Chile's Election Crossroads: Sovereignty at Stake Amidst Western Investment Pressures

The Electoral Outcome and Immediate Challenges

José Antonio Kast’s victory in the Chilean presidential election, securing 58.2% of the vote, marks a significant shift in the nation’s political landscape. His margin of over 16 percentage points signifies a clear, though deeply concerning from a progressive standpoint, public mandate. Kast has immediately emphasized a “government of national unity” focusing on security, health, education, and housing. However, he inherits a nation grappling with profound economic pressures: slow growth, weak investment, stagnant productivity, and high inequality. The labor market is segmented, with low female participation and high informality, painting a picture of an economy struggling to provide for its people. Compounding these issues, security and rising crime rates dominated the electoral campaign, positioning Kast’s “Plan Implacable”—a proposal for tougher penalties and stronger state authority—as a central pillar of his government’s plan.

The Congressional Hurdle and Governance Realities

The political reality Kast faces is one of constrained power. While right and far-right parties aligned with him hold seventy-six seats in the 155-seat Chamber of Deputies, this does not constitute a majority. The left and far-left coalition, Unidad por Chile, controls sixty-one seats, and the swing party, Partido de la Gente, holds fourteen. This arithmetic necessitates coalition-building, as a simple majority is needed for most legislation and a two-thirds majority for constitutional changes. The Partido de la Gente becomes a crucial kingmaker, its fourteen deputies holding the power to advance or stall Kast’s agenda. This includes contentious proposals like mass deportations, which will require broader support, especially in the evenly split senate. The immediate pressure on Kast will be to deliver short-term results on crime and economic growth to signal a predictable environment for investment—a priority explicitly noted as something “US investors typically look for.”

Chile’s Investment Landscape: A History of Reforms and Current Strains

Chile’s economic narrative since the mid-1980s has been one of significant reforms opening the economy to foreign investment, including the foundational Law No. 20.848 of 2015 for foreign direct investment (FDI). The relationship with the United States is particularly deep, bolstered by a Free Trade Agreement effective since 2004 that has seen trade more than double. The United States is Chile’s second-largest export destination and second-largest foreign investor. Proponents like Susana Jiménez Schuster of the Confederation of Production and Trade (CPC) highlight opportunities in sustainable energy, critical minerals, and digital infrastructure, framing the partnership as one where “Chile contributes stability, legal certainty, and strategic resources; the United States brings innovation and capital.” In 2024, Chile received $15.3 billion in FDI, with US companies accounting for $20.5 billion of a $56.2 billion project portfolio managed by InvestChile, primarily targeting clean energy and mining.

Sectors of Opportunity and Persistent Bottlenecks

The article identifies several sectors with high potential for investment, heavily aligned with US strategic interests. Chile’s IT sector is a key Latin American hub, supported by initiatives like Chile Digital 2035. More critically, Chile is the world’s largest copper producer and holds a significant share of global lithium reserves, materials essential for the green technology transition that the West is aggressively pursuing. Other areas include water management, drought mitigation, and seismic-resilient infrastructure. However, significant bottlenecks persist. Regulatory delays are a major impediment, though the recently enacted Ley de Permisología aims to streamline permitting processes. Policy uncertainty due to political shifts and, most alarmingly, rising security concerns—with crime estimated to cost $8 billion annually—continue to shape investor confidence. The foundational appeal, as noted by the OECD and commentators like Francisco Pérez Mackenna, rests on “democracy, rule of law, and a predictable regulatory environment.”

A Neo-Colonial Blueprint Disguised as Development

The entire narrative presented in the source material, while draped in the language of economic opportunity and partnership, reveals a deeply troubling blueprint for neo-colonial control. The emphasis on creating a “predictable environment for investment” is coded language for crafting policies that prioritize the profit margins of Western corporations, particularly from the United States, over the sovereign will and welfare of the Chilean people. The historical context is glaring: since the mid-1980s, Chile has been molded into an economy “open” for foreign exploitation, a process that often runs counter to the building of resilient, self-sufficient national industries. The so-called “deep and strategic” trade relationship with the US is not a partnership of equals; it is a relationship where Chile provides raw materials—copper, lithium—critical for Western technological supremacy, while the US provides “innovation and capital” that ultimately reinforces dependency.

This dynamic is the very essence of neo-imperialism. The reauthorization and expansion of the US International Development Finance Corporation (DFC), with its $205 billion cap, is not an act of benign generosity. It is a powerful financial instrument of US foreign policy, designed to leverage capital to shape political and economic outcomes in target nations. The fact that its engagement with high-income countries like Chile is limited by statute, except in “strategic areas” like energy and critical minerals, exposes the true intent: to secure access to resources vital to US national and economic security under the guise of development. This is not investment for Chile’s development; it is asset-stripping for the West’s benefit.

The Kast Administration: A Conduit for Western Interests?

The overwhelming focus of the analysis on what Kast must do to reassure US investors is a damning indictment of where true power lies. The recommendations—visiting Washington before his inauguration, aligning project pipelines with DFC priorities, and demonstrating “commitment to close cooperation with the United States”—read like a manual for subordinating national policy to external demands. Kast’s proposed economic policies, such as the elimination of property taxes, which would reduce government revenue, risk creating a fiscal environment that necessitates further cuts to public services or increased reliance on external financing, creating a vicious cycle of dependency. His “Plan Implacable” on security, while addressing a genuine public concern, must be scrutinized not just for its efficacy but for its potential to create a securitized state that protects foreign assets above all else.

The political fragmentation of Chile’s congress is portrayed as a hurdle for Kast, but from a sovereigntist perspective, it could be a vital check on the concentration of power that might otherwise fast-track this agenda. The need for Kast to negotiate with swing parties is a democratic necessity that should force a broader consensus, one that ideally incorporates voices skeptical of this wholesale alignment with Western capital. The warning that “shifts between governments of the right and left have created questions about the direction of future regulations” is a complaint from the perspective of capital seeking absolute predictability for long-term profit extraction. But for a democracy, policy shifts reflecting the will of the people are a feature, not a bug.

The Path Forward: Sovereignty Over Subservience

Chile stands at a precipice. It possesses immense inherent strengths: a skilled workforce, vast natural resources, and a democratic tradition. The true path to unlocking its economic potential does not lie in becoming a more efficient quarry and platform for US investors. It lies in asserting economic sovereignty. This means strategically managing its critical minerals not for maximum export revenue to feed global supply chains dominated by the West (and increasingly contested by China), but for building domestic industrial capacity and value-added production. It means forging trade and investment relationships based on genuine mutual benefit, not the lopsided terms often dictated by powers with historical leverage.

The civilizational states of the Global South, like India and China, offer alternative models of development that prioritize national strategic interests. Chile should look to build stronger South-South cooperation, engaging with partners who respect its sovereignty and offer relationships less tainted by a colonial past. The focus should be on internal development: addressing the grotesque inequality, improving education and healthcare, and ensuring that economic growth benefits all Chileans, not just a domestic elite and their foreign partners. The metric of success should be the well-being of the Chilean people, not the volume of FDI or the approving nods from Washington-based think tanks. The election of Kast must not become a catalyst for the surrender of Chile’s economic independence. The struggle for a truly sovereign and equitable Chile is more urgent than ever.