Analysis of the Chilean tourism market - products and opportunities for the destination Pucón and the IXth region

Table of Contents

Table of  Contents  I

Table of  Figures  IV

  List of Abbreviations  V

1  Introduction  1

1.1  Subject and Objective  1

1.2  Approach  3

2  Fundamentals  5

2.1  The Chilean Market  5

2.1.1  The Historical and Political Background  5

2.1.1.1  Geography  5

2.1.1.2  The XIII Region  6

2.1.1.3  Short Description  7

2.1.1.4  History  10

2.1.1.5  Population  13

2.1.1.6  The Mapuche  15

2.1.1.7  Demographic Profile  16

2.1.1.8  The Structure of the Economy  18

2.1.2  Tourism Development  19

2.1.2.1  General Overview  19

2.1.2.2  Tourist Arrivals  20

2.1.2.3  Visitor Structure  21

2.1.2.4  Tourism Supply  22

2.1.2.5  Tourism Demand  23

2.1.3  Alternative Tourism  24

I

2.2  Pucón as Destination  27

2.2.1  Overview  27

2.2.2  SWOT Analysis  28

2.2.2.1  Definition  28

2.2.2.2  SWOT Analysis of Pucón  30

2.2.3  USP Unique Selling Proposition  35

3  Benchmarking and Market Analysis  38

3.1  Benchmarking  38

3.1.1  Definition  38

3.1.2  Types of Benchmarking  40

3.1.2.1  Internal Benchmarking  41

3.1.2.2  External Benchmarking  41

3.1.3  The Use of Benchmarking in this Essay  43

3.2  Tourism Agencies in Pucón  43

3.2.1  Main Agencies  43

3.2.2  Overview of the Tourism Agency Ronco Track  45

4  Data Interpretation  47

4.1  Data of the Tourism Agency Ronco Track  47

4.1.1  Supply  47

4.1.2  Demand  48

4.1.3  Cost Volume Profit Analysis  49

4.1.3.1  Sales  49

4.1.3.2  Variable and Fixed Costs  50

4.1.3.3  Contribution Margin and Net Income  51

4.2  The Questionnaire  53

4.2.1  Target Definition  53

4.2.2  Kinds of the Surveys  54

4.2.3  Interview Rules  55

4.2.4  Structure of the Questionnaire  55

4.2.5  About the Analysis  57

II

4.3  Analysis of the Survey Results  58

4.3.1  Analysis of the Test Run  58

4.3.2  Problems and Difficulties during the Implementation  58

4.3.3  Single Question Frequencies  59

4.3.3.1  Customer Structure  59

4.3.3.2  Satisfaction with the Excursion  60

4.3.3.3  General Impression about the Agency  61

5  Opportunities for Pucón and the IXth Region  62

5.1  Eco and Cultural Tourism  62

5.1.2  The Growing Industry  62

5.1.2  Ecotourism  64

5.1.3  Cultural tourism  65

5.2  Different Aspects  67

5.2.1  Economic Point of View  67

5.2.2  Community s Welfare  68

5.2.3  Development from within  69

5.3  Strategies and Solutions  72

5.3.1  IT as Solution  72

5.3.2  The “true Price  74

5.3.3  Providing Knowledge and Financial Resources  75

5.4  Problem and Risks  78

6  Conclusion  81

  References  i

III

Table of Figures

  Figures in the Main Part  

  Fig 1: Regions of Chile  7

  Fig 2: Important Facts about Chile  9

  Fig 3: New Forms of Tourism  25

  Fig 4: SWOT Analysis of the Destination Pucón  35

  Fig 5: Types of Benchmarking  40

  Fig 6: Range of Activities of the Agency Ronco Track  47

  Fig 7: Simplify Demand Calculation  48

  Fig 8: Simplify Sales Calculation (only Quad Bike)  49

  Fig 9: Simplify Sales Calculation of all Products  49

  Fig 10: Variable Costs Calculation  50

  Fig 11: Fixed Costs Calculation  51

  Fig 12: Contribution Margin Calculation  51

  Fig 13: Net Income Calculation  52

  Fig 14: Advantages and Disadvantages of Various Opinion Polls  54

  Illustrations and Figures of the Appendix are separate  

IV

List of Abbreviations

AIDS Acquired Immune Deficiency Syndrome  

CDC Center for Disease Control  

CIA Central Intelligence Agency  

CM Contribution Margin  

CONADI Corporación Nacional de Desarrollo Indígena  

CONAMA Comision Nacional del Medio Ambiente  

CONF Corporacion Nacional Forestal  

CORFO La Corporación de Fomento de la Producción  

C.P. Chilean Pesos  

cp. Compare  

e.g. for example  

etc. et cetera  

FAO Food and Agriculture Organisation for the United Nations  

FAT Technical Assistance Fund  

FIA Fundación para la Innovación Agraria  

FNDR Fondo Nacional de Desarrollo Regional  

f.o.b. free on board  

GDP Gross Domestic Product (BIP, Bruttoinlandsprodukt)  

HIV Human Immunodeficiency Virus  

ibidem at the same place  

Ill. Illustration  

IPGR Industrail Production Growth Rate  

MIDEPLAN Ministerio de Planificación y Cooperación  

NN. Author not none  

No. Number  

p. Page  

PGR Population Growth Rate  

PROChile La Dirección de Promoción de Exportaciones  

PROFO Proyectos Asociativos de Fomento  

