Snapshot of the Chilean Economy

Transcription

1

2 Snapshot of the Chilean Economy Economy GDP 2012 GDP per capita (PPP, 2012) Actual interest rate (Monetary Policy, Jan 2013) US$ 268 billion (IMF) US$ (IMF) 5.0% Unemployment rate (Avg. 2012) 6.5% Exports (2012) Imports (2012) US$ 78,8 billion US$ 74,6 billion Chile s Sovereign Ratings Fitch Ratings AA- Standard & Poors AA- Moody s Aa3 Social Population 17.6 million Official Language Spanish Currency Peso Literacy rate 97% Life expectancy 78 years Source: Central Bank of Chile 2

3 Chilean Economic Activity IMACEC Index, which tracks the Chilean economic activity in a monthly basis, has consistently reached levels above 5% during the past few years. Also, it highlights the 2010 earthquake s impact on the economy. Source: Central Bank of Chile 3

4 Economic Growth Projections Growth comparison: World, Latin America and OECD *Projected growth 4,5* 4,1* 2,1* Mundo Latinoamérica y el Caribe Chile OECD Source: International Monetary Fund 4

5 Outstanding Business Environment Doing Business 2012 Competitiveness Yearbook 2012 Economic Freedom Index (39 out of 183 economies)* (28 out of 59 economies)* 2012 (7 out of 179 economies)* Singapore Hong Kong New Zealand United States Denmark Norway United Kingdom Korea Iceland Ireland Chile Peru Colombia Mexico Uruguay Paraguay Argentina Brazil Ecuador Bolivia Venezuela Hong Kong Sweden Germany United Kingdom South Korea Japan Chile Czech Republic Peru Brazil Russia South Africa Colombia Argentina Category Pos. Protecting investors 29 Chile leads Latin America. *Selected economies. 5

6 Chile, Globally un integrated país abierto economy al mundo A country with an open economy: 22 Free Trade Agreements with 59 countries. Turkey Ecuador Colombia Australia Peru Cuba Panama Japan India P-4 China EFTA Korea United States European Union Central America Mexico Canada MERCOSUR Venezuela Bolivia Malaysia Agreements In force 63% of world population Agreements signed but not yet in force 86% of the global GDP Agreements under negotiation 90.5% of Chile s export markets Thailand Hong Kong Nicaragua Vietnam Source: Government of Chile Foreign Investment Committee 6

7 Avoidance of Double Taxation Agreements (ADTA) Chile has entered into 25 ADTA with 25 countries. Belgium Denmark Spain France Ireland Poland Portugal Thailand Malaysia New Zealand United States Russia Australia United Kingdom Sweden Switzerland Norway Croatia Canada Colombia Ecuador Mexico Peru Argentina Brazil Paraguay Agreements in force Agreements signed but not yet in force Agreements under negotiation South Korea Source: Government of Chile, Foreign Investment Committee 7

8 FDI in Top 10 Host Economies Top 10 host economies (FDI inflows, average , US$ Billions) 8

9 FDI in Emerging Markets The FDI historical flows exhibit imbalances among the 3 main emerging markets worlwide: Em. Asia, Em. Europe and LatAm. However, we observe a positive trend towards Latin America in the past year, which is estimated to increase this year. Source: Central Bank of Chile 9

10 FDI Flows into Latin America and the Caribbean Latin America s Largest FDI recipients * (ThUS$ million) Chile became Latin America s second largest recipient of FDI in United Nations forecasted a US$ million FDI inflow to Chile last year, however this was topped by the actual figure of US$ million. Forecast Growth Rate of FDI inflows by Region, 2012 (%) 52,70% * 2012 figures are estimates. Source: Global Investment Trends Monitor, UNCTAD. While Latin America and the Caribbean would register an average growth of 7,2%, FDI flows worldwide would score US$1,3 billion, with a 18,3% decrease over the previous year. This figure, close to the 2009 figure, would be influenced by low FDI inflows to Europe and the U.S., mainly due to the uncertainty in macroeconomic policies for investors. 7,20% World LatAm Chile -18,30% Source: Global Investment Trends Monitor, UNCTAD. 10

11 FDI in Chile Figures provided by the Central Bank of Chile exhibit a record level of FDI in 2012, reaching US$ million, a 62,7% increase from previous record in This implies a 27,1% CAGR between 2002 and 2012, placing 2012 s FDI as 11 times the 2002 level. Foreign Direct Investment in Chile (US$ MM) Source: Central Bank of Chile 11

