Colombia on Sale

25 November 2013 | Article

At the beginning of 2000´s, the price of minerals in the world was in their highest levels since 1970´s. This level of prices was responding to the rising demand by China, Southeast Asian countries and developed countries in general. Two main proposals were given to the exporting countries, so they could manage better this mining and energy boom: The first one from Alice Amsden from MIT. She proposes to build an “Organization of the Mineral Exporting Countries (OMEC)” with members from African and Latin American countries.   

With OMEC the exporting countries could be able to improve the private and public incomes and improve the public expenditure. The second one was to build and improve all the productive chains inside the production of minerals and mining. With these new and improved national chains of industrial production, exporting developing countries could increase the national production beyond the exploitation of natural resources, improving at the same time industrialization and employment.

The first proposal never prospered. In fact what happened was the entire contrary; the developing exporting countries were push to an oversupply of minerals and energy.The general impact was the overexploitation of natural resources inside this countries and the stabilization of mineral worldwide prices. The second proposal, in the other hand, has been develop successfully by some Latin American countries like Argentina, Chile, and Brazil (Ocampo 2012 and Durán and Montoya, 2013.

According to Bebbington (2013) the energy and mining boom in Latin America have a lot of political and economic differences between countries. In some countries, like Venezuela and Bolivia, this boom has been handled like a nationalistic project, so the taxes for the international companies that exploit the natural resources are higher, and the revenues has been investedby the State in social programs to reduce hunger and poverty. Other countries like Ecuador, Brazil and Chile has been conducted this boom like an opportunity to pull over other economic sectors, so the incomes for the state are high too, but the generation of long term wealth has been better.

By Juan Pablo Durán Ortiz