## Chile: A Role Model of Export Diversification Policies? — Sections 1–3 (WP/21/148)

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### Introduction and framing
- Chile’s export basket is highly concentrated in copper (copper represents about half of Chile’s goods exports) but Chile has considerably developed non-hydrocarbon/mineral (NHM) exports, including complex exports (as defined in Hidalgo and Hausmann, 2009).
- Developing more labor-intensive export sectors (manufacturing and services) could have more direct social benefits than copper and export diversification is empirically associated with lower output volatility and higher long-term output growth.
- Chile’s poor performance on traditional diversification and complexity indices largely reflects exogenous copper abundance and high international copper prices, not an inability to develop non-copper exports.
- Controlling for remoteness, Chile’s per capita exports of NHM and complex exports are among the highest in the world.
- Paper structure (as provided): Section B assesses progress in diversification and complexity; Section C quantifies the effect of distance and policy determinants; Section E provides concluding remarks.

### Evidence from conventional indicators and alternative metrics
- Conventional indicators and their limitations:
  - Herfindahl-Hirschman index of export concentration above 0.3 in 2015.
  - Chile ranks low in the Economic Complexity Index (ECI); copper appears in the bottom 5 percent of the Product Complexity Index.
  - The fall in Chile’s ECI after the early 2000s commodity boom is driven by the rising share and value of low-complexity copper in exports, not necessarily by declining productive capacity.
  - Copper exports grew from US$ 8 billion in 2003 to a peak of US$ 54 billion in 2011, when it accounted for 54 percent of Chile’s goods exports.
  - Conclusion: ECI and concentration indices can be misleading for commodity exporters because they are affected by exogenous commodity price and volume movements.
- Alternative metrics (NHM and complex exports per capita):
  - Complex exports per capita: defined as complex exports = goods with Product Complexity Index above zero.
  - Complex exports per capita growth: growth by a factor of eight in the last three decades since the mid-1980s for complex exports per capita.
  - By 2014-16, Chile’s complex exports per capita were six times higher than in Andean countries (AND) and three times higher than the average in other Southern Cone countries (SCC).
  - Chile’s complex exports per capita performance is more similar to the average in Central America and Mexico (CAM) and East Asia Emerging Markets (EAEM) than to neighboring Andean and Southern Cone subregions.
  - OECD TIVA (2019) domestic value added of NHM exports in 2018:
    - Mexico, Malaysia and Thailand: around 60 percent.
    - Australia: 81 percent.
    - Chile: 88 percent.
  - Implication: difference in domestic value-added complex exports per capita between EAEM and Chile is likely much lower (about 2 to 1) than the gross exports comparison (about 3 to 1).

### Composition of complex exports and services profile
- Top ten complex exports (Chile, 2016; US$ m):
  - Car Tires: 345.6
  - Processed Copper: 322.2
  - Miscellaneous Converted Paper: 306.4
  - Telecom Parts and Accessories: 213.0
  - Motorcycles: 171.2
  - Medicaments: 160.4
  - Construction Machinery: 159.6
  - Railway Passenger Cars: 153.4
  - Miscellaneous Articles of Plastic: 132.2
  - Miscellaneous Condensation Products: 124.0
- Many top complex products are manufacturing (telecommunications products, vehicles, machinery, medicaments) rather than resource-industrialization products.
- Chile produces many products with PCI above two (examples: medical equipment, electrical instruments, metal working machine tools).
- Services exports (Chile, 2016, US$ m):
  - Transportation: 2953.0
  - Travel: 2737.0
  - Business services: 2525.0
  - Computer and information services: 378.6
  - Insurance services: 307.1
  - Financial services: 174.3
  - Royalties and license fees: 43.4
  - Personal, cultural, and recreational services: 25.2
- Non-tourism services are less sensitive to distance; Chile’s per capita services exports compare favorably to other regions including EAEM.

