Migration To an Emerging Economy: The Case of Chile
The Chilean economy has undergone a rapid transition from an economy with a per capita income of around 7,000 dollars in the early 1990s to a country with an income per head of near 25,000 dollars in 2017. This has followed two to three decades of rapid economic growth and internal transformation. Now the country is a member nation of the OECD and has the highest level of income per person in the Latin American region. Macroeconomic indicators show fiscal sustainability, low inflation, modest levels of foreign public debt, respectable levels of domestic savings and realistic exchange rates. Chile’s main resource base is in mining (copper, lithium, iron ore, and other products), agro-industry, forestry and fish-based products. In addition, the country is relying more on clean energy and is changing its energy matrix away from coal and other traditional energy sources. On the social side, poverty has declined but inequality of income and wealth is considerable and social gaps remain in access to education, health and social security.
In the last 10–15 years, the country has received a large and increasing inflow of migrants. The number of foreign migrants has increased from near 200,000 in the late 1990s to about 500,000 today. Main source countries include Peru, Bolivia, Colombia, Haiti, Ecuador, Venezuela, Spain, the United States and other nations. Migrants are attracted by existing job opportunities that are filled quickly, and also by broader development possibilities that offer an advantage relative to source countries that have gone through internal economic crises in recent years. The current Chilean migration law, established in 1975, is under revision in parliament to put it in line with the new realities of the 21st century and the changes undergone in the labor market and the economy more generally. Issues of migrant protection, contracting requirements, diversity of skills, and variety of visa are at the forefront of the new migration law under discussion. International investors face no impediments to reside and do business in Chile, although more needs to be done to attract advanced human capital in the migration regime.
In summary, in spite of its relatively remote location relative to center economies in North America and Europe, Chile has become an increasingly interesting location for people from all over the world. Tourism is reaching record numbers and migration flows have more than doubled in less than two decades. The main challenge is establishing how to maintain growth and job creation, while diversifying the production and energy base of the country. Social challenges exist in the direction of reducing inequalities and making social services more accessible to all. A new migration law will help to provide a more modern legal framework for the international mobility of people in a country that has been historically open and friendly with foreigners.
Author: Prof. Andres Solimano, Founder and President of the International Center for Globalization and Development, Chile