12 FDI in Chile, inflows under D.L (US$82,021 million) Breakdown by countries Breakdown by industries Netherlands 2,1% Mexico 2,2% France 2,0% Others 11,5% United States 24,6% Manufacturing 10,9% Construction 1,7% Agriculture, Forestry & Fishing 1,4% Mining 34,1% Italy 2,4% Australia 4,6% Japan 5,5% Transport & Communications 11,1% United Kingdom 8,0% Canada 18,1% Spain 19,0% Electricity, Gas & Water 18,4% Services 22,4% Source: Foreign Investment Committee 12

13 Canadian FDI in Chile Canada has been the main source of Foreign Direct Investment in Chile for the past decade, accounting for 24% of total FDI in that period (MMUS$ 7.799), according to the Foreign Investment Committee. Foreign Direct Investment in Chile By Country of Origin ( ) Foreign Direct Investment in Chile (D.L. 600 materialized, US$ MM) 5% 8% 5% 9% 13% 17% Source: Foreign Investment Commitee 24% 19% Canada (Canadá) Spain (España) United States (Estados Unidos) Japan (Japón) United Kingdom (Reino Unido) Australia (Australia) Mexico (México) FDI from Canada Other FDI Source: Foreign Investment Committee Historical Foreign Direct Investment in Chile By Country of Origin ( ) Source: Foreign Investment Commitee 5% 2% 5% 8% 18% 18% 25% 19% United States (Estados Unidos) Spain (España) Canada (Canadá) United Kingdom (Reino Unido) Japan (Japón) Australia (Australia) Italy (Italia) Since 1974, when FDI measure was first implemented in Chile, Canada has been the third largest foreign investor in the country, accounting for 18% of total inflows (MMUS$ ). Source: Foreign Investment Commitee Others (Otros) 13

14 Investment Opportunities Mining Food Industry Chile is a world class player. Mining companies plan to invest US$91 billion during the next eight years. Services In 2010, service exports totaled US$10.8 billion. 15% of our total exports and 5% of GDP. Investment Opportunities: Produce Industry; Wine Industry and grape sub-products; Olive Industry; Meat and Dairy subproducts; Salmon Industry; Food Ancillary Industries; Elaborated Foods; Biotechnology applied to the Food Industry. Energy High growth potential. Investment Opportunities: Natural conditions for Non- Conventional Renewable Energy; Need for matrix diversification; Energy independence. Infrastructure Chile has an investment portfolio of an aggregate amount of US$7,9 billion in public tenders. Manufacturing & Assembly Export-oriented fabrication & integration of parts & components. 14 Source: Government of Chile, Foreign Investment Committee

15 International Trade: Chile - Canada There are 2 main sources to measure international trade between Chile and Canada: StatsCan and the Central Bank of Chile. Even though there might be differences in their figures, trends are usually similar. Chilean EXPORTS to Canada US$ MM Statistics Canada Central Bank of Chile * * 2012 figures from StatsCan are Jan-Jun 2012 only. Chilean IMPORTS from Canada US$ MM Statistics Canada Central Bank of Chile * * 2012 figures from StatsCan are Jan-Jun 2012 only. Differences between 2 main sources: Tariff Codes are different Intermediate destination sometimes accounted as final Time gaps until product arrives to destination Trade Balance Chile-Canada (US$ MM) Chilean EXPORTS to Canada Chilean IMPORTS from Canada Figures provided by StatsCan exhibit a positive trend in Trade Balance between 2007 and 2011, driven by an increase in Chilean exports to Canada * TRADE BALANCE Chile - Canada Source: StatsCan 15

16 International Trade: Chile - Canada Chilean exports to Canada are concentrated in few products. Based on Statistics Canada s figures, the top 3 exported products (Gold, Silver and Grapes) accounted for 54% of total exports to Canada in Likewise, the top 6 exported products (+ Copper, Wine and Fish) explained 71% of total. Share in Total Exports (%) Top 6 Chilean Products Exported to Canada (71% of total in 2011) S12 Gold Silver Grapes Copper Wine Fish Source: StatsCan Chilean Exports to Canada US$ MM S12 Gold Silver Grapes Copper Wine Fish TOP TOTAL % Top 6 / Total 62% 68% 59% 56% 65% 71% 65% 100% 80% 60% 40% 20% 0% Chilean Exports to Canada by Sector (% of total exp.) S12 59 Non Minerals Other Minerals Gold + Silver Copper Source: StatsCan In 2011, minerals accounted for almost half of total Chilean Exports to Canada. In terms of products, Gold has increased significantly its share in the past few years, while Copper has exhibited the opposite trend. 16