### Remoteness, proximity to markets, and gravity-model evidence
- Proximity to Markets (PM) index:
  - PM index defined as the sum of GDP of rest of the world (ROW) countries weighted by the inverse of distance to each ROW partner (proximity to markets).
  - Salinas (2021) finds PM index explains about a quarter of the variation in NHM, manufacturing, and complex exports per capita; explains less of the variation of services.
  - Doubling a country’s PM has been associated with about ten percentage points higher annual growth in complex exports per capita (dynamic panel regression analysis over the last five decades).
  - Malaysia’s PM is about 170 percent of that of Chile; based on PM differences, Malaysia’s complex exports were expected to grow seven percentage points higher than Chile’s, yet the growth difference over the last fifty years has been of 2.8 percentage points.
- OLS regressions of exports per capita on log(Proximity to Markets) (Period 2000-2017; year and country fixed effects included):
  - Log of Per capita non-hydrocarbon/mineral exports: coefficient 2.72 (P-value 0.00)
  - Per capita complex exports: coefficient 3.50 (P-value 0.00)
  - Per capita service exports: coefficient 2.30 (P-value 0.00)
  - Observations: 70066904 2408
  - R-Squared: 0.23 0.31 0.21
  - Note: Proximity to Markets is the sum of GDP of trading partners weighted by the inverse of distance to the trading partner.
- Chile’s PM index is about half of the average PM of EAEM countries; PM alone predicts Chile’s NHM, manufacturing, and complex exports per capita should be about a fifth of the EAEM average level.
- When policy variables (education, governance, infrastructure, tariffs) are added to PM, Salinas (2021) explains up to 80-90 percent of cross-country variation in NHM and complex exports; controlling for policy variables, PM alone predicts Chile’s NHM, manufacturing, and complex exports per capita should be about a third of the EAEM average level.
- Scatter-plot evidence: Chile exports more complex products than predicted by distance alone; Chile’s upward deviation in complex exports per capita is among the highest in the world (comparable to Australia and New Zealand).

### Quantified policy determinants and counterfactuals (Salinas, 2021)
- Marginal contributions (point-estimates) to NHM, manufacturing, and complex exports from a one standard deviation improvement:
  - Increasing schooling attainment by one standard deviation: more than doubles these exports.
  - Enhancing governance by one standard deviation: increases them by 35 percent.
  - Improving infrastructure by one standard deviation: increases them by 30 percent.
  - Cutting tariffs from 15 to 5 percent: increases them by almost 50 percent.
- Comparative gaps with New Zealand (inferred impacts on complex exports):
  - Eliminating education attainment gap with New Zealand: associated with 100 percent increase.
  - Eliminating governance gap with New Zealand: could increase complex exports by 45 percent.
  - Eliminating infrastructure gap with New Zealand: could increase complex exports by 23 percent.
  - Lowering average tariffs to New Zealand’s level: could increase complex exports by 13 percent.
  - Attaining all these improvements together: would triple Chile’s complex exports, considerably surpassing the average in EAEM but not attaining EE’s average largely because of remoteness.
- Chile Complex Exports per Capita in 2015-17 (US$):
  - Actual: 375
  - Predicted with New Zealand Policies:
    - Governance: 545
    - Educational attainment: 752
    - Infrastructure quality: 461
    - Average import tariff: 427
    - Combined policies: 1531
- Panel Figure A.2 — Marginal contributions (Chile) coefficients (note: Complex exports defined as products with Product Complexity Index above zero):
  - e(Log proximity to markets|X): coef = .75240659, se = .23812331, t = 3.16
  - e(Governance|X): coef = .3469958, se = .21435036, t = 1.62
  - e(Education|X): coef = 2.4022082, se = 1.0223145, t = 2.35
  - e(Infrastructure|X): coef = 1.2053644, se = .14163048, t = 8.51
  - e(Tariffs|X): coef = -.05852025, se = .02794462, t = -2.09

### Econometric estimates (selected)
- Selected coefficient estimates from panel regressions (Table A.2; dependent variable: Log of non-hydrocarbon/mineral exports):
  - Log GDP reporter: 0.756***
  - Log GDP partner: 0.858***
  - Log distance: -1.279***
  - Governance (WB Index): 0.484***
  - Education (UN Index): 5.099***
  - Infrastructure (GCR Index): 0.175***
  - Average Tariff: -0.0310***
- Notes: Observations 44,989 (non-overlapping 5-year averages within the 1962-2018 period); * p<0.1, ** p<0.05, *** p<0.01.

