During the early 1990s, Chile's reputation as a role model for economic reform was strengthened when the democratic government of Patricio AYLWIN - which took over from the military in 1990 - deepened the economic reform initiated by the military government.
Growth in real GDP averaged 8% during 1991-97, but fell to half that level in 1998 because of tight monetary policies implemented to keep the current account deficit in check and because of lower export earnings - the latter a product of the global financial crisis.
A severe drought exacerbated the recession in 1999, reducing crop yields and causing hydroelectric shortfalls and electricity rationing, and Chile experienced negative economic growth for the first time in more than 15 years.
Despite the effects of the recession, Chile maintained its reputation for strong financial institutions and sound policy that have given it the strongest sovereign bond rating in South America.
By the end of 1999, exports and economic activity had begun to recover, and growth rebounded to 4.2% in 2000. Growth fell back to 3.1% in 2001 and 2.1% in 2002, largely due to lackluster global growth and the devaluation of the Argentine peso.
Chile's economy began a slow recovery in 2003, growing 3.2% and accelerated to 5.8% in 2004. GDP growth benefited from high copper prices, solid export earnings (particularly forestry, fishing, and mining), and stepped-up foreign direct investment. Unemployment, however, remains stubbornly high. Chile deepened its longstanding commitment to trade liberalization with the signing of a free trade agreement with the US, which took effect on 1 January 2004.
GDP - real growth rate: 5.8% (2010 est.)
GDP - per capita: purchasing power parity - $8,700 (2004) , grown to $12,000 in 2010
GDP - composition by sector: agriculture: 6.3% industry: 38.2% services: 55.5% (2004 est.)
Population below poverty line: 20.6% (2009)
Inflation rate (consumer prices): 1.56% (2010
Labor force: 6.2 million (2010 est.)
Labor force - by occupation: agriculture 13.6%, industry 23.4%, services 63% (2003)
Unemployment rate: 6.5% (2010 est.)
Budget: revenues: $21.53 billion expenditures: $19.95 billion, including capital expenditures of $3.33 billion (2009 est.)
Industries: copper, other minerals, foodstuffs, fish processing, iron and steel, wood and wood products, transport equipment, cement, textiles
Agriculture - products: grapes, apples, pears, onions, wheat, corn, oats, peaches, garlic, asparagus, beans, beef, poultry, wool; fish; timber
Exports: $29.2 billion f.o.b. (2010 est.)
Exports - commodities: copper, fruit, fish products, paper and pulp, chemicals, wine
Exports - partners: US 14%, Japan 11.4%, China 9.9%, South Korea 5.5%, Netherlands 5.1%, Brazil 4.3%, Italy 4.1%, Mexico 4% (2010)
Imports: $22.53 billion f.o.b. (2010 est.)
Imports - commodities: petroleum and petroleum products, chemicals, electrical and telecommunications equipment, industrial machinery, vehicles, natural gas Inequality remains in prosperous Chile
By Daniel Schweimler
BBC News
The Chilean carabineros or armed police wait at one end of the street, armed with riot shields and crash helmets and backed by mounted police and huge, metal-clad water cannon. Facing them at the other end are masked demonstrators, their backpacks loaded with stones.
Then the stones start flying and the police move in. The result: 170 arrests and one policeman injured.
Just another demonstration in Chile.
Two days later in a similar protest, a policeman was shot dead, causing outrage and great concern in this otherwise tranquil country.
Most march peacefully, but violence also frequently erupts, as it did earlier this month when demonstrators took to the street to mark the military coup on 11 September 1973, when General Augusto Pinochet overthrew the elected Socialist President, Salvador Allende.
But if it is not that, it is the transport system, or the crumbling schools or the plummeting popularity of the left-of-centre President, Michelle Bachelet.
Organised chaos
Chile is the outstanding success story in Latin America.
“ There is a mixture between real political protest and social unrest in general ”
Pablo Halpern, lawyer
Since the military left office in 1990, it has had a stable democratic government, the economy is growing, unemployment is down and disputes with its neighbours are being resolved - albeit slowly.
So why all the protests?
"Chile is a very prosperous country if you look at the figures of the economy. But the life for the people is very hard," explains one protester.
Chile has seen its economy grow year after year, at about 5.5% per year. Shiny state of the art office blocks are sprouting in the capital, Santiago, and the streets are full of new cars.
Pablo Halpern, a wealthy lawyer, joins me after a day's skiing in the mountains above Santiago.
He believes the protests do not accurately reflect the situation in Chile.
"Even if the images are sometimes very violent and result in damaging the streets and the windows of the shops - and things like that look very violent - they're for a very short period and in some narrow areas - downtown, close to the presidential palace," he explains.
"They start at a certain time and they end at 12 o'clock that same day. So it's really an exercise where there is a mixture between real political protest and social unrest in general."
Widespread discontent
The distribution of wealth in Chile is one of the worst in the region. Sandro Imacache is one of those who feels he is not reaping the benefits of the boom.
“ The gap between the rich and poor is very strong ”
Political analyst Claudio Fuentes
"At the moment the minimum wage is too low," he says, standing behind the reception desk of the modern apartment block in the plush Las Condes district of Santiago, where he works as a concierge.
That wage is $208 (£104) per month - though some 15% of Chile's work force earns less, according to the latest Survey of National Socioeconomic Composition.
"With that I've got to support a family and pay for the useless transport system that we've got. Life here in Chile is expensive - everything goes up and nothing comes down.
"The transport system is crap and expensive. It takes me one and a half hours to get to work - with three changes - and that's without the queues.
"The supermarkets, the hospitals, it's all going up. We used to pay 30 to 40 pesos for an onion - and now it's 150 or 160 - just for one."
Sandro sees the wealth but does not get his hands on much of it. He cannot afford to join the demonstrations, but is part of the growing tide of discontent in Chile among people who feel they are being left behind.
Political analyst Claudio Fuentes says the government is not acting fast enough to rectify the problem.
"Chile is one of the three most unequal countries in Latin America," he says.
"I think this problem has been waiting to be resolved for a very long time and I think the gap between the rich and poor is very strong, and I think you can see that in Santiago even - if you go to the north and south of Santiago you see the differences between the rich and poor.
"And you see that these frustrations of the people have been addressed in the last demonstrations - the students for example who can't get into the universities because the quality of the education isn't very good."
Chile is still one of the most prosperous and stable countries in Latin America.
But while most Chileans are happy with the way things are going, there is also a growing tide of discontent being fed by frustration that the wealth is not being shared by all.
And unless that problem is resolved, sooner rather than later, the demonstrations are only likely to grow - in numbers and intensity.
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