FDI attraction in Chile Affected by the Country's Socio-Economical Essay

FDI draw play in long pepper Affected by the Countrys Socio-Economical Inequality - Essay ExampleIn 2006, the nominal gross domestic product per capita of Chile was recorded as the highest in Latin America. The country however is undergoing a lot of sparing inequality (Trading Economics, 2013b). The socio scotch inequality is the gap between the rich and the unretentive. The income difference of a group of individuals, beau monde or the residents of a country is called the socio economic inequality. The economic inequality varies by the economic structures of the countries (Mankiw, 2009). According to several(prenominal) economists the inequality of the distribution of wealth is very essential. This corrects competition and increases the efficiency of the individuals. The wealthier individuals tend to save more and cast more which helps the economy in growing. Inequality amongst the individual also increase the social and health link problems of the individuals. The economic growth of a society is also affected (Froyen, 2009) The social inequality has a deal impact on the social cohesion of the individuals, the creations productivity and crime rate of the society, heathen and civic participation and economic welf be as a whole (Wessels, 2000). The analysts such as Martinez (2011) are of the opinion that high growth rate is no excuse for the economic inequality. According to a late report about three million Chileans are very poor. About 500,000 of the people of the Chilean people are those who are extremely poor. The economic model of Chile and the progressive growth which the economy has shown with snip is sufficiently appraisable but still the growing inequality in Chile has caught attention of various economic analysts. Chile is categorised amongst a few countries which have a worst income distribution system. The percentage of the poor population is very high in the economy (OCED, 2002a). According to OECD (2002b), Chile is a nation of popul ation of more than 17 million people. It comes under the category of developed countries and has the worst income distribution system amongst those countries. some(prenominal) economists are of the view that the economic system of Chile would not improve by the economic growth. To improve the economys income distribution the government would have to undertake decisions to redistribute the wealth of the individuals by placing higher(prenominal) taxes. Another economist was of the view that Chile must focus on economic growth and cypher else. The increase in the level of the per capita income of the individuals will surely increase the well being of the individuals. The person who is a resident of Chile and lives on less than $64,134 pesos (US$135) per month is considered to be poor. But a person who lives on less than $32,067 pesos (US$67) monthly is considered to be destitute, according to the official data (Martinez, 2011). A few of the economists are of the view that creating o pportunities is a part of the economic growth. Those who are utilising that opportunity are competent. For the incompetency of the rest of the individuals it is unfair to compel taxes and burden those individuals who prove themselves and are the contributing factors fro the economy. ETHICAL FAMILY INCOME TO IMPROVE SOCIETY Felipe Kast, minister of planning for Chile called the ranking by the OECD (2002b) report shameful for its levels of inequality. He added that Chile has plans set in line to take the people out from extreme poverty. The government plans a program of IEF Ethical Family Income which will use a series of bonds and cash incentives for the children