Economic History of Chile

Economic History Of Chile

The economy of Chile has shifted substantially over time from the subsistence agriculture practised by its indigenous peoples to an early husbandry-oriented economy and finally to one of raw material export and a large service sector. A period of free trade that began with independence in the 1810s bought a modernizing development of certain sectors of the Chilean economy and to the formation of a local business class, a novelty in Chile. Chile experienced its first modern economic crisis with the Long depression in the 1870s.

Nitrate deposits of the north conquered in War of the Pacific (1879–1884) made the economy dependent on a single export, suffer from the Dutch disease and halting earlier diversification of the economy. Government tresaury grew considerably due to taxation of nitrate. Albeit the country's general economy suffered with the invention of synthethic saltpeter in the 1910s the final blow came with the Great Depression, which hit Chile far harder more than most countries.

Chile started to industrialize in the 1930s with the creation of CORFO that established forestry enterprises, pulpmills, steel mills and sugar and petroleum refineries. In the mid-1970s under the influence of the Chicago Boys, Pinochet's military dictatorship initiated neoliberal economics policies that have been credited to have resulted in booms for the primary sector (copper, wine, salmon, etc.). Also in the post-coup period there has been a rise in outsourcing, self-employment, informal employment and an increase in women's share in the labor force.