The role of the public sector and transnational corporations in the mining development of Latin America

The world economic crisis, especially the sharp decline in the demand for minerals and metals and the collapse of their real prices (31% in the last five years), together with unprecedented economic stagnation and indebtedness, have eroded the capacity of the governments and public enterprises of the mining countries of Latin America to negotiate with the transnational corporations. These corporations are not only reducing their investments in the region but also trying to evade the effects of the crisis by cutting back the benefits acquired by the mining countries in earlier negotiations. Given the present adverse situation and the danger of an incentives war among governments to attract foreign capital, some thought should be given to the achievements and miscalculations of the public sector and the change which it has undergone in its relations with the transnational corporations in past decades.