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The only way is up for Chile.

Article Excerpt
Byline: Jason Mitchell

Chile has one of the freest economies in the world and is at the forefront of developing Latin America's links with Asia.

Jim O'Neill, the legendary head of global economic research at Goldman Sachs, who coined the term BRIC' at the start of this decade as a convenient shorthand for the world's most exciting emerging markets (Brazil, Russia, India and China), recently said that those economies are now too big and too developed. He added that they will continue to be important motors of economic growth but that there are other emerging markets that will be the new tiger economies. He believes Chile is among those economies, together with Mexico and Indonesia - or MIC' in shorthand.

"In the emerging markets, we expect many economies to see above-trend growth through 2010, with Chile and Israel at the top of the list and the BRICs, Indonesia and Mexico also in that camp," says Mr O'Neill.

"Chile has had impressive economic growth," says Jerome Booth, head of research at Ashmore Booth, the private equity manager that invests in emerging markets. "It is an economy that has clearly benefited from an important self-insurance by building up its reserves."

In many ways, Chile has been the model for the Latin American region for a long time. Brazilian analysts say that the country was an important example for Brazil in the late-1990s and that the Latin giant followed many of the much smaller country's economic and political strategies. This led to Brazil's rise as an economic heavyweight this decade.

Model economy

Chile has had investment grade since the start of the 1990s, it has one of the highest numbers of free-trade agreements in the world, it was one of the first Latin American countries to strike a free-trade agreements with China, and it is currently negotiating its membership of the Organisation for Economic Co-operation and Development (OECD).

"Chile is the benchmark for all the countries of the world," says Javier Santiso,...

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