Arica is an important port for a large inland region of South America. The city serves a free port for Bolivia and manages a substantial part of that country's trade. In addition it is the end station of the Bolivian oil pipeline beginning in Oruro. The city's strategic position is enhanced by being next to the Pan-American Highway, being connected to both Tacna in Peru and La Paz in Bolivia by railroad and being served by an international airport.
Its mild weather has made Arica known as the "city of the eternal spring" in Chile while its beaches are frequented by Bolivians. The city was an important port already during Spanish colonial rule. Chile seized the city from Peru in 1880 following the War of the Pacific and was recognized as Chilean by Peru in 1929. A substantial part of African Chileans live in or trace their origins to Arica.
Archaeological findings indicate that Arica was inhabited by different native groups dating back 10,000 years.
Spaniards settled the land under captain Lucas Martinez de Begazo in 1541, and in 1570, the area was grandly retitled as "La Muy Ilustre y Real Ciudad San Marcos de Arica" (the very illustrious and royal city of San Marcos of Arica). By 1545, Arica was the main export entrepot for Bolivian silver coming down from Potosí, which then possessed the world's largest silver mine. Arica thus held the crucial role as one of the leading ports of the Spanish Empire. The envious riches made Arica the target for pirates, buccaneers, and privateers, among whom Francis Drake, Thomas Cavendish, Richard Hawkins, Joris van Spilbergen, John Watling, Simon de Cordes, Leandro de Valencia, Bartholomew Sharp, William Dampier, and John Clipperton all took part in looting the city.
Following the collapse of Spanish rule, in 1821, Arica was part of the recently independent Peruvian Republic. The Peruvian Constitution of 1823 regards it as a province of the Department of Arequipa.
In 1855, Peru inaugurated the Arica-Tacna railroad (53 km long), one of the first in Latin America. The rail line still functions today.
The earthquake of August 13, 1868 struck near the city with an estimated magnitude of 8.0 to 9.0 Estimates on the death toll vary greatly, some estimates have the number at 25,000 to 70,000 people. Others estimate that the population of Arica was less than 3,000 people and the death toll was around 300. It triggered a tsunami, measurable across the Pacific in Hawaii, Japan and New Zealand. As Arica lies very close to the subduction zone known as the Peru–Chile Trench where the Nazca Plate dives beneath the South American Plate, the city is subject to megathrust earthquakes.
Chilean forces occupied the region following the War of the Pacific. The Treaty of Ancón in 1883 formally acceded the region to Chilean control. The 1929 Tacna-Arica compromise in the Treaty of Lima subsequently restored Tacna to Peru but Arica remained part of Chile.
In 1958, the Chilean Government established the "Junta de Adelanto de Arica" (Board of Development for Arica), which promulgated many tax incentives for the establishment of industries, such as vehicle assembly plants, a tax-free zone, and a casino, among others. Many car manufacturers opened plants in Arica, such as Citroën, Peugeot, Volvo, Ford and General Motors, which produced the Chevrolet LUV pickup until 2008.
In 1975, together with Chile's new open economy policies, the "Junta de Adelanto de Arica" was abolished.
The Arica and Parinacota Region was created on October 8, 2007 under Law 20.175, promulgated on March 23, 2007 by President Michelle Bachelet in the city of Arica.
According to the 2002 census by the National Statistics Institute, Arica spans an area of 4,799.4 km2 (1,853 sq mi) and has 185,268 inhabitants (91,742 men and 93,526 women). Of these, 175,441 (94.7%) lived in urban areas and 9,827 (5.3%) in rural areas. The population grew by 8.8% (14,964 people) between the 1992 and 2002 censuses. Arica is home to 97.7% of the total population of the region.
The population is a mixture between older-residing local Indians such as the Aymara with African people or Chinese who first arrived as miners and rail workers in the 1890s, and Europeans including the Spanish, Italians, Greeks, British and French or their descendants who arrived at different times of local history. Some Ariqueanos have an affinity with the cultures of Peru and distantly, Bolivia.
