Economic history of Chile

Economic history of Chile
Colonial era Colonial mining Real Situado Hacienda Encomienda Alerce logging Century of wheat Bourbon reforms
Early republic Independence debt Silver rush Wheat cycle Early coal mining Long Depression
Saltpetre Republic Saltpetre War "Oreros" and "Papeleros" Sheep-farming boom Tierra del Fuego gold rush Meat riots Great Depression
Internal growth Copper mining during World War II CORFO (Production Development Corporation) UN Economic Commission Land reform Copper nationalization Vuskovic plan
Return of liberalism Chicago Boys El ladrillo 1982 crisis "Miracle of Chile" Asian crisis 2004 energy crisis
v t e

The economy of Chile has shifted substantially over time from the heterogeneous economies of the diverse indigenous peoples to an early husbandry-oriented economy and finally to one of raw material export and a large service sector. Chile's recent economic history (since 1973) has been the focus of an extensive debate, as it pioneered neoliberal economic policies.^[1][2][3]

Chile emerged into independence as a rural economy on what was the periphery of the Spanish Empire. A period of relative free trade that began with independence in the 1810s brought a modernizing development of certain sectors of the Chilean economy. This was accompanied by formation of a local business class, a novelty in Chile. Chile experienced its first modern economic crisis with the Long depression in the 1870s. The exploitation of lucrative nitrate deposits of the north conquered in the War of the Pacific (1879–1884) marked a whole epoch in the history of Chile and the economic legacy of nitrate has been widely debated.

Historically, the Chilean economy has been dependent on natural resources (nitrate, copper, coal, and gold).^[1] When Chile became an independent nation in 1818 it was the poorest^{[clarification needed]} territory in the Americas,^[4][5] by the 1890s it had become richer^{[clarification needed]} than Sweden, and twice as rich than Japan^[6] and it became one of the 15 richest^{[clarification needed]} nations in the world,^[7] a position it would retain for decades, even as late as the 1950s it remained richer^{[clarification needed]} than its former colonial master, Spain, and almost as rich as Germany.^[8] However, starting in the late 1920s, the Chilean economy began a steady decline with 1950 industrial capacity inferior to what it had been forty years previously.^[6] It was not until the late 1970s that this decline started to revert.^[9] Since that time the Chilean economy has generally grown although it has yet to regain its former status.

In the first half of the 20th century Chile suffered severe economic recessions including the Great Depression. This period saw the rapid urbanization of the country, and a state-led partial "industrialization" that began in 1939. Large-scale copper mining replaced nitrate extraction as the country's main source of wealth. Chilean agriculture remained one of the most undeveloped sectors of economy and was stagnant, despite land reforms in the 1960s and 1970s, from 1930 to 1980.

In the mid-1970s under the influence of the Chicago Boys, Pinochet's military dictatorship initiated profound changes oriented to a "neoliberal" economic model. The government implemented trade liberalization, as well as privatization of state-owned assets.^[1][10] The democratic governments that succeeded the dictatorship since 1990 have largely continued its economic policies, but increased social spending and reduced poverty. Chilean exports and GDP per capita rose steadily through the 1980s and 1990s until the Asian crisis of 1997 after which economic growth slowed somewhat. In the post-1973 period there has been a rise in outsourcing, self-employment, informal employment and an increase in women's share in the labor force.^[11]