Friday, January 15, 2010

Three cheers for Chile

This month Chile became the first South American country to join the Organization for Economic Co-operation and Development (OECD). This elite organization is not based on geographic or language similarities, but by meeting the highest economic standards in the world. The OECD is, effectively, the club of the world's 30 developed nations and Chile has reached an important benchmark in its economic development, an achievement built on growth and freedom, according to Ryan Streeter, a Senior Fellow with the London-based Legatum Institute. Streeter goes on to note that Chile was nothing short of a bold experiment in economic liberalization. This experiment has made it among the most affluent in Latin America.

For around a decade in the 1970s and early 80s, 30 Chileans who had studied under the University of Chicago's Milton Friedman transformed their economy. Later known as the "Chicago boys," these economists instituted policies of free trade, stable monetary policies, and deregulating the markets. They essentially de-politicized the economy and put Chile on the fast track of development.

As a result of these policies and the incredible economic turn around of this country, Chile is now poised to join the OECD. It struggled for years in the political and civil liberties front during the Pinochet years (although he drove, in a dictatorial fashion, the policies of economic reform that the nation enjoys today); but Freedom House now gives the country its top rating when it comes to political and other freedoms.

According to the Legatum Institute's Prosperity Index, Chile tops the list of South America's largest countries (those with populations over 10 million), supported by its high scores in governance, safety and security, and the contribution of its policies to economic growth. When you see the combination of change towards both political and economic freedom, you see a country that has created a situation in which the economy is significantly depoliticized, it is one ruled by law, and one in which the people are free to choose their destinies.

Chile has become a beacon of hope for countries that have suffered for generations under despots and demagogues and is a source of inspiration for Western countries that longed enjoyed freedom, but are now choosing a path towards serfdom. Chile could be a country to watch in the 21st century.

Kevin Price is a syndicated columnist whose articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. Kevin Price is Host of the Price of Business (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here.

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