SENCE Servicio Nacional de Capacitación y Empleo  

V

Sernatur Servicio Nacional de Turismo de Chile

SNAPSE Systema Nacional de Áreas Silvestres Protegidas del Estado

Chileno

TIES The International Tourism Society

UNPD United Nations Development Programme

U.S. United States

Vol. Volume

WTTC World Travel & Tourism Council

VI

1 Introduction

1.1 Subject and Objective

On the economic front, tourism has the capacity to create jobs: jobs for the poor, jobs for women and young people, jobs in the indigenous communities, unskilled as well as highly qualified jobs, jobs in seaside resorts as well as in remote rural areas and in ecotourism activities. Tourism is a much more diverse industry than many others and can build upon a wide resource base. Diversity increases the scope for wide participation. Furthermore, most export industries depend on financial, productive and human capital. Indeed, tourism depends on these but also on natural capital, such as wildlife, scenery and beaches, and culture, vital assets of many developing countries in Latin America and the Caribbean. For these reasons combined, tourism should be considered as one of the important economic development opportunities available to developing countries in the region.

The United Nations declared the year 2002 as INTERNATIONAL YEAR OF ECOTOURISM. The development of ecotourism often involves precious and fragile natural resources and must be done with great sensitivity. Natural habitats have been diminishing at alarming rates and equally alarming reports are regularly published on diminishing water resources, deforestation, increases in pollution, the destruction of corral reefs and many more.

Ecotourism is a field of human activity where conservation and development can wisely and effectively be blended to achieve a mutual goal to the benefit of people and communities. This is why ecotourism should also be sensitive to local communities, their land rights, traditions, cultures and ways of life. Ecotourism in remote areas cannot be developed without the consent and active involvement of local peoples, who should become partners in the process.

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For many countries like Chile, particularly in the developing world, tourism is one of the few meaningful sources of economic development and job creation. What would be the situation of countries like Cuba, Dominican Republic, Seychelles, Maldives, Vietnam and many others without tourism? Tourism can therefore play an important role in improving living standards and raising people above the poverty threshold.

Throughout this essay the example of the tourist destination Pucón and the IXth region will be used to explain the situation now and the opportunities for cultural and ecotourism. The destination is one of the famous tourism areas in Chile and well know for outdoor and adventure actitvities worldwide. Nevertheless the IXth region “Araucanía” in Chile is the area with the highest native population in this country. Moreover, its name is derived from the local native people named, "Araucanos" ¹ , and it is nationally known for its various amount of volcanoes, lakes, woods and hot springs. For this reason, there are five national parks and seven wild areas to protect the long list of natural resources. This region has the best opportunities for the future development of ecotourism. The main components of this thesis are:

The tourism development situation in Chile under the consideration of the native population What are the strengths and weaknesses of the destination Pucón and the unique selling proposition?

Actual offers and analysis of an agency as economy example Visitor structure and satisfaction with the products New opportunities for the destination and the IXth region which are part of the sustainable tourism development – cultural and ecotourism

¹ Ruta de los Volcanos: available from: http://www.rutadelosvolcanes.com/about.php

(as of 21-Mai-2005)

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1.2 Approach

For this thesis the author has been three months in Pucón during the main season and worked for the tourism agency Ronco Track. It was part of this work to understand and analyze the actual situation on the spot. More than that, it was important to collect the different point of views from the locals and to comprehend their situation in comparison to the future developments of this region.

