Landerretche and stagnation: "The copper supercycles served to hide the problems of our economy"

This is a machine translation of the original release issued in Spanish.

PRESS RELEASE from CFA Chile
August 2024

Santiago, August 2024.- The third version of the Chile Investment Forum was successfully held, an event organized by CFA Society Chile, an association that brings together more than 200 professionals specialized in investment management, and which seeks to be a space for dialogue and analysis of the local capital market.

The event was attended by Richard Clarida , Managing Director of the investment management company PIMCO and former Vice President of the United States Federal Reserve; and economist Oscar Landerretche , academic at the University of Chile and former Chairman of the Board of Codelco . The conversation was moderated by María Alicia Montes, CFA Asset Allocation Manager at AFP Cuprum and former President of CFA Society Chile.

During the event, Landerretche analyzed the stagnation of the Chilean economy. “We are all prisoners of our political narratives. We like to blame those who think differently than us, but the problem we have with our economic growth does not stand up to that analysis, because the downward trend in growth has been going on for 15 years. If we look at the underlying structural economic growth without copper, the truth is that we have a straight line that goes downwards, which crosses three left-wing governments and two right-wing governments,” he said.

Along these lines, Landerretche pointed out that “the copper supercycles served to hide the problems of our economy. We made up the idea that we were growing, but in reality we were charging higher prices. Our productivity was not growing. Now we are deceiving ourselves downwards: we blame the pandemic, the outbreak or the current government. However, the problem is not the current government. When was the last time there were pro-growth reforms in Chile? With Lagos?”

In this scenario, the University of Chile academic addressed the need to improve corporate governance to overcome stagnation. “Each actor must understand what their role is in the development strategy. To do so, we need effective governments for workers, with high-quality unions; for communities, with high-quality policies; for the government, with high-quality public management; and for companies, with high-quality private management,” he said.

Following the event, the president of CFA Society Chile, Hugo Aravena , praised the possibility of having a space that brings together the financial market. “This edition of the CFA Society Chile Investment Forum was a valuable opportunity to reflect on the current state of the local and global economy with two renowned economists. We appreciate the interest shown by the financial industry to discuss these issues and we will continue working to create spaces that seek to contribute to the development of our capital market,” he said.

About CFA Society Chile

CFA Society Chile is an association of more than 210 professionals related to investment management in Chile, founded in October 2015, which promotes a financial industry that contributes to the development of the country, with the ultimate goal of benefiting society as a whole.

CFA Society Chile is part of CFA Institute, a global non-profit organization that provides the most rigorous and prestigious certification for financial analysts worldwide.