LUKSIC TAKES ISSUES WITH LAMARCA'S CRITICISM

Manufacturing magnate Guillermo Luksic criticized recent remarks by Felipe Lamarca calling for a change in Chile’s economic model. Luksic claims that this very economic model is responsible for Chile’s economic success over the last 30 years.

Lamarca, one of Chile’s best-known and most successful businessmen stunned Chile’s financial community with an interview in La Tercera in October strongly criticizing Chile’s economic elite for their failure to work towards creating a more equitable country (ST, Oct. 14). In the interview Lamarca blamed the Chile’s big businesses for monopolizing opportunities and adding to social disparity.

Guillermo Luksic is part of the economic elite Lamarca referred to. He is one of the three Luksic brothers whose combined fortunes are estimated at more than US$ 4.5 billion. Between the three men they control Banco de Chile, the nation's second largest and most profitable bank, CCU, Madeco, Lucchetti, Telefónica del Sur, and the Antofagasta Plc mines.

According to Lamarca, Chile’s market economy is not functioning well because of economic concentration and the lack of competition. “All the economic power is concentrated in just a few hands, and instead of trickle-down, it is more like one drop at a time,” said Lamarca.

A recent World Bank study found that Chile has the 12th-worst distribution of wealth in the world with the poorest 10 percent of citizens earning 1.2 percent of the country’s total income, compared with the top 10-ten percent earning 47 percent. This income disparity, along with other factors, ranked Chile below the majority of African countries (ST, Apr. 20).

Luksic disagrees. “It seems to me that fusion and concentration are necessary…” he said. “The only effective economic model that will produce development and employment is the one we have.”

According to Luksic, “other (economic) models have been tested and found tremendously inefficient at bringing prosperity to the country.”
However, Lamarca is not the only critic of Luksic’s self-proclaimed “only effective economic model.” Jaime Crispi, a former member of the European-American Studies Institute of the European Union and top aide to Finance Minister Nicolás Eyzaguirre recently wrote a report criticizing Chile’s historic economic model (ST, Sept. 21) and a Human Development Report released by the United Nations Development Program (UNDP) highlighted income disparity as the single greatest obstacle to Chile’s future growth (ST, Sept. 8).