It was not often easy to get in contact with the native population called “Mapuche” and to win their confidence as an outsider. More than that, it was complicated to show them the “real willingness” for understanding their situation and problems. Normally the tourists never get in a real conversation with the native people, than they are shy and live a secluded live. With the help of a local friend from the native people the author had the change to spend one day with a Mapuche family and to learn more about them.

The essay is self-contained and structured consecutively to finally understand the chances, the possibilities and the advantages of a cultural and ecotourism for the destination Pucón and the IXth region. Furthermore, understanding the necessary of the “development from within” is a main element to comprehend the different aspects and strategies in chapter 5.

The fundamentals in chapter 2 are giving a background to understand the coherences. The historical and political developments are important components in the Chilean tourism development and it is essential to get an overview of the whole situation for understanding the actual problems and opportunities. Furthermore the critical situation of the native people is examined in this chapter as starting point for the opportunities. How important tourists are for the destination and which basic terms and conditions are leading to the further development of Pucón will be described, before the SWOT and the USP analysis worked out.

3

In chapter 3 a basic benchmark-study and market analysis helps to learn from other agencies. The main idea is to compare the products which already exist and to find the differences between the competitors. On the other hand, the example of the agency Ronco Track shows their USP and the different strategy for a successful business.

In chapter 4 the data analysis of the agency shows the relation between supply and demand. The survey explains the target group and their satisfaction with the products. After the cost – volume – profit analysis the reader will understand the necessity of new opportunities for the destination Pucón and the IXth region.

Chapter 5 regard the terms cultural and ecotourism on the side of the supply. After giving factors of this growth industry, different strategies are illustrated. The opportunities for the destination Pucón and the IXth are developed on the collected information and based on the worldwide ecotourism trend. The reader will understand the problematic and sensitivity of cultural and ecotourism. The chapter 5 will only concentrate on some solution ideas for a successful implementation and relationship between cause and effect between the tourists and the native people.

As result of this essay chapter 6 concludes with a summary of the different chapters and point out the main inference for opportunities of the destination Pucón and the IXth region.

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2 Fundamentals

2.1 The Chilean Market

2.1.1 The Historical and Political Background

Chile is a country of startling contrasts and extreme beauty, with attractions ranging from the towering volcanic peaks of the Andes to the ancient forests of the Lake District. There are a multitude of very good parks, and plenty of opportunities for fine adventure travel. Chile is justly famous as the location of Torres del Paine, considered by many to be the finest nature travel destinations in all of South America.

“Chile – República de Chile means in the language de Aymará Indians the land where the world ends” 2 .

2.1.1.1 Geography

For anyone who has ever been fascinated by geography, the long, impossibly thin line of Chile has always produced a tiny moment of astonishment. Chile stretches over 4,300 km along the south-western coast of South America, a distance roughly the same as that from San Francisco to New York, or Edinburgh to Baghdad. At the same time, its width never exceeds 240 km, making the country more than eighteen times longer than its widest point (ill. 1). The most obvious factor in Chile's remarkable slenderness is the massive, virtually impassable wall of the Andes, a mountain range that is still rising and that contains more than fifty active volcanic peaks. The western border is of course the Pacific Ocean, but it is a misconception to picture Chile as nothing more than the steep western slope of the Andean peaks. Along its length Chile is marked by a narrow depression between the mountains and the sea. To the north the land rises and becomes more arid, until one reaches the forbidding Atacama Desert, one of the most inhospitable regions on earth.

² NN.: Chile; available from: http://www.flyfishingtravel.com/chile.htm (as of 19-April-2005)

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To the south just the opposite transformation takes place: the land falls away, and the region between mountains and ocean fades into the baffling archipelagic maze that terminates in Chilean Patagonia. Chile's southern extremity is marked by Cape Horn, a treacherous headland surrounded by almost continuously stormtossed seas and passable only through the foggy stillness of the Strait of Magellan. In the centre of the country, however, is a long and expansive river valley, a five hundred mile corridor occupied in the north by vineyards and great farms and in the south by primeval forests and enchanting lakes. Santiago, the capital, anchors the northern and more prosperous section of the central valley.

