{"id":2797,"date":"2025-10-31T00:08:00","date_gmt":"2025-10-31T00:08:00","guid":{"rendered":"https:\/\/apexperu.org\/?p=2797"},"modified":"2025-10-31T00:11:26","modified_gmt":"2025-10-31T00:11:26","slug":"la-cuestion-codelco-control-estatal-o-reforma-de-mercado-en-las-elecciones-de-chile-de-2025","status":"publish","type":"post","link":"https:\/\/apexperu.org\/en\/la-cuestion-codelco-control-estatal-o-reforma-de-mercado-en-las-elecciones-de-chile-de-2025\/","title":{"rendered":"The Codelco Question: State Control or Market Reform in Chile\u2019s 2025 Election"},"content":{"rendered":"
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The Codelco Question: State Control or Market Reform in Chile\u2019s 2025 Election<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t
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By Edmund Smith<\/em><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t

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\u00a0 \u00a0 \u00a0 <\/span>Chile has long been recognised as one of the most stable and prosperous nations in Latin America with a history of sound economic management. Chile\u2019s success has been heavily supported by its exploitation of abundant natural resources, having held its position as global leaders in copper production every year since 1983. At present, copper exports account for 45% of Chile\u2019s total export sales in an era where electronic innovation has driven demand ever higher. In recent weeks, Chile narrowly avoided a devastating 50% tariff on copper exports to the United States announced by the Trump administration. This exception demonstrates the strength of the Chile-US copper trade and the importance of the raw material to economic growth.<\/span><\/p>

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\u00a0 \u00a0 \u00a0 This has translated into tangible benefits for citizens. Chile scored the highest in Latin America on the United Nations\u2019 Human Development Index (HDI) in 2023 and the greatest economic freedom in the region as defined by the <\/span>Heritage Foundation.<\/span><\/i>Chile has also enjoyed a prolonged period of stable democracy since the fall of General Pinochet\u2019s regime in 1990 defined largely by moderate and consensus politics. This was seen as at-risk in 2021 when left-wing radical Gabriel Boric took the Presidency but, for all his promises of pension and industry reform, he has settled for a more moderate position in government with many schemes being abandoned.<\/span><\/p>

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\u00a0 \u00a0 \u00a0However, there are a number of underlying issues in Chile which help to explain the election of an outsider. Chile is a deeply unequal society with the top 1% of the population earning a quarter of the revenue and holding half of the country\u2019s wealth. This inequality has led to widespread protests and low levels of trust in government institutions; an unstable backdrop to present economic problems.<\/span><\/p>

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\u00a0 \u00a0 \u00a0Over recent years, Chile\u2019s economy has begun to slow. Relatively low growth has been accompanied by an inflation rate consistently above 4%. President Boric is also facing public discontent, presiding over the lowest growth rate since the return of democracy in 1990. The copper industry has also been slowing. Central to this story is Codelco: the state-owned mining company and largest copper producing firm in the world.<\/span><\/p>

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\u00a0 \u00a0 \u00a0Established by the state in 1976 and held in public ownership ever since, Codelco has competed in the free marketplace and has helped drive economic growth for the country ever since but, over the past 25 years, productivity has been declining, reaching a nadir in 2023. A number of factors lie behind this decline. The copper mining industry is highly volatile as imperfect knowledge of the deposits, and this can lead to major setbacks. In 2022, the mine at Chuquicamata (one of Codelco\u2019s largest) was forced to reassess its development plan and therefore delay production. Similarly, access to high-quality ores has declined, thus reducing the productivity of existing mines. Furthermore, there are more worrying causes for Codelco\u2019s falling productivity rooted in their legal obligations. As a state-owned company, 70% of its profits and 10% of its sales is handed to the government. This has dramatically stifled the ability for Codelco to reinvest in much-needed infrastructure improvements. This has resulted in the firm facing large debts to the sum of US$20 billion by the end of 2023 followed by a downgraded risk rating from Moody\u2019s Investor Service. Codelco\u2019s decline is, as mentioned above, of the greatest importance around the world. The export of refined copper cathodes to the United States is significant but Chile also exports both refined and unrefined copper to emerging markets around the world including the People\u2019s Republic of China and Vietnam as they rapidly expand their electronic industrial capacities.<\/span><\/p>

