Economics- Chili

CASE STUDY: CHILE

Chile is a long but narrow country which is situated in South America with a population of 16.6 million (recorded in 2007) with Santiago as its capital. From the 16th century to 1818 Chile fought the Spanish for there independence. After this the country faced challenges with its political structure. The country was communist, but it gradually moving towards a free market economy with free trade agreements being signed. The political structure consists of a President to run the Government which is elected for a 6 year term. The legislation is decided by the senate and the chamber of deputies which has 168 members. Chile now has there first woman president Michelle Bachelet.

PART TWO

Public expenditure

Education

Public expenditure on education in Chile rose from 2.4% GDP in 1990 to 4.4% in 2001, and rises on average more than 6% yearly. Chile’s total private expenditure for education went from 3.8% GDP in 1990 to 7.4% GDP in 2004.

Health

In the 1980’s Chile’s health system changed drastically and formed a dual system (private and public). This system separates the social classes and separates the rich to the private funds and the poor to the public. After 1990 there was an increase in public expenditure on health, with the total GDP percentage being approximately 6% per person.

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Infrastructure

In 2007 Chile ended with a GDP growth of 5.2% increased from 4% in 2006. There has been rising public expenditure on infrastructure which has helped employment and consumption, whilst the increasing food and fuel rates have caused inflation. One asset of infrastructure is the highway that was completed in 2005 in Santiago. It allowed drivers to travel up to 120km’s on a highway that can cut up to 40-60% of their time. Chile has struggled with their fiscal policy of deciding whether to focus on infrastructure or to create better social services. After the 20th when Chile became a democracy they decided an efficient way to raise the funds...