El Gran Exito: The Chilean Success Story

This report by the South African Institute of International Affairs analyzes Chile's economic and political transition from a military dictatorship (1973–1989) to a stable democracy. It highlights how Chile combined liberal market reforms with progressive social policies and pragmatic leadership to achieve high GDP growth and human development, offering these as potential lessons for African nations seeking to improve economic growth and reduce poverty.

• Chile's economic transformation during the 1990s was characterized by an average GDP growth of 7%, leading the country to achieve human development rankings comparable to Spain, Singapore, and Korea.
• The military regime from 1973 to 1989 implemented significant liberal economic reforms, including the removal of non-tariff barriers between 1973 and 1975, the reduction of tariffs to a flat 10% by 1979, and the privatization of banking, agriculture, and industrial assets.
• Following the return to democracy in 1989, Chile focused on macro-economic stability and social development. The government reduced inflation from 27% in 1990 to 2.3% by 1999 and increased tax revenues from 14.5% of GDP in 1990 to 22% in 2000 to fund social spending.
• Chile significantly reduced poverty levels through targeted social initiatives; the percentage of the population living below the poverty line dropped from 39% in 1990 to 21% by 2000.
• To ensure long-term sustainability and avoid reliance on a single product or market, Chile pursued a strategy of product and market diversification through numerous free trade agreements (FTAs), including bilateral deals with the US and the EU in 2002.
• Chile attracted substantial foreign direct investment (FDI) by establishing a transparent and stable legal framework, notably Decree Law (DL) 600 of 1974, which creates legally binding contracts between investors and the state that cannot be modified unilaterally.
• The report identifies the use of foreign investment for infrastructure as a key success factor, noting that over $5 billion of foreign investment since 1995 was used to improve transport infrastructure, including airports and city highways.
• Chile is ranked as the least corrupt country in Latin America according to Transparency International’s Corruption Perception Index, placing 17th among 102 nations.

APA

White, L. (2005). El Gran Exito: The Chilean Success Story. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2013/06/Best-Prac-No.3_Chile.pdf

Chicago

White, Lyal. El Gran Exito: The Chilean Success Story. South African Institute of International Affairs, 2005. https://saiia.org.za/wp-content/uploads/2013/06/Best-Prac-No.3_Chile.pdf.

Wikipedia

{{cite report |last1=White |first1=Lyal |title=El Gran Exito: The Chilean Success Story |publisher=South African Institute of International Affairs |date=2005 |url=https://saiia.org.za/wp-content/uploads/2013/06/Best-Prac-No.3_Chile.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{white2005gran, author = {White, Lyal}, title = {{El Gran Exito: The Chilean Success Story}}, institution = {South African Institute of International Affairs}, year = {2005}, url = {https://saiia.org.za/wp-content/uploads/2013/06/Best-Prac-No.3_Chile.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }