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WEEKLY NEWSLETTER
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Chile
Index
The relative importance of the construction sector has
declined
significantly since the early 1970s. In 1970 the
construction share
of GDP was almost 8 percent, but by 1992 it had fallen to
6
percent. This trend is largely the result of a dramatic
decline in
the public sector's construction activities. Whereas in
1970 the
public sector was responsible for over 30 percent of the
total
square meters constructed, in 1991 this portion had been
reduced to
3.1 percent. This trend is partially reflected in a
decline in the
quality of the infrastructure. In order to maintain its
pace of
growth, Chile must reverse this trend.
The total construction area grew during the 1987-91
period at
a healthy pace of 12.5 percent per annum. However, all of
this
increase is attributable to the private sector. During
this period,
the yearly area constructed by the public sector declined
(see
table 30, Appendix). The sector enjoyed a robust growth of
10
percent in 1992 as a result of an increase in housing
starts and
other construction projects.
A significant percentage of private-sector construction
is
financed by the government. In fact, one of the most
important
innovations of the military regime was that the state's
role as
direct producer was greatly reduced. Since the late 1970s,
the
overwhelming majority of public works have been executed
by
private-sector firms under government contract. A similar
major
structural reform has taken place in housing for people
with low
income. Although in the 1960s and early 1970s houses in
this sector
were constructed by government-owned firms, in the early
1990s they
were being built by private firms and sold to people with
low
incomes through an elaborate subsidy system
(see Housing
Policies
, ch. 2).
Data as of March 1994
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