During Transition times Chile offered stability and governance for global investors. In non-polarity, Trans-National companies (TNs) are looking for countries that are resilient and able to keep their wealth and competitive edge, where governments can warrant that TNs contracts will uphold, where the threat of nationalization is minuscule or non-existent, where capital return from revenues and con
vertibility are guaranted regardless of electoral cycles. Chile is a nuclear-free zone and currently undergoing democratic consolidation through second-generation reforms (tax, education and possibly the Constitution). Against the backdrop of China’s slowdown, the end of the boom of commodities, and an appreciated dollar, these reforms should be critically analyzed as potential political risks given the history of FDI and capital flow that Chile has maintained in 35 years. Social change must be acknowledged – however - and the political variables at play must be empirically analyzed to have an informed opinion, one that is not only descriptive but which can also serve as a prognosis. Therefore at a time when the Chilean public sphere is empowered, the focus shifts to institutional response to social change. How resilient are institutions in the face of social demands? Is there a risk for populist leaders? How efficiently can leaders produce public policy aiming at governance, inclusive growth and incentives to investors?Elite and non-elite structures must be politically and anthropologically analyzed. Given the extractive nature of the Chilean economy, a correct analysis must focus on Chilean institutions and their capacity to move to innovation, value added products and high productivity.In order to jump into development, Chile must solve the “middle trap” dilemma whereby countries are cannot overcome their extractive nature for improved productivity. Higher productivity requires higher standards in education, and consequently, more investment is needed; OECD, IMF, the World Bank, the World Economic Forum are all backing initiatives to fulfill second-generation reforms as urgent measures to bring stability, governance and sustainable growth, but can Chile fulfill them efficiently while keeping investment’s confidence at the same time? That is precisely our job. To bring the political landscape into the overall picture and make sense of it all.
