MercoPress. South Atlantic News Agency

Magallanes ten years of growth based on energy projects

In spite of the global recession and the international gloomy atmosphere, Magallanes region in the extreme south of Chile has been forecasted ten years of 6.3% annual average growth speared by investments in energy related projects.

Roberto Zahler, former Chilean Central Bank president graduated in the University of Chicago and currently a consultant and professor at the Economics Department from the University of Chile made the optimistic forecast during a conference on "Economic and Social Development in (Magallanes) Region XII: Methanex and other growth locomotives until 2018". Zahler mentions specifically hydrocarbons exploration and exploitation which will enable Methanex to resume full capacity production (now severely curtailed by insufficient natural gas supply from Argentina). Currently at minimum production the Canadian methanol producing plant near Punta Arenas represents 8% of Magallanes GDP, but once natural gas proven reserves in Chilean Tierra del Fuego become abundant, its participation could soar to 18% of GDP and would later stabilize at 15% by 2018. Other areas mentioned by Zahler include coal extraction which is booming, salmon farming and tourism. "For the first time in many decades Magallanes has a wide and diversified portfolio of development projects, and investments committed, to ensure a sustained economic activity for the coming ten years", underlined Zahler. According to Zahler' estimates the development of simultaneous projects ensures a sustained annual growth of 6.3% compared with the average 2% of the last fifteen years. If this finally happens, Magallanes GDP would jump from 1.2 billion US dollars this year to 2.2 billion by 2018. Employment would advance at an annual 3.1% compared to 2% in the last 15 years, which means the labour force would increase from 65.000 to 88.000 by 2018.