### Chile’s policy strengths and remaining gaps
- Strengths:
  - Trade liberalization: average MFN tariff reduced from about 100 percent in the 1970s to about 25 percent in 1980, and to low single-digit in 2017.
  - Early elimination of non-tariff barriers (in the 1970s).
  - Extensive Free-Trade Agreements with major partners.
  - Improvements in political stability and governance: Polity IV index improved from a negative to the maximum score; by 2017 Chile’s overall governance index is considerably ahead of comparator EM groups.
  - Rapid expansion of infrastructure coverage (electricity and phone line coverage) with superlative quality in some areas (ports and electricity quality highlighted).
  - Educational attainment: above most EM regions (though recently surpassed by EE) and higher PISA results in Reading and Science relative to most EM countries.
- Remaining gaps:
  - Education quality: Chile is significantly below OECD countries in PISA tests and basic competencies.
  - Further room to catch up with Australia and New Zealand in education, governance, and infrastructure (trade openness is already comparable).

### Regional benchmarking and remote-country comparisons
- NHM exports per capita:
  - Chile was within the average range of EM regional groups in 1980 and has gradually surpassed the average in most other EM regions, including EAEM.
  - Chile has used natural resource abundance to surpass EAEM and SCC in NHM exports per capita.
- Complex exports per capita:
  - Chile’s progress in complex exports has been less impressive and lags the EAEM average.
  - Chile’s PM relative to EAEM decreased from two thirds in 1980 to one half in 2017, exacerbating distance disadvantage.
- Remote-country benchmarking:
  - Among a sample of remote countries (income per capita above 8,000 US dollars, population above 1 million, southern latitude similar to Chile’s), only Australia and New Zealand have complex export complexity levels above the EAEM average; Chile is next highest among these remote economies.

### Policy implications and prioritized recommendations
- Preserve leadership in strengthening economic fundamentals and redouble efforts to overcome distance-imposed hurdles.
- Priority policy actions:
  - Strengthen connectivity to markets via investments in transport and communications infrastructure to lower goods and knowledge exchange costs (increase “effective” proximity).
  - Continue to enhance education attainment and quality.
  - Strengthen governance and institutional development.
  - Maintain low trade barriers and pursue open trade policies and agreements.
  - Targeted investments in ports and electricity quality, as these infrastructure areas are strongly associated with export development.
  - Develop exports of services and high value-to-weight products, which are less affected by transportation costs.
  - Improve telecommunications and electricity infrastructure towards the quality level of advanced countries to foster complex export services.
  - Leverage technology to mitigate distance-related constraints.
- Policy coherence across governance, education, infrastructure, and trade openness is essential to translate institutional and human capital strengths into broader export complexity gains.

*Source: WP/21/148 — Chile: A Role Model of Export Diversification Policies? — Sections 1–3 (wpiea2021148-print-pdf)*

### Section 1

### Chile: A Role Model of Export Diversification Policies? — Section 1

### Introduction
- Despite Chile’s export basket being highly concentrated in copper (copper represents about half of Chile’s goods exports), Chile has considerably developed non-hydrocarbon/mineral (NHM) exports, including complex exports (as defined in Hidalgo and Hausmann, 2009).
- Developing more labor-intensive export sectors (manufacturing and services) could have more direct social benefits than copper and export diversification is empirically associated with lower output volatility and higher long-term output growth.
- Chile’s poor performance on traditional diversification and complexity indices largely reflects exogenous copper abundance and high international copper prices, not an inability to develop non-copper exports.
- Controlling for remoteness, Chile’s per capita exports of NHM and complex exports are among the highest in the world.
- Structure of the paper:
  - Section B: assesses progress in diversification and complexity.
  - Section C: quantifies the effect of distance and policy determinants.
  - Section E: concluding remarks.

### Export concentration and complexity: conventional indicators
- Traditional indicators show high export concentration and low complexity:
  - Herfindahl-Hirschman index of export concentration above 0.3 in 2015.
  - Chile ranks low in the Economic Complexity Index (ECI); copper appears in the bottom 5 percent of the Product Complexity Index.
- The fall in Chile’s ECI after the early 2000s commodity boom is driven by the rising share and value of low-complexity copper in exports, not necessarily by declining productive capacity.
  - Copper exports grew from US$ 8 billion in 2003 to a peak of US$ 54 billion in 2011, when it accounted for 54 percent of Chile’s goods exports.
- Conclusion: ECI and concentration indices can be misleading in commodity exporters because they are affected by exogenous commodity price and volume movements.

