The country of Chile is located in
the continent of South America. It borders the countries of Peru and Argentina.
The capital is Santiago and has a population of about eighteen million people.
Most of their people reside in urban areas. Majority of Chileans are a mix of
European descents. Since the 1980’s, the country has been known for having the
highest Native American population. The official language that the people speak
is Spanish. There are some of the population, but not many that speak their ancestor’s
language which is Mapudungu.
From the year Chile gain
independence, which was from 1810 to the twentieth century, their main export
goods were wheat and grains. The two main export locattions were Australia and
California. It was said that the wheat that from Chile was used in bread that
fed the 49ers. Later down the line when Chile won territories from Bolivia and
Peru, the country became a large exporter for nitrate. Nitrate is used as a key
ingredient to create gun powder. Nitrate was a product that benefited Chile
until Germany created a synthetic version. Many years later when The Great
Depression occurred, it became the ending of Chile exporting nitrate.
In the early 1900’s to the 1970’s,
it was a period that was known for a brand new economic reasoning. The new
philosophy was called Forced Input Substitution. This was created not just for
Chile, but for other Latin American Countries. It was known as an order of
protection because the government did not want the countries to depend heavily
on one product being successful. The government’s idea was to always have a
backup plan in case one thing goes wrong. With this, the Chilean government was
very hands on and involved with the process. Instead of producing basic goods
and materials such as wine and metals, the government wanted to produce more
automobiles and heavy machinery.
They initially wanted to make this
move because they thought they could sell high technology goods for a higher
price. The government had also wanted to create products that were incentive
for consumers to purchase. I order for Chilean consumers to purchase these
goods; they had locally made versions for a lower price so that it would be
affordable for more people to buy them. By
providing cheaper version, this allowed the industries to not be exposed or
unprotected. The industry at the time seemed to be going well until it reached
the early 1970’s. when Salvador Allende became president to the country, they
have reached a boiling point and ended all productions and closing the market
to the United State and the rest of the world.
During the mid-1970’s when Augusto
Pinochet took over, he decided to reopen the economy and market. He wanted to
be able to revive the economy and make it successful. After reopening the
economy, the country was operating under the influence of using whatever they
had access to. Since the revival occurred, they gained more success and they
then were able to export traditional goods today such as the copper, fish,
fruits, wine and etc. as of today Chile has had the greatest achievement with
the economic foreign policy with the United States. At that time, Chile was the
only country to have such a great victory.
Chile has an economic history that
has been fluctuating throughout the years. Throughout their independence, Chile
has been one of the most politically stable country in Latin America. The
country made in improvements with stabilizing and modernizing their
institutions. During the mid-1900’s, the country had improved and was able to
extend their general sector. Social and political developments increased
expectations for the low and middle class much faster than the economic rise of
the well-being. Chile has been known for having an economy that fluctuates dramatically.
From the 1970’s, the country has had
annual rate that would rise a few percentage rates. For example, between the
years of 1980 and 1997, the country’s annual rate had risen by 7.2 percent.
Although 7.2 was considered to be average, it affected the economy in positive
way. Between the years of 1998 and 2005, the economy grew an additional 3.5
percent. Although this was not as much as what they would consider average,
small improvements were still great. The increase in percentages resulted in
the country’s warfare improvement and economic improvements.
In the year of 1982, the GDP decreased
14.1 percent due to them being in a recession. The currency was shockingly
overvalued and the capital stopped flowing in which was reducing the ability to
finance investments. When the recession occurred, unemployment increased up to
20 percent. The recession not only had an effect on the unemployment but also
the wages that was payed to the workers also decreased. The economy in Chile
certainly had its pros and cons. One moment their economy is great and flowing
smoothly and the next, it is experiencing a downfall.
Before the 1960’s, it was reported that
land was among the highest in the western hemisphere. Parts of the land became
private when agrarians’ producers were forced to be modernize enterprises in
order to survive in the foreign competitions. Since 1990 when the democratic
restoration occurred, the government decided to allow some of the Native
Americans back to their land. Back then the land in Chile was under supervision
and residents were not able to live in their environment whenever they pleased.
