LatinFinance - May/June 2015 - 25
Economy
Tax reforms are
dividing economists
INVESTOR
REPORT
CHILE
PAGE 26
Codelco
The national copper miner
feels the strain of low prices
PAGE 30
Rodrigo Vergara
Chile's central bank governor
evaluates the country's
economic prospects
PAGE 34
Infrastructure finance
The commodity price
crash is also being felt in the
energy industry
PAGE 36
A way forward
One of the Andean superstars just a few
years ago, Chile's economy has fallen
victim to the lower commodity prices
that are hitting all of Latin America. The
country posted its lowest growth rate
in several years in 2014. While some
economists expect it to pick up this year,
to around 3%, that is still far from the 5%plus range of a few years ago.
Lower global oil prices are less of a
concern for Chile than the copper prices.
The effects of that mineral cheapening
are being felt across the economy. Even
the project financing industry is taking
note: with less investment going into
mining, there are fewer potential offtakers for new electricity infrastructure
(page 36).
Chile has been increasing energy
production from renewables at a faster
rate than anywhere in the region. But
that could be about to change. With fewer
miners willing to sign up to long-term
power purchase agreements, renewable
energy projects are finding it tougher to
be financed.
At the center of the issue, however is
Codelco. The road ahead for the national
mining company and the world's largest
copper producer is representative of the
issues facing similar companies across
the region, and indeed the globe (page
30).
As its mines age, Codelco is finding it
tougher to maintain production - never
mind increase it. Still, the company
is advancing with a large-scale capital
expenditure plan designed to set it up
for the long run, and it is unlikely to have
trouble tapping bond markets any time
soon. Additionally, analysts expect the
copper price to edge up this year.
At the national level, Chile is taking
steps to diversify the way it makes money
from the copper industry, moving away
from a focus on production. Increasingly,
the government is promoting innovative
companies, human capital and research
and development to cater to the industry
globally.
Meanwhile, Michelle Bachelet's
administration is advancing tax and
labor reforms as the global environment
tests Chile's economic resilience (page
26). The government hopes to increase
the national tax take by 3% of GDP in the
coming years. The moves have divided
economists. The real test of their success,
however, will be in the results of investing
these new revenues. LF
May/June 2015 - L ATINFINA NCE.COM 25
http://www.LATINFINANCE.COM
LatinFinance - May/June 2015
Table of Contents for the Digital Edition of LatinFinance - May/June 2015
Contents
LatinFinance - May/June 2015 - Cover1
LatinFinance - May/June 2015 - Cover2
LatinFinance - May/June 2015 - Contents
LatinFinance - May/June 2015 - 2
LatinFinance - May/June 2015 - 3
LatinFinance - May/June 2015 - 4
LatinFinance - May/June 2015 - 5
LatinFinance - May/June 2015 - 6
LatinFinance - May/June 2015 - 7
LatinFinance - May/June 2015 - 8
LatinFinance - May/June 2015 - 9
LatinFinance - May/June 2015 - 10
LatinFinance - May/June 2015 - 11
LatinFinance - May/June 2015 - 12
LatinFinance - May/June 2015 - 13
LatinFinance - May/June 2015 - 14
LatinFinance - May/June 2015 - 15
LatinFinance - May/June 2015 - 16
LatinFinance - May/June 2015 - 17
LatinFinance - May/June 2015 - 18
LatinFinance - May/June 2015 - 19
LatinFinance - May/June 2015 - 20
LatinFinance - May/June 2015 - 21
LatinFinance - May/June 2015 - 22
LatinFinance - May/June 2015 - 23
LatinFinance - May/June 2015 - 24
LatinFinance - May/June 2015 - 25
LatinFinance - May/June 2015 - 26
LatinFinance - May/June 2015 - 27
LatinFinance - May/June 2015 - 28
LatinFinance - May/June 2015 - 29
LatinFinance - May/June 2015 - 30
LatinFinance - May/June 2015 - 31
LatinFinance - May/June 2015 - 32
LatinFinance - May/June 2015 - 33
LatinFinance - May/June 2015 - 34
LatinFinance - May/June 2015 - 35
LatinFinance - May/June 2015 - 36
LatinFinance - May/June 2015 - 37
LatinFinance - May/June 2015 - 38
LatinFinance - May/June 2015 - 39
LatinFinance - May/June 2015 - 40
LatinFinance - May/June 2015 - 41
LatinFinance - May/June 2015 - 42
LatinFinance - May/June 2015 - 43
LatinFinance - May/June 2015 - 44
LatinFinance - May/June 2015 - 45
LatinFinance - May/June 2015 - 46
LatinFinance - May/June 2015 - 47
LatinFinance - May/June 2015 - 48
LatinFinance - May/June 2015 - Cover3
LatinFinance - May/June 2015 - Cover4
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