The lush Lake District to the south, however, is the homeland of Chile's indigenous peoples, the Araucanians. Also parts of Chile are two notable Pacific possessionsthe Juan Fernandez Islands and the famous Easter Island, both of which are administered as national parks. The Juan Fernandez Islands are located about 670 km off the Chilean coast, while Easter Island is situated 3700 km distant. Chile's climate is as diverse as its geography. Aside from the obviously extreme climatic conditions of the Andes and the Atacama, however, the country enjoys a comfortable temperate climate 3.

2.1.1.2 The XIII Region

Politically, Chile is divided into regions, which are subdivided into provinces. Forty provinces are listed in "Administrative Subdivisions of Countries". Over the years the number of provinces was increased to 51 but no later than 1993. The number of municipalities has also increased, to 345 ⁴ . The thirteen regions are divided into 51 provinces (provinces), which are further subdivided into communes (municipalities) ⁵ . The table below shows all of the regions of Chile as they stand now (fig. 1 and ill. 2).

³ cp. Geographia: Chile; available from: http://www.geographia.com/chile/ (as of 19-April-2005)

⁴ cp. Stadoids: Regions of Chile; available from: http://www.statoids.com/ucl.html

(as of 19-April-2005)

⁵ cp. ibidem

6

Fig.1: Regions of Chile

Source: Stadoids 6

2.1.1.3 Short Description

In this essay it is important to understand the political and economical background. Therefore the fig. 2 shows the actual important and interesting facts about the Chilean economy. Furthermore in the following chapters 2.1.1.4 to 2.1.1.8 will have a closer look to the development over the last decades and analysis the reason of the fluctuation.

The flag of Chile was introduced on 17th of October in 1817. It shows two horizontal stripes in white and red, and in the white stripe near the pole a blue square with a white five jagged star (ill. 5). “The red stand for the blood, which was shed for the achievement of the independence. The white stand for the snow on the peaks of the Andes and the blue for the heaven above Chile. The white star is interpreted as freedom star, and stands for the honor of the land and the progress, too. The flag pictures a simplified form of the US American Stars and Stripes" 7 .

⁶ Stadoids: Regions of Chile; available from: http://www.statoids.com/ucl.html (as of 19-April-2005) ⁷ NN.: Chile / Meaning / Origin of the Flag; available from:

http://www.flaggenlexikon.de/fchile.htm (as of 19-April-2005)

7

Fig. 2: Important Facts about Chile

Source: Own Illustration, Data based on various References 8

⁸ cp.1 Theodora: Geographic / Chile 2004; available from:

http://www.theodora.com/wfbcurrent/chile/ (as of 19-April-2005) cp.2 Travelblog: Chilean Background; available from:

http://www.travelblog.org/World/ci-info.html (as of 19-April-2005) cp.3 CIA: The World Factbook / Chile; available from:

http://www.cia.gov/cia/publications/factbook/geos/ci.html (as of 19-April-2005)

9

2.1.1.4 History

“From one of the most neglected outposts of the Spanish Empire, Chile developed into one of the most prosperous and democratic nations in Latin America. Throughout its history Chile was dependent on great external powers for economic exchange and political influence: Spain in the colonial period, Britain in the nineteenth century, and the United States in the twentieth century” ⁹ .

Chile's dependence is made most evident by the country's heavy reliance on exports. These have included silver and gold in the colonial period, wheat in the mid-nineteenth century, nitrates up to World War I, copper after the 1930s, and a variety of commodities sold overseas in more recent years.

The national economy's orientation toward the extraction of primary products has gone hand in hand with severe exploitation of workers. Beginning with the coerced labor of native Americans during the Spanish conquest, the exploitation continued with mestizo peonage on huge farms in the eighteenth and nineteenth centuries and brutal treatment of miners in the north in the first decade of the twentieth century.

Politically, Chile has also conformed to several patterns. Since winning independence in 1818, the nation has had a history of civilian rule surpassed by that of few countries in the world. In the nineteenth century, Chile became the first country in Latin America to install a durable constitutional system of government, which encouraged the development of an array of political parties. Military intervention in politics has been rare in Chile, occurring only at times of extraordinary social crisis, as in 1891, 1924, 1925, 1932, and 1973. These interventions often brought about massive transformations; all the fundamental changes in the Chilean political system and its constitutions have occurred with the intervention of the armed forces, acting in concert with civilian politicians.

