Monday, December 22, 2008

Salvadoran dreamin, on such a winter's day

Sometimes it's nice to have a good laugh on a Monday morning, and so I felt lucky that Mary Anastasia O'Grady had a column published. It's about El Salvador, and has two main points:

First, "many Salvadorans are worried" that the FMLN will come to power and become radical. It is not hard to guess which "many Salvadorans" she has spoken to.

Second, the Salvadoran economy would improve greatly if it allowed much expanded foreign access to mining. Here is the really funny part--she cites Chile as an example of how mining can transform a country, ignoring the fact that it is mostly in the hands of the Chilean state. Not even Pinochet wanted to privatize.

And she has a special bonus observation: remember the Salvadoran civil war? It was the FMLN's fault.

15 comments:

mike a,  1:22 PM  

Codelco only controls about 35% of the Chilean copper industry. That leaves 65% in the hands of private enterprise. One could argue that Codelco's time is up and should also be privatized, especially if you look at their productivity versus the competition in the last 10 years.

You may not like O'Grady but she usually has her facts straight.

Greg Weeks 1:47 PM  

As I understand it, CODELCO owns most of the largest mines, and has a 49% stake in the others. References to "private" mines are technically correct because they are 51%, but they are more accurately "public-private." If you have info indicating otherwise, I will take a look.

mike a,  3:46 PM  

This is by no means a rock solid source, but it says that Codelco is responsible for 35% of Chile's output.

http://www.nationsencyclopedia.com/Americas/Chile-MINING.html

There are many other operators in Chile who own 100% of their mines (BHP, Rio Tinto, some other Australian firms, etc). They have to pay a royalty to the government, but not to Codelco per se.

Randinho 11:16 PM  

Pinochet did not want to privatize, but in fact directed 10% of CODELCO's earnings be earmarked for the military.

CODELCO is the world's largest copper producer.If Mary Anastacia O'Grady told me the sky was blue I would look out the window.

Justin Delacour 11:35 PM  

You may not like O'Grady but she usually has her facts straight.

You're quite the joker there, Mike.

Paul 11:11 AM  

Randinho,


"CODELCO is the world's largest copper producer."

There might be a slight correlation there with Chile having the largest copper reserves in the world and CODELCO being a protected by the State producer .

I find it amazing it's almost 2009 and there is still debate whether state owned industries are as efficient as private enterprise.

Paul 11:21 AM  

"It is not hard to guess which "many Salvadorans" she has spoken to."

I've spoken to a few (poor) Salvadorans here in the US and they are also worried.

"Here is the really funny part--she cites Chile as an example of how mining can transform a country, ignoring the fact that it is mostly in the hands of the Chilean state."

I guess it's "funny" if you resort to misrepresenting her point. She doesn't even address the private/public issue, she just points out that Chile's copper mining in general has helped their economy. O'Grady says El Salvador could do something similiar if they exploit their gold resources. That's a pretty common sense analogy to make, but I guess it's more fun to bash O'Grady than address the merit of her argument.

Randinho 12:21 PM  

Paul,

I'm not disputing that fact. I am disputing Mike a's figures from an unsourced article.

Randinho 2:28 PM  

Also, for the record, it is a fact that in the 1980's the people of El Salvador suffered under the ARENA party and the military. The Truth Commission established as a fact that the overwhelming majority of the suffering was squarely the responsibility of the military, the right wing death squads and other government entities. For O'Grady to attempt to rewrite history in this fashion only renders the rest of what she wrote less than credible, and I'm being charitable here.

In addition, she doesn't seem to realize that state-run enterprises in Latin America are often more a reflection of nationalism than of simple left-right politics. For example, during Brazil's military dictatorship in the 60's and 70's, the right-wing generals set up a number of state-owned enterprises including the Itaipu Dam.

For O'Grady to have a column dealing with the Americas in a major newspaper, but fail to consider basic historical facts of recent history, frankly makes everything she writes suspect.

Paul 2:57 PM  

"For O'Grady to attempt to rewrite history in this fashion only renders the rest of what she wrote less than credible, and I'm being charitable here."

In a throwaway line, she says the Salvadorans suffered at the hands of the FMLN. You dispute that? If so, then sorry but I guess I'll consider anything else you write as "less than credible."

"In addition, she doesn't seem to realize that state-run enterprises in Latin America are often more a reflection of nationalism than of simple left-right politics. "

I don't see where she really even addresses that in this particular article. However, I'm certain she recognizes, regardless of nationalism issues, that state run enterprises are usually inefficient, corrupt bureaucracies that fare miserably compared to the private sector.

mike a,  4:04 PM  

Randinho,

Codelco produced 1.66 million tons of copper in 2007, while Chile produced 5.9 million tons. My previous figures actually understated the importance of the private sector in the mining industry in Chile. Codelco is clearly not a minor player, but to say the copper industry in Chile is government controlled is neither fair nor accurate.

http://en.wikipedia.org/wiki/Codelco

http://www.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUSN0717118720080407

I agree that nationalization is not purely a right/left issue, but more often than not, it's the left that prefers bloated nationalist organizations into which they can hire retreads who are party loyalists. Codelco is no different.

Greg Weeks 4:20 PM  

I just go back to the point I made earlier--when Codelco owns 49% of a mine, as far as I can tell it is counted as "private." I guess a more precise angle would be what percentage of Chile's copper export earnings are made by Codelco vs. private. That way private companies are not counted as 100% production when they receive 51% (or whatever percent it happens to be) of the profits.

Randinho 10:44 PM  

In a throwaway line, she says the Salvadorans suffered at the hands of the FMLN. You dispute that? If so, then sorry but I guess I'll consider anything else you write as "less than credible."

Oh piffle. It wasn't a throwaway line. Far more people suffered under Arena's rule in the 1980's and O'Grady simply elides that fact. It has been established as fact.

Mike a,

Ex-president Lagos wanted to privatize CODELCO. Last time I looked he was on the left.

Paul 1:30 PM  

"Oh piffle. It wasn't a throwaway line. Far more people suffered under Arena's rule in the 1980's and O'Grady simply elides that fact. It has been established as fact."

Apparently, all that remains of your argument is hair-splitting over who suffered most -despite the fact that O'Grady's column isn't even about the civil war in the 1980's.

But I guess you see the Marxist terrorists as the "good guys" in the conflict and so we all must show deference, or something.

Paul 1:37 PM  

"That way private companies are not counted as 100% production when they receive 51% (or whatever percent it happens to be) of the profits."

But is CODELCO actually doing any of the producing in these cases, or are just receiving royalties? In any case, it doesn't render O'Grady's argument any less valid.

  © Blogger templates The Professional Template by Ourblogtemplates.com 2008

Back to TOP