Chile in the Road to the Commodity Boom: Deindustrialization Without Policy Space

Abstract

This chapter analyzes the way Chile confronted the period of stagnation after the Asian crisis. It considers two dimensions. The first one is the role of the business associations to pressure the government to, as a way to reinvigorate growth, liberalize the financial market and initiate a new wave of signing trade agreements with the big markets. The second one includes both the United States’ interests in, through negotiating trade agreements, reducing the policy space in the region, and the beginning of the commodity boom. The outcome of the interaction of these dimensions in Chile’s strategy is both a deep deindustrialization and a reduction in the policy space for the state.