Chile vs. Peru

severe earthquakes; active volcanism; tsunamis

volcanism: significant volcanic activity due to more than three-dozen active volcanoes along the Andes Mountains; Lascar (5,592 m), which last erupted in 2007, is the most active volcano in the northern Chilean Andes; Llaima (3,125 m) in central Chile, which last erupted in 2009, is another of the country's most active; Chaiten's 2008 eruption forced major evacuations; other notable historically active volcanoes include Cerro Hudson, Calbuco, Copahue, Guallatiri, Llullaillaco, Nevados de Chillan, Puyehue, San Pedro, and Villarrica; see note 2 under "Geography - note"

earthquakes, tsunamis, flooding, landslides, mild volcanic activity

volcanism: volcanic activity in the Andes Mountains; Ubinas (5,672 m), which last erupted in 2009, is the country's most active volcano; other historically active volcanoes include El Misti, Huaynaputina, Sabancaya, and Yucamane; see note 2 under "Geography - note"

note 1: the longest north-south trending country in the world, extending across 39 degrees of latitude; strategic location relative to sea lanes between the Atlantic and Pacific Oceans (Strait of Magellan, Beagle Channel, Drake Passage)

note 2: Chile is one of the countries along the Ring of Fire, a belt of active volcanoes and earthquake epicenters bordering the Pacific Ocean; up to 90% of the world's earthquakes and some 75% of the world's volcanoes occur within the Ring of Fire

note 3: the Atacama Desert - the driest desert in the world - spreads across the northern part of the country; Ojos del Salado (6,893 m) in the Atacama Desert is the highest active volcano in the world, Chile's tallest mountain, and the second highest in the Western Hemisphere and the Southern Hemisphere - its small crater lake (at 6,390 m) is the world's highest lake

note 1: shares control of Lago Titicaca, world's highest navigable lake, with Bolivia; a remote slope of Nevado Mismi, a 5,316 m peak, is the ultimate source of the Amazon River

note 2: Peru is one of the countries along the Ring of Fire, a belt of active volcanoes and earthquake epicenters bordering the Pacific Ocean; up to 90% of the world's earthquakes and some 75% of the world's volcanoes occur within the Ring of Fire

note 3: on 19 February 1600, Mount Huaynaputina in the southern Peruvian Andes erupted in the largest volcanic explosion in South America in historical times; intermittent eruptions lasted until 5 March 1600 and pumped an estimated 16 to 32 million metric tons of particulates into the atmosphere reducing the amount of sunlight reaching the earth's surface and affecting weather worldwide; over the next two and a half years, millions died around the globe in famines from bitterly cold winters, cool summers, and the loss of crops and animals

note 4: the southern regions of Peru and the extreme northwestern part of Bolivia are considered to be the place of origin for the common potato

Chile is in the advanced stages of demographic transition and is becoming an aging society - with fertility below replacement level, low mortality rates, and life expectancy on par with developed countries. Nevertheless, with its dependency ratio nearing its low point, Chile could benefit from its favorable age structure. It will need to keep its large working-age population productively employed, while preparing to provide for the needs of its growing proportion of elderly people, especially as women - the traditional caregivers - increasingly enter the workforce. Over the last two decades, Chile has made great strides in reducing its poverty rate, which is now lower than most Latin American countries. However, its severe income inequality ranks as the worst among members of the Organization for Economic Cooperation and Development. Unequal access to quality education perpetuates this uneven income distribution.

Chile has historically been a country of emigration but has slowly become more attractive to immigrants since transitioning to democracy in 1990 and improving its economic stability (other regional destinations have concurrently experienced deteriorating economic and political conditions). Most of Chile's small but growing foreign-born population consists of transplants from other Latin American countries, especially Peru.

Peru's urban and coastal communities have benefited much more from recent economic growth than rural, Afro-Peruvian, indigenous, and poor populations of the Amazon and mountain regions. The poverty rate has dropped substantially during the last decade but remains stubbornly high at about 30% (more than 55% in rural areas). After remaining almost static for about a decade, Peru's malnutrition rate began falling in 2005, when the government introduced a coordinated strategy focusing on hygiene, sanitation, and clean water. School enrollment has improved, but achievement scores reflect ongoing problems with educational quality. Many poor children temporarily or permanently drop out of school to help support their families. About a quarter to a third of Peruvian children aged 6 to 14 work, often putting in long hours at hazardous mining or construction sites.

