Universidad del Rosario

Escuela de Ciencias Humanas – Periodismo y Opinión Pública

Kelly Valentina Cubillos Pineda
Latinamerican Culture Diversity
25/may/2019
Harvard Business Case

1.WHAT GEOGRAFIC ADVANTAGES DO FAVOR CHILE?

Chile is located at the very bottom of the latin american continent, adjoins with countries like
Peru, Bolivia and Argentina. Its geography its known for the Andes mountain range, known
for its volcanic activity, as well as for its rich hydrography, which provides important ways of
commerce. Some of Chile`s lands were especial for sow, to cultivate different types of cereals,
pastures, potatoes and fruits. Also it is well known that Chile is a big producer of salmon. But
one of its more important incomes, is copper, turning Chile in one of the biggest exports, the
copper mines are located in the Atacama dessert.

2. WHAT WAS ALLENDE´S PRESIDENCY LIKE?

Allende´s presidency started with changes that implied expropriating the copper mines and
reinforced exchange laws, all of this resulted in changes on the income wages and a growth on
the central bank credit, which made inflation erupt at alarming rates, it concluded on the
country´s reserve to extinguish itself.

A big portion of the middle class turned its back on Salvador Allende, as well as the military,
until one day in 1973. On September 11, Allende took his own life when the opposition and
the army started bombing the presidential palace. General commander Augusto Pinochet took
power of the country.

3. ANALYZE AUGUSTO PINOCHET´S PRESIDENCY.

Pinochet´s desire was to stabilize the political topic in Chile, by declaring state of emergency,
which made the government have more power when taking decisions, like banning the
congress, there was no freedom of speech, and many people said to be Marxists were killed,
hundreds of people disappeared and to the date, are still disappeared.
Regarding the social matter, some adjustments were made in the schooling, fitness services,
agriculture, the judicial gadget, and administrative and regional areas. When restoring the
situations, the government called the Chicago Boys, who advanced a improvement method for
the crisis. Stabilization guidelines, structural and monetary changes were made. The group had
to balance the economic price range, decreasing inflation and stabilizing the currency. Also
there was a raise on taxes and consumption, decreased the amount authorities spent on 15%,
the reforms made the privatization of companies and a new tax shape (VAT), the interest fee
was elevated to take part as an arbitrator. This concluding in delivering foreign capital to the
country, as well as changing the price.

4. WHAT LEARNING LESSONS CAN MOST LATIN AMERICAN COUNTRIES LEARN

FROM THIE CHILEAN CASE?

Most importantly, the trade agreements the Chilean government made should be taking in
account by other countries, but the trades must be handled with care in order to have some tariff
reduction and an exchange free relationship. The pro´s of a free trade offers a reduction in the
import tariff. Also it should be made with more countries, and preferably with nearby countries,
so every exchange can create a close connection between the countries. And by having a better
relationship with near countries, the country can have a better image to invest in.

Also the government of the country can see Chile´s example of creating new forms of calling
the attention to have a higher rate in investment, and to build some policies of export growth.
After implementing this new guidelines were focused on paying the debt, something that
countries should prioritize.

Creating the pension system, that urged workers to give the 10% of their salary to their
retirement, helped to maintain intermediaries, this increased competitiveness and also these
savings raised the rate of savings in Chile, in order to finance national investment. Also when
privatizing the health system this allowed people to choose where they wanted to be served.