Record foreign investment authorized in Chile for 2012
SANTIAGO — Chile’s Foreign Investment Committee has announced a total of US$13.8 billion was authorized over the course of the year, a new record for Chile. The previous record of US$13.3 billion was set in 2010, this year’s total being an increase of 4 percent.
There is no surprise which industry tops the list of foreign investment, with mining companies receiving a total of US$9 billion in foreign investment. As the largest producer of copper in the world, many existing mines worked on expansion projects to keep up with worldwide demand for copper. 70.1 percent of direct foreign investment went to mining projects.
The services industry, which includes banking and financial services, health, hospitality, tourism and travel, insurance and many others was the next biggest beneficiary of investment, receiving 16.7 percent of direct foreign investment.
The Atacama Region accounted for more than half of foreign investments, being home to some of the largest mining projects in the world. The region received 56.4 percent of total direct foreign investment.
The countries leading the way in investment in Chile were Canada, Japan, Spain and the USA. Matías Moro from the Foreign Investment Committee noted the growing interest from Asian countries, with China and South Korea both joining Japan in the top 10 countries investing in Chile. Moro said, “It shows the committee’s efforts to position Chile in the minds of Asia’s business people is starting to beat fruit.”
In a different world of foreign investment, the departure from Chile of Israeli venture capitalist Arnon Kohavi has created a wave of controversy, particularly in Chile’s community of start-up ventures. Kohavi arrived in town six months ago, will all guns blazing claiming “the next Facebook, Skype or MercadoLibre has to come from Chile” and said that he was looking for the “Zamorano of technology,” in reference to the well-known former striker of the Chilean national team.
Kohavi was interviewed on the technology website TheNextWeb and claimed the Chilean environment was not ready for his investments, that Chile was run by families of social elites who did not care about entrepreneurs and that “entrepreneurs would have to get used to talking in English.”
After arriving in Chile, planning to stay for “an indefinite period,” Kohavi’s departure to Singapore after just six months has caused an angry reaction within the start-up community, including a response, also published on TheNextWeb website from Rich Yang, one of the original participants in the Start Up Chile program. Start Up Chile is a government backed program looking to attract entrepreneurs to Chile in order to change the culture and mindset within the Chilean community. While the first rounds were not open to Chileans, that has been changed now and both foreigners already inside Chile and Chileans can apply to the program.
This year, for the first time ever, Chile reached the top 20 of countries for foreign direct investment, according to the UN’s World Investment Report. In a time of global economic uncertainty, Matías Moro said, “Foreign investors value the good conditions that Chile offers for doing business. Our country is known for its reliability, clear rules and excellent opportunities for investment as is borne out by different international rankings.”