COUNTRY PRIVATE SECTOR DIAGNOSTIC - Creating Markets in Chile - A Stronger Private Sector for a More Productive and Inclusive Society - Executive Summary

Jul 19, 2026

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Chile’s strong private sector is assessed through an executive summary that frames market liberalization, falling poverty, and persistent inequality as key dynamics. With lower growth and weaker productivity, gaps in services, skills, innovation support, risk finance, and competition are highlighted as constraints on firm efficiency. The constitutional process is positioned as an opportunity to strengthen the private sector as a partner for a greener, knowledge-based, inclusive, and more productive economy, enabling transitions via productivity, innovation, and skills.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages21

Reading Time53 min

AccessFree to download

Executive Summary

Background and key challenges

Strategic avenues for strengthening the private sector

Priority transition areas

Public Disclosure Authorized Public Disclosure Authorized Public COUNTRY PRIVATE SECTOR DIAGNOSTIC CREATING MARKETS IN CHILE A Stronger Private Sector for a More Productive and Inclusive Society Executive Summary June 2022 About IFC IFC—a member of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2021, IFC committed a record $31.5 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic. For more information, [visit www.ifc.org](visit www.ifc.org). © International Finance Corporation 2022. All rights reserved. 2121 Pennsylvania Avenue, N.W. Washington, D.C. 20433 [www.ifc.org](www.ifc.org) The material in this work is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. IFC does not guarantee the accuracy, reliability or completeness of the content included in this work, or for the conclusions or judgments described herein, and accepts no responsibility or liability for any omissions or errors (including, without limitation, typographical errors and technical errors) in the content whatsoever or for reliance thereon. The findings, interpretations, views, and conclusions expressed herein are those of the authors and do not necessarily reflect the views of the Executive Directors of the International Finance Corporation or of the International Bank for Reconstruction and Development (the World Bank) or the governments they represent. EXECUTIVE SUMMARY Chile has long had a strong private sector that has enjoyed an accommodating and supportive policy environment. Vibrant private activity, domestic and foreign, has supported a development success story, with sustained growth and falling poverty. Chile was the first country in Latin America to reach high-income status, joining the Organisation for Economic Co-operation and Development (OECD) in 2010. Economic growth was robust over several decades, averaging 6.0 percent during the 1990s and 4.5 percent between 2000 and 2013. Poverty plummeted, and the country now has oneof the lowest poverty rates in Latin America. Substantial growth in wages also brought with it an expansion of the middle class to more than 60 percent of the population. The imperative of building a green, knowledge-based, inclusive economy will inevitably continue to rely on the private sector playing a potent role as a partner in development. Remarkable opportunities are emerging to transform the economy, including through greater digitalization, the development of green hydrogen, and the expansion of climatesmart agriculture, as argued in this report. Yet today, the private sector and its role asan agent of inclusion, innovation, and growth are central issues in the ongoing debate over the future of Chile. In an environment constrained by lower growth and productivity, Chileans are demanding access to better opportunities and improved services. The market liberalization reforms initiated in the late 1970s and early 1980s—which supported a private sector– driven and price-deregulated market economy, amplified by sustained commodity demand from China in later years—brought steady progress and economic growth until the mid- 2000s. But lately growth rates have been on the decline. The end of the commodity cycle, combined with the lagging quality of some services, including tertiary education—which is provided largely by the private sector—have fed perceptions of unmet expectations. Segmentation continues in education and health care, and labor markets remain segregated, pointing to

FAQs

What central argument does the Country Private Sector Diagnostic make for Chile?

The diagnostic argues that the private sector must become a stronger development partner to build a more inclusive, innovative, productive, and greener economy.

Why has Chile’s growth and productivity slowed in recent years?

Growth decline is linked to the end of the commodity cycle, lagging quality of some services such as tertiary education, and broader weaknesses in productivity and efficiency.

Which three avenues does the report say are essential?

It identifies enhancing productivity, building a knowledge-based economy through greater support to innovation, and upgrading skills to support inclusion and innovation.

Jul 19, 2026

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