Governance is about making the right policy choices that puts emphasis on economic growth and economic freedoms. The two are not mutually exclusive; policy decisions are the fulcrum upon which an economy runs. Get it wrong and a whole generation will be doomed, as we have experienced over the last 50 years in post-independence Africa. So what makes Chile a hotbed of investment and economic activity in Latin America? Here are the key points according to the 2013 Index of Economic Freedom published by the Heritage Foundation
- Chile has successfully diversified its economy away from over-dependence commodity exports with a particularly strong banking and finance sector making it probably the most advanced economy in Latin America.
- Chile is using PROPERTY RIGHTS to avoid the destabilizing corruption and OVER-REGULATION that have afflicted “oil-cursed” neighbours such as Venezuela. It has stable solid regulations and low levels of corruption.
- Due to the Chilean governments’ ability to restrain unnecessary and frivolous largesse, the private economy has been growing faster than government spending and Chilean bonds are rated (AA-) on the same level as countries like Japan and China by S&P.
- Chile has rule of law strongly maintained by an independent and efficient judicial system, prudent public finance management that has kept public debt and recent budget deficits under control