002, originating primarily from Argentina, Bolivia and Peru.
   Emigration of Chileans has decreased during the last decade: It is
   estimated that 857,781 Chileans live abroad, 50.1% of those being in
   Argentina, 13.3% in the United States, 4.9% in Sweden, and around 2% in
   Australia, with the rest being scattered in smaller numbers across the
   globe.

Culture

   Dancing the cueca in 1906. Proclaimed Chile's official national folk
   dance since September 18, 1979
   Enlarge
   Dancing the cueca in 1906. Proclaimed Chile's official national folk
   dance since September 18, 1979

   Northern Chile was an important centre of culture in the medieval and
   early modern Inca empire, while the central and southern regions were
   areas of Mapuche cultural activities. Throught the colonial period
   following the conquest, and during the early Republican period, the
   country's culture was dominated by the Spanish. Other European
   influences, primarily English and French, began in the 19th century and
   have continued until today.

   The national dance is the cueca. Another form of traditional Chilean
   song, though not a dance, is the tonada. Arising from music imported by
   the Spanish colonists, it is distinguished from the cueca by an
   intermediate melodic section and a more prominent melody. In the
   mid-1960s native musical forms were revitalized by the Parra family
   with the Nueva Canción Chilena, which was associated with political
   activists and reformers, and by the folk singer and researcher on
   folklore and Chilean ethnography, Margot Loyola.

   Chileans call their country país de poetas 'land of poets'. Gabriela
   Mistral was the first Chilean to win a Nobel Prize for Literature
   (1945). Chile's most famous poet, however, is Pablo Neruda, who also
   won the Nobel Prize (1971) and is world-renowned for his extensive
   library of works on romance, nature, and politics. His three highly
   individualistic homes, located in Isla Negra, Santiago and Valparaíso
   are popular tourist destinations.

Language

   Chilean Spanish is notoriously difficult for foreigners to understand
   due to the dropping of final syllables and 's' sounds, the very soft
   pronunciation of some consonants and the high levels of slang employed,
   particularly in Santiago and the surrounding areas. Chileans also tend
   to speak much faster than natives of neighboring countries. These
   factors all contribute to newly arrived visitors to the country, even
   proficient Spanish speakers, hearing no more than indecipherable
   mumbles in early encounters with locals. Books have been written (such
   as 'How to survive in the Chilean Jungle' by John Brennan and Alvaro
   Taboada) which attempt to detail and explain the difficulties and
   idiosyncrasies of Chilean Spanish.

   English language learning and teaching is popular among students and
   higher professions, although with varying degrees of success. Even with
   intensive preparation, culture shock can take a real toll on
   communication; many words have been absorbed into everyday speech from
   English, although may be unrecognizable due to Non-native
   pronunciations of English and misuse.

National symbols

   A red copihue
   Enlarge
   A red copihue

   The national flower is the copihue (Lapageria rosea, Chilean
   bellflower), which grows in the woods of southern Chile.

   The coat of arms depicts the two national animals: the condor (Vultur
   gryphus, a very large bird that lives in the mountains) and the huemul
   (Hippocamelus bisulcus, an endangered white tail deer). It also has the
   legend Por la razón o la fuerza (By right or might or By reason or by
   force).

International rankings

Overall

     * The Economist: The World in 2005 - Worldwide quality-of-life index,
       2005, ranked 31 out of 111 countries (first in Latin America)
       [November/04]
     * UNDP: Human Development Report - Human Development Index 2006,
       ranked 38 out of 177 countries (second in Latin America after
       Argentina) [November/06]

Economy

     * Heritage Foundation/The Wall Street Journal: 2006 Index of Economic
       Freedom, ranked 14 (free) out of 157 countries (first in Latin
       America) [January/06]
     * Fraser Institute: Economic Freedom of the World: 2006 Annual
       Report, ranked 20 out of 130 countries (tied with Cyprus, Hungary
       and Portugal) (first in Latin America) [September/06]
     * IMD International: World Competitiveness Yearbook 2006, ranked 24
       out of 61 economies (countries and regions) (first in Latin
       America)
     * World Economic Forum: Global Competitiveness Report 2006-2007 -
       Global Competitiveness Index, ranked 27 out of 125 countries (first
       in Latin America) [September/06]
     * World Bank: Where is the Wealth of Nations? (2005) - Total wealth
       per capita, ranked 32 out of 118 countries (fourth in Latin America
       after Argentina, Uruguay and Brazil) [September/05]

Other

     * Freedom House: Freedom in the World 2006, average score: 1 (Free)
       (Costa Rica and Uruguay are the only two other Latin American
       countries with the highest score) [September/06]
     * Save the Children: State of the World's Mothers 2006, ranked 19 out
       of 125 countries (second in Latin America after Costa Rica)
       [May/06]
     * Transparency International: 2006 Corruption Perceptions Index,
       ranked 20 out of 163 countries (tied with Belgium and the United
       States) (first in Latin America) [November/06]
     * World Economic Forum: Global Information Technology Report
       2005-2006 - Networked Readiness Index, ranked 29 out of 115
       countries (first in Latin America) [March/06]
     * FedEx: The Power of Access - 2006 Access Index, ranked 32 out of 75
       countries (first in Latin America) [May/06]
     * A.T. Kearney/ Foreign Policy Magazine: Globalization Index 2005,
       ranked 34 out of 62 countries (second in Latin America after
       Panama) [April/05]
     * Brown University: Sixth Annual Global e-Government Study (2006),
       ranked 34 out of 198 countries (first in Latin America) [August/06]
     * Yale University/ Columbia University: 2005 Environmental
       Sustainability Index, ranked 42 out of 146 countries (ninth in
       Latin America after Uruguay, Argentina, Brazil, Peru, Paraguay,
       Costa Rica, Bolivia, Colombia and Panama) [January/05]
     * Reporters without borders: Worldwide press freedom index 2006,
       ranked 49 out of 168 countries (fifth in Latin America after
       Bolivia, Costa Rica, Panama, El Salvador) [October/06]
     * Freedom House: Freedom of the Press 2006, ranked 53 (Free) out of
       194 countries (second in Latin America after Costa Rica) [April/06]

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