A Leftist Firebrand Is Taking Power in Chile. It’s a Red Flag for the EV Revolution.
A Leftist Firebrand Is Taking Power in Chile. It’s a Red Flag for the EV Revolution.
"The fear is that Chile reverts to the Latin American mean of low growth and timid private-sector investment," said AS/COA's Brian Winter to Barron's.
The world needs a lot more copper and lithium for those electric vehicles we are all supposed to be driving soon. So, it’s an awkward time for the dominant copper-producing nation, and No. 2 in lithium, to lurch leftward politically.
That’s just what happened in Chile last month, when 35-year-old former campus activist Gabriel Boric was elected president. Boric ran on higher taxes and tighter environmental controls for the mining industry, and vague promises of a post-resource-dependent Chile. “Some of his circle have fundamental questions about what they call extractivism,” says Brian Winter, vice president for policy at Americas Society/Council of the Americas…
The constitution writers, whose first draft is due this summer, seem bent on enshrining expensive rights to environmental and social protection. Investors flash back to a similar exercise in Brazil circa 1988. “Many would say the Brazilian constitution is at the root of that country’s constant fiscal problems,” says Alberto Ramos, head of Latin American economic research at Goldman Sachs.
All this matters beyond the Andean nation of 19 million because a whole region could lose its macroeconomic star. “The fear is that Chile reverts to the Latin American mean of low growth and timid private-sector investment,” Winter says…
