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Business Opportunities
in Chile
Eliel Hasson Nisis
TLC ConsultingChile
WHO IS CHILE?
WHO IS CHILE? (2)
• Poverty: 18,8% *
– 4,7% indigence
• Poverty has diminished, but...
– (1990: 38,6% and 12,9%, respectively)
• Richest 10%: 38% income
– (and poorest 10%: 3% income…)
* Source: CASEN 2003 POLL
WHO IS CHILE? (3)
GDP*
External Trade:2/3 GDP
(goods/services)/GDP
Services
Industry
Agriculture
56,9%
34,5%
Imports
31,3%
34,3%
8,8%
• Copper exports: 40%
* Source: World Bank
Exports
WHO IS CHILE? (4)
• Importance of Chile*:
Exports
Imports
43 Iran
0,378%
43
Vietnam
0,283%
44 Algeria
0,296%
44
Romania
0,266%
45 Chile
0,284%
45
Chile
0,255%
46 Ukraine
0,278%
46
Ukraine
0,253%
47 Vietnam
0,256%
47
Slovak Rep.
0,246%
* WTO Source: “International Trade Statistics 2003”
Chile in the Global Trade
 Multilateral (WTO)
 Bilateral (70% trade)
 Unilateral (6% MFN; 1.5% effective)
International Integration & Trade
In force
Pending
Population
GDP
(million)
(US$ Billion)
Population
GDP
(million)
(US$ Billion)
Singapore
4,3
91
834
New Zealand
3,9
76
104,9
626
Brunei
0,3
8
454,9
9.867
China
1.313,3
1.410
48,0
605
Perú
27,6
61
2,0
541
India
1.081,12
599
Mercosur
283,0
639
Japan
127,8
4.326
Central
América
39,5
89
1.261,0
24.082
2.558,4
6.571
EE.UU.
297,0
10.881,0
Canadá
31,7
México
EU
South Korea
EFTA
Total
Total
Chile – US FTA
 The United States represents 22% of global GDP,
accounts for 19% of the world's imports, and its market is
148 times the size of the Chilean economy.
 Chile's FTA with the United States:


consolidates and extends the access of Chilean product,
establishes clear and permanent rules for trade in services and
investment, as well as for trade in goods.
 Under the Agreement, 87% of Chilean exports to the
United States obtained immediate tariff-free access, and
this will rise gradually to 94.8% over the first four years,
and to 100% over twelve years.
 The FTA opens up new opportunities.
Chile – US FTA
 In the three months following the entry into force of the
U.S.-Chile Free Trade Agreement, total U.S. exports to
Chile increased by 24 percent compared to the same
period of 2003, growing from $617.29 million to $766.79
million. This compares favorably to an increase of 13
percent in U.S. exports to the world in the first quarter of
2004.
 U.S. exports of manufactured goods to Chile increased
by 19.5 percent January/March 2004, from $570.9
million to $682.3 million. Particularly strong growth was
registered in exports of construction equipment, medical
equipment, and paper.
 Exports of U.S. agricultural goods grew 22.6 percent
from $22.66 million to $27.77 million.
Business Opportunities
Investment in
Infrastructure
Services
•Financial Services
•Engineering Services
•Software and services
Travel and
Tourism
•Architectural and
Construction Services
•Telecommunications
Why doing business in Chile?
1. Business Environment
2. Political Stability
3. Modernization of the State
4. Economic Freedom
5. Best city to Do Business in LA
Doing Business with the
Chilean Government
 Chile is not a party to the WTO Agreement on Government
Procurement, but the U.S.-Chile FTA calls for open tendering in
public procurement, in general.
 The FTA provisions covers procurements by twenty Chilean central
government entities for non-construction purchases over
US$56,000.
 It also covers local government non-construction procurements over
US$460,000. In both cases, higher limits apply for construction
work.
 The agreement also calls for non-discriminatory “national treatment”
for either country’s suppliers.
 Tender opportunities should be published at least thirty days in
advance and technical specifications or requirements should be
performance-based.
 www.chilecompra.cl. The site serves as a central source for all
Chilean government procurement. Foreign and local bidders on
government tenders must register with the Chilean Direccion de
Provisionamiento del Estado (Bureau of Government Procurement
Supplies).
Chile – US FTA
GP MARKET ACCESS
- Three groups
-Three categories
-Positive list
Chile
USA
EU
I
Central Government
Federal Government
Central Governments
II
Municipalities
States
Sub central entities
III
Ports
Other entities
Ports
Airports
Chile – US FTA
GP MARKET ACCESS
•
•
•
(2)
3 categories: Goods, Services, Construction Services
US$ - European Union DEG
DEG = US$ 1.43958
Thresholds
Goods
Services
Construction
Services
Central Government
US
UE
56.190
130.000
US
UE
56.190
130.000
US
UE
6.481.000
5.000.000
Sub federal/local
US
UE
460.000
200.000
US
UE
460.000
200.000
US
UE
6.481.000
5.000.000
Other entities
US
UE
280.951
400.000
US
UE
280.951
400.000
US
UE
6.481.000
5.000.000
Basic Overview
Market Place
•
•
•
•
•
Value Added Services
US$ 2.500 millions per year.
1.000.000 transactions per year.
60% services, 40% goods.
900 buying organizations.
150.000 suppliers
E Catalogue
Logistics
Consulting
Financial
Buyers
Suppliers
Institutions
Regulatory Frame Work
Non Binding Principles for Government Procurement
Basic Processes
Basic Processes
Bidding Process
Foreign Suppliers registered at
ChileCompra
Colombia
3.8%
Brazil Germany
4.4%
4.4%
Spain
14.0%
Peru
3.0%
United Kingdom
2.8%
Canada
2.5%
Uruguay
1.7%
Mexico
1.7%
Otros
26.4%
Argentina
16.9%
EE.UU.
24.3%
Others
20.5%
BOT in Chile:
How the system works?
Total Concessions
Dams
1%
Interurban
Highway
72%
Penitenciaries
2%
Urban Roads
20%
Airport
5%
Investment US$5.5bn (Official estimate)
Concessions Program 2005-2007
Hospitality Infrastructure




New Hospital in Maipú
Hospital Sotero del Río
New Hospitality Complex Barros Luco –
Trudeau
New Hospitality Complex Salvador Infante
Total estimated investment:MMUS$250
Concessions Program 2005-2007
Dam Program



Ancoa Dam
Punilla Dam
Aconcagua System
Total estimated investment:MMUS$400
Concessions Program 2005-2007
Airport Program




New Airport IX region
New Airport IV region
New Bidding Airport El Tepual (Puerto Montt)
New Bidding Airport Diego Aracenna (Iquique)
Total estimated investment:MMUS$100
Thank you
Address: Avenida El Golf 40, Piso 13º
Las Condes, Santiago, Chile
Phone: (56-2) 280 5000
e-mail :[email protected]