Chile: Your Country of Choice y

Chile: Your Country
y of Choice
Hernán Cheyre
Vice-Presidents CORFO
&
President of Public Private Council of Global Services
Chile at a Glance
US Time Zone Alignment
Population 16.5 million
Same Business day overlap
US & European market close
coverage
Antofagasta
Capital - Santiago
Currency - Chilean
Peso (CLP)
Valparaíso
Santiago
Concepción
Temuco
Language - Spanish
Other Major Cities:
Antofagasta, Valparaíso,
Concepción, Temuco
Average GDP
Growth(2000 2009) –
Growth(2000-2009)
4.5 percent
Labor Force – 7.3
million
•
Chile mirrors Eastern Standard Time during European & US summer
•
EST - 2 hours during European & US winter
•
GMT - 5 hours and CET - 6 during European & US summer
•
GMT - 3 hours and CET - 4 during European & US winter
Source: INE, Economist
Slide | 2
Chile: an emerging economy, with outstanding possibilities
GDP 2009 (USD bn)
GDP PPP 2009 (USD bn)
46970
14256
43960
12471
36220
36130
35220
36035
25090
4845
5068
14341
14270
10070
7990
8510
2175
1284 1336
6020
1572
2960
845
116
127
163
211
229
309
1402
Source: Fitch Ratings
Slide | 3
Good Economy Performance
KEY
• GDP has grown at a sustained rate
• Inflation Rate approaching international standards
Fundamentals
• Macroeconomic Stability
• Competitive Markets
• Small or non existent barriers to Trade
• Sound Financial System
• Fiscal Responsibility
• Pro Business Framework
• Welfare Network
Source: Fitch Ratings
Slide | 4
Best place for business in Latin America and Emerging
Markets
The Best in Latin America and Emerging Markets
No 1 in Latin America:
No 1 among Romania, India and China:
• World Economic Forum Competitiveness
Index, 2010
• Transparency International Competitiveness
Index, 2008-2009
• AT Kearney
K
Global
Gl b l Services
S i
Location
L
ti IIndex
d
2009
• Ease
E
off Doing
D i B
Business
i
R
Ranking,
ki
2010
2010,
World Bank
• Transparency International Competitiveness
Index, 2009
And among Emerging Markets
Best in Latin America…
Parameter
World Economic Forum
Competitiveness Index, 2010
134 countries
AT Kearney Global Services Location
Index 2009
50 countries
ti
Transparency International
Competitiveness Index, 2010
178 countries
Ease of Doing Business Ranking, 2010
183 countries
Argentina
Brazil
Costa Rica
Mexico
Chile
Romania
India
China
85
56
55
60
30
64
49
30
27
12
23
11
8
19
1
2
105
69
41
98
21
69
87
78
118
129
121
51
49
55
133
89
Source: World Economic Forum, AT Kearney, CPI, Doing Business
Slide | 5
Competitive position in reference to global players
Business Environment Economic Freedom
Ranking 2010
Ranking 2008
Corruption Index
Ranking 2010
Growth Competitiveness Sovereign Risk
Ranking 2010
Ranking 2010
1. Dinamarca
1. Hong Kong
1. Denmark
1. Suiza
US (AAA)
2. Finlandia
2. Singapur
1. New Zealand
2. US
Inglaterra (AAA)
3. Singapur
3. Australia
1. Singapore
3. Singapur
Francia (AAA)
4 Canadá
4.
7 Canadá
7.
4 Finland
4.
7 Alemania
7.
Canadá (AAA)
5. Suiza
8. US
6. Sweeden
8. Japón
Japón (AA)
6. Hong Kong
10. Chile
6. Canada
9. Canadá
Chile (A+)
7. Holanda
11. Canadá
7. Netherlands
10. Holanda
China ((A+))
9. US
14. Luxemburgo
15. Germany
13. Inglaterra
Corea (A)
10. Inglaterra
15. Holanda
20. UK
16. Francia
Polonia (A-)
17. Francia
19. Japón
21. Chile
29. China
México (BBB)
19. Taiwán
23. Alemania
22. US
30. Chile
India (BBB-)
20. Chile
27. Taiwán
23. Uruaguay
33. España
Brasil (BBB-)
22. España
33. Uruguay
24. France
49. India
Grecia (BB+)
25. Corea
41. México
69. Brazil
56. Brasil
Colombia (BB+)
27. Japón
58. Colombia
78. Colombia
60. México
Uruguay (BB-)
35. México
113. Brasl
78. China
69. Colombia
Venezuela (BB-)
42 Brasil
42.
124 India
124.
87 India
87.
78 Perú
78.