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\u00a0 \u00a0 \u00a0Traditionally, Codelco has enjoyed the support of politicians of all stripes, with the groundwork led by President Allende\u2019s socialist government and implementation achieved under Pinochet\u2019s right wing neoliberal regime. However, in the upcoming election in November, the current structure of Codelco is set to be called into question.<\/span><\/p>

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\u00a0 \u00a0 \u00a0On the left, the Unidad por Chile coalition recently selected communist candidate Jeannette Jara as their candidate with a promise of forced reinvestment of Codelco profits and a commitment to state ownership of the lithium mining industry \u2013 an unfulfilled promise from Boric\u2019s radical election campaign.\u00a0<\/span><\/p>

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\u00a0 \u00a0 \u00a0 On the right, Jos\u00e9 Antonio Kast, a conservative politician and brother of Miguel Kast (one of the \u201cChicago Boys\u201d economists who influenced Pinochet-era economic reforms), has responded by arguing in favour of greater private sector involvement in Codelco with growing support from markets due to sluggish bureaucracy and rising costs experienced in recent years. While the selling of non-core assets would yield fiscal benefits, backlash from workers and unions could be substantial.<\/span><\/p>

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\u00a0 \u00a0 \u00a0 \u00a0Chilean elections operate on a run-off basis whereby, should a winner not emerge in the first round, the two top-performing candidates move through to a head-to-head second round. Recent polling has shown Jara and Kast as the two most likely to progress, presenting a clear fork in the road for Chilean politics. The choice voters face is clear: a left-wing vision that expands state control or a right-wing approach that seeks to open the door to private capital and market reforms. Both candidates are campaigning on the premise that Codelco cannot continue as it is, yet their proposed solutions could not be more different.<\/span><\/p>

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\u00a0 \u00a0 \u00a0President Boric\u2019s election five years ago may not have resulted in the radical shake-up which was predicted but it captured a desire for change in Chile and, with his poor economic record, it is no surprise that the candidates on both sides are calling for change in this central element of the economy. His enduring legacy will be the rewriting of the country\u2019s constitution to remove the old Pinochet-era form in use since the 1990s.<\/span><\/p>

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\u00a0 \u00a0 \u00a0With the determination of a winner less than a month away, much can change as the election enters the run-off. However, it is clear that the economy and specifically the mining sector is at the centre of this election and, with the left and the right offering radically different solutions, Chile\u2019s reputation for pragmatic economic management and moderate politics may be at risk.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>","protected":false},"excerpt":{"rendered":"

La cuesti\u00f3n Codelco: \u00bfcontrol estatal o reforma de mercado en las elecciones de Chile de 2025? Por Edmund Smith \u00a0 \u00a0 \u00a0 Chile ha sido reconocido durante mucho tiempo como uno de los pa\u00edses m\u00e1s estables y pr\u00f3speros de Am\u00e9rica Latina, con un historial de gesti\u00f3n econ\u00f3mica s\u00f3lida. El \u00e9xito de Chile se ha visto […]<\/p>","protected":false},"author":4,"featured_media":2802,"comment_status":"open","ping_status":"open","sticky":false,"template":"elementor_header_footer","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-2797","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/apexperu.org\/en\/wp-json\/wp\/v2\/posts\/2797","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/apexperu.org\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/apexperu.org\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/apexperu.org\/en\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/apexperu.org\/en\/wp-json\/wp\/v2\/comments?post=2797"}],"version-history":[{"count":4,"href":"https:\/\/apexperu.org\/en\/wp-json\/wp\/v2\/posts\/2797\/revisions"}],"predecessor-version":[{"id":2801,"href":"https:\/\/apexperu.org\/en\/wp-json\/wp\/v2\/posts\/2797\/revisions\/2801"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/apexperu.org\/en\/wp-json\/wp\/v2\/media\/2802"}],"wp:attachment":[{"href":"https:\/\/apexperu.org\/en\/wp-json\/wp\/v2\/media?parent=2797"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/apexperu.org\/en\/wp-json\/wp\/v2\/categories?post=2797"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/apexperu.org\/en\/wp-json\/wp\/v2\/tags?post=2797"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}