In 2008, Finance Minister Andres Velasco, Chile has been under increasing criticism over its financial policy. As the world’s largest copper producer, Chile has tripled benefit from the increase in copper prices, which had more than in 2003. Copper sales translates into more income for the government of Chile’s Codelco, the largest copper, was a state-owned enterprise. Velasco had decided to save the majority of sales in two copper stabilization fund until the end of August 2008, the c … Read more »

In 2008, Finance Minister Andres Velasco, Chile has been under increasing criticism over its financial policy. As the world’s largest copper producer, Chile has tripled benefit from the increase in copper prices, which had more than in 2003. Copper sales translates into more income for the government of Chile’s Codelco, the largest copper, was a state-owned enterprise. Velasco had decided to save the majority of sales in two copper stabilization fund until the end of August 2008, the common set of more than 20% of Chile’s GDP. Several critics wanted the funds will be used to improve the poor public education, income, and other social issues looming. After all, Chile had one of the unequal distribution of wealth in the world. The productivity has been stagnant and economic growth had slowed considerably since the 1990s. What to do Velasco of the growing discontent of the population? Was it really to keep the interest of Chile rescue the copper wealth?
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from
Laura Alfaro,
Dante Roscini,
Renee Kim
Source: Harvard Business School
25 pages.
Release Date: 29 March 2010. Prod #: 710019-PDF-ENG
Chile’s Copper Surplus: The Road Not Taken (A) HBR case solution