### Alternative metrics: NHM and complex exports per capita
- Complex exports per capita (complex exports are goods with Product Complexity Index above zero) is less affected by commodity-driven fluctuations and better reflects productive capabilities.
- Chile’s growth in NHM and complex exports:
  - Growth rates of NHM and complex export categories have been persistently high since the mid-1980s, with growth by a factor of eight in the last three decades since the mid-1980s for complex exports per capita.
  - By 2014-16, Chile’s complex exports per capita were six times higher than in Andean countries (AND) and three times higher than in the average in other Southern Cone countries (SCC).
- Comparisons with other regions:
  - Chile’s complex exports per capita performance is more similar to the average in Central America and Mexico (CAM) and East Asia Emerging Markets (EAEM) than to neighboring Andean and Southern Cone subregions.
- Methodological considerations explaining differences with CAM and EAEM:
  - Large copper production reduces labor available for non-copper sectors, lowering per capita complex exports.
  - Participation in global value chains (GVCs) causes gross NHM exports in CAM and EAEM to overstate domestic value added.
    - OECD TIVA (2019) domestic value added of NHM exports in 2018:
      - Mexico, Malaysia and Thailand: around 60 percent.
      - Australia: 81 percent.
      - Chile: 88 percent.
    - Implication: the difference in domestic value-added complex exports per capita between EAEM and Chile is likely much lower (about 2 to 1) than the gross exports comparison (about 3 to 1).

### Composition of Chile’s complex exports and distance effects
- Top ten complex exports: only two (Processed Copper and Converted Paper) are resource-industrialization products; most are manufacturing (telecommunications products, vehicles, machinery, medicaments) not linked to natural resource abundance.
- Chile produces many products with PCI above two (medical equipment, electrical instruments, metal working machine tools).
- Gravity-model evidence:
  - Distance from major markets is a major determinant of exports and a key hurdle for Chile’s export diversification and complexity.
  - Non-tourism services are less sensitive to distance; Chile’s per capita services exports compare favorably to other regions including EAEM.
- Chile’s services export profile (2016, US$ m):
  - Transportation: 2953.0
  - Travel: 2737.0
  - Business services: 2525.0
  - Computer and information services: 378.6
  - Insurance services: 307.1
  - Financial services: 174.3
  - Royalties and license fees: 43.4
  - Personal, cultural, and recreational services: 25.2

### Key findings and implications
- Conventional indices (Herfindahl-Hirschman, ECI) overstate Chile’s lack of diversification because they are distorted by copper’s export share and price movements.
- Direct measures of NHM and complex exports per capita reveal sustained and substantial progress in diversification and complexity since the mid-1980s.
- Chile’s relative remoteness reduces gross exports and participation in GVCs, but high domestic value added (88 percent of NHM exports) mitigates the implication that Chile lags in productive capability.
- Services exports, especially skill-intensive non-tourism services, are a comparative strength less constrained by distance.

*Source: WP/21/148 — Chile: A Role Model of Export Diversification Policies? — Section 1*

### Section 2

### Section 2 — Chile’s Export Diversification and Remoteness

### Top complex exports (Chile, 2016)
- Car Tires: 345.6 US$ m
- Processed Copper: 322.2 US$ m
- Miscellaneous Converted Paper: 306.4 US$ m
- Telecom Parts and Accessories: 213.0 US$ m
- Motorcycles: 171.2 US$ m
- Medicaments: 160.4 US$ m
- Construction Machinery: 159.6 US$ m
- Railway Passenger Cars: 153.4 US$ m
- Miscellaneous Articles of Plastic: 132.2 US$ m
- Miscellaneous Condensation Products: 124.0 US$ m
- Note: Complex exports are those with Product Complexity Index (Hausmann and others, 2013) above zero. Source: UNCTAD Comtrade.

### Remoteness and Proximity to Markets (PM)
- PM index: defined as the sum of GDP of rest of the world (ROW) countries weighted by the inverse of distance to each ROW partner (proximity to markets).
- Salinas (2021) findings:
  - PM index explains on its own about a quarter of the variation in NHM, manufacturing, and complex exports per capita.
  - PM index explains less of the variation of services.
  - Doubling a country’s PM has been associated with about ten percentage points higher annual growth in complex exports per capita (dynamic panel regression analysis over the last five decades).
  - Malaysia’s PM is about 170 percent of that of Chile; based on PM differences, Malaysia’s complex exports were expected to grow seven percentage points higher than Chile’s, yet the growth difference over the last fifty years has been of 2.8 percentage points.
- Empirical support: gravity equation variables and distance to markets are significantly associated with diversification into NHM, manufacturing, and complex exports (Salinas, 2021; Cadestin and others, 2016; Raei and others, 2019).

