MercoPress. South Atlantic News Agency

Magallanes Region economy contracted 1.3% from 2004 to 2008

The worst performance of all Chilean regions because of the methanol export collapse

Magallanes Region, in the extreme south of Chile, economic performance from 2004 to 2008 has been one of the worst of the country according to the regional report from Chile’s Central Bank. The region experienced in the period a 1.3% GDP contraction, the only negative result of all Chilean regions.

The report indicates that working on constant prices GDP growth in Magallanes region was minus 0.9% in 2004; positive 4.2% in 2005; positive 4.9% in 2006 but then plummets minus 10.8% in 2007 and minus 3.8% last year.

According to the Finance Ministry regional representative Rodrigo Aicón this to a great extent can be explained because of the collapse of the region’s main export, methanol, forced on by the lack of sufficient (Argentine) natural gas and the fact that the Cabo Negro complex could only work at a third of its capacity.

However he also pointed out that there are ongoing efforts to diversity Magallanes economy and avoid being so dependent on a hegemonic export.

“We’re working to give a boost to other sectors of the regional economy such as tourism, sheep and cattle farming, mining (coal extraction and hydrocarbons), fisheries and aquaculture: a major diversification process so we can promise Magallanes a better future”, said Aicon.

However Arturo Storaker former president of the regional council of the Magallanes Production and Commerce Confederation, said figures are “most eloquent” and show the “lack of capacity from the ruling Concertación and political leaders from all sectors. They have been unable to propose an economic growth model which ensures an improvement in the life quality of people from Magallanes”.

“What is needed urgently is to boost the private sector and strengthen public institutions so we can achieve a minimum indispensable growth”, added Storaker. “If we want more and better jobs, we need economic growth which has been forgotten by the last governments”.