⁹ NN.: The Library of Congress / Country Studies / Chile; available from:

http://workmall.com/wfb2001/chile/chile_history_index.html (as of 19-April-2005)

10

From 1932 to 1973, Chile built on its republican tradition by sustaining one of the most stable, reformist, and representative democracies in the world. Although elitist and conservative in some respects, the political system provided for the peaceful transfer of power and the gradual incorporation of new contenders. Under girding that system were Chile's strong political parties, which were often attracted to foreign ideologies and formulas. Having thoroughly permeated society, these parties were able to withstand crushing blows from the Pinochet regime of 197390 ¹⁰ .

Republican political institutions were able to take root in Chile in the nineteenth century before new social groups demanded participation. Contenders from the middle and lower classes gradually were assimilated into an accommodating political system in which most disputes were settled peacefully, although disruptions related to the demands of workers often met a harsh, violent response.

The system expanded to incorporate more and more competing regional, anticlerical, and economic elites in the nineteenth century. The middle classes gained political offices and welfare benefits in the opening decades of the twentieth century. From the 1920s to the 1940s, urban laborers obtained unionization rights and participated in reformist governments. In the 1950s, women finally exercised full suffrage and became a decisive electoral force. And by the 1960s, rural workers achieved influence with reformist parties, widespread unionization, and land reform ¹¹ .

Throughout the twentieth century, leaders outside Santiago also pleaded for administrative decentralization until the Pinochet government devolved greater authority on provincial and municipal governments and even moved Congress from Santiago to Valparaíso ¹² .

¹⁰ NN.: Historia de Chile; available from:

http://www.geocities.com/Athens/Acropolis/1004/cronologia.htm (as of 4-Mai-2005) ¹¹ NN.: Chile / Geschichte; available from: http://de.wikipedia.org/wiki/Chile#Geschichte (as of 4-Mai-2005) ¹² cp. Guia del Mundo: Chile / Historia; available from:

http://www.guiadelmundo.com/paises/chile/historia.html (as of 19-April-2005)

11

The third issue dividing Chileans-social class-grew in importance from the nineteenth century to the twentieth century. Although both the Conservatives and the Liberals represented the upper stratum, in the nineteenth century the Radicals began to speak on behalf of many in the middle class, and the Democrats built a base among urban artisans and workers. In the twentieth century, the Socialists and Communists became the leaders of organized labor. Along with the Christian Democratic Party, these parties attracted adherents among impoverished people in the countryside and the urban slums.

In the twentieth century, three other issues became salient, although not as significant as divisions over social class, regionalism, or the role of the church. One was the cleavage between city and country, which was manifested politically by the leftist parties' relative success in the urban areas and by the rightist groups in the countryside. Another source of strife was ideology; most Chilean parties after World War I sharply defined themselves in terms of programmatic and philosophical differences, often imported from abroad, including liberalism, Marxism, corporatism, and communitarianism. Gender also became a political issue and divider. After women began voting for president in 1952, they were more likely than men to cast ballots for rightist or centrist candidates.

During the colonial period and most of the twentieth century, the central state played an active role in the economy until many of its functions were curtailed by the military government of General Pinochet. State power was highly centralized from the 1830s to the 1970s, to the ire of the outlying provinces.

Although normally governed by civilians, Chile has been militaristic in its dealings with native people, workers, and neighbouring states. In the twentieth century, it has been a supporter of arbitration in international disputes. In foreign policy, Chile has long sought to be the strongest power on the Pacific Coast of South America, and it has always shied away from diplomatic entanglements outside the Americas ¹³ .

¹³ cp. NN.: The Library of Congress / Country Studies / Chile; available from:

http://workmall.com/wfb2001/chile/chile_history_index.html (as of 19-April-2005)

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2.1.1.5 Population

Chile's population is composed predominantly of mestizos, who are descended from marriage between the Spanish colonizers and the indigenous people. The surviving indigenous groups consist of the Aymara, in the north, and the Mapuche, who number roughly 100,000 and continue to inhabit the forested areas of the Lake District. Chile is also home to a number of significant immigrant groups, including minority populations from virtually every European country. There are significant numbers of Basques and Palestinians. The high proportion of mestizos among Chile's people has made race a minor issue in comparison to class, which continues to be a source of considerable tension. The great majority of Chile's people, as one might expect, are concentrated in the central valley. Spanish is the country's official language, but some of the Indian dialects remain.

