Friday, July 20, 2012

How did Chile become the richest nation in South America

Three decades ago, it was a basket case.  Since then, it has been the fastest-growing economy in the region. How did they do it?

Pension reform is the best-known economic reform in Chile. Ever since the early 1980s, workers have been allowed to put 10 percent of their income into a personal retirement account. This system, implemented by José Piñera, has been remarkably successful, reducing the burden of taxes and spending and increasing saving and investment, while also producing a 50-100 percent increase in retirement benefits. Chile is now a nation of capitalists.

These capitalists have
  1. liberalized trade
  2. reduced the size of government
  3. strengthened property rights
  4. reduced the burden of regulation
  5. protected their currency

In short, they have moved their country in almost the opposite direction as the United States. 

1 comment:

  1. Thanks for sharing this wonderful article