Peru was a country of immigration in the 19th and early 20th centuries, but has become a country of emigration in the last few decades. Beginning in the 19th century, Peru brought in Asian contract laborers mainly to work on coastal plantations. Populations of Chinese and Japanese descent - among the largest in Latin America - are economically and culturally influential in Peru today. Peruvian emigration began rising in the 1980s due to an economic crisis and a violent internal conflict, but outflows have stabilized in the last few years as economic conditions have improved. Nonetheless, more than 2 million Peruvians have emigrated in the last decade, principally to the US, Spain, and Argentina.

Alliance for Progress (Alianza para el Progreso) or APP [Cesar ACUNA Peralta]
American Popular Revolutionary Alliance or APRA [Cesar TRELLES Lara]
Broad Front (Frente Amplio; also known as El Frente Amplio por Justicia, Vida y Libertad) (coalition includes Nuevo Peru [Veronika MENDOZA], Tierra y Libertad [Marco ARANA Zegarra], and Fuerza Social [Susana VILLARAN de la Puente]
Free Peru (Peru Libre) [Vladimir CERRON Rojas]
National Solidarity (Solidaridad Nacional) or SN [Luis CASTANEDA Lossio]
National Victory (Victoria Nacional) or VN [George FORSYTH Sommer]
Peru Posible or PP (coalition includes Accion Popular and Somos Peru) [Alejandro TOLEDO Manrique]
Peruvian Aprista Party (Partido Aprista Peruano) or PAP [Javier VELASQUEZ Quesquen] (also referred to by its original name Alianza Popular Revolucionaria Americana or APRA)
Peruvian Nationalist Party [Ollanta HUMALA]
Peruvians for Change (Peruanos Por el Kambio) or PPK [Pedro Pablo KUCZYNSKI]
Popular Action (Accion Popular) or AP [Mesias GUEVARA Amasifuen]
Popular Christian Party (Partido Popular Cristiano) or PPC [Lourdes FLORES Nano]
Popular Force (Fuerza Popular; formerly Fuerza 2011) [Keiko FUJIMORI Higuchi]
Popular Renewal (Renovacion Popular) [Rafael LOPEZ ALIAGA]
Purple Party (Partido Morado) [Julio Armando GUZMAN Caceres]
Social Integration Party (Avanza Pais - Partido de Integracion Social) [Pedro CENAS Casamayor]
Together For Peru (Juntos por el Peru) or JP [Robert SANCHEZ Palomino]
We Are Peru (Somos Peru) [Patricia LI]
We Can Peru (Podemos Peru) [Jose Leon LUNA Galvez]

Chile has a market-oriented economy characterized by a high level of foreign trade and a reputation for strong financial institutions and sound policy that have given it the strongest sovereign bond rating in South America. Exports of goods and services account for approximately one-third of GDP, with commodities making up some 60% of total exports. Copper is Chile's top export and provides 20% of government revenue.

From 2003 through 2013, real growth averaged almost 5% per year, despite a slight contraction in 2009 that resulted from the global financial crisis. Growth slowed to an estimated 1.4% in 2017. A continued drop in copper prices prompted Chile to experience its third consecutive year of slow growth.

Chile deepened its longstanding commitment to trade liberalization with the signing of a free trade agreement with the US, effective 1 January 2004. Chile has 26 trade agreements covering 60 countries including agreements with the EU, Mercosur, China, India, South Korea, and Mexico. In May 2010, Chile signed the OECD Convention, becoming the first South American country to join the OECD. In October 2015, Chile signed the Trans-Pacific Partnership trade agreement, which was finalized as the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) and signed at a ceremony in Chile in March 2018.

The Chilean Government has generally followed a countercyclical fiscal policy, under which it accumulates surpluses in sovereign wealth funds during periods of high copper prices and economic growth, and generally allows deficit spending only during periods of low copper prices and growth. As of 31 October 2016, those sovereign wealth funds - kept mostly outside the country and separate from Central Bank reserves - amounted to more than $23.5 billion. Chile used these funds to finance fiscal stimulus packages during the 2009 economic downturn.

In 2014, then-President Michelle BACHELET introduced tax reforms aimed at delivering her campaign promise to fight inequality and to provide access to education and health care. The reforms are expected to generate additional tax revenues equal to 3% of Chile's GDP, mostly by increasing corporate tax rates to OECD averages.

