This wasn't my experience. I got into Startup Chile knowing nobody in chile. Many of the other teams there were south americans from a variety of countries, including chile. I really don't believe that last name was a factor in the selection process (Though I do believe being from south america gives you a leg up these days.)
After Startup Chile there were a variety of follow on funding programs, almost all of which I would have difficulty getting in, but that a chilean would have a much easier time getting in.
I knew chileans who were bootstrapping from nothing (who got none of the funding I got) and I knew chileans who were getting investments. The chilean government supports a thriving angel and VC system there which, as far as I can tell is much better than the one in Seattle, though maybe not as good as the bay area.
Sure it is probably more nepotistic-- in hiring-- but I don't believe that when it comes to startups. And all it takes is a few startups to be successful to create a system where more startups are started each year. And then more are successful and it feeds on itself.
Chile doesn't seem to have much regulation keeping businesses out... so really it's all about being willing to pull yourself up by your bootstraps, network with others and apply to the opportunities for help that are there-- which was pretty vibrant.
Of course it's all a matter of degrees.