Lessons from Chile for Africa’s Growth Strategy

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

  1. 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.
  2. 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.
  3. 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.
  4. 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

Story Source: http://blog.heritage.org/2013/01/23/chile-strong-economy-a-case-of-positive-policy-and-freedom/?utm_source=rss&utm_medium=rss&utm_campaign=chile-strong-economy-a-case-of-positive-policy-and-freedom

About the Author

Theo Acheampong
Theo is an economist and social media enthusiast who provides regular commentary on socioeconomic and political developments in Ghana and Africa at large. Theo is passionate about leadership, entrepreneurship and the role of innovative technologies in solving Africa's developmental challenges.