Peru's economy reflects its varied topography - an arid lowland coastal region, the central high sierra of the Andes, and the dense forest of the Amazon. A wide range of important mineral resources are found in the mountainous and coastal areas, and Peru's coastal waters provide excellent fishing grounds. Peru is the world's second largest producer of silver and copper.

The Peruvian economy grew by an average of 5.6% per year from 2009-13 with a stable exchange rate and low inflation. This growth was due partly to high international prices for Peru's metals and minerals exports, which account for 55% of the country's total exports. Growth slipped from 2014 to 2017, due to weaker world prices for these resources. Despite Peru's strong macroeconomic performance, dependence on minerals and metals exports and imported foodstuffs makes the economy vulnerable to fluctuations in world prices.

Peru's rapid expansion coupled with cash transfers and other programs have helped to reduce the national poverty rate by over 35 percentage points since 2004, but inequality persists and continued to pose a challenge for the Ollanta HUMALA administration, which championed a policy of social inclusion and a more equitable distribution of income. Poor infrastructure hinders the spread of growth to Peru's non-coastal areas. The HUMALA administration passed several economic stimulus packages in 2014 to bolster growth, including reforms to environmental regulations in order to spur investment in Peru's lucrative mining sector, a move that was opposed by some environmental groups. However, in 2015, mining investment fell as global commodity prices remained low and social conflicts plagued the sector.

Peru's free trade policy continued under the HUMALA administration; since 2006, Peru has signed trade deals with the US, Canada, Singapore, China, Korea, Mexico, Japan, the EU, the European Free Trade Association, Chile, Thailand, Costa Rica, Panama, Venezuela, Honduras, concluded negotiations with Guatemala and the Trans-Pacific Partnership, and begun trade talks with El Salvador, India, and Turkey. Peru also has signed a trade pact with Chile, Colombia, and Mexico, called the Pacific Alliance, that seeks integration of services, capital, investment and movement of people. Since the US-Peru Trade Promotion Agreement entered into force in February 2009, total trade between Peru and the US has doubled. President Pedro Pablo KUCZYNSKI succeeded HUMALA in July 2016 and is focusing on economic reforms and free market policies aimed at boosting investment in Peru. Mining output increased significantly in 2016-17, which helped Peru attain one of the highest GDP growth rates in Latin America, and Peru should maintain strong growth in 2018. However, economic performance was depressed by delays in infrastructure mega-projects and the start of a corruption scandal associated with a Brazilian firm. Massive flooding in early 2017 also was a drag on growth, offset somewhat by additional public spending aimed at recovery efforts.

economic impact on telcom services during pandemic due to consumer unemployment; good mobile operator competition with LTE services; fixed-line tele-density remains among lowest in South America, with obstacles to growth including widespread poverty, fixed-to-mobile substitution, expensive telephone services, and geographical inaccessibility in the Andean mountains and Amazon jungles; government investment in underserved areas with fiber backbone; government facilitated virtual learning during pandemic via tablets with Internet connectivity; 3G network and new LTE services expanded providing mobile broadband to rural communities, though low penetration still exists; major importer of broadcasting equipment and computers from China (2021)

Chile and Peru rebuff Bolivia's reactivated claim to restore the Atacama corridor, ceded to Chile in 1884, but Chile has offered instead unrestricted but not sovereign maritime access through Chile to Bolivian natural gas; Chile rejects Peru's unilateral legislation to change its latitudinal maritime boundary with Chile to an equidistance line with a southwestern axis favoring Peru; in October 2007, Peru took its maritime complaint with Chile to the ICJ; territorial claim in Antarctica (Chilean Antarctic Territory) partially overlaps Argentine and British claims; the joint boundary commission, established by Chile and Argentina in 2001, has yet to map and demarcate the delimited boundary in the inhospitable Andean Southern Ice Field (Campo de Hielo Sur)

Chile and Ecuador rejected Peru's November 2005 unilateral legislation to shift the axis of their joint treaty-defined maritime boundaries along the parallels of latitude to equidistance lines which favor Peru; organized illegal narcotics operations in Colombia have penetrated Peru's shared border; Peru rejects Bolivia's claim to restore maritime access through a sovereign corridor through Chile along the Peruvian border