Wednesday, July 15, 2009

Team 1 - AmCham visit

We began our International Business tour of various companies doing business in Chile, whether Chilean or multinational in origin, by visiting AMCHAM CHILE. Team 1's Jim Kehrer, Laura Zima, Rebecca Schenker and "Alfred" hosted.

  • In a business climate that has depended for centuries on building and maintaining relationships, AMCHAM CHILE serves as a faciliator bringing Chilean businesses and companies seeking to partner with Chilean companies together. With a membership of around 700 companies comprising most of the large businesses in Chile and the large foreign investor companies, it is not surprising that of the companies we visited subsequent to AMCHAM CHILE, PricewaterhouseCollins, D&S, and SQM are AMCHAM members. Of interest is that TATA is not an AMCHAM member, which suggests that it may not currently have a direct tie with the rest of the close-knit Chilean ruling business class (a factor that might in part explain its current legal predicament).

  • The AMCHAM representative, John Welby (see Laura's blog) provided background information on Chile's history, current social problems and trade agreements. He also highlighted the close relationship that Chile has with the United States on the Free Trade Agreement of January 2004. Since the signing of the FTA, imports and exports between our two countries grew 345%!! -- an astounding figure. Also, Chile is one of our only main trading partners where our exports to them are greater than our imports from them.

  • Given that Chile won a relatively recent war with its neighbors to the north - Peru and Bolivia -- a close trading partnership with the United States serves a number of purposes. Firstly, Chile cannot get oil from its neighbors and therefore depends almost completely on the US to provide this commodity. Secondly, by strengthening its relationship with the US there is at least an appearance of being protected by the US should future problems with its neighbors develop. The interesting part of this is that the Chilean's value business relationships above all else - a sentiment that is not true in the US. So it seems that our two countries may not be on the same page in this regard: we shall see.

  • Another interesting aspect of visiting AMCHAM first was that our reaction to their current and ancient social problems, and the impact of their dicey political history was only understood from a US cultural perspective. We learned so much about the Chilean society during the rest of our stay, that I think the depth and breathe of our understanding of the social class related problems and what is really standing in the way of their current resolution, surprised us all.

  • On a hopeful note, the Chileans feel that they are in the process of creating a middle class, and in a society that takes little steps toward the resolution of any problem, this might permit, as years go by, the establishment of a lower middle class, an upper lower class, etc. (Thanks Roderigo for your input in this regard). At least everyone in Chile knows (and accepts thanks to Pinochet's human rights violations to re-establish the status quo for the rich) that overnight resolution of the social class problems - (as attempted by Allende) - will not be the way Chile will go.

  • The "take-away" from the AMCHAM visit and repeated throughout our company visits - is that Chile has indeed fashioned a stable, innovative and "ethical" country to safely and profitably invest in.

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