17 ProChile Canada ProChile Canada contributes to Chile s economic development through its promotion abroad, supporting Chilean exporters to the internationalization of their business in a sustainable path. Likewise, enhancing the promotion of investment and tourism are new strategic targets to achieve in the upcoming years. Exports Investment Tourism TRADE COMMISSION OF CHILE In Canada 1. Strengthen our contact network in Canada, with a special focus on its four major provinces 2. Deliver high quality market research to our Chilean exporters 3. Organize high quality commercial missions nationwide 4. Organize investment attraction activities that invite Canadian companies to go to Chile 5. Positioning Canada as an attractive market for our entrepreneurs 17

18 Chile s Next Growth Phase: ( ) Sustainable Growth Increased Productivity Gains Science & Education Innovation & Entrepreneurship 18

19 The basic elements of our action plan Chile is a globally integrated economy, with strong foundations and outstanding business environment. We strongly believe that Chile s Next Growth Phase ( ) should arise from becoming a Regional Hub for Entrepreneurship & Innovation. Culture and ecosystem Financing Human Capital R&D Institutions Global Connection 19

20 Where is Chile going to add value 20

21 2013: The year of innovation Competition for a better business environment Emblematic Projects A new culture for innovation 21

22 Entrepreneurship at the core of a new economy 1. Entrepreneurship For and From the people 2. Goal Build a strong ecosystem: Positive culture - Knowledge & technology - Human networks Global thinking - Financing 3. Government Retreat from market zone and concentrate where market fails Make it easy to create companies Avoid red-tape 22

23 New registered activities on an historical record 200 Earthquake Financial crisis Record of creation of new companies = Source: Chilean IRS 23

24 A hub for Global Entrepreneurs (Snapshot nota The Economist October 13 th., 2012) 24

25 New R&D Tax Credit 35% Tax Credit for all R&D expenditure (remaining 65% is tax deductible) = almost 50% of R&D is paid by Gov. All R&D expenditures are allowed, incl operational expenses, real and personal property, payroll, etc R&D activity can be performed in-house or by third parties, and if needed, up to 50% can be done in a foreign country Annual maximum tax credit per company (legal entity) is US$1,2 million (however all remaining expenditure is tax deductible) Tax benefit can be carried forward 10 years New tax credit law become effective on September 7th 2012 Law was approved with overwhelming majority from all parties Law will be valid (i.e. new projects can be certified) until at least

26 Centres of Excellence: First Institutional Call A success! Fraunhoffer-Chile R&D being performed for more than a year, more than 75 people contributing to projects, extra funding leveraged, signing of additional research contract with industry, among others CSIRO-Chile Centre launched, staff being hired (18 people already), and starting R&D activities in Santiago and Antofagasta. Closed funding from 5 major Mining companies. INRIA-Chile Has become a Chilean legal entity and was formally launched as CIRIC in June Introducing new activities with ALMA (Astronomy) Wageningen-Chile. Around 85 people collaborating. Articulated cooperation with vast number of customers, and exploring new funding alternatives with other food industry actors. Officially launched in July

27 Centres of Excellence 2.0 New Round! This 2 nd Call will not have ex-ante sector or industry priorities in place. Proposals tackling high impact areas for Chile s economy (or even with the potential of creating new industries and leverage regional platforms) will be valued better off. Proposals may leverage additional regional funds within the country. Projects should contribute to position Chile as an innovation hub within Latam. Target are Centers with investment close to USD24M Institutional Centers: USD 12.8M in 8 years Corporate Centers: USD 8M in 4 years and 1:2 funding 27

28 Regional Hub for Entrepreneurship & Innovation 28

29 Trade Commission of Chile ProChile - Canada 2 Bloor Street West, Suite 1801, Toronto, Ontario Tel.: jafigueroa@prochile.gob.cl DISCLAIMER: The information contained in this document is for the purposes of information only and the particular conditions of each specific potential project may vary from those set out here. The contents of this document should in no way be interpreted as a legally binding obligation of the Republic of Chile or any other state agency that participates in any way in the processes of administrative approval or of any other nature corresponding under Chilean law. This information in no way constitutes an authorization to start or exercise the economic activity potentially intended to be developed. The resulting agreements will be governed and interpreted exclusively according to the laws of the Republic of Chile, their related regulation and the national policies applicable to each particular case.