It can be difficult for foreigners to find good information in English regarding upcoming elections in Chile and some of the main sectors that drive the economy. BNamericas has recently released a new report that outlines political risk in different Latin American countries. The aim of the report is to track and put into perspective all political news that impacts the real economy.

Below we have summarized some of the main points:

  • Chile is Latin America's most stable country, but is going through a challenging period marked by low growth and overwhelming disapproval of the current government of Michelle Bachelet.
  • Presidential elections will be held on November 19. In the latest poll by local pollster Adimark, the right- leaningex-president Sebastian Piñera, 67, is in the lead, with 31% of respondents saying they would vote for him, followed by 64-year-old independent Alejandro Guiller, at 15%. Next is leftist Beatriz Sanchez, at 13%.
  • In order to avoid a two-candidate runoff on December 17, the winning candidate would have to win more than 50% of the first-round vote, which at the moment appears unlikely.
  • In Chile, presidents cannot run for consecutive terms, but can run again. If Piñera were to win, it would mean 16 years divided between him and current president Bachelet.

Presidential Candidate Front Runners:

Sebastian Piñera:

Piñera is a billionaire businessman who served as president from 2010 to 2014 in what is largely considered a boom period in recent Chilean history. He was, of course,aided by record-high copper prices. It is also worth noting that while the country performed well, he had generally low approval ratings. He resoundingly won his Chile Vamos coalition's primary in early July, and has since shot up in the polls.

His platform includes:

  • An overhaul of tax policy to spur investment, GDP expansion and innovation, with the aim of "doubling growth." This includes a corporate tax rate "at average levels within the OECD."
  • A revision of labor laws.
  • A public-private infrastructure program worth US$20 billion over 8 years.
  • A perfection of the private pension system while keeping it in place.
  • The ex-president has also said he would look to dismantle the controversial Transantiago transport system.

 Alejandro Guillier

Alejandro Guillier is a left-leaning TV and radio journalist and current senator of Antofagasta who is running as an independent. He has lost a lot of ground in recent months in polling. His platform includes:

His platform includes:

  • To spur growth, he calls on moving away from a dependence on raw materials and towards diversification. A focus on "strengthening production and infrastructure."
  • A new state pension plan to compete with private system.
  • A continued push to support green energy.


  • Growth has slowed in Chile and is expected to hit 1.5% this year, after growing 1.6% in 2016 and 2.3% in 2015.Over the last three decades, growth has averaged around 5%.
  • The Chilean peso has lost considerable ground to the dollar in the last five years. At end-2012, the dollar traded at 479 Chilean pesos. Today, its value is 655 pesos, and has generally stayed within the 650-700 pesos band in the past 24 months.
  • Inflation remains stable in Chile. Since peaking at 10% during the 2009 financial crisis, annual inflation has remained between 2-5% and was at 1.7% year-on-year in June. The Central Bank kept the benchmark interest rate unchanged at 2.5% in July, its lowest level since September, 2010.
  • Copper prices are at their highest levels since early 2015, at US$2.75/lb. This is still a far cry from 2011, when they nudged close to US$$4.5/lb, but is a considerable improvement on average prices in 2015 and 2016 of close to US$2/lb. Chile is the world's largest copper producer and 47% of its exports were copper – based in 2016 (in 2010, this figure was 56%).


  • 2017 started with the 44-day strike at the Escondida mine. Workers returned to the mine after invoking a rarely used legal provision that extends the existing contract for 18 months, a poor outcome for both sides that leaves significant risk ahead when it comes time to revisit the contract in 2018 under the new labor rules.
  • Chile is losing ground in terms of its general reputation as a good place to do mining, but remains attractive overall in regional as well as global terms. The country's unrivaled copper reserves mean the majors already invested here, even if the changing operational context presents new challenges. Indeed, they must invest even to maintain production levels as deposits age. This simple fact will form the basis for Chile's mining investment to continue at one of the highest rates in Latin America despite the difficulties.
  • Structural efficiency improvements through innovation and end-to-end integration of operations is key. As Codelco CEO Nelson Pizarro noted earlier this year, "only with competitiveness" can miners face long term market uncertainties. One way companies have sought efficiencies and risk reduction in Chile is through collaboration, such as Goldcorp and Teck combining two projects into Nueva Unión or Teck and Collahuasi looking at sharing a port.


  • Chile remains a global leader in renewable energy where it has enjoyed a boom in the last four years. But financing for power projects is almost impossible without a long term PPA. With the mining industry contracting, this means securing a contract in a highly-competitive government-sponsored auction is essential.
  • In the immediate future, perhaps the biggest question is whether – and if so, how – the government adjusts the bidding rules for upcoming power auctions. Developers of conventional projects are likely to lobby strongly for changes in their favor, and it wouldn't be unreasonable to expect the same of renewable energy firms.
  • While once vociferous protests have slowed, some projects, just as AES Gener's Alto Maipo project have been severely delayed (the project will likely be scrapped).
  • A recent extended power outage in capital Santiago exposes the outdated distribution system and need for infrastructure upgrades.

HGG Opinion:

There is no doubt that over the last 2 years there has been a slowdown in the Chilean economy. Changes to the tax and labor code have created some uncertainty in the economy which were not timed well with a drop-in copper prices. These factors have all contributed to a weak investment environment.

With that in mind, there have been some positives:

  • It was recently reported that there is a USD$65 billion-dollar project pipeline for mining projects.
  • Copper prices are predicted to remain strong and increase in the mid-term.
  • Major mining companies have been able to lower costs and remain competitive.
  • The renewable market has received international attention over the last couple of years due to the success of power auctions. Solar and wind are growing is tremendously.
  • There is a wave of new infrastructure spending in the coming years – new metro lines, tunnels connecting Chile and Argentina, highways and rail.
  • Chile continues to have a growing middle class with the desire for new products, technology, brands, etc.
  • The agriculture sector has remained strong and the amount of Chilean wine exported is a win for the country.

The slowdown has been positive in some ways. It has allowed the economy to adjust to new global realities. It has forced companies to look at efficiencies while expanding their businesses away from just the mining sector. Without a doubt, Chile will continue growing and provide foreign companies with the confidence needed to invest.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.