Chile

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

República de Chile Republic of Chile
Flag Coat of arms
Motto: Por la Razón o la Fuerza (Spanish: "By right or might")
Anthem: Himno Nacional
Capital	Santiago1 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

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.

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.

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.

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.

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.

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

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

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

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.

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

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.

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

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

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.

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

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

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

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]