Latin America's Shenzhen flourishes in the wilderness

PUBLISHED : Friday, 18 September, 1998, 12:00am
UPDATED : Friday, 18 September, 1998, 12:00am

The port of Iquique, developed from wilderness on the edge of the Chilean desert, was an unlikely place for an economic phenomenon when construction started two decades ago.

It never rains and the barren landscape can barely support the hardiest of bushes.

But these days it is Chile's boom town and Hong Kong investors are flocking to the city, nicknamed 'Latin America's Shenzhen'.

The attraction is not the climate, obviously, although being located beside a desert, Iquique does boast some impressive beaches.

What the port does offer, however, is unique free trade zone status coupled with the dogged determination and tireless ambition of its colourful mayor, Jorge Soria, to create South America's gateway to the Asia-Pacific.

'This man is quite amazing,' Chilean Consul-General Hernan Brantes said. 'He will do anything to promote the city. Even at a dinner party I gave recently for some prominent Hong Kong businessmen, he could not resist the chance to stand up and tell everybody, in Spanish, what wonderful opportunities were open for them in Iquique.' To some of the guests, he was preaching to the converted. Iquique has lost count of the number of Hong Kong companies that have set up shop.

The dozens of local enterprises include more than 30 from the SAR's Indian Chamber of Commerce.

Only those who do business with South America may know the name, but Iquique is home to by far the largest concentration of Hong Kong companies in Chile - and possibly all of Latin America.

The key to Iquique's success is its liberal trading status. In the free trade zone, import duties are exempt on goods bound for export.

For Hong Kong traders, this back door last year accounted for nearly US$2 billion worth of business.

Mainland China imports accounted for another US$3 billion. Together, they are the biggest traders in town, outstripping even the United States and Japan.

Iquique's location and transport connections to neighbouring countries is a crucial element. It may be an arduous journey by road down to the Chilean capital, Santiago, but there are new highway connections and direct flights to Bolivia, Para guay, Peru, Argentina, Brazil and Uruguay - all of which are closer.

Foreign investment is now being invited to improve rail links to this vast Mercosur market of more than 200 million.

With such huge volumes of trade, Iquique's port has become the 'Pacific port for South America'.

'It's like Shenzhen, a very special city with a special system where anyone can start a company,' Mr Brantes said. 'There is no tax, nothing. There is some Hong Kong business in Santiago, but the number of firms in Iquique is amazing.' Blooming from the desert like Las Vegas, the city boasts imported palm trees, a year-round tourist industry and growth of 10 per cent, double the national rate.

But it is not stopping yet. Mayor Soria has master plans to develop the infrastructure with a bulk port to underpin Iquique's ambition of becoming a continental hub.

'In the 21st century, Iquique will be the main merchandising port for the Asia-Pacific,' he predicted.

As Hong Kong was built as a gateway to China, he said Iquique was developing as the bridge to South America.