page_title: Economic history of Chile
section_title: Concertación era (1990–2010)
hierarchical_section_title: Economic history of Chile / Concertación era (1990–2010)
caption_attribution_description: English: Chilean and Latin American gross domestic product (GDP) per capita, measured by "current international dollars", over time at PPP. The Latin American average INCLUDES Chile. Source: International Monetary Fund, World Economic Outlook Database, October 2015
context_page_description: The economy of Chile has shifted substantially over time from the heterogeneous economies of the diverse indigenous peoples to an early husbandry-oriented economy and finally to one of raw material export and a large service sector. Chile's recent economic history has been the focus of an extensive debate from which "neoliberalism" acquired its modern meaning.
  Chile emerged into independence as a rural economy on what was the periphery of the Spanish Empire. A period of relative free trade that began with independence in the 1810s brought a modernizing development of certain sectors of the Chilean economy. This was accompanied by formation of a local business class, a novelty in Chile. Chile experienced its first modern economic crisis with the Long depression in the 1870s. The exploitation of lucrative nitrate deposits of the north conquered in War of the Pacific marked a whole epoch in the history of Chile and the economic legacy of nitrate has been widely debated.
  In the first half of the 20th century Chile suffered severe economic recessions including the Great Depression.
context_section_description: After the return to Democracy the Presidents Patricio Aylwin (1990–93) and Eduardo Frei Ruiz-Tagle (1994–99) avoided radical change in favour of a “change in continuity”. To raise the lower income groups the share of government social spending was raised and a tax reform increased fiscal income. In 1990 the labor code was reformed with the aim to legitimate unions in order to balance the bargaining powers of employers and employees. Also in 1990 a tripartite agreement between government, unions and employers provided for an increase in the real minimum wage of 28% until 1993. In the first half of the 1990s a significant success on poverty reduction and a bit more equitable income distribution was achieved.
  Capital controls such as a reserve requirement for foreign loans and a tax on foreign currency loans helped to prevent another financial crisis when many southern American countries suffered from the impact of the Tequila crisis. Nevertheless, the capital controls were not adapted to the disproportionate real appreciation of the peso and excessive capital inflows in 1996–97. Thus Chile was affected by the 1997 Asian financial crisis and witnessed a financial and economic crisis, albeit a relatively short one.
caption: Gross domestic product per capita at constant PPP prices, 1950–2017. Latin America in orange, and Chile in blue (PPP, Current international dollars).
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