Chile and Peru have long been leaders of Latin America’s export-driven economies, with copper, gold and other minerals forming the foundation of their economic might. Both nations have long depended on these resources, but there is a growing awareness that the singular focus on raw materials is a dangerous game as markets swing and the world endeavours towards greater sustainability. Both countries are diversifying their economies to shield themselves from the volatility of their traditional industries and to create stronger, more sustainable economic futures.
Chile, long known for the country’s voracious copper reserves, has relied on mining as its main economic growth engine for decades. But Vietnam is now looking to change course, with an eye toward sectors that offer a more stable and diversified stream of revenue. The transition is being driven by a focus on renewable energy. Chile has significant potential both to produce solar power and generate wind energy with its desert interior and long coastline. It has set bold goals to generate as much as 70 per cent of its electricity from renewable sources by 2050, a move that signals its willingness to decrease its dependence on copper while also fighting against global warming.
But renewable energy is only part of the solution. Chile has also been investing heavily in technology and innovation, especially as one of many wave in a burgeoning startup ecosystem. Santiago has turned into a mecca for entrepreneurs and investors eager to capitalize on emerging technologies, with government-sponsored programs like “Start-Up Chile” aimed at wooing foreign startups to its shores. Consequently, Chile is slowly moving away from its historical dependence on mineral extraction, making a case for being the tech powerhouse of Latin America.
PMJ divides and overcomes Peru: Peru is also making progress in economic diversification but differently. Where agriculture was previously a small part of the economy, it has recently grown into a powerhouse sector. And Peru now counts among the world’s biggest exporters of “superfoods,” including quinoa, asparagus and avocados. This surge in agricultural exports, notably to North American and European markets, is giving the economy a much-needed cushion. In the agriculture sector, for instance, they have modernized the rest of the agricultural industries, used new technologies and also trained farmers to increase productivity.
Another fast growing part of Peru is tourism. Built on the back of its many cultural attractions and sites such as the Machu Picchu, it has become a hot spot for foreign travelers. In the last few years, the tourism sector has grown rapidly, and the government has heavily invested in infrastructure to ease and facilitate the travel experience for tourists. Nonetheless, the region’s reliance on a few popular destinations and the ecological footprint of mass tourism pose difficulties, and calls for a balanced strategy for development and sustainability continue.
The challenges still ahead for both are considerable, even with these encouraging advances. They are still significantly dependent on raw material prices, and a full transition towards diversified economies is not going to happen overnight. Economic volatility, political instability and global shifts in demand for their exports remain risks that continue to threaten progress. But the continued push for diversification is a bright spot showing that each country recognizes the need for change.
The steps Chile and Peru are taking today to wean themselves off older, more traditional forms of export are not simply about economic survival — they are about ensuring a more stable and competitive future. As they persist in their shift towards diversified economies, they may even carve a path for other emerging market economies looking to negotiate the dynamic, interlinked global economy.