The urban area of Arica has 175,441 inhabitants in an area of 41.89 km². Arica in 2007 had more than 185,000 inhabitants (not counting the inhabitants of the valleys and Lluta Azapa, with that reach almost to the 194.000 inhabitants). The growing city of Arica spreads outward into the desert and the Peru-Chile border. The Azapa Valley has developed a year-round agricultural economy due to improvements in irrigation and transportation of its products.
The villages that make up the commune are Villa Frontera and San Miguel de Azapa. Some hamlets are Poconchile, Molinas, Sora, Las Maitas and Caleta Vitor.
Arica was made famous in 1970 by the spiritual master Oscar Ichazo when he held a 10-month training there for 50 North Americans from the Esalen Institute in California. The Arica School, based in the United States of America, has influenced thousands of people all over the world.
The commune of Arica is composed of 19 census districts.
The Morro de Arica is a steep and tall hill located in the city. Its height is 139 meters above sea level. It was the last bulwark of defence for the Peruvian troops who garrisoned the city. It was assaulted and captured on June 7, 1880 by Chilean troops in the last part of their Campaña del Desierto (Desert Campaign) during the War of the Pacific.
Near the city is the Azapa Valley, an oasis where vegetables and Azapa olives are grown. Economically, it is an important port for Chilean ore, and its tropical latitude, dry climate, and the city's beach, have made Arica a popular tourist destination. It is also a center of rail communication with Bolivia and has its own international airport. Arica has strong ties with the city of Tacna, Peru; many people cross the border daily to travel between the cities, partly because many services (for example, dentists) are cheaper on the Peruvian side. Arica is connected to Tacna in Peru and to La Paz in Bolivia by separate railroad lines.
According to the Köppen Climate Classification system, Arica features the rare mild desert climate, abbreviated "BWn" on climate maps. Unlike many other cities with arid climates, Arica seldom sees extreme temperatures throughout the course of the year. Arica is also known as the driest inhabited place on Earth, at least as measured by rainfall: average annual precipitation is 0.76 mm (0.03 inches), as measured at the airport meteorological station. Despite its lack of rainfall, Arica typically has a relatively high humidity, with levels similar to those of equatorial climates. The sunshine intensity is similar to the Sahara desert region in the Northern Hemisphere (or like the Cape Verde islands).
As a commune, Arica is a third-level administrative division of Chile administered by a municipal council, headed by an alcalde who is directly elected every four years. The 2008–2012 alcalde is Waldo Sankán Martínez (Independent).
Within the electoral divisions of Chile, Arica is represented in the Chamber of Deputies by Mr. Vlado Mirosevic (Partido Liberal) and Mr. Luis Rocaful as part of the 1st electoral district, which includes the entire Arica and Parinacota Region. The commune is represented in the Senate by Fulvio Rossi Ciocca (PS) and Jaime Orpis Bouchon (UDI) as part of the 1st senatorial constituency (Arica and Parinacota Region and Tarapacá Region).
Arica was one of the four host cities of the 1962 FIFA World Cup, and it was the venue for a Rip Curl Pro Search surfing event that took place from June 20 to July 1, 2007. Arica Plays host to a leg of the International Bodyboarding Association's world tour event every year at the notorious "el flops" surf break. The event has been running since 2004.
Other attractions include the former house of the Governor, the House of Culture, railway station Arica-La Paz, the Archaeological and Anthropological Museum of San Miguel de Azapa, Sea and Historical Arms and Arica. For evening entertainment there is the Casino de Arica.
More than 20 km of beaches, many known for the quality of surfing, span across the Coastal Range in the northern sector. The harbored location makes these beaches unique from other cities in Chile in terms of topography.
From north to south the beaches are located Las Machas, Chinchorro, del Alacrán, El Laucho, La Lisera, Brava, Arenillas Negras, La Capilla, Corazones and La Liserilla.
Passenger train services on the Arica–La Paz railway ceased in 1996, but as of 2017 there were proposals to restart services from Arica as a tourist attraction (and for freight).
In 2011, Chile announced plans to privatise the Port of Arica. These were opposed by Bolivia, as Arica is its main sea port.
Chacalluta International Airport is the main airport in Arica and is located 18.5 km to north of the city. In this terminal operates three domestic airlines, LAN Chile, Principal Airlines and Sky Airlines to many Chilean airports and also to Arequipa, Peru and La Paz, Bolivia.