They had to be told when it was okay for them to live in their residential
Chile has been an import and export
center for many countries. Even though it has exported many goods and imported
them as well, that too had its downfall. Going back to the year 2009, a
recession hit and there were drastic changes. They suffered losses of more than
20 percent in the import and export industry. Because they had so much losses,
it put a strain on trading activities and completion of projects. Because these
situations occurred, it put a hold on the country in general because the losses
for crucially affecting them. Throughout the entire shipments, commodities were
worth more resulting in 75 percent of the total shipments.
As the years gone by, exports and import
were also decreasing. Exports were decreasing more than 19 percent. Imports
also decreasing by more than two billion dollars. Some items that were being
exported were copper, fish, frozen juice products, fruits, wine and lumber. Chile
is widely known for their copper exports. Copper has been their number one
product considered it was about 50 percent of their entire exportation.While
other items that was being imported were fuel oil, aircrafts, petroleum and
telecom equipment. Chile has definitely been a huge import and export network.
Some of their export and import partners include China (being number one), North
America, Japan and Brazil.
During the later years, the economy in
Chile has further improved since the economy has gone through the recession.
Their import and export industry has been great to them and helped them recover
drastically. The Latin American country became the 35th largest
export and import country and named the 70th most complex. In the
year of 2016, almost sixty million dollars was made through exports. That was a
large improvement considering how much decreases Chile has experienced in the
last few years. When it came to imports, fifty-seven billion dollars was made.
Although Chile experienced such hardship in the recession, their ability to
bounce back served to be phenomenal.
Throughout the years, the Latin American
country has been improving. Although the economy has a rise and fall effect,
they still manage to push through in order to make a change. Even though they
are in partnership with other countries, their crops still manage to be
exported and made money off of. On a year to year basis, Chile’s export economy
increases by up to twenty-five percent. In 2016, the country’s exports gained
over 58 billion dollars while their imports gained about 57 billion. The country’s
GDP was up to 247 million.
The business environment in Chile is
different from what many are used to if they are from the United States. The Unites
States like to business but they would rather handle business by strictly
getting to the point. In fact, Chileans like to do business in a way that forms
a relationship through the business world. Yea, they get to the point of doing
professional business, but in the beginning, they like to be able to have
casual conversations and feel a sense of comfort with their business partners. They
are a very warm and open culture and they believe polite social conversations.
Many times, business meetings begin with
firm handshakes whether it is dealing with a male or female. Sometimes if a
person has made an appointment, they are not seen when their appointment is
because the person will keep them waiting even if they are not doing anything
at all. In Chile, the keep the person waiting and do not believe in getting
this done right away. They believe in doing things when they feel like it
because it goes to show who is in charge. In addition, they may feel like the
more important the person is the less time they would have to wait to be seen.
When a meeting starts, Chileans usually
like making small talk and getting to know each other on a personal level. They
do not do trying to be nosey, but they want to take general interest in a
person. Their business meetings are often a meeting between two people and that
is why they want to get to know someone one on a personal level. Throughout the
time of having a casual conversation, bringing up topics such as wine, food and
family are good topics to talk about. Another thing to do is not try to
schedule meetings during the months of January and February because those are
used for their holiday.
The work environments for Chileans are
different than one may be used to. Their official language is Spanish; however,
they generally do speak a small amount of English. Answering emails, phones,
faxes and letters right away are very uncommon. Chileans like to do things at
their own pace or whenever they feel like it is necessary. Otherwise, they do
not respond to anything until they feel like it. Another topic to discuss when it
comes down to time framing is the work hours. As of right now, Chile has one of
the highest numbers of work hours in the world.
A few years ago, there was a law that past
to decrease the work hours from forty-eight hours a week to forty-five hours a
week. It did not serve a problem for the Chileans because since they put
everything off to the last minute, it would just be extra hours they have to
work anyway. It is common for workers to work past their work time but they do
not get payed over time for it. Majority of the time it is frowned upon when
workers leave their jobs at the exact time they originally are supposed to. It makes
it seem that they are in a rush to leave their jobs.
Chileans may feel the need to move at
their own pace. However, in a way it can have a negative effect on doing business
with other countries. Another country that wants to get into business with
them, may not want to have the polite and casual conversations. Instead, they
may want to get straight to the point and get the ball rolling. Not everyone is
going to be expected to conduct business the same as how the Chileans do. One may
feel that the way Chileans conduct business would be considered as wasting too
much time especially if there are deadlines to fulfill. Not everyone country
has the same beliefs when it comes down to business decisions.