Financial crisis and capital controls: Latin America

Over two decades Chile has moved from an inward‐looking model of development based on industrialisation through import‐substitution to an outward‐looking model opening the economy to the outside world and based on export‐led development. This shift has brought about a profound change in the country's trade policies, entailing the adoption of neutral tariffs and tax policies, non‐discriminatory policies, and low level of protection. As a consequence, there has been a drastic improvement in the resource allocation process. Diversification of the country's foreign markets is a key component in the success of the new strategy, which has been reflected in the country's rapid economic growth of the last 12 years.