In the north, they speak Aymara, in the south Mapuche, and on Easter Island the Polynesian language of Rapa Nui ¹⁴ . During the nineteenth century, the newly independent government sought to stimulate European immigration. Beginning in 1845, it had some success in attracting primarily German migrants to the Chilean south, principally to the Lake District. For this reason, that area of the country still shows a German influence in its architecture and cuisine, and German (peppered with archaic expressions and intonations) is still spoken by some descendants of these migrants.

People from England and Scotland also came to Chile, and some established export-import businesses of the kind that the Spanish crown previously had kept at bay. Other European immigrants, especially northern Italians, French, Swiss, and Croats, came at the end of the nineteenth century. More Spaniards and Italians, East European Jews, and mainly Christian Lebanese, Palestinians, and Syrians came in the decades before World War II. Many of these immigrants became prominent entrepreneurs or professionals, and their numbers never exceeded 10 percent of the total population at any given time.

¹⁴ cp. Geographia: Chile / History & Culture; available from:

http://www.geographia.com/chile/chilehistory.htm (as of 19-April-2005)

13

Thus, in contrast to Argentina, whose population was transformed around the turn of the century by numerous European immigrants, especially Italians, the Chilean population continued to be defined by the original Spanish and native American mixture. Acculturation was fairly rapid for all immigrant groups. Because secondgeneration residents saw themselves primarily as Chileans, ethnic identities had little impact on national society.

The term Mapuche ("people of the land") now encompasses most of the native Chilean groups. The number of Mapuche residing on the reservations that were set up beginning in the late 1880s has declined in recent years. About 300,000 were counted as living in the reservations by the 1982 census. The 1992 census asked respondents to identify themselves ethnically as Mapuche, Aymara (the native population of northern Chile whose main trunk lies in Bolivia), Rapa Nui (the Polynesian group that lives in or originates from Easter Island), and other. The results showed that 9.6% of the population over age fourteen self-identified as Mapuche, 0.5% as Aymara, and less than 0.25% as Rapa Nui. This means that about 1.3 million Chileans are native Americans, mainly Mapuche, or the descendants of one of the fourteen or so different tribal groups that occupied what is now Chile before the Spanish conquest.

With the partial exception of the indigenous groups, the Chilean population perceives itself as essentially homogeneous. Despite the configuration of the national territory, regional differences and sentiments are remarkably muted. Even the Spanish accent of Chileans varies only very slightly from north to south; more noticeable are the small differences in accent based on social class or whether one lives in the city or the country. The fact that the Chilean population essentially was formed in a relatively small section of the center of the country and then migrated in modest numbers to the north and south helps explain this relative lack of differentiation, which is now maintained by the national reach of radio and especially of television. The media diffuse and homogenize colloquial expressions ¹⁵ .

¹⁵ Geographia: Chile / History & Culture; available from:

http://www.geographia.com/chile/chilehistory.htm (as of 19-April-2005) NN.: Chile; available from: http://www.shsu.edu/~his_ncp/labn.html#04 (as of 4-Mai-2005)

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2.1.1.6 The Mapuche

Since Mapuche territory was incorporated into the Chilean state at the end of last century, Mapuche have systematically been deprived of their territory and been subject to racial discrimination. The majority struggles with poverty, deprived of the means to reproduce its culture. The southern region IX around Temuco (ill. 3), with the highest percentage of Mapuche population, is the poorest in the country and has the highest mortality rate (33% under poverty line in 1994, 36% in 1996) ¹⁶ .

Many Mapuche communities in rural areas became isolated islands surrounded by pine plantations. The native forest has been cut down by the forestry companies, and traditional means of survival have disappeared: the animals they would hunt, the plants they would gather for food and medicine. The fast-growing pines also dry out all ground water sources. The water which can be found moreover is likely to be contaminated by the chemicals used in forest management. These communities isolation is increased by the deterioration of the few available roads by the logging trucks.

In spite of over a hundred years of colonisation by the Chilean state, still around one million people, half of them living in urban areas, identify themselves as Mapuche (ill. 6). After having been lumped together with “the poor” and not being heard for many decades of political life in Chile, they are now in a process of choosing ways to relate as Mapuche to the nation-state of Chile. Different Mapuche groups have chosen different strategies and there is no one rallying voice which can speak for all of them.