### Statistical estimates and regression results
- OLS regressions of exports per capita on proximity to markets (Period 2000-2017; year and country fixed effects included):
  - Dependent variables and log(Proximity to Markets) coefficients:
    - Log of Per capita non-hydrocarbon/mineral exports: 2.72
    - Per capita complex exports: 3.50
    - Per capita service exports: 2.30
  - P-values: 0.00 for all coefficients (as shown).
  - Observations: 70066904 2408
  - R-Squared: 0.23 0.31 0.21
  - Note: Proximity to Markets is the sum of GDP of trading partners weighted by the inverse of distance to the trading partner.

### Chile’s performance given remoteness
- Chile’s PM index is about half of the average PM of EAEM countries; statistical estimates predict Chile’s NHM, manufacturing, and complex exports per capita should be about a fifth of the EAEM average level based on PM alone.
- When policy variables (education, governance, infrastructure, tariffs) are added to PM, Salinas (2021) explains up to 80-90 percent of cross-country variation in NHM and complex exports.
- Controlling for policy variables, PM alone predicts Chile’s NHM, manufacturing, and complex exports per capita should be about a third of the EAEM average level.
- Scatter-plot evidence: Chile exports more complex products than predicted by distance alone, indicating policies have partially offset distance disadvantage; Chile’s upward deviation in complex exports per capita is among the highest in the world (comparable to Australia and New Zealand).

### Policy determinants with quantified impacts (Salinas, 2021 estimates)
- Marginal contributions (point-estimates) to NHM, manufacturing, and complex exports:
  - Increasing schooling attainment by one standard deviation: more than doubles these exports.
  - Enhancing governance by one standard deviation: increases them by 35 percent.
  - Improving infrastructure by one standard deviation: increases them by 30 percent.
  - Cutting tariffs from 15 to 5 percent: increases them by almost 50 percent.
- Comparative gaps with New Zealand (inferred impacts):
  - Eliminating education attainment gap with New Zealand: associated with 100 percent increase in complex exports.
  - Eliminating governance gap with New Zealand: could increase complex exports by 45 percent.
  - Eliminating infrastructure gap with New Zealand: could increase complex exports by 23 percent.
  - Lowering average tariffs to New Zealand’s level: could increase complex exports by 13 percent.
  - Attaining all these improvements together: would triple Chile’s complex exports, considerably surpassing the average in EAEM but not attaining EE’s average largely because of remoteness.

### Chile’s policy strengths and areas for improvement
- Strengths:
  - Trade liberalization: average MFN tariff reduced from about 100 percent in the 1970s to about 25 percent in 1980, and to low single-digit in 2017.
  - Early elimination of non-tariff barriers (in the 1970s).
  - Extensive Free-Trade Agreements with major partners.
  - Improvements in political stability and governance: Polity IV index improved from a negative to the maximum score; by 2017 Chile’s overall governance index is considerably ahead of comparator EM groups.
  - Rapid expansion of infrastructure coverage (electricity and phone line coverage) with superlative quality in some areas (ports and electricity quality highlighted).
  - Educational attainment: above most EM regions (though recently surpassed by EE) and higher PISA results in Reading and Science relative to most EM countries.
- Remaining gaps:
  - Education quality: Chile is significantly below OECD countries in PISA tests and basic competencies.
  - Further room to catch up with Australia and New Zealand in education, governance, and infrastructure (trade openness is already comparable).

### Regional comparisons and implications
- NHM exports per capita:
  - Chile was within the average range of EM regional groups in 1980 and has gradually surpassed the average in most other EM regions, including EAEM.
  - Chile has used natural resource abundance to surpass EAEM and SCC in NHM exports per capita.
- Complex exports per capita:
  - Chile’s progress in complex exports has been less impressive and lags the EAEM average.
  - Chile’s PM relative to EAEM decreased from two thirds in 1980 to one half in 2017, exacerbating distance disadvantage.
- Remote-country benchmarking:
  - Among a sample of remote countries (income per capita above 8,000 US dollars, population above 1 million, southern latitude similar to Chile’s), only Australia and New Zealand have complex export complexity levels above the EAEM average; Chile is next highest among these remote economies.