Argentina (B-)
(B )
53. China
140. China
105. Argentina
85. Argentina
Ecuador (CCC-)
Slide | 6
CHILE: GDP Growth 1986-2009
GDP %
14
12
1986-1997: 7.6%
12,3
10 6
10,6
10 6
10,6
10
8
8
7,3
6,6
6
7,4
7
6,6
6,2
5,7
5,6
6
1998-2009: 3.3%
5,6
4,6
4,5
3,7
4
4,6
3,9
3,7
34
3,4
32
3,2
2,2
2
0
-0,8
-2
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Source: Chile Central Bank
Slide | 7
Chile bets on Global Coverage
• Net Exports acquaint for 57% of GDP
• Chile Exports over 5,200 different products to 181 markets around the globe
• Extensive Network of Free Trade Agreements, including US, EU, Japan and
China
• Import duties up to 6%, with an effective rate of 2%
Access to World Markets
•
Free Trade Agreements: EFTA, China, South
Korea Mexico
Korea,
Mexico, Colombia
Colombia, Panama
Panama, Peru
Peru,
Central America, USA, Canada, Japan
•
Complete Economic Agreements: Argentina,
Brazil, Paraguay, Bolivia, Ecuador and
Venezuela
•
Partial Agreements: India
Low Tax Burden
•
Chile has Double Taxation Agreements
with 22 countries, including UK, Spain,
France, Poland, Russia
•
In addition, negotiations are under way with
India, China, Finland, Ireland, the
Netherlands, Switzerland, and the United
States, among others
Source: DIRECON
Slide | 8
Is The Chilean Economy ready to face the international turmoil?
FACTS:
Fiscal Responsibility
p
y
Sound Public Sector Financial Position
(Sovereign US$14.5
US$14 5 Bn)
Small foreign debt to GDP ratio
Sound Financial System
Slide | 9
Fiscal Budget in a Good Shape
10
8
8.8
7.7
Cash Balance
6
Structural Balance
53
5.3
4
2
1.0
1.0
0.7
0
-1.2
-2
-1.2
-4
E i l t to
Equivalent
t US$7.200 MM
US$7 200 MM
-4.4
44
-6
2006
2007
2008
2009
2010 Feb
Source: Ministry of Finance
Slide | 10
Government is reducing debt
Hong
g Kong
g
Chile
ƒ Public Debt 2009 (% GDP)
China
Perú
Euro Area
Nueva Zelandia
México
Colombia
Argentina
Inglaterra
Brasil
Estados Unidos
Canadá
India
Japón
0
50
100
150
200
250
Source: Fitch Ratings
Slide | 11
External Debt to GDP is smaller than many other Emerging
Countries
Brasil
Egipto
India
México
Colombia
Costa Rica
Paraguay
Perú
I d
Indonesia
i
Bolivia
Argentina
Rusia
Malasia
Uruguay
Turquía
Chile
El Salvador
Jordania
Polonia
Georgia
Ucrania
Croacia
Bulgaria
Estonia
Letonia
Hungría
OECD
Public
Private
0
20
40
60
80
100
120
140
160
180
200
Fuente: Central Bank, IMF, Moody’s and World Bank
Slide | 12
EMBI + SPREAD (Bps) July 2010
Chile
México
Perú
Sudáfrica
Panamá
Colombia
Brasil
Asia
Indonesia
Filipinas
Europe
Turquía
Rusia
Bulgaria
EMBI
Latin
Ucrania
Argentina
Ecuador
Venezuela
0
200
400
600
800
1000
1200
1400
Source: JP Morgan
Slide | 13
Jul-10
Ago-10
Jun-10
Abr-10
May-10
Mar-10
Ene-10
Feb-10
Nov-09
Dic-09
Oct-09
Ago-09
Sep-09
Jul-09
May-09
Jun-09
Abr-09
Feb-09
Mar-09
Dic-08
Ene-09
Nov-08
Sep-08
Oct-08
Ago-08
Jun-08
Jul-08
Chilean Economy in a strong recovery path
ƒ GDP GROWTH (12M%)
10%
8%
6%
4%
2%
0%
-2%
-4%
E th k
Earthquake
-6%
Fuente: Central Bank
Slide | 14
Key Government Objectives 2010-2014
Economic Goals
Average GDP growth of 6%
200,000 new jobs every year
Increase Investment to GDP rate to 28%
Develop 100,000 new entrepreneurs (4 years)
Boost R&D Investment
Slide | 15
Chile on its way to become a developed economy
GDP per capita PPP
Source: Ministry of Finance
Slide | 16
Why Chile?
FACTS
Political Stabilityy
Economic Growth
Excellent Infrastructure
Good Institutional Framework
Slide | 17
Chile: Your Country
y of Choice
Hernán Cheyre
Vice-Presidents CORFO
&
President of Public Private Council of Global Services