Economic Revival In Chile

by Nathaniel Parish Flannery

New construction at Chile’s stalled Costanera Center, the unfinished 984 foot tall tower in the heart of Santiago’s gleaming financial district, is a highly visible reminder that even though the country‘s economy was rocked off course by the 2009 global financial crisis, in 2010 the country’s economy is already starting to recover. A billboard hanging in front of the $US600 million skyscraper, a development that is overseen by Chile’s Cencosud S.A., announces that the project is an “icon of Latin American development.”

According to Chilean press sources, on December 5, 2009 Horst Paulmann, Cencosud’s chairman, told close associates that he was ready to re-start construction on the Costanera tower. As the new phase gets under way, the project could employ as many as 3,000 construction workers by March, 2010.  On December 17, 2009 Michelle Bachalet, then Chile’s president, whose administration is widely credited with effectively managing the country’s economy both during the early boom years of her administration and during the recent downturn, attended a ribbon-cutting ceremony to mark the official re-launch of the Costanera project.  Contacted on January 11, 2009, Alfredo Merlet, a market risk analyst at Rabobank Chile, which is located in Santiago’s financial district next to the Costanera project, explained that from the street in front of his office he can already see that workers have been called back to the Costanera site. Construction is expected to be completed by the end of 2012.

As workers are now being called back to the site, new construction on the tower can be seen as evidence that the country’s economy is emerging from recession.

According to January 2010 data from Adimark GfK, a Santiago, Chile based market research firm, Chile’s Economic Perception Index (IPEC), a measure of consumer confidence, has reached a 35 month high.

Chile, Latin America’s sixth largest economy, has long been viewed as a model of successful growth. Thomas Trebat, the former Head of Latin America Research at Citigroup, currently the Executive Director of the Institute of Latin American Studies at Columbia University in New York, explained in a recent interview that “from 1990 until 2007 Chile led the region with 17 years of solid growth.”

When the Costanera project broke ground in 2006, it was seen as a testament to the country’s successful track record and high expectations for its own future. The 7.5 million square foot project was slated to include a 12 screen cinema, a world-class hotel, and more than 300 retail stores, catering to the middle and upper income segments of Santiago’s five million residents as well as the estimated 2 million foreign tourists who visit Chile every y.....




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