Chile's Economic Miracle: Free Trade Lessons
The chart above helps to document graphically what has accurately been described as the “Chile economic miracle.” Up until the early 1980s, when the first round of economic reforms (1974–1983) were starting to have a positive effect, Chile’s economic performance was among the weakest of the Latin American countries, with annual increases of real GDP per capita averaging only 0.76 percent from 1913 to 1983. Additional economic reforms in 1985 and 1990 that included trade liberalization supercharged Chile’s economy, and annual growth in per capita output since 1983 has averaged an impressive 4.2 percent per year.
Before the economic reforms, with only 0.76 percent annual growth, it took almost an entire century for living standards to double in Chile; living standards now double every 17 years with 4.2 percent real growth, and that’s a real economic miracle!
One major factor in Chile’s amazing economic success has been its active pursuit since the 1990s of becoming one of the world’s most open and free markets. To help overcome its natural handicap of being a small and remote country, Chile has become a world leader in free trade, demonstrated by its free trade agreements with more than 50 countries around the world, which give its consumers and companies access to more than half of the world’s customers and markets.
Read more here of my Enterprise Blog post More on Chile’s Economic Miracle: Free Trade Lessons for the U.S.?