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Monthly Snapshots - November 2019: Chile Edition

Amazon Web Services announces multi-million dollar investment in Chile

The Amazon Web Services (AWS) subsidiary of global technology giant Amazon has recently announced a million-dollar investment in Chile. The data centre called Edge Location, or Edge Data Centre, will allow users to deliver high-speed data service to customers.

With the project announced, Santiago will be part of a global network consisting of 191 points of presence (180 edge locations and 11 regional edge caches) in 73 cities in 33 countries. In the region, Amazon already has invested in infrastructures in Sao Paulo and Rio de Janeiro as well as a few months ago announcing a similar investment in Argentina.

The news was released by the Minister of Economy, Juan Andrés Fontaine, who assured that this is a sign that, despite the current social crisis, the country is moving forward.

While the amount of the investment was not disclosed, it is estimated - according to sources in the technology sector - at around US$50 million.

Competitiveness Index: Chile holds 33rd place and remains the leader in the region for macroeconomic stability

Included in the ranking, Chile maintains leadership in the region followed by Mexico (48), Uruguay (54) and Colombia (57). Further back is Peru (65), Brazil (71) and Argentina (83), and among the last places, Ecuador (90), Bolivia (107) and Venezuela (133).

In a recent statement Finance Minister Felipe Larraín explained that "the 15-point gap between Chile and the second Latin American country (Mexico) clearly indicates that Chile is comfortably the most competitive country in our region".

Chile scores particularly well in innovation and macroeconomic stability. According to the dean of the IAU School of Government, Chile "maintains a significantly better location than countries with similar levels of per capita income," highlighting labor market setbacks and the adoption of information technologies as "fundamental public policy challenges for the 21st century".

Fintech hub "Chilecon Valley" remains a hub for innovative start-ups

Chile has a total entrepreneurial activity rate of 25.1%, positioning it in third place globally, making Chile a hub for entrepreneurs around the world. This is further highlighted with the government organisation Start-Up Chile who have helped 1,600 companies from 85 different countries since 2008.

Amongst all this entrepreneurial activity, there has been a surge of Fintech’s using Chile as a hub for their service. 72% of Chileans have access to the internet meaning the number of digital banking, payment and remittance applications continue to grow yearlyIn addition, the latest figure from December 2017 says around 75 fintech start-ups operate in Chile. This is where the nickname “Chilican Valley comes from.

Chilican valley has been largely helped by recent economic initiatives made at Government level. Thanks to the former president, Michelle Bachelet there is now a “tech visa” program which allows foreign entrepreneurs and investors to participate in the countries rich startup ecosystem.

This ultimately shows that Chile is a hub for innovative start-ups in Chile, this is why more and more fintech start-ups are using Chile as a base to expand to other countries. .

Hochschild buys rare earth deposit in Chile for US$56 million

Peru’s Hochschild Mining plc (listed in London) has increased its investment in Chile by acquiring the stake in the BioLantanidos ionic rare earth deposit in the Concepción area.

Rare earths are essential in a number of modern-day electrical components - such as mobile phones, televisions and laptops. This is becoming increasingly important due to the increasing global demand for these types of products.

Hochschild explained that it had invested US$2.5 million in the project in 2018 and early 2019 in exchange for a 6.2% stake, with an option to increase ownership.

This further goes to show what an attractive investment Chile is to foreign investors. Chile boasts numerous natural resources which are critical in this day and age.

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