Compare and contrast the economies of Chile and Venezuela?

Question

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Answer 1

first of all, venezuela is led by an autocratic president. chile, by constrast, is a democracy where every law must be passed in congress. now, chiles development strategy is driven by openness to trade, a public sector that doesnt interfere with private sector investment decisions other than antitrust bodies and regulations that prevent businesses from abusing consumers. fiscal policy is counter cyclical, meaning that money is saved during booming times so it can be spent during the lower phase of the business cycle. monetary policy is driven by an inflation targeting scheme that says consumer price inflation cannot surpass a range between 2 and 4% annualy. foreign exchange policy floats the exchange rate so it can absorb sudden, external shocks, like capital outflows during, for instance, stressing times for emerging markets, like in the 90s. foreign investors receive the same treatment as domestic investors. needless to say, all this is praised by multilateral organisations such as the imf, the world bank and the oecd, to which chile has recently been invited to become a member.
now to venezuela. venezuela is not a free market as chile is, as the govt heavily controls every aspect of it. in the past month it has closed radio and tv stations for instance, the energy sector is already back in the hands of the state as it may soon be the banking sector. chavez controls prices not through a sound monetary policy scheme like chiles but through price controls, just like argentina wrongly does. chavez is a left populist whereas chile has a left/centre administration that cares about social spending but only through what congress allows to.
both chile and venezuela have been benefiting from the extraordinary world economy stance through commodity prices -venezuela is one of the main exporters of crude oil and chile is the worlds premier producer and exporter of copper, among other metals.
the difference between both nations is tha the venezuelan administration spends all of the oil porceeds now, not saving a pence. chile, by constrast, follows its counter cyclical guidelines and even tries, through fiscal policy, to avoid an excessive appreciation of the chilean peso against the us dollar -a byproduct of the high copper price-, which could lead to some degree of dutch disease, by saving $15 billion abroad. only the interests of it are to be spent for now. hope this helps!

Answer 2

the difference between both nations is tha the venezuelan administration spends all of the oil porceeds now, not saving a pence. chile, by constrast, follows its counter cyclical guidelines and even tries, through fiscal policy, to avoid an excessive appreciation of the chilean peso against the us dollar -a byproduct of the high copper price-, which could lead to some degree of dutch disease, by saving $15 billion abroad. only the interests of it are to be spent for now. hope this helps!