Kirchnerism vs Freedom: The huge contrast between Tierra del Fuego and Magallanes

Although separated by just the Strait of Magellan, the regions of Magallanes (Chile) and Tierra del Fuego (Argentina) illustrate very different socioeconomic trajectories.

Both share an extreme geographical location, harsh climatic conditions, a low population density, and stunning landscapes. But while the Chilean region managed to establish itself as a productive development hub, with low poverty and a strategic vision for the future, the Argentine province faces structural stagnation, fiscal dependency, and growing uncertainty.

The successful case of Magallanes

The region of Magallanes and Chilean Antarctica, with about 175,000 inhabitants, is one of the southernmost areas in the world with the best social indicators. With just 6,188 people below the poverty line, nearly full employment, and a diversified economy, Magallanes has been able to leverage its strategic location, its natural resources, and its openness to private investment.

Its economy is supported by five essential pillars: hydrocarbon exploitation (with ENAP as a central player), salmon farming, international tourism, industrial/craft-made fishing, and agriculture.

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In 2024, the region exported USD 1.2 billion: USD 342 million in methanol, USD 650 million in salmon and trout, and the rest in seafood and agricultural products.

This figure is complemented by another USD 400 million in revenue caused by inbound tourism, particularly thanks to Torres del Paine National Park, which attracts about 250,000 tourists a year, mostly Europeans and Americans, in addition to 200,000 Argentines who visit the Punta Arenas Free Zone.

Moreover, Magallanes has an ambitious horizon. Private projects for green hydrogen promise global investments of more than USD 30 billion over the next five years. Chile projects that 13% of the world's production of this energy vector could be caused in this region, thanks to its unique climatic conditions (constant winds exceeding 100 km/h).

The average salary is around USD 1,000 monthly, with salmon workers earning between USD 900 and USD 1,600, teachers with salaries between USD 1,500 and USD 4,000, and a mayor earning around USD 8,000 monthly.

The economic spillover reaches commerce, services, and municipal revenue. More than 200 companies provide services to salmon farming, which directly and indirectly employs about 7,000 people. All this in a region considered peripheral and isolated.

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The case of Tierra del Fuego

On the Argentine side, the province of Tierra del Fuego, with about 180,000 inhabitants and an estimated GDP of USD 7.731 billion, presents a very different picture. Although it has a gross product more than double that of Magallanes, its poverty rate is almost 20 times higher: it is estimated at around 90,000 people.

In Ushuaia, the provincial capital, about 90,000 people live, of whom more than 10,000 are poor. The average salary is around USD 400 monthly, less than half that of its Chilean neighbor. Due to the enormous amount of state regulations and bans, such as in the case of salmon farming, its economy depends almost exclusively on the electronics industry, concentrated in Río Grande.

Tierra del Fuego receives about 400,000 tourists a year, with approximate revenues of USD 200 million, according to the Fuegian Institute of Tourism. Although this number is slightly higher than that of Magallanes, the economic impact is smaller, both due to the shorter stay of visitors and the lower average daily spending.

Meanwhile, the province banned salmon farming development in 2021, a decision celebrated by the left and Kirchnerism as a supposed "environmental victory," but which closed the door to an economic engine that proved to be essential in the Chilean case.

Lessons from the south

The comparison between Magallanes and Tierra del Fuego offers a powerful lesson on public policy decisions. The Chilean bet on diversification, openness to private investment, long-term vision, and leveraging natural resources proved to be a success, with less poverty, more employment, better salaries, and a sustained development horizon.

Meanwhile, Tierra del Fuego remains a hostage to state regulations, with a fragile productive apparatus, low wages, and an increasingly vulnerable social fabric. Geographical proximity doesn't translate into proximity of results. Today, Magallanes represents a model to study—and perhaps to copy—by its Argentine neighbor.