The real perk are those $40k. I'm living with $350 a month (cost living + food + rent). I'm including the living costs, rent, food, servers, travels, services, etc. in those $2k.

But you can make it with $350 anyway. I agree with Ben that isolation is the biggest downside of Chile and the lack of this kind of entrepreneurship (I mean Hacker News and Y Combinator style), but if you just need to focus on your first prototype I think it's a good deal.

EDIT: But if you are in the stage of looking for investment (Angel, VC, Y Combinator) and getting some press coverage it would be like a suicide.