Georgia could be the next U.S. state to enter into an economic and educational partnership with the South American nation of Chile.
Chile’s ties with California have bolstered its wine industry, and the Chile-Massachusetts Partnership has helped build its biotech scene and improve its higher education system, Chilean Ambassador to the U.S. Felipe Bulnes said during a speech hosted by the World Affairs Council of Atlanta Oct. 9.
“I would be insane to say that Georgia is not at the top of our list. I’m serious on this,” he said, noting that Georgia is the fourth largest buyer of Chilean exports among states.
Georgia also operates a trade office in Santiago, the Chilean capital. Some of Chile’s largest firms, including forestry giant Arauco and fertilizer manufacturer SQM have operations here.
ProChile, the government’s trade promotion agency, put an office in Buckhead in 2009 but closed it later amid worldwide restructuring of its trade offices.
Mr. Bulnes said the closure happened before his tenure began in 2012 and that he would reevaluate the need for a ProChile office in Atlanta.
“You can count on one thing: That I’m going to check the facts and whether the situation has changed in order to review that decision,” he told Global Atlanta in an interview.
While it has just 17 million people, Chile has been seen as a strong source of stability and opportunity in Latin America.
It has averaged 5 percent growth over the past two decades, to which Mr. Bulnes credits its commitment to democracy and economic freedom.
The stage was set 40 years ago, when a coup d’etat toppled the existing socialist regime. Augusto Pinochet, the new dictator, would stay in power for the next 17 years, maintaining a firm political grip while gradually opening up the economy. He relied heavily on ideas of the “Chicago Boys,” a group of Chileans who had studied under free-market economist Milton Friedman at the University of Chicago.
Even after Pinochet stepped down in 1990 to allow elections, his center-left successors kept his economic reforms in place.
“They realized that you could criticize everything about Pinochet, but not the economic policy. They kept it. They were very brave and very courageous because one temptation would have been to say, ‘We don’t want to follow anything,'” Mr. Bulnes said.
Now, Chile has the open society to match its increasingly open borders, he added.
Chile has 24 free-trade agreements covering 60 countries where it sells nearly all of its exports with reduced tariffs. Since such a pact was signed with the U.S. in 2004, bilateral trade has more than tripled from $8 billion to $26 billion. Chile is also one of the founding members of the Trans-Pacific Partnership, a proposed 11-country trade bloc focused on Asia.
Though critics have argued that liberalization has widened the gap between the rich and poor in Chile, Mr. Bulnes said trade has drastically reduced poverty.
But commodities, especially copper, still account for more than half of Chile’s exports, meaning that there is more work to be done to diversify the economy.
Chile is tackling that challenge by investing in higher education and wooing foreign companies at all levels, from multinationals to startups. Last year, foreign direct investment in Chile reached a record $28 billion.
StartUp Chile, a government program, provides $40,000 in seed capital and working visas to eligible foreign entrepreneurs. Two companies that grew out of the Georgia Institute of Technology – Tubing Operations for Humanitarian Logistics and Sanivation – have been selected for the program over the past few years.
Chile also set aside $6 billion in 2008 for BECAS Chile scholarships, which have helped more than 3,000 students go abroad for advanced degrees.
Mr. Bulnes wasn’t the only one singing Chile’s praises; he got some high-level backup at the World Affairs Council event.
Dennis Lockhart, president and CEO of the Federal Reserve Bank of Atlanta, praised the country as “well-run” and “progressive,” noting that he was impressed by the way the country chose not to restructure its debt in the late 1980s.
Jeffrey Bowman, president and CEO of Atlanta-based Crawford & Co., highlighted the country’s strong financial and insurance regulations, which protected the economy in the aftermath of the 8.8-magnitude earthquake that struck the country in 2010.
Crawford alone processed 35 percent of the 220,000 claims issued by reinsurance firms related to the earthquake. Astoundingly, less than 20 of those cases ended up in litigation, he said. Crawford now has 10 locations and 400 employees in Chile, Mr. Bowman said.
“It’s a beautiful country, very successful, and has a very efficient economy,” Mr. Bowman added.
For more on the World Affairs Council of Atlanta, visit www.wacatlanta.org.