How To Get A Job In Chile

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1 Royal Netherlands Embassy in Santiago de Chile Business in Brief - May 2010 Royal Netherlands Embassy in Santiago de Chile Business in Brief is a monthly publication of the Economic Section of the Netherlands Embassy in Santiago de Chile and contains news on the latest economic development in Chile as well as an update on local and international company news. Inhoud Dutch Pavilion on Expomin 2010 mining fair MACROECONOMIC NEWS Reallocations of the 2010 budget because of earthquake Government studies feasibility of rise in mining royalty Chilean exports 48.8% up in first trimester Chile's foreign investments grow big in first trimester IMF predictions: Chile and Peru will lead Latin American growth Chile rated most secure country in Latin America Government plans to reduce time needed to start a business SECTOR AND COMMERCIAL NEWS Important Solar Power Project for Codelco Former BHP Billiton Executive Appointed CEO of Codelco Drop in fishing production and high fish meal prices because of earthquake damage LAN Airline to invest US$2.8 billion to expand fleet Chile wins bid for world s largest telescope Chile has highest broadband penetration in Latin America ExpoEstudiante Fair May 15-20, 2010 Universities of Groningen, Tilburg, Rotterdam Business School, STC and Nuffic present on the ExpoEstudiante Fair in Santiago de Chile. University of Groningen visiting Chile June 7, 2010 Research Delegation from the University of Groningen visiting Chile (Faculty of Medicine) International Investment Forum: "Chile: Investment opportunities in the Agri-Food Cluster" June 7-11, 2010, Santiago-Chile More information Spreekdagen Latijns-Amerika. June 28-30, 2010 More Information FruitTrade 2010 Octobre 6-7, 2010, Santiago de Chile More Information Seminar Maritime Mission to the Netherlands September 1, 2010, Santiago de Chile Organised by the Netherlands Council for Trade Promotion (NCH). Contact

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3 Dutch Pavilion on Expomin 2010 mining fair The 11th edition of Expomin, one of the most important mining fairs in Latin America, took place on April in Santiago de Chile. More than 1,000 suppliers of technologies, equipments, machinery, services and provisions; and over 68,000 visitors attended the fair. The Netherlands were present at the Dutch Pavilion, organised by the Royal Dutch Embassy of Santiago de Chile. The participating Dutch companies and Chilean enterprises that represent Dutch products were: CTS Chile, Dutch Holding S.A., Groeneveld Chile Ltda, Hellema Holland Engineering Ltda., ING Chile and Pro-Ambiente S.A. The pavilion was a success and our participants have already showed interest in participate next year in Exponor, Antofagasta s mining fair. If there is sufficient interest from companies, the Embassy will consider participating with a Dutch pavilion on this fair. In case of interest please contact the Embassy. Outgoing Maritime Mission to the Netherlands November 2010 Organised by the Netherlands Council of Trade Promotion (NCH). Contact Incoming Agricultural Mission November 2010, Santiago de Chile Organised by the Netherlands Council for Trade Promotion (NCH) and Rabobank. Contact MACROECONOMIC NEWS Reallocations of the 2010 budget because of earthquake To deal with immediate needs, the government will have implemented within three months a package worth US$111 million, financed from reallocations of the 2010 budget, which includes a temporary employment programme; distribution of 25,000 tents and 40,000 plywood housing units; a financing programme for small fishermen s equipment and forgiving % of their patent payments; and monthly payments for six months for students in the

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5 worst affected areas. The Ministry of Education will distribute 10 billion Chilean pesos to municipal schools for temporary equipment or for repairs. According to the Minister of Finance, Felipe Larraín, funding for reconstruction is likely to come from four sources: a balance between budget reallocations, tapping Chile s offshore sovereign fund (US$11.2 billion), local borrowing and temporary tax increases limited to large companies. Source: The Economist Intelligence Unit Government studies feasibility of rise in mining royalty President Piñera commissioned in March an assessment regarding the feasibility and impact of a 3% rise in the royalty paid by copper mining companies from the current 5% of operating profits. Mining companies who voluntarily accept the proposed 8% royalty would obtain a longer term for the tax invariability clause in foreign-exchange contracts. The assessment estimated that the higher royalty would lower mining companies return on assets by 2% from the extraordinarily high levels registered since 2005 owing to high copper prices. Mining companies have reacted strongly against the government s pressure, and the industry s association, the Consejo Minero, has warned that private mining investment projects for , worth US$22,134 million according to official figures from the Chilean Copper Commission(Cochilco) would be put at risk by any changes to the tax regime. Source: The Economist Intelligence Unit

