Chile To Move On From Developing Country Status

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Few countries ever go from poor to rich. But tiny Chile, in a corner of South America, has for 20 years been quietly and successfully fighting poverty; and posting some of the world's most impressive economic growth numbers. Chile is months away from wiping out the last of its slums.

RENEE MONTAGNE, host:

Chile has spent 20 years working on creating good governance and a good economy. Now, economists say Chile is on the threshold of a rare milestone. It's preparing to go from a developing country status to the status of a developed country - the first time for a Latin American nation. NPR's Juan Forero reports from Santiago.

JUAN FORERO: An unsightly concrete canal carries raging snow melt past a shantytown in the capital's northeast fringe. This place looks like any Latin American shantytown, except where normally there would be block after block of sprawling poverty, here there are only 20 wood-plank homes. And soon, they'll be a thing of the past.

(Soundbite of hammering)

FORERO: Literally feet away, construction workers listen to a folk song as they hammer, saw and weld. The state is building 150 homes here.

(Soundbite of hammering)

FORERO: Each at three stories high, each with three bedrooms. Shantytown residents, like Lionel Vasquez(ph) and his family, will soon be among the new homeowners.

Mr. LIONEL VASQUEZ: (Spanish spoken)

FORERO: We're happy, Vasquez says, because we've always lived in the camps. Now, we have our own home.

Since 2006, Chile's built nearly half a million homes - some earmarked for poor families, debt-free, or provided with partial subsidies to the working class. So many, in fact, that Santiago, a city of six million, is months away from knocking down its last shantytown.

Rosario Bruna(ph) is a housing official.

Ms. ROSARIO BRUNA (Housing Official): The winter is awfully cold here, so people get sick a lot. And now they're going to have a roof, they're going to have houses that don't allow the water to come in. It's actually a very, very big change for them.

FORERO: Chile's center-left governments have used such programs to cut poverty from 45 percent in the 1980s, to just 14 percent today - the lowest in Latin America. But Chile's also known for its prudent economic stewardship. It's gone from debtor nation to creditor, its economy is among the world's most open.

Marcelo Giugale is the World Bank's director for poverty reduction in Latin America.

Mr. MARCELO GIUGALE (Director for Poverty Reduction in Latin America, World Bank): I think it's well on its way to become a developed country, and it's not just because we see numbers that look very promising.

FORERO: It's also because of intangibles, Giugale says, like strong institutions and low corruption.

Mr. GIUGALE: The state is (unintelligible) much more self-centered, self-healing - and over 30 years of hard work, they managed to convert this into a service to people that is very accountable to society.

FORERO: Increasingly, the world is noticing. The Organization for Economic Cooperation and Development recently invited Chile to join. Dubbed the Club of Rich Nations, the OECD includes the U.S., Japan and European powers.

Chilean Finance Minister, Andres Velasco, says his country is shooting to be perhaps the next Portugal.

Mr. ANDRES VELASCO (Finance Minister, Chile): Chile is hoping to reach the per capita income levels of a developed country some time next decade. And by this, I mean the per capita income levels of some of the countries in, say, the south of Europe.

FORERO: Chile's rise has, in a sense, been remarkable because of what this country once was: a dark dictatorship.

(Soundbite of fighter planes)

FORERO: In the 1973 CIA-supported coup, airplanes bombed the presidential palace - an attack captured by a TV news crew - and General Augusto Pinochet, who looked menacing in dark glasses and a heavy gray cape, took power. It's a far different Chile than the one today - the one with glitzy office towers, manicured lawns and new freeways.

Of course, not everyone says that Chile's miracle has reached them.

(Soundbite of music)

FORERO: Marique San Tearia(ph) is a 35-year-old sales clerk, protesting with others for better pay.

Ms. MARIQUE SAN TEARIA (Sales Clerk): (Spanish spoken)

FORERO: She says wages are just too low and it's hard to make ends meet. Still, Tearia admits there are many programs to help the working classes. Among them, people like Lionel Vasquez, the shantytown resident who's about to leave the past behind.

(Soundbite of coughing)

FORERO: He walks up the steps of one of the homes that's near completion, and he waxes on about what life would be like for him, his wife and their children.

Mr. VASQUEZ: (Spanish spoken)

FORERO: He says their two children will each have a bedroom and that he'll set up his vending business in the living room. He expects to move in March, and he says he can't wait.

Juan Forero, NPR News, Santiago, Chile.

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