At first sight, Chile’s economy looks in better shape than most of its Latin American and Caribbean (LAC) neighbors with 4.1 percent of GDP growth in 2013, much higher than the regional 2.5 percent according to the World Bank. However Chile apparently failed to escape the latest strong wave of political difficulties that has been crippling the economic future of similar countries like Brazil and Argentina for months. Rumors have been growing about a possible resignation of Chilean President Michelle Bachelet after scandals of corruption, in one of which her son and daughter-in-law are implicated, facing tax fraud and bribery charges with the owners of the Penta Group, one of Chile’s largest holding companies.
“There may be corruption in Chile, but it is not widespread. Not everyone is corrupt in our country,” Bachelet said after affirming her stepping down “would be an institutional failure.” With 3.3 percent of real GDP growth projected change for 2015, up from just 2 percent in 2014, Chile remains an encouraging emerging market, globally seen more positively than its neighbors by a majority of investors. In fact, despite current difficulties, the potential for political instability in Chile may be lower because it has historic knowledge of the importance of preserving democracy and because overall conditions – as regards security, human rights, human development and even transparency – are closer to US-European standards than LAC’s. According to banking and investment experts, the current discontent over corruption is just a big bump on Chile’s road to full economic recovery.