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Business Opportunities in Chile
Eliel Hasson Nisis
TLC ConsultingChile
WHO IS CHILE?
• GDP 2003: US$69.2 billions*
• Population: 15.8 millions
• GDP per capita:
4.250Panama77
4.280Costa Rica76
4.390Chile75
4.490Lithuania74
4.920Slovak Republic73
US$Country
9.450Trinidad and Tobago
78
9.590Antigua and Barbados
77
9.810Chile76
10.130Latvia75
10.270South Africa74
US$Country
* Fuente: Banco Mundial
“upper-middle-income”: US$5.040
WHO IS CHILE? (2)
• Poverty: 18,8% *– 4,7% indigence
• Poverty has diminished, but...– (1990: 38,6% and 12,9%, respectively)
• Richest 10%: 38% income– (and poorest 10%: 3% income…)
* Source: CASEN 2003 POLL
WHO IS CHILE? (3)
* Source: World Bank
8,8%Agriculture
34,3%Industry
56,9%Services
GDP*
31,3%Imports
34,5%Exports
External Trade:2/3 GDP
(goods/services)/GDP
• Copper exports: 40%
WHO IS CHILE? (4)
• Importance of Chile*:
0,256%Vietnam47
0,278%Ukraine46
0,284%Chile45
0,296%Algeria44
0,378%Iran43
Exports
0,246%Slovak Rep.47
0,253%Ukraine46
0,255%Chile45
0,266%Romania44
0,283%Vietnam43
Imports
* WTO Source: “International Trade Statistics 2003”
Chile in the Global TradeChile in the Global Trade
Multilateral (WTO)
Bilateral (70% trade)
Unilateral (6% MFN; 1.5% effective)
International Integration & Trade
In force Population(million)
GDP(US$ Billion)
EE.UU. 297,0 10.881,0
Canadá 31,7 834
México 104,9 626
EU 454,9 9.867
South Korea 48,0 605
EFTA 2,0 541
Mercosur 283,0 639
Central América
39,5 89
Total 1.261,0 24.082
Pending Population(million)
GDP(US$ Billion)
Singapore 4,3 91
New Zealand 3,9 76
Brunei 0,3 8
China 1.313,3 1.410
Perú 27,6 61
India 1.081,12 599
Japan 127,8 4.326
Total 2.558,4 6.571
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
Travel and Tourism
Services
•Financial Services
•Engineering Services
•Software and services
•Architectural and Construction Services
•Telecommunications
Why doing business in Chile?
1. Business Environment1. Business Environment
2. Political Stability 2. Political Stability
3. Modernization of the State3. Modernization of the State
4. Economic Freedom4. Economic Freedom
5. Best city to Do Business in LA5. 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$460,000. In both cases, higher limits apply for construction work.
The agreement also calls for non-discriminatory “national treatment” for either country’s suppliers.
Tender opportunities should be published at least thirty days in advance and technical specifications or requirements should be performance-based.
www.chilecompra.cl. The site serves as a central source for all Chilean government procurement. Foreign and local bidders on government tenders must register with the Chilean Direccion de Provisionamiento del Estado (Bureau of Government Procurement Supplies).
Chile – US FTA GP MARKET ACCESS
Chile USA EU
I Central Government Federal Government Central Governments
II Municipalities States Sub central entities
III Ports Other entities Ports
Airports
- Three groups
-Three categories
-Positive list
Chile – US FTA GP MARKET ACCESS (2)
• 3 categories: Goods, Services, Construction Services
• US$ - European Union DEG
• DEG = US$ 1.43958
Thresholds Goods Services Construction Services
Central Government US 56.190
UE 130.000
US 56.190
UE 130.000
US 6.481.000
UE 5.000.000
Sub federal/local US 460.000
UE 200.000
US 460.000
UE 200.000
US 6.481.000
UE 5.000.000
Other entities US 280.951
UE 400.000
US 280.951
UE 400.000
US 6.481.000
UE 5.000.000
Basic Overview
E CatalogueE CatalogueE CatalogueE Catalogue
LogisticsLogisticsLogisticsLogistics
ConsultingConsultingConsultingConsulting
Value Added Services Value Added Services
BuyersBuyers SuppliersSuppliers
Market PlaceMarket Place
FinancialFinancialFinancialFinancial
Regulatory Frame Work
Non Binding Principles for Government Procurement
Institutions
• US$ 2.500 millions per year.• 1.000.000 transactions per
year.• 60% services, 40% goods.• 900 buying organizations.• 150.000 suppliers
Basic Processes
Basic Processes
Bidding Process
Foreign Suppliers registered at ChileCompra
EE.UU.24.3%
Argentina16.9%
Spain14.0%
Brazil4.4%
Germany4.4%
Otros26.4%
Canada2.5%
Mexico1.7%
Uruguay1.7%
United Kingdom2.8%
Peru3.0%
Colombia3.8%
Others20.5%
BOT in Chile:How the system works?
Total Concessions
Urban Roads 20%
Airport5%
Interurban Highway
72%
Dams1% Penitenciaries
2%
Investment US$5.5bn (Official estimate) 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]