Chile Abolishes Law Requiring State-run Copper Miner to Finance Military

[Judi Lynn]

By Reuters
July 24, 2019 06:23 PM

SANTIAGO - Chilean lawmakers passed a measure on Wednesday abolishing a decades-old law under which state-run Codelco, the world's largest copper miner, helped foot the bill for the country's military.

The bill establishes a dedicated fund to finance the Chilean armed forces and beefs up congressional oversight of the use of those funds, according to a statement from Chile's Congress.

Codelco's payments to Chilean state coffers will be phased out over a period lasting more than a decade.

The legislation replaces a 1958 law, strengthened during the dictatorship of Augusto Pinochet, that required Codelco to turn over 10 percent of its export sales to the military.

More:
https://www.voanews.com/americas/chile-abolishes-law-requiring-state-run-copper-miner-finance-military

[Kurt V.]

1. hmm. mixed feelings on this one.

[sandensea]

2. Interesting news. Chile's doing this b/c the state must finance their "private" pension fund system.

What never gets mentioned by Pinochet apologists is that the Chilean private pension model is publicly financed.

Chileans themselves call it el gran fraude - "the great fraud."

Each retirement account pays 30% commissions from the top. Consequently, 70-80% of Chilean retirees end up with nothing or close to it in their pension accounts - and depend on state subsidies to cover the minimum $200 pension Chilean law guarantees (and Chile's expensive).

The subsidies largely come from Codelco. Copper nets Chile $40 billion in exports, and these (under Codelco) remain mostly state-owned.

As Chile's population ages, their pension financing needs are increasing.

So that's a "private" pension system for you: the profits are private; but the Chilean state spends 6% of GDP - one third of its federal budget - on bailing out retirees with hollowed-out pensions.

Neighboring Argentina had a similar experience.

After 14 years of having to bail out insolvent private pensions (while the funds wired billions overseas), Cristina Kirchner nationalized private pensions in 2008.

Argentina did keep the private option - but almost nobody takes it. Minimum pensions in Argentina thus rose from $70 a month to $440 by the time Mrs. Kirchner left office in 2015 (they're now $260).

The Buenos Aires Stock Exchange used to treat pension funds as its dumping ground for unwanted shares. They're hoping Macri re-privatizes them after his re-election (which as you know is next to impossible, barring massive fraud).

Thanks again, Judi, for keeping an eye on Señor Piñera. The 'long-handed Ladino', they call him in Chile.

[Judi Lynn]

3. Not all that hot for the people who need a good pension system.

Have noticed there are some right-wingers in the States who insist Chile has a model pension system, proof that Pinochet's government was far better for Chile. I learned that US conservatives do still think Pinochet really had all the right ideas, and set up a dream government. They apparently believe it's A-OK to conduct mass murdering, torturing, disappearing people, too, just like the Dirty War.

There have been a LOT of sick people in the Western Hemisphere continually since the Second World War, and clearly from well before that, too.

I want to reread your post, so the information will stick. It's really helpful to be able to go over the points, as we have always been left totally clueless about things outside the lower 48 states, usually. Very odd when you think about it.

I never knew how people see Piñera, but I definitely have read he is very low on opinion polls. It is so peculiar that he was re-elected. I don't think he was that well liked near the end of his first time in office, was he? Something very strange about a return to office for him.

I'm certain you have helped many others to insights, important points that we just don't find in any of our domestic "news" sources. Very huge favor you have done for us.

Thank you for your comments.