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WEEKLY NEWSLETTER
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Chile
Index
Figure 8. Gross Domestic Product (GDP) by Sector, 1992
Source: Based on information from Economist Intelligence Unit,
Country Report: Chile [London], No. 2, 1993, 11.
A World Bank study shows that after the trade
liberalization of
the 1970s, Chile experienced a substantial increase in
productivity. This study also shows that in the 1987-91
period,
Chile's productivity increased much more than that of any
other
country in Latin America. Chile's national accounts for
1989-91
show a number of interesting features (see
table 20,
Appendix).
First, the share of agriculture, livestock, and forestry
in GDP
decreased during these three years from 8.1 percent to 7.9
percent.
This short-term trend, however, was somewhat misleading.
In 1971
the share of GDP generated by agriculture, livestock, and
forestry
had been 7.4 percent. From a historical perspective, the
increase
in the relative importance of the primary sector in a
twenty-year
span--from 7.4 percent to 7.9 percent of GDP--was somewhat
of an
anomaly. A well-documented trend is that in the vast
majority of
countries, as income and output expand and national
economies
become more developed, this sector generates a smaller
share of
GDP. In the case of Chile, the absence of this phenomenon
can be
explained by the drastic structural reforms implemented in
the
second half of the 1970s and in the 1980s. An important
consequence
of the market-oriented reforms of the Pinochet government
was the
elimination of discrimination against export agriculture
that had
characterized the Chilean economy during the decades of
importsubstitution industrialization. The level of productivity
of the
agricultural sector (measured as crop yields) had
increased
significantly by the early 1990s
(see
Agriculture
, this
ch.).
A second important feature of Chile's national accounts
in
1989-91 is that the manufacturing sector represented
approximately
21 percent of GDP for the period. This was significantly
lower than
this sector's share of total output in 1969-70, when it
was almost
25 percent. The reduced participation of manufacturing
also
reflected the structural reforms of the 1970s and 1980s.
Those
policies had eliminated the protection walls that had
artificially
encouraged Chile's industrial sector during the 1960s.
The share of mining in GDP remained roughly constant
from 1967
to 1992. However, the composition of mining production
changed
substantially; in particular, there was a drop in the
importance of
copper mining. Also, construction's share of GDP shrank
from 7.7
percent of GDP in 1970 to 6.0 percent in 1992. During the
same
period, the share of services increased from 26 percent to
29.1
percent. Within this sector, a particularly significant
increase
occurred in the financial area
(see
fig. 8).
Data as of March 1994
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