CHILE

International trade and material flows – the case of the Chilean export economy

This project analyses the metabolic changes and developments of the Chilean socio-economic system driven by export orientation and active integration in the world markets within the last 30 years.

Material flow accounting and analysis (MFA) is internationally recognised as a key tool to assess the economy-environment relationship and the biophysical metabolism of societies and to provide indicators for environmental pressures of human activities. In this project first steps towards the compilation of material flow accounts for Chile are undertaken.

In the 1970s, Chile was the first Latin American country to initiate a process of economic transformation towards an active integration in the world market system. This transformation process was accompanied by liberalisation and deregulation of national markets and the privatisation of former state owned industries. On the one hand, economists frequently emphasised the success of this neo-liberal, export oriented model in Chile referring to high rates of economic growth and decreasing inflation.

On the other hand Chile’s “free-market miracle” was mainly based on the intensification of primary commodity exports (such as metals and agricultural products) and lead to increased environmental pressures and higher inequalities in income distribution. The overall objective of this project is to assess and analyse this restructuring of the Chilean economy from the perspective of resource use in a time series from 1973-2000.

The main objectives of this project are to

• Account and analyse the development of the different MFA indicators in the selected time periode
• Quantify the material requirements for export production and relate them to the amount of material resources available for domestic consumption.
• Further specify existing approaches for indicators on the “material welfare” of societies.
• Relate the MFA-based indicators to standard socio-economic indicators, like GDP and employment, in order to calculate resource productivities , with special focus on the export sector.
• Discuss potential contributions of MFA to the ongoing debates on “ecologically unequal exchange” and “ecological debt” as well as “free trade versus environmental protection”.

Results show that material inputs to the Chilean economy increased by a factor of six, mainly due to the promotion of resource-intensive exports from mining, fruit planting, forestry and fishery sectors. With more than 40 tons, Chile’s resource use per capita at present is one of the highest in the world.