### Policy implications and recommended focus areas
- Strengthen connectivity to markets via investments in transport and communications infrastructure to lower goods and knowledge exchange costs (increase “effective” proximity).
- Continue to enhance education attainment and quality.
- Strengthen governance and institutional development.
- Maintain low trade barriers and pursue open trade policies and agreements.
- Targeted investments in ports and electricity quality, as these infrastructure areas are strongly associated with export development.

### Conclusions
- Chile’s development of non-mineral and complex exports has been more successful than implied by commonly used diversification and complexity indices.
- Geographic remoteness is a significant constraint, but effective policies in education, governance, infrastructure, and trade openness can substantially offset distance disadvantages and materially raise complex and NHM exports per capita.

*Source: wpiea2021148-print-pdf - Section 2 (IMF).*

### Section 3

### Section 3 — Chile: Determinants and Policy Implications for Non-hydrocarbon/Non-mineral and Complex Exports

### Key findings on Chile’s export complexity performance
- Chile’s performance in NHM (non-hydrocarbon/mineral) and complex export categories is as strong as its overall economic performance and more similar to the average in the high performing East Asian region than to other South American countries.
- This performance persists despite Chile’s remoteness from large global economic centers and is likely a result of efforts to strengthen institutional development, educational attainment, trade policy openness, and physical infrastructure.
- If Chile has low diversification and ranks low in terms of the ECI, this is attributed to exogenous copper abundance and distance to large international markets, not to an ineffective policy framework.
- Among remote countries, Chile has seen the fastest growth in exports complexity per capita, driven by strong governance, education, infrastructure quality, and trade policy openness.

### Quantitative illustrations and counterfactuals
- Chile Complex Exports per Capita in 2015-17 (US$):
  - Actual 375
  - Predicted with New Zealand Policies:
    - Governance 545
    - Educational attainment 752
    - Infrastructure quality 461
    - Average import tariff 427
    - Combined policies 1531
- From Panel Figure A.2 — Marginal contributions (Chile) (note: Complex exports defined as products with Product Complexity Index above zero):
  - e(Log proximity to markets|X): coef = .75240659, se = .23812331, t = 3.16
  - e(Governance|X): coef = .3469958, se = .21435036, t = 1.62
  - e(Education|X): coef = 2.4022082, se = 1.0223145, t = 2.35
  - e(Infrastructure|X): coef = 1.2053644, se = .14163048, t = 8.51
  - e(Tariffs|X): coef = -.05852025, se = .02794462, t = -2.09

### Econometric evidence (selected coefficients from Table A.2)
- Dependent Variable: Log of non-hydrocarbon/mineral exports (SITC2 codes 0-2999, 4000-6772, 6900-8999).
- Selected coefficient estimates (panel regressions; Hausman-Taylor and related specifications):
  - Log GDP reporter 0.756***
  - Log GDP partner 0.858***
  - Log distance -1.279***
  - Governance (WB Index) 0.484***
  - Education (UN Index) 5.099***
  - Infrastructure (GCR Index) 0.175***
  - Average Tariff -0.0310***
- Notes excerpt: Observations 44,989 (non-overlapping 5-year averages within the 1962-2018 period); * p<0.1, ** p<0.05, *** p<0.01.

### Policy implications and recommendations
- Preserve Chile’s leadership in strengthening economic fundamentals and redouble efforts to overcome the hurdles imposed by distance to large markets.
- Benchmark against Australia and New Zealand—examples of high complexity development despite long distance to large international markets.
- Priority policy actions:
  - Continue strengthening governance, education, and infrastructure to reach higher degrees of complexity.
  - Focus on transport infrastructure to reduce costs imposed by remoteness.
  - Develop exports of services and high value-to-weight products, which are less affected by transportation costs.
  - Improve telecommunications and electricity infrastructure towards the quality level of advanced countries to foster complex export services.
  - Leverage technology as a key ally to overcome distance-related constraints.

### Sectoral focus and structural considerations
- Transport infrastructure improvements can directly lower trade costs associated with remoteness and support diversification toward complex goods.
- Telecommunications and electricity quality upgrades are particularly relevant for expanding complex export services and high value-to-weight manufacturing.
- Policy coherence across governance, education, infrastructure, and trade openness is essential to translate Chile’s institutional and human capital strengths into broader export complexity gains.

*Source: Section 3, wpiea2021148-print-pdf*

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_Source: https://www.imf.org/-/media/files/publications/wp/2021/english/wpiea2021148-print-pdf.pdf_