CHILE: Commission finds privatisations cost state US$6bn
Development: On 21 July a commission of the chamber of deputies released a report claiming the Chilean government lost around US$6bn during the privatisation of state firms during the dictatorship of Augusto Pinochet.
Significance: The findings of the commission, composed entirely of members of the ruling leftwing Concertación, are unlikely to help those angling for the privatisation of other state firms, such as Codelco, the state-run mining company. Despite a series of scandals about corruption at the firm, the Chilean public remains opposed to its privatisation. The current high world price of copper, of which Chile is the world's largest exporter, has made a substantial contribution to Chile's strong economic growth. The report comes at a time when two parliamentary commissions have been set up, at the instigation of Chile's rightwing opposition, to look into the running of both state and private firms during the period 1998-2004.
The commission found that the sale of just 30 of the country's largest firms (out of a total of 725) lost the state some US$2.2bn. The report said that the privatisations carried out were created to benefit government employees who were able to snap up the firms at a bargain price. One example was the Compañía de Aceros del Pacífico (CAP), which was sold for US$105.5m, but whose value subsequently rocketed to US$811.5m. The document also reported other dishonest activity with state assets, such as the transferral of 11,000 pieces of state real estate into private ownership.