42 years of the nationalization of copper in Chile

Yesterday, July 12, was the anniversary of the nationalization of copper in Chile. Allende referred to the nationalization as the most important act in Chile's history since independence (you can see parts of his speech in this documentary from Telesur here; in Spanish). Even though the government of the military coup (1973-89) weakened the nationalization, it was ultimately unable to revert the process and privatize it. This is the most direct cause of the coup against Allende, and the support from the US intelligence services. In the last decade natural resource nationalism (as noted before here) allowed for better income distribution.

Natural Resource Nationalism and Fiscal Revenues

One of the relevant points made by Amico and Fiorito for the case of Argentina, that apply to many countries in the region, is the increase in fiscal revenue that was associated to the higher national participation in the gains from exports of primary goods. This has been, in part, associated to the left of center governments and the so-called Natural Resource Nationalism. The table below shows the evidence.

It can be seen that, with the exception of Mexico and Venezuela, where State revenue from oil was already high, in all other countries there was a significant increase in State revenues. Governments have appropriated primary export earnings and turned them into fiscal resources by taking a share of operating earnings, either through public enterprises (which included nationalization in some cases) or through equity holdings, more stringent requirements on the payments of royalties, and by levying taxes on export earnings.

Read more on the fiscal situation in Latin America in ECLAC's report here. For more on Natural Resource Nationalism read the following paper by Carlos Medeiros (h/t Revista Circus).