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| Chile Investment: An Amazing 2010 for Chile |
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Chile's stellar performance through the financial crisis, while maintaining nearly zero public debt, has made Chile recognized by both large institutional investors and small private investors around the World for its safe-haven investment status, a status that few countries around the World have enjoyed in recent years. The social, economic, and political stability of Chile was more than demonstrated earlier this year when the Central regions of Chile suffered an historical 8.8 earthquake just days before a change of governments. Over 1/3 of the Chilean population was directly effected, and over 800,000 houses destroyed or damaged. Due to Chile's long-term planning in relation to construction standards and disaster response, the death toll in Chile numbered in a few hundred. Most deaths were a result of the tsunami that followed, and not directly from building collapses or other earthquake related destruction. In spite of these obstacles, Chile managed to smoothly transition governments in the middle of the national crisis and handily muster the funds and resources itself for recovery and reconstruction. The reconstruction effort is estimated to cost 30 billion U.S., and Chile will finance this through a combination of tapping savings set aside in past years from the copper boom, a voluntary increase in tax on copper mining companies, and issuing approximately $10 billion U.S. in bonds over several years. The voluntary tax increase on mining was welcomed as the mining companies that accept the deal will be exempt from future tax increases for 10 years, if they accept the proposed higher tax rate now to help fund the reconstruction in Chile. |
Chile's stellar performance through the financial crisis, while maintaining nearly zero public debt, has made Chile recognized by both large institutional investors and small private investors around the World for its safe-haven investment status, a status that few countries around the World have enjoyed in recent years. 