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7 Chilean exports 48.8% up in first trimester According to Chilean Customs, Chilean export grew 48.8% in this first trimester. Exports to China totalled US$4 billion, (98% increase over the first trimester of 2009). China remains the largest export market for Chile (a quarter of all Chilean exports). Exports to Taiwan show an even larger expansion (143% to US$428 million). Japan, currently Chile s third largest export market increased 36% to just under US$1.5 billion. South Korea also showed significant growth (64% to US$906 million). Exports have also increased to Belgium, Spain, and Canada (each by more than 50% and US$100 million). Exports to Italy and Brazil have risen even more, roughly doubling in volume to US$511 million and US$882 million respectively. An exception is the US, Chile s second largest export market, which shrank 14% to US$1.8 billion. Copper led the growth of exports. (more than US$10 billion, almost double the volume of the first trimester of 2009). The fruit industry is down by 6%. Imports have increased 27.8% overall to US$11.2 billion for the trimester. Imports of cars showed remarkable growth, increasing US$608 million to just under US$1 billion. Source: Santiago Times Chile's foreign investments grow big in first trimester During the first three months of the year, Chile invested US$ 1.7 billion in foreign countries, according to the Chamber of Commerce of Santiago (CCS). This is seven times more than last year (40% of all foreign investments of 2009). The country in which Chile invests most is Peru, with the retail sector responsible for 40% of the growth. The second most important sector is forestry,

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9 accounting for 23% of total foreign investments. After Peru, Brazil is in second place receiving most of Chile's investments (32%). Source: El Mercurio IMF predictions: Chile and Peru will lead Latin American growth The International Monetary Fund (IMF) predicted that Chile and Peru will lead Latin America s growth in 2011 with an expansion of 6% each due to reconstruction and higher commodity prices. The IMF upped Chile s projected growth from 4 to 4.7%. in its world economic outlook report. According to the IMF, Chile s growth rate will slow in 2012, yielding to Peru and Mexico. By 2014 to 2015 Chile s GDI will recover its growth having been 4.5%. At least until 2015, Chile will be the sixth largest economy in South America, measured by the size of its GDP, following Brazil, Mexico, Argentina, Venezuela and Colombia. The IMF also predicts that the GDP this year would total US$196 billion, making Chile 45th in the world economy. By 2015, the country will advance to place 42 in the global ranking with a GDP estimated at US$282 billion. Source: La Tercera Chile rated most secure country in Latin America According to a study carried out by FTI Consulting (International Forensic Technologies), Chile is, for the second year in a row, the safest country of Latin America. This year, Chile is at a level 2 of insecurity, on a scale from 1 to 5, with 1 being the safest country and 5 the most insecure one. Level 2 is labelled 'stable without changes'. Reasons for Chile's positive ranking include the respect for the country's police forces and the

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11 punishments for petty crimes such as robberies and vehicle theft. Data used in the study came from local police stations and NGOs. Source: Santiago Times Government plans to reduce time needed to start a business The Chilean government is trying to reduce the amount of time, currently 27 days, to only 12 days to start a business venture in Chile. The government hopes to cut the number of steps to establish a business from nine to one, and to surpass the Organization for Economic Cooperation and Development (OECD) s standards. The Ministries of Finance and Justice have two options for achieving the proposed modernization: they can design a new law, or they can reactivate the proposal that the previous Bachelet administration sent to Congress in March of According to government sources, the second idea has most support. Chile s government is also studying expediting the bankruptcy process. According to the World Bank, this process requires 4.5 years on average in Chile, with only 21% of the capital being recovered. Source: Santiago Times SECTOR AND COMMERCIAL NEWS Important Solar Power Project for Codelco Codelco, Chile s state-owned copper company, announced last week a plan to outfit some of their mines with solar power over the next few years, a move expected to save millions of dollars in

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13 energy costs. The US$50 million project will be focused primarily on the Gaby Mine refinery, and will be open for operation between 2010 and The use of solar panels is expected to cut the mine s petroleum use by 30%, saving the company nearly US$700 million. Sources: El Mercurio, Santiago Times Sources: El Mercurio, Santiago Times Former BHP Billiton Executive Appointed CEO of Codelco Diego Hernández Cabrera, a current executive with International mining giant BHP Billiton, was appointed unanimously as CEO by Codelco s board of executives. Along with Hernández s appointment came a host of questions regarding his transition from a large private company, to one of the world s largest state-owned enterprises. Hernández has indicated his desire to improve the efficiency of the mines, but others in the mining industry have expressed their concern about changes in the context of a state-owned business, specifically in regard to workers. Hernández is also a well-known opponent to the mining royalty tax. He was a key actor in the negotiations when Ricardo Lagos first presented the idea during his presidency. The mining royalty tax was recently thrown back into the spotlight, with a proposition to increase it in order to fund reconstruction for the earthquake. Hernández will assume his new position on May 19. Sources: La Tercera, Santiago Times. Drop in fishing production and high fish meal prices because of earthquake damage

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15 The earthquake in Chile destroyed many of Chile s fish and fish meal processing plants. Export and domestic fishing sales fell 46.4% during the first three months of the year, from US$412 million in the same period in 2009, to US$221 million as a result of lower production in the lines for preserved, frozen fish and fish oil, according to the Association of Industrial Fishing, Asipes. These sectors represent just over 60% of the catch in Chile. Regarding to fishmeal, Chile is the world s second biggest exporter of fishmeal, after Peru. The El Niño weather phenomenon, which hit Peruvian catches strongly this year, is also contributing to the current fishmeal shortfall. Fishmeal prices rose to a record 1,937 US dollars a ton in late April, up 85% in the past year, because of strong demand and supply disruptions. Prices in Rotterdam, The Netherlands, were as low as 1,000 per ton after the economic crisis of Asipes predicts reconstruction of infrastructure will cost around US$305.7 million, a figure that could rise. Sources: Mercopress, El Mercurio LAN Airline to invest US$2.8 billion to expand fleet Chile's dominant airline and flag carrier announced it will invest US$2.83 billion between 2010 and 2013 to expand its fleet. According to CEO Jorge Awad, the company would invest US$500 million in 2010 and US$1 billion in 2011 to purchase both short and long-haul aircraft. LAN reported that its net profit rose 36% to US$88.3 million during the first quarter of the year. Source: Mercopress

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17 Chile wins bid for world s largest telescope Chile has won its bid for the world s largest telescope to be constructed on its shores. The 42-metre European Extremely Large Telescope will be built in Chile s north 3,060 meters (10, 040 feet) above sea level on a mountain known as Armazonas. The mountain is located in the central part of the Atacama Desert 130 kilometres south of Antofagasta and about 20 kilometres away from Cerro Paranal (location of the Very Large Telescope). According to the European Southern Observatory (ESO), Chile s natural conditions, as well as a number of incentives offered by the government made it more attractive than Spain s Canary Islands. Construction of the telescope will begin next year and it is set to be operational in Sources: ESO, Reuters Chile has highest broadband penetration in Latin America According to the Chilean Broadband Barometer, Chile remains the most advanced Latin American country in terms of broadband penetration. Broadband use in Chile increased 18% from December 2008 to December Now 10.30% of Chileans and 33.6% of houses have broadband access. Chile ranks first among Latin American countries, but is far from the broadband penetration in other OECD countries. Source: Santiago Times Colofon

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19 Business in Brief / May 2010 Royal Netherlands Embassy Locatie 503 / HMA Santiago de Chile Postbus DD Den Haag Tel: (56-2) Fax: (56-2) Information compiled by: Economic Section of the Embassy Please send your comments or suggestions to: stg-ea@minbuza.nl You can find Business in Brief also on the website of the Embassy: Wil je deze nieuwsbrief niet meer ontvangen? Meld je dan hier af. Dit bericht kan informatie bevatten die niet voor jou is bestemd. Indien je niet de geadresseerde bent of dit bericht abusievelijk aan je is toegezonden, wordt je verzocht dat aan de afzender te melden en het bericht te verwijderen. De Staat aanvaardt geen aansprakelijkheid voor schade, van welke aard ook, die verband houdt met risico's verbonden aan het elektronisch verzenden van berichten. This message may contain information that is not intended for you. If you are not the addressee or if this message was sent to you by mistake, you are requested to inform the sender and delete the message. The State accepts no liability for damage of any kind resulting from the risks inherent in the electronic transmission of messages.

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