Attempts were made by the first elected government after the end of Pinochet's regime in 1990 to improve the situation of Mapuche, which had been set back even more drastically under the dictatorship's nationalistic agenda. An Indigenous Act was passed in 1993 which provided for the set-up of a National Agency of Indigenous Development, but the necessary funding was never provided.

¹⁶ Mapuche International: News; available from:

http://www.mapuche-nation.org/english/html/news/n-72.htm (as of 4-Mai-2005)

15

There were also serious internal differences between indigenous and Chilean board members. The most marked differences arose in the case of the required approval by the named agency, of indigenous land permutations necessary for the construction of a hydroelectric dam at Ralko, in Mapuche Pewenche territory. Thus, no significant improvements have been made by this Agency. The majority of Mapuche continue to be deprived of the necessary means for self-reliance and self-determination. In many cases, particularly for the Mapuche Communities in Conflict in the Malleco and Arauco provinces (north of Temuco), the situation got increasingly worse.

2.1.1.7 Demographic Profile

A new decennial census was taken in 1992. The total population was officially given as 13.348.401, of which 6.553.254 were male and 6.795.147 were female. According to that data, the average population density in 1992 remained 17.6 inhabitants per square kilometre. Population density varied greatly, however, from the sparsely populated far north and far south to the much more densely inhabited central Chile. In 1993 the figure rose to 18 inhabitants per square kilometre.

The National Statistics Institute (Instituto Nacional de Estadísticas) estimated the birth rate in 1991 at 22.4 per 1.000 population, an increase over 1985, when the rate stood at 21.6 per 1.000. This has led to a corresponding widening of the base of the age pyramid of the population, which had narrowed significantly with the

¹⁷ Mortan, B.: In Defence of Rakgo Mapu; available from:

http://web.uvic.ca/igov/research/journal/articles_morton.htm (as of 4-Mai-2005)

16

decline in the birth rate that began in the mid- to late 1960s. The current increase in the birth rate is a slight demographic echo of the birth control programs that began in the mid-1960s. These programs reduced the fertility of women of childbearing age, causing the original drop in the birth rate, whereas the rise in the early 1990s resulted from children born to new generations of women who have reached the childbearing period of their lives. Whereas women of childbearing age (fourteen to forty-nine years) had had an average of 4.09 children in 1967; by 1992 this average had dropped to 2.39. Now a day the birth rate is 16.46 per 1.000 population. 18

With the declining birth-rate and no significant increase in immigration, much of the growth in the Chilean population over the 1970s and 1980s resulted from a decline in mortality. The mortality rate in 1992 was estimated at 5.6 per 1.000 population, whereas in 1960 it had been more than twice that, at 12.5 per 1.000. In 1990 life expectancy at birth was estimated at 71.0 years ( 68 for men and 75 for women), up from the 1960 figure of 57.1 years (57.6 for men and 63.7 for women). These improvements resulted in part from better health care beyond the first year of life, but they are explained primarily by a dramatic decline in infant mortality during the 1960-90 period. In 1960 infant mortality was 119.5 per 1.000 live births, and by 1991 it had declined to 14.6 per 1.000.

This latter rate, one of the lowest in Latin America, indicated the success of the various health programs for expectant mothers and infants implemented since the late 1960s. Now a day the infant mortality rate had declined to 9.05 per 1.000 live births. In the early 1990s, the Chilean population was older than it has been in the 1960s. The 1982 census revealed for the first time ever that the population included a majority of adults over twenty-one years of age. Yet it was still a very young population: 49 percent of Chileans were estimated in 1991 to be less than twenty-four years of age. Now a day the average population age is over twentynine years ¹⁹ .

¹⁸ cp. NN.: The Library of Congress Country Studies / CIA World Factbook / Chile / Society; available from: http://www.photius.com/countries/chile/society/index.html (as of 19-April-2005) ¹⁹ cp. International Planned Parenthood Federation: Country Profiles / Chile; available from: http://ippfnet.ippf.org/pub/IPPF_Regions/IPPF_CountryProfile.asp?ISOCode=CL (as of 19-April-2005)

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2.1.1.8 The Structure of the Economy

Chile has a market-oriented economy characterized by a high level of foreign trade. During the early 1990s, Chile's reputation as a role model for economic reform was strengthened when the democratic government of Patricio Aylwinwhich 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 earningsthe 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 lacklustre global growth and the devaluation of the Argentine peso, but recovered to 3.2% in 2003. Unemployment, although declining over the past year, remains stubbornly high, putting pressure on President Lagos to improve living standards. One bright spot was the signing of a free trade agreement with the US, which took effect on 1 January 2004. In 2004, GDP growth is set to accelerate to more than 4% as copper prices rise, export earnings grow, and foreign direct investment picks up.

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2.1.2 Tourism Development

2.1.2.1 General Overview

Tourism is one of the economic sectors most affected by the new trends of the global information society. Increasing disposable incomes, larger available leisure times, and steadily decreasing transportation and communication costs have allowed increasing numbers of people to travel and vacation throughout the world. More open boundaries and freer commercial policies in almost every region of the planet have facilitated the movement of larger contingencies of people across national boundaries.

It is difficult to define exactly what the tourism industry comprises. What it is called tourism really embraces a vast and diverse range of activities, from large-scale mass or package tours to small-scale, individually-tailored holidays; from internal domestic visits to family or friends, to international or intercontinental journeys, to business trips and “sun, sand and sea” recreational breaks; from activity, sports, nature, health, ‘green’ or alternative holidays, to culture or adventure. Therefore, there is some debate regarding the exact size and growth of tourism. In spite of the debate, however, there is a consensus that tourism is clearly one of the largest industries in the world, if not the absolute largest. For the year 2010, the WTTC expects that total tourism sector’s GDP will reach almost US$ 6,600 billion ²⁰ .

For the Latin American region in particular, tourism GDP was amount to almost US$ 97 billion in 2000, and it would increase to almost US$ 190 billion in 2010, an increase of more than 95% in a decade or of 5.1% per year. Moreover, the jobs provided by the tourism sector today are 12.4 million, and will increase 2.6% annually during the next decade, to reach a total level of employment of almost 16 million people in the year 2010 ²¹ .

²⁰ World Travel & Tourism Council: Blueprint for New Tourism / Case Study; available from:

http://www.wttc.org/frameset1.htm (as of 18-Mai-2005)

²¹ World Travel & Tourism Council: Tourism Satellite Accounting; available from:

http://www.wttc.org/2004tsa/frameset2a.htm (as of 18-Mai-2005)

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Chile is one of the Latin American region's most dynamic and promising markets. Its strength and attractiveness lie not in its size, but in the energy and professionalism of its entrepreneurs, the transparency of its regulation and the predictability of its decision-makers. Market-led reforms adopted close to 30 years ago and an increasingly diversified economy with strong ties to buyers and suppliers in the Americas, Europe and Asia have given Chile a wide range of options for further growth. The slowdown in the US economy, coupled with the events of 11 September 2001 in the US and the particularly adverse regional economic conditions were all key factors adversely affecting the local travel and tourism market in 2002 / 2003. The continuous depreciation of the Chilean Peso in 2002 severely impacted Chile's tourism industry ²² . High-income earners still travelled abroad, but for the less affluent sector of the population it became more expensive.

The recession in Chile impacted all sectors, particularly tourism. Hotels, restaurants and travel agencies experienced rocky financial situations. Historically Chile lacked a coherent national tourism strategic development plan, but the review period witnessed the first steps to generate a strategy joining public and private sector efforts. The idea that tourism could be a key economic sector began to take root. International promotion to attract long haul tourists was one sign of it but dedicated resources were still limited at the end of the review period.

2.1.2.2 Tourist Arrivals

Another area of significant new investment is tourism, which increased significantly during the 1980s, aided by government efforts to promote it both domestically and abroad through the National Tourism Service Sernatur. More than 1.5 million tourists visited the country in 1994. Sernatur reported that during 1994 a total investment of US$ 320 million in hotel construction had either already been made or was under consideration in Viña del Mar, Santiago, Cuenca del Sol in Coquimbo Region and the ski resorts of La Parva and Valle Nevado.

²² World Travel & Tourism Council: Regional Initiatives / Latin America Regional Programme;

available from: http://www.wttc.org/2004tsa/frameset2a.htm (